OMNICARE INC

FORM 10-K(Annual Report)

Filed 02/19/13 for the Period Ending 12/31/12

Address 900 OMNICARE CENTER

201 E. FOURTH STREETCINCINNATI, OH, 45202

Telephone 5137192600CIK 0000353230

SIC Code 5912 - Retail-Drug Stores and Proprietary StoresIndustry Healthcare Facilities & Services

Sector HealthcareFiscal Year 12/31

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

� ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012 OR

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission File No. 1-8269

OMNICARE, INC. (Exact Name of Registrant as Specified in Its Charter)

OMNICARE, INC.

900 OMNICARE CENTER 201 E. FOURTH STREET

CINCINNATI, OHIO 45202 (Address of Principal Executive Offices)

513-719-2600 (Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

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Delaware 31-1001351 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

Title of Each Class

Name of Each Exchange on which Registered

Common Stock ($1.00 Par Value) New York Stock Exchange

4.00% Trust Preferred Income Equity Redeemable New York Stock Exchange

Securities issued by Omnicare Capital Trust I and

guaranteed by Omnicare, Inc.

Series B 4.00% Trust Preferred Income Equity New York Stock Exchange

Redeemable Securities issued by Omnicare Capital

Trust II and guaranteed by Omnicare, Inc.

Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes � No � Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes � No � Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes � No � Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( §232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes � No � Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes � No � Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. � Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

(Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes � No � Aggregate market value of the registrant’s voting stock held by non-affiliates, based upon the closing price of said stock on the New York Stock Exchange Composite Transaction Listing on the last business day of the registrant’s most recently completed second fiscal quarter (i.e., June 30, 2012) ($31.34 per share): 3,470,086,963 As of January 31, 2013, the registrant had 104,638,271 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE Portions of Omnicare, Inc.’s (“Omnicare”, the “Company” or the “Registrant”) definitive Proxy Statement for its 2013 Annual Meeting of Stockholders, to be held May 22, 2013 , are incorporated by reference into Part III of this report. Definitive copies of Omnicare’s 2013 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the end of the Company’s fiscal year.

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Large accelerated filer � Accelerated filer �

Non-accelerated filer � Smaller reporting company �

OMNICARE, INC .

2012 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

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PART I

PAGE

Item 1. Business 4

Item 1A. Risk Factors 11

Item 1B. Unresolved Staff Comments 16

Item 2. Properties 16

Item 3. Legal Proceedings 16

Item 4. Mine Safety Disclosures 16

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

16

Item 6. Selected Financial Data 19

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

19

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 35

Item 8. Financial Statements and Supplementary Data 36

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

90

Item 9A. Controls and Procedures 90

Item 9B. Other Information 91

PART III

Item 10. Directors, Executive Officers and Corporate Governance 91

Item 11. Executive Compensation 91

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

91

Item 13. Certain Relationships and Related Transactions, and Director Independence

92

Item 14. Principal Accountant Fees and Services 92

PART IV

Item 15. Exhibits and Financial Statement Schedules 92

As used in this document, unless otherwise specified or the context otherwise requires, the terms “Omnicare,” “Company,” “its,” “we,” “our”and “us” refer to Omnicare, Inc. and its consolidated subsidiaries.

PART I

ITEM 1. – BUSINESS Background Omnicare, Inc. ("Omnicare" or the "Company"), a corporation formed in 1981, is a leading healthcare services company that specializes in the management of complex pharmaceutical care. The Company operates two primary businesses through two operating segments, Long-Term Care Group ("LTC") and Specialty Care Group (" SCG "), each serving a different customer population but sharing a common objective: advancing health outcomes at the lowest possible cost. Through LTC, Omnicare is the nation's largest provider of pharmaceuticals and related pharmacy and ancillary services to long-term care facilities as well as chronic care facilities and other settings. SCG provides specialty pharmacy, commercialization services for the biopharmaceutical industry and end-of-life pharmaceutical care management for hospice care agencies. Omnicare leverages its specialized clinical capabilities and innovative technology solutions across both primary businesses as key components of the value we believe we provide to our customers. Information regarding the Company's reportable segments is presented at the “Segment Information” note of the Notes to our 2012 Consolidated Financial Statements, included at Part II, Item 8, of this filing. Long-Term Care Group Omnicare operates the largest institutional pharmacy business in North America, as measured in both revenues and the number of beds served. Due to the size and scope of LTC, we believe we have unique cost advantages, especially pertaining to the sourcing of pharmaceuticals. The scale of our operations has also provided us the opportunity to make investments in proprietary automation technology to reduce our dispensing costs while improving the accuracy and consistency of our service delivery. LTC's customers consist of skilled nursing facilities (“SNFs”), assisted living facilities (“ALFs”), independent living communities, hospitals, correctional facilities, and other healthcare service providers. In light of a customer mix that is heavily penetrated in the senior market, we have a high level of insight into geriatric pharmaceutical care. At December 31, 2012 , LTC provided our pharmacy services in 47 states in the United States (“U.S.”) and the District of Columbia. LTC comprised approximately 79% of the Company’s total net sales during the year ended December 31, 2012 , and dispensed approximately 114.3 million prescriptions. In addition to pharmaceutical distribution, we believe we provide value to our customers through our extensive clinical services, our customer-facing technology offerings and the speed at which we convert residents of our customers' facilities to lower-cost generic pharmaceuticals. With respect to our clinical services, we provide pharmacy consulting, including monthly patient drug therapy evaluations, assist in compliance with state and federal regulations and provide proprietary clinical and health management programs (utilizing outcomes-based algorithm technology). LTC also provides a suite of technology solutions based largely on our Omniview® web-based platform that is intended to improve the efficiency of our customers' operations through such tools as the electronic ordering of prescription refills, proof-of-delivery tracking, and real-time validation of Medicare Part D coverage, among others. LTC also provides a number of other products and services, including intravenous medications and nutrition products (infusion therapy products and services), respiratory therapy services, medical supplies and equipment (including billing the Medicare Part B program for eligible patients) and clinical care planning. We also provide pharmaceutical case management services for retirees, employees and dependents who have drug benefits under corporate-sponsored healthcare programs. Operating Model We purchase, repackage and dispense prescription and non-prescription medication in accordance with physician orders and deliver such prescriptions to long-term care facilities for administration to individual residents (by the facilities’ nursing staff for SNFs). We service long-term care facilities typically within a radius of approximately 150 miles of our pharmacy locations and maintain a 24-hour, seven-day per week, on-call pharmacist service for emergency dispensing and delivery, and for consultation with the facility's staff or attending physician. Our pharmacy infrastructure is primarily based on a "hub-and-spoke" network composed of 120 spoke pharmacies intended to primarily handle new prescription orders and 32 hub pharmacies that use proprietary automation to support spoke pharmacies with refill prescriptions (in addition to filling new prescription orders in their respective local markets). The use of automation within our pharmacies leverages our size and, we believe, distinguishes us from our competitors, by reducing our dispensing costs while improving our dispensing accuracy. Upon receipt of a prescription, the relevant resident information is entered into our computerized dispensing and billing systems. At that time, the dispensing system checks the prescription for any potentially adverse drug interactions, duplicative therapy or resident sensitivity. When required and/or specifically requested by the physician or patient, branded drugs are dispensed, and generic

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Table of Contents drugs are substituted in accordance with applicable state and federal laws as requested by the physician or patient. Subject to physician approval and oversight, and in accordance with our pharmaceutical care guidelines, we also provide for patient-specific therapeutic interchange of more efficacious and/or safer drugs for those presently being prescribed. See "The Omnicare Geriatric Pharmaceutical Care Guidelines®" below for further discussion. We utilize a unit-of-use drug distribution system. This means that our prescriptions are packaged for dispensing in individual doses. This differs from prescriptions filled by retail pharmacies, which typically are dispensed in vials or other bulk packaging requiring measurement of each dose by or for the patient. Our delivery system is intended to improve control over pharmaceutical distribution and patient compliance with drug therapy by increasing the accuracy and timeliness of drug administration. In conjunction with our drug distribution system, our computerized record keeping/documentation system is designed to result in greater efficiency in nursing time, improved control and reduced waste in client facilities, and lower error rates in both dispensing and administration. We believe we distinguish ourselves from many of our competitors by also providing proprietary clinical programs. For example, we have developed a ranking of drugs based on their relative clinical effectiveness for the elderly and by cost to the payor. We use these rankings, which we call the Omnicare Geriatric Pharmaceutical Care Guidelines®, or Omnicare Guidelines ® , to more effectively manage patient care and costs. In addition, we provide health and outcomes management programs for the large base of elderly residents of the long-term facilities we serve. The Omnicare Geriatric Pharmaceutical Care Guidelines® Supplementing the various clinical services Omnicare provides, we offer client facilities and their attending physicians a guide to pharmaceutical treatment of the elderly called the Omnicare Geriatric Pharmaceutical Care Guidelines® (“Omnicare Guidelines®”) . We believe the Omnicare Guidelines® is the first drug formulary ranking drugs by disease state according to their clinical effectiveness independent of their cost, specifically designed for the elderly. The Omnicare Guidelines® ranks drugs used for specific diseases as preferred, acceptable or unacceptable based solely on their disease-specific clinical effectiveness. The Omnicare Guidelines ® takes into account such factors as pharmacology, safety and toxicity, efficacy, drug administration, quality of life and other considerations specific to the frail elderly population. The clinical evaluations and rankings are developed exclusively for us by the University of the Sciences in Philadelphia, an academic institution recognized for its expertise in geriatric long-term care. The Omnicare Guidelines® is extensively reviewed and updated at least annually by the University of Sciences in Philadelphia, taking into account, among other factors, the latest advances as documented in the medical literature. In addition, the Omnicare Guidelines® provides relative cost information comparing the prices of the drugs to patients, their insurers or other payors of the pharmacy bill. As the Omnicare Guidelines® focuses on health benefits, rather than solely on cost, we believe that use of the Omnicare Guidelines® assists physicians in making the best clinical choices of drug therapy for the patient in a manner that is cost efficient for the payor of the pharmacy bill. Accordingly, we believe that the development of and compliance with the Omnicare Guidelines® is important in lowering costs for Omnicare’s payors. The Omnicare Guidelines® is also integrated into our primary customer-facing technology platform, Omniview®. Omniview® The primary component of our customer-facing technology suite, Omniview®, provides our facility customers with an innovative technological platform to improve efficiencies within their operations. Our broad range of advanced technologies allow web-based access to electronic medical records, automated pharmacy billing, on-line medication refills and returns processing, census tracking, pre-admission medication assessment and access to the Omnicare Guidelines® . Our MyOmniview web-portal is designed to address patients' and family member needs by allowing access to the patients' health records, billing information and pharmaceutical information. We also offer OmniviewDr as the physician-facing part of Omniview's technology portal, providing prescribers the ability to view patient health records, approve prescription refill requests, and view a comprehensive document library, among other time-saving and patient care-enhancing features. Additionally, OmniviewDr is the first and only electronic prescribing solution for controlled substances in institutional settings, enabling prescribers, nurse practitioners, and physician assistants to electronically transmit orders for controlled substances, as well as other medications, in real-time, directly to Omnicare pharmacies. This feature reduces the time it takes for patients to receive urgent medication while streamlining a cumbersome, manual, paper-based process. Specialty Care Group SCG touches a broad spectrum of the healthcare continuum, serving the needs of biopharmaceutical manufacturers, physicians, nurses, caregivers and patients. Our services are largely centered on the specialty pharmaceutical market and revolve around five platforms: brand support services, supply chain solutions, patient support services, specialty pharmacy and disease management

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Table of Contents for end-of-life care. By integrating these services across SCG's platforms, we are able to provide our manufacturer clients one end to end solution for all of their needs. Our brand support services, supply chain solutions and patient support services are integrated, fee-for-service platforms which focus on helping the drug manufacturer to market, to distribute and obtain reimbursement for their products. In our specialty pharmacy platform, we provide dispensing of specialized pharmaceuticals that are high cost, have complex reimbursement and supply chain challenges, have limited patient populations and are not available through normal retail channels. These specialized drugs deal primarily with specific categories of drugs and disease states, such as rheumatoid arthritis, multiple sclerosis, oncology and growth hormones. In our end-of-life care platform, Omnicare provides hospice care pharmaceutical management. SCG accounted for approximately 21% of the Company’s total net sales during the year ended December 31, 2012 . Product and Market Development Our LTC and SCG businesses engage in a continuing program for the development of new services and for marketing these services. While new service and new market development are important factors for the growth of these businesses, we do not expect that any new service or marketing efforts, including those in the developmental stage, will require the investment of a significant portion of our assets. Materials/Supply Unlike others within the institutional pharmacy industry, we leverage our purchasing scale and direct sourcing infrastructure to source most of our generic pharmaceuticals directly from manufacturers; we believe that this creates a cost advantage over others within the industry. We also purchase some generic and branded pharmaceuticals through wholesale distributors with whom we have a prime vendor agreement at discounted prices based upon contracts negotiated by us directly with pharmaceutical manufacturers; and in some cases, based upon prices accessed through group purchasing organization contracts. We have not experienced any significant difficulty in obtaining pharmaceuticals or other products and supplies used in the conduct of our business. Patents, Trademarks, and Licenses Our business operations are not dependent upon any material patents, trademarks or licenses (see further discussion of licenses in the “Government Regulation” caption below). Seasonality Except for the periodic impacts of the flu season and/or number of billing days during any particular quarter, our business operations are generally not impacted significantly by seasonality. Inventories We seek to maintain adequate on-site inventories of pharmaceuticals and supplies to ensure prompt delivery service to our customers. Our primary wholesale distributor also maintains local warehousing in most major geographic markets in which we operate. Customers At December 31, 2012 , our LTC primarily serves long-term care institutions and other chronic care settings, comprising approximately 970 thousand beds in 47 states in the US and the District of Columbia. Our SCG operates throughout the U.S., and serves a broad range of clients, including many of the major multi-national biopharmaceutical companies and hospice care agencies. No single customer comprised more than 10% of consolidated revenues in 2012 , 2011 or 2010 . Financial information with respect to geographic location is presented at the “Segment Information” note of the Notes to our 2012 Consolidated Financial Statements, included at Item 8 of this Filing. Backlog Backlog is not a relevant factor in our business as products and services are sold promptly on an as-ordered basis.

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Table of Contents Government Regulation Our pharmacies and the long-term care institutions we serve are subject to extensive federal, state and local regulation. These regulations cover required qualifications, day-to-day operations, reimbursement and the documentation of activities. We continuously monitor the effects of regulatory activity on our operations. Licensure, Certification and Regulation. States generally require that companies operating a pharmacy within the state be licensed by the state board of pharmacy. At December 31, 2012 , we had pharmacy licenses, or pending applications, for each pharmacy we operate. In addition, many states regulate out-of-state pharmacies as a condition of the delivery of prescription products to patients in their states. Our pharmacies hold the requisite licenses applicable in these states. In addition, our pharmacies are registered with the appropriate state and federal authorities pursuant to statutes governing the regulation of controlled substances. Federal and State Laws Affecting the Repackaging, Labeling and Interstate Shipping of Drugs. Federal and state laws impose certain registration, repackaging and labeling requirements on entities that repackage drugs for distribution, other than pharmacies that repackage in the regular practice of dispensing or selling drugs directly to patients. A drug repackager must register with the FDA as a repackager, and with the relevant states as a drug wholesaler and/or repackager. A drug repackager is subject to FDA inspection for compliance with relevant Current Good Manufacturing Practices ("CGMPs"). We hold all required registrations and licenses, and we believe our ongoing repackaging operations are in substantial compliance with applicable federal CGMP requirements and state wholesaler requirements. In addition, we believe we comply with applicable laws regarding the transfer and shipment of pharmaceuticals. Drug Pedigree Regulations. Federal and state laws impose "drug pedigree" regulations on wholesale distributors. These regulations generally require the wholesale drug distributor to maintain, and provide to pharmacies, a history of the transactions in the chain of distribution of a given drug lot from the manufacturer to the pharmacy. Some states have adopted or are considering adopting electronic pedigree tracking laws. Effective July 2016, California will require pharmaceutical wholesalers and repackagers to implement electronic track-and-trace capabilities for pharmaceutical products. Supply chain laws and regulations such as these could increase the overall regulatory burden and costs associated with our distribution business. We believe we are in compliance with federal and state regulations currently in effect. These regulations, however, may be interpreted in the future in a manner inconsistent with our interpretation and application which could adversely affect our results of operations, cash flows and financial condition. Medicare and Medicaid. Our business has long operated under regulatory and cost containment pressures from federal and state laws primarily affecting Medicare and Medicaid. We have historically received reimbursement from Medicare (primarily under the Part A and D programs and to a lesser extent the Part B program) and Medicaid programs, directly from individual residents or their responsible parties (private pay), long-term care facilities and from other payors such as third-party insurers. The Company’s payor mix (as a percentage of annual sales) for the last three years ended December 31 is presented at the “Description of Business and Summary of Significant Accounting Policies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. For those patients who are not covered by government-sponsored programs or private insurance, we generally directly bill the patient or the patient's responsible party on a monthly basis. Depending upon local market practices, we may alternatively bill private patients through the nursing facility. Pricing for private pay patients is based on prevailing regional market rates or "usual and customary" charges. The Medicaid program is a cooperative federal-state program designed to enable states to provide medical assistance to aged, blind or disabled individuals or members of families with dependent children whose income and resources are insufficient to meet the costs of necessary medical services. Our pharmacies participate in state Medicaid programs. Federal law and regulations contain a variety of requirements relating to the furnishing of prescription drugs under Medicaid. First, states are given authority, subject to certain standards, to limit or specify conditions for the coverage of particular drugs. Second, federal Medicaid law establishes standards affecting pharmacy practice. These standards include general requirements relating to patient counseling and drug utilization review and more specific standards for skilled nursing facilities (“SNFs”) and nursing facilities (“NFs”) relating to drug regimen reviews for Medicaid patients in such facilities. Third, federal regulations impose certain requirements relating to reimbursement for prescription drugs furnished to Medicaid patients. Among other things, regulations establish "upper limits" on payment levels; the calculation of these so-called upper limits have been subject to revision by Congress in recent years (see below). In addition to requirements imposed by federal law, states have substantial discretion to determine administrative, coverage, eligibility and payment policies under their state Medicaid programs that may affect our operations.

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Table of Contents The Medicare program is a federally funded and administered health insurance program for individuals age 65 and over, or who are disabled. While pharmacies are not subject to Medicare certification requirements, providers such as SNFs and suppliers of medical equipment and supplies, including our supplier operations, are subject to specified standards. Failure to comply with these requirements and standards may adversely affect an entity's ability to participate in the Medicare program and receive reimbursement for services provided to Medicare beneficiaries. Medicare and Medicaid providers and suppliers are subject to inquiries or audits to evaluate their compliance with requirements and standards set forth under these government-sponsored programs. These audits and inquiries, as well as our own internal compliance program, from time-to-time have identified overpayments and other billing errors resulting in repayment or self-reporting to the applicable agency. We believe that our billing practices materially comply with applicable state and federal requirements. However, the requirements may be interpreted in the future in a manner inconsistent with our interpretation and application. The Medicare and Medicaid programs are subject to statutory and regulatory changes, retroactive and prospective rate adjustments (including freezes and funding reductions), administrative rulings and executive orders, all of which may adversely affect our business. Payments for pharmaceutical supplies and services under the Medicare and Medicaid programs may not continue to be based on current methodologies or remain comparable to present levels. In this regard, we may be subject to payment reductions as a result of federal budgetary or other legislation related to the Medicare and Medicaid programs. In addition, numerous state governments are experiencing budgetary pressures that may result in Medicaid payment reductions and/or delays in payment to us or our customer nursing facilities. In addition, if we or our client facilities fail to comply with applicable reimbursement regulations, even if inadvertently, our business could be adversely impacted. Additionally, changes in reimbursement programs or applicable regulations, such as reductions in the allowable reimbursement levels, modifications in the timing or processing of payments and other changes intended to limit or decrease the growth of Medicaid and Medicare expenditures, could adversely affect our business. Referral Restrictions. We have to comply with federal and state laws governing financial and other arrangements between healthcare providers. These laws include the federal anti-kickback statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration directly or indirectly in return for or to induce the referral of an individual to a person for the furnishing of any item or service for which payment may be made in whole or in part under federal healthcare programs. We are also subject to the federal physician self-referral statute, which prohibits physicians from referring Medicare and Medicaid patients for certain “designated health services,” including outpatient prescription drugs, durable medical equipment, and enteral supplies and equipment to an entity if the referring physician (or a member of the physician’s immediate family) has a “financial relationship,” through ownership or compensation, with the entity. Many states have enacted similar statutes which are not necessarily limited to items and services for which payment is made by federal healthcare programs. Violations of these laws may result in fines, imprisonment, denial of payment for services, and exclusion from the federal programs and/or other state-funded programs. Other provisions in the Social Security Act and in other federal and state laws authorize the imposition of penalties, including criminal and civil fines and exclusions from participation in Medicare, Medicaid and other federal healthcare programs for false claims, improper billing and other offenses. We believe our contract arrangements with other healthcare providers, our pharmaceutical suppliers and our pharmacy practices are in compliance with applicable federal and state laws. These laws may, however, be interpreted in the future in a manner inconsistent with our interpretation and application. Healthcare Reform and Federal Budget Legislation. This information has been updated by the discussion in the “Federal and state healthcare legislation has significantly impacted our business, and future legislation and regulations are likely to affect us” section of Part I, Item 1A, “Risk Factors”, of this Filing, which section is incorporated by reference herein. Health Information Privacy, Security and Transaction Practices. This information has been updated by the discussion in the “Federal and state laws that protect patient health and other personal information may increase our costs and limit our ability to collect and use that information”section of Part I, Item 1A, “Risk Factors”, of this Filing, which section is incorporated by reference herein. Compliance Program. The Office of Inspector General (“OIG”) has issued guidance to the healthcare industry to help providers design effective voluntary compliance programs to prevent fraud, waste and abuse in healthcare programs, including Medicare and Medicaid. In addition, the Company and its operating units are subject in the ordinary course of business to audits, inspections

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Table of Contents and investigatory reviews by federal and state authorities covering various aspects of its business. In 2009, the Company entered into an amended and restated corporate integrity agreement which succeeds the Company’s prior corporate integrity agreement entered into in 2006 and which requires, among other things, that the Company maintain and augment its compliance program in accordance with the terms of the agreement. Although we believe that we are in compliance in all material respects with federal, state and local laws, failure to comply could subject us to denial of the right to conduct business, fines, criminal penalties and other enforcement actions. See “Risk Factors”, “Legal Proceedings” and the “Commitments and Contingencies” note to the Company’s consolidated financial statements at Items 1A, 3 and 8, respectively, of this Filing for further discussion of the impact of government regulation on our business. Competition LTC is highly regional or local in nature and, within a given geographic area of operations, highly competitive. We are the nation's largest provider of pharmaceuticals and related pharmacy services to long-term care institutions. Our largest competitor nationally is PharMerica Corporation ("PharMerica"). We also compete with numerous local and regional institutional pharmacies, pharmacies owned by long-term care facilities and local retail pharmacies. We compete on the basis of quality, price, terms and overall cost-effectiveness, along with the clinical expertise, breadth of services, technology and professional support we offer. Further, some states have enacted "freedom of choice" or "any willing provider" requirements as part of their state Medicaid programs or in separate legislation. Limitations such as these may increase the competition which we face in providing services to nursing facility residents. SCG offers a comprehensive portfolio of brand support and specialty pharmacy services tailored to the biotechnology and pharmaceutical industries. SCG competes throughout the United States with drug wholesalers and pharmaceutical benefit management companies. The SCG integrated solution addresses management and dispensing of specialty medications and medications for end-of-life patients, pharmaceutical reimbursement, pharmacy support services, third party logistics and pharmacy benefit management under a single management team which, we believe, differentiates us from our competitors. We compete on the basis of quality and overall cost effectiveness, along with the breadth of services and professional support we offer. Environmental Matters In operating our facilities, historically we have not encountered any major difficulties in effecting compliance with applicable pollution control laws. No material capital expenditures for environmental control facilities are expected. While we cannot predict the effect which any future legislation, regulations or interpretations may have upon our operations, we do not anticipate any changes regarding pollution control laws that would have a material adverse impact to Omnicare. Employees At December 31, 2012 , we employed approximately 14,400 persons in our continuing operations, (including approximately 1,200 part-time employees), all of which are located within the U.S. Executive Officers of the Company Our executive officers of the Company at the time of this filing are as follows:

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First Elected to

Name Age Office (1) Present Office

John L. Workman 61 Chief Executive Officer (2) September 11, 2012

Nitin Sahney 49 President and Chief Operating Officer (3) September 11, 2012

Robert O. Kraft 42 Senior Vice President and Chief Financial Officer (4) September 11, 2012

Alexander M. Kayne 40 Senior Vice President, General Counsel and Secretary (5) April 4, 2011

(1) Executive officers are elected for one-year terms at the annual organizational meeting of the Board of Directors, which follows the annual meeting of stockholders.

(2) Mr. Workman was appointed Chief Executive Officer on September 11, 2012. Mr. Workman served as Interim Chief Executive Officer and Chief Financial Officer since June 2012, as President and Chief Financial Officer from February 2011 to June

Table of Contents

2012 and as Executive Vice President and Chief Financial Officer from November 2009 to February 2011. From 2004 to 2009, he served as Executive Vice President and Chief Financial Officer of HealthSouth. Prior to joining HealthSouth, Mr. Workman served as Chief Executive Officer of U.S. Can Corporation where he also served as Chief Operating Officer and Chief Financial Officer during his six-year tenure. Before that, he spent more than 14 years with Montgomery Ward & Company, Inc., serving in various capacities, including Chief Financial Officer and Chief Restructuring Officer. Mr. Workman began his career with the public accounting firm KPMG, where he was a partner.

Available Information We make available, free of charge, on or through our Corporate Web site, at www.omnicare.com , our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Additionally, the public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C., 20549. Information regarding operation of the Public Reference Room is available by calling the SEC at 1-800-SEC-0330. Information that we file with the SEC is also available at the SEC’s Web site at www.sec.gov . We also post on our Corporate Web site the following corporate governance documents and committee charters:

Copies of these documents are also available in print to any stockholder who requests them by writing our Corporate Secretary at:

Omnicare, Inc. 900 Omnicare Center 201 East Fourth Street Cincinnati, OH 45202

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(3) Mr. Sahney was appointed President and Chief Operating Officer on September 11, 2012. Mr. Sahney served as Omnicare's Chief Operating Officer since June 2012 and as Executive Vice President and President - Specialty Care Group from November 2010 to June 2012. Prior to joining Omnicare, Mr. Sahney managed a healthcare investment fund since October 2007. Before that, Mr. Sahney served as President and CEO of RxCrossroads, a specialty pharmaceutical services company acquired by Omnicare in 2005, from 2001 until August 2007. Prior to his involvement with RxCrossroads, Mr. Sahney held a number of management positions with Cardinal Healthcare, beginning in September 1993.

(4) Mr. Kraft was appointed Senior Vice President and Chief Financial Officer on September 11, 2012. Mr. Kraft served as Omnicare's Senior Vice President - Finance since November 2010. Prior to joining Omnicare, Mr. Kraft spent 18 years with PricewaterhouseCoopers, where he was a partner.

(5) Mr. Kayne was appointed Senior Vice President, General Counsel and Secretary on April 11, 2011. From November 2010 to April 2011, Mr. Kayne served as Interim General Counsel and Secretary of Omnicare. Prior to joining Omnicare, Mr. Kayne was a partner with Dewey and LeBoeuf LLP in its litigation department. In May 2012, Dewey & LeBoeuf LLP filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.

• Corporate Governance Guidelines

• Code of Business Conduct and Ethics

• Audit Committee Charter

• Compliance Committee Charter

• Compensation Committee Charter

• Nominating and Governance Committee Charter

• Executive Committee Charter

Table of Contents ITEM 1A. – RISK FACTORS Risks Relating to Our Business If we or our client facilities fail to comply with Medicaid and Medicare regulations, our revenue could be reduced, we could be subject to penalties and we could lose our eligibility to participate in these programs. Our business is dependent upon revenues from the Medicare and Medicaid programs, which are highly regulated. The failure, even if inadvertent, of us and/or our client facilities to comply with applicable regulations could adversely affect our reimbursement under these programs and our ability to continue to participate in these programs, which could have a material adverse effect on our results of operations. In addition, our failure to comply with applicable Medicare and Medicaid regulations could subject us to other penalties. A significant portion of our revenue is pursuant to agreements with payors, including Medicare Part D Plans, and with long term care facility clients, and could be reduced due to the termination of or changes to such agreements. In 2012 , approximately 49% of our revenue was derived from beneficiaries covered under the Medicare Part D program, and 21% was paid by SNFs for drugs covered under Medicare Part A. Our reimbursement under the Part D Program, as well as our reimbursement from certain private third-party payors, is determined pursuant to agreements that we negotiate with those payors or their pharmacy benefit manager (“PBM”) representatives. Likewise, our reimbursement from SNFs for drugs is determined pursuant to our agreements with them. Certain of these contracts are terminable upon prior notice by the other party. We cannot provide assurance that we will be able to replace terminated or expired contracts on terms as favorable as the existing contracts or at all. The termination or modification of these agreements could adversely affect our reimbursement from these sources, which could have a material adverse effect on our results of operations. Further, termination of our agreement with a long term care facility or similar customer generally terminates our provision of services to any of the residents of the given facility, resulting in the loss of revenue from any source for those residents. If a SNF experiences financial difficulty, this could lead to payment disputes and ultimately to the termination of the contract. Additionally, the proportion of our Part D business serviced under specific agreements may change over time based upon beneficiary choice, reassignment of beneficiaries to different Part D Plans, Part D Plan consolidation or other factors, which could also adversely affect our revenue. The Company’s payor mix (as a percentage of annual sales) for the last three years ended December 31 is presented at the “Description of Business and Summary of Significant Accounting Policies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. Continuing efforts to contain healthcare costs may reduce our future revenue. Our sales and profitability are affected by the efforts of healthcare payors to contain or reduce the cost of healthcare by lowering reimbursement rates, limiting the scope of covered services, and negotiating reduced or capitated pricing arrangements. Many states are facing budget pressures that could result in increased cost containment efforts impacting healthcare providers. Any changes which lower reimbursement levels under Medicare, Medicaid or other programs could reduce our future revenue. These changes may include modifications in the timing or processing of payments, Medicare competitive bidding for certain medical equipment and supplies, and other changes intended to limit or decrease the growth of Medicare, Medicaid or third party expenditures. In addition, our profitability may be adversely affected by any efforts of our suppliers to shift healthcare costs by increasing the net prices on the products we obtain from them. Federal and state healthcare legislation has significantly impacted our business, and future legislation and regulations are likely to affect us. We derive a significant portion of our revenues directly or indirectly from government-sponsored programs, principally the federal Medicare program and to a lesser extent state Medicaid programs. As part of ongoing operations, the Company and its customers are subject to legislative and regulatory changes impacting operations and the level of reimbursement received from the Medicare and Medicaid programs. For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), changed the requirements for CMS’s calculation of maximum prescription drug reimbursement amounts under state Medicaid programs, as discussed below under "Changes in industry pricing benchmarks could materially impact our financial performance." Further, effective for federal fiscal year 2012 which began October 1, 2011, CMS has reduced reimbursement rates paid to skilled nursing facilities for services provided under Medicare Part A by 11.1% compared to fiscal year 2011 levels. On August 2, 2012, CMS published a notice updating Medicare payment rates for skilled nursing facilities for fiscal year 2013, which began October 1, 2012. Under the notice, Medicare rates are increasing by 1.8%, compared to fiscal year 2012 amounts.

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Table of Contents On August 2, 2011, President Obama signed into law the Budget Control Act of 2011, which increased the nation’s debt ceiling while taking steps to reduce the federal deficit. Under this law, a bipartisan Joint Select Committee on Deficit Reduction was charged with identifying $1.5 trillion in deficit reduction, which could include cuts in Medicare, Medicaid, and other federal spending and/or revenue increases. The Committee failed to produce a budget plan before its deadline, which under the terms of the Budget Control Act was scheduled to trigger an enforcement mechanism known as sequestration to make a total of $1.2 trillion in spending reductions in January 2013, divided between domestic and defense spending. Medicare provider payments would be subject to sequestration, although the reductions would be capped at 2%. Sequestration was delayed for two months, however, by the American Taxpayer Relief Act of 2012, which was signed into law on January 2, 2013. During this time period, Congress and the President are expected to consider alternative deficit reduction options, which potentially could include provisions that reduce federal spending on the Medicare and Medicaid programs. If sequestration ultimately is imposed, or alternative legislation is adopted that reduces funding for Medicare and/or Medicaid, it could adversely affect the Company's business. In order to rein in healthcare costs, the Company anticipates that federal and state governments will continue to review and assess alternate healthcare delivery systems, payment methodologies and operational requirements for healthcare providers, including long-term care facilities and pharmacies. Given the debate regarding the cost of healthcare, managed care, universal healthcare coverage, and other healthcare issues, the Company cannot predict with any degree of certainty the impact of the ACA, or additional healthcare initiatives, if any, on its business. Further, the Company receives discounts, rebates and other price concessions from pharmaceutical manufacturers pursuant to contracts for the purchase of their products. There can be no assurance that any changes in legislation or regulations, or interpretations of current law, that would eliminate or significantly reduce the discounts, rebates and other price concessions that the Company receives from manufacturers or that otherwise impact payment available for drugs under federal or state healthcare programs, would not have a material adverse impact on the Company’s overall consolidated results of operations, financial position or cash flows. Longer term, funding for federal and state healthcare programs must consider the aging of the population; the growth in enrollees as eligibility is potentially expanded; the escalation in drug costs owing to higher drug utilization among seniors; the impact of the Medicare Part D benefit for seniors; the introduction of new, more efficacious but also more expensive medications; and the long-term financing of the entire Medicare program. Given competing national priorities, it remains difficult to predict the outcome and impact on us of any changes in healthcare policy relating to the future funding of the Medicare and Medicaid programs. Further, Medicare, Medicaid and/or private payor rates for pharmaceutical supplies and services may not continue to be based on current methodologies or remain comparable to present levels. Any future healthcare legislation or regulation impacting these rates may materially adversely affect the Company’s business. Changes in industry pricing benchmarks could materially impact our financial performance. Contracts and fee schedules in the prescription drug industry, including our contracts with various payors and fee schedules under state Medicaid programs, generally use certain published benchmarks to establish pricing for prescription drugs. These benchmarks include average wholesale price (“AWP”) and wholesale acquisition cost (“WAC”). Most of our contracts and fee schedules utilize the WAC or AWP standard. Recent events have raised uncertainties as to whether payors will continue to utilize AWP as it has previously been calculated or whether other pricing benchmarks will be adopted for establishing prices within the industry. Also, pursuant to the ACA, certain federal upper limit (“FUL”) prices for certain generic and multisource branded drugs under Medicaid which had been calculated using WAC will instead be calculated using average manufacturer price (“AMP”), which is a price reported by manufacturers to CMS. The ACA also changed certain definitions relating to AMP and other requirements for calculation of AMP and FULs. CMS has released, for review and comment only, draft FULs and related data, as well as its draft methodology for calculating such FULs. The Company has provided comments to CMS on various aspects of these draft FULs and methodology, including the Company's assessment that the draft weighted AMPs do not reflect the market prices at which these drugs can be acquired in the marketplace. The FUL methodology has not been finalized to date. CMS has also released proposed regulations relating to the calculation of AMP and FULs pursuant to the ACA changes, and in the same release has proposed that Medicaid reimbursement of drugs to which FULs do not apply be based upon an “actual acquisition cost” measure, with new requirements for Medicaid dispensing fees. The Company has submitted comments on these proposals. In addition, CMS has begun conducting a national survey of pharmacies to create a national average drug acquisition cost benchmark (“NADAC”), the results of which states may use to set pharmacy payment rates, and has released draft NADAC amounts for comment. The Company has submitted comments to CMS on various aspects of the proposed NADAC. CMS also has released for comment draft National Average Retail Price (NARP) data, which reflects prices paid for drugs to retail community pharmacies for individuals with Medicaid, cash paying customers, and those with certain third party insurance. Due to these and other uncertainties, we can give no assurance that the short- or long-term impact of changes to industry pricing benchmarks will not have a material adverse effect on our business and financial results in future periods. Our various projections, including earnings guidance for 2013, contemplate what we have estimated to be the most probable impact resulting from the short- or long-term impact of changes to industry pricing benchmarks. Actual results may be materially less favorable than those estimated in formulating such projections.

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Table of Contents If we fail to comply with licensure requirements, fraud and abuse laws, false claims provisions or other applicable laws, we may need to curtail operations, and could be subject to significant penalties. Our pharmacy business is subject to extensive and often changing federal, state and local regulations, and our pharmacies are required to be licensed in the states in which they are located or do business. While we continuously monitor the effects of regulatory activity on our operations and we currently have pharmacy licenses for each pharmacy we operate, the failure to obtain or renew any required regulatory approvals or licenses could adversely affect the continued operation of our business. In addition, we are subject to federal and state laws imposing registration, repackaging and labeling requirements on certain entities that repackage drugs for distribution; state and federal laws regarding the transfer and shipment of pharmaceuticals; and “drug pedigree” provisions requiring wholesale drug distributors to document a history of the transactions in a drug lot’s chain of distribution. We are also subject to federal and state laws that prohibit some types of direct and indirect payments between healthcare providers. These laws, commonly known as the fraud and abuse laws, prohibit payments intended to induce or encourage the referral of patients to, or the recommendation of, a particular provider of items or services. Violation of these laws can result in loss of licensure, civil and criminal penalties, and exclusion from the Medicaid, Medicare and other federal healthcare programs. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as governmental/regulatory authorities responsible for enforcing the laws and regulations to which we are subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. From time to time we receive government inquiries from federal and state agencies regarding compliance with various healthcare laws. There can be no assurance that the ultimate resolution of any such claims, inquiries or investigations, individually or in the aggregate, will not have a material adverse effect on our consolidated results of operations, financial position or cash flows. Moreover, Congress has enacted health reform legislation that expands federal health care fraud enforcement authorities. We cannot predict at this time the costs associated with compliance with such law. Our pharmacies are registered with the appropriate state and federal authorities pursuant to statutes governing the regulation of controlled substances. The Drug Enforcement Administration (“DEA”) increased scrutiny and enforcement of long-term care pharmacy practices under the federal Controlled Substances Act. We believe that this increased scrutiny and, in some cases, stringent interpretation of existing regulations, effectively changes longstanding practices for dispensing controlled substances in the long-term care facility setting. We have been required to modify the controlled substances dispensing procedures at certain of our pharmacies to comply with the regulations as currently interpreted by the DEA. Heightened enforcement of controlled substances regulations could increase the overall regulatory burden and costs associated with our pharmacy services. There can be no assurance that this heightened level of enforcement and such investigations or any other investigations, or any fines or other penalties resulting therefrom, will not materially adversely affect our results of operations, financial condition or cash flows. Federal and state laws that protect patient health and other personal information may increase our costs and limit our ability to collect and use that information. Our Company and the healthcare industry generally are required to comply with the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which mandates, among other things, the adoption of standards to enhance the efficiency and simplify the administration of the healthcare system. Many states have similar laws applicable to the Company. In many of our operations, we are a “covered entity” under HIPAA, and therefore required to comply in our operations with these standards and subject to significant civil and criminal penalties for failure to do so. We also provide services to customers that are healthcare providers themselves and we are required to provide satisfactory written assurances to those customers through our contractual agreements that we will provide our services in accordance with the requirements of the HIPAA standards. Failure to comply with these contractual agreements could lead to loss of customers, contractual liability to our customers and direct action by the federal government, including penalties. On January 17, 2013, the Office for Civil Rights of the Department of Health and Human Services released a major final rule modifying the HIPAA Privacy, Security, Breach and Enforcement Rules, including revisions made by the Health Information Technology for Economic and Clinical Health Act (“HITECH”). While we are still reviewing the extensive provisions of the rule, it generally appears to expand privacy and security requirements for business associates of entities that receive protected health information, increase penalties for noncompliance, and strengthen requirements for reporting of breaches, among other changes. The rule is effective March 23, 2013, and covered entities and business associates must comply with the applicable requirements of this final rule by September 23, 2013. We cannot determine at this time the cost of compliance with the new requirements. In addition to HIPAA, the Company works to ensure that it adheres to state privacy laws and other state privacy or health information requirements not preempted by HIPAA, including those which furnish greater privacy protection for the individual than HIPAA. We believe we fully comply with current HIPAA rules, including the associated changes to HIPAA pursuant to the HITECH Act, and similar state requirements; however, at this time we cannot estimate if future changes, if any,

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Table of Contents to the cost of compliance of the HIPAA and similar state standards will result in an adverse effect on our operations or profitability, or that of our customers. Like many health care providers, Omnicare maintains personal information concerning its patients. Such information is subject to increasing regulation designed to prevent or mitigate the effects of financial and medical identity theft. Our existing security measures may be insufficient to protect against attacks by hackers, cyber terrorism, computer viruses, telecommunications failures or other catastrophic events, any of which could result in a breach in the security of the confidential data that the Company maintains. The loss or improper exposure of personal data maintained by the Company could adversely impact the business and prospects of the Company, harm the Company's reputation and result in possible fines and sanctions and/or civil litigation by customers and affected individuals. There are costs and administrative burdens associated with ongoing compliance with information privacy and security laws. Failure to comply carries with it the risk of significant penalties and sanctions. Omnicare cannot predict at this time the costs associated with compliance, or the impact of such laws and regulations on the Company’s results of operations, cash flows or financial condition. We have substantial outstanding debt and could incur more debt in the future. Any failure to meet its debt obligations would adversely affect our business and financial condition. At December 31, 2012 , our total consolidated long-term debt accounted for approximately 37.0% of total capitalization. In addition, we and our subsidiaries may be able to incur substantial additional debt in the future. The instruments governing our current indebtedness contain restrictions on our incurrence of additional debt. These restrictions, however, are subject to a number of qualifications and exceptions, and under certain circumstances, we could incur substantial additional indebtedness in compliance with these restrictions, including in connection with potential acquisition transactions. Additionally, these restrictions do not prevent us from incurring obligations that do not constitute debt under the governing documents. The degree to which we are leveraged could have important consequences, including:

Our ability to make payments on and to refinance our debt will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, business, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available under our credit facilities in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. We may need to refinance all or a portion of our debt on or before maturity. We cannot assure you that we would be able to refinance any of our debt, including any credit facilities, on commercially reasonable terms or at all. We are subject to risks relating to our acquisition strategy. One component of our strategy contemplates our making selected acquisitions. Acquisitions involve inherent uncertainties. These uncertainties include our ability to consummate proposed acquisitions on favorable terms or at all, the effect on acquired businesses of integration into a larger organization, and the availability of management resources to oversee the operations of these businesses. Even though an acquired business may have experienced positive financial performance as an independent company prior to an acquisition, we cannot be sure that the business will continue to perform positively after an acquisition. We also may acquire businesses with unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations, and tax contingencies. We have policies and procedures to conduct reviews of potential acquisition candidates for compliance with healthcare laws and to adapt the acquired businesses to our standards and applicable laws. We also generally seek indemnification from sellers covering these matters. We may, however, incur material liabilities for past activities of acquired businesses.

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• a substantial portion of our cash flow from operations will be required to be dedicated to interest and principal payments and may not be available for operations, working capital, capital expenditures, expansion, acquisitions, dividends or general corporate or other purposes;

• our ability to obtain additional financing in the future may be impaired;

• we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage;

• our flexibility in planning for, or reacting to, changes in our business and industry may be limited; and

• our degree of leverage may make us more vulnerable in the event of a downturn in our business or in our industry or the economy in general.

Table of Contents We cannot be sure of the successful completion or integration of any acquisition, or that an acquisition will not have an adverse impact on our results of operations, cash flows or financial condition. We also may not realize any or all of the anticipated benefits of any acquisition. If we fail to comply with our Corporate Integrity Agreement, we could incur penalties or suffer other adverse consequences; there are costs associated with compliance. In 2009, the Company entered into an amended and restated Corporate Integrity Agreement (“CIA”), which requires, among other things, that the Company maintain and augment its compliance program in accordance with the terms of the agreement. Pursuant to the CIA, the Company is required, among other things, to (i) create procedures designed to ensure that each existing, new or renewed arrangement with any actual or potential source of health care business or referrals to Omnicare or any actual or potential recipient of health care business or referrals from Omnicare does not violate the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), or related regulations, directives and guidance, including creating and maintaining a database of such arrangements; (ii) retain an independent review organization to review the Company’s compliance with the terms of the CIA and report to the Office of Inspector General regarding that compliance; and (iii) provide training for certain Company employees as to the Company’s obligations under the CIA. The CIA continues the requirements of the Company’s prior corporate integrity agreement to create and maintain procedures designed to ensure that all therapeutic interchange programs are developed and implemented by Omnicare consistent with the CIA and federal and state laws for obtaining prior authorization from the prescriber before making a therapeutic interchange of a drug, and to maintain procedures for the accurate preparation and submission of claims for federal health care program beneficiaries, including beneficiaries in hospice programs. The requirements of the CIA have resulted in increased costs to maintain the Company’s compliance program and greater scrutiny by federal regulatory authorities. Violations of the CIA could subject the Company to significant monetary penalties or other adverse consequences. Consistent with the CIA, the Company reviews its contracts for compliance with applicable laws and regulations. We operate in highly competitive businesses. LTC is highly regionalized and, within a given geographic region of operations, highly competitive. Our largest competitor is PharMerica. In the geographic regions we serve, we also compete with numerous local and regional institutional pharmacies, pharmacies owned by long-term care facilities and local retail pharmacies. While we compete on the basis of quality, price, terms and overall cost-effectiveness, along with the clinical expertise, breadth of services, pharmaceutical technology and professional support we offer, competitive pressures may adversely affect our profitability and results of operations. SCG competes throughout the United States with drug wholesalers and pharmaceutical benefit management companies. While we compete on the basis of quality and overall cost effectiveness, along with the breadth of services and professional support we offer, competitive pressures may adversely affect our profitability and results of operations. Factors outside the Company's control could require us to record an asset impairment of goodwill. We are required to analyze goodwill and other intangible assets for impairment. Factors out of the Company's control, including, but not limited to the economic environment, Omnicare's market capitalization, and anticipated cash flows of the Company could require us to record an impairment charge for goodwill. The accounting guidance establishes a method of testing goodwill for impairment on an annual basis, or on an interim basis if an event occurs that would reduce the fair value of a reporting unit or an indefinite-lived intangible asset below its carrying value. As of December 31, 2012 , we had approximately $4.3 billion of goodwill which represented 60.9% of our total assets. If an impairment is found to exist, we will be required to record a non-cash asset impairment charge which could be significant. For additional information regarding our goodwill see the "Goodwill and Other Intangible Assets" note of the Notes to Consolidated Financial Statements and the Goodwill caption of our "Critical Accounting Policies" at Part II, Item 7 of this Filing. Implementation of our new enterprise resource planning information technology system may result in unexpected costs and business interruptions. We are currently designing and implementing, a new company-wide enterprise resource planning (ERP) software system with the objective of gradually migrating to the new system. Upon completion, this new system will replace our existing operating and accounting systems. Capital expenditures for our new ERP software system for fiscal 2013 and beyond will depend upon the pace of conversion of our legacy systems. The new ERP system is being implemented in phases spanning the next several years. The Company is beginning the implementation of the first phase at pilot locations beginning in early 2013 with rollouts to other locations beginning in the second half of 2013. If the implementation is not executed successfully, this could result in business interruptions. If we do not complete the implementation of the project timely and successfully, we may experience, among other

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Table of Contents things, additional costs associated with completing this project and a delay in our ability to improve existing operations, support future growth and enable us to take advantage of new applications and technologies. All of this may also result in a distraction of management's time, diverting their attention from our operations and strategy. ITEM 1B. – UNRESOLVED STAFF COMMENTS Not applicable. ITEM 2. – PROPERTIES Our facilities include offices, distribution centers, warehouses and other key operating facilities (such as institutional pharmacies) in various locations within the United States. At December 31, 2012 , the Company operated a total of 202 facilities. LTC has 189 facilities, 8 of which were owned, in 44 states within the U.S. (excluding Alaska, Hawaii, North Dakota, Wyoming, Vermont and Delaware) representing approximately 2.7 million square feet. SCG operates 9 leased facilities in South Carolina, Florida, Kentucky, Pennsylvania, Tennessee and Ohio, representing 0.6 million square feet. Our Corporate/Other segment has 4 leased facilities which includes the Company's headquarters in Cincinnati, Ohio and locations in Ohio, Kentucky, Pennsylvania and the District of Columbia, representing approximately 0.2 million square feet. We consider all of these facilities to be in good operating condition and generally to be adequate for present and anticipated needs. ITEM 3. - LEGAL PROCEEDINGS Information relating to certain legal proceedings in which Omnicare is involved is included in the “Commitments and Contingencies” note of the Notes to our Consolidated Financial Statements, included at Part II, Item 8, of this Filing and is incorporated herein by reference. ITEM 4. –MINE SAFETY DISCLOSURES Not applicable.

PART II

ITEM 5. - MARKET FOR THE REGISTRANT’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND IS SUER PURCHASES OF EQUITY SECURITIES Price Range of Common Stock; Holders of Record Our Common Stock is listed on the New York Stock Exchange, and the following table sets forth the ranges of high and low sales prices during each of the calendar quarters of 2012 and 2011 .

The number of holders of record of our Common Stock on January 31, 2013 was 2,057 . This amount does not include stockholders with shares held under beneficial ownership in nominee name or within clearinghouse positions of brokerage firms and banks.

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2012 2011

High Low High Low

First Quarter $36.26 $32.12 $30.89 $24.41

Second Quarter $36.48 $29.24 $33.01 $30.24

Third Quarter $36.28 $29.76 $32.99 $25.02

Fourth Quarter $36.81 $32.53 $35.27 $20.36

Table of Contents Stock Performance Graph The following graph compares the cumulative total return for the last five years on a $100 investment (assuming dividend reinvestment) on December 31, 2007 in each of the Common Stock of the Company, the Standard & Poor’s 500 Stock Index and the S&P 500 Health Care index.

Dividends On February 13, 2013 , the Board of Directors approved a quarterly cash dividend of 14 cents , for an indicated annual rate of 56 cents per common share for 2013, which is greater than the total annual dividend amount paid per common share for the 2012 and 2011 years (the quarterly dividends are presented in the "Summary of Quarterly Results " note of the Notes to Consolidated Financial Statements). It is presently intended that cash dividends on common shares will continue to be paid on a quarterly basis; however, there can be no assurances as future dividends are necessarily dependent upon our future earnings and financial condition and other factors not currently determinable. In addition, our senior credit facility and other agreements governing our indebtedness impose restrictions on our ability to pay dividends.

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December 31,

2007 2008 2009 2010 2011 2012

Omnicare, Inc. $ 100.00 $ 122.14 $ 106.77 $ 112.65 $ 153.64 $ 162.99 S&P 500 100.00 63.01 79.68 91.68 93.62 108.59 S&P 500 Health Care Index 100.00 77.21 92.42 95.10 107.21 126.39

Table of Contents Stock Repurchases A summary of Omnicare’s repurchases of the Company’s common stock during the quarter ended December 31, 2012 is as follows (in thousands, except per share data):

(a) During the fourth quarter of 2012 , the Company purchased 135 shares of Omnicare common stock in connection with its employee benefit plans, including purchases associated with the vesting of restricted stock awards. These purchases were not made pursuant to a publicly announced repurchase plan or program. (b) The following chart summarizes the Company's stock repurchase programs as approved by the Board of Directors in effect for the periods ended December 31, 2010 through December 31, 2012 (in thousands):

(c) On November 29, 2012 the Company entered into an accelerated share repurchase ("ASR") agreement with Goldman, Sachs & Co. ("Goldman") pursuant to which the Company will repurchase $250 million of its outstanding common stock, and received an initial delivery of approximately 5.8 million shares of its common stock from Goldman. The specific number of shares that the Company ultimately will repurchase under the ASR Agreement will be based generally on the average of the daily volume-weighted average price per share of the Company's common stock during a repurchase period, subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At settlement, under certain circumstances, Goldman may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to Goldman. The ASR Agreement is part of the stock repurchase program authorized on September 12, 2012. For further description of the Company’s ASR Agreement, see the “Common Stock Repurchase” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. In the year ended December 31, 2012 , the Company repurchased approximately 10 million shares at an aggregate cost of approximately $339 million , for a cumulative amount of approximately 19.2 million shares and approximately $580 million through December 31, 2012 . Accordingly, the Company had approximately $220 million of share repurchase authority remaining as of December 31, 2012 after factoring the remaining $50 million equity forward contract from the ASR program. Additional information regarding our equity compensation plans is included at Items 8 and 12 of this Filing.

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Period Total Number of

Shares Purchased (a) Average Price Paid per

Share

Total Number of Shares Purchased as Part of

Publicly Announced Plans or Programs

Maximum Number (or Approximate Dollar Value) of Shares that Are Eligible To Be Purchased Under the

Plans or Programs (b)

October 1 - 31, 2012 — $ — — $ 498,011 November 1 - 30, 2012 (c) 6,776 34.28 6,642 219,963 December 1 - 31, 2012 1 36.40 — 219,963

Total 6,777 $ 34.28 6,642 $ 219,963

Date Approved Amount Approved Term Date Remaining Repurchase

Authority

May 3, 2010 $ 200,000 May 3, 2012 — May 26, 2011 $ 100,000 December 31, 2012 —

February 21, 2012 $ 200,000 February 28, 2014 — September 12, 2012 $ 350,000 December 31, 2014 $ 219,963

Table of Contents ITEM 6. - SELECTED FINANCIAL DATA The following table summarizes certain selected financial data and should be read in conjunction with our consolidated financial statements and related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included at Items 8 and 7, respectively, of this Filing. All amounts disclosed herein relate to the Company’s continuing operations unless otherwise stated. Five-Year Summary of Selected Financial Data Omnicare, Inc. and Subsidiary Companies (in thousands, except per share data)

ITEM 7. – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL C ONDITION AND RESULTS OF OPERATIONS (“MD&A”) The following discussion should be read in conjunction with the Consolidated Financial Statements, related notes and other financial information appearing elsewhere in this report. In addition, see the “Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information” caption below, as well as the “Risk Factors” previously discussed at Item 1A of this Filing. All amounts disclosed herein relate to the Company’s continuing operations unless otherwise stated. Executive Overview

Omnicare, Inc. ("Omnicare" or the "Company") is a leading healthcare services company that specializes in the management of complex pharmaceutical care. The Company operates two primary businesses, Long-Term Care Group ("LTC") and Specialty Care Group (" SCG "), each serving a different customer population but sharing a common objective: advancing health outcomes at the lowest possible cost. Through LTC, Omnicare is the nation's largest provider of pharmaceuticals and related pharmacy and ancillary services to long-term care facilities as well as chronic care facilities and other settings. SCG provides specialty pharmacy, commercialization services for the biopharmaceutical industry and end-of-life pharmaceutical care management for hospice care agencies. Omnicare leverages its specialized clinical capabilities and innovative technology solutions across both primary businesses as key components of the value we believe we provide to our customers. Omnicare services customers across the United States. Through LTC, Omnicare operates the largest institutional pharmacy business in North America, as measured in both revenues and the number of beds served. Due to the size and scope of LTC, we believe we have unique cost advantages, especially pertaining to the sourcing of pharmaceuticals. The scale of our operations has also provided us the opportunity to make investments in proprietary automation technology to reduce our dispensing costs while improving the accuracy and consistency of our service delivery. LTC's customers consist of skilled nursing facilities (“SNFs”), assisted living facilities (“ALFs”), independent living

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For the years ended or at December 31,

2012 2011 2010 2009 2008

INCOME STATEMENT DATA:

Net sales $ 6,160,388 $ 6,182,922 $ 6,030,670 $ 6,001,053 $ 5,992,450 Income from continuing operations 194,874 161,532 14,464 234,695 129,699 Diluted earnings per common share - continuing operations 1.73 1.41 0.13 2.00 1.10 Dividends per common share 0.42 0.1525 0.11 0.09 0.09 Diluted weighted average number of common shares outstanding 112,988 114,781 116,927 117,777 118,313

BALANCE SHEET DATA (at end of period): Cash and cash equivalents $ 454,213 $ 580,262 $ 494,484 $ 275,707 $ 214,666 Total assets 6,989,264 7,193,110 7,311,520 7,272,211 7,398,352 Long-term debt (excluding current portion), net of swap 2,030,030 1,968,274 2,106,758 1,980,239 2,352,822 Stockholders' equity 3,505,712 3,795,436 3,818,761 3,878,810 3,657,686

OTHER FINANCIAL DATA:

Net cash flows from operating activities of continuing operations $ 544,484 $ 549,399 $ 368,903 $ 480,715 $ 433,589 Capital expenditures (99,920 ) (62,806 ) (23,517 ) (29,231 ) (57,041 )

Table of Contents communities, hospitals, correctional facilities, and other healthcare service providers. In light of a customer mix that is heavily penetrated in the senior market, we have a high level of insight into geriatric pharmaceutical care. At December 31, 2012 , LTC provided our pharmacy services in 47 states in the United States (“U.S.”) as well as the District of Columbia and also served approximately 970 thousand beds. LTC comprised approximately 79% of the Company’s total net sales during the year ended December 31, 2012 , and dispensed approximately 114.3 million prescriptions. SCG touches a broad spectrum of the healthcare continuum, serving the needs of biopharmaceutical manufacturers, physicians, nurses, caregivers and patients. Our services are largely centered on the specialty pharmaceutical market. These services are based on five platforms: brand support services, supply chain solutions, patient support services, specialty pharmacy and disease management for end-of-life care. Our brand support services, supply chain solutions and patient support services are integrated, fee-for-service platforms which focus on helping the drug manufacturer market, distribute and obtain reimbursement for their products. In our specialty pharmacy platform, we provide dispensing of specialized pharmaceuticals that are high cost, have complex reimbursement and supply chain challenges, have limited patient populations and are not available through normal retail channels. These specialized drugs deal primarily with specific categories of drugs and disease states, such as rheumatoid arthritis, multiple sclerosis, oncology and growth hormones. In our end-of-life care platform, Omnicare provides hospice care pharmaceutical management. SCG accounted for approximately 21% of the Company’s total net sales during the year ended December 31, 2012 . Omnicare believes it has an attractive business model, with a market leadership position in the long-term care market, and its relative position in the growing specialty care market supported by strong cash flows. Omnicare believes its business model is appropriately aligned with its customers, payors and patients; many of the factors that benefit the Company, such as new low-cost generic introductions and more accurate and efficient automation technologies, also have a favorable effect on the Company's key constituencies. Because of this factor, Omnicare believes it can play a role in solving our country's healthcare cost dilemma while striving for positive patient outcomes. Effective September 11, 2012 the Company's Board of Directors ("BOD") appointed John L. Workman as the Chief Executive Officer of the Company. Mr. Workman was also appointed to serve on the BOD as of such date. Mr. Workman's appointment follows the Board's previous acceptance of John Figueroa's resignation as CEO and a Director of the Company. The Company's BOD also appointed Nitin Sahney, Chief Operating Officer, to the additional position of President, and appointed Robert O. Kraft, Senior Vice President of Finance, to the position of Senior Vice President and Chief Financial Officer, in each case effective September 11, 2012. In 2012, SCG continued it's rapid growth, driven by strong performance across all platforms. Further, recently launched generic drugs generated savings to Omnicare's LTC customers and Omnicare, serving to more than offset the infrastructure and human capital investments as well as payor driven reimbursement reductions within LTC. The Company did experience a decrease in beds served in 2012 due primarily to the loss of a large, low margin correctional facility customer as well as the termination of several legacy accounts for collections and related issues. During 2012, the Company's BOD authorized an additional aggregate $550 million in share repurchases and also increased the quarterly cash dividend to $0.14 per share on the Company's common stock, a 100% increase over the previous quarterly dividend rate of $0.07 per share. Also, on November 29, 2012, the Company entered into an accelerated share repurchase ("ASR") program with Goldman, Sachs & Co. ("Goldman") pursuant to which the Company will repurchase $250 million of its outstanding common stock. The ASR program is part of the Company's previously disclosed share repurchase program and is expected to be completed in the first half of 2013. Also during 2012, the Company completed an amendment and extension of its senior unsecured credit agreement (as amended and restated, the "Credit Facility") with more favorable overall pricing. The Credit Facility consists of a $300 million five-year senior unsecured revolving credit facility (the "Revolving Credit Facility") and a $425 million, five-year senior unsecured term loan facility (the "Term Loan"). Further, during 2012, Omnicare entered into separate, privately negotiated exchange agreements under which, effective April 3, 2012, the Company retired $256.9 million in aggregate principal amount of outstanding 3.75% Convertible Senior Subordinated Notes due 2025 (the "2025 Notes") in exchange for its issuance of $390 million in aggregate principal amount of new 3.75% Convertible Senior Subordinated Notes due 2042 (the "2042 Notes"). In connection with the issuance of the 2042 Notes, the Company also entered into capped call transactions with a counterparty, which are intended to reduce potential dilution upon conversion of the 2042 Notes. In the year ended December 31, 2012 the Company completed the disposition of its Canadian pharmacy and the Company's pharmacy operational software business which were not considered, individually or in the aggregate, significant to the operations of Omnicare. The Company recorded a net gain on the disposition of these businesses of $ 1.8 million , which is reflected in the "Other charges" caption of the Consolidated Statements of Comprehensive Income.

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Table of Contents For further description of the Company’s business activities, see the “Business” caption of Part I, Item 1, of this Filing. Outlook Historically, Omnicare's growth was driven largely by acquisitions. The Company has shifted its focus to become more operationally driven and customer-focused in an effort to make the organization more efficient and establish consistent organic growth. The Company's strategy has three key priorities:

Beginning in 2010, Omnicare instituted a number of structural and organizational changes that began to impact the customer experience with the initial focus on retention. The Company has seen results from this focus on retention levels, but believes much more can be done in this area by creating a foundation from which the Company can achieve operational excellence. Starting in June 2012, the Company began the implementation of a multi-phase plan with the additional goal of achieving consistent organic growth. This plan involves improving operations at under performing locations and the application of a sales transformation model. The Company began implementing and executing on this sales transformation model in late 2012 and also began to add new sales talent to the organizational structure, while also launching a sales training program across the organization. The final phase is strategic and long-term and consists of analyzing the results of the other phases and optimizing a strategy to align the Company to longer-term industry trends. The Company has made operating progress in the last half of 2012 and believes it will be in a better position to leverage its operational structure and further enhance its value proposition to potential and existing customers by the second half of 2013. Just as Omnicare has invested in the underlying operations within LTC, it has similarly repositioned its SCG to better capitalize on the attractive growth characteristics within the specialty pharmaceutical market. Until late 2010, the businesses that now encompass Omnicare's SCG operated nearly independently, realizing few synergies from our other businesses. Since creating SCG, however, these businesses have reported into a single management team that is focused on better leveraging the assets of these specialty care businesses. Beginning in 2011, the Company made a number of organizational investments in SCG to further advance capabilities while improving sales results, especially in the fee-for-service operating platforms (third party logistics, brand support services, patient assistance programs). Through these efforts, Omnicare built a manufacturer-focused sales organization, and the Company is encouraged by the results of this group which has seen significant growth in sales and operating profit since the realignment. The specialty care industry is out pacing the broader pharmaceutical industry, and the Company believes its recent investments in SCG will position us well to maximize our opportunities within this rapidly growing market. In addition to repositioning its two primary businesses for organic growth, Omnicare has made a number of recent investments to improve the efficiency of its operations while improving dispensing and thereby enhancing patient care. Specifically, the Company is in the process of transitioning from two primary billing-and-dispensing systems to one new technology platform. While this is a multi-year integration, the Company currently expects to benefit from this initiative beginning in 2013. Separately, Omnicare is also piloting several new automation capabilities within its pharmacies and on site at its customer facilities. If the pilots are successful, these initiatives are expected to have a broader launch in mid-2013 and would then be expected to positively impact profitability beginning in 2014. Omnicare believes a continued focus on standardizing its operations, both within LTC and SCG, will be a source of earnings growth while also adding to the cost advantage the Company possesses over most of its competitors. In addition to the Company's internally driven growth objectives, there are certain pharmaceutical market dynamics and demographic developments that may continue to alter the landscape of the industries in which Omnicare competes. Specifically, both generic drugs and specialty pharmaceuticals have steadily increased their respective shares of the overall market, and Omnicare believes it is positioned well to capitalize on the continued developments in both areas. With respect to generic drugs, Omnicare uses its direct sourcing infrastructure to maintain a purchasing advantage while rapidly converting residents to newly available generic alternatives. Because Omnicare generally makes a higher profit on generic drugs than branded alternatives, the Company believes its interests are fully aligned with its customers and payors; as Omnicare benefits from these lower cost alternatives, so do its customers, payors and the residents it serves. Numerous branded drugs the Company dispenses in high volumes are expected to lose patent exclusivity over the next few years, creating an attractive growth opportunity for Omnicare while also enabling its customers to better manage through any industry cost pressures. With respect to specialty pharmaceuticals, a number of new treatment alternatives have become available for such complicated therapeutic categories as multiple sclerosis and rheumatoid arthritis. Omnicare believes that, through SCG, it is well-positioned to benefit from the continued introduction of new large-molecule compounds and other specialty pharmaceutical therapies. As

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• Establish consistent net organic growth in LTC • Continue growth momentum in SCG • Efficient allocation of capital/return of capital to shareholders

Table of Contents more of these products enter the market, the Company believes the demand for commercialization services, such as reimbursement support and third party logistics, will continue to increase. Demographic trends indicate that demand for long-term care will increase well into the middle of this century as the elderly population grows significantly. Moreover, those over 65 years old consume a disproportionately high level of healthcare services, including prescription drugs, when compared with the under-65 population. There is widespread consensus that appropriate pharmaceutical care is generally considered the most cost-effective form of treatment for the chronic ailments afflicting the elderly while also improving the quality of life. These factors are expected to result in a meaningful increase in demand for the geriatric pharmaceutical industry as a potential means to permit our country to maintain the level of services provided under its government-sponsored healthcare programs while ensuring healthcare costs are contained. In order to fund this growing demand, the Company believes that the government and the private sector will continue to review, assess and possibly alter healthcare delivery systems and payment methodologies. While it cannot at this time predict the ultimate effect of any of these initiatives on Omnicare’s business, management believes that the Company’s expertise in geriatric pharmaceutical care and pharmaceutical cost management position Omnicare to help meet the challenges of today’s healthcare environment, although changes in government reimbursement regulations could significantly adversely impact our operating results. In addition to any potential impacts associated with these regulatory and other matters, factors that could negatively impact the Company's future operating results include the impact of pricing adjustments, increasing competitive pressures, bed losses which may result from ongoing competition, and an increase in its payroll cost resulting from our operational initiatives. Consolidated Results of Operations

The following summary table presents consolidated financial information and results of operations of Omnicare as well as Adjusted operating income and Adjusted income from continuing operations (in thousands).

2012 vs. 2011 Net sales for the year were positively impacted by drug price inflation and growth in SCG . Offsetting these factors was the unfavorable sales impact of the increased availability and utilization of generic drugs, reductions in reimbursement coupled with competitive pricing issues, and a lower average number of beds served. See discussion of sales and operating income results in more detail at the “Long-Term Care Group Segment” and “Specialty Care Group Segment” captions below. Gross profit as a percentage of total net sales was 24.1% for the year ended December 31, 2012 , as compared with 22.3% in 2011 . Gross profit was favorably affected by the increased availability and utilization of higher margin generic drugs, cost reduction and productivity improvement initiatives, the favorable dollar effect of drug price inflation, as well as growth in the SCG segment. Partially offsetting these factors was certain of the aforementioned items that, individually, served to reduce net sales, primarily the reductions in reimbursement coupled with competitive pricing issues, increased payroll and employee benefit costs in connection with the Company’s initiatives to improve its organizational structure and a lower average number of beds served.

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For the years ended December 31,

2012 2011 2010

Net sales $ 6,160,388 $ 6,182,922 $ 6,030,670 Operating income 447,178 432,943 189,154 Adjusted operating income (a) 564,356 504,710 498,594 Income from continuing operations 194,874 161,532 14,464 Adjusted income from continuing operations (a) 287,870 244,108 247,315

(a) Adjusted operating income and Adjusted income from continuing operations exclude certain items not considered part of the core operating results of the Company and certain non-cash charges. Management believes that presenting these non-GAAP financial measures enhances investors' understanding of how management assesses the performance of the Company's businesses. Management uses non-GAAP measures for budgeting purposes, measuring actual results, allocating resources and in determining employee incentive compensation. Omnicare's method of calculating non-GAAP financial results may differ from those used by other companies and, therefore, comparability may be limited. See the “Special Items” caption of this MD&A for a description of the excluded items and a reconciliation of Adjusted operating income and Adjusted income from continuing operations to the most comparable GAAP financial measures.

Table of Contents Leveraging of fixed and variable overhead costs primarily relates to generating higher sales volumes from pharmacy facilities with no or limited increases in fixed costs (e.g., rent, depreciation, etc.) and negligible to moderate increases in variable costs (e.g., utilities, labor, etc.), as well as the elimination of pharmacies through the Company’s productivity and consolidation initiatives, further discussed below. The Company believes it will be able to continue to leverage fixed and variable overhead costs through both internal and acquired growth. Government and other reimbursement formulas generally adjust to take into account drug price inflation or deflation. In order to enhance its gross profit margins, the Company strategically allocates its resources to those activities that will increase internal sales growth and favorably impact sales mix, or will lower costs. In addition, through the ongoing development of its pharmaceutical purchasing programs, the Company is able to obtain discounts, rebates and other price concessions (“Discounts”) and thereby manage its pharmaceutical costs. Increased leverage in purchasing favorably impacts gross profit and is primarily derived through timing of brand to generic conversions and Discounts relating to purchases from the Company’s suppliers and vendors. When recognizing the related receivables associated with these Discounts, Omnicare accounts for these Discounts as a reduction of cost of goods sold and inventories. The Company records its estimates of Discounts earned during the period on the accrual basis of accounting, giving proper consideration to whether those Discounts have been earned based on the terms of applicable arrangements, and to the levels of inventories remaining on-hand. Receivables related to Discounts are regularly adjusted based on the best available information, and to actual amounts as the applicable arrangements are settled and cash is received. The aggregate amount of these adjustments has not been significant to the Company’s operations. Omnicare’s consolidated selling, general and administrative (“operating”) expenses as a percentage of net sales amounted to 13.3% in 2012 , versus the 12.5% experienced in the prior-year period. Operating expenses for the year ended December 31, 2012 were unfavorably impacted by increased payroll and employee benefit costs as well as other costs associated with Omnicare's initiatives to improve its organizational structure and customer service. Partially offsetting these factors was the continued progress in the Company’s non-drug purchasing program. Also, negatively impacting the rate is the reduction in net sales due to the impact of the increased availability and utilization of generic drugs. Interest expense, net of investment income, was lower in 2012 than the prior-year period primarily due to the refinancing activities completed in 2012 and 2011 and certain debt redemption costs recorded in 2011 which were higher than similar costs recorded in 2012. See additional information at the "Debt" note of the Notes to Consolidated Financial Statements. The effective tax rates are different than the federal statutory rates largely as a result of the impact of state and local income taxes and certain non-deductible litigation costs. The year over year change in the effective tax rate is primarily due to certain non-deductible charges relating to litigation settlements in 2011. See further discussion at the “Income Taxes” note of the Notes to Consolidated Financial Statements. 2011 vs. 2010 Net sales for the year were positively impacted by drug price inflation and growth in SCG . Partially offsetting these factors was the unfavorable sales impact of reductions in reimbursement coupled with competitive pricing issues and the increased availability and utilization of generic drugs. See discussion of sales and operating income results in more detail at the “Long-Term Care Group Segment” and “Specialty Care Group Segment” captions below. Gross profit as a percentage of total net sales was 22.3% for the year ended December 31, 2011 , as compared with 22.2% in 2010 . Gross profit was favorably impacted by the increased availability and utilization of higher margin generic drugs, cost reduction and productivity improvement initiatives, as well as the favorable dollar effect of drug price inflation. Partially offsetting these factors were the unfavorable impact of certain of the aforementioned items that, individually, served to reduce net sales, primarily the reductions in reimbursement coupled with competitive pricing issues and a lower average number of net beds served year-over-year as well as by increased payroll and employee benefit costs in connection with the Company's initiatives to improve its organizational structure. Omnicare’s consolidated selling, general and administrative (“operating”) expenses as a percentage of net sales amounted to 12.5% in 2011 , versus the 12.4% experienced in the prior-year period. Operating expenses for the year ended December 31, 2011 were favorably impacted by continued progress in the Company’s non-drug purchasing program which were offset primarily by increased payroll and employee benefit costs as well as other costs associated with Omnicare's initiatives to improve its organizational structure and customer service.

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Table of Contents The decrease in the provision for doubtful accounts in 2011 over 2010 was primarily due to the unfavorable impact in 2010 of the fourth quarter 2010 implementation of a different strategic approach for the resolution of past due accounts being disputed and/or in litigation, resulting in the Company recording an incremental charge of $48.5 million in 2010, which was partially offset by increased provisioning in 2011 under the new approach. Investment income for the year ended December 31, 2011 was lower than the amount earned in the comparable prior-year period due primarily to lower invested balances in the 2011 period, related largely to the liquidation of rabbi trust assets in the second half of 2010 and 2011 to fund payments to former participants in the Company's excess benefit plan, and lower rates earned on the Company's cash and cash equivalents. Interest expense was higher in 2011 than the prior-year period due primarily to certain debt redemption costs recorded in 2011, including tender premiums and the write-off of debt issuance costs, related to the Company's redemption of approximately $525 million of its outstanding 6.875% Senior Subordinated Notes, due 2015 (the "6.875% Notes"), and $250 million of its 6.125% Senior Subordinated Notes (the "6.125% Notes"). See additional information at the “Debt” note of the Notes to Consolidated Financial Statements. The effective tax rates are different than the federal statutory rates largely as a result of the impact of state and local income taxes and certain non-deductible litigation costs. The year-over-year change in the effective tax rate is primarily due to a larger reduction of income tax expense in 2010 compared to 2011 relating to the reversal of certain unrecognized tax benefits for tax positions settled through the expiration of statute of limitations. See further discussion at the “Income Taxes” note of the Notes to Consolidated Financial Statements. Long-Term Care Group Segment

2012 vs. 2011 LTC sales were favorably impacted by drug price inflation, which was more than offset by reductions in reimbursement primarily relating to maximum allowable costs ("MAC") coupled with competitive pricing issues related to our facilities contracts and a lower average number of beds served. Also unfavorably impacting sales was the increased availability and utilization of generic drugs. When a drug converts from brand to generic, the Company's cost goes down, and a portion of that savings is passed on to our customers, which also serves to reduce sales. While the Company is focused on reducing its costs to mitigate the impact of drug pricing and reimbursement issues, there can be no assurance that such issues or other pricing and reimbursement pressures will not adversely impact LTC. Operating income in 2012 was favorably impacted largely by the increased availability and utilization of higher margin generic drugs, cost reduction and productivity improvement initiatives, the favorable dollar effect of drug price inflation, as well as the year-over-year impact of various "special items" further discussed at the "Special Items" section of this MD&A. Operating income was unfavorably affected primarily by the operating income effect of certain of the aforementioned items that, individually, served to reduce net sales, primarily the reductions in reimbursement and pricing. 2011 vs. 2010 LTC sales were unfavorably impacted by reductions in reimbursement primarily relating to maximum allowable costs ("MAC") and federal upper limit changes ("FUL") coupled with competitive pricing issues related to our facilities contracts. Also unfavorably impacting sales was the increased availability and utilization of generic drugs. Operating income in 2011 was favorably impacted largely by the increased availability and utilization of higher margin generic drugs, cost reduction and productivity improvement initiatives as well as the favorable dollar effect of drug price inflation and the year over year impact of various "special items" further discussed at the "Special Items" section of this MD&A. Operating income

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For the years ended December 31,

2012 2011 2010

Net sales $ 4,848,341 $ 5,123,477 $ 5,175,730 Operating income $ 562,675 $ 476,800 $ 374,110 Beds served 970 1,010 1,023 Scripts dispensed 114,319 115,074 114,573

Table of Contents in 2011 was unfavorably affected primarily by the operating income effect of certain of the aforementioned items that, individually, served to reduce net sales, primarily the reductions in reimbursement and pricing. Specialty Care Group Segment

2012 vs. 2011 SCG sales were positively impacted primarily by higher drug utilization, higher prescription volumes and drug price inflation coupled with increased volume in programs with drug manufacturers. Favorable drug utilization was driven primarily from growth in the company's Multiple Sclerosis and Oncology therapies. Operating income was favorably affected primarily by the same factors as those impacting the net sales increase. Partially offsetting these factors was the unfavorable impact of mix within the SCG segment toward business with lower margins, competitive pricing pressures and investments in facilities and personnel in order to position the segment for future growth. 2011 vs. 2010 SCG sales were positively impacted primarily by higher drug utilization, higher prescription volumes and drug price inflation coupled with increased volume in programs with drug manufacturers. Operating income in 2011 was favorably affected primarily by the same factors as those impacting the net sales increase and the year-over-year impact of a $13.3 million asset impairment charge taken in the prior year related to the Company's hospice business. Partially offsetting these factors was the unfavorable impact of mix within the SCG segment toward business with lower margins and other competitive pricing pressures. Restructuring and Other Related Charges

See discussion at the “Restructuring and Other Related Charges” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. Special Items

Omnicare management believes that presenting certain non-GAAP financial measures, which exclude items not considered part of the core operating results of the Company and certain non-cash charges ("Special Items"), enhances investors' understanding of how Omnicare management assesses the performance of the Company's businesses. Omnicare management uses non-GAAP measures for budgeting purposes, measuring actual operating results, allocating resources and in determining employee incentive compensation. Omnicare's method of calculating non-GAAP financial results may differ from those used by other companies and, therefore, comparability may be limited. Financial results for the three years ended December 31, 2012 from continuing operations included the Special Items presented in the table below, which also contains a reconciliation of our non-GAAP amounts to their most directly comparable GAAP financial measure (in thousands, except per share amounts):

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For the years ended December 31,

2012 2011 2010

Net sales $ 1,301,761 $ 1,044,191 $ 838,790 Operating income $ 129,218 $ 98,938 $ 75,039

Table of Contents

Discontinued Operations

Net income for the year ended December 31, 2011 was negatively impacted by losses from the divestiture of discontinued operations. The loss from operations of the home healthcare and related ancillary businesses (the “Disposal Group”) and Tidewater (collectively the “Non-Core Disposal Group”) for the year ended December 31, 2011 in comparison to the same prior year period, primarily reflects the divestiture of the home infusion portion of the Disposal Group in November 2010 and the divestiture of Tidewater in April 2011. Additionally, during the year ended December 31, 2011 the Non-Core Disposal Group recorded an impairment loss of $23 million to reduce the carrying value of DME (the remaining portion of the Disposal Group) and Tidewater to fair value based on the final terms of the divestitures. For the year ended December 31, 2010, the Non-Core Disposal Group recorded an impairment loss of $10.3 million to reduce the carrying value of the Disposal Group to fair value as of December 31, 2010. The operating loss in the CRO Services portion of Discontinued Operations, in comparison to the same prior year period, was primarily due to the divestiture of the operations in early 2011. For the year ended December 31, 2011, CRO Services recorded an impairment loss of $50 million to reduce the carrying value of the CRO Services operations to fair value based on the final terms of the divestiture. The 2010 period includes a previously disclosed goodwill impairment loss of approximately $91 million. The operating loss in 2010 was attributable to lower levels of new business added, as well as early project terminations by clients and client-driven delays in the commencement of certain projects. See further discussion at the “Discontinued Operations” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing.

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For the years ended December 31,

2012 2011 2010

Settlement, litigation and other related charges (i) $ 49,375 $ 55,674 $ 113,709 Other charges (ii) 67,803 16,093 147,231 Provision for doubtful accounts (iii) — — 48,500

Subtotal - operating expense Special Items 117,178 71,767 309,440 Amortization of discount on convertible notes (iv) 24,073 24,195 29,536 Debt redemption costs - interest expense (iv) 12,363 25,491 14,297 Gain on sales of rabbi trust assets (v) — — (3,606 )

Total Special Items $ 153,614 $ 121,453 $ 349,667

Total Special Items - aftertax (vi) $ 92,996 $ 82,576 $ 232,851

Operating income $ 447,178 $ 432,943 $ 189,154 Operating expense Special Items 117,178 71,767 309,440

Adjusted operating income $ 564,356 $ 504,710 $ 498,594

Income from continuing operations $ 194,874 $ 161,532 $ 14,464 Total Special Items - aftertax 92,996 82,576 232,851

Adjusted income from continuing operations $ 287,870 $ 244,108 $ 247,315

(i) See further discussion at the “Commitments and Contingencies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing ("Notes to Consolidated Financial Statements").

(ii) See further discussion at the “Other Charges” caption of the “Description of Business and Summary of Significant Accounting Policies”note of the Notes to Consolidated Financial Statements.

(iii) See further discussion at the “Accounts Receivable” caption of the “Description of Business and Summary of Significant Accounting Policies” note of the Notes to Consolidated Financial Statements.

(iv) See further discussion at the “Debt” note of the Notes to Consolidated Financial Statements.

(v) See further discussion at the “Employee Benefit Plans” note of the Notes to Consolidated Financial Statements.

(vi) The tax effect was calculated by multiplying the tax-deductible pretax amounts by the appropriate effective tax rate.

Table of Contents Impact of Inflation

The Company estimates that the impact of drug price inflation on its cost of sales for its highest dollar products during the three years ended December 31, 2012 ranged between approximately 5% to 8%. However, the impact on Omnicare's net income is significantly lower, inasmuch as government and other reimbursement formulas, which impact sales, generally adjust to take into account drug price inflation or deflation. Financial Condition, Liquidity and Capital Resources

Cash and cash equivalents at December 31, 2012 were $455.3 million compared with $582.6 million at December 31, 2011 (including restricted cash amounts). The Company generated net cash flows from operating activities of continuing operations of $544.5 million during the year ended December 31, 2012 , compared with $549.4 million and $368.9 million during the years ended December 31, 2011 and 2010 , respectively. Operating cash flows in 2012 were used primarily for debt payments, acquisition-related payments, capital expenditures, stock repurchases and dividend payments. Net cash flows from operating activities during the year ended December 31, 2012 were unfavorably impacted primarily by the year-over-year change in accounts payable and a litigation settlement payment of $50 million in 2012 relating to the Company's settlement with the Drug Enforcement Agency, see further discussion at the “Commitments and Contingencies” note of the Notes to Consolidated Financial Statements. Net cash flows from operating activities were also impacted by a deposit made with our drug wholesaler in the fourth quarter of $45 million; the Company made an additional $19.8 million payment in the first quarter of 2013. Net cash flows from operating activities during the year ended December 31, 2011 were favorably impacted by the year-over-year change in net income, inventories, accounts payable and non-trade receivables, which was partially offset by the reduced favorable impact of trade accounts receivable in comparison to the prior year, as well as tender premiums relating to the Company's debt restructuring activities (see further information in the cash flows used in financing activities discussion below). Net cash flows from operating activities during the year ended December 31, 2010 were unfavorably impacted by the decrease in net income as well as the year-over-year change in inventories due to large inventory reductions in 2009. These unfavorable impacts were partially offset by a year-over-year reduction in accounts receivable as well as in the cash requirements relating to accounts payable activity. Favorably impacting operating cash flow was the excess of tax deductible interest expense over book interest expense related to the Company’s 4.00% Junior Subordinated Convertible Debentures, 3.25% Convertible Debentures and 3.75% Convertible Notes due 2025 and 2042. This resulted in an increase in the Company’s deferred tax liabilities during the year ended December 31, 2012 and 2011 of $15.0 million and $10.4 million , respectively ( $173 million cumulative as of December 31, 2012 ). The recorded deferred tax liability could, under certain circumstances, be realized in the future upon conversion or redemption of the debt, which would serve to reduce operating cash flows. Net cash used in investing activities of continuing operations was $139.3 million , $154.8 million and $125.5 million during the years ended December 31, 2012 , 2011 and 2010 , respectively. Acquisitions of businesses required outlays of $34.9 million (including amounts payable relating to pre- 2012 acquisitions) in 2012 relating to one acquisition. Acquisitions of businesses during 2011 and 2010 required cash payments of $101.9 million and $111.8 million , respectively. The 2012 , 2011 and 2010 acquisition related outlays were funded primarily by operating cash flows. In the year ended December 31, 2012 the Company received $19.2 million for the divestiture of its Canadian pharmacy and the Company's pharmacy operational software business. In the year ended December 31, 2011, the Company had net cash flows of approximately $13.1 million primarily relating to the divestiture of its CRO Services, Medical Equipment and Tidewater group purchasing businesses. Omnicare’s capital requirements, in addition to the payment of debt and dividends, are primarily comprised of its acquisition program and capital expenditures. The Company's capital expenditures were $99.9 million , $62.8 million and $23.5 million for the years ended December 31, 2012, 2011 and 2010, respectively. The increase relates to investment in information technology systems, primarily related to the Company's ongoing investment in the business to improve operations and customer service. Net cash used in financing activities was $531.2 million , $308.8 million and $24.6 million during the years ended December 31, 2012 , 2011 and 2010 , respectively. In 2012, the Company amended and restated its credit facility providing for more favorable overall pricing and an extension of the maturity date. The new facility consists of a $300 million, five-year senior unsecured revolving credit facility and a $425 million, five-year senior unsecured term loan facility. The credit agreement also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the commitments under the credit agreement by up to $300 million in the aggregate. The Company's obligations under the credit agreement are unsecured and are guaranteed by the subsidiaries of the Company, subject to certain exemptions. The credit agreement will mature on September 28, 2017. The interest rate applicable to the credit agreement is, at the Company's option, a floating base rate plus an applicable margin or the London interbank offered rate (LIBOR) plus an applicable margin. At December 31, 2012, the interest

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Table of Contents rate on the term loan was 1.97% . The applicable margins for the credit agreement may increase or decrease based on the Company's consolidated total leverage ratio as specified in the credit agreement. Also, during 2012 , the Company entered into separate, privately negotiated exchange agreements under which, effective April 3, 2012, the Company retired $ 256.9 million in aggregate principal amount of outstanding 2025 Notes in exchange for its issuance of $390 million in aggregate principal amount of new 2042 Notes. The Company also redeemed $25 million of its 3.25% convertible senior debentures, due 2035. During 2011, the Company completed the issuance of an additional $150 million aggregate principal amount of its 7.75% Senior Subordinated Notes due 2020, redeemed $525 million of the 6.875% Senior Subordinated Notes due 2015 and redeemed $250 million of its 6.125% senior subordinated notes, due 2013. In 2010, the Company completed the issuance of $400 million aggregate principal amount of 7.75% Senior Subordinated Notes, due 2020, using the proceeds to purchase all $225 million of the Company’s 6.75% senior subordinated notes, due 2013. Also in 2010, the Company completed the issuance of $575 million of 3.75% Convertible Senior Subordinated Notes, due 2025, using a portion of the proceeds to purchase $525 million of the Company’s 3.25% Convertible Debentures, which resulted in an economic gain (calculated as the difference between the $525 million face value of the extinguished debt and the actual amount paid by the Company to repurchase the debt of approximately $499 million) of approximately $26 million (even though the Company was required to recognize an accounting loss of $25.6 million due to its application of the authoritative guidance for convertible debt). Further during 2010, the Company paid off the remaining $125 million on the senior term A loan component of the 2005 Credit Facility. At December 31, 2012 , there were no outstanding borrowings on the 2012 Revolving Credit Facility and $420 million outstanding on the Term Loan. As of December 31, 2012 , the Company had approximately $11 million outstanding relating to standby letters of credit, substantially all of which are subject to automatic annual renewals. The following chart summarizes the Company's stock repurchase programs as approved by the Board of Directors in effect for the periods ended December 31, 2010 through December 31, 2012 (in thousands):

As part of the share repurchase program, on November 29, 2012, the Company entered into an accelerated share repurchase ("ASR") agreement with Goldman, Sachs & Co. ("Goldman") pursuant to which the Company will repurchase $250 million of outstanding common stock. Pursuant to the ASR Agreement, the Company made a $250 million payment to Goldman on November 30, 2012 and received an initial number of approximately 5.8 million shares of its outstanding common stock from Goldman on the same day. The specific number of shares that the Company ultimately will repurchase under the ASR Agreement will be based generally on the average of the daily volume-weighted average price per share of the Company's common stock during a repurchase period, subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At settlement, under certain circumstances, Goldman may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to Goldman. The transaction is expected to be completed during the first half of 2013. The Company had approximately $220 million of share repurchase authority remaining as of December 31, 2012 , considering the remaining $50 million equity forward contract related to the ASR . In the year ended December 31, 2012 , the Company repurchased approximately 10 million shares (including shares pursuant to the ASR agreement) at an aggregate cost of approximately $339 million , for a cumulative amount of approximately 19.2 million shares and approximately $580 million through December 31, 2012 . In the year ended December 31, 2011 the Company repurchased approximately 4.8 million shares at an aggregate cost of approximately $140 million . In the year ended December 31, 2010 the Company repurchased approximately 4.4 million share at an aggregate cost of approximately $101 million . On February 13, 2013 , the Company’s Board of Directors declared a quarterly cash dividend of 14 cents per share for an indicated annual rate of 56 cents per common share for 2013, which is greater than the annual dividends paid per common share for the 2012 and 2011 years. Aggregate dividends of $45.2 million paid during 2012 were higher than the $17.2 million paid in 2011 and

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Date Approved Amount Approved Term Date Remaining Repurchase

Authority

May 3, 2010 $ 200,000 May 3, 2012 — May 26, 2011 $ 100,000 December 31, 2012 —

February 21, 2012 $ 200,000 February 28, 2014 — September 12, 2012 $ 350,000 December 31, 2014 $ 219,963

Table of Contents the $12.8 million paid in 2010 , due primarily to an increase in dividends paid per common share to 42 cents in 2012 as compared to 15 cents and 11 cents per common share paid in 2011 and 2010 , respectively. There were no known material commitments and contingencies outstanding at December 31, 2012 , other than the contractual obligations summarized in the “Disclosures About Aggregate Contractual Obligations and Off-Balance Sheet Arrangements” caption below, certain acquisition-related payments potentially due in the future, including deferred payments, indemnification payments and payments originating from earnout and other provisions that may become payable, as well as the matters discussed in the “Commitments and Contingencies” note of the Notes to Consolidated Financial Statements, and the “Legal Proceedings” section at Part I, Item 3 of this Filing. The Company believes that net cash flows from operating activities, credit facilities and existing cash balances will be sufficient to satisfy its future working capital needs, acquisition contingency commitments, debt servicing, capital expenditures and other financing requirements for at least the next year, although no such assurances can be given in that regard. Additionally, the Company believes that external sources of financing, including short- and long-term debt financings, are available. Omnicare may not be able to refinance maturing debt at terms that are as favorable as those from which the Company previously benefited or at terms that are acceptable to Omnicare. In addition, no assurances can be given regarding the Company’s ability to obtain additional financing in the future. Disclosures About Aggregate Contractual Obligations and Off-Balance Sheet Arrangements

Aggregate Contractual Obligations: The following summarizes the Company’s aggregate contractual obligations as of December 31, 2012 , and the effect such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in thousands):

As of December 31, 2012 , the Company had approximately $11 million outstanding relating to standby letters of credit, substantially all of which are subject to automatic annual renewals. Off-Balance Sheet Arrangements: As of December 31, 2012 , the Company had two unconsolidated entities, Omnicare Capital Trust I (the “Old Trust”) and Omnicare Capital Trust II (the “New Trust”), which were established for the purpose of facilitating the offerings of the 4.00% Trust Preferred Income Equity Redeemable Securities due 2033 (the “Old Trust PIERS”) and the Series B 4.00% Trust Preferred Income Equity Redeemable Securities (the “New Trust PIERS”), respectively. For financial reporting purposes, the Old Trust and New Trust are treated as equity method investments of the Company. The Old Trust and New Trust are 100%-owned finance subsidiaries of the Company. The Company has fully and unconditionally guaranteed the securities of the Old Trust and New Trust. The Old 4.00%

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Total Less Than 1

Year 1-3 Years 4-5 Years After 5 Years

Debt obligations $ 2,450,242 $ 21,250 $ 42,500 $ 355,938 $ 2,030,554 Capital lease obligations 23,685 6,463 11,683 5,539 — Operating lease obligations 119,044 28,367 47,487 27,795 15,395 Purchase obligations 29,876 21,149 4,802 3,925 — Other current obligations 207,574 207,574 — — — Other long-term obligations 51,315 2,448 34,573 3,739 10,555

Subtotal 2,881,736 287,251 141,045 396,936 2,056,504 Future interest relating to debt and capital lease obligations (a) 1,423,548 89,950 179,562 176,387 977,649

Total contractual cash obligations $ 4,305,284 $ 377,201 $ 320,607 $ 573,323 $ 3,034,153

(a) Represents estimated future interest costs based on the stated fixed interest rate of the debt, or the variable interest rate in effect at period end for variable interest rate debt. The estimated future interest costs presented in this table do not include any amounts potentially payable associated with the contingent interest and interest reset provisions of the Company’s convertible debentures and notes, as applicable. To the extent that any debt would be paid off by Omnicare prior to the stated due date or refinanced, the estimated future interest costs would change accordingly. Further, these analyses do not consider the effects of potential changes in the Company’s credit rating on future interest costs, changes in variable interest rates, as well as any tax effects associated with the Company’s interest costs.

Table of Contents Debentures issued by the Company to the Old Trust and the 4.00% Convertible Debentures issued by the Company to the New Trust in connection with the issuance of the Old Trust PIERS and the New Trust PIERS, respectively, are presented as a single line item in Omnicare’s consolidated balance sheets and debt footnote disclosures. Additionally, the related disclosures concerning the Old Trust PIERS and the New Trust PIERS, the guarantees, and the Old 4.00% Debentures and 4.00% Convertible Debentures are included in the “Debt” note of the Notes to Consolidated Financial Statements. Omnicare records interest payable to the Old Trust and New Trust as interest expense in its consolidated statement of income. As of December 31, 2012 , the Company had no other unconsolidated entities, or any financial partnerships, such as entities often referred to as structured finance or special purpose entities, which might have been established for the purpose of facilitating off-balance sheet arrangements. Quantitative and Qualitative Disclosures about Market Risk

Omnicare’s primary market risk exposure relates to variable interest rate risk through its variable interest debt and swap agreements related to certain of the Company’s borrowings. Accordingly, market risk loss is primarily defined as the potential loss in earnings due to higher interest rates for certain debt of the Company. The modeling technique used by Omnicare for evaluating interest rate risk exposure involves performing sensitivity analysis on the variable-rate debt, assuming a change in interest rates of 100 basis-points. Among the Company’s debt obligations is $420 million outstanding under the variable-rate Senior Term Loan, due 2017, at an interest rate of 1.97% at December 31, 2012 (a 100 basis point change in the interest rate would increase or decrease interest expense by approximately $4.2 million per year). In connection with its offering of $400 million of 7.75% Senior Notes during 2010 and the additional $150 million in 2011, the Company entered into Swap Agreements on all $550.0 million of its aggregate principal amount of the 7.75% Senior Notes (the “7.75% Swap Agreements”). Under the 7.75% Swap Agreements, which are designed to effectively lower the Company's cost, but subject the Company to variable interest rate risk, the Company receives a fixed rate of 7.75% and pays a floating rate based on LIBOR with a maturity of six months, plus a weighted average spread of 4.27%. The weighted average estimated LIBOR-based floating rate (including the 4.27% spread) was 4.77% at December 31, 2012 (a 100 basis-point change in the interest rate would increase or decrease interest expense by approximately $5.5 million per year).

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Table of Contents The fair value of the Company’s fixed-rate debt facilities is based on quoted market prices in an active market (Level 1) and is summarized as follows (in thousands):

Fair Value of Financial Instruments

See further discussion of the Company’s debt, swap agreements and derivative instruments at the “Debt” and “Fair Value” notes of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. The Company does not have any financial instruments held for trading purposes. Critical Accounting Policies

The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP. In connection with the preparation of these financial statements, Omnicare management is required to make assumptions, judgments, and estimates that affect the reported amounts of assets, liabilities, stockholders' equity, revenues and expenses and the related disclosure of commitments and contingencies. On a regular basis, the Company evaluates its critical estimates giving consideration to a combination of factors, including historical experience, current conditions, feedback from outside advisors where feasible, and on various other assumptions that are believed to be reasonable at the time and under the current circumstances. The Company's significant accounting policies are summarized in the “Description of Business and Summary of Significant Accounting Policies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not require significant management judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. An accounting policy is considered to be critical if it is important to the determination of the registrant’s financial position and operating results, and requires significant judgment and estimates on the part of management in its application. If actual results were to differ materially from the judgments and estimates made, the Company’s reported financial position and/or operating results could be materially affected. The Company believes the following critical accounting policies and estimates involve more significant judgments and estimates used in the preparation of the consolidated financial statements. Revenue Recognition In general, Omnicare recognizes revenue when products are delivered or services are rendered or provided to the customer, prices are fixed and determinable and collection is reasonably assured.

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December 31, 2012 December 31, 2011

Financial Instrument: Book Value Market Value Book Value Market Value

7.75% senior subordinated notes, due 2020, gross $ 550,000 $ 614,600 $ 550,000 $ 591,300 3.75% convertible senior subordinated notes, due 2025

Carrying value 204,608 — 361,345 — Unamortized debt discount 113,446 — 213,655 — Principal amount 318,054 459,600 575,000 816,500

4.00% junior subordinated convertible debentures, due 2033 Carrying value 206,266 — 203,675 — Unamortized debt discount 138,734 — 141,325 — Principal amount 345,000 331,600 345,000 318,800

3.25% convertible senior debentures, due 2035 Carrying value 377,782 — 384,799 — Unamortized debt discount 49,718 — 67,701 — Principal amount 427,500 425,400 452,500 404,600

3.75% convertible senior debentures, due 2042 Carrying value 229,624 — — — Unamortized debt discount 160,376 — — — Principal amount 390,000 397,100 — —

Table of Contents A significant portion of the Company’s revenues from sales of pharmaceutical and medical products are reimbursed by the federal Medicare Part D plan and, to a lesser extent, state Medicaid programs. Payments for services rendered to patients covered by these programs are generally less than billed charges. The Company monitors its revenues and receivables from these reimbursement sources, as well as other third-party insurance payors, and records an estimated contractual allowance for sales and receivable balances at the revenue recognition date, to properly account for anticipated differences between billed and reimbursed amounts. Accordingly, the total net sales and receivables reported in the Company’s financial statements are recorded at the amount ultimately expected to be received from these payors. Since billing functions for a portion of the Company’s revenue systems are largely computerized, enabling on-line adjudication (i.e., submitting charges to Medicare, Medicaid or other third-party payors electronically, with simultaneous feedback of the amount to be paid) at the time of sale to record net revenues, exposure to estimating contractual allowance adjustments is limited primarily to unbilled and/or initially rejected Medicare, Medicaid and third-party claims (typically approved for reimbursement once additional information is provided to the payor). For the remaining portion of the Company’s revenue systems, the contractual allowance is estimated for all billed, unbilled and/or initially rejected Medicare, Medicaid and third-party claims. The Company evaluates several criteria in developing the estimated contractual allowances on a monthly basis, including historical trends based on actual claims paid, current contract and reimbursement terms, and changes in customer base and payor/product mix. Contractual allowance estimates are adjusted to actual amounts as cash is received and claims are settled, and the aggregate impact of these resulting adjustments were not significant to the Company’s operations for any of the periods presented. Further, Omnicare does not expect the effects of a change in estimate related to unsettled December 31, 2012 contractual allowance amounts from Medicare, Medicaid and third-party payors to be significant to its future consolidated results of operations, financial position and cash flows. Patient co-payments are associated with Medicare Part D, certain state Medicaid programs, Medicare Part B and certain third-party payors and are typically not collected at the time products are delivered or services are rendered, but are billed to the individual as part of the Company’s normal billing procedures. These co-payments are subject to the Company’s normal accounts receivable collections procedures. Under certain circumstances, the Company accepts returns of medications and issues a credit memo to the applicable payor. The Company estimates and accrues for sales returns based on historical return experience, giving consideration to the Company’s return policies. Product returns are processed in the period received and are not significant when compared to the overall sales and gross profit of the Company. Allowance for Doubtful Accounts Collection of accounts receivable from customers is the Company’s primary source of operating cash flow and is critical to Omnicare’s operating performance, cash flows and financial condition. Omnicare’s primary collection risk relates to facility and private pay customers, as billings to these customers can be complex and may lead to disputes and/or delays in payments. The Company provides a reserve for accounts receivable considered to be at increased risk of becoming uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. Omnicare establishes this allowance for doubtful accounts and considers such factors as historical collection experience (i.e., payment history and credit losses) and creditworthiness, specifically identified credit risks, aging of accounts receivable by payor category, current and expected economic conditions and other relevant factors. Management reviews this allowance for doubtful accounts on an ongoing basis for appropriateness. Judgment is used to assess the collectability of account balances and the economic ability of customers to pay. The allowance for doubtful accounts as of December 31, 2012 was $269.4 million , compared with $358.7 million at December 31, 2011 . The allowance for doubtful accounts represented 23.9% and 27.8% of gross receivables (net of contractual allowance adjustments) as of December 31, 2012 and December 31, 2011 , respectively. The decrease in the allowance for doubtful accounts is related to an increase in write-offs of accounts receivable balances prior to the implementation of the Company's new ERP system. Unforeseen future developments could lead to changes in the Company’s provision for doubtful accounts levels and future allowance for doubtful accounts percentages, which could materially impact the overall financial results, financial position or cash flows of the Company. For example, a one percentage point increase in the allowance for doubtful accounts as a percentage of gross receivables as of December 31, 2012 would result in an increase to the provision for doubtful accounts and related allowance for doubtful accounts of approximately $11.3 million . Patient charges pending approval from Medicare, Medicaid and third-party payors are primarily billed as private pay and, where applicable, are recorded net of an estimated contractual allowance at period end. Once an approval to bill Medicare, Medicaid and/or third-party payors has been obtained, the private pay balance is reversed and a corresponding Medicare, Medicaid or third-party receivable amount is recorded. The Company’s policy is to resolve accounts receivable with pending status as soon as practicable. Pending accounts receivable balances were not a significant component of the overall accounts receivable balance at December 31, 2012 .

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Table of Contents Omnicare has standard policies and procedures for collection of its accounts receivable. The Company’s collection efforts generally include the mailing of statements, followed up when necessary with delinquency notices, personal and other contacts, the use of an in-house national collections department or outside collection agencies, and potentially mediation/arbitration or litigation when accounts are considered unresponsive. Omnicare’s collection efforts primarily relate to its facility and private pay customers, as well as efforts to collect/rework Medicare Part D copays and rejected claims. When Omnicare becomes aware that a specific customer is potentially unable to meet part or all of its financial obligations, for example, as a result of bankruptcy or deterioration in the customer’s operating results or financial position, the national credit and collections department includes the exposed balance in its allowance for doubtful accounts requirements. At such time that a balance is definitively deemed to be uncollectible, the balance is written off against the allowance for doubtful accounts. At December 31, 2012 , the Company does not have a significant portion of its overall accounts receivable balance placed in mediation/arbitration, litigation or with outside collection agencies. Given the Company's experience, management believes that the aggregate reserves for potential losses are adequate, but if any of the Company's larger customers were to unexpectedly default on their obligations to Omnicare, the Company’s overall allowances for doubtful accounts may prove to be inadequate. In particular, if economic conditions worsen, the payor mix shifts significantly or the Company's customers' reimbursement rates are adversely affected, impacting Omnicare’s customers' ability to pay their bills, management may adjust the allowance for doubtful accounts accordingly, and the Company’s accounts receivable collections, cash flows, financial position and results of operations would be adversely affected. See further discussion at the “Accounts Receivable” caption of the “Description of Business and Summary of Significant Accounting Policies”note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. Goodwill The Company has adopted the revised authoritative guidance regarding the testing for goodwill impairment which allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that the fair value of a reporting unit is less than the carrying amount then the Company would perform the two step goodwill impairment test. The first step, used to identify potential impairment, is a comparison of the reporting unit's estimated fair value to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of the impairment, if any. The second step requires the Company to calculate an implied fair value of goodwill at the reporting unit level. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. The Company's 2012 annual goodwill impairment analysis included an assessment of certain qualitative factors including, but not limited to, macroeconomic, industry and market conditions; cost factors that have a negative effect on earnings; overall financial performance; the movement of the Company's share price; and other relevant entity and reporting unit specific events. The Company considered the qualitative factors and weighted the evidence obtained and determined that it is not more likely than not that the fair value of any reporting unit is less than its carrying amount. In 2011, the Company performed its annual goodwill impairment analysis under the same guidance and, except for the CRO goodwill impairment charge discussed at the "Discontinued Operations" note of the Notes to Consolidated Financial Statements, concluded that goodwill had not been impaired. Although the Company believes the factors considered in the impairment analysis are reasonable, significant changes in any one of our assumptions could produce a significantly different result. Taxes The Company estimates its current and deferred tax assets and liabilities, including those relating to acquired subsidiaries, based on current tax laws in the statutory jurisdictions in which it operates. These estimates include judgments about deferred tax assets and liabilities resulting from temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities, as well as the realization of deferred tax assets (including those relating to net operating losses). The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are expected to be settled or realized. Omnicare periodically reviews its deferred tax assets for recoverability and establishes a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on the Company’s expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing

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Table of Contents temporary differences is based on current tax law and Omnicare’s tax methods of accounting. If the Company is unable to generate sufficient future taxable income by jurisdiction, or if there is a material change in the actual effective tax rates or the time period within which the underlying temporary differences become taxable or deductible, or if the tax laws change unfavorably, then the Company could be required to increase its valuation allowance against its deferred tax assets, resulting in an increase in the effective tax rate and related tax expense. The Company also reviews its tax liabilities, including those relating to acquired subsidiaries, giving consideration to the relevant authoritative guidance, including accounting for uncertainty in income taxes, which provides guidance for the financial statement recognition and measurement of income tax positions taken or expected to be taken in a tax return. Under this authoritative guidance, recognition and measurement are considered discrete events. The recognition threshold is met when it is determined a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by the relevant taxing authority. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is 50 percent likely of being realized upon ultimate resolution with a taxing authority. Omnicare operates in a significant number of states and tax jurisdictions with varying tax laws. The Company is subject to both federal and state audits of tax returns in the normal course of business. While the Company believes it has provided adequately for tax liabilities in its consolidated financial statements, adverse determinations by applicable taxing authorities could have a material adverse effect on Omnicare’s consolidated financial position, results of operations or cash flows. If the provisions for current or deferred taxes is not adequate, if the Company is unable to realize certain deferred tax assets or if the tax laws change unfavorably, the Company could potentially experience tax losses. Likewise, if provisions for current and deferred taxes are in excess of those eventually needed, if the Company is able to realize additional deferred tax assets or if tax laws change favorably, the Company could experience potential tax gains. A one percentage point change in the Company's overall 2012 , 2011 and 2010 effective tax rates would impact tax expense and net income by $3.1 million , $2.7 million and $0.3 million , respectively. Legal Contingencies As part of its ongoing operations, the Company is subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as governmental/regulatory authorities responsible for enforcing the laws and regulations to which the Company is subject (and including reviews of individual Omnicare pharmacies' reimbursement documentation and administrative practices). Oftentimes, these inspections, audits, investigations and inquiries relate to prior periods, including periods predating Omnicare’s actual ownership of a particular acquired unit. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. The Company from time to time receives government inquiries from federal and state agencies regarding compliance with various healthcare laws. In addition, the Company is involved with various legal actions arising in the normal course of business. At any point in time, the Company is in varying stages of discussions on these matters. Each quarter, the Company reviews, including consultation with its outside legal advisors where applicable, the status of inspections, audits, inquiries, investigations, legal claims and legal proceedings and assesses its potential financial exposure. Omnicare records accruals for such contingencies to the extent that the Company concludes that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. To the extent the amount of a probable loss is estimable only by reference to a range of equally probable outcomes, and no amount within the range appears to be a better estimate than any other amount, the low end of the range is accrued. These matters are continuously being evaluated and, in many cases, are being contested by the Company and the outcome is not predictable. The inherently unpredictable nature of legal proceedings may be exacerbated by various factors from time to time, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. Because of inherent uncertainties related to these matters, the use of estimates, assumptions, judgments and external factors beyond the Company's control, accruals are based on the best information available at the time. As additional information becomes available, Omnicare reassesses the potential liability related to any pending inspections, audits, inquiries, investigation, claims and litigation and may revise its estimated exposure upward or downward accordingly, including any related disclosure. Such revision in the estimates of the potential liabilities could have a material impact on the Company's consolidated financial statements. Information pertaining to legal proceedings is further discussed at the “Commitments and Contingencies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing.

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Table of Contents Recently Issued Accounting Standards Information pertaining to recently issued accounting standards is further discussed at the “Recently Issued Accounting Standards” caption of the “Description of Business and Summary of Significant Accounting Policies” note of the Notes to Consolidated Financial Statements at Part II, Item 8, of this Filing. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information

In addition to historical information, this report contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements regarding the intent, belief or current expectations regarding the matters discussed or incorporated by reference in this document (including statements as to “beliefs,” “expectations,” “anticipations,” “intentions” or similar words) and all statements which are not statements of historical fact. Such forward-looking statements, together with other statements that are not historical, are based on management’s current expectations and involve known and unknown risks, uncertainties, contingencies and other factors that could cause results, performance or achievements to differ materially from those stated. The most significant of these risks and uncertainties are described in the Company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission and include, but are not limited to: overall economic, financial, political and business conditions; trends in the long-term healthcare and pharmaceutical industries; the ability to attract new clients and service contracts and retain existing clients and service contracts; the ability to consummate pending acquisitions on favorable terms or at all; trends for the continued growth of the Company’s businesses; trends in drug pricing; delays and reductions in reimbursement by the government and other payors to customers and to the Company; the overall financial condition of the Company’s customers and the ability of the Company to assess and react to such financial condition of its customers; the ability of vendors and business partners to continue to provide products and services to the Company; the successful integration of acquired companies and realization of contemplated synergies; the continued availability of suitable acquisition candidates; the ability to attract and retain needed management; competition for qualified staff in the healthcare industry; variations in demand for the Company’s products and services; variations in costs or expenses; the ability to implement productivity, consolidation and cost reduction efforts and to realize anticipated benefits; the potential impact of legislation, government regulations, and other government action and/or executive orders, including those relating to Medicare Part D, including its implementing regulations and any subregulatory guidance; reimbursement and drug pricing policies and changes in the interpretation and application of such policies, including changes in calculation of average wholesale price; discontinuation of reporting average wholesale price, and/or implementation of new pricing benchmarks; legislative and regulatory changes impacting long term care pharmacies; government budgetary pressures and shifting priorities; federal and state budget shortfalls; efforts by payors to control costs; changes to or termination of the Company’s contracts with pharmaceutical benefit managers, Medicare Part D Plan sponsors and/or commercial health insurers or to the proportion of the Company’s business covered by specific contracts; the outcome of disputes and litigation; potential liability for losses not covered by, or in excess of, insurance; the impact of executive separations; the impact of benefit plan terminations; the impact of differences in actuarial assumptions and estimates as compared to eventual outcomes; events or circumstances which result in an impairment of assets, including but not limited to, goodwill and identifiable intangible assets; the final outcome of divestiture activities; market conditions; the outcome of audit, compliance, administrative, regulatory, or investigatory reviews; volatility in the market for the Company’s stock and in the financial markets generally; access to adequate capital and financing; tax laws and regulations; changes in accounting rules and standards; the impacts of potential cybersecurity risks and/or incidents; costs to comply with the Company’s Corporate Integrity Agreements; and unexpected costs and interruptions from the implementation of our new information technology system. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, the Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as otherwise required by law, the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. ITEM 7A. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information required under this Item is set forth in the “Quantitative and Qualitative Disclosures about Market Risk” caption at Part II, Item 7, of this Filing.

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Table of Contents ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DA TA Index to Consolidated Financial Statements and Financial Statement Schedule

All other financial statement schedules are omitted because they are not applicable or because the required information is shown elsewhere in

the Consolidated Financial Statements or Notes thereto.

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PAGE

Financial Statements:

Report of Independent Registered Public Accounting Firm

37

Consolidated Statements of Comprehensive Income (Loss)

38

Consolidated Balance Sheets 39

Consolidated Statements of Cash Flows

40

Consolidated Statements of Stockholders' Equity

41

Notes to Consolidated Financial Statements

42

Financial Statement Schedule

II - Valuation and Qualifying Accounts S-2

Table of Contents

Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Omnicare, Inc. In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Omnicare, Inc. and its subsidiaries at December 31, 2012 and 2011 , and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP Cincinnati, Ohio February 19, 2013

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LO SS) OMNICARE, INC. AND SUBSIDIARY COMPANIES

(in thousands, except per share data)

The Notes to Consolidated Financial Statements are an integral part of these statements.

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For the years ended December 31,

2012 2011 2010

Net sales $ 6,160,388 $ 6,182,922 $ 6,030,670 Cost of sales 4,676,983 4,805,825 4,694,440 Gross profit 1,483,405 1,377,097 1,336,230 Selling, general and administrative expenses 819,642 773,835 747,608 Provision for doubtful accounts 99,407 98,552 136,630 Settlement, litigation and other related charges 49,375 55,674 113,709 Other charges 67,803 16,093 149,129 Operating income 447,178 432,943 189,154 Interest expense, net of investment income (135,103 ) (160,118 ) (155,646 )

Income from continuing operations before income taxes 312,075 272,825 33,508 Income tax provision 117,201 111,293 19,044 Income from continuing operations 194,874 161,532 14,464 Loss from discontinued operations — (74,608 ) (120,573 )

Net income (loss) $ 194,874 $ 86,924 $ (106,109 )

Earnings (loss) per common share - Basic: Continuing operations $ 1.78 $ 1.43 $ 0.12 Discontinued operations — (0.66 ) (1.04 )

Net income (loss) $ 1.78 $ 0.77 $ (0.91 )

Earnings (loss) per common share - Diluted: Continuing operations $ 1.73 $ 1.41 $ 0.13 Discontinued operations — (0.65 ) (1.03 )

Net income (loss) $ 1.73 $ 0.76 $ (0.91 )

Weighted average number of common shares outstanding: Basic 109,531 113,000 116,348

Diluted 112,988 114,781 116,927

Other comprehensive income (loss), net of tax

Cumulative translation adjustment 1,384 (4,691 ) (3,807 )

Unrealized appreciation (depreciation) in fair value of investments (151 ) (1,274 ) 924 Amortization of pension benefit gain and actuarial loss (1,363 ) (7 ) 33,437

Total other comprehensive income (loss), net of tax (130 ) (5,972 ) 30,554

Comprehensive income (loss) 194,744 80,952 (75,555 )

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CONSOLIDATED BALANCE SHEETS OMNICARE, INC. AND SUBSIDIARY COMPANIES

(in thousands, except share data)

The Notes to Consolidated Financial Statements are an integral part of these statements.

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December 31,

2012 2011

ASSETS

Current assets:

Cash and cash equivalents $ 454,213 $ 580,262 Restricted cash 1,066 2,336 Accounts receivable, less allowances of $269,416 (2011-$358,713) 857,052 931,314 Inventories 385,698 419,378 Deferred income tax benefits 136,186 153,444 Other current assets 254,644 210,637

Total current assets 2,088,859 2,297,371 Properties and equipment, at cost less accumulated depreciation of $228,890 (2011-$299,900) 282,660 225,257 Goodwill 4,256,959 4,250,579 Identifiable intangible assets, less accumulated amortization of $236,116 (2011-$246,200) 196,873 235,270 Other noncurrent assets 163,913 184,633

Total noncurrent assets 4,900,405 4,895,739

Total assets $ 6,989,264 $ 7,193,110

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:

Accounts payable $ 200,125 $ 273,768 Accrued employee compensation 73,791 61,019 Current debt 27,713 26,447 Other current liabilities 180,385 178,833

Total current liabilities 482,014 540,067 Long-term debt, notes and convertible debentures 2,030,030 1,968,274 Deferred income tax liabilities 914,660 838,857 Other noncurrent liabilities 56,848 50,476

Total noncurrent liabilities 3,001,538 2,857,607 Total liabilities 3,483,552 3,397,674

Commitments and contingencies (Note 17) Stockholders' equity:

Preferred stock, no par value, 1,000,000 shares authorized, none issued and outstanding — — Common stock, $1 par value, 200,000,000 shares authorized, 133,503,156 shares issued (2011-131,756,500 shares issued) 133,503 131,757

Paid-in capital 2,419,970 2,488,941 Retained earnings 1,801,075 1,651,829 Treasury stock, at cost- 28,851,671 shares (2011-18,132,600 shares) (846,016 ) (484,123 )

Accumulated other comprehensive (loss) income (2,820 ) 7,032 Total stockholders' equity 3,505,712 3,795,436

Total liabilities and stockholders' equity $ 6,989,264 $ 7,193,110

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CONSOLIDATED STATEMENTS OF CASH FLOWS OMNICARE, INC. AND SUBSIDIARY COMPANIES

(in thousands) For the years ended December 31,

2012 2011 2010

Cash flows from operating activities:

Net income (loss) $ 194,874 $ 86,924 $ (106,109 )

Loss from discontinued operations — 74,608 120,573 Adjustments to reconcile net income (loss) to net cash flows from operating activities:

Depreciation 51,932 47,053 46,096 Amortization 84,009 86,079 104,450 Write-off of debt issuance costs 12,466 6,012 6,636 Debt redemption tender offer premium — (19,582 ) (7,591 )

Asset impairment charges — — 22,884 Benefit plan termination and related costs — — 25,187 Loss on debt extinguishment 35,092 — 25,552 Deferred tax provision 95,742 62,909 22,952

Changes in assets and liabilities, net of effects from acquisition and divestiture of businesses: Accounts receivable, net of provision for doubtful accounts 80,080 100,584 198,863 Inventories 37,736 4,994 (34,676 )

Current and noncurrent assets 17,110 120,360 38,966 Accounts payable (69,423 ) 26,351 (44,638 )

Accrued employee compensation 12,476 1,595 21,451 Current and noncurrent liabilities (7,610 ) (48,488 ) (71,693 )

Net cash flows from operating activities of continuing operations 544,484 549,399 368,903 Net cash flows from (used in) operating activities of discontinued operations — 623 (288 )

Net cash flows from operating activities 544,484 550,022 368,615 Cash flows from investing activities:

Acquisition of businesses, net of cash received (34,873 ) (101,933 ) (111,812 )

Divestiture of businesses, net 19,207 13,099 — Capital expenditures (99,920 ) (62,806 ) (23,517 )

Marketable securities (25,018 ) — — Transfer of cash to trusts for employee health and severance costs, net of payments out of the trust 1,326 (275 ) 11,082 Other (56 ) (2,874 ) (1,259 )

Net cash flows used in investing activities of continuing operations (139,334 ) (154,789 ) (125,506 )

Net cash flows used in investing activities of discontinued operations — (622 ) (546 )

Net cash flows used in investing activities (139,334 ) (155,411 ) (126,052 )

Cash flows from financing activities: Payments on term loans (24,688 ) (5,625 ) (125,000 )

Proceeds from long-term borrowings and obligations 425,000 600,000 975,000 Payments on long-term borrowings and obligations (453,573 ) (777,609 ) (726,533 )

Capped call transaction (48,126 ) — — Fees paid for financing activities (7,566 ) (13,780 ) (33,249 )

Increase (decrease) in cash overdraft balance (14,927 ) 11,674 18,221 Payments for Omnicare common stock repurchases (388,968 ) (140,127 ) (100,942 )

Proceeds (payments) for stock awards and exercise of stock options, net of stock tendered in payment 24,951 30,712 (13,989 )

Dividends paid (45,214 ) (17,217 ) (12,839 )

Other 1,912 3,140 (5,289 )

Net cash flows used in financing activities (531,199 ) (308,832 ) (24,620 )

Net (decrease) increase in cash and cash equivalents (126,049 ) 85,779 217,943 Less increase (decrease) in cash and cash equivalents of discontinued operations — 1 (834 )

(Decrease) increase in cash and cash equivalents of continuing operations (126,049 ) 85,778 218,777 Cash and cash equivalents at beginning of year 580,262 494,484 275,707

The Notes to Consolidated Financial Statements are an integral part of these statements.

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Cash and cash equivalents at end of year $ 454,213 $ 580,262 $ 494,484

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY OMNICARE, INC. AND SUBSIDIARY COMPANIES (in thousands, except per share data)

The Notes to Consolidated Financial Statements are an integral part of these statements.

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Common

Stock Paid-in Capital

Retained Earnings

Treasury Stock

Accumulated Other

Comprehensive Income

Total Stockholders'

Equity

Balance at January 1, 2010 $ 127,825 $ 2,269,905 $ 1,701,437 $ (205,017 ) $ (15,340 ) $ 3,878,810 Dividends paid ($0.11 per share) — — (12,839 ) — — (12,839 )

Stock acquired/issued for benefit plans — — — 68 — 68 Stock option exercises and amortization/forfeitures 386 12,153 — — — 12,539 Common stock repurchase — — — (100,942 ) — (100,942 )

Stock awards/issuance, net of amortization/forfeitures 1,423 36,837 — (27,663 ) — 10,597 Adjustment to deferred tax convertible debt adjustment — 106,083 — — — 106,083 Net (loss) — — (106,109 ) — — (106,109 )

Other comprehensive income (loss), net of tax 0 0 0 0 30,554 30,554 Balance at December 31, 2010 129,634 2,424,978 1,582,489 (333,554 ) 15,214 3,818,761

Dividends paid ($0.1525 per share) — — (17,217 ) — — (17,217 )

Stock acquired/issued for benefit plans — — — (14 ) — (14 )

Stock option exercises and amortization/forfeitures 1,565 40,466 — (21 ) — 42,010 Common stock repurchase — — — (140,127 ) — (140,127 )

Stock awards/issuance, net of amortization/forfeitures 558 23,497 (19 ) (10,407 ) — 13,629 Translation adjustment recorded as loss on sale of CRO — — — — (2,210 ) (2,210 )

Other — — (348 ) — — (348 )

Net income — — 86,924 — — 86,924 Other comprehensive income (loss), net of tax — — — — (5,972 ) (5,972 )

Balance at December 31, 2011 131,757 2,488,941 1,651,829 (484,123 ) 7,032 3,795,436 Dividends paid ($0.42 per share) — — (45,214 ) — — (45,214 )

Stock acquired/issued for benefit plans — — — 39 — 39 Stock option exercises, amortization/forfeitures and adjustments 1,295 50,093 — (232 ) — 51,156 Common stock repurchase — — — (339,117 ) — (339,117 )

Purchase of capped call — (48,126 ) — — — (48,126 )

Debt exchange — (54,546 ) — — — (54,546 )

Equity forward contract — (50,000 ) — — — (50,000 )

Stock awards/issuance, net of amortization/forfeitures 451 33,608 (414 ) (22,583 ) — 11,062 Translation adjustment recorded on divestiture of business — — — — (9,722 ) (9,722 )

Net income — — 194,874 — — 194,874 Other comprehensive income (loss), net of tax — — — — (130 ) (130 )

Balance at December 31, 2012 $ 133,503 $ 2,419,970 $ 1,801,075 $ (846,016 ) $ (2,820 ) $ 3,505,712

Table of Contents Notes to Consolidated Financial Statements Note 1 - Description of Business and Summary of Significant Accounting Policies Description of Business Omnicare, Inc. ("Omnicare" or the "Company") is a leading healthcare services company that specializes in the management of complex pharmaceutical care. The Company operates two primary businesses, Long-Term Care Group ("LTC") and Specialty Care Group (" SCG "), each serving a different customer population but sharing a common objective: advancing health outcomes at the lowest possible cost. Through LTC, Omnicare is the nation's largest provider of pharmaceuticals and related pharmacy and ancillary services to long-term care facilities as well as chronic care facilities and other settings. SCG provides specialty pharmacy, commercialization services for the biopharmaceutical industry and to end-of-life pharmaceutical care management for hospice care agencies. Omnicare leverages its specialized clinical capabilities and innovative technology solutions across both primary businesses as key components of the value Omnicare believes it provides to its customers. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Omnicare consolidates entities in which the Company is the primary beneficiary, in accordance with the authoritative guidance regarding the consolidation of variable interest entities. All significant intercompany accounts and transactions have been eliminated in consolidation. Translation of Foreign Financial Statements Assets and liabilities of the Company’s foreign operations were translated at the year-end rate of exchange, and the income statements were translated at average rates of exchange. Gains or losses from translating foreign currency financial statements were accumulated in a separate component of stockholders’ equity. With the disposition of its Canadian pharmacy in the third quarter of 2012, the Company has no foreign operations as of December 31, 2012 . Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Carrying values of cash and cash equivalents approximate fair value due to the short-term nature of these instruments. Omnicare maintains amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and the Company has not experienced any losses on such deposits. Restricted Cash Restricted cash primarily represents cash transferred to separate irrevocable trusts for settlement of employee health and severance costs, and cash collected on behalf of third parties. Fair Value of Financial Instruments The Company applies the authoritative guidance for fair value measurements, which defines a hierarchy prioritizing the inputs used in fair value measurements. “Level 1” measurements use quoted prices in active markets for identical assets or liabilities. “Level 2” measurements use significant observable inputs. “Level 3” measurements use significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available. See further discussion at the “Fair Value” note of the Notes to Consolidated Financial Statements. Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of interest-bearing cash and cash equivalents, accounts receivable and fixed to floating interest rate swap agreements.

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Table of Contents The Company is exposed to credit risk in the event of default by the financial institutions or issuers of cash and cash equivalents to the extent recorded on the Consolidated Balance Sheets. Specifically, at any given point in time, the Company has cash on deposit with financial institutions, and cash invested in high quality short-term money market funds and/or U.S. government-backed repurchase agreements, generally having original maturities of three months or less, in order to minimize its credit risk. The Company establishes allowances for doubtful accounts based on various factors, including historical credit losses and specifically identified credit risks. Management reviews the allowances for doubtful accounts on an ongoing basis for appropriateness. For the years ended December 31, 2012 , 2011 and 2010 , no single customer accounted for 10% or more of revenues. The Company generally does not require collateral from its customers relating to the extension of credit in the form of accounts receivable balances. In 2012 , approximately one-half of Omnicare’s pharmacy services billings were directly reimbursed by government-sponsored programs. These programs include primarily federal Medicare Part D and, to a lesser extent, the state Medicaid programs. The remainder of Omnicare’s billings were paid or reimbursed by individual residents or their responsible parties (private pay), facilities and other third-party payors, including private insurers. A portion of these revenues also are indirectly dependent on government programs. The table below represents the Company’s approximated payor mix (as a % of annual sales) for the last three years ended:

(a) Includes payments from SNFs on behalf of their federal Medicare program-eligible residents (Medicare Part A) and for other services and supplies, as well as payments from third-party insurers and private pay.

Accounts Receivable The following table is an aging of the Company’s December 31, 2012 and 2011 gross accounts receivable (net of allowances for contractual adjustments, and prior to allowances for doubtful accounts), aged based on payment terms and categorized based on the four primary overall types of accounts receivable characteristics (in thousands):

During the fourth quarter 2010, Omnicare implemented a Company-wide Reorganization Program. Among other changes, this program has resulted in numerous senior management and other organizational leadership changes, including a realignment of division presidents for LTC and change in its Office of General Counsel. As a result of these activities and the performance of its year end closing process, the Company reassessed the allowance for doubtful accounts for facility receivables and concluded that an incremental charge of $ 48.5 million was necessary. The key factors leading to management’s change in estimate relate primarily

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December 31,

2012 2011 2010

Private pay, third-party and facilities (a) 39 % 41 % 42 %

Federal Medicare program (Part D & Part B) 50 % 47 % 46 %

State Medicaid programs 7 % 9 % 9 %

Other sources 4 % 3 % 3 %

Totals 100 % 100 % 100 %

December 31, 2012 Current and 0-180

Days Past Due 181 Days and Over Past Due Total

Medicare (Part D and Part B), Medicaid

and Third-Party payors $ 238,348 $ 163,773 $ 402,121 Facility payors 383,848 168,945 552,793 Private Pay payors 70,835 100,719 171,554 Total gross accounts receivable $ 693,031 $ 433,437 $ 1,126,468 December 31, 2011

Medicare (Part D and Part B), Medicaid and Third-Party payors $ 257,782 $ 199,303 $ 457,085

Facility payors 387,509 204,419 591,928 Private Pay payors 85,934 155,080 241,014

Total gross accounts receivable $ 731,225 $ 558,802 $ 1,290,027

Table of Contents to a decision in the fourth quarter of 2010 to implement a different strategic approach for the resolution of past due accounts which are disputed and/or currently in litigation. In particular, this new approach includes a heightened focus on settling outstanding accounts receivable disputes and the avoidance of protracted costly and often disruptive litigation with customers, where possible. As a result of this change in approach, the Company believes it will have reduced opportunities to monetize disputed receivables through litigation, increasing the risk of uncollectible accounts receivable. Further, many state medicaid agencies are experiencing budgetary and monetary pressures which could cause them to delay payments. Notes Receivable The Company periodically enters into notes receivable from its customers. These notes receivable and the related allowance for losses are recorded in the “Other Current Assets” and “Other Non-Current Assets” captions of the Consolidated Balance Sheets, and are not considered material to the consolidated financial position of the Company. The Company assesses and monitors credit risk associated with notes receivable through review of the customer’s net worth, payment history, long-term debt ratings and/or other information available from recognized credit rating services. The receivables are periodically assessed for significant changes in credit ratings or other information indicating an increase in exposure to credit risk. Historic losses on notes receivable have not been material. Inventories Inventories consist primarily of purchased pharmaceuticals and medical supplies held for sale to customers and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Physical inventories are typically performed on a monthly basis at all pharmacy sites, and in all cases the Company’s policy is to perform them at least once a quarter. Cost of goods sold is recorded based on the actual results of the physical inventory counts. The Company receives discounts, rebates and/or other price concessions (“Discounts”) relating to purchases from its suppliers and vendors. When recognizing the related receivables associated with the Discounts, Omnicare accounts for these Discounts as a reduction of cost of goods sold and inventories. The Company records its estimates of Discounts earned during the period on the accrual basis of accounting, giving proper consideration to whether those Discounts have been earned based on the terms of applicable arrangements, and to the levels of inventories remaining on-hand. Receivables related to Discounts are regularly adjusted based on the best available information, and to actual amounts as cash is received and the applicable arrangements are settled. Historical estimates have not differed materially from actual results. Properties and Equipment Properties and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are charged to expense as incurred. Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to 10 years for computer equipment and software, machinery and equipment, and furniture and fixtures. Buildings and building improvements are depreciated over 40 years , and leasehold improvements are amortized over the lesser of the initial lease terms or their useful lives. The Company capitalizes certain costs that are directly associated with the development of internally developed software, representing the historical cost of these assets. Once the software is completed and placed into service, such costs are amortized over the estimated useful lives, ranging from three to 10 years . Leases Rental payments under operating leases are expensed. Leases that substantially transfer all of the benefits and risks of ownership of property to Omnicare or otherwise meet the criteria for capitalization are accounted for as capital leases. An asset is recorded at the time a capital lease is entered into together with its related long-term obligation to reflect its purchase and financing. Property and equipment recorded under capital leases are depreciated on the same basis as previously described. Valuation of Long-Lived Assets Long-lived assets such as property and equipment, software (acquired and internally developed) and investments are reviewed for impairment when events or changes in circumstances indicate that the book carrying amount of the assets may not be recoverable. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its book carrying amount.

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Table of Contents Goodwill, Intangibles and Other Assets Intangible assets are comprised primarily of goodwill, customer relationship assets, noncompete agreements, technology assets, and trademarks and trade names, all originating from business combinations accounted for as purchase transactions. The Company has adopted the revised authoritative guidance regarding the testing for goodwill impairment which allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that the fair value of a reporting unit is less than the carrying amount then the Company would perform the two step goodwill impairment test. The first step, used to identify potential impairment, is a comparison of the reporting unit's estimated fair value to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of the impairment, if any. The second step requires the Company to calculate an implied fair value of goodwill at the reporting unit level. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess. Intangible assets are amortized over their useful lives. Indefinite-lived intangible assets are reviewed annually for impairment, which resulted in a write-off of approximately $ 13.3 million during 2010. See further discussion at the “Goodwill and Other Intangible Assets” note of the Notes to Consolidated Financial Statements. Debt issuance costs are included in the “Other noncurrent assets” line of the Consolidated Balance Sheets and are amortized over the life of the related debt, and to the put and initial redemption date of December 15, 2015 in the case of the 3.25% convertible senior debentures due 2035. Insurance Accruals The Company is self-insured for certain employee health, property and casualty insurance, worker's compensation, medical professional liability and automobile liability insurance claims. The Company carries a stop-loss umbrella policy for health insurance to limit the maximum potential liability for both individual and aggregate claims for a plan year. Claims are paid as they are submitted to the respective plan administrators. The Company records monthly expense for the self-insurance plans in its financial statements for incurred claims, based on historical claims experience and input from third-party insurance professionals in order to determine the appropriate accrual level. The accrual gives consideration to claims that have been incurred but not yet paid and/or reported to the plan administrator. The Company establishes the accruals based on the historical claim lag periods, current payment trends for similar insurance claims and input from third-party insurance and valuation professionals. The discount rate utilized in the computation of the property and casualty accrual balance at December 31, 2012 and 2011, was 0.91% and 1.1% , respectively. Revenue Recognition In general, Omnicare recognizes revenue when products are delivered or services are rendered or provided to the customer, prices are fixed and determinable and collection is reasonably assured. A significant portion of the Company’s revenues from sales of pharmaceutical and medical products have been reimbursed by the federal Medicare Part D plan and, to a lesser extent, state Medicaid programs. Payments for services rendered to patients covered by these programs are generally less than billed charges. The Company monitors its revenues and receivables from these reimbursement sources, as well as other third-party insurance payors, and records an estimated contractual allowance for certain sales and receivable balances at the revenue recognition date, to properly account for anticipated differences between billed and reimbursed amounts. Accordingly, the total net sales and receivables reported in the Company’s financial statements are recorded at the amount ultimately expected to be received from these payors. Since billing functions for a portion of the Company’s revenue systems are largely computerized, enabling on-line adjudication (i.e., submitting charges to Medicare, Medicaid or other third-party payors electronically, with simultaneous feedback of the amount to be paid) at the time of sale to record net revenues, exposure to estimating contractual allowance adjustments is limited primarily to unbilled and/or initially rejected Medicare, Medicaid and third-party claims (typically approved for reimbursement once additional information is provided to the payor). For the remaining portion of the Company’s revenue systems, the contractual allowance is estimated for all billed, unbilled and/or initially rejected Medicare, Medicaid and third-party claims. The Company evaluates several criteria in developing the estimated contractual allowances for billed, unbilled and/or initially rejected claims on a monthly basis, including historical trends based on actual claims paid, current contract and reimbursement terms, and changes in customer base and payor/product mix. Contractual allowance estimates are adjusted to actual amounts as cash is received and claims are settled, and the aggregate impact of these resulting adjustments were not significant to the Company’s operations for any of the periods presented.

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Table of Contents Patient co-payments are associated with certain state Medicaid programs, Medicare Part B, Medicare Part D and certain third-party payors and are typically not collected at the time products are delivered or services are rendered, but are billed to the individual as part of the Company’s normal billing procedures. These co-payments are subject to the Company’s normal accounts receivable collections procedures. Under certain circumstances, the Company accepts returns of medications and issues a credit memo to the applicable payor. The Company estimates and accrues for sales returns based on historical return experience, giving consideration to the Company’s return policies. Product returns are processed in the period received, and are not significant. Stock-Based Compensation The Company records compensation costs relating to share-based payment transactions in its financial statements under a fair value recognition model. Under the provisions of this guidance, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period of the award (usually the vesting period). Delivery Expenses Omnicare incurred expenses totaling approximately $181 million , $180 million and $177 million for the years ended December 31, 2012 , 2011 and 2010 , respectively, to deliver the products sold to its customers. Delivery expenses are included in the “Selling, general and administrative expenses” line of the Consolidated Statements of Comprehensive Income. Evaluation of Subsequent Events The Company evaluated subsequent events through the date the Consolidated Financial Statements were issued. No matters were identified that would materially impact the Company’s Consolidated Financial Statements or associated disclosures. Income Taxes The Company accounts for income taxes using the asset and liability method under which deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates to differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Future tax benefits are recognized to the extent that realization of those benefits are considered to be more likely than not, and a valuation allowance is established for deferred tax assets which do not meet this threshold. Under the authoritative guidance regarding the accounting for uncertainty in income taxes, which provides guidance for the financial statement recognition and measurement of income tax positions taken or expected to be taken in a tax return, recognition and measurement are considered discrete events. The recognition threshold is met when it is determined a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by the relevant taxing authority. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to be recognized in the financial statements. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) consists of the following (in thousands):

The amounts are net of applicable tax benefits which were inconsequential in the years ended December 31, 2012 and 2011 .

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December 31,

2012 2011

Cumulative foreign currency translation adjustments $ 9,722 $ 8,338 Translation adjustment recorded as divestiture of business (9,722 ) — Unrealized gain (loss) on fair value of investments (428 ) (277 )

Pension and postemployment benefits (2,392 ) (1,029 )

Total accumulated other comprehensive income (loss), net $ (2,820 ) $ 7,032

Table of Contents Other Charges (Credits) Other Charges (Credits) consist of the following (in thousands):

Use of Estimates in the Preparation of Financial Statements The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and stockholders’ equity at the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and amounts reported in the accompanying notes to consolidated financial statements. Significant estimates underlying the accompanying consolidated financial statements include the allowance for doubtful accounts and contractual allowance reserve; the net carrying value of inventories; acquisition-related accounting including goodwill and other indefinite-lived intangible assets, and the related impairment assessments; accruals pursuant to the Company’s restructuring initiatives; stock-based compensation; various other operating allowances and accruals (including employee health, property and casualty insurance accruals and related assumptions); fair value determinations; accruals related to pending litigation; and current and deferred tax assets, liabilities and provisions. Actual results could differ from those estimates depending upon the resolution of certain risks and uncertainties. Potential risks and uncertainties, many of which are beyond the control of Omnicare, include, but are not necessarily limited to, such factors as overall economic, financial and business conditions; delays and reductions in reimbursement by the government and other payors to Omnicare and/or its customers; the overall financial condition of Omnicare’s customers; the effect of new government regulations, executive orders and/or legislative initiatives, including those relating to reimbursement and drug pricing policies and changes in the interpretation and application of such policies; efforts by payors to control costs; the outcome of disputes and litigation; the outcome of audit, compliance, administrative or investigatory reviews, including governmental/ regulatory inquiries; other contingent liabilities; the ability to consummate pending acquisitions and the successful integration of acquired

December 31,

2012 2011 2010

Acquisition and other related costs (1) $ 1,380 $ 25,549 $ 5,319 Restructuring and other related charges (2) 11,046 — 17,165 Disposition of businesses (3) (1,777 ) — — Stock option expense (4) — — 4,207 Repack matters - SG&A (5) — (10,500 ) 663 Asset impairment charges (6) — — 22,884 Separation, benefit plan termination and related costs (7) 21,000 1,044 64,760 Loss on sale of plane and termination of plane lease (8) 1,062 — 6,785 Debt redemption loss and costs (9) 35,092 — 27,346 Subtotal - other charges 67,803 16,093 149,129 Repack matters - COS (5) — — (1,898 )

Total - other charges, net $ 67,803 $ 16,093 $ 147,231

(1) See further discussion at the “Acquisitions” note of the Notes to Consolidated Financial Statements.

(2) See further discussion at the "Restructuring and Other Related Charges" note of the Notes to Consolidated Financial Statements.

(3) See further discussion at the "Disposition of Business" caption of this note.

(4) See further discussion at the “Stock-Based Compensation” note of the Notes to Consolidated Financial Statements.

(5) See further discussion at the “Commitments and Contingencies” note of the Notes to Consolidated Financial Statements.

(6) In its annual assessment for the year ended December 31, 2010, the Company concluded that certain trade names of the business were impaired and recorded a non-cash impairment loss of approximately $13.3 million in 2010. The Company also recorded other non-cash asset impairment charges of approximately $10 million in 2010, primarily to write-off certain technology assets that were abandoned, and related non-compete agreement assets.

(7) See additional information at the "Separation, Benefit Plan Termination and Related Costs" note of the Notes to Consolidated Financial Statements.

(8) The Company sold its corporate aircraft in 2012 for a $ 1.1 million loss. The years ended December 31, 2012 and 2010 include charges relating to the sale of the Company's aircraft and the termination of the Company’s prior aircraft lease, respectively.

(9) See further discussion at the “Debt” note of the Notes to Consolidated Financial Statements.

47

Table of Contents companies; changes in international economic and political conditions; changes in interest rates; changes in the valuation of the Company’s financial instruments, including the swap agreements and other derivative instruments; changes in tax laws and regulations; access to capital and financing; the demand for Omnicare’s products and services; pricing and other competitive factors in the industry; changes in insurance claims experience and related assumptions; the outcome of the Company’s annual goodwill and other identifiable intangible assets impairment assessments; variations in costs or expenses; and changes in accounting rules and standards. Recently Issued Accounting Standards In July 2012, the Financial Accounting Standards Board ("FASB") amended the authoritative guidance regarding the impairment testing for indefinite-lived intangible assets. Under the amendments, an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. This amended guidance will not have any material impact on the Company's consolidated results of operations, financial position and cash flows. Disposition of Businesses In the year ended December 31, 2012 the Company completed the disposition of its Canadian pharmacy and the Company's pharmacy operational software business, which were not considered, individually or in the aggregate, significant to the operations of Omnicare. The Company recorded a gain on the disposition of these businesses of $1.8 million , which is reflected in the "Other charges" caption of the Consolidated Statements of Comprehensive Income. Reclassifications Certain reclassifications of prior-year amounts have been made to conform with the current-year presentation, none of which were considered material to the Company’s financial statements taken as a whole. Note 2 - Common Stock Repurchase Program The following chart summarizes the Company's stock repurchase programs as approved by the Board of Directors in effect for the periods ended December 31, 2010 through December 31, 2012 (in thousands):

As part of the share repurchase program, on November 29, 2012 , the Company entered into an accelerated share repurchase ("ASR") program with Goldman, Sachs & Co. ("Goldman") pursuant to which the Company will repurchase $250 million of outstanding common stock. Pursuant to the ASR Agreement, the Company made a $250 million payment to Goldman on November 30, 2012 and received an initial number of approximately 5.8 million shares of its outstanding common stock from Goldman on the same day. The average price paid for the initial share delivery was based on 80% of the $250 million payment to Goldman. The initial shares were valued at $200 million and recorded in treasury stock. The remaining $50 million balance was recorded as an equity forward contract which is included in paid in capital at December 31, 2012 . The specific number of shares that the Company ultimately will repurchase under the ASR Agreement will be based generally on the average of the daily volume-weighted average price per share of the Company's common stock during a repurchase period, subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At settlement, under certain circumstances, Goldman may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of its common stock or

48

Date Approved Amount Approved Term Date Remaining Repurchase

Authority

May 3, 2010 $ 200,000 May 3, 2012 — May 26, 2011 $ 100,000 December 31, 2012 —

February 21, 2012 $ 200,000 February 28, 2014 — September 12, 2012 $ 350,000 December 31, 2014 $ 219,963

Table of Contents may elect to make a cash payment to Goldman. The ASR Agreement contains provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the ASR Agreement may be accelerated, extended or terminated early by Goldman and various acknowledgments, representations and warranties made by the parties to one another. The transaction is expected to be completed during the first half of 2013. In the year ended December 31, 2012 , the Company repurchased approximately 10 million shares (including shares pursuant to the ASR agreement) at an aggregate cost of approximately $339 million , for a cumulative amount of approximately 19.2 million shares and approximately $580 million through December 31, 2012 . Accordingly, the Company had approximately $220 million of share repurchase authority remaining as of December 31, 2012 , including the $50 million equity forward contract recorded as part of the ASR. In the year ended December 31, 2011 the Company repurchased approximately 4.8 million shares at an aggregate cost of approximately $140 million . In the year ended December 31, 2010 the Company repurchased approximately 4.4 million shares at an aggregate cost of approximately $101 million . Note 3 - Discontinued Operations

Non-Core Disposal Group

In 2009, the Company commenced activities to divest certain home healthcare and related ancillary businesses (“the Disposal Group”) that were non-strategic in nature. In 2010, Omnicare divested the home infusion business portion of the Disposal Group. Also, in 2010, the Company entered into a letter of intent (“LOI”) regarding its disposition of the remaining durable medical equipment (“DME”) portion of the Disposal Group. In the third quarter of 2011, the prior LOI was terminated, and a new LOI was entered into with a separate party. The Company closed the DME transaction in the fourth quarter of 2011. In connection with these activities, Omnicare recorded an impairment loss in discontinued operations for the DME portion of the Disposal Group totaling $18.0 million in the year ended December 31, 2011. Additionally, in the second quarter of 2011, the Company divested of its Tidewater Group Purchasing Organization (“Tidewater”) as the Company determined it was no longer a good strategic fit within the Company’s portfolio of assets. The Company does not consider the operations of the Disposal Group and Tidewater (collectively, the “Non-Core Disposal Group”) as significant, individually or in the aggregate, to the operations of Omnicare.

In the year ended December 31, 2011, the Non-Core Disposal Group recorded an impairment loss of $23 million to reduce the carrying value of DME and Tidewater to fair value based on the final terms of the divestitures. In the year ended December 31, 2010, the Non-Core Disposal Group recorded an impairment loss of approximately $10.3 million to reduce the carrying value of the Disposal Group to fair value as of December 31, 2010. The net assets held for sale of the Non-Core Disposal Group were required to be measured at the lower of cost or fair value less costs to sell. Prior to divestiture, the fair values were based on a market approach utilizing both selected guideline public companies and comparable industry transactions, which were considered “Level 3” inputs within the fair value hierarchy. The fair value amount was estimated, reviewed quarterly and finalized upon disposition of the individual components of the Non-Core Disposal Group.

CRO Services

As previously disclosed by the Company, the Contract Research Services (“CRO Services”) industry had been facing unfavorable market conditions. The Company determined that its CRO Services business was no longer a good strategic fit within the Company’s portfolio of assets. In light of these factors, and in connection with the reallocation of resources started in the second half of 2010, the Company committed to a plan to divest of its CRO Services business in the first quarter of 2011 and completed the divestiture in April 2011. For the year ended December 31, 2011, CRO Services recorded an impairment loss of $50 million to reduce the carrying value of the CRO Services operations to fair value based on the final terms of the divestiture. During 2010, the Company performed an interim impairment test with respect to goodwill and certain other intangible assets related to its CRO Services reporting unit outside of its normal fourth quarter test period. Based on the results of the tests performed, the Company recorded a goodwill impairment loss of approximately $91 million in the third quarter of 2010.

The results from operations for all periods presented have been revised to reflect the results of the Non-Core Disposal Group and CRO Services as discontinued operations, including the impairment losses, as well as certain expenses of the Company related to the divestitures.

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Table of Contents

Selected financial information related to the discontinued operations of the Non-Core Disposal Group and CRO Services follows (in thousands):

Note 4 - Acquisitions Historically, the Company has been involved in a program to acquire providers of pharmaceutical products and related pharmacy services to long-term care facilities and their residents as well as patients in other care settings. The Company’s strategy has included the acquisition of freestanding institutional pharmacy businesses as well as other assets, generally insignificant in size, which have been combined with existing pharmacy operations to augment their internal growth. From time-to-time, the Company may acquire other businesses which complement the Company’s core businesses. In the years ended December 31, 2012 , 2011 and 2010 , the Company incurred acquisition and other related costs of approximately $1.4 million , $25.5 million and $5.3 million , respectively, which were primarily related to professional fees and acquisition related restructuring costs for acquisitions offset in part by a reduction of the Company’s original estimate of contingent consideration payable for certain acquisitions. During the years ended December 31, 2012 , 2011 and 2010 , the Company completed one, two and four acquisitions of businesses (all of which were in the LTC segment), respectively, none of which were, individually or in the aggregate, significant to the Company. Acquisitions of businesses required cash payments of approximately $35 million , $102 million and $112 million (including amounts payable pursuant to acquisition agreements relating to prior-period acquisitions) in 2012 , 2011 and 2010 , respectively. The impact of these aggregate acquisitions on the Company’s overall goodwill balance has been reflected in the disclosures at the “Goodwill and Other Intangible Assets” note. The net assets and operating results of acquisitions have been included in the Company’s consolidated financial statements from their respective dates of acquisition. Amounts contingently payable through 2013, primarily representing payments originating from earnout provisions of acquisitions which were completed prior to January 1, 2009, were immaterial as of December 31, 2012 .

For the years ended December

31,

2011 2010

Net sales - Non-Core Disposal Group ("NCDG") $ 24,858 $ 59,656 Net sales - CRO Services 32,146 109,176 Net sales - total discontinued 57,004 168,832

(Loss) from operations of NCDG, pretax (4,298 ) (14,025 )

(Loss) from operations of CRO Services, pretax (4,921 ) (19,269 )

(Loss) from operations - total discontinued, pretax (9,219 ) (33,294 )

Income tax benefit - NCDG 1,450 3,614 Income tax benefit - CRO Services 1,923 8,116 Income tax benefit - total discontinued 3,373 11,730

(Loss) from operations of NCDG, aftertax (2,848 ) (10,411 )

(Loss) from operations of CRO Services, aftertax (2,998 ) (11,153 )

(Loss) from operations - total discontinued, aftertax (5,846 ) (21,564 )

Impairment loss on NCDG, pretax (23,105 ) (10,343 )

Impairment loss on CRO Services, pretax (49,978 ) (90,628 )

Income tax (expense) benefit of impairment loss on NCDG (2,996 ) 1,859 Income tax benefit of impairment loss on CRO Services 7,317 103 Impairment loss on discontinued, aftertax (68,762 ) (99,009 )

Loss from discontinued operations of NCDG (28,949 ) (18,895 )

Loss from discontinued operations of CRO Services (45,659 ) (101,678 )

Loss from discontinued operations - total $ (74,608 ) $ (120,573 )

Note 5 - Cash and Cash Equivalents

50

Table of Contents A summary of cash and cash equivalents follows (in thousands):

See additional information at the “Description of Business and Summary of Significant Accounting Policies” and “Fair Value” notes of the Notes to Consolidated Financial statements. Note 6 - Properties and Equipment A summary of properties and equipment follows (in thousands):

Note 7 - Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill, by business segment, are as follows (in thousands):

The “Other” caption above includes the settlement of acquisition matters relating to prior-year acquisitions . “Other” also included the effect of adjustments due to foreign currency translations, which related primarily to the Company's pharmacy that was located in Canada, which was included in LTC and was disposed of in the third quarter of 2012. The Company performed its annual goodwill impairment analysis for the year ended December 31, 2012 in accordance with the authoritative guidance on goodwill impairment. This analysis included an assessment of qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less than their carrying amounts. The impairment analysis involves an assessment of certain qualitative factors including, but not limited to, macroeconomic, industry and market conditions; cost factors that have a negative effect on earnings; overall financial performance; the movement of the Company's share price; and other relevant entity and reporting unit specific events. This assessment includes the determination of the likely effect of each factor on the fair value of each reporting unit. Although the Company believes the factors considered in the impairment analysis

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December 31,

2012 2011

Cash $ 404,158 $ 580,047 Money market funds 50,055 215

$ 454,213 $ 580,262

December 31,

2012 2011

Land $ 3,726 $ 3,646 Buildings and building improvements 15,526 15,084 Computer equipment and software 256,439 251,087 Machinery and equipment 116,246 130,064 Furniture, fixtures and leasehold improvements 119,613 125,276 511,550 525,157 Accumulated depreciation (228,890 ) (299,900 )

$ 282,660 $ 225,257

LTC SCG Total

Goodwill balance as of January 1, 2011 $ 3,504,340 $ 678,588 $ 4,182,928 Goodwill acquired in the year ended December 31, 2011 52,924 — 52,924 Other 14,687 40 14,727 Goodwill balance as of December 31, 2011 3,571,951 678,628 4,250,579 Goodwill acquired in the year ended December 31, 2012 21,184 — 21,184 Disposition of businesses (14,258 ) — (14,258 )

Other (546 ) — (546 )

Goodwill balance as of December 31, 2012 $ 3,578,331 $ 678,628 $ 4,256,959

Table of Contents are reasonable, significant changes in any of the assumptions could produce a significantly different result. Based on the Company's annual goodwill impairment analysis for the years ended December 31, 2012 and 2011, except for the impairment charges disclosed in the "Discontinued Operations" note of the Notes to Consolidated Financial Statements, Omnicare concluded that goodwill had not been impaired. The table below presents the Company’s other identifiable intangible assets, all of which are subject to amortization, except trademark and trade names as described below (in thousands):

(a) Certain of Omnicare's trademarks and trade names are amortized over their useful lives ranging up to five years. The remainder have indefinite useful lives as further discussed below. The value of intangible assets with indefinite lives is $24.1 million as of December 31, 2012 and 2011 .

Amortization expense related to identifiable intangible assets was $43.1 million , $41.6 million and $38.9 million for the years ended December 31, 2012 , 2011 and 2010 , respectively. Omnicare’s trademarks and trade names primarily constitute identifiable intangible assets with indefinite useful lives. Accordingly, these trademarks and trade names are not amortized, but are reviewed annually for impairment. The Company performed its annual assessment for the year ended December 31, 2012 and 2011 and concluded that these assets had not been impaired. The fair value at December 31, 2012 and 2011 was determined using projected revenue and cash flows developed by the Company (Level 3 inputs). Estimated annual amortization expense for intangible assets subject to amortization at December 31, 2012 for the next five fiscal years is as follows (in thousands):

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December 31, 2012

Original Amortization

Life (in years) Gross Carrying

Amount Accumulated Amortization

Net Carrying Amount

Customer relationship assets 6.0 — 15 $ 369,782 $ (213,987 ) $ 155,795 Trademarks and trade names — (a) 28,565 (2,434 ) 26,131 Non-compete agreements 2 — 15 29,042 (15,571 ) 13,471 Technology assets 10 — 11 5,600 (4,124 ) 1,476

Total $ 432,989 $ (236,116 ) $ 196,873

December 31, 2011

Original Amortization

Life (in years) Gross Carrying

Amount

Accumulated Amortization

and Impairment Losses

Net Carrying Amount

Customer relationship assets 8.5 — 15 $ 405,036 $ (221,477 ) $ 183,559 Trademarks and trade names — (a) 28,122 (837 ) 27,285 Non-compete agreements 5 — 15 42,010 (20,063 ) 21,947 Technology assets 10 — 11 5,976 (3,575 ) 2,401 Other 10 — 15 326 (248 ) 78

Total $ 481,470 $ (246,200 ) $ 235,270

Year ended Amortization

December 31, Expense

2013 $ (37,563 )

2014 (36,010 )

2015 (34,796 )

2016 (23,976 )

2017 (15,215 )

Table of Contents Note 8 - Fair Value The Company’s assets and (liabilities) measured at fair value were as follows (in thousands):

See further discussion of Omnicare’s application of the authoritative guidance for fair value measurements, including clarification of Levels 1, 2 and 3, at the “Fair Value of Financial Instruments” caption of the “Description of Business and Summary of Significant Accounting Policies”note of the Notes to Consolidated Financial Statements.

For cash and cash equivalents, restricted cash, accounts receivable and accounts payable, the net carrying value of these items approximates their fair value at period end (level 1). Further, at period end, the fair value of Omnicare’s variable rate debt facilities approximates the carrying value, as the effective interest rates fluctuate with changes in market rates. The fair value of the Company’s fixed-rate debt facilities is based on quoted market prices and, while recorded on the Consolidated Balance Sheets at carrying value, and thus excluded from the table above, are included in the Debt note of the Notes to Consolidated Financial Statements. Note 9 - Leasing Arrangements The Company has operating leases that cover various operating and administrative facilities and certain operating equipment. In most cases, the Company expects that these leases will be renewed, or replaced by other operating leases, in the normal course of business. There are no significant contingent rentals in the Company’s operating leases. Omnicare, Inc. routinely guarantees many of the lease obligations of its subsidiaries in the normal course of business.

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Based on

Fair Value

Quoted Prices in Active Markets (Level 1)

Other Observable

Inputs (Level 2)

Unobservable Inputs

(Level 3)

December 31, 2012

Assets and (Liabilities) Measured at Fair Value on a Recurring Basis:

Bond Portfolio (1) $ 24,887 $ — $ 24,887 $ — 7.75% interest rate swap agreement - fair value hedge (2) 46,090 — 46,090 — Derivatives (3) — — — —

Total $ 70,977 $ — $ 70,977 $ —

December 31, 2011

Assets and (Liabilities) Measured at Fair Value on a Recurring Basis:

7.75% interest rate swap agreement - fair value hedge (2) $ 35,473 $ — $ 35,473 $ — Derivatives (3) — — — —

Total $ 35,473 $ — $ 35,473 $ —

(1) The bond portfolio is presented in "Other Current Assets" and is representative of investments in a portfolio of high quality corporate bonds and U.S. Treasury bonds which is managed by a third party. The fair value is based on quoted market prices of the individual bonds that make up the portfolio.

(2) The fair value of the Company’s interest rate swap agreements ("swaps") are valued using market inputs with mid-market pricing as a practical expedient for the bid/ask spread. As such, these swaps are categorized within Level 2 of the hierarchy. The Company’s swaps are discussed in further detail at the “Debt” note of the Notes to Consolidated Financial Statements.

(3) The Company’s derivative instruments are discussed in further detail at the “Debt” note of the Notes to Consolidated Financial Statements.

Table of Contents The following is a schedule of future minimum rental payments required under operating leases that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2012 (in thousands):

Aggregate minimum rentals scheduled to be received in the future under non-cancelable subleases as of December 31, 2012 , which would serve to partially reduce the total minimum payments required as presented in the table above, are not significant. Total rent expense under operating leases for the years ended December 31, 2012 , 2011 and 2010 were $ 58.4 million , $ 56.6 million and $ 56.7 million , respectively. Note 10 - Debt A summary of debt follows (in thousands):

The following is a schedule of required debt payments due during each of the next five years and thereafter, as of December 31, 2012 (in thousands):

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Year ended

December 31,

2013 $ 28,367 2014 27,536 2015 19,951 2016 15,533 2017 12,262

Later years 15,395

Total minimum payments required $ 119,044

December 31,

2012 2011

Revolving loans, due 2017 $ — $ — Senior term loan, due 2017 419,688 444,375 7.75% senior subordinated notes, due 2020 550,000 550,000 3.75% convertible senior subordinated notes, due 2025 318,054 575,000 4.00% junior subordinated convertible debentures, due 2033 345,000 345,000 3.25% convertible senior debentures, due 2035 427,500 452,500 3.75% convertible senior subordinated notes, due 2042 390,000 — Capitalized lease and other debt obligations 23,685 15,054 Subtotal 2,473,927 2,381,929 Add interest rate swap agreements 46,090 35,473 (Subtract) unamortized debt discount (462,274 ) (422,681 )

(Subtract) current portion of debt (27,713 ) (26,447 )

Total long-term debt, net $ 2,030,030 $ 1,968,274

Table of Contents

Total cash interest payments made for the years ended December 31, 2012 , 2011 and 2010 were $90.9 million , $111.1 million and $110.3 million excluding early redemption and tender premium payments. As of December 31, 2012 , the Company had approximately $11 million outstanding relating to standby letters of credit, substantially all of which are subject to automatic annual renewals. Senior Credit Agreement

Revolving Loans and Term Loans

During 2012, the Company amended and extended its existing senior unsecured credit agreement (as amended and restated, the "Credit Facility"). The Credit Facility consists of a $300 million five-year senior unsecured revolving credit facility (the "Revolving Credit Facility") and a $425 million , five-year senior unsecured term loan facility (the "Term Loan"). The amendment and restatement, among other things, provided for (i) an extension of the maturity date of the credit facilities to September 28, 2017 and (ii) a reduction in pricing. The Credit Facility is guaranteed by the subsidiaries of the Company, subject to certain exceptions. The interest rate applicable to the Credit Facility is, at the Company's option, a floating base rate plus an applicable margin or the London interbank offered rate ("LIBOR") plus an applicable margin. Initially, the applicable margins were set to 0.75% with respect to the floating base rate loans and 1.75% with respect to the LIBOR loans. The applicable margins for the Credit Facility may increase or decrease based on the Company's consolidated total leverage ratio as specified in the Credit Facility. The interest rate on the Term Loan was 1.97% at December 31, 2012 . In connection with the amendment and restatement, the Company recorded $2.0 million in new deferred debt issuance costs. Total debt issuance costs associated with the Credit Facility are $6.3 million , of which $0.3 million were amortized to interest expense in the year ended December 31, 2012 . The Credit Facility contains certain financial covenants requiring maintenance of certain interest coverage and leverage ratios, and customary affirmative and negative covenants including without limitation, a restriction on the payment of dividends. At December 31, 2012 , there was no outstanding balance under the Revolving Credit Facility and $ 419.7 million in loans outstanding under the Term Loan. In connection with entering into the Credit Facility, the Company’s existing $750 million senior unsecured credit agreement, dated as of August 24, 2011 (the “Senior Credit Agreement”) was terminated.The Senior Credit Agreement consisted of a $300 million five-year senior unsecured revolving credit facility (the “2011 Revolving Credit Facility”) and a $450 million , five-year senior unsecured term loan facility (the “2011 Term Loan”). There was $433 million outstanding under the 2011 Term Loan at the time of its termination. Existing letters of credit under the Senior Credit Agreement were rolled over into or transferred to the Credit Facility. In connection with the termination of the Senior Credit Agreement, the Company wrote off approximately $8.3 million of deferred debt issuance costs, which was recorded in interest expense in the third quarter of 2012. Approximately $1.1 million of these expenses were amortized to expense in the year ended December 31, 2011. On August 24, 2011, in connection with entering into the Senior Credit Agreement, the Company’s existing $400 million senior secured revolving credit facility, dated as of May 18, 2010 (the “2010 Revolving Credit Facility”) was terminated. There were no outstanding loans under the 2010 Revolving Credit Facility at the time of its termination. Existing letters of credit under the 2010 Revolving Credit Facility were rolled over into or transferred to the Senior Credit Agreement. In connection with the termination of the 2010 Revolving Credit Facility, the Company wrote off approximately $2.5 million of deferred debt issuance costs, which was recorded in interest expense in the third quarter of 2011. Approximately $1.1 million of these expenses were amortized to expense in the year ended December 31, 2010.

55

Year ended

December 31,

2013 $ 27,713 2014 27,995 2015 26,188 2016 25,091 2017 336,386 Later years 2,030,554

Total debt payments $ 2,473,927

Table of Contents 6.125% Senior Subordinated Notes The Company completed, during the second quarter of 2003, its offering of $250 million of 6.125% senior subordinated notes due 2013 (the “6.125% Notes”). In connection with the issuance of the 6.125% Notes, the Company deferred $6.6 million in debt issuance costs, of which approximately $0.2 million was amortized to expense in year ended December 31, 2011 and $0.7 million was amortized to expense in the year ended December 31, 2010. In 2011, the Company redeemed all $250 million aggregate principal amount of its outstanding 6.125% Notes. In connection with the redemption of the 6.125% Notes, the Company incurred debt redemption costs of approximately $1.6 million , which were recorded in interest expense for the year ended December 31, 2011. In connection with its offering of the 6.125% Notes, the Company entered into an interest rate swap agreement with respect to all $250 million of the aggregate principal amount of the 6.125% Notes (the “ 6.125% Swap Agreement”). In the second quarter of 2010, the counterparties to the interest rate swap agreement on the 6.125% Senior Notes terminated the swap agreement, effective June 1, 2010. In connection with terminating the 6.125% Swap Agreement, the counterparties paid the Company approximately $2.6 million , which was being amortized as a reduction to interest expense over the remaining term of the 6.125% Notes until the redemption was completed in 2011. 6.875% Senior Subordinated Notes On December 15, 2005, Omnicare completed its offering of $525 million aggregate principal amount of 6.875% Senior Subordinated Notes (the “ 6.875% Notes”). In connection with the issuance of the 6.875% Notes, the Company deferred $10.7 million in debt issuance costs, of which approximately $1 million was amortized to expense in each of the years ended December 31, 2011 and 2010 , respectively. In December 2010, the Company entered into a Swap Agreement on all $525 million of aggregate principal amount of the 6.875% Notes (“the 6.875% Swap Agreement”). In the second quarter of 2011, the 6.875% Swap Agreement was terminated, and the Company began paying interest at the 6.875% stated rate effective May 11, 2011. In 2011, the Company redeemed all $525 million aggregate principal amount of its outstanding 6.875% Notes. In connection with the redemption of the 6.875% Notes, the Company incurred debt redemption costs, of approximately $22 million , primarily in the third quarter, consisting of a $18 million call premium and net write-off of approximately $4 million of deferred debt issuance costs, which were recorded in interest expense for the year ended December 31, 2011. 7.75% Senior Subordinated Notes As of December 31, 2012 , the Company had $ 550 million aggregate principal outstanding of the Company's 7.75% Senior Subordinated Notes due 2020 (the " 7.75% " Notes). On May 18, 2010, Omnicare, Inc. completed its initial offering of $400 million aggregate principal amount of the 7.75% Notes, (the “Initial 7.75% Notes”) and on September 20, 2011, the Company completed its offering of an additional $150 million aggregate principal amount of its 7.75% Notes (the "Additional 7.75% Notes"). In connection with the issuance of the 7.75% Notes, the Company deferred approximately $12.6 million in debt issuance costs, of which approximately $1.2 million , $1.1 million and $0.6 million was amortized to expense in the years ended December 31, 2012 , 2011 and 2010 , respectively. The 7.75% Notes contain certain restrictive covenants and events of default customary for such instruments, including without limitation, restrictions on the payment of dividends, incurrence of additional debt and other restrictions contained in the indenture governing the 7.75% Notes. The 7.75% Notes are guaranteed by the Company’s subsidiaries, subject to certain exceptions. In connection with its offering of the Initial 7.75% Notes, the Company entered into an interest rate swap agreement (the "Initial 7.75% Swap Agreement") and in connection with its offering of the Additional 7.75% Notes, the Company entered into two swap agreements (the “Additional 7.75% Swap Agreements”) (collectively the " 7.75% Swap Agreements"), which are designed to effectively lower the Company's cost, but subject the Company to variable interest rate risk. Under the Initial 7.75% Swap Agreement the Company receives a fixed rate of 7.75% and pays a floating rate based on LIBOR with an interest period of six months, plus a spread of 3.87% . Under the Additional 7.75% Swap Agreements the Company receives a fixed rate of 7.75% and pays a floating rate based on LIBOR with an interest period of six months, plus a weighted average spread of 5.32% . The floating rates for the 7.75% Swap Agreements are determined semi-annually, in arrears, two London Banking Days prior to the first of each December and June. The Company records interest expense on the 7.75% Notes at the floating rates. The overall weighted average floating interest rate on the 7.75% Swap Agreements was 4.77% at December 31, 2012 . The 7.75% Swap Agreements, which match the terms of the 7.75% Notes, are designated and accounted for as fair value hedges. Accordingly, changes in the fair value of the interest rate swap agreements are offset by changes in the recorded carrying value of the related 7.75% Notes. The fair value of the interest rate swap agreements, approximately $46 million and $35 million

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Table of Contents at December 31, 2012 and 2011 , respectively, are recorded in “Other noncurrent assets” or “Other noncurrent liabilities” on the Consolidated Balance Sheets, as applicable, and as an adjustment to the book carrying value of the related 7.75% Notes. 3.75% Convertible Senior Subordinated Notes due 2025 On December 7, 2010, Omnicare completed its offering of $575 million aggregate principal amount of 3.75% convertible senior subordinated notes due 2025 (the “2025 Notes”). The 2025 Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2011. The initial conversion rate is 36.4409 shares of common stock per $1,000 principal amount of 2025 Notes (equivalent to an initial conversion price of approximately $27.44 per share), subject to adjustment in certain circumstances. The holders may convert their 2025 Notes, prior to December 15, 2023 , on any date during any calendar quarter beginning after March 31, 2011 (and only during such calendar quarter) if the closing sale price of the Company's common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on, and including, the last trading day of the previous quarter, or at any time on or after December 15, 2023 or under certain other specified circumstances. Upon conversion, the Company will pay cash and shares of its common stock, if any, based on a daily conversion value calculated on a proportionate basis for each day of the 25 trading-day cash settlement averaging period. The conversion price is a 23.5% premium to the $22.22 closing price of the Company's common stock on December 1, 2010. The 2025 Notes are guaranteed by the Company’s subsidiaries, subject to certain excluded subsidiaries. Embedded in the 2025 Notes are two derivative instruments, specifically, a contingent interest provision and a contingent conversion parity provision. The embedded derivatives are valued periodically, and at period end, the values of the derivatives embedded in the 2025 Notes were not material. However, the values are subject to change, based on market conditions, which could affect the Company’s future results of operations, financial position or cash flows. In connection with the issuance of the 2025 Notes, the Company has deferred approximately $9.4 million in debt issuance costs, of which approximately $0.4 million , $0.6 million and $0.1 million were amortized to expense for the years ended December 31, 2012 , 2011 and 2010 , respectively, in addition approximately $3.8 million were written off in connection with the repurchase. The Company recognized a non-cash loss on the debt exchange of approximately $33.3 million in the second quarter of 2012, which was reflected in "Other charges" on the Consolidated Statements of Comprehensive Income. 3.75% Convertible Senior Subordinated Notes due 2042 Omnicare entered into separate, privately negotiated exchange agreements under which, effective April 3, 2012 , the Company retired $256.9 million in aggregate principal amount of outstanding 2025 Notes in exchange for its issuance of $390 million in aggregate principal amount of new 3.75% Convertible Senior Subordinated Notes due 2042 (the "2042 Notes"). The 2042 Notes are guaranteed by substantially all of the Company's subsidiaries, subject to certain exceptions. The 2042 Notes mature in April 2042 and will pay interest semiannually at a rate of 3.75% per year. Commencing with the interest period beginning April 1, 2019, the 2042 Notes will also pay contingent interest under certain circumstances based on their then current trading price. The 2042 Notes are convertible, upon certain circumstances, into cash and, if applicable, shares of Omnicare common stock. The 2042 Notes have an initial conversion rate of 24.09639 shares of common stock per $1,000 original principal amount of notes (subject to adjustment in certain events). This is equivalent to an initial conversion price of approximately $41.50 per share. Under certain circumstances, the Company has the right to redeem the 2042 Notes on or before April 1, 2016 by paying a coupon make-whole amount plus accrued but unpaid interest. After April 1, 2016 the Company may, as its option, redeem the 2042 Notes by paying par plus accrued but unpaid interest. In addition, holders may require the Company to repurchase all or part of their 2042 Notes upon a fundamental change (as defined in the indenture governing the 2042 Notes) at a cash repurchase price equal to par plus accrued but unpaid interest. In connection with the issuance of the 2042 Notes, the Company also entered into capped call transactions with a counterparty. The capped calls are subject to adjustment or termination upon the occurrence of specified events affecting the Company and are subject to additional disruption events that may give rise to termination. The capped call transactions are intended to reduce potential economic dilution upon conversion of the 2042 Notes. In connection with the issuance of the 2042 Notes, the Company has deferred approximately $3.6 million in debt issuance costs, of which approximately $0.1 million were amortized to expense in the year ended December 31, 2012 . 4.00% Junior Subordinated Convertible Debentures During the first quarter of 2005, the Company completed its offer to exchange up to $345 million aggregate liquidation amount of 4.00% Trust Preferred Income Equity Redeemable Securities due 2033 of Omnicare Capital Trust I (the “Old Trust”), for an equal amount of Series B 4.00% Trust Preferred Income Equity Redeemable Securities of Omnicare Capital Trust II (the “New

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Table of Contents Trust”). The New Trust PIERS have substantially similar terms to the Old Trust PIERS, except that the New Trust PIERS have a net share settlement feature. In connection with the exchange offer, the composition of the Company’s 4.00% junior subordinated convertible debentures underlying the trust PIERS was impacted. Additional information regarding the 4.00% junior subordinated convertible debentures underlying the Old Trust PIERS and the New Trust PIERS is summarized below. Original 4.00% Junior Subordinated Convertible Debentures In connection with the offering of the Old Trust PIERS in the second quarter of 2003, the Company issued a corresponding amount of 4.00% junior subordinated convertible debentures (the “Old 4.00% Debentures”) due 2033 to the Old Trust. The Old Trust is a 100%-owned finance subsidiary of the Company. The Company has fully and unconditionally guaranteed the securities of the Old Trust. The Old Trust PIERS offer fixed cash distributions at a rate of 4.00% per annum payable quarterly, and a fixed conversion price of $40.82 under a contingent conversion feature whereby the holders may convert their Old Trust PIERS if the closing sales price of Company common stock for a predetermined period, beginning with the quarter ending September 30, 2003, is more than 130% of the then-applicable conversion price or, during a predetermined period, if the daily average of the trading prices for the Old Trust PIERS is less than 105% of the average of the conversion values for the Old Trust PIERS through 2028 ( 98% for any period thereafter through maturity). The Old Trust PIERS also will pay contingent distributions, commencing with the quarterly distribution period beginning June 15, 2009, if the average trading prices of the Old Trust PIERS for a predetermined period equals 115% or more of the stated liquidation amount of the Old Trust PIERS. In this circumstance, the holder of the convertible debenture will receive 0.125 percent of the average trading price during the predetermined period. Embedded in the Old Trust PIERS are two derivative instruments, specifically, a contingent interest provision and a contingent conversion parity provision. The embedded derivatives are periodically valued, and at period end, the values of both derivatives embedded in the Old Trust PIERS were not material. However, the values are subject to change, based on market conditions, which could affect the Company’s future results of operations, financial position or cash flows. Omnicare irrevocably and unconditionally guarantees, on a subordinated basis, certain payments to be made by the Old Trust in connection with the Old Trust PIERS. Subsequent to the first quarter 2005 exchange offer discussed in further detail at the Series B 4.00% Junior Subordinated Convertible Debentures caption below, the Company has $11,233,050 aggregate liquidation amount of the Old Trust PIERS and underlying Old 4.00% Debentures remaining outstanding at period end. Series B 4.00% Junior Subordinated Convertible Debentures On March 8, 2005, the Company completed the exchange of $333,766,950 aggregate liquidation amount of the Old Trust PIERS (representing 96.7% of the total liquidation amount of the Old Trust PIERS outstanding) for an equal amount of the New Trust PIERS, plus an exchange fee of $0.125 per $50 stated liquidation amount of Old Trust PIERS. Each New Trust PIERS represents an undivided beneficial interest in the assets of the New Trust, which assets consist solely of a corresponding amount of Series B 4.00% junior subordinated convertible debentures (the “ 4.00% Convertible Debentures”) issued by the Company with a stated maturity of June 15, 2033. The Company has fully and unconditionally guaranteed the securities of the New Trust. Subsequent to the completion of the exchange offering and at period end, the Company has $333,766,950 of 4.00% Convertible Debentures outstanding. The terms of the New Trust PIERS are substantially identical to the terms of the Old Trust PIERS, except that the New Trust PIERS are convertible into cash and, if applicable, shares of Company common stock, whereas the outstanding Old Trust PIERS are convertible only into Company common stock (except for cash in lieu of fractional shares). The purpose of the exchange offer was to change the conversion settlement provisions of the Old Trust PIERS. By committing to pay up to the stated liquidation amount of the New Trust PIERS to be converted in cash upon conversion, the Company is able to account for the New Trust PIERS under the treasury stock method. As of December 31, 2012 and 2011 , the aforementioned contingent threshold had not been met and, accordingly, the Old 4.00% Debentures and the 4.00% Convertible Debentures have been classified as long-term debt on the December 31, 2012 and 2011 Consolidated Balance Sheets. In connection with the issuance of the Old 4.00% Debentures and the 4.00% Convertible Debentures, the Company has deferred $6.1 million in debt issuance costs, of which approximately $0.2 million was amortized to expense in each of the years ended December 31, 2012 , 2011 and 2010 . 3.25% Convertible Senior Debentures On December 15, 2005, Omnicare completed its offering of $977.5 million aggregate principal amount of 3.25% convertible senior debentures due 2035 (with optional redemption by Omnicare on or after, and optional repurchase right of holders on, December 15, 2015, at par) (the “3.25% Convertible Debentures"). The 3.25% Convertible Debentures have an initial conversion

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Table of Contents price of approximately $79.73 per share under a contingent conversion feature whereby the holders may convert their 3.25% Convertible Debentures, prior to December 15, 2033 , on any date during any fiscal quarter beginning after March 31, 2006 (and only during such fiscal quarter) if the closing sales price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter or during any five consecutive trading days period if, during each of the previous five consecutive trading days, the trading price of the convertible debentures for each day was less than 98 percent of the then current conversion price. The 3.25% Convertible Debentures bear interest at a rate of 3.25% per year, subject to an upward adjustment on and after December 15, 2015 in certain circumstances, up to a rate not to exceed 1.99 times the original 3.25 percent interest rate per year. The 3.25% Convertible Debentures also will pay contingent interest in cash, beginning with the six-month interest period commencing December 15, 2015, during any six-month period in which the trading price of the 3.25% Convertible Debentures for each of the five trading days ending on the second trading day immediately preceding the first day of the applicable six-month interest period equals or exceeds 120% of the principal amount of the 3.25% Convertible Debentures. Embedded in the 3.25% Convertible Debentures are three derivative instruments, specifically, a contingent interest provision, an interest reset provision and a contingent conversion parity provision. The embedded derivatives are valued periodically, and at period end, the values of the derivatives embedded in the 3.25% Convertible Debentures were not material. However, the values are subject to change, based on market conditions, which could affect the Company’s future results of operations, financial position or cash flows. In connection with the issuance of the 3.25% Convertible Debentures, the Company has deferred approximately $17.6 million in debt issuance costs, of which approximately $0.8 million , $1 million and $2 million were amortized to expense for the years ended December 31, 2012 , 2011 and 2010 , respectively. On December 16, 2010, Omnicare purchased $ 525 million aggregate principal amount of its outstanding 3.25% Convertible Debentures pursuant to a tender offer. Total consideration required to complete the purchase, including accrued and unpaid interest, was approximately $498.8 million . Also, in the second quarter of 2012, the Company purchased an additional $25 million aggregate principal amount of its 3.25% Convertible Debentures. After giving effect to the purchase of the tendered debentures, $ 428 million aggregate principal amount of the 3.25% Convertible Debentures remain outstanding. In connection with the initial purchase of the 3.25% Convertible Debentures, the Company wrote-off debt issuance costs of $4.6 million , which were recorded in interest expense for the three months and year ended December 31, 2010. Further, in connection with the extinguishment of $ 525 million of 3.25% Convertible Debentures, the Company was required to recognize a non-cash loss of $25.6 million due to its application of the authoritative guidance for extinguishments of convertible debt. The Company also incurred $1.3 million of professional fees associated with the purchase of the 3.25% Convertible Debentures. The aforementioned losses on extinguishment and related professional fees were recorded in the “Other Charges” caption of its Consolidated Statements of Comprehensive Income, during the three months and year ended December 31, 2010. In connection with the additional repurchase, the Company recognized a non-cash loss on the debt extinguishment of $1.8 million which was recorded in "Other Charges" during the second quarter of 2012. 6.75% Senior Subordinated Notes In 2010 the Company completed the redemption of all $225 million aggregate principal amount of 6.75% senior subordinated notes due 2013 (the “ 6.75% Notes”). In connection with the purchase of the 6.75% Notes, the Company incurred early redemption fees of $7.6 million and the write-off of debt issuance costs of $2.1 million , both of which were recorded in interest expense in the second quarter of the year ended December 31, 2010. Additionally, the Company incurred approximately $0.4 million of professional fees associated with the purchase of the 6.75% Notes, which were recorded in selling, general and administrative expenses for the year ended December 31, 2010. Favorably impacting operating cash flow was the excess of tax deductible interest expense over book interest expense related to the Company’s 4.00% Convertible Debentures, 3.25% Convertible Debentures and 3.75% Convertible Notes. This resulted in an increase in the Company’s deferred tax liabilities during the year ended December 31, 2012 , 2011 and 2010 of $15.0 million , $10.4 million and $30.3 million , respectively ( $173 million cumulative as of December 31, 2012 ). The recorded deferred tax liability could, under certain circumstances, be realized in the future upon conversion or redemption which would serve to reduce operating cash flows. Information relating to the Company's convertible securities at December 31, 2012 can be found in the following table:

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Table of Contents

The fair value of the Company’s fixed-rate debt facilities, excluding the previously disclosed swap values, is based on quoted market prices (Level II) and is summarized as follows (in thousands):

Fair Value of Financial Instruments

Note 11 - Stock-Based Compensation Stock-Based Compensation Plans During 2004, stockholders of the Company approved the 2004 Stock and Incentive Plan (the “2004 Plan”), under which the Company is authorized to grant equity-based and other incentive compensation to employees, officers, directors, consultants and advisors of the Company in an amount aggregating up to 10.0 million shares of Company common stock. Beginning May 18, 2004, stock-based incentive awards are made only from the 2004 Stock and Incentive Plan. The 2004 Plan includes grants of options, restricted stock, and performance based restricted stock units. Prior to the 2004 Plan, the Company had the 1998 Long-Term Employee Incentive Plan and the 1992 Long-Term Stock Incentive Plan, all of which no longer issue stock-based incentives but which had outstanding awards at December 31, 2012 . Under these plans, stock options vest and become exercisable at varying points in time, ranging up to four years in length, and have terms that generally span ten years from the grant date. Stock option awards are granted with an exercise price at least equal to the fair market value of Company stock upon grant. Omnicare’s normal practice is to issue new shares upon stock option exercise. Certain stock option and share awards provide for accelerated vesting if there is a change in control, as defined in the plans.

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Convertible Debt Carrying Value of Equity Component (in thousands)

Remaining Amortization Period Effective Interest Rate

3.75% convertible senior subordinated notes, due 2025 $ 27,230 13.00 8.250 %

4.00% junior subordinated convertible debentures, due 2033 $ 151,655 20.50 8.010 %

3.25% convertible senior debentures, due 2035 $ 245,433 3.00 7.630 %

3.75% convertible senior subordinated notes, due 2042 $ 161,600 29.25 7.110 %

December 31, 2012 December 31, 2011

Financial Instrument: Book Value Market Value Book Value Market Value

7.75% senior subordinated notes, due 2020, gross $ 550,000 $ 614,600 $ 550,000 $ 591,300 3.75% convertible senior subordinated notes, due 2025

Carrying value 204,608 — 361,345 — Unamortized debt discount 113,446 — 213,655 — Principal amount 318,054 459,600 575,000 816,500

4.00% junior subordinated convertible debentures, due 2033 Carrying value 206,266 — 203,675 — Unamortized debt discount 138,734 — 141,325 — Principal amount 345,000 331,600 345,000 318,800

3.25% convertible senior debentures, due 2035 Carrying value 377,782 — 384,799 — Unamortized debt discount 49,718 — 67,701 — Principal amount 427,500 425,400 452,500 404,600

3.75% convertible senior debentures, due 2042 Carrying value 229,624 — — — Unamortized debt discount 160,376 — — — Principal amount 390,000 397,100 — —

Table of Contents Employee Stock Purchase Plan In November 1999, the Company’s Board of Directors adopted the Omnicare StockPlus Program, a non-compensatory employee stock purchase plan (the “ESPP”). Under the ESPP, employees and non-employee directors of the Company who elect to participate may contribute up to 6% of eligible compensation (or an amount not to exceed $20,000 for non-employee directors) to purchase shares of the Company’s common stock. For each share of stock purchased, the participant also receives two options to purchase additional shares of the Company’s stock. The stock options are subject to a four-year vesting period and are generally subject to forfeiture in the event the related shares purchased are not held by the participant for a minimum of two years. The stock options have a ten-year life from the date of issuance. Amounts contributed to the ESPP are used by the plan administrator to purchase the Company’s stock on the open market or for shares issued by Omnicare. Restricted Stock Awards Non-vested stock awards are granted at the discretion of the Compensation Committee of the Board of Directors. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically three to ten-year periods (vesting on a straight-line basis). Members of the Board of Directors can elect to receive either a restricted stock award or a restricted stock unit, which is deferred until their separation from the board, vesting of these awards/units mirrors their term of service (currently one year). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. Performance Based Restricted Unit Awards Performance based restricted unit awards are granted at the discretion of the Compensation Committee of the Board of Directors. These awards are restricted as to the transfer of ownership and vest based on the the Company's achievement of earnings per share targets over a three year period. Stock-Based Compensation The Company uses the Black-Scholes options pricing model to determine the fair value of stock options on the grant date, which is affected by Omnicare’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include Omnicare’s expected stock price volatility over the expected term of the awards, actual and projected employee exercise behaviors, the risk-free interest rate and the stock’s dividend yield. The expected term of stock options granted represents the period of time that the stock options are expected to be outstanding and is estimated based primarily on historical stock option exercise experience. The expected volatility is based primarily on the historical volatility of the Company’s stock over a period generally commensurate with the expected term of the stock options. The risk-free interest rate used in the option valuation model is based on United States Treasury Strip (“stripped coupon interest”) issues with remaining terms similar to the expected term of the stock options. The expected dividend yield is based on the current Omnicare stock dividend yield. The Company is required to estimate forfeitures at the time of the grant and revise those estimates in subsequent periods as necessary to reflect any changes in actual forfeiture experience. Omnicare uses historical data to estimate pre-vesting stock option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. All stock option awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting period. The table below represents the assumptions used to value stock options granted during the years ended December 31,:

Total pretax stock-based compensation expense recognized in the Consolidated Statements of Comprehensive Income as part of S,G&A expense for stock options and stock awards for the year ended December 31, 2012 is approximately $1.3 million and $15.3 million , approximately $2.0 million and $19.7 million for the year ended December 31, 2011 (including the stock option and restricted stock award separation costs disclosed at the “Separation, Benefit Plan Termination and Related Costs” note of the Notes

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2012 2011 2010

Expected volatility 33.6 % 35 % 35 %

Risk-free interest rate 0.7 % 1.0 % 1.0 %

Expected dividend yield 1.7 % 0.5 % 0.5 %

Expected term of options (in years) 5.00 5.00 4.90 Weighted average fair value per option $9.72 $ 8.74 $ 7.54

Table of Contents to Consolidated Financial Statements), and approximately $5.4 million and $32.4 million for the year ended December 31, 2010 , respectively. As of December 31, 2012 , there was approximately $38 million of total unrecognized compensation cost related to nonvested stock awards and stock options granted to Omnicare employees, which is expected to be recognized over a remaining weighted-average period of approximately three years. The total grant date fair value of shares vested during the years ended December 31, 2012 , 2011 , and 2010 related to stock options was approximately $2.1 million , $0.8 million and $3.7 million respectively. The total grant date fair value of shares vested during the years ended December 31, 2012 , 2011 , and 2010 related to stock awards was $17.6 million , $18.7 million and $41.1 million respectively. General Stock Option Information A summary of stock option activity under the plans for the year ended December 31, 2012 , is presented below (in thousands, except exercise price data):

The total exercise date intrinsic value of options exercised during the years ended December 31, 2012 , 2011 and 2010 was approximately $11.9 million , $11.5 million and $3.6 million , respectively. The following summarizes information about stock options outstanding and exercisable (in thousands, except exercise price and remaining life data):

General Restricted Stock Award Information A summary of nonvested restricted stock awards and performance based restricted stock units for the year ended December 31, 2012 , is presented below (in thousands, except fair value data):

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2012

Shares Weighted Average

Exercise Price

Options outstanding, beginning of year 3,477 $ 36.17 Options granted 313 34.60 Options exercised (1,291 ) 26.36 Options forfeited (400 ) 40.82 Options outstanding, end of year 2,099 41.09

Options exercisable, end of year 1,688 $ 43.87

OPTIONS OUTSTANDING OPTIONS EXERCISABLE

Range of Exercise Prices

Number Outstanding at December 31,

2012

Weighted Average Remaining

Contractual Life (in years)

Weighted Average Exercise Price

Number Exercisable at December 31,

2012

Weighted Average Remaining

Contractual Life (in years)

Weighted Average Exercise Price

$15.46 - $23.17 62 5.77 $ 21.78 38 5.11 $ 21.75 23.18 - 30.90 440 5.42 26.31 239 3.70 26.02 30.91 - 38.61 252 6.89 34.28 66 3.20 35.16 38.62 - 61.79 1,345 1.14 48.09 1,345 1.14 48.09

$15.46 - $61.79 2,099 2.86 $ 41.09 1,688 1.67 $ 43.87

Table of Contents

Note 12 - Separation, Benefit Plan Termination and Related Costs Separation Costs: During the year ended December 31, 2012 , the Company recorded a $21 million charge in connection with the separation of certain executives of the Company, including charges resulting from the resignation of the Company's former Chief Executive Officer on June 10, 2012 and the separation of other executives in the first and third quarters. These charges, primarily related to severance and accelerated vesting of restricted stock, are reflected in the "Other charges" caption of the Consolidated Statements of Comprehensive Income. In the quarter and year ended December 31, 2011, the Company recorded a charge of approximately $1 million for restricted stock award amortization for a former executive. In 2010, Joel F. Gemunder retired from his position as the Company's President and Chief Executive Office and as a member of the Board of Directors. Also, Cheryl D. Hodges, Senior Vice President and Secretary of the Company, resigned from the Company, both effective July 31, 2010. In connection with the separation of these former executives, the Company recorded a charge of approximately $40 million for separation related expenses, primarily related to severance and accelerated vesting of stock options and restricted stock. Benefit Plan Termination and Related Costs: See additional information at the “Employee Benefit Plans” note of the Notes to Consolidated Financial Statements. Note 13 - Employee Benefit Plans The Company has various defined contribution savings plans under which eligible employees can participate by contributing a portion of their salary for investment, at the direction of each employee, in one or more investment funds. Several of the plans were adopted in connection with certain of the Company’s acquisitions. The plans are primarily tax-deferred arrangements pursuant to Internal Revenue Code (“IRC”) Section 401(k) and are subject to the provisions of the Employee Retirement Income Security Act (“ERISA”). The Company matches employee contributions in varying degrees (either in cash in 2012 and 2011 or shares of the Company’s common stock or cash in 2010, in accordance with the applicable plan provisions) based on the contribution levels of the employees, as specified in the respective plan documents. Expense relating primarily to the Company’s matching contributions for these defined contribution plans for the years ended December 31, 2012 , 2011 and 2010 was $8.9 million , $6.5 million and $5.6 million , respectively. The Company has a non-contributory, defined benefit pension plan covering certain corporate headquarters employees and the employees of several companies sold by the Company in 1992, for which benefits ceased accruing upon the sale (the “Qualified Plan”). Benefits accruing under this plan to corporate headquarters employees were fully vested and frozen as of January 1, 1994. The Company also had an excess benefit plan (“EBP”) that provides retirement payments to certain headquarters employees in amounts generally consistent with what they would have received under the Qualified Plan. The retirement benefits provided by the EBP are generally comparable to those that would have been earned in the Qualified Plan, if payments under the Qualified Plan were not limited by the IRC. On September 30, 2010, the Company terminated the defined benefit portion of its Excess Benefit Plan. See additional information at the “Plan curtailment” and “Benefit plan termination and related costs” section of this Note. The Qualified Plan is funded with an irrevocable trust, which consists of assets held in the Vanguard Intermediate Term Treasury Fund Admiral Shares fund (“Vanguard Fund”), a mutual fund holding U.S. Treasury obligations. In addition, the Company has established rabbi trusts, which are also held in the Vanguard Fund, to provide for retirement obligations under the EBP. The Company’s general approach is to fund its pension obligations in accordance with the funding provisions of ERISA.

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2012

Shares

Weighted Average Grant

Date Price

Nonvested shares, beginning of year 2,126 $ 26.42 Shares awarded 651 34.30 Shares vested (667 ) 26.45 Shares forfeited (499 ) 28.62

Nonvested shares, end of year 1,611 $ 28.97

Table of Contents Components of Net Periodic Pension Cost and Other Amounts Recognized in Other Comprehensive Income (Pre-tax) (in thousands):

Plan curtailment As a result of plan curtailments, the projected benefit obligation of the Excess Benefit Plan was remeasured as of July 31, 2010 and September 30, 2010, resulting in a pretax increase to other comprehensive income of approximately $23.3 million during the 2010 year. Benefit plan termination and related costs On September 30, 2010, the Company terminated the defined benefit portion of its Excess Benefit Plan (“the Plan”) which was not a qualified plan under the Internal Revenue Code of 1986, as amended. As a result of the termination, each active participant’s terminated plan liability was determined, based primarily on the participant’s compensation and duration of employment, as of September 30, 2010. Partial payments were made to non-active participants through September 30, 2010, with the final payments made in September 2011. As a result of the Plan termination, the Company recognized a one-time charge to expense of approximately $25 million in the third quarter of 2010 for benefit plan termination and related costs, primarily comprised of the recognition of previously deferred actuarial losses. Approximately $75 million and $58 million of payments were made during 2011 and 2010, respectively to former plan participants, primarily to three former executives (Joel F. Gemunder, Cheryl D. Hodges and Patrick E. Keefe) using funds obtained upon the liquidation of rabbi trust assets. In addition, under the terms of the related separation agreements, Mr. Gemunder and Ms. Hodges earned interest on their unpaid benefit plan amounts at a rate of 8.75% per annum until the final payments were made in February 2011. In connection with the funding of the payments in 2010 to the former executives, the Company recorded a gain of approximately $3.6 million in the fourth quarter of 2010 on rabbi trust assets liquidated to make the payments. The estimated amount of net loss in accumulated other comprehensive income expected to be recognized as a component of net periodic pension cost during the 2013 year is approximately $0.3 million . The actuarial assumptions used to calculate net periodic pension costs for years ended December 31 were as follows:

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For the years ended December 31,

Net Periodic Pension Cost (Pre-tax): 2012 2011 2010

Service cost $ — $ — $ 2,226 Interest cost 270 269 3,323 Amortization of deferred amounts (primarily prior actuarial losses) 272 109 4,891 Expected return on assets (261 ) (241 ) (224 )

Net periodic pension cost 281 137 10,216 Benefit plan termination and related costs (see below) — — 25,187 Net periodic pension costs and benefit plan termination and related costs 281 137 35,403 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Pre-tax):

Net loss (gain), net of curtailment 753 1,145 (49,463 )

Amortization of net (loss) (272 ) (110 ) (4,891 )

Amortization of prior service cost — — — Total loss (gain) recognized in other comprehensive income 481 1,035 (54,354 )

Total loss (gain) recognized in net periodic pension cost and other comprehensive income $ 762 $ 1,172 $ (18,951 )

2012 2011 2010

Discount rate 4.3 % 5.4 % 3.8 %

Rate of increase in compensation levels N/A N/A 15.0 %

Expected rate of return on assets 6.0 % 6.0 % 6.0 %

Table of Contents The actuarial assumptions used to calculate the benefit obligations at the end of plan year were as follows:

The discount rate assumption was determined giving consideration primarily to the Citigroup Pension Liability Index. The expected rate of return on assets was estimated based primarily on the historical rate of return on intermediate-term U.S. Government securities. Obligations and Funded Status (in thousands):

The Company’s investment strategy generally targets investing in intermediate U.S. government and agency securities funds, seeking a moderate and sustainable level of current income by investing primarily in intermediate-term U.S. Treasury obligations with a low credit default risk. Amounts Recognized in the Consolidated Balance Sheets Consist of (in thousands):

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2012 2011 2010

Discount rate 3.8 % 4.3 % 5.4 %

Rate of increase in compensation levels N/A N/A N/A Expected rate of return on assets 6.0 % 6.0 % 6.0 %

For the years ended December 31,

Change in Plan Assets: 2012 2011

Fair value of plan assets at end of prior year $ 4,359 $ 4,081 Actual return on plan assets 131 387 Employer contributions 230 31 Benefits paid (190 ) (140 )

Fair value of plan assets at end of year $ 4,530 $ 4,359

Change in Projected Benefit Obligation: Projected benefit obligation at end of prior year $ 6,454 $ 5,034 Interest cost 270 269 Actuarial loss 623 1,291 Benefits paid (190 ) (140 )

Projected benefit obligation at end of year $ 7,157 $ 6,454

Funded Status: Projected benefit obligation in excess of plan assets $ (2,627 ) $ (2,095 )

Accumulated benefit obligation at end of year $ 7,157 $ 6,454

December 31,

2012 2011

Current liabilities $ — $ — Noncurrent liabilities 2,627 2,095

Total $ 2,627 $ 2,095

Amounts Recognized in Accumulated Other Comprehensive Income (Pretax) Consist of: Net loss $ 2,467 $ 1,985 Prior service cost — —

Total $ 2,467 $ 1,985

Table of Contents Information for Pension Plans with an Accumulated Benefit Obligation in excess of Plan Assets (in thousands):

No significant funding is anticipated to be necessary in 2013 relating to the Qualified Plan. Projected benefit payments, which reflect expected future service, as appropriate, for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter as of December 31, 2012 are estimated at approximately $0.3 million per year through 2022. Note 14 - Income Taxes Provision The provision for income taxes from continuing operations is comprised of the following (in thousands):

Tax benefits related to the exercise of stock options and stock awards have been credited (debited) to paid-in capital in amounts of $2.5 million , $5.0 million and $(1.2) million for the years ended December 31, 2012 , 2011 and 2010 , respectively. Effective Income Tax Rate The difference between the Company’s reported income tax expense from continuing operations and the federal income tax expense from continuing operations computed at the statutory rate of 35.0% is explained in the following table (in thousands):

Income tax payments, net, amounted to $44.1 million , $6.4 million and $23.6 million the years ended December 31, 2012 , 2011 and 2010 , respectively.

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December 31,

2012 2011

Qualified Plan:

Projected benefit obligation $ 7,157 $ 6,454 Accumulated benefit obligation 7,157 6,454 Fair value of plan assets (1) 4,530 4,359

(1) See "Obligations and Funded Status" table of this note for further discussion.

For the years ended December 31,

2012 2011 2010

Current provision $ 21,459 $ 48,384 $ (3,908 )

Deferred provision 95,742 62,909 22,952

Total income tax provision from continuing operations $ 117,201 $ 111,293 $ 19,044

For the years ended December 31,

2012 2011 2010

Federal income tax at the statutory rate $ 109,226 35.0 % $ 95,489 35.0 % $ 11,728 35.0 %

State, local and foreign income taxes, net of federal income tax benefit 10,508 3.4 9,415 3.5 4,133 12.3 Reduction for tax positions settled, net of federal income tax benefit 80 — (1,676 ) (0.6 ) (12,324 ) (36.8 )

Settlements — — 7,000 2.6 13,746 41.0 Other, net (including tax accrual adjustments) (2,613 ) (0.8 ) 1,065 0.3 1,761 5.3 Total income tax provision from continuing operations $ 117,201 37.6 % $ 111,293 40.8 % $ 19,044 56.8 %

Table of Contents Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

As of December 31, 2012 , the Company has remaining deferred tax benefits related to its federal and state net operating losses and capital losses totaling approximately $82 million ( $29 million federal, $50 million state and $3 million capital). These NOLs and capital losses will expire, in varying amounts, beginning in 2013 through 2032. The potential future tax benefits of the NOLs and capital losses have been offset by $21 million of valuation allowance based on the Company’s analysis of the likelihood of generating sufficient taxable income in the various jurisdictions to utilize the benefits before expiration. Uncertain Tax Positions At January 1, 2012 , the Company had gross unrecognized tax benefits of $17.1 million and ended the year with gross unrecognized tax benefits of $14.2 million . A reconciliation of the beginning and ending of year amount of unrecognized tax benefit is as follows (in thousands):

Included in the balance at December 31, 2012 are approximately $8.7 million of unrecognized tax benefits, net of federal tax benefit, that, if recognized, would affect the effective tax rate. The liabilities for unrecognized tax benefits are carried in “Other noncurrent liabilities” on the Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date for any significant unrecognized amounts. However, it is reasonably possible that $4.6 million , net of federal tax benefit, of unrecognized federal and state tax benefits will reverse within one year of the balance sheet date due to the expiration of statutes of limitation and settlement of the 2009 and 2010 IRS audit. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expenses. During the year ended December 31, 2012 , the Company recognized approximately $(0.1) million in interest, net of federal tax benefit, and penalties. The Company had accrued approximately $2.9 million for the payment of interest and penalties accrued at December 31, 2012 .

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December 31,

2012 2011

Accounts receivable reserves $ 91,773 $ 120,983 Net operating loss (“NOL”) and capital loss carryforwards 81,530 82,035 Accrued liabilities 78,331 88,073 Other 47,421 28,414 Gross deferred tax assets, before valuation allowances 299,055 319,505 Valuation allowances (21,037 ) (20,502 )

Gross deferred tax assets, net of valuation allowances $ 278,018 $ 299,003

Amortization of intangibles $ 606,933 $ 568,849 Contingent convertible debentures interest 353,397 322,035 Fixed assets and depreciation methods 55,135 48,034 Subsidiary stock basis 12,271 12,203 Current and noncurrent assets 10,702 15,149 Other 18,054 18,146

Gross deferred tax liabilities $ 1,056,492 $ 984,416

2012 2011 2010

Unrecognized tax benefits at beginning of year $ 17,091 $ 18,034 $ 27,700 Additions based on tax positions related to the current year 1,845 1,219 1,532 Additions for tax positions of prior years 2,050 5,212 3,100 Reductions for tax positions of prior years (3,051 ) (492 ) (1,634 )

Settlement reductions (3,410 ) (5,330 ) — Reductions for tax positions settled through the expirations of the statute of limitations (309 ) (1,552 ) (12,664 )

Unrecognized tax benefits at end of year $ 14,216 $ 17,091 $ 18,034

Table of Contents The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal examinations by tax authorities for years before 2009, and state and local, or non-U.S. income tax examinations, by tax authorities for years before 2008. The Internal Revenue Service is currently examining the 2009 and 2010 income tax returns. The Company is also currently under examination by various state jurisdictions. Note 15 - Earnings Per Share Data Basic earnings per share are computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include the dilutive effect of stock options, warrants and restricted stock awards, as well as convertible debentures. The following is a reconciliation of the basic and diluted earnings per share (“EPS”) computations for both the numerator and denominator (in thousands, except per share data):

For the years ended December 31,

2012: Income (loss)(Numerator)

Common Shares(Denominator)

Per Common Share Amounts

Basic EPS

Income from continuing operations $ 194,874 $ 1.78 Loss from discontinued operations — — Net income 194,874 109,531 $ 1.78

Effect of Dilutive Securities Convertible securities 284 2,891 Stock options, warrants and awards — 566 Diluted EPS Income from continuing operations plus assumed conversions 195,158 $ 1.73 Loss from discontinued operations — — Net income plus assumed conversions $ 195,158 112,988 $ 1.73

2011:

Basic EPS Income from continuing operations $ 161,532 $ 1.43 Loss from discontinued operations (74,608 ) (0.66 )

Net income 86,924 113,000 $ 0.77

Effect of Dilutive Securities Convertible securities 287 1,011 Stock options, warrants and awards — 770 Diluted EPS Income from continuing operations plus assumed conversions 161,819 $ 1.41 Loss from discontinued operations (74,608 ) (0.65 )

Net income plus assumed conversions $ 87,211 114,781 $ 0.76

2010:

Basic EPS

Income from continuing operations $ 14,464 $ 0.12 Loss from discontinued operations (120,573 ) (1.04 )

Net loss (106,109 ) 116,348 $ (0.91 )

Effect of Dilutive Securities

4.00% junior subordinated convertible debentures 289 275

Stock options, warrants and awards — 304

Diluted EPS

Income from continuing operations plus assumed conversions 14,753 $ 0.13 Loss from discontinued operations (120,573 ) (1.03 )

Net loss plus assumed conversions $ (105,820 ) 116,927 $ (0.91 )

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Table of Contents EPS is reported independently for each amount presented. Accordingly, the sum of the individual amounts may not necessarily equal the separately calculated amounts for the corresponding period. The Company is required to include additional shares in its diluted share outstanding calculation based on the treasury stock method when the average Omnicare stock market price for the applicable period exceeds the following amounts:

During the years ended December 31, 2012 , 2011 and 2010 , the anti-dilutive effect associated with certain stock options, warrants and stock awards was excluded from the computation of diluted EPS, since the exercise price was greater than the average market price of the Company’s common stock during these periods. The aggregate number of stock options, warrants and stock awards excluded from the computation of the diluted EPS for those years totaled approximately 2.1 million , 2.6 million and 4.6 million , respectively. Note 16 - Restructuring and Other Related Charges Company-wide Reorganization Program: During 2010, the Company initiated a “Company-wide Reorganization Program”, including a reshaping of the organization with the objective of deploying resources closer to the customers, allowing Omnicare to become more responsive to customer needs, better leveraging the Omnicare platform and better positioning the Company for potential growth. The program was completed in the third quarter of 2012 with the completion of the relocation of the Corporate office. The Company recorded restructuring and other related charges for the CWR program of approximately $11 million in the third quarter of 2012 and $14 million cumulatively since 2010. The majority of the charges were recorded in the Corporate/Other segment. Details of the Company-wide Reorganization Program restructuring related charges are as follows (pretax, in thousands):

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Convertible Debt Price

3.75% convertible senior subordinated notes, due 2025 $ 27.19 4.00% junior subordinated convertible debentures, due 2033 $ 40.82 3.25% convertible senior debentures, due 2035 $ 78.74 3.75% convertible senior subordinated notes, due 2042 $ 41.33

2010 Provision/ Accrual

Utilized during 2010

Balance at December 31,

2010

Utilized during 2011

Restructuring charges:

Employee severance $ 446 $ (141 ) $ 305 $ (278 )

Employment agreement buy-outs 2,733 (933 ) 1,800 (1,432 )

Lease terminations 91 (91 ) — — Other assets, fees and facility exit costs — — — —

Total restructuring charges $ 3,270 $ (1,165 ) $ 2,105 $ (1,710 )

Balance at December 31,

2011 2012 Provision/

Accrual

Utilized during 2012

Balance at December 31,

2012

Restructuring charges:

Employee severance $ 27 $ — $ (27 ) $ — Employment agreement buy-outs 368 — (368 ) — Lease terminations — 10,034 (1,935 ) 8,099 Other assets, fees and facility exit costs — 731 (364 ) 367

Total restructuring charges $ 395 10,765 $ (2,694 ) $ 8,466

Other related charges 281

Total restructuring and other related charges $ 11,046

Table of Contents Omnicare Full Potential Plan: In 2006, the Company commenced the implementation of the “Omnicare Full Potential” Plan, a major initiative primarily designed to re-engineer the Company’s pharmacy operating model to increase efficiency and enhance customer growth, which was substantially completed in 2010. The Omnicare Full Potential Plan optimized resources across the entire organization through implementing best practices, including the realignment and right-sizing of functions, and a “hub-and-spoke” model, whereby certain key administrative and production functions were transferred to regional support centers (“hubs”) specifically designed and managed to perform these tasks, with local pharmacies (“spokes”) focusing on time-sensitive services and customer-facing processes. The Company recorded restructuring and other related charges for the Omnicare Full Potential Program of approximately $14 million during the year ended December 31, 2010 , or cumulative aggregate restructuring and other related charges of approximately $110 million through 2010. The Company eliminated approximately 2,700 positions in completing the Omnicare Full Potential program. The restructuring charges primarily included severance pay, the buy-out of employment agreements, lease terminations, and other exit-related asset disposals, professional fees and facility exit costs. The other related charges were primarily comprised of professional fees. Details of the Omnicare Full Potential Plan restructuring and other related charges are as follows (pretax, in thousands):

As of December 31, 2012 , the Company has made cumulative payments of approximately $ 25 million of severance and other employee-related costs for the Omnicare Full Potential Plan. The remaining liabilities at December 31, 2012 represent amounts not yet paid relating to actions taken in connection with the program (primarily lease payments). The provision/accrual and corresponding payment amounts relating to employee severance were accounted for in accordance with the authoritative guidance for employers’ accounting for postemployment benefits; and the provision/accrual and corresponding payment amounts relating to employment agreement buy-outs are being accounted for in accordance with the authoritative guidance regarding accounting for costs associated with exit or disposal activities. Note 17 - Commitments and Contingencies Omnicare continuously evaluates contingencies based upon the best available information. The Company believes that liabilities have been recorded to the extent necessary in cases where the outcome is considered probable and reasonably estimable. To the

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Balance at December 31,

2009

2010 Provision/ Accrual

Utilized during 2010

Balance at December 31,

2010

Restructuring charges:

Employee severance $ — $ 6,398 $ (5,688 ) $ 710 Employment agreement buy-outs — — — — Lease terminations 7,113 3,578 (4,119 ) 6,572 Other assets, fees and facility exit costs 459 2,453 (2,531 ) 381

Total restructuring charges $ 7,572 12,429 $ (12,338 ) $ 7,663

Other related charges 1,466 Total restructuring and other related charges $ 13,895

Utilized during 2011

Balance at December 31,

2011

Utilized during 2012

Balance at December 31,

2012

Restructuring charges:

Employee severance $ (486 ) $ 224 $ (224 ) $ — Employment agreement buy-outs — — — — Lease terminations (2,798 ) 3,774 (1,739 ) 2,035 Other assets, fees and facility exit costs (359 ) 22 (22 ) —

Total restructuring charges $ (3,643 ) $ 4,020 $ (1,985 ) $ 2,035

Table of Contents extent that resolution of contingencies results in amounts that vary from the Company's recorded liabilities, future earnings will be charged or credited accordingly.

On October 19, 2012, a qui tam complaint, entitled United States ex rel. Lesa Martino Whalen v. Omnicare, Inc., No. 8:11-cv-2297, was unsealed by the United States District Court for the Middle District of Florida, Tampa Division. The case had been filed on October 11, 2011 under seal in that court. The U.S. Department of Justice notified the court that it has declined to intervene in this action. The complaint was brought by Lesa Martino Whalen as a private party qui tam relator on behalf of the federal government. The action alleges civil violations of the False Claims Act based on allegations that the Company failed to comply with Florida pharmacy regulations. On February 14, 2013, this action was dismissed by the court based on Relator's notice of voluntary dismissal.

On October 5, 2011, a qui tam complaint, entitled United States ex rel. Donald Gale v. Omnicare, Inc., No. 1:10-cv-0127, was served on the Company. The case had been filed on January 19, 2010 under seal with the U.S. District Court for the Northern District of Ohio, Eastern Division. The complaint was unsealed by the Court on June 9, 2011 after the U.S. Department of Justice notified the court that it has declined to intervene in this action. The complaint was brought by Donald Gale as a private party qui tam relator on behalf of the federal government. The action alleges civil violations of the False Claims Act based on allegations that the Company provided certain customer facilities with discounts and other forms of remuneration in return for referrals of business in violation of the Anti-Kickback Statute, and offered pricing terms in violation of the "most favored customer" pricing laws of various state Medicaid plans. The Company filed a motion to dismiss on January 27, 2012. On September 26, 2012, the Court granted in part and denied in part the Company's motion to dismiss. Allegations concerning pricing and certain discounts remain in the case. The Company believes that the allegations are without merit and intends to vigorously defend itself in this action.

On August 4, 2011, a qui tam complaint, entitled United States of America ex rel. Fox Rx, Inc. v. Omnicare, Inc. and Neighborcare, Inc., No. 1:11-cv-0962, that was filed under seal with the U.S. District Court for the Northern District of Georgia, was unsealed by the Court. The U.S. Department of Justice has declined to intervene in this action. The Company was served with the complaint on November 23, 2011. The complaint was brought by Fox Rx, Inc. as a qui tam relator on behalf of the federal government. The action alleges civil violations of the False Claims Act based on allegations that the Company billed Medicare Part D for medically unnecessary antipsychotic drugs, increased the dispensing fees by artificially shortening the supply of prescribed medication, submitted claims for antipsychotic drugs without complying with Fox Rx, Inc.'s prior approval requirements, and waived or failed to collect copayments from patients to induce the use of prescription drugs. The Company filed a motion to dismiss on December 21, 2011. On August 29, 2012, the Court granted the Company's motion to dismiss, though granting leave to replead certain counts. On September 18, 2012, Relator filed its Third Amended Complaint reasserting its claims regarding copayments and antipsychotic drugs. On October 2 and 5, 2012, the Company filed motions to dismiss the Third Amended Complaint. The Company believes that the allegations are without merit and intends to vigorously defend itself in this action.

On August 24, 2011, a class action complaint entitled Ansfield v. Omnicare, Inc., et al. was filed on behalf of a putative class of all purchasers of the Company's common stock from January 10, 2007 through August 5, 2010 against the Company and certain of its current and former officers in the United States District Court for the Eastern District of Kentucky, alleging violations of federal securities law in connection with alleged false and misleading statements with respect to the Company's compliance with federal and state Medicare and Medicaid laws and regulations. On October 21, 2011, a class action complaint entitled Jacksonville Police & Fire Pension Fund v. Omnicare, Inc. et al. was filed on behalf of the same putative class of purchasers as is referenced in the Ansfield complaint, against the Company and certain of its current and former officers, in the U.S. District Court for the Eastern District of Kentucky. Plaintiffs allege substantially the same violations of federal securities law as are alleged in the Ansfield complaint. Both complaints seek unspecified money damages. The Court has appointed lead counsel and a consolidated amended complaint was filed on May 11, 2012. The Company filed a motion to dismiss on July 16, 2012. The Company believes that the claims asserted are without merit and intends to defend against them vigorously.

On September 15, 2010, Omnicare entered into settlement agreements, without any finding of wrongdoing or admission of liability, with the State of Michigan, the Commonwealth of Massachusetts and David M. Kammerer ("Relator"), relating to sealed qui tam litigation originally filed by Relator in Ohio federal court in August 2003. The Company has paid $11.6 million pursuant to the Michigan settlement agreement and $9.45 million pursuant to the Massachusetts settlement agreement to resolve allegations of inappropriate billing, beginning in August 1997, under the states' usual and customary charge provisions. The Company has paid Relator's expenses and attorneys' fees of $385 thousand . The Company recorded provisions of $24.2 million for these payments, and a separate unrelated matter with another state which is still under review, in the quarter ended June 30, 2010. On October 29, 2010, a qui tam complaint entitled United States ex rel. Banigan and Templin, et al. v. Organon USA, Inc., Omnicare, Inc. and Pharmerica, Inc., Civil No. 07-12153-RWZ, that had been filed under seal with the U.S. District Court in Boston, Massachusetts, was ordered unsealed by the court. The complaint was brought by James Banigan and Richard Templin, former employees of Organon, as private party qui tam relators on behalf of the federal government and several state and local governments.

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Table of Contents The action alleges civil violations of the False Claims Act based on allegations that Organon USA, Inc. and its affiliates paid the Company and several other long-term care pharmacies rebates, post-purchase discounts and other forms of remuneration in return for purchasing pharmaceuticals from Organon and taking steps to increase the purchase of Organon's drugs in violation of the Anti-Kickback Statute. The U.S. Department of Justice has notified the court that it has declined to intervene in this action. The Court denied the Company's motion to dismiss on June 1, 2012, and the case is now in the discovery stage. The Company believes that the allegations are without merit and intends to vigorously defend itself in this action.

The Drug Enforcement Administration ("DEA") investigated alleged errors and deficiencies in paperwork requirements for controlled substance dispensing at several of the Company's pharmacies in Ohio and the United States Attorney's Office, Northern District of Ohio ("AUSA"), conducted an investigation relating to this matter. The AUSA conducted a criminal investigation of several current and former employees in connection with the DEA audits. The Company recorded a provision for this matter in the quarters ended December 31 and June 30, 2011 and December 31, 2010. On May 10, 2012, the Company agreed to a nationwide settlement of all matters subject to the DEA investigation in exchange for a payment of $50 million . The settlement included a release of all Omnicare owned pharmacies, all Omnicare joint venture pharmacies, and all present and former directors, officers, and employees from any civil penalty claim, or any administrative action, including denial, suspension, or revocation of any DEA registration, related to the subject matter of the investigation. The Company and current and former employees are no longer the subject of a criminal investigation by the AUSA in connection with the DEA audits.

The United States Department of Justice, through the United States Attorney's Office for the Western District of Virginia, is investigating whether the Company's activities in connection with agreements it had with the manufacturer of the pharmaceutical Depakote violated the False Claims Act or the Anti-Kickback Statute. The Company is cooperating with this investigation and believes that it has complied with applicable laws and regulations with respect to this matter.

The United States Department of Justice is investigating whether certain of the Company's practices relating to customer collections violated the False Claims Act or the Anti-Kickback Statute. The Company is cooperating with this investigation and believes that it has complied with applicable laws and regulations with respect to this matter. On April 14, 2010, a purported shareholder derivative action, entitled Manville Personal Injury Settlement Trust v. Gemunder, et al., Case No. 10-CI-01212, was filed in Kentucky State Court, against members of the Board and certain current and former officers of the Company, individually, purporting to assert claims for breach of fiduciary duty, unjust enrichment, gross mismanagement, and waste of corporate assets arising out of alleged violations of federal and state laws prohibiting the payment of illegal kickbacks and the submission of false claims in connection with the Medicare and Medicaid healthcare programs. Plaintiff alleges that the Board and senior management caused the company to violate these laws, which has resulted in over $100 million in fines and penalties paid by Omnicare and exposed the Company and certain individual defendants to potential civil and criminal liability. On April 27, 2011 the court entered an order denying defendants' motion to dismiss the complaint for failure to make a pre-suit demand and failure to state a claim. Defendants filed a notice of appeal from the decision in the Kentucky Court of Appeals, and plaintiff moved to dismiss that appeal on the grounds that the order denying defendants' motion to dismiss is not subject to an immediate appeal under Kentucky law. On October 6, 2011, the Kentucky Court of Appeals granted plaintiff's motion on the grounds that the appeal was premature. The case is now in the discovery stage. The individual defendants have denied all allegations of wrongdoing, believe the claims against them to be completely without merit and intend to vigorously defend themselves in this action.

On January 8, 2010, a qui tam complaint, entitled United States ex rel. Resnick and Nehls v. Omnicare, Inc., Morris Esformes, Phillip Esformes and Lancaster Ltd. d/b/a Lancaster Health Group, No. 1:07cv5777, that was filed under seal with the U.S. District Court in Chicago, Illinois was unsealed by the court. The U.S. Department of Justice and the State of Illinois have notified the court that they have declined to intervene in this action. The complaint was brought by Adam Resnick and Maureen Nehls as private party “qui tam relators” on behalf of the federal government and two state governments. The action alleges civil violations of the False Claims Act and certain state statutes based on allegations that Omnicare acquired certain institutional pharmacies at above-market rates in violation of the Anti-Kickback Statute and applicable state statutes. On December 1, 2010, Resnick filed a motion to withdraw as a relator, which the court granted on December 14, 2010. The Company recorded a provision for this matter in the quarter ended June 30, 2012.

On June 11, 2010, a qui tam complaint, entitled United States ex rel. Stone v. Omnicare Inc., No. 1:09cv4319, that was filed under seal with the U.S. District Court in Chicago, Illinois was unsealed by the court. The U.S. Department of Justice and the various states named in the complaint have notified the court that they have declined to intervene in this action. The complaint was brought by John Stone, the Company's former Vice President of Internal Audit, as a private party qui tam relator on behalf of the federal government and several state governments. The action alleges civil violations of the False Claims Act and certain state statutes based on allegations that the Company submitted claims for reimbursement for certain ancillary services that did not conform with Medicare and Medicaid regulations, submitted claims for reimbursement from newly acquired pharmacies that were in

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Table of Contents violation of certain Medicaid and Medicare regulations, violated certain FDA regulations regarding the storage and handling of a particular drug, and violated certain Medicaid billing regulations relating to usual and customary charges. Relator also asserts against the Company a retaliatory discharge claim under the False Claims Act. Following the court's order dismissing some claims with prejudice, on September 15, 2011, Relator filed an Amended Complaint. He repeated his claim that the Company submitted false claims for certain ancillary services that did not conform with Medicare and Medicaid regulations. Relator also asserted a claim in the Amended Complaint that the Company submitted false claims to the Nevada Medicaid program for a particular drug. Relator repeated his retaliatory discharge claim. The Company filed a motion to dismiss the Amended Complaint on November 15, 2011. The Relator filed a response in opposition to that motion. On April 24, 2012, the court granted Omnicare's motion to dismiss without prejudice all claims except the retaliatory discharge claim. On May 29, 2012, Relator filed a Second Amended Complaint. The Company filed a motion to dismiss on June 28, 2012. On November 20, 2012, the court granted Omnicare's motion to dismiss with prejudice all claims except the retaliatory discharge claim. The Company filed its Answer to the remaining claim on December 11, 2012. The Company believes that the remaining allegation is without merit and intends to vigorously defend itself in this action.

On November 19, 2010, the Company was served with a second amended qui tam complaint entitled United States ex rel. Rostholder v. Omnicare, Inc. and Omnicare Distribution Center, LLC f/k/a Heartland Repack Services LLC, No. CCB-07-1283, that was filed under seal with the U.S. District Court in Baltimore, Maryland in May 2007. The U.S. Department of Justice notified the court on April 22, 2009 that it declined to intervene in this action. The complaint was brought by Barry Rostholder as a private party qui tam relator on behalf of the federal government and several state and local governments. The action, in general, alleges civil violations of the False Claims Act based on allegations that the Company submitted claims for reimbursement for drugs that were repackaged at its Heartland repackaging facility in violation of certain FDA regulations. These allegations arise from the previously disclosed issues experienced by the Company at its Heartland repackaging facility, which suspended operations in 2006. On September 30, 2011, the Company filed a motion to dismiss the lawsuit in its entirety. On August 14, 2012, the Court granted the Company's motion with prejudice as to the relator and without prejudice as to the United States. Relator filed an amended motion for reconsideration on September 10, 2012. On October 19, 2012, the Court denied relator's motion to reconsider. On November 16, 2012, relator filed a Notice of Appeal to the United States Court of Appeals for the Fourth Circuit from the District Court's denial of the motion to reconsider and granting of the Company's motion to dismiss. The Company believes that the claims in the complaint are without merit and intends to vigorously defend itself in this action if pursued.

As part of the previously disclosed civil settlement agreement entered into by the Company with the U.S. Attorney's Office, District of Massachusetts in November 2009, the Company also entered into an amended and restated corporate integrity agreement (“CIA”) with the Department of Health and Human Services Office of the Inspector General with a term of five years from November 2, 2009. Pursuant to the CIA, the Company is required, among other things, to (i) create procedures designed to ensure that each existing, new or renewed arrangement with any actual or potential source of health care business or referrals to Omnicare or any actual or potential recipient of health care business or referrals from Omnicare does not violate the Anti-Kickback Statute, 42 U.S.C. (§) 1320a-7b(b) or related regulations, directives and guidance, including creating and maintaining a database of such arrangements; (ii) retain an independent review organization to review the Company's compliance with the terms of the CIA and report to OIG regarding that compliance; and (iii) provide training for certain Company employees as to the Company's requirements under the CIA. The requirements of the Company's prior corporate integrity agreement obligating the Company to create and maintain procedures designed to ensure that all therapeutic interchange programs are developed and implemented by Omnicare consistent with the CIA and federal and state laws for obtaining prior authorization from the prescriber before making a therapeutic interchange of a drug and to maintain procedures for the accurate preparation and submission of claims for federal health care program beneficiaries in hospice programs, have been incorporated into the amended and restated CIA without modification. The requirements of the CIA have resulted in increased costs to maintain the Company's compliance program and greater scrutiny by federal regulatory authorities. Violations of the corporate integrity agreement could subject the Company to significant monetary penalties. Consistent with the CIA, the Company is reviewing its contracts to ensure compliance with applicable laws and regulations. As a result of this review, pricing under certain of its consultant pharmacist services contracts have been increased and will continue to be increased, and these price increases have resulted and may continue to result in the loss of certain contracts.

In February 2006, two substantially similar putative class action lawsuits were filed in the United States District Court for the Eastern District of Kentucky, and were consolidated and entitled Indiana State Dist. Council of Laborers & HOD Carriers Pension & Welfare Fund v. Omnicare, Inc., et al., No. 2:06cv26. The amended consolidated complaint was filed against Omnicare, three of its officers and two of its directors and purported to be brought on behalf of all open-market purchasers of Omnicare common stock from August 3, 2005 through July 27, 2006, as well as all purchasers who bought their shares in the Company's public offering in December 2005. The complaint contained claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and Rule 10b-5) and Section 11 of the Securities Act of 1933 and sought, among other things, compensatory damages and injunctive relief. Plaintiffs alleged that Omnicare (i) artificially inflated its earnings (and failed to file GAAP-compliant financial statements) by engaging in improper generic drug substitution, improper revenue recognition and overvaluation of receivables and inventories; (ii) failed to timely disclose its contractual dispute with UnitedHealth Group Inc.; (iii) failed to timely record

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Table of Contents certain special litigation reserves; and (iv) made other allegedly false and misleading statements about the Company's business, prospects and compliance with applicable laws and regulations. The defendants filed a motion to dismiss the amended complaint on March 12, 2007, and on October 12, 2007, the court dismissed the case. On November 9, 2007, plaintiffs appealed the dismissal to the United States Court of Appeals for the Sixth Circuit. On October 21, 2009, the Sixth Circuit Court of Appeals generally affirmed the district court's dismissal, dismissing plaintiff's claims for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. However, the appellate court reversed the dismissal for the claim brought for violation of Section 11 of the Securities Act of 1933, and returned the case to the district court for further proceedings. On July 14, 2011, the court granted plaintiffs' motion to file a third amended complaint. This complaint asserts a claim under Section 11 of the Securities Act of 1933 on behalf of all purchasers of Omnicare common stock in the December 2005 public offering. The new complaint alleges that the 2005 registration statement contained false and misleading statements regarding Omnicare's policy of compliance with all applicable laws and regulations with particular emphasis on allegations of violation of the federal anti-kickback law in connection with three of Omnicare's acquisitions, Omnicare's contracts with two of its suppliers and its provision of pharmacist consultant services. On August 19, 2011, the defendants filed a motion to dismiss plaintiffs' most recent complaint and on February 13, 2012 the court dismissed the case and struck the case from the docket. On March 12, 2012, plaintiffs filed a notice of appeal in the United States Court of Appeals for the Sixth Circuit.

On February 13, 2006, two substantially similar shareholder derivative actions, entitled Isak v. Gemunder, et al., Case No. 06-CI-390, and Fragnoli v. Hutton, et al., Case No. 06-CI-389, were filed in Kentucky State Circuit Court, Kenton Circuit, against the members of Omnicare's board of directors, individually, purporting to assert claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment arising out of the Company's alleged violations of federal and state health care laws based upon the same purportedly improper generic drug substitution that is the subject of the federal purported class action lawsuits. The complaints seek, among other things, damages, restitution and injunctive relief. The Isak and Fragnoli actions were later consolidated by agreement of the parties. The Company believes that the allegations are without merit and intends to vigorously defend itself in this action.

During 2006, the Company experienced certain quality control and product recall issues, as well as fire damage, at one of its repackaging facilities. In connection with the resolution of these matters (the “Repack Matters”) the Company decided not to reopen this facility. The Company has been cooperating with federal and state officials who have been conducting investigations relating to the Repack Matters and certain billing issues. The Company believes all investigations into the Repack Matters have been closed. The Company received insurance recoveries, net of increased costs in the 2010 period, of approximately $ (10.5) million and $ (1.2) million for the years ended December 31, 2011 and 2010 , respectively.

The years ended December 31, 2012 , 2011 and 2010 included a $49.4 million , $55.7 million and $113.7 million charge, respectively, reflected in “Settlement, litigation and other related charges” on the Consolidated Statements of Comprehensive Income, primarily for estimated litigation and other related settlements and associated professional expenses for resolution of certain regulatory matters with the federal government and various states and a qui tam lawsuit, certain large customer disputes, the investigation by the federal government and certain states relating to drug substitutions and costs associated with the purported class and derivative actions against the Company. In connection with Omnicare's participation in Medicare, Medicaid and other healthcare programs, the Company is subject to various inspections, audits, inquiries and investigations by governmental/regulatory authorities responsible for enforcing the laws and regulations to which the Company is subject. Further, the Company maintains a compliance program which establishes certain routine periodic monitoring of the accuracy of the Company's billing systems and other regulatory compliance matters and encourages the reporting of errors and inaccuracies. As a result of the compliance program, Omnicare has made, and will continue to make, disclosures to the applicable governmental agencies of amounts, if any, determined to represent over-payments from the respective programs and, where applicable, those amounts, as well as any amounts relating to certain inspections, audits, inquiries and investigations activity are included in “Settlement, litigation and other related charges” on the Consolidated Statements of Comprehensive Income. Although the Company cannot know the ultimate outcome of the matters described in the preceding paragraphs other than as disclosed, there can be no assurance that the resolution of these matters will not have a material adverse impact on the Company’s consolidated results of operations, financial position or cash flows or, in the case of other billing matters, that these matters will be resolved in an amount that would not exceed the amount of the pretax charges previously recorded by the Company. As part of its ongoing operations, the Company is subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as governmental/regulatory authorities responsible for enforcing the laws and regulations to which the Company is subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. The Company from time to time receives government inquiries from federal and state agencies regarding compliance with various healthcare laws. In addition, the Company is also involved in various legal actions arising in the normal course of business. At any point in time, the Company is in varying stages

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Table of Contents of discussions on these matters. Omnicare records accruals for such contingencies to the extent that the Company concludes that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These matters are continuously being evaluated and, in many cases, are being contested by the Company and the outcome is not predictable. The inherently unpredictable nature of legal proceedings may be exacerbated by various factors from time to time, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. Consequently, unless otherwise stated, no estimate of the possible loss or range of loss in excess of the amounts accrued, if any, can be made at this time regarding the matters described above. Further, there can be no assurance that the ultimate resolution of these matters, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. The Company indemnifies the directors and officers of the Company for certain liabilities that might arise from the performance of their job responsibilities for the Company. Additionally, in the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this involves the resolution of claims made, or future claims that may be made, against the Company, its directors and/or officers, the outcomes of which are unknown and not currently predictable. Accordingly, no liabilities have been recorded for the indemnifications. Note 18 - Segment Information The Company is organized in two operating segments, Long-Term Care Group ("LTC") and Specialty Care Group ("SCG"). These segments are based on the operations of the underlying businesses and the customers they serve. The Company's larger reportable segment is LTC, which primarily provides distribution of pharmaceuticals, related pharmacy consulting and other ancillary services and medical supplies. LTC's customers are primarily skilled nursing, assisted living and other providers of healthcare services. The Company’s other reportable segment is SCG, which provides specialty pharmacy, key commercialization services for the biopharmaceutical industry and end-of-life pharmaceutical care management for hospice care agencies. The primary components of the "Corporate/Other" segment are the Company's corporate management oversight and administration, including its information technology and data management services, as well as other consolidating and eliminating entries, which have not been charged to reportable segments. The Company evaluates the performance of its segments based on revenue and operating income, and does not include segment assets or nonoperating income/expense items for management reporting purposes.

75

Table of Contents The table below presents information about the segments as of and for the years ended December 31, 2012 , 2011 and 2010 (in thousands):

The Company's continuing operations were primarily located in the United States with one pharmacy located in Canada which was not material to the consolidated sales or total assets of Omnicare and was disposed of in the third quarter of 2012.

76

For the years ended December 31,

2012: LTC SCG Corporate/Other Consolidated

Totals

Net sales $ 4,848,341 $ 1,301,761 $ 10,286 $ 6,160,388 Depreciation and amortization expense (69,818 ) (15,595 ) (50,528 ) (135,941 )

Settlement, litigation and other related charges (49,175 ) (200 ) — (49,375 )

Other charges, net (2,568 ) (2,090 ) (63,145 ) (67,803 )

Operating income (loss) from continuing operations 562,675 129,218 (244,715 ) 447,178 2011:

Net sales $ 5,123,477 $ 1,044,191 $ 15,254 $ 6,182,922 Depreciation and amortization expense (64,484 ) (16,221 ) (52,427 ) (133,132 )

Settlement, litigation and other related charges (55,031 ) (643 ) — (55,674 )

Other charges, net (15,049 ) — (1,044 ) (16,093 )

Operating income (loss) from continuing operations 476,800 98,938 (142,795 ) 432,943 2010:

Net sales $ 5,175,730 $ 838,790 $ 16,150 $ 6,030,670 Depreciation and amortization expense (58,271 ) (17,094 ) (75,181 ) (150,546 )

Settlement, litigation and other related charges (113,279 ) (430 ) — (113,709 )

Other charges, net (13,745 ) (14,173 ) (119,313 ) (147,231 )

Operating income (loss) from continuing operations 374,110 75,039 (259,995 ) 189,154

Table of Contents Note 19 - Summary of Quarterly Results The following table presents the Company's unaudited quarterly financial information for 2012 and 2011 (in thousands, except per share data):

77

First Second Third Fourth Full

2012 Quarter Quarter Quarter Quarter Year

Net sales $ 1,593,068 $ 1,536,027 $ 1,501,348 $ 1,529,945 $ 6,160,388 Cost of sales 1,224,968 1,168,681 1,130,053 1,153,281 4,676,983 Gross profit 368,100 367,346 371,295 376,664 1,483,405 Selling, general and administrative expenses 200,124 201,878 203,550 214,090 819,642 Provision for doubtful accounts 24,431 24,078 24,047 26,851 99,407 Settlement, litigation and other related charges 7,203 26,093 4,931 11,148 49,375 Other charges 11,512 49,209 5,036 2,046 67,803 Operating income 124,830 66,088 133,731 122,529 447,178 Interest expense, net of investment income (30,834 ) (35,574 ) (39,036 ) (29,659 ) (135,103 )

Income from continuing operations before income taxes 93,996 30,514 94,695 92,870 312,075 Income tax provision 38,257 11,822 33,270 33,852 117,201 Income from continuing operations 55,739 18,692 61,425 59,018 194,874 Loss from discontinued operations — — — — Net income $ 55,739 $ 18,692 $ 61,425 $ 59,018 $ 194,874

Earnings per common share - Basic: (a) Continuing operations $ 0.50 $ 0.17 $ 0.56 $ 0.55 $ 1.78 Discontinued operations — — — — — Net income $ 0.50 $ 0.17 $ 0.56 $ 0.55 $ 1.78

Earnings per common share - Diluted: (a) Continuing operations $ 0.48 $ 0.17 $ 0.55 $ 0.54 $ 1.73 Discontinued operations — — — — — Net income $ 0.48 $ 0.17 $ 0.55 $ 0.54 $ 1.73

Dividends per common share $ 0.0700 $ 0.0700 $ 0.1400 $ 0.1400 $ 0.4200

Weighted average number of common shares outstanding: Basic 111,487 110,580 109,315 106,773 109,531

Diluted 116,500 113,472 111,951 110,074 112,988

Comprehensive income $ 56,161 $ 17,003 $ 63,354 $ 58,226 $ 194,744

Table of Contents

Notes to Summary of Quarterly Results:

Note 20 - Guarantor Subsidiaries

The Company’s 7.75% Senior Subordinated Notes due 2020, the 3.75% Convertible Notes due 2025 and the 3.75% Convertible Notes due 2042 are fully and unconditionally guaranteed subject to certain customary release provisions on an unsecured, joint and several basis by certain wholly-owned subsidiaries of the Company (the “Guarantor Subsidiaries”). The following condensed consolidating financial data illustrates the composition of Omnicare, Inc. (“Parent”), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries as of December 31, 2012 and 2011 for the balance sheets, as well as the statements of comprehensive income and the statements of cash flows for each of the three years in the period ended December 31, 2012 . Management believes separate complete financial statements of the respective Guarantor Subsidiaries would not provide information that would be necessary for evaluating the sufficiency of the Guarantor Subsidiaries, and thus are not presented. No consolidating/eliminating adjustments column is presented for the condensed consolidating statements of cash flows since there were no significant consolidating/eliminating adjustment amounts during the periods presented.

78

First Second Third Fourth Full

2011 Quarter Quarter Quarter Quarter Year

Net sales $ 1,525,571 $ 1,555,906 $ 1,544,360 $ 1,557,085 $ 6,182,922 Cost of sales 1,190,612 1,219,513 1,198,299 1,197,401 4,805,825 Gross profit 334,959 336,393 346,061 359,684 1,377,097 Selling, general and administrative expenses 190,166 192,474 191,293 199,902 773,835 Provision for doubtful accounts 24,530 24,357 24,255 25,410 98,552 Settlement, litigation and other related charges 6,013 19,816 6,742 23,103 55,674 Other charges 1,889 2,332 6,718 5,154 16,093 Operating income 112,361 97,414 117,053 106,115 432,943 Interest expense, net of investment income (34,382 ) (33,730 ) (55,926 ) (36,080 ) (160,118 )

Income from continuing operations before income taxes 77,979 63,684 61,127 70,035 272,825 Income tax provision 28,824 27,403 23,343 31,723 111,293 Income from continuing operations 49,155 36,281 37,784 38,312 161,532 Loss from discontinued operations (19,851 ) (37,728 ) (9,900 ) (7,129 ) (74,608 )

Net income (loss) $ 29,304 $ (1,447 ) $ 27,884 $ 31,183 $ 86,924

Earnings (loss) per common share - Basic: (a) Continuing operations $ 0.43 $ 0.32 $ 0.34 $ 0.34 $ 1.43 Discontinued operations (0.17 ) (0.33 ) (0.09 ) (0.06 ) (0.66 )

Net income (loss) $ 0.26 $ (0.01 ) $ 0.25 $ 0.28 $ 0.77

Earnings (loss) per common share - Diluted: (a) Continuing operations $ 0.43 $ 0.32 $ 0.33 $ 0.34 $ 1.41 Discontinued operations (0.17 ) (0.33 ) (0.09 ) (0.06 ) (0.65 )

Net income (loss) $ 0.26 $ (0.01 ) $ 0.24 $ 0.27 $ 0.76

Dividends per common share $ 0.0325 $ 0.0400 $ 0.0400 $ 0.0400 $ 0.1525

Weighted average number of common shares outstanding: Basic 114,129 113,487 112,729 111,687 113,000

Diluted 115,064 114,701 114,644 114,344 114,781

Comprehensive income (loss) $ 25,925 $ (981 ) $ 24,002 $ 32,006 $ 80,952

(a) Earnings per share is calculated independently for each separately reported quarterly and full year period. Accordingly, the sum of the separately reported quarters may not necessarily be equal to the per share amount for the corresponding full year period, as independently calculated.

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Summary Consolidating Statements of Comprehensive Income

(in thousands) For the years ended December 31,

2012: Parent Guarantor

Subsidiaries Non-Guarantor

Subsidiaries

Consolidating / Eliminating Adjustments

Omnicare, Inc. and Subsidiaries

Net sales $ — $ 6,023,153 $ 137,235 $ — $ 6,160,388 Cost of sales — 4,589,932 87,051 — 4,676,983 Gross profit — 1,433,221 50,184 — 1,483,405 Selling, general and administrative expenses 4,816 793,205 21,621 — 819,642 Provision for doubtful accounts — 97,862 1,545 — 99,407 Settlement, litigation and other related charges — 49,375 — — 49,375 Other charges 35,092 36,723 (4,012 ) — 67,803 Operating (loss) income (39,908 ) 456,056 31,030 — 447,178 Interest expense, net of investment income (133,368 ) (1,089 ) (646 ) — (135,103 )

(Loss) income from continuing operations before income taxes (173,276 ) 454,967 30,384 — 312,075 Income tax (benefit) expense (66,763 ) 173,729 10,235 — 117,201 (Loss) income from continuing operations (106,513 ) 281,238 20,149 — 194,874 Equity in net income of subsidiaries 301,387 — — (301,387 ) — Net income $ 194,874 $ 281,238 $ 20,149 $ (301,387 ) $ 194,874

Comprehensive income $ 194,744 $ 281,238 $ 21,533 $ (302,771 ) $ 194,744

2011:

Net sales $ — $ 6,057,114 $ 125,808 $ — $ 6,182,922 Cost of sales — 4,720,920 84,905 — 4,805,825 Gross profit — 1,336,194 40,903 — 1,377,097 Selling, general and administrative expenses 15,579 746,579 11,677 — 773,835 Provision for doubtful accounts — 96,623 1,929 — 98,552 Settlement, litigation and other related charges — 55,674 — — 55,674 Other charges — 16,093 — — 16,093 Operating (loss) income (15,579 ) 421,225 27,297 — 432,943 Interest expense, net of investment income (158,621 ) (1,491 ) (6 ) — (160,118 )

(Loss) income from continuing operations before income taxes (174,200 ) 419,734 27,291 — 272,825 Income tax (benefit) expense (66,753 ) 167,588 10,458 — 111,293 (Loss) income from continuing operations (107,447 ) 252,146 16,833 — 161,532 Loss from discontinued operations — (71,425 ) (3,183 ) — (74,608 )

Equity in net income of subsidiaries 194,371 — — (194,371 ) — Net income $ 86,924 $ 180,721 $ 13,650 $ (194,371 ) $ 86,924

Comprehensive income $ 80,952 $ 180,721 $ — $ 8,959 $ (189,680 ) $ 80,952

2010:

Net sales $ — $ 5,891,219 $ 139,451 $ — $ 6,030,670 Cost of sales — 4,590,118 104,322 — 4,694,440 Gross profit — 1,301,101 35,129 — 1,336,230 Selling, general and administrative expenses 9,569 722,789 15,250 — 747,608 Provision for doubtful accounts — 134,391 2,239 — 136,630 Settlement, litigation and other related charges — 113,709 — — 113,709 Other charges — 149,129 — — 149,129 Operating (loss) income (9,569 ) 181,083 17,640 — 189,154 Interest expense, net of investment income (162,925 ) 7,279 — — (155,646 )

(Loss) income from continuing operations before income taxes (172,494 ) 188,362 17,640 — 33,508 Income tax (benefit) expense (64,478 ) 82,225 1,297 — 19,044 (Loss) income from continuing operations (108,016 ) 106,137 16,343 — 14,464

79

Loss from discontinued operations — (85,684 ) (34,889 ) — (120,573 )

Equity in net income of subsidiaries 1,907 — — (1,907 ) — Net income (loss) $ (106,109 ) $ 20,453 $ (18,546 ) $ (1,907 ) $ (106,109 )

Comprehensive income (loss) $ (75,555 ) $ 20,453 $ (22,353 ) $ 1,900 $ (75,555 )

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Balance Sheets

(in thousands)

80

As of December 31, 2012: Parent Guarantor Subsidiaries Non-Guarantor

Subsidiaries

Consolidating / Eliminating Adjustments

Omnicare, Inc. and Subsidiaries

ASSETS

Cash and cash equivalents $ 383,674 $ 58,312 $ 12,227 $ — $ 454,213 Restricted cash — 1,066 — — 1,066 Accounts receivable, net (including intercompany) — 849,753 197,370 (190,071 ) 857,052 Inventories — 379,448 6,250 — 385,698 Deferred income tax benefits, net-current — 137,736 — (1,550 ) 136,186 Other current assets 1,765 248,833 14,871 (10,825 ) 254,644

Total current assets 385,439 1,675,148 230,718 (202,446 ) 2,088,859 Properties and equipment, net — 276,056 6,604 — 282,660 Goodwill — 4,219,900 37,059 — 4,256,959 Identifiable intangible assets, net — 193,852 3,021 — 196,873 Other noncurrent assets 75,336 93,508 11,382 (16,313 ) 163,913 Investment in subsidiaries 5,453,702 — — (5,453,702 ) —

Total assets $ 5,914,477 $ 6,458,464 $ 288,784 $ (5,672,461 ) $ 6,989,264

LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities (including intercompany) $ 60,454 $ 587,025 $ 35,431 $ (200,896 ) $ 482,014 Long-term debt, notes and convertible debentures 2,012,807 17,223 5,000 (5,000 ) 2,030,030 Deferred income tax liabilities, net-noncurrent 335,504 559,405 21,301 (1,550 ) 914,660 Other noncurrent liabilities — 68,161 — (11,313 ) 56,848 Stockholders’ equity 3,505,712 5,226,650 227,052 (5,453,702 ) 3,505,712

Total liabilities and stockholders’ equity $ 5,914,477 $ 6,458,464 $ 288,784 $ (5,672,461 ) $ 6,989,264

As of December 31, 2011:

ASSETS

Cash and cash equivalents $ 460,253 $ 101,786 $ 18,223 $ — $ 580,262 Restricted cash — 2,336 — — 2,336 Accounts receivable, net (including intercompany) — 920,829 119,614 (109,129 ) 931,314 Inventories — 412,081 7,297 — 419,378 Deferred income tax benefits, net-current — 156,139 — (2,695 ) 153,444 Other current assets 3,865 193,079 13,693 — 210,637

Total current assets 464,118 1,786,250 158,827 (111,824 ) 2,297,371 Properties and equipment, net — 220,066 5,191 — 225,257 Goodwill — 4,171,328 79,251 — 4,250,579 Identifiable intangible assets, net — 229,051 6,219 — 235,270 Other noncurrent assets 77,485 100,725 6,423 — 184,633 Investment in subsidiaries 5,593,155 — — (5,593,155 ) —

Total assets $ 6,134,758 $ 6,507,420 $ 255,911 $ (5,704,979 ) $ 7,193,110

LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities (including intercompany) $ 59,596 $ 569,623 $ 19,977 $ (109,129 ) $ 540,067 Long-term debt, notes and convertible debentures 1,957,167 11,107 — — 1,968,274 Deferred income tax liabilities, net-noncurrent 322,559 500,242 18,751 (2,695 ) 838,857 Other noncurrent liabilities — 50,476 — — 50,476 Stockholders’ equity 3,795,436 5,375,972 217,183 (5,593,155 ) 3,795,436

Total liabilities and stockholders’ equity $ 6,134,758 $ 6,507,420 $ 255,911 $ (5,704,979 ) $ 7,193,110

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows

(in thousands)

81

For the year ended December 31,

2012: Parent Guarantor

Subsidiaries Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (88,461 ) $ 636,402 $ (3,457 ) $ 544,484 Cash flows from investing activities: Acquisition of businesses, net of cash received — (34,873 ) — (34,873 )

Divestiture of businesses, net — 19,207 — 19,207 Capital expenditures — (97,579 ) (2,341 ) (99,920 )

Marketable securities (25,514 ) — 496 (25,018 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trusts — 1,326 — 1,326 Other — (56 ) — (56 )

Net cash flows used in investing activities (25,514 ) (111,975 ) (1,845 ) (139,334 )

Cash flows from financing activities: Payments on term loans (24,688 ) — — (24,688 )

Proceeds from long-term borrowings and obligations 425,000 — — 425,000 Payments on long-term borrowings and obligations (453,573 ) — — (453,573 )

Capped Call transaction (48,126 ) — — (48,126 )

Fees paid for financing activities (7,566 ) — — (7,566 )

Decrease in cash overdraft balance (12 ) (14,915 ) — (14,927 )

Payments for Omnicare common stock repurchases (388,968 ) — — (388,968 )

Proceeds for stock awards and exercise of stock options, net of stock tendered in payment 24,951 — — 24,951 Dividends paid (45,214 ) — — (45,214 )

Other 555,592 (552,986 ) (694 ) 1,912 Net cash flows from / (used in) financing activities 37,396 (567,901 ) (694 ) (531,199 )

Net decrease in cash and cash equivalents (76,579 ) (43,474 ) (5,996 ) (126,049 )

Cash and cash equivalents at beginning of year 460,253 101,786 18,223 580,262 Cash and cash equivalents at end of year $ 383,674 $ 58,312 $ 12,227 $ 454,213

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows - Continued

(in thousands)

82

For the year ended December 31,

2011: Parent Guarantor

Subsidiaries Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (118,642 ) $ 665,702 $ 2,962 $ 550,022 Cash flows from investing activities: Acquisition of businesses, net of cash received — (101,933 ) — (101,933 )

Divestiture of businesses, net — 13,099 — 13,099 Capital expenditures — (60,396 ) (2,410 ) (62,806 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trusts — (275 ) — (275 )

Other — (3,486 ) (10 ) (3,496 )

Net cash flows used in investing activities — (152,991 ) (2,420 ) (155,411 )

Cash flows from financing activities: Payments on term loans (5,625 ) — — (5,625 )

Proceeds from long-term borrowings and obligations 600,000 — — 600,000 Payments on long-term borrowings and obligations (777,609 ) — — (777,609 )

Fees paid for financing activities (13,780 ) — — (13,780 )

Increase in cash overdraft balance 5,921 5,753 — 11,674 Payments for Omnicare common stock repurchases (140,127 ) — — (140,127 )

Proceeds for stock awards and exercise of stock options, net of stock tendered in payment 30,712 — — 30,712 Dividends paid (17,217 ) — — (17,217 )

Other 435,842 (434,276 ) 1,574 3,140 Net cash flows from / (used in) financing activities 118,117 (428,523 ) 1,574 (308,832 )

Net (decrease) increase in cash and cash equivalents (525 ) 84,188 2,116 85,779 Less increase in cash and cash equivalents of discontinued operations — — 1 1 (Decrease) increase in cash and cash equivalents of continuing operations (525 ) 84,188 2,115 85,778 Cash and cash equivalents at beginning of year 460,778 17,598 16,108 494,484 Cash and cash equivalents at end of year $ 460,253 $ 101,786 $ 18,223 $ 580,262

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows - Continued

(in thousands)

83

For the year ended December 31,

2010: Parent Guarantor

Subsidiaries Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (86,774 ) $ 443,924 $ 11,465 $ 368,615 Cash flows from investing activities: Acquisition of businesses, net of cash received — (111,812 ) — (111,812 )

Divestiture of businesses, net — — — — Capital expenditures — (22,496 ) (1,021 ) (23,517 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trust — 11,082 — 11,082 Other — (1,791 ) (14 ) (1,805 )

Net cash flows used in investing activities — (125,017 ) (1,035 ) (126,052 )

Cash flows from financing activities: Payments on term loans (125,000 ) — — (125,000 )

Proceeds from long-term borrowings and obligations 975,000 — — 975,000 Payments on long-term borrowings and obligations (726,533 ) — — (726,533 )

Fees paid for financing activities (33,249 ) (33,249 )

Increase in cash overdraft balance 9,744 8,477 — 18,221 Payments for Omnicare common stock repurchases (100,942 ) — — (100,942 )

Payments for stock awards and exercise of stock options, net of stock tendered in payment (13,989 ) — — (13,989 )

Dividends paid (12,839 ) — — (12,839 )

Other 344,494 (342,826 ) (6,957 ) (5,289 )

Net cash flows from / (used in) financing activities 316,686 (334,349 ) (6,957 ) (24,620 )

Net increase (decrease) in cash and cash equivalents 229,912 (15,442 ) 3,473 217,943 Less increase (decrease) in cash and cash equivalents of discontinued operations — (838 ) 4 (834 )

Increase (decrease) in cash and cash equivalents of continuing operations 229,912 (14,604 ) 3,469 218,777 Cash and cash equivalents at beginning of year 230,866 32,202 12,639 275,707 Cash and cash equivalents at end of year $ 460,778 $ 17,598 $ 16,108 $ 494,484

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

The Company’s 3.25% Convertible Debentures due 2035 are fully and unconditionally guaranteed subject to certain customary release provisions on an unsecured basis by Omnicare Purchasing Company, LP, a wholly-owned subsidiary of the Company (the “Guarantor Subsidiary”). The following condensed consolidating financial data illustrates the composition of Omnicare, Inc. (“Parent”), the Guarantor Subsidiary and the Non-Guarantor Subsidiaries as of December 31, 2012 and 2011 for the balance sheets, as well as the statements of comprehensive income and the statements of cash flows for each of the three years in the period ended December 31, 2012 . Management believes separate complete financial statements of the Guarantor Subsidiary would not provide information that would be necessary for evaluating the sufficiency of the Guarantor Subsidiary, and thus are not presented. The Guarantor Subsidiary does not have any material net cash flows in the condensed consolidating statements of cash flows. No consolidating/eliminating adjustments column is presented for the condensed consolidating statements of cash flows since there were no significant consolidating/eliminating adjustment amounts during the periods presented.

84

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Summary Consolidating Statements of Comprehensive Income

(in thousands)

For the years ended December 31,

2012: Parent Guarantor Subsidiary Non-Guarantor

Subsidiaries

Consolidating/ Eliminating Adjustments

Omnicare, Inc. and Subsidiaries

Net sales $ — $ — $ 6,160,388 $ — $ 6,160,388 Cost of sales — — 4,676,983 — 4,676,983 Gross profit — — 1,483,405 — 1,483,405 Selling, general and administrative expenses 4,816 1,438 813,388 — 819,642 Provision for doubtful accounts — — 99,407 — 99,407 Settlement, litigation and other related charges — — 49,375 — 49,375 Other charges 35,092 — 32,711 — 67,803 Operating (loss) income (39,908 ) (1,438 ) 488,524 — 447,178 Interest expense, net of investment income (133,368 ) — (1,735 ) — (135,103 )

(Loss) income from continuing operations before income taxes (173,276 ) (1,438 ) 486,789 — 312,075 Income tax (benefit) expense (66,763 ) (557 ) 184,521 — 117,201 (Loss) income from continuing operations (106,513 ) (881 ) 302,268 — 194,874 Loss from discontinued operations — — — — — Equity in net income of subsidiaries 301,387 — — (301,387 ) — Net income (loss) $ 194,874 $ (881 ) $ 302,268 $ (301,387 ) $ 194,874

Comprehensive income (loss) $ 194,744 $ (881 ) $ 303,652 $ (302,771 ) $ 194,744 2011:

Net sales $ — $ — $ 6,182,922 $ — $ 6,182,922 Cost of sales — — 4,805,825 — 4,805,825 Gross profit — — 1,377,097 — 1,377,097 Selling, general and administrative expenses 15,579 1,467 756,789 — 773,835 Provision for doubtful accounts — — 98,552 — 98,552 Settlement, litigation and other related charges — — 55,674 — 55,674 Other charges — — 16,093 — 16,093 Operating (loss) income (15,579 ) (1,467 ) 449,989 — 432,943 Interest expense, net of interest income (158,621 ) — (1,497 ) — (160,118 )

(Loss) income from continuing operations before income taxes (174,200 ) (1,467 ) 448,492 — 272,825 Income tax (benefit) expense (66,753 ) (562 ) 178,608 — 111,293 (Loss) income from continuing operations (107,447 ) (905 ) 269,884 — 161,532 Loss from discontinued operations — — (74,608 ) — (74,608 )

Equity in net income of subsidiaries 194,371 — — (194,371 ) — Net income (loss) $ 86,924 $ (905 ) $ 195,276 $ (194,371 ) $ 86,924

Comprehensive income (loss) $ 80,952 $ (905 ) $ 190,585 $ (189,680 ) $ 80,952 2010:

Net sales $ — $ — $ 6,030,670 $ — $ 6,030,670 Cost of sales — — 4,694,440 — 4,694,440 Gross profit — — 1,336,230 — 1,336,230 Selling, general and administrative expenses 9,569 1,403 736,636 — 747,608 Provision for doubtful accounts — — 136,630 — 136,630 Settlement, litigation and other related charges — — 113,709 — 113,709 Other charges — — 149,129 — 149,129 Operating (loss) income (9,569 ) (1,403 ) 200,126 — 189,154 Interest expense, net of investment income (162,925 ) — 7,279 — (155,646 )

(Loss) income from continuing operations before income taxes (172,494 ) (1,403 ) 207,405 — 33,508 Income tax (benefit) expense (64,478 ) (524 ) 84,046 — 19,044

85

(Loss) income from continuing operations (108,016 ) (879 ) 123,359 — 14,464 Loss from discontinued operations — — (120,573 ) — (120,573 )

Equity in net income of subsidiaries 1,907 — — (1,907 ) — Net income (loss) $ (106,109 ) $ (879 ) $ 2,786 $ (1,907 ) $ (106,109 )

Comprehensive income (loss) $ (75,555 ) $ (879 ) $ (1,021 ) $ 1,900 $ (75,555 )

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Balance Sheets

(in thousands)

As of December 31, 2012: Parent Guarantor Subsidiary Non-Guarantor

Subsidiaries

Consolidating/ Eliminating Adjustments

Omnicare, Inc. and Subsidiaries

ASSETS

Cash and cash equivalents $ 383,674 $ — $ 70,539 $ — $ 454,213 Restricted cash — — 1,066 — 1,066 Accounts receivable, net (including intercompany) — 204 857,052 (204 ) 857,052 Inventories — — 385,698 — 385,698 Deferred income tax benefits, net-current — — 137,736 (1,550 ) 136,186 Other current assets 1,765 — 252,879 — 254,644

Total current assets 385,439 204 1,704,970 (1,754 ) 2,088,859 Properties and equipment, net — 22 282,638 — 282,660 Goodwill — — 4,256,959 — 4,256,959 Identifiable intangible assets, net — — 196,873 — 196,873 Other noncurrent assets 75,336 19 88,558 — 163,913 Investment in subsidiaries 5,453,702 — — (5,453,702 ) —

Total assets $ 5,914,477 $ 245 $ 6,529,998 $ (5,455,456 ) $ 6,989,264

LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities (including intercompany) $ 60,454 $ 54 $ 421,710 $ (204 ) $ 482,014 Long-term debt, notes and convertible debentures 2,012,807 — 17,223 — 2,030,030 Deferred income tax liabilities, net-noncurrent 335,504 — 580,706 (1,550 ) 914,660 Other noncurrent liabilities — — 56,848 — 56,848 Stockholders’ equity 3,505,712 191 5,453,511 (5,453,702 ) 3,505,712

Total liabilities and stockholders’ equity $ 5,914,477 $ 245 $ 6,529,998 $ (5,455,456 ) $ 6,989,264

As of December 31, 2011:

ASSETS

Cash and cash equivalents $ 460,253 $ — $ 120,009 $ — $ 580,262 Restricted cash — — 2,336 — 2,336 Accounts receivable, net (including intercompany) — 177 931,314 (177 ) 931,314 Inventories — — 419,378 — 419,378 Deferred income tax benefits, net-current — — 153,989 (545 ) 153,444 Other current assets 3,865 — 206,772 — 210,637

Total current assets 464,118 177 1,833,798 (722 ) 2,297,371 Properties and equipment, net — 17 225,240 — 225,257 Goodwill — 19 4,250,560 — 4,250,579 Identifiable intangible assets, net — — 235,270 — 235,270 Other noncurrent assets 77,485 — 107,148 — 184,633 Investment in subsidiaries 5,593,155 — — (5,593,155 ) —

Total assets $ 6,134,758 $ 213 $ 6,652,016 $ (5,593,877 ) $ 7,193,110

LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities (including intercompany) $ 59,596 $ 82 $ 480,566 $ (177 ) $ 540,067 Long-term debt, notes and convertible debentures 1,957,167 — 11,107 — 1,968,274 Deferred income tax liabilities, net-noncurrent 322,559 — 516,843 (545 ) 838,857 Other noncurrent liabilities — — 50,476 — 50,476 Stockholders’ equity 3,795,436 131 5,593,024 (5,593,155 ) 3,795,436

Total liabilities and stockholders’ equity $ 6,134,758 $ 213 $ 6,652,016 $ (5,593,877 ) $ 7,193,110

86

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows

(in thousands)

87

For the year ended December 31,

2012: Parent Guarantor Subsidiary Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (88,461 ) $ — $ 632,945 $ 544,484 Cash flows from investing activities: Acquisition of businesses, net of cash received — — (34,873 ) (34,873 )

Divestitures of businesses, net — — 19,207 19,207 Capital expenditures — — (99,920 ) (99,920 )

Marketable securities (25,514 ) — 496 (25,018 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trust — — 1,326 1,326 Other — — (56 ) (56 )

Net cash flows used in investing activities (25,514 ) — (113,820 ) (139,334 )

Cash flows from financing activities: Payments on term loans (24,688 ) — — (24,688 )

Proceeds from long-term borrowings and obligations 425,000 — — 425,000 Payments on long-term borrowings and obligations (453,573 ) — — (453,573 )

Capped Call transaction (48,126 ) — — (48,126 )

Fees paid for financing activities (7,566 ) — — (7,566 )

Decrease in cash overdraft balance (12 ) — (14,915 ) (14,927 )

Payments for Omnicare common stock repurchases (388,968 ) — — (388,968 )

Proceeds for stock awards and exercise of stock options, net of stock tendered in payment 24,951 — — 24,951 Dividends paid (45,214 ) — — (45,214 )

Other 555,592 — (553,680 ) 1,912 Net cash flows from / (used in) financing activities 37,396 — (568,595 ) (531,199 )

Net decrease in cash and cash equivalents (76,579 ) — (49,470 ) (126,049 )

Cash and cash equivalents at beginning of year 460,253 — 120,009 580,262 Cash and cash equivalents at end of year $ 383,674 $ — $ 70,539 $ 454,213

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows

(in thousands)

88

For the year ended December 31,

2011: Parent Guarantor Subsidiary Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (118,642 ) $ — $ 668,664 $ 550,022 Cash flows from investing activities: Acquisition of businesses, net of cash received — — (101,933 ) (101,933 )

Divestitures of businesses, net — — 13,099 13,099 Capital expenditures — — (62,806 ) (62,806 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trust — — (275 ) (275 )

Other — — (3,496 ) (3,496 )

Net cash flows used in investing activities — — (155,411 ) (155,411 )

Cash flows from financing activities:

Payments on term loans (5,625 ) — — (5,625 )

Proceeds from long-term borrowings and obligations 600,000 — — 600,000 Payments on long-term borrowings and obligations (777,609 ) — — (777,609 )

Fees paid for financing activities (13,780 ) — — (13,780 )

Increase in cash overdraft balance 5,921 — 5,753 11,674 Payments for Omnicare common stock repurchases (140,127 ) — — (140,127 )

Payments for stock awards and exercise of stock options, net of stock tendered in payment 30,712 — — 30,712 Dividends paid (17,217 ) — — (17,217 )

Other 435,842 (432,702 ) 3,140 Net cash flows from / (used in) financing activities 118,117 — (426,949 ) (308,832 )

Net (decrease) increase in cash and cash equivalents (525 ) — 86,304 85,779 Less increase in cash and cash equivalents of discontinued operations — — 1 1 (Decrease) increase in cash and cash equivalents of continuing operations (525 ) — 86,303 85,778 Cash and cash equivalents at beginning of year 460,778 — 33,706 494,484

Cash and cash equivalents at end of year $ 460,253 $ — $ 120,009 $ 580,262

Table of Contents Note 20 - Guarantor Subsidiaries - Continued

Condensed Consolidating Statements of Cash Flows

(in thousands)

89

For the year ended December 31,

2010: Parent Guarantor

Subsidiaries Non-Guarantor

Subsidiaries Omnicare, Inc. and

Subsidiaries

Cash flows from operating activities:

Net cash flows (used in) / from operating activities $ (86,774 ) $ — $ 455,389 $ 368,615 Cash flows from investing activities: Acquisition of businesses, net of cash received — — (111,812 ) (111,812 )

Divestitures of businesses, net — — — — Capital expenditures — — (23,517 ) (23,517 )

Transfer of cash to trusts for employee health and severance costs, net of payments out of the trust — — 11,082 11,082 Other — — (1,805 ) (1,805 )

Net cash flows used in investing activities — — (126,052 ) (126,052 )

Cash flows used in financing activities:

Payments on term loans (125,000 ) — — (125,000 )

Proceeds from long-term borrowings and obligations 975,000 — — 975,000 Payments on long-term borrowings and obligations (726,533 ) — — (726,533 )

Fees paid for financing activities (33,249 ) — (33,249 )

Increase in cash overdraft balance 9,744 — 8,477 18,221 Payments for Omnicare common stock repurchases (100,942 ) — — (100,942 )

Payments for stock awards and exercise of stock options, net of stock tendered in payment (13,989 ) — — (13,989 )

Dividends paid (12,839 ) — — (12,839 )

Other 344,494 — (349,783 ) (5,289 )

Net cash flows from / (used in) financing activities 316,686 — (341,306 ) (24,620 )

Net increase (decrease) in cash and cash equivalents 229,912 — (11,969 ) 217,943 Less decrease in cash and cash equivalents of discontinued operations — — (834 ) (834 )

Increase (decrease) in cash and cash equivalents of continuing operations 229,912 — (11,135 ) 218,777 Cash and cash equivalents at beginning of year 230,866 — 44,841 275,707

Cash and cash equivalents at end of year $ 460,778 $ — $ 33,706 $ 494,484

Table of Contents ITEM 9. – CHANGES IN AND DISAGREEMENTS WITH ACCOUNT ANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. – CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures . Based on an evaluation, as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) are effective to ensure that information required to be disclosed in the reports that the Company files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and are also effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Changes in Internal Control. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth quarter ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process that is designed under the supervision of the Chief Executive Officer and the Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment under the framework in Internal Control – Integrated Framework , our management concluded that, as of December 31, 2012 , our internal control over financial reporting was effective. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

90

Table of Contents ITEM 9B. – OTHER INFORMATION None.

PART III ITEM 10. – DIRECTORS, EXECUTIVE OFFICERS AND CORPOR ATE GOVERNANCE The information required by this Item 10 regarding our directors and executive officers, our audit committee and Section 16(a) compliance is included under the captions “Election of Directors,” “Governance of the Company and Board Matters” and “Section 16(A) Beneficial Ownership Reporting Compliance” in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference. Information concerning our executive officers is also included under the caption “Executive Officers of the Company” in Part I of this Report. There have been no material changes to the procedures by which stockholders may recommend nominees to the board of directors as described in the Company's Proxy Statement dated April 19, 2012. Audit Committee Financial Expert. The information required by this Item 10 disclosure requirement is included in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference. Codes of Ethics . We expect all of our employees to act in accordance with and to abide by the Omnicare “Code of Business Conduct and Ethics – It’s About Integrity” (the “Omnicare Integrity Code”). The Omnicare Integrity Code is a set of business values and procedures that provides guidance to Omnicare employees with respect to compliance with the law in all of their business dealings and decisions on behalf of Omnicare and with respect to the maintenance of ethical standards, which are a vital and integral part of Omnicare’s business. The Omnicare Integrity Code applies to all employees including the Chief Executive Officer, the Chief Financial Officer, the Principal Accounting Officer and other senior financial officers (the “Covered Officers”). In addition to being bound by the Omnicare Integrity Code’s provisions about ethical conduct, conflicts of interest and compliance with law, Omnicare has adopted a Code of Ethics for the Covered Officers. The Company will furnish any person, without charge, a copy of the Code of Ethics for the Covered Officers upon written request addressed to Omnicare, Inc., 900 Omnicare Center, 201 East Fourth Street, Cincinnati, OH 45202, Attn.: Corporate Secretary. A copy of the Code of Ethics for the Covered Officers can also be found on our Web site at www.omnicare.com . Any waiver of any provision of the Code granted to a Covered Officer may only be granted by our Board of Directors or its Audit Committee. If a waiver is granted, information concerning the waiver will be posted on our Web site at www.omnicare.com for a period of 12 months. ITEM 11. – EXECUTIVE COMPENSATION The information required by this Item 11 is included in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference. ITEM 12. – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Equity Compensation Plan Information The following table sets forth certain information regarding our equity compensation plans as of December 31, 2012 (in thousands, except exercise price data):

91

Plan Category

Number of Securities to be issued Upon Exercise of Outstanding Options and

Warrants

Weighted Average Exercise Price of Outstanding Options and Warrants

Number of Securities Remaining Available for Future Issuance Under

Equity Compensation Plans (c)

Equity compensation plans

approved by stockholders (a) 1,972 $ 41.24 2,436 Equity compensation plans not approved by stockholders (b) 138 38.41 —

Total 2,110 $ 41.05 2,436

Table of Contents

The remaining information required by this Item 12 is included in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference. ITEM 13. – CERTAIN RELATIONSHIPS AND RELATED TRANSA CTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item 13 is included in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference. ITEM 14. – PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item 14 is included in our proxy statement for our 2013 annual meeting of stockholders and is incorporated herein by reference.

PART IV ITEM 15. – EXHIBITS AND FINANCIAL STATEMENT SCHEDUL ES (a)(1) Financial Statements

Our 2012 Consolidated Financial Statements are included in Part II, Item 8, of this Filing. (a)(2) Financial Statement Schedule

See Index to Financial Statements and Financial Statement Schedule at Part II, Item 8, of this Filing. (a)(3) Exhibits See Index of Exhibits.

92

(a) Includes the 1992 Long-Term Stock Incentive Plan and the 2004 Stock and Incentive Plan.

(b) Includes the 1998 Long-Term Employee Incentive Plan as further discussed in the "Stock-Based Employee Compensation" note of the Notes to Consolidated Financial Statements included at Item 8 of this Filing. Additionally, at December 31, 2012, the outstanding amount includes 10 compensation related warrants issued in 2003 at an exercise price of $33.08 per share.

(c) Excludes securities listed in the first column of the table.

Table of Contents

SIGNATURES Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange Act of l934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on this 19th day of February 2013.

Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

James D. Shelton, Director* Mark A. Emmert, Director* Steven J. Heyer, Director* Sam R. Leno, Director* Andrea R. Lindell, DNSc, RN, Director* Barry Schochet, Director* Amy Wallman, Director* *Alexander M. Kayne, by signing his name hereto, signs this document on behalf of each person indicated above pursuant to a power of attorney duly executed by such person and filed with the Securities and Exchange Commission.

S-1

OMNICARE, INC. /s/Robert O. Kraft

Robert O. Kraft Senior Vice President and Chief Financial Officer

Signature Title Date

/s/John L. Workman

Chief Executive Officer and Director

February 19, 2013

John L. Workman (Principal Executive Officer)

/s/Robert O. Kraft

Senior Vice President and Chief Financial Officer

Robert O. Kraft (Principal Financial and Accounting Officer)

/s/Alexander M. Kayne

Alexander M. Kayne (Attorney-in-Fact)

Table of Contents

SCHEDULE II

OMNICARE, INC. AND SUBSIDIARY COMPANIES Valuation and Qualifying Accounts

(in thousands)

S-2

Year ended December 31,

Balance at beginning of

period

Additions charged to cost

and expenses

Write-offs, (net of

recoveries) and other

Balance at end

of period

Allowance for uncollectible accounts receivable:

2012 $ 358,713 $ 99,407 $ (188,704 ) $ 269,416 2011 401,027 98,552 (140,866 ) 358,713 2010 332,541 136,630 (68,144 ) 401,027 Tax valuation allowance: 2012 $ 20,502 $ 3,765 $ (3,230 ) $ 21,037 2011 18,418 4,151 (2,067 ) 20,502 2010 22,594 (3,723 ) (453 ) 18,418

Table of Contents

S-3

INDEX OF EXHIBITS

Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)

Document Incorporated by Reference from a Previous Filing, Filed Herewith or Furnished Herewith, as Indicated Below

(3.1) Restated Certificate of Incorporation of Omnicare, Inc. (as amended) Form 10-K March 27, 2003

(3.2) Fourth Amended and Restated By-Laws of Omnicare, Inc. Form 8-K February 22, 2011

(4.1) Subordinated Debt Securities Indenture, dated as of June 13, 2003, between Omnicare, Inc. and SunTrust Bank, as Trustee

Form 8-K June 16, 2003

(4.2) Second Supplemental Indenture, dated as of June 13, 2003, between Omnicare, Inc. and SunTrust Bank, as Trustee

Form 8-K June 16, 2003

(4.3) Third Supplemental Indenture, dated as of March 8, 2005, between Omnicare, Inc. & SunTrust Bank, as Trustee

Form 8-K March 9, 2005

(4.4) Indenture, dated as of December 15, 2005, by and among the Company, Omnicare Purchasing Company, LP, as guarantor and the Trustee (including the Form of 3.25% Convertible Senior Debenture due 2035)

Form 8-K December 16, 2005

(4.5) Guarantee Agreement of Omnicare, Inc. relating to the Trust Preferred Income Equity Redeemable Securities of Omnicare Capital Trust I, dated as of June 13, 2003

Form 8-K June 16, 2003

(4.6) Amended and Restated Trust Agreement of Omnicare Capital Trust II, dated as of March 8, 2005

Form 8-K March 9, 2005

(4.7) Guarantee Agreement of Omnicare, Inc. relating to the Series B 4.00% Trust Preferred Income Equity Redeemable Securities of Omnicare Capital Trust II, dated as of March 8, 2005

Form 8-K March 9, 2005

(4.8) Sixth Supplemental Indenture, dated as of May 18, 2010, by and among the Company, the Guarantors named therein and the Trustee (including the form of 7.75% Senior Subordinated Notes due 2020)

Form 8-K May 21, 2010

(4.9) Seventh Supplemental Indenture, dated as of December 7, 2010, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as Trustee (including the form of 3.75% Convertible Senior Subordinated Notes due 2025).

Form 8-K December 7, 2010

(4.10) Eighth Supplemental Indenture among Omnicare, Inc., the guarantors party thereto and U.S. Bank National Association (as successor to SunTrust Bank), as Trustee (including the form of 3.75% Convertible Senior Subordinated Note due 2042)

Form 8-K March 29, 2012

(10.1) Annual Incentive Plan for Senior Executive Officers* Appendix A to Proxy Statement for 2009 Annual Meeting of Stockholders dated April 21, 2009

(10.2) 1998 Long-Term Employee Incentive Plan* Form 10-K March 30, 1999

Table of Contents

S-4

INDEX OF EXHIBITS

Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)

Document Incorporated by Reference from a Previous Filing, Filed Herewith or Furnished Herewith, as Indicated Below

(10.3) Amendment to 1998 Long-Term Employee Incentive Plan, effective November 26, 2002*

Form 10-K March 27, 2003

(10.4) Omnicare, Inc. 2004 Stock and Incentive Plan* Appendix B to the Company’s Definitive Proxy Statement for 2004 Annual Meeting of Stockholders, filed on April 9, 2004

(10.5) Form of Indemnification Agreement with Directors and Officers* Form 10-K March 30, 1999

(10.6) Split Dollar Agreement, dated June 1, 1995 (Agreements in the same form exist with J.F. Gemunder, C.D. Hodges, P.E. Keefe and J.M. Stamps)*

Form 10-K March 25, 1996

(10.7) Employment Agreement with J.M. Stamps, dated as of June 1, 1999*

Form 10-K February 26, 2009

(10.8) Amendment to Employment Agreement with J.M. Stamps, dated as of December 29, 2008*

Form 10-K February 26, 2009

(10.9) Amendment to Employment Agreement with Jeffrey M. Stamps, dated as of December 7, 2010*

Form 10-K February 24, 2011

(10.10) Separation Agreement, dated as of September 21, 2012 between Omnicare, Inc. and J.M. Stamps*

Filed Herewith

(10.11) Employment Agreement with J.L. Workman, dated as of October 21, 2009*

Form 10-K February 25, 2010

(10.12) Amendment to Employment Agreement with John L. Workman, dated as of December 7, 2010*

Form 10-K February 24, 2011

(10.13) Second Amendment to Employment Agreement with John L. Workman, dated June 11, 2012*

Form 10-Q July 25, 2012

(10.14) Form of Stock Option Award Agreement *

Form 10-Q April 26, 2012

(10.15) Form of Restricted Stock Award Agreement (Officers) *

Form 10-Q April 26, 2012

(10.16) Form of Restricted Stock Award Agreement (Employees other than Officers) *

Form 10-Q April 26, 2012

(10.17) Prime Vendor Agreement for Pharmaceuticals with McKesson Corporation, dated as of July 27, 2010**

Form 10-Q October 28, 2010

(10.18) Credit Agreement, dated as of August 24, 2011, by and among Omnicare, Inc., as the Borrower, the lenders named therein, SunTrust Bank, as Administrative Agent, JP Morgan Chase Bank, N.A., as Syndication Agent and Barclays Bank PLC, Goldman Sachs Bank USA and Bank of America, N.A., as Co-Documentation Agents.

Form 8-K August 25, 2011

(10.19) Amendment to Split Dollar Agreement with J.F. Gemunder, dated December 22, 2008*

Form 10-K February 26, 2009

(10.20) Amendment to Split Dollar Agreement dated December 22, 2008 (Agreements in the same form exist with C.D. Hodges and J.M. Stamps)*

Form 10-K February 26, 2009

(10.21) Employment Agreement with John G. Figueroa, dated as of December 7, 2010*

Form 10-K February 24, 2011

Table of Contents

S-5

INDEX OF EXHIBITS

Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)

Document Incorporated by Reference from a Previous Filing, Filed Herewith or Furnished Herewith, as Indicated Below

(10.22) Employment Agreement with Nitin Sahney, dated as of October 28, 2010*

Form 10-K February 24, 2011

(10.23) Amendment to Employment Agreement with Nitin Sahney, dated February 17, 2011*

Form 10-K February 24, 2011

(10.24) Second Amendment to Employment Agreement with Nitin Sahney, dated June 11, 2012*

Form 10-Q July 25, 2012

(10.25) Employment Agreement with Alexander M. Kayne, dated April 1, 2011.*

Form 10-Q April 28, 2011

(10.26) Employment Agreement with Priscilla Stewart-Jones, dated as of July 22, 2011.*

Form 10-Q October 25, 2011

(10.27) Separation Agreement, effective July 31, 2010, among Omnicare, Inc. and Joel F. Gemunder*

Form 10-Q October 28, 2010

(10.28) Separation Agreement, effective July 31, 2010, among Omnicare, Inc. and Cheryl D. Hodges*

Form 10-Q October 28, 2010

(10.29) Form of Exchange Agreement relating to the exchange of the Company's 3.75% Convertible Senior Subordinated Notes due 2025 for 3.75% Convertible Senior Subordinated Notes due 2042

Form 8-K March 29, 2012

(10.30) Form of Performance Restricted Stock Unit Award Agreement I *

Form 10-Q April 26, 2012

(10.31) Form of Performance Restricted Stock Unit Award Agreement 2013 II *

Filed Herewith

(10.32) Separation Agreement, dated as of June 10, 2012, between Omnicare, Inc. and John Figueroa*

Form 10-Q July 25, 2012

(10.33) Separation Agreement, dated as of August 9, 2012, between Omnicare, Inc. and Priscilla Stewart-Jones*

Form 10-Q October 31, 2012

(10.34) Employment Agreement with L.P. Finn III, dated as of August 21, 1997*

Form 10-K March 1, 2007

(10.35) Amendment to Employment Agreement with L.P. Finn III, dated as of December 22, 2008*

Form 10-K February 26, 2009

(10.36) Separation Agreement, dated as of February 3, 2012, among Omnicare, Inc., Omnicare Management Company and L.P. Finn, III*

Form 10-K February 23, 2012

(10.37) Omnicare, Inc. Senior Executive Severance Plan * Filed Herewith

(10.38) Omnicare, Inc. Executive Severance Plan * Filed Herewith

(10.39) Omnicare, Inc. Deferred Compensation Plan * Filed Herewith

(10.40) Confirmation relating to Accelerated Share Repurchase, dated November 29, 2012, between Omnicare, Inc. and Goldman, Sachs & Co.

Filed Herewith

Table of Contents

* Indicates management contract or compensatory arrangement.

S-6

INDEX OF EXHIBITS

Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)

Document Incorporated by Reference from a Previous Filing, Filed Herewith or Furnished Herewith, as Indicated Below

(10.41) Amended and Restated Credit Agreement, dated as of September 28, 2012, by and among Omnicare, Inc., as the Borrower, the lenders named therein, SunTrust Bank, as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent and Barclays Bank PLC, Goldman Sachs Bank USA and Bank of America, N.A., as Co-Documentation Agents.

Form 8-K October 4, 2012

(12) Statement of Computation of Ratio of Earnings to Fixed Charges Filed Herewith

(21) Subsidiaries of Omnicare, Inc. Filed Herewith

(23) Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP)

Filed Herewith

(24) Powers of Attorney Filed Herewith

(31.1) Rule 13a-14(a) Certification of Chief Executive Officer of Omnicare, Inc. in accordance with Section 302 of the Sarbanes-Oxley Act of 2002

Filed Herewith

(31.2) Rule 13a-14(a) Certification of Chief Financial Officer of Omnicare, Inc. in accordance with Section 302 of the Sarbanes-Oxley Act of 2002

Filed Herewith

(32.1) Section 1350 Certification of Chief Executive Officer of Omnicare, Inc. in accordance with Section 906 of the Sarbanes-Oxley Act of 2002***

Furnished Herewith

(32.2) Section 1350 Certification of Chief Financial Officer of Omnicare, Inc. in accordance with Section 906 of the Sarbanes-Oxley Act of 2002***

Furnished Herewith

(101) The following materials from the Omnicare, Inc. Annual Report on Form 10-K for the year ended December 31, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statement of Cash Flows (iv) Consolidated Statements of Stockholders' Equity and (v) the Notes to Consolidated Financial Statements

As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934

** Confidential treatment granted as to certain portions, which portions have been filed separately with the Securities and Exchange Commission.

*** A signed original of this written statement required by Section 906 has been provided to Omnicare, Inc. and will be retained by Omnicare, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 10.10

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (“ this Agreement ”) is made as of September 21, 2012 by OMNICARE, INC. a corporation organized and existing under the laws of the State of Delaware, its parents, affiliates, subsidiaries, including but not limited to Omnicare Management Company, Inc . , divisions, successors and assigns and the employees, officers, directors, shareholders and agents thereof (collectively referred to throughout this Agreement as the “ Company ”), and JEFFREY M. STAMPS (“ Executive ”).

RECITALS:

WHEREAS, Executive and the Company were parties to an Employment Agreement dated June 1, 1999 and amended on December 31, 2002, December 29, 2008, April 11, 2009 and December 7, 2010 (the “ Employment Agreement ”);

WHEREAS, the Company and the Executive mutually agree that the Executive’s Employment Agreement and his employment will terminate effective as of November 15, 2012;

WHEREAS , the end of the term of Executive’s Employment Agreement is approaching, and the Company has decided that instead of allowing the Employment Agreement to expire by the Company providing notice of its intent not to renew the Employment Agreement, the Company and Executive have agreed to terminate the Employment Agreement and Executive’s employment according to the terms set forth herein;

WHEREAS , through his signature and non-revocation of such signature to this Agreement and to Exhibit A hereto and in exchange for the benefits provided herein, Executive is agreeing to waive and release any claims against the Company; and

WHEREAS , the parties wish to settle their mutual rights and obligations arising from such termination of Executive’s Employment Agreement and Executive’s employment subject to the terms and conditions as hereinafter set forth.

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

(a) Executive’s Employment Agreement and Executive’s employment with the Company will terminate effective on

November 15, 2012 (the “Termination Date”). Executive hereby resigns, effective as of November 15, 2012, from his position as Executive Vice President and President, Long-Term Care Group and from all other positions and offices with the Company and any affiliate of the Company. Executive hereby waives any right to notice of termination of his employment and payment in lieu thereof.

(b) Executive agrees that until his Termination Date he shall perform those tasks, and either be present at the Company’s

offices or be available, as directed by the Chief Operating Officer and President and/or his designee and thereby contribute toward a meaningful transition of his duties and client, customer and other business relationships. As part of such transition, within thirty (30) days after signing this Agreement, Executive shall provide to the Chief Executive Officer, and/or Chief Operating Officer and President or their designee in a format directed: (i) a plan for the transition of customer contracts and relationships to a successor to Executive’s role as designated by the Chief Executive Officer, and/or Chief Operating Officer and President; (ii) will fully cooperate in calling clients and communicating Omnicare’s message to effectuate a smooth transition as provided to him by Chief Operating Officer and/or his designee; and (iii) all of Executive’s operational, institutional and business knowledge and all of the customer and contractual information known by Executive that relate to the performance of Executive’s duties for the Company.

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1. Cessation of Employment Relationship .

Executive shall also participate in the interview referred to in Section 4 (a) below. Executive shall not remove, copy, or utilize any of the Company’s files, memoranda, documents, records, electronic records, or software except as in the interest of the Company in the performance of the tasks he is to perform pursuant to this Paragraph.

(c) Executive and the Company shall come to mutual agreement regarding the communication of Executive’s departure from

the Company. Nothing herein shall prevent the Company from complying with its regulatory obligations.

2. Payment Obligations .

(a) Accrued Salary . The Company shall pay to Executive his accrued and unpaid base salary through the Termination Date, in accordance with the Company’s normal payroll practices.

(b) Severance . Subject to Section 7(a), the Company shall pay to Executive $730,312.83 in equal pro-rata installments over eighteen (18) months in accordance with the Company’s normal payroll practices, with payment commencing on the first payroll date following the thirtieth (30 th ) day after the Termination Date.

(c) Health Care . If the Executive elects to continue coverage under the Company’s group health insurance plan in accordance with the COBRA continuation coverage requirements, the Company will pay Executive’s premiums for health care continuation coverage for Executive and his eligible dependents upon the same terms and conditions in effect for active employees of the Company subject to Executive's continued co-payment of premiums for such coverage until the last day of the 18-month period beginning on Executive’s Termination Date, provided, in the event Executive obtains other employment that offers substantially similar or more favorable benefits, determined on a benefit-by-benefit and coverage-by-coverage basis, such continuation of premium payments by the Company shall immediately cease. The Executive agrees to notify the Company promptly if and when he begins employment with another employer and if and when he (and his eligible dependents) becomes eligible to participate in any benefit or other welfare plans, programs or arrangements of another employer.

(d) Business Expenses . The Company shall pay to Executive an amount equal to any unreimbursed expenses as of the Termination Date in accordance with the Company’s standard procedures for expense reimbursement.

(e) Restricted Stock . On the Termination Date, Executive shall vest in the 76,989 shares of restricted stock previously awarded to him by the Company that are outstanding and unvested as of the date of this Agreement.

(f) Stock Options . On the Termination Date, Executive shall vest in the non-qualified option to purchase 20,057 shares of Company common stock previously awarded to him by the Company that is outstanding and unvested as of the Termination Date . Notwithstanding any provision of any stock option award agreement to the contrary, Executive shall have the right to exercise his non-qualified options until the later date of three (3) months following the Termination Date or the expiration date of the non-qualified stock option as set forth in the stock option award agreement.

(g) Performance Stock Units . On the Termination Date, Executive shall forfeit all performance stock units granted to him by the Company to the extent outstanding and unvested as of the Termination Date.

(h) Rabbi Trust Deferred Compensation Plan . On the Termination Date, Executive shall be fully vested in the $715,753.31 previously credited to his account under the Omnicare, Inc. Rabbi Trust for Deferred Compensation Arrangements plan. $157,954.58 shall be paid in a lump sum no later than four months following the Termination Date and $544,205.49 shall be paid in a lump sum on the first payroll date following the six-month anniversary of the Termination Date or following Executive’s death, if earlier.

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(i) Split Dollar Life Benefit . Beginning in 2013, the Company shall pay to Executive $7,991 per year until the earlier of

2025 or Executive’s death, as a bonus and the taxes on such bonus, pursuant to its obligations under the split dollar life insurance agreements between the Company and the Executive that were entered into in 1996 (the “Split Dollar Agreements”). Executive acknowledges and agrees that he has no entitlement under the Split Dollar Agreements other than as set forth in this Agreement. Executive agrees to perform all of his obligations under the Split Dollar Agreements.

(j) Other Benefits .

(i) The Company shall pay to Executive a lump sum of $30,741.02 for earned but unused vacation time as of the Termination Date in accordance with Company policy;

(ii) The parties understand that Executive is not entitled to, and shall not receive, any incentive awards under the Omnicare, Inc. Annual Incentive Plan for the 2012 calendar year.

(k) No Consideration Absent Execution of this Agreement and No Additional Payment Owed . Executive understands and agrees that unless otherwise required by law or vested under the governing plan documents and/or agreements, other than Section 2(c), Executive would not receive the monies or benefits specified in Section 2 except for Executive’s execution of and non-revocation of Executive’s signature to this Agreement and the General Release and Covenant Not to Sue attached as Exhibit A hereto (the “ Release ”) and the fulfillment of the promises contained therein. Except as provided in this Section 2, Executive shall not be due any payments or benefits from the Company in connection with his employment or the termination of his employment.

3. Waiver and Release of All Claims .

(a) The receipt of the payments and benefits provided under this Agreement is conditioned upon (1) the Executive’s execution and non-revocation of this Agreement and (2) Executive’s execution of the Release within five (5) days of the Termination Date and his non-revocation of the Release. If Executive’s agreement to this Section 3 of the Agreement is revoked prior to the expiration of the revocation period set forth in this Agreement or the Release is not timely executed, or if Executive’s signature to the Release is revoked prior to the expiration of the revocation period set forth in the Release, (the date the Release becomes non-revocable, the “ Release Date ”): (1) all payments, benefits or rights under Section 2 of this Agreement shall be forfeited unless otherwise required by law or vested under the governing plan document and/or agreements (except for Section 2 (c) which shall remain in full force and effect), and (2) the remaining provisions of this Agreement shall be in full force and effective as of the date Executive executes this Agreement. (b) In exchange for the consideration provided in Section 2 of this Agreement, Executive knowingly and voluntarily releases and forever discharges the Company and its parent corporation, affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees (except Patrick Downing), attorneys, officers, directors and agents thereof, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively referred to throughout the remainder of this Agreement as “Releasees”), of and from any and all claims, known and unknown, asserted or unasserted, which the Executive has or may have against Releasees as of the date of execution of this Agreement, including, but not limited to, any alleged violation of:

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• Title VII of the Civil Rights Act of 1964;

• Sections 1981 through 1988 of Title 42 of the United States Code;

• The Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any tax qualified benefit plan);

• The Immigration Reform and Control Act;

• The Americans with Disabilities Act of 1990;

This Release shall not, however, apply to any obligation of the Company pursuant to the Separation Agreement, any rights to indemnification from the Company Executive may have or any benefit to which Executive is entitled under any tax qualified pension plan of the Company or its affiliates, COBRA continuation coverage benefits or any other welfare benefits required to be provided by statute or other claims that cannot by law be waived (claims with respect thereto, collectively, "Excluded Claims") .

Executive further agrees, warrants, promises and covenants that, to the maximum extent permitted by law, neither Executive, nor any person, organization, or other entity acting on Executive’s behalf has filed or will file, sued or will sue, caused or will cause, or permitted or will permit to be filed, initiated or will initiate any lawsuit for damages or other relief (including injunctive, declaratory, monetary or other relief) against the Releasees other than Excluded Claims. Executive has not assigned or transferred, and will not assign or transfer, any claim that Executive is waiving and releasing herein, nor has Executive purported to do so. If any claim is not subject to release, to the extent permitted by law, Executive waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any other Releasee is a party.

Nothing in this Agreement shall be viewed as Executive releasing claims or counterclaims against Patrick Downing.

(c) Knowing and Voluntary Waiver . Executive has been given but has voluntarily declined twenty-one (21) days to review this Agreement. Executive has been advised to consult with an attorney prior to signing of this. Executive may revoke his signature to this Section 3 of the Agreement for a period of seven (7) calendar days following the date on which Executive signs this Agreement. Any revocation within this period must be submitted, in writing, to J. Phenise Poole, Senior Corporate Counsel, and state, “I hereby revoke my acceptance of Section 3 of our Separation Agreement.” The revocation must be personally delivered to J. Phenise Poole or her designee, or mailed via overnight delivery to Omnicare, Inc., 900 Omnicare Center, 201 E. Fourth Street, Cincinnati, Ohio 45202, within seven (7) calendar days after Executive signs this Agreement. (See Section 3 (a) for consequences of revocation.) Executive agrees that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original up to twenty-one (21) calendar day consideration period. By signing this Agreement, Executive freely and knowingly, and after due consideration, enters into this Agreement intending to waive, settle and release all claims Executive has or might have against Releasees.

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• The Age Discrimination in Employment Act of 1967 (“ADEA” );

• The Worker Adjustment and Retraining Notification Act;

• The Fair Credit Reporting Act;

• The Family and Medical Leave Act;

• The Equal Pay Act;

• The False Claims Act (including the qui tam provisions thereof);

• The Sarbanes-Oxley Act of 2002;

• The Older Workers Benefit Protection Act;

• any other federal, state or local law, rule, regulation, or ordinance;

• any public policy, contract, tort, or common law; or

• any basis for recovering costs, fees, or other expenses including attorneys’ fees incurred in these matters.

4. Cooperation .

(a) In consideration for the payments and benefits to Executive hereunder, Executive hereby agrees that Executive shall reasonably

cooperate with the Company and its affiliates and provide information and assistance to the Company and its affiliates, that relate to Executive’s prior positions with and work conducted on behalf of the Company and its affiliates. In connection with Executive's cooperation duties and responsibilities under this section, Executive shall provide, within fifteen (15) days following the date of this Agreement, an exit interview with an individual or individuals designated by the Company. Executive hereby represents and warrants that during such exit interview Executive shall provide a thorough and comprehensive description of all facts known to him personally, to the full extent of Executive’s knowledge or belief, that the Company or any of the Releasees (as defined herein), has violated or is currently in violation of any federal or state law, regulation, standard, requirement, or Corporate Compliance Program (specifically including but not limited to the Federal False Claims Act, 31 U.S.C. § 3729 et seq., or any state law equivalent, the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a, the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812, or the Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b et seq.).

(b) Executive further agrees to assist the Company and its affiliates 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 and its affiliates, 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. Executive also hereby consents to testify on behalf of the Company should the Company designate him to testify pursuant to a subpoena served on the Company pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure or any similar state or agency rule. All such requests to provide services, including any subpoenas, shall be scheduled with good faith consideration for Executive’s personal, employment, and other obligations. The Company shall reimburse Executive for all reasonable travel, lodging and other similar expenses), as well as reasonable compensation for Executive’s time (not including time providing actual testimony), incurred in connection with fulfilling his obligations under this Section 4(b).

(c) To the extent permitted by law and not contrary to any court or governmental orders or requests, Executive hereby agrees that he shall notify the Company promptly (and in any event within seven business days) if he is contacted in connection with any litigation, proceeding or governmental investigation that may concern the Company or its affiliates and, without limitation of the foregoing, shall forward to the Company’s General Counsel, by overnight delivery, any subpoena or other document received by him in connection with any such matter within seven business days of receipt.

(d) Executive agrees that Executive will not seek or accept employment or contract placement with the Company or any of its related or affiliated companies at any time in the future, including, but not limited to, regular, temporary, contract or consulting employment. In the event that Executive is contracted for or hired by the Company, Executive expressly acknowledges that Executive’s contract or employment may be terminated on the basis of this Agreement. The Company and Executive agree that this subparagraph is a negotiated, nonretaliatory term of this Agreement.

5. Noncompetition, Nonsolicitation and Nondisclosure .

(a) Nondisclosure . Executive shall not directly or indirectly use any proprietary, “confidential information” of the Company for any purpose not associated with the Company’s activities or disseminate or disclose any such information to any person or entity not affiliated with the Company. Such proprietary, “confidential information” includes, without limitation, customer lists, computer technology, programs and data, whether online or off-loaded onto disk format, sales, marketing and prospecting methodologies, plans and materials and any other such plans, programs, methodologies and materials uses in managing marketing or furthering the Business. Executive will undertake all reasonably necessary and appropriate steps to ensure that the confidentiality of the Company’s proprietary, “confidential information” shall be maintained.

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(b) Nonsolicitation . While Executive is employed by the Company and for a period of eighteen (18) months following the Termination Date, and within the States in which the Company of Omnicare operates the Business, Executive agrees to the following:

(i) Not to directly or indirectly contact, solicit, serve, cater or provide services to any customer, client, organization or person who, or which has had a business relationship with the Company during the eighteen (18) month period preceding Executive’s Termination Date;

(ii) Not to directly or indirectly influence or attempt to influence any customer, client, organization or person who, or

which, has had a business relationship with the Company during the eighteen (18) month period preceding Executive’s Termination Date to direct or transfer away any business or patronage from the Company;

(iii) Not to directly or indirectly solicit or attempt to solicit any employee, officer or director to leave the Company, or to

contact any customer or client in order to influence or attempt to influence the directing or transferring of any business or patronage away from the Company; and

(iv) Not to directly or indirectly interfere with or disrupt any relationship, contractual or otherwise, between the Company

and their respective customers, clients, employees, independent contractors, agents, suppliers, distributors or other similar parties.

(c) Noncompetition . While Executive is employed by the Company and for a period of eighteen (18) months following the

Termination Date, Executive will not directly or indirectly engage, consult with or for, or hold an interest in any business competing with the Business as then conducted by the Company, nor 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 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 Business as then conducted by the Company, in the United States and such other defined geographic areas in which the Company operates the Business.

(d) Business . “Business” means the provision of pharmaceutical products and ancillary services, including, but not limited to,

specialty pharmaceutical products and support services, to long-term care facilities, other healthcare service providers and recipients of services from such facilities, and any other businesses in which the Company or its affiliates is engaged in on the Termination Date.

(e) Compliance . Executive represents and warrants that during his employment with the Company Executive fully complied with all

obligations pertaining to nondisclosure, nonsolicitation and noncompetition as set forth in section 5 of the Employment Agreement. Executive also acknowledges and agrees that the payments and other benefits provided to him pursuant to Section 2 of this Agreement is specifically dependent upon Executive’s compliance with all provisions of this Agreement including but not limited to the provisions pertaining to nondisclosure, nonsolicitation and noncompetition set forth in this section.

(f) Future Employers . Executive agrees to advise any and all employers or potential employers of Executive’s obligations set forth in

this section of the Agreement.

6. Non-Disparagement Covenant . Executive shall not make any statements, whether written or oral, disparaging or denigrating Omnicare, Inc., including its current, former and future officers, directors, employees, agents, representatives, attorneys, and shareholders. Omnicare, Inc. shall instruct the members of its board of directors, its executive officers and its employees with the title of Senior Vice President or above, in each case who hold such positions as of the date of this Agreement, not to make any statements, whether written or oral, disparaging or denigrating Executive other than written or oral statements among employees and directors of Omnicare, Inc.

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7. Miscellaneous .

(a) Section 409A Compliance . This Agreement is intended to be exempt from or comply with Section 409A of the Internal

Revenue Code of 1986, as amended, and all Treasury Regulations and guidance promulgated thereunder (“Code Section 409A”) and to the maximum extent permitted the Agreement shall be limited, construed and interpreted in accordance with such intent. Notwithstanding any other provision of this Agreement to the contrary, to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Code Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. The Company shall have no liability to Executive if this Agreement or any amounts paid or payable hereunder are subject to Code Section 409A or the additional tax thereunder.

For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the right to receive payments in the form of installment payments shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment.

Notwithstanding any other provision of this Agreement to the contrary, if at the time of Executive’s separation from service (as defined in Code Section 409A), Executive is a “Specified Employee”, then the Company will defer the payment or commencement of any nonqualified deferred compensation subject to Code Section 409A payable upon separation from service (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six (6) months following separation from service or, if earlier, the earliest other date as is permitted under Code Section 409A (and any amounts that otherwise would have been paid during this deferral period will be paid in a lump sum on the day after the expiration of the six (6) month period or such shorter period, if applicable). Executive will be a “Specified Employee” for purposes of this Agreement if, on the date of Executive’s separation from service, Executive is an individual who is, under the method of determination adopted by the Company designated as, or within the category of executives deemed to be, a “Specified Employee” within the meaning and in accordance with Treasury Regulation Section 1.409A-1(i). The Company shall determine in its sole discretion all matters relating to who is a “Specified Employee” and the application of and effects of the change in such determination.

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

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

(d) Return of Company Property . Executive shall promptly return to the Company all files, memoranda, documents, records, electronic records, software, copies of the foregoing, credit cards, keys, identification badges and any other property of the Company or its affiliates in his possession, including, but not limited to, pricing information, customer information, and contracts and contractual information. Executive shall not retain originals or copies of any items described in this paragraph including paper and electronic copies.

(e) Nonadmission of Liability . This Agreement is not an admission of guilt or wrongdoing by any Releasees and Executive acknowledges that the Releasees deny that they have engaged in wrongdoing of any kind or nature.

(f) Consent to Jurisdiction . The parties hereby (i) agree that any suit, proceeding or action at law or in equity (an “Action” ) arising out of or relating to this Agreement must be instituted in state or federal court located within Hamilton County, Ohio, (ii) waive any objection which he or it may have now or hereafter to the laying of the venue of any such Action, (iii) irrevocably submit to the jurisdiction of any such Action, and (iv) hereby waive any claim or defense of inconvenient forum. The parties irrevocably agree that service of any and all process which

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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(g) hereof, or to such other address as the parties shall designate in writing by notice duly given in accordance with Section 7(g) hereof, and that such service shall be deemed effective service of process upon the parties in any such Action. The parties irrevocably agree that such service of process shall have the same force and validity as if service were made to him or it according to the law governing such service in the State of Ohio, and waive all claims of error by reason of any such service.

(g) 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:

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.

(h) Assignment . No rights of any kind under this Agreement shall, without the prior consent of the Company, 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. This Agreement shall be binding upon and shall inure to the benefit of the Company and its respective successors and assigns.

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

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If to the Company:

Omnicare, Inc. 900 Omnicare Center 201 E. Fourth Street Cincinnati, OH 45202 Attention: General Counsel With a copy to: Scott Carroll Jackson Lewis LLP PNC Center 26th Floor 201 East Fifth Street Cincinnati, OH 45202

If to Executive: Jeffrey M. Stamps 5132 Cedar Brooke Court Springboro, Ohio 45066 With a copy to: Randy Freking Freking and Betz 525 Vine Street, Suite 600 Cincinnati, Ohio 45202

(j) 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.

(k) 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.

(l) Entire Agreement . This Agreement (including the Release) constitutes the entire understanding and agreement between the parties hereto and, except as expressly set forth herein, supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, concerning the subject matter hereof, including but not limited to 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 and Executive has not relied on any representations, warranties, covenants, understandings or agreements in signing this Agreement. No supplement modification or amendment of this Agreement shall be binding unless executed in writing by the parties.

(m) Consequences of Breach by Executive . Executive acknowledges that the Company is entering this Agreement in reliance on his promises, agreements, warranties, and covenants to adhere to each of the responsibilities and duties as described throughout this Agreement, and that the promises, agreements, warranties, covenants, duties, responsibilities and obligations set forth in each section of this Agreement each constitute a material inducement for the Company to enter this Agreement. In the event that Executive breaches any provision of this Agreement, including but not limited to any provision of Section 5, Executive agrees that, in addition to any other remedies available to the Company at law or in equity, the Company shall cease all payments and benefits under Section 2 hereof and Executive agrees to repay to the Company any severance payments specified in Section 2(b) that he has received. Executive further acknowledges and agrees that the provisions of Section 5 of this Agreement are reasonable and appropriate in all respects, and in the event of any violation by Executive of any such provisions, the Company would suffer irreparable harm and its remedies at law would be inadequate. Accordingly, in the event of any violation, threatened violation, or attempted violation of any such provisions by Executive, Executive shall be subject to legal action for such breach or violation and may be held liable to the Company for contractual and/or other legal or equitable remedies, including return of severance payments provided under this Agreement and the Company shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief. Executive agrees to indemnify and hold the Company harmless from and against any and all loss, cost, damage, or expense, including without limitation, attorneys’ fees that arise out of any breach by Executive of this Agreement. All rights and remedies of the Company under this Agreement are cumulative and in addition to all other rights and remedies which may be available to the Company from time to time, under any other agreement, at law, or in equity.

(n) Clawback . In addition to any compensation recovery (clawback) which may be required by this Agreement, law or

regulation (including but not limited to any clawback required by Section 954 of the Dodd-Frank Act), Executive acknowledges and agrees that any compensation paid under this Agreement shall be subject to any clawback requirements as set forth in the Company’s corporate governance guidelines or policies and to any similar successor provisions as may be in effect from time to time, including by reason of guidelines or policies adopted following the Termination Date as required by law.

(o) Severability . Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect. To avoid any confusion, should any provision of Section 5 of this Agreement be deemed illegal or unenforceable because its scope is considered excessive, such provision shall be modified so that the scope of the provision is reduced only to the minimum extent necessary to render the provision as modified valid, legal and enforceable.

SIGNATURES ON FOLLOWING PAGE

9

Upon the advice of counsel, Executive hereby waives the 21-day period provided to consider this Agreement in Section 3(c).

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. /s/ Alexander M. Kayne By: Alexander M. Kayne Title: SVP, General Counsel and Secretary EXECUTIVE

/s/ Jeffery M. Stamps By: Jeffrey M. Stamps

10

EXHIBIT A

GENERAL RELEASE AND COVENANT NOT TO SUE

I, Jeffrey M. Stamps, on behalf of myself and my heirs, executors, administrators and assigns, in consideration of the benefits provided

in Section 2 of the separation agreement between Omnicare, Inc. and Jeffrey M. Stamps, dated as of 9/21/12 (the “Separation Agreement”), to which this General Release and Covenant not to Sue (the “Release”) is attached, do hereby knowingly and voluntarily release and forever discharge the Company and its parent corporation, affiliates, subsidiaries, including but not limited to Omnicare Management Company, Inc., divisions, predecessors, insurers, successors and assigns, and their current and former employees (except Patrick Downing), attorneys, officers, directors and agents thereof, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively referred to throughout the remainder of this Release as “Releasees”), of and from any and all claims, known and unknown, asserted or unasserted, which I have or may have against Releasees as of the date of execution of this Release, including, but not limited to, any alleged violation of:

If any claim is not subject to release, to the extent permitted by law, I waive any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any other Releasee is a party.

• Title VII of the Civil Rights Act of 1964;

• Sections 1981 through 1988 of Title 42 of the United States Code;

• The Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any tax qualified benefit plan);

• The Immigration Reform and Control Act;

• The Americans with Disabilities Act of 1990;

• The Age Discrimination in Employment Act of 1967 (“ADEA” );

• The Worker Adjustment and Retraining Notification Act;

• The Fair Credit Reporting Act;

• The Family and Medical Leave Act;

• The Equal Pay Act;

• The False Claims Act (including the qui tam provisions thereof);

• The Sarbanes-Oxley Act of 2002;

• The Older Workers Benefit Protection Act;

• any other federal, state or local law, rule, regulation, or ordinance;

• any public policy, contract, tort, or common law; or

• any basis for recovering costs, fees, or other expenses including attorneys’ fees incurred in these matters.

Nothing in this Release shall be viewed as my releasing claims or counterclaims against Patrick Downing.

This Release shall not, however, apply to any obligation of the Company pursuant to the Separation Agreement, any rights to indemnification from the Company I may have or any benefit to which I am entitled under any tax qualified pension plan of the Company 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 have been given but have voluntarily declined twenty-one (21) days to review this Release. I have been advised to consult with an attorney prior to signing of this. I understand that I may revoke my signature to this Release for a period of seven (7) calendar days following the date on which I sign this Release. Any revocation within this period must be submitted, in writing, to J. Phenise Poole, Senior Corporate Counsel, and state, “I hereby revoke my acceptance of the General Release.” The revocation must be personally delivered to J. Phenise Poole or her designee, or mailed via overnight delivery to Omnicare, Inc., 900 Omnicare Center, 201 E. Fourth Street, Cincinnati, Ohio 45202, within seven (7) calendar days after Executive signs this Release. Executive agrees that any modifications, material or otherwise, made to this Release do not restart or affect in any manner the original up to twenty-one (21) calendar day consideration period. By signing this Release, Executive freely and knowingly, and after due consideration, enters into this Release intending to waive, settle and release all claims Executive has or might have against Releasees.

I further agree, warrant, 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, sued or will sue, caused or will cause, or permitted or will permit to be filed, initiated or will initiate any lawsuit for damages or other relief (including injunctive, declaratory, monetary or other relief) against the Releasees other than Excluded Claims. I have not assigned or transferred, and will not assign or transfer, any claim that I am waiving and releasing herein, nor have I purported to do so.

This Release will be governed by and construed in accordance with the laws of the State of Ohio. If any provision in this Release is held invalid or unenforceable for any reason, the Executive intends that such portion be modified to make it enforceable to the maximum extent permitted by law. If any such portion cannot be modified to be enforceable, the remaining provisions shall be construed as if the invalid or unenforceable provision had not been included.

For the avoidance of doubt, nothing contained herein shall preclude me from enforcing my rights to the benefits due and owing to me under the Separation Agreement. I also acknowledge that any dispute regarding the terms of this Release shall be subject to Section 7(f) of the Separation Agreement.

IN WITNESS WHEREOF, I have executed this Release on this 15 day of November, 2012.

/s/ Jeffery M. Stamps Jeffrey M. Stamps 4812-9482-1137, v. 2-9482-1137, v. 1-6344-8849, v. 5

EXHIBIT 10.31

OMNICARE, INC.

Performance Restricted Stock Unit Award

AWARD AGREEMENT, dated as of [ ____________ ] [ ___ ] , [ ___ ] , (the “ Grant Date ”) between Omnicare, Inc., a Delaware corporation (“ Omnicare ” or the “ Company ”), and [ ____________ ] (the “ Participant ” ). This Award is granted by the Compensation Committee of the Omnicare Board of Directors (the “ Committee ” ) pursuant to the terms of the 2004 Stock and Incentive Plan (the “ Stock Plan ”). All capitalized terms not defined in this Agreement, shall have the meanings set forth in the Stock Plan.

Section 1. Performance Stock Unit Award . Omnicare hereby grants to the Participant, on the terms and conditions set forth herein, a target Award of [ _________ ] “ Performance Stock Units ” (the “ Target Shares ”) with respect to shares of the common stock of Omnicare (the “ Shares ”). The Performance Stock Units are notional units of measurement denominated in shares of Common Stock, which represent an unfunded, unsecured compensation obligation of Omnicare.

Section 2. Performance Criteria .

2.1 Eligible Units . Except as set forth in Section 4 below, provided the Participant is continuously employed by Omnicare or a Subsidiary from the date hereof through the applicable payment dates, the Participant shall be paid a number of Shares (the “ Earned Shares ”) based upon the following:

(a) First Performance Period . A number of Shares equal to 25% of the Target Shares will be deemed Earned Shares upon the first anniversary of the Grant Date provided that Company has achieved an Adjusted Cash Earnings Per Share of $ [___] for the period from [____________] [___], [___] to [____________] [___], [___] [one year] (the “ First Performance Period ”). One-half (1/2) of such Earned Shares will be paid as soon as practicable following the determination of the performance results for the First Performance Period but in all events in the calendar year following the First Performance Period (such Shares and any Shares paid following the Second and Third Performance Periods (as defined below) are hereinafter referred to as the “ Paid Shares ” ). One-half (1/2) of such Earned Shares will be payable on the Final Payment Date (as defined below) to the extent such Shares are not clawed back in accordance with Section 2.1(e) below (such Shares and any Shares subject to the claw-back in Section 2.1(e) in the Second and Third Performance Periods (as defined below) are hereinafter referred to as the “ Claw-Back Shares ”). In the event that the performance criterion for the First Performance Period is not met, the Target Shares for the First Performance Period will be carried

over to the end of the Cumulative Performance Period and may be earned in accordance with Section 2.1(d) below (such Shares, along with any Shares that carry-over from the Second and Third Performance Periods are hereinafter referred to as the “ Carry-Over Shares ”).

(b) Second Performance Period . A number of Shares equal to 25% of the Target Shares will be deemed Earned Shares upon the second anniversary of the Grant Date provided that Company has achieved an Adjusted Cash Earnings Per Share of $ [___] for the period from [____________] [___], [___] to [____________] [___], [___] [one year] (the “ Second Performance Period ”). One-half (1/2) of such Earned Shares will become Paid Shares and will be paid as soon as practicable following the determination of performance results for the Second Performance Period but in all events in the calendar year following the Second Performance Period. One-half (1/2) of such Earned Shares will become Claw-Back Shares. In the event that the performance criterion for the Second Performance Period is not met, the Target Shares for the Second Performance Period will become Carry-Over Shares.

(c) Third Performance Period . A number of Shares equal to 25% of the Target Shares will be deemed Earned Shares upon the third anniversary of the Grant Date provided that Company has achieved an Adjusted Cash Earnings Per Share of $ [___] for the period from [____________] [___], [___] to [____________] [___], [___] [one year] (the “ Third Performance Period ”). One-half (1/2) of such Earned Shares will become Paid Shares and will be paid as soon as practicable following the determination of the performance results for the Third Performance Period but in all events in the calendar year following the Third Performance Period (the “Final Payment Date ”). One-half (1/2) of such Earned Shares will become Claw-Back Shares. In the event that the performance criterion for the Third Performance Period is not met, the Target Shares for the Third Performance Period will become Carry-Over Shares.

(d) Carry-Over Shares . With respect to any Carry-Over Shares, in the event the minimum Cumulative Adjusted Cash Earnings Per Share for the period from [____________] [___], [___] to [____________] [___], [___] [three years] (the “ Cumulative Performance Period ”) as set forth on Exhibit A (the “ Minimum Cumulative Target ”) is not met, all Carry-Over Shares will be forfeited. In the event that the Minimum Cumulative Target is met, between 50% and 150% of the Carry-Over Shares will become Earned Shares as set forth on Exhibit A. The number of Shares that have become Paid Shares and Claw-Back Shares in accordance with Sections 2.1(a), (b), and (c) and Earned Shares pursuant to this Section 2.1(d) are hereinafter referred to as the “ Initial Earned Shares .”

(e) Total Earned Shares . In the event the Minimum Cumulative Target is met, a number of additional Shares shall become Earned Shares equal to (i) a number of Shares determined by applying a percentage between 50% and 150% to the total number of Target Shares (based upon the Cumulative Adjusted Cash

Earnings Per Share achieved for the Cumulative Performance Period as set forth on Exhibit A) (the “ Cumulative Percentage Shares ”) less (ii) the Initial Earned Shares (the “ Additional Earned Shares ”). The sum of the Initial Earned Shares and the Additional Earned Shares (including a subtraction from the Initial Earned Shares if Additional Earned Shares is a negative figure) shall be hereinafter referred to as the “ Total Earned Shares .” In the event the Minimum Cumulative Target is not met, all Claw-Back Shares from Sections 2.1(a), (b) and (c) will be forfeited, there are no Additional Earned Shares and the Total Earned Shares shall be any Shares that became Paid Shares pursuant to Section 2.1(a), (b) and (c). The Total Earned Shares shall be subject to upward or downward adjustment in the sole discretion of the Committee of not more that 20% (after such adjustment, the “Adjusted Earned Shares ”), except that the Adjusted Earned Shares cannot be less than the sum of any Shares that became Paid Shares pursuant to Sections 2.1(a), (b) and (c). In making such adjustment, the Committee may consider total shareholder return, cash flow, customer retention, operational efficiency and any other aspects of Company and individual performance. The Adjusted Earned Shares (minus any Paid Shares under Sections 2.1(a), (b) and (c) or any Shares paid earlier pursuant to Sections 4.1, 4.2, 4.3, 4.4 or Section 4.6) shall be paid on the Final Payment Date.

(f) Section 162(m). Notwithstanding anything in this Agreement to the contrary, in the event that the Committee has designated the Award as a Section 162(m) Award (as defined in the Stock Plan), no Shares shall be paid to the Participant under this Agreement unless (i) any performance goals established by the Committee for purposes of Section 162(m) of the Code have been met or (ii) Shares are payable under Section 4.1, 4.2 or 4.6 below.

Section 3. Dividends . The amount of dividends, if any, that would have been paid per Earned Share had such Share been held by the Participant will be accumulated from the Grant Date through the date the Earned Share is paid to the Participant under Section 2 hereof. The amount of dividends paid per Death Share, Disability Share, Pro-Rata Cumulative Period Share, Pro-Rata Termination Share or Change in Control Share will be accumulated from the Grant Date through the date each such Share is paid to the Participant pursuant to the applicable provision of Section 4 hereof. Such accumulated amounts will be paid in cash to the Participant within thirty (30) days of the applicable payment date. No amount shall be paid with respect to dividends for any Shares that are clawed back, forfeited or otherwise not paid to the Participant or his or her estate under this Agreement.

Section 4. Termination of Employment and Change in Control .

4.1. Death . If the Participant’s employment with the Company or a Subsidiary terminates on account of death, a number of Shares equal to a pro-rata portion of the Target Shares, based on the number of days in the Cumulative Performance Period that have elapsed prior to the Participant’s termination on account of death shall be deemed to be Earned Shares. Such pro-rata portion of Target Shares (excluding any Shares that became Paid Shares under this Agreement prior to the date of death, but

including the Claw-Back Shares) shall be hereinafter referred to as the “ Death Shares .” The Death Shares will be paid to the Participant’s estate within thirty (30) days of termination on account of death.

4.2. Disability . If the Participant’s employment with the Company or a Subsidiary terminates due to Disability (as defined below), a number of Shares equal to a pro-rata portion of the Target Shares, based on the number of days in the Cumulative Performance Period that have elapsed prior to the Participant’s termination on account of Disability shall be deemed to be Earned Shares. Such pro-rata portion of Target Shares (excluding any Shares that became Paid Shares under this Agreement prior to the date of the termination, but including the Claw-Back Shares) shall be hereinafter referred to as the “ Disability Shares .” The Disability Shares will be paid within thirty (30) days of termination on account of Disability. For purposes of this Agreement, “Disability” shall be as defined in Sections 409A(a)(2)(A)(ii) and 409A(a)(2)(C) of the Code.

4.3. Retirement . If the Participant’s employment with the Company or a Subsidiary terminates on account of retirement under the Company’s Employees Savings and Investment Plan at or after normal retirement age with the consent of the Committee (taking into account, among other factors, Participant’s length of service at the time of retirement, the degree of his or her prior contribution to the Company, any continuing benefits to the Company, and the personal circumstances of his or her retirement ) and in the event the Minimum Cumulative Target is met, the Participant shall receive a number of Shares equal to (i) the pro-rata portion of the Cumulative Percentage Shares based on the number of days in the Cumulative Performance Period that have elapsed prior to the Participant’s retirement less (ii) any Paid Shares paid with respect to any calendar year prior to the year of retirement (the “ Pro-Rata Cumulative Period Shares ”). The Pro-Rata Cumulative Period Shares shall be paid on the Final Payment Date.

4.4. Termination without Cause Upon Retirement Eligibility . In the event of the Participant’s termination of employment without “Cause” (as defined below) by the Company following his or her attainment of age 65 and at least 10 years of service, the Participant shall receive a pro-rata portion of the Target Shares based on the number of days in the Cumulative Performance Period that have elapsed prior to the Participant’s termination of employment (the “ Pro-Rata Termination Shares ”). The Pro-Rata Termination Shares will not include any Paid Shares, Carry-Over Shares or Claw-Back Shares from a calendar year prior to the year of termination. Any such Carry-Over Shares will be forfeited. Any such Claw-Back Shares will be payable on the Final Payment Date only in the event that the Minimum Cumulative Target is met. The Pro-Rata Termination Shares will be paid on the Final Payment Date. For purposes of this Agreement, “Cause” shall be as defined in the Omnicare, Inc., Senior Executive Severance Plan.

4.5. Termination for any Other Reason . The Participant shall forfeit the Performance Stock Units and any right to payment of Shares or related dividends upon a termination of the Participant’s employment for any reason other than as

set forth in Sections 4.1 through 4.4 other than Shares that had become Paid Shares prior to such termination. Any Claw-Back Shares will be forfeited.

4.6. Change in Control . Upon a “Change in Control” (as defined below), the Participant shall be deemed to have earned a number of Shares equal to the Target Shares. The number of Target Shares (excluding any Shares that became Paid Shares under this Agreement prior to the date of the Change in Control) shall be hereinafter referred to as the “ Change in Control Shares .” In the event that the Participant remains continuously employed by the Company or a Subsidiary until the date of the Change in Control, the Change in Control Shares shall be paid to the Participant on or within 30 days after the Change in Control (in Shares or other consideration equal to the Fair Market Value of the Shares on the date of the Change in Control as determined by the Committee). For purposes of this Agreement, “ Change in Control ” shall be as defined in the Stock Plan as long as such Change in Control constitutes a change in ownership of the corporation, a change in effective control of the corporation, or a change in the ownership of a substantial portion of the assets of the corporation for purposes of Section 409A of the Code. Upon a Change in Control, no Shares other than the Change in Control Shares or Shares that became Paid Shares under this Agreement prior to the date of the Change in Control shall be payable under this Agreement.

Section 5. Restrictions on Transfer . Neither this Award nor any Performance 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 Performance 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 Performance 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 .

(a) The provisions of this Agreement and any payments made hereunder are intended to comply with, and should be interpreted consistent with, the requirements of Section 409A of the Code, and any related regulations or other effective guidance promulgated thereunder by the U.S. Department of the Treasury or the Internal Revenue Service (“ Section 409A ”). However, the Committee shall have the right in its sole discretion to adopt such amendments to the 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 Section 409A or to comply with the requirements of Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination employment under Section 4.3 or 4.4 hereof unless such termination is also a “Separation from Service” within the meaning of Section 409A. Any provision of this Agreement to the contrary notwithstanding, if at the time of the Participant’s Separation from Service, the Company determines that the Participant is a “Specified Employee,” within the meaning of Section 409A, based on an identification date of December 31, then to the extent any payment or benefit that the Participant becomes entitled to under this Agreement on account of such separation from service would be considered nonqualified deferred compensation under Section 409A, such payment or benefit shall be paid or provided at the date which is the earlier of (i) six (6) months and one day after such separation from service, and (ii) the date of the Participant’s death (the “ Delay Period ”).

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 a Subsidiary 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.

Section 12. Covenants . The Participant has read and reviewed the terms and conditions of the Stock Plan and agrees to be bound by its terms and conditions. In addition, as a condition of the receipt of this Award, the Participant reconfirms his or her promises and obligations as set forth in any Omnicare plan or agreement with Omnicare in which the Participant participates or is a party containing covenants in favor of Omnicare in respect of nondisclosure, nonsolicitation and noncompetition.

Section 13. Additional Clawback . In addition to any compensation recovery (clawback) which may be required by this Award Agreement, law or regulation (including but not limited to any clawback required by Section 954 of the Dodd-Frank Act), the Participant acknowledges and agrees that any compensation paid under this Award Agreement shall be subject to any clawback requirements as set forth in Omnicare’s corporate governance guidelines or policies and to any similar successor provisions as may be in effect from time to time, including by reason of guidelines or policies adopted following the Participant’s termination of employment.

OMNICARE, INC.

By: ______________________________________ Name: PARTICIPANT

By: ______________________________________ [ NAME ]

EXHIBIT A

Cumulative Adjusted Cash Earnings Per Share Determination

For Cumulative Adjusted Cash Earnings Per Share between the above target amounts, the % of relevant Target Shares payable shall be based upon linear interpolation.

Performance Level Minimum Target Maximum

3-year Cumulative Adjusted Cash EPS $[___] $[___] $[___]

% of Relevant Target Shares Earned 50% 100% 150%

EXHIBIT 10.37

OMNICARE, INC. SENIOR EXECUTIVE SEVERANCE PLAN

This Senior Executive Severance Plan is effective as of January 1, 2013. OBJECTIVE Omnicare, Inc. (the “Company”) has adopted the Omnicare, Inc. Senior Executive Severance Plan (the “Plan”) to

provide key executives with the financial security to allow them to focus on the growth of the Company’s business.

Executives must make important decisions that affect the livelihood of many associates and the overall performance of

the Company. In order to free these executives to make decisions in a thoughtful and strategic manner regardless of the

personal consequences, the Company has provided them with this additional level of security. The Company further

believes that the Plan will aid the Company in attracting and retaining highly qualified executives who are essential to

its success.

PLAN OPERATION

Any decisions or determinations required to be made under the Plan shall be made by the Compensation Committee of the Company’s Board of Directors (the “Committee”) or one or more executives of the Company to which authority is delegated by the Committee. The decisions and determinations of the Committee (and any executive to whom authority has been delegated) relating to the Plan are final and binding on all persons. PARTICIPATION Participation in the Plan is limited to the most senior executives of the Company and its subsidiaries as selected by the

Committee (upon recommendation of the Company’s Chief Executive Officer) or as selected by the Company’s Chief

Executive Officer if such authority is so delegated by the Committee. Notwithstanding anything contained herein,

employees of the Company and its subsidiaries are not eligible to participate in the Plan and are excluded from coverage

under the Plan if they are a party to an individual arrangement or a written employment agreement or other severance

payment policy or arrangement with the Company or any of its subsidiaries containing a severance provision unless the

Participant waives any rights to such severance provisions in a manner deemed appropriate by the Committee.

ELIGIBILITY FOR PAYMENTS

In order to be eligible for payments under this plan, a Participant must:

For purposes of this Plan, a “Qualifying Termination” shall be defined as:

Notwithstanding any provision of the Plan to the contrary, the following events shall not constitute a “Qualifying

Termination” for purposes of the Plan:

(a) Sign an Acknowledgement Form attached to this Plan as Exhibit A (an “Acknowledgement Form”);

(b) Have a Qualifying Termination (as defined below);

(c) Be in an active status with the Company at the time of separation, or be returning to work on a timely basis

following an approved leave of absence or disability leave;

(d) Execute a full release of claims and covenant not to sue in a form determined by the Company in its sole discretion (the “Release”) that is executed and non-revocable prior to the date that is 60 days following the date of a Participant’s termination of employment (the “Release Date”); and

(e) Return all Company property and materials and provide any requests for expense reimbursement prior to the beginning of payments under this plan and resolve any outstanding financial obligations owed to the Company in each case prior to the Release Date.

(a) A termination of employment by the Company or any of its subsidiaries other than for Cause (as defined below);

or

(b) A voluntary resignation for Good Reason (as defined below).

(a) A termination by the Company or any of its subsidiaries for Cause;

(b) A voluntary termination other than for Good Reason;

(c) Mandatory retirement in accordance with Company policy;

(d) Termination on account of death or Disability (as defined below);

(e) Refusing, rejecting or declining to accept a transfer to a position with the Company or its subsidiaries (for which

a Participant is qualified as determined by the Company by reason of knowledge, training, and experience),

provided the transfer would not constitute Good Reason for a voluntary termination;

SEVERANCE BENEFITS

Under the Plan, in the event a Participant is terminated in a Qualifying Termination as described above, he or she will be

eligible for the following benefits:

The Severance shall be paid in accordance with the normal payroll practices of the Company, provided that no payment

will be made until after the Release Date. In the event that the Release is executed and non-revocable prior to the

Release Date, any Severance that would have been payable prior to the Release Date in accordance with normal payroll

practices will be

(f) The sale of all or part of the business assets of the Company, any of its subsidiaries or the division or business

unit that employs the Participant if the Participant is offered comparable employment by the acquirer of such

assets, provided such employment would not constitute Good Reason if the employing entity did not change; or

(g) Upon the formation of a joint venture or other business entity in which the Company or a subsidiary will directly

or indirectly own some outstanding voting or other ownership interest if a Participant is offered comparable

employment by the joint venture entity or other business entity, provided such employment would not constitute

Good Reason if the employing entity did not change.

(a) Payment of any earned, but unpaid, base salary in accordance with the Company’s payroll policy and any earned

but unused vacation time as of the date of termination in accordance with Company policy (the “Accrued

Obligations”); and

(b) Eighteen (18) months of the Participant’s then-current base salary (the “Severance”);

(c) To the extent permitted by applicable law and provided the Company is able to provide such benefits without the imposition on the Company of any tax or penalty, if the Participant timely elects and pays for continuation coverage under the Company’s group health plan in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), continued payment by the Company of its portion (as in effect from time to time for active employees of the Company) of the premium for such coverage for the Participant and his or her eligible dependents for eighteen (18) months; provided, however, that (i) if the Company determines that it cannot continue such payments without penalties or adverse tax consequences to the Company, the Company shall pay directly to the Participant a lump-sum cash amount equal to the then-unpaid amount of the Company’s portion of the premium for such coverage, provided that such cash payment does not result in any such penalties or adverse tax consequences and (ii) in the event the Participant obtains other employment that offers substantially similar or more favorable benefits, taken as a whole, such premium payments by the Company or other rights under this paragraph (c) shall immediately cease; and

(d) Executive Outplacement Services as arranged and paid by the Company.

accumulated and paid in a lump sum on the first payroll date following the Release Date. Notwithstanding the foregoing,

in the event that a Qualifying Termination occurs within the twenty-four (24) month period following a Change in

Control (as defined below), the Severance will be paid in a lump-sum on the Release Date provided the Release is

executed and non-revocable prior to the Release Date. In the event that the Release is not executed and non-revocable

prior to the Release Date, the Severance and all other benefits under the Plan will be forfeited (other than the Accrued

Obligations or any other provision required by law). Payment of the Severance may also be subject to the provisions of

Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”) discussed below.

Notwithstanding the other provisions of this Plan, in the event that any Severance or other benefits otherwise payable to

the Participant (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of

1986, as amended (the “Code”), and (ii) but for this paragraph, would be subject to the excise tax imposed by Section

4999 of the Code, then any Severance and other benefits shall be either (x) delivered in full, or (y) delivered as to such

lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the

Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and

employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state and local excise

taxes), results in the receipt by the Participant on an after-tax basis, of the greatest amount of benefits, notwithstanding

that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and the

Participant otherwise agree in writing, any determination required under this paragraph will be made by the Company

and its advisors. Any reduction in payments and/or benefits required by this provision shall occur in the following order:

(1) reduction of Severance; (2) reduction of vesting acceleration of equity awards; and (3) reduction of other benefits

paid or provided to the Participant. In the event that acceleration of vesting of equity awards is to be reduced, such

acceleration of vesting shall be cancelled in the reverse order of the date of grant for the Participant’s equity awards. If

two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis.

Any rights a Participant may have with respect to pension benefits, long-term performance awards, stock options,

restricted stock and restricted stock units, deferred compensation, bonus payments or other employee or fringe benefits

will be determined in accordance with the applicable Company plans, programs and/or policies.

If a Participant is rehired by the Company or any of its subsidiaries, any unpaid Severance will be forfeited. If a Participant is a terminated employee who is subsequently reinstated to employee status back to the date he or she was terminated (including reinstatement as the result of an appeal of a claim for disability benefits), any Severance payment made to a Participant must be repaid to the Company.

RESTRICTIVE COVENANTS

Any agreement that a Participant has entered into with the Company or a subsidiary that provides for nondisclosure of information, noncompetition with the Company or its subsidiaries and non-solicitation of the Company’s and its subsidiaries’ current or prospective clients, customers or employees (each, a “Restrictive Covenant Agreement”) shall remain in full force and effect following a Qualifying Termination, and Participant agrees to abide by the terms of any such agreement. The Company reserves all rights to enforce the provisions of any Restrictive Covenant Agreement. In the event that a Participant breaches any Restrictive Covenant Agreement, any unpaid Severance and all other benefits under the Plan will be forfeited (other than the Accrued Obligations or any other provision required by law) .

MISCELLANEOUS

(a) If anything in this Plan conflicts with the Company’s employee handbook or any other Company policy, the terms of this Plan shall control unless otherwise specified in this Plan. If anything in this Plan conflicts with applicable law, applicable law shall control.

(b) If a Participant’s separation is covered by the provisions of the Workers Adjustment and Retraining Notification Act (WARN), any payments made to the Participant under provisions of that act will offset the Severance calculated under the Plan.

(c) The Plan does not constitute a contract of employment. Nothing in this plan is to be construed as providing the Participant with a right to continued employment. A Participant's employment with the Company continues to be “at will” subject to the benefits provided herein upon a Qualifying Termination.

(d) The Company shall withhold from any amounts payable under the Plan all federal, state, local or other taxes that are legally required to be withheld.

(e) Except as specifically provided for in this Plan, neither the provisions of this Plan nor the Severance and benefits provided for hereunder shall reduce any amounts otherwise payable to a Participant under any incentive, retirement, stock option, stock bonus, stock ownership, group insurance or other benefit plan.

(f) The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(g) The Severance and other benefits under the Plan shall constitute unfunded obligations of the Company. The Severance payments shall be made, as due, from the general funds of the Company. The Plan shall constitute solely an unsecured promise by the Company to provide such benefits to a Participant to the extent provided herein. For avoidance of doubt, any health benefits to which a Participant may be entitled under the Plan shall be provided under other applicable employee benefit plans of the Company.

(h) In addition to any compensation recovery (claw back) which may be required under any agreement between the Company and the Participant, law or regulation (including but not

limited to any claw back required by Section 954 of the Dodd-Frank Act), Participant acknowledges and agrees that any compensation paid under this Plan is deemed to be subject to any claw back requirements as set forth in the Company’s corporate governance guidelines or policies and to any similar successor provisions as may be in effect from time to time, including by reason of guidelines or policies adopted following the date of the Participant’s Qualifying Termination.

(i) By signing the Acknowledgement Form, the Participant agrees not to commence any action or suit related to Participant’s employment by the Company or any arbitration related to this Plan: (i) more than six months after the termination of Participant's employment, if the action, suit or arbitration is related to the termination of Participant’s employment, or (ii) more than six months after the event or occurrence on which participant’s claim is based, if the action, suit, or arbitration is based on an event or occurrence other than the termination of participant’s employment. Participant agrees to waive any statute of limitations that is contrary to this section.

(j) A Participant and Company shall submit to mandatory, final and binding arbitration any controversy or claim arising out of, or relating to, this Plan or any breach hereof. Such arbitration shall be conducted in Cincinnati, Ohio, or such other location as the parties mutually agree, in accordance with the employment rules of the American Arbitration Association in effect at the time such arbitration is conducted. Judgment upon the determination or award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Nothing in this section shall affect or limit in any way the Company’s right to resort to a court for injunctive, equitable, or other relief for breach or threatened breach of Participant’s obligation to Company or otherwise relating to enforcement of any Restrictive Covenant Agreement or otherwise related to unfair competition or restrictive covenants .

(k) This Plan shall be governed by and construed in accordance with the substantive laws of the State of Ohio, without regard to the conflicts of law principles thereof. Participant is deemed to agree (i) that any suit, proceeding or action at law or in equity (each, an “Action") arising out of or relating to this Plan must be instituted in state or federal court located within Hamilton County, Ohio, (ii) to waive any objection which he or she may have now or hereafter to the laying of the venue of any such Action, (iii) to irrevocably submit to the jurisdiction of any such Action, and (iv) to hereby waive any claims or defenses of inconvenient forum. Company and the Participant irrevocably agrees that service of any and all process which may be served in any such Action may be served upon Participant or Company by registered mail and that such service shall be deemed effective service of process upon the Participant and Company in any such Action. The Participant and Company irrevocably agree that such service of process shall have the same force and validity as if service were made to Participant or Company according to the law governing such service in the State of Ohio, and waive all claims of error by reason of any such service.

(l) All Participants in this Plan are required to be in compliance with the Company’s Anti-Kickback Statute Policies & Procedures (CPL-CIA-006) and should review the Company’s Anti-Kickback Statute Policies & Procedures before agreeing to this Plan. Any Plan Participant who is found to be in violation of the Company’s Anti-Kickback Statute Policies

and Procedures as determined by the Company in its sole discretion will be deemed ineligible for the payments described in this Plan (other than the Accrued Obligations or other provision required by law) without limitation of any other right or remedies that the Company might have or any other obligations Participant may have to the Company or any other person or entity. Additionally, Participant agrees to return to the Company within five (5) days of the Company’s written request any previously paid payments made pursuant to this Plan if the Company determines that Participant has violated the Company's Anti-Kickback Statute Policies & Procedures.

SECTION 409A

(m) A Participant may not assign or otherwise transfer Participant’s rights, obligations, or duties contained in this Plan. The Company retains the right without further notice or consent to assign its rights and obligations under the Plan to any successor in interest or purchaser of substantially all of the Company’s assets. In the event of such an assignment, the benefits and burdens of this Plan shall inure to the benefit of and is binding upon the successor or assignee of the Company.

(n) Any notice to be provided under this Plan may be given in writing or electronically through the Company’s electronic communications systems.

(o) By signing the Acknowledgement Form, the Participant accepts all Rules, Restrictions, Terms and Conditions of the Plan.

(a) To the fullest extent possible, amounts and other benefits payable under the Plan are intended to be comply with or be exempt from Code Section 409A, and the Company shall have complete discretion to interpret and construe this Agreement and any associated documents in any manner that establishes an exemption from (or compliance with) the requirements of Code Section 409A. Any terms of this Plan that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply with Code Section 409A. If for any reason, such as imprecision in drafting, any provision of this Plan does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company. If, notwithstanding the foregoing provisions of this paragraph, any provision of this Plan would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company shall interpret or reform such provision in a manner intended to avoid the incurrence by the Participant of any such additional tax or interest; provided that the Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that the

Company determines may be considered nonqualified deferred compensation under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A, and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean such a separation from service. The determination of whether and when a separation from service has occurred for purposes of this Plan shall be made in accordance with the presumptions set forth in Section 1.409A-1(h) of the Treasury Regulations.

(c) Any provision of this Plan to the contrary notwithstanding, if at the time of a Participant’s separation from service, the Company determines that the Participant is a “specified employee,” within the meaning of Code Section 409A, based on an identification date of December 31, then to the extent any payment or benefit that the Participant becomes entitled to under this Plan on account of such separation from service would be considered nonqualified deferred compensation under Code Section 409A, such payment or benefit shall be paid or provided at the date which is the earlier of (i) six (6) months and one day after such separation from service, and (ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this paragraph shall be paid or provided to the Participant in a lump-sum and any remaining payments and benefits due under this Plan shall be paid or provided in accordance with the normal payment dates specified for them herein.

(d) Any reimbursements and in-kind benefits provided under this Plan that constitute deferred compensation within the meaning of Code Section 409A shall be made or provided in accordance with the requirements of Code Section 409A, including, without limitation, that (i) in no event shall any fees, expenses or other amounts eligible to be reimbursed by the Company under this Plan be paid later than the last day of the calendar year next following the calendar year in which the applicable fees, expenses or other amounts were incurred; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits that the Company is obligated to pay or provide, in any given calendar year shall not affect the expenses that the Company is obligated to reimburse, or the in-kind benefits that the Company is obligated to pay or provide, in any other calendar year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; (iii) the Participant’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Participant’s remaining lifetime (or if longer, through the sixth (6th) anniversary of the commencement date of such obligations).

(e) For purposes of Code Section 409A, the Participant’s right to receive the Severance payments shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Plan specifies a payment period with reference to a number of days (for example, “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company. In no event may the Participant, directly or indirectly, designate

the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A.

AMENDMENT AND TERMINATION OF PLAN

The Company reserves the right to modify or terminate this Plan with respect to one or more Participants (or all

Participants) at its sole discretion at any time. However, any such modification or termination will not impact

Participants who have already been terminated under the Plan as of the date of the modification or termination. In

addition, any Participant impacted by any such modification or termination will be notified by the Company thirty (30)

days prior to implementation of such modification or termination. Following a Change in Control (as defined below), the

Plan may not be terminated or adversely amended with respect to anyone who is a Participant on the date of the Change

in Control without the consent of such Participant.

DEFINITIONS

For purposes of this Plan, the following definitions will be used:

2. "Cause” will mean any of the following

(f) The Company makes no representation or warranty and shall have no liability to the Participant or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Code Section 409A but do not satisfy an exemption from, or the conditions of, Code Section 409A.

1. " Participant” means any employee of the Company who is at least at the vice-president level who has been

selected to participate in this plan by the Company and who executes an Acknowledgement Form.

a. Conduct which is materially detrimental to the Company's reputation, goodwill or business operations;

b. Gross or habitual neglect of Participant’s duties or obligations or breach of such duties , or misconduct in

discharging such duties;

c. Participant’s failure to substantially perform his or her duties to the Company or the repeated absence

from his or her duties without the consent of the Chief Executive Officer of the Company;

d. Participant's failure or refusal to comply with the policies, standards and regulations of the Company or

to follow the directions of the Chief Executive Officer of the Company in complying with those policies,

standards and regulations;

In no event shall a Participant be considered to have been terminated for “Cause” unless the Company delivers a

written notice of termination to the Participant identifying in reasonable detail the acts or omissions constituting

“Cause” and the provision of this Plan relied upon. In the case where such acts or omissions are not capable of

cure, the Participant’s termination will take effect upon his or her receipt of such notice. In the case where such

acts or omissions are capable of cure, the Participant’s termination will take effect fifteen (15) days following

his or her receipt of such notice if such acts or omissions are not cured by the Participant by such date, provided

the Company may suspend the Participant’s employment or place him or her on leave of absence pending such

cure. For the avoidance of doubt, mere failure of the Company to achieve earnings goals shall not constitute

“Cause.”

a. Substantial reduction in compensation and benefits from the compensation and benefits provided immediately prior to the Change in Control.

b. Substantial and material negative change in the work responsibilities and duties from the Participant’s work responsibilities and duties immediately prior to the Change in Control.

c. Relocation of the work place more than 50 miles from the work place of the Participant immediately prior to the Change in Control.

d. The termination or material adverse modification of the Omnicare, Inc. Senior Executive Severance Plan without the Participant’s prior written consent.

To qualify for the Severance and other benefits under the Plan upon voluntary termination for Good Reason, a

Participant must notify the Company in writing of termination for Good Reason specifying the event constituting

Good Reason within thirty (30) calendar days of

e. Breach or threatened breach of the restrictive covenants Participant owes to the Company;

f. Fraud or willful or intentional misrepresentation in connection with the Participant’s performance of his

or her duties;

g. Conviction of Employee for, or entry of plea of guilty or nolo contender by Employee with respect to,

any criminal act.

3. “ Change in Control” shall mean a “Change in Control” under the Company’s 2004 Stock & Incentive Plan or

any successor thereto as in effect on the date of the Change in Control, provided such “Change in Control”

constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial

portion of the assets of the Company, within the meaning of Code Section 409A.

4. " Good Reason" will mean that within 24 months following a Change In Control, the Participant had one or

more of the following happen:

the Participant being notified of the event. Failure for any reason to give written notice of termination of

employment for Good Reason shall be deemed a waiver of the right to voluntarily terminate employment and

claim Good Reason under this Plan in relation to such event. The Company shall have a period of thirty (30) days

in which to cure the Good Reason. If the Good Reason is cured within this period, a Participant will not be

entitled to voluntarily terminate for Good Reason with respect to the event that has been cured.

5. “ Disability" will mean the Participant is unable to perform his or her duties to the Company or its subsidiaries

by reason of illness or other physical or mental disability, and such physical or mental disability has continued

for 90 days or would be reasonably expected to continue for at least 90 days.

EXHIBIT A

PARTICIPANT ACKNOWLEDGEMENT AND ACCEPTANCE OF THE RULES, RESTRICTIONS, TERMS

AND CONDITIONS OF THE OMNICARE, INC. SENIOR EXECUTIVE SEVERANCE PLAN

I acknowledge that I have received this official plan document for the Omnicare, Inc. Senior Executive Severance Plan (the “Plan”), and confirm that I have read and understand the terms of the Plan. Furthermore, I agree that any severance compensation I may be due will be paid under the rules, restrictions, terms and conditions as stated above. I also acknowledge that (i) I am still bound by Restrictive Covenant Agreements (as defined in the Plan) previously entered in between myself and Omnicare, Inc. or one of its subsidiaries or (ii) I have concurrently herewith entered into a restrictive covenant agreement in a form approved by the Company.

Name (print)

Signature of Recipient

Date

EXHIBIT 10.38

OMNICARE, INC. EXECUTIVE SEVERANCE PLAN

This Executive Severance Plan is effective as of January 1, 2013. OBJECTIVE Omnicare, Inc. (the “Company”) has adopted the Omnicare, Inc. Executive Severance Plan (the “Plan”) to provide key

executives with the financial security to allow them to focus on the growth of the Company’s business. Executives must

make important decisions that affect the livelihood of many associates and the overall performance of the Company. In

order to free these executives to make decisions in a thoughtful and strategic manner regardless of the personal

consequences, the Company has provided them with this additional level of security. The Company further believes that

the Plan will aid the Company in attracting and retaining highly qualified executives who are essential to its success.

PLAN OPERATION

Any decisions or determinations required to be made under the Plan shall be made by the Compensation Committee of the Company’s Board of Directors (the “Committee”) or one or more executives of the Company to which authority is delegated by the Committee. The decisions and determinations of the Committee (and any executive to whom authority has been delegated) relating to the Plan are final and binding on all persons. PARTICIPATION Participation in the Plan is limited to executives of the Company and its subsidiaries at the vice-president level or above

as selected by the Committee (upon recommendation of the Company’s Chief Executive Officer) or as selected by the

Company’s Chief Executive Officer if such authority is so delegated by the Committee. Notwithstanding anything

contained herein, employees of the Company and its subsidiaries are not eligible to participate in the Plan and are

excluded from coverage under the Plan if they are a party to an individual arrangement or a written employment

agreement or other severance payment policy or arrangement with the Company or any of its subsidiaries containing a

severance provision unless the Participant waives any rights to such severance

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provisions in a manner deemed appropriate by the Committee.

ELIGIBILITY FOR PAYMENTS

In order to be eligible for payments under this plan, a Participant must:

For purposes of this Plan, a “Qualifying Termination” shall be defined as:

A termination of employment by the Company or any of its subsidiaries other than for Cause (as defined below)

provided that such termination is not excluded below.

Notwithstanding any provision of the Plan to the contrary, the following events shall not constitute a “Qualifying

Termination” for purposes of the Plan:

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(a) Sign an Acknowledgement Form attached to this Plan as Exhibit A (an “Acknowledgement Form”);

(b) Have a Qualifying Termination (as defined below);

(c) Be in an active status with the Company at the time of separation, or be returning to work on a timely basis

following an approved leave of absence or disability leave;

(d) Execute a full release of claims and covenant not to sue in a form determined by the Company in its sole discretion (the “Release”) that is executed and non-revocable prior to the date that is 60 days following the date of a Participant’s termination of employment (the “Release Date”); and

(e) Return all Company property and materials and provide any requests for expense reimbursement prior to the beginning of payments under this plan and resolve any outstanding financial obligations owed to the Company in each case prior to the Release Date.

(a) A termination by the Company or any of its subsidiaries for Cause;

(b) A voluntary termination;

(c) Mandatory retirement in accordance with Company policy;

(d) Termination on account of death or Disability (as defined below);

SEVERANCE BENEFITS

Under the Plan, in the event a Participant is terminated in a Qualifying Termination as described above, he or she will be

eligible for the following benefits:

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(e) Refusing, rejecting or declining to accept a transfer to a position with the Company or its subsidiaries (for which

a Participant is qualified as determined by the Company by reason of knowledge, training, and experience);

(f) The sale of all or part of the business assets of the Company, any of its subsidiaries or the division or business

unit that employs the Participant if the Participant is offered comparable employment by the acquirer of such

assets; or

(g) Upon the formation of a joint venture or other business entity in which the Company or a subsidiary will directly

or indirectly own some outstanding voting or other ownership interest if a Participant is offered comparable

employment by the joint venture entity or other business entity.

(a) Payment of any earned, but unpaid, base salary in accordance with the Company’s payroll policy and any earned

but unused vacation time as of the date of termination in accordance with Company policy (the “Accrued

Obligations”); and

(b) Twelve (12) months of the Participant’s then-current base salary (the “Severance”); and

(c) To the extent permitted by applicable law and provided the Company is able to provide such benefits without the imposition on the Company of any tax or penalty, if the Participant timely elects and pays for continuation coverage under the Company’s group health plan in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), continued payment by the Company of its portion (as in effect from time to time for active employees of the Company) of the premium for such coverage for the Participant and his or her eligible dependents for twelve (12) months; provided, however, that (i) if the Company determines that it cannot continue such payments without penalties or adverse tax consequences to the Company, the Company shall pay directly to the Participant a lump-sum cash amount equal to the then-unpaid amount of the Company’s portion of the premium for such coverage, provided that such cash payment does not result in any such penalties or adverse tax consequences and (ii) in the event the Participant obtains other employment that offers substantially similar or more favorable benefits, taken as a whole, such premium payments by the Company or other rights under this paragraph (c) shall immediately cease.

The Severance shall be paid in accordance with the normal payroll practices of the Company, provided that no payment

will be made until after the Release Date. In the event that the Release is executed and non-revocable prior to the

Release Date, any Severance that would have been payable prior to the Release Date in accordance with normal payroll

practices will be accumulated and paid in a lump sum on the first payroll date following the Release Date.

Notwithstanding the foregoing, in the event that a Qualifying Termination occurs within the twenty-four (24) month

period following a Change in Control (as defined below), the Severance will be paid in a lump-sum on the Release Date

provided the Release is executed and non-revocable prior to the Release Date. In the event that the Release is not

executed and non-revocable prior to the Release Date, the Severance and all other benefits under the Plan will be

forfeited (other than the Accrued Obligations or any other provision required by law). Payment of the Severance may

also be subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section

409A”) discussed below.

Any rights a Participant may have with respect to pension benefits, long-term performance awards, stock options,

restricted stock and restricted stock units, deferred compensation, bonus payments or other employee or fringe benefits

will be determined in accordance with the applicable Company plans, programs and/or policies.

If a Participant is rehired by the Company or any of its subsidiaries, any unpaid Severance will be forfeited. If a Participant is a terminated employee who is subsequently reinstated to employee status back to the date he or she was terminated (including reinstatement as the result of an appeal of a claim for disability benefits), any Severance payment made to a Participant must be repaid to the Company.

RESTRICTIVE COVENANTS

Any agreement that a Participant has entered into with the Company or a subsidiary that provides for nondisclosure of information, noncompetition with the Company or its subsidiaries and non-solicitation of the Company’s and its subsidiaries’ current or prospective clients, customers or employees (each, a “Restrictive Covenant Agreement”) shall remain in full force and effect following a Qualifying Termination, and Participant agrees to abide by the terms of any such agreement. The Company reserves all rights to enforce the provisions of any Restrictive Covenant Agreement. In the event that a Participant breaches any Restrictive Covenant Agreement, any unpaid Severance and all other benefits under the Plan will be forfeited (other than the Accrued Obligations or any other provision required by law) .

MISCELLANEOUS

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(a) If anything in this Plan conflicts with the Company’s employee handbook or any other Company policy, the terms of this Plan shall control unless otherwise

specified in this Plan. If anything in this Plan conflicts with applicable law, applicable law shall control.

5

(b) If a Participant’s separation is covered by the provisions of the Workers Adjustment and Retraining Notification Act (WARN), any payments made to the Participant under provisions of that act will offset the Severance calculated under the Plan.

(c) The Plan does not constitute a contract of employment. Nothing in this plan is to be construed as providing the Participant with a right to continued employment. A Participant's employment with the Company continues to be “at will” subject to the benefits provided herein upon a Qualifying Termination.

(d) The Company shall withhold from any amounts payable under the Plan all federal, state, local or other taxes that are legally required to be withheld.

(e) Except as specifically provided for in this Plan, neither the provisions of this Plan nor the Severance and benefits provided for hereunder shall reduce any amounts otherwise payable to a Participant under any incentive, retirement, stock option, stock bonus, stock ownership, group insurance or other benefit plan.

(f) The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(g) The Severance and other benefits under the Plan shall constitute unfunded obligations of the Company. The Severance payments shall be made, as due, from the general funds of the Company. The Plan shall constitute solely an unsecured promise by the Company to provide such benefits to a Participant to the extent provided herein. For avoidance of doubt, any health benefits to which a Participant may be entitled under the Plan shall be provided under other applicable employee benefit plans of the Company.

(h) In addition to any compensation recovery (claw back) which may be required under any agreement between the Company and the Participant, law or regulation (including but not limited to any claw back required by Section 954 of the Dodd-Frank Act), Participant acknowledges and agrees that any compensation paid under this Plan is deemed to be subject to any claw back requirements as set forth in the Company’s corporate governance guidelines or policies and to any similar successor provisions as may be in effect from time to time, including by reason of guidelines or policies adopted following the date of the Participant’s Qualifying Termination.

(i) By signing the Acknowledgement Form, the Participant agrees not to commence any action or suit related to Participant’s employment by the Company or any arbitration related to this Plan: (i) more than six months after the termination of

Participant's employment, if the action, suit or arbitration is related to the termination of Participant’s employment, or (ii) more than six months after the event or occurrence on which participant’s claim is based, if the action, suit, or arbitration is based on an event or occurrence other than the termination of participant’s employment. Participant agrees to waive any statute of limitations that is contrary to this section.

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(j) A Participant and Company shall submit to mandatory, final and binding arbitration any controversy or claim arising out of, or relating to, this Plan or any breach hereof. Such arbitration shall be conducted in Cincinnati, Ohio, or such other location as the parties mutually agree, in accordance with the employment rules of the American Arbitration Association in effect at the time such arbitration is conducted. Judgment upon the determination or award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Nothing in this section shall affect or limit in any way the Company’s right to resort to a court for injunctive, equitable, or other relief for breach or threatened breach of Participant’s obligation to Company or otherwise relating to enforcement of any Restrictive Covenant Agreement or otherwise related to unfair competition or restrictive covenants .

(k) This Plan shall be governed by and construed in accordance with the substantive laws of the State of Ohio, without regard to the conflicts of law principles thereof. Participant is deemed to agree (i) that any suit, proceeding or action at law or in equity (each, an “Action") arising out of or relating to this Plan must be instituted in state or federal court located within Hamilton County, Ohio, (ii) to waive any objection which he or she may have now or hereafter to the laying of the venue of any such Action, (iii) to irrevocably submit to the jurisdiction of any such Action, and (iv) to hereby waive any claims or defenses of inconvenient forum. Company and the Participant irrevocably agrees that service of any and all process which may be served in any such Action may be served upon Participant or Company by registered mail and that such service shall be deemed effective service of process upon the Participant and Company in any such Action. The Participant and Company irrevocably agree that such service of process shall have the same force and validity as if service were made to Participant or Company according to the law governing such service in the State of Ohio, and waive all claims of error by reason of any such service.

(l) All Participants in this Plan are required to be in compliance with the Company’s Anti-Kickback Statute Policies & Procedures (CPL-CIA-006) and should review the Company’s Anti-Kickback Statute Policies & Procedures before agreeing to this Plan. Any Plan Participant who is found to be in violation of the Company’s Anti-Kickback Statute Policies and Procedures as determined by the Company in its sole discretion will be deemed ineligible for the payments described in this Plan (other than the Accrued Obligations or other provision required by law) without limitation of any other right or remedies that the Company might have or any other obligations Participant may have to the Company or any other person or entity. Additionally, Participant agrees to return to the Company within five (5) days of the Company’s written request any previously paid payments made

pursuant to this Plan if the Company determines that Participant has violated the Company's Anti-Kickback Statute Policies & Procedures.

SECTION 409A

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(m) A Participant may not assign or otherwise transfer Participant’s rights, obligations, or duties contained in this Plan. The Company retains the right without further notice or consent to assign its rights and obligations under the Plan to any successor in interest or purchaser of substantially all of the Company’s assets. In the event of such an assignment, the benefits and burdens of this Plan shall inure to the benefit of and is binding upon the successor or assignee of the Company.

(n) Any notice to be provided under this Plan may be given in writing or electronically through the Company’s electronic communications systems.

(o) By signing the Acknowledgement Form, the Participant accepts all Rules, Restrictions, Terms and Conditions of the Plan.

(a) To the fullest extent possible, amounts and other benefits payable under the Plan are intended to be comply with or be exempt from Code Section 409A, and the Company shall have complete discretion to interpret and construe this Agreement and any associated documents in any manner that establishes an exemption from (or compliance with) the requirements of Code Section 409A. Any terms of this Plan that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply with Code Section 409A. If for any reason, such as imprecision in drafting, any provision of this Plan does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company. If, notwithstanding the foregoing provisions of this paragraph, any provision of this Plan would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company shall interpret or reform such provision in a manner intended to avoid the incurrence by the Participant of any such additional tax or interest; provided that the Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that the Company determines may be considered nonqualified deferred compensation under Code Section 409A upon or following a termination of

employment unless such termination is also a “separation from service” within the meaning of Code Section 409A, and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean such a separation from service. The determination of whether and when a separation from service has occurred for purposes of this Plan shall be made in accordance with the presumptions set forth in Section 1.409A-1(h) of the Treasury Regulations.

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(c) Any provision of this Plan to the contrary notwithstanding, if at the time of a Participant’s separation from service, the Company determines that the Participant is a “specified employee,” within the meaning of Code Section 409A, based on an identification date of December 31, then to the extent any payment or benefit that the Participant becomes entitled to under this Plan on account of such separation from service would be considered nonqualified deferred compensation under Code Section 409A, such payment or benefit shall be paid or provided at the date which is the earlier of (i) six (6) months and one day after such separation from service, and (ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this paragraph shall be paid or provided to the Participant in a lump-sum and any remaining payments and benefits due under this Plan shall be paid or provided in accordance with the normal payment dates specified for them herein.

(d) Any reimbursements and in-kind benefits provided under this Plan that constitute deferred compensation within the meaning of Code Section 409A shall be made or provided in accordance with the requirements of Code Section 409A, including, without limitation, that (i) in no event shall any fees, expenses or other amounts eligible to be reimbursed by the Company under this Plan be paid later than the last day of the calendar year next following the calendar year in which the applicable fees, expenses or other amounts were incurred; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits that the Company is obligated to pay or provide, in any given calendar year shall not affect the expenses that the Company is obligated to reimburse, or the in-kind benefits that the Company is obligated to pay or provide, in any other calendar year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; (iii) the Participant’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Participant’s remaining lifetime (or if longer, through the sixth (6th) anniversary of the commencement date of such obligations).

(e) For purposes of Code Section 409A, the Participant’s right to receive the Severance payments shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Plan specifies a payment period with reference to a number of days (for example, “payment shall be made

within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company. In no event may the Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A.

AMENDMENT AND TERMINATION OF PLAN

The Company reserves the right to modify or terminate this Plan with respect to one or more Participants (or all

Participants) at its sole discretion at any time. However, any such modification or termination will not impact

Participants who have already been terminated under the Plan as of the date of the modification or termination. In

addition, any Participant impacted by any such modification or termination will be notified by the Company thirty (30)

days prior to implementation of such modification or termination. Following a Change in Control (as defined below), the

Plan may not be terminated or adversely amended with respect to anyone who is a Participant on the date of the Change

in Control without the consent of such Participant.

DEFINITIONS

For purposes of this Plan, the following definitions will be used:

2. "Cause” will mean any of the following

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(f) The Company makes no representation or warranty and shall have no liability to the Participant or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Code Section 409A but do not satisfy an exemption from, or the conditions of, Code Section 409A.

1. " Participant” means any employee of the Company who is at least at the vice-president level who has been

selected to participate in this plan by the Company and who executes an Acknowledgement Form.

a. Conduct which is materially detrimental to the Company's reputation, goodwill or business operations;

b. Gross or habitual neglect of Participant’s duties or obligations or breach of such duties , or misconduct in

discharging such duties;

c. Participant’s failure to substantially perform his or her duties to the Company or the repeated absence

from his or her duties without the consent of the Chief Executive Officer of the Company;

In no event shall a Participant be considered to have been terminated for “Cause” unless the Company delivers a

written notice of termination to the Participant identifying in reasonable detail the acts or omissions constituting

“Cause” and the provision of this Plan relied upon. In the case where such acts or omissions are not capable of

cure, the Participant’s termination will take effect upon his or her receipt of such notice. In the case where such

acts or omissions are capable of cure, the Participant’s termination will take effect fifteen (15) days following

his or her receipt of such notice if such acts or omissions are not cured by the Participant by such date, provided

the Company may suspend the Participant’s employment or place him or her on leave of absence pending such

cure.

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d. Participant's failure or refusal to comply with the policies, standards and regulations of the Company or

to follow the directions of the Chief Executive Officer of the Company in complying with those policies,

standards and regulations;

e. Breach or threatened breach of the restrictive covenants Participant owes to the Company;

f. Fraud or willful or intentional misrepresentation in connection with the Participant’s performance of his

or her duties;

g. Conviction of Employee for, or entry of plea of guilty or nolo contender by Employee with respect to,

any criminal act.

3. “ Change in Control” shall mean a “Change in Control” under the Company’s 2004 Stock & Incentive Plan or

any successor thereto as in effect on the date of the Change in Control, provided such “Change in Control”

constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial

portion of the assets of the Company, within the meaning of Code Section 409A.

4. “ Disability" will mean the Participant is unable to perform his or her duties to the Company or its subsidiaries

by reason of illness or other physical or mental disability, and such physical or mental disability has continued

for 90 days or would be reasonably expected to continue for at least 90 days.

EXHIBIT A

PARTICIPANT ACKNOWLEDGEMENT AND ACCEPTANCE OF THE RULES, RESTRICTIONS, TERMS

AND CONDITIONS OF THE OMNICARE, INC. EXECUTIVE SEVERANCE PLAN

I acknowledge that I have received this official plan document for the Omnicare, Inc. Executive Severance Plan (the “Plan”), and confirm that I have read and understand the terms of the Plan. Furthermore, I agree that any severance compensation I may be due will be paid under the rules, restrictions, terms and conditions as stated above. I also acknowledge that (i) I am still bound by Restrictive Covenant Agreements (as defined in the Plan) previously entered in between myself and Omnicare, Inc. or one of its subsidiaries or (ii) I have concurrently herewith entered into a restrictive covenant agreement in a form approved by the Company.

Name (print)

Signature of Recipient

Date

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EXHIBIT 10.39

The Omnicare, Inc. Non-Qualified Deferred Compensation Plan

Omnicare Non-Qualified Deferred Compensation Plan

DEFERRED COMPENSATION PLAN FOR

OMNICARE, INC.

Omnicare, Inc., a Delaware corporation (the “Company”), hereby establishes this Deferred Compensation Plan (the “ Plan ”), effective January 1, 2013 (the “Effective Date”), for the purpose of attracting and retaining high quality executives, and motivating them to strive for increased efficiency in and the successful operation of the Company. The Plan is intended to, and shall be interpreted to; comply in all respects with Code Section 409A and those provisions of ERISA applicable to an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees.”

ARTICLE I TITLE AND DEFINITIONS

1.1 “ Account ” or “ Accounts ” shall mean the bookkeeping account or accounts established under this Plan pursuant to Article 4.

1.2 “ Base Salary ” shall mean a Participant’s annual base salary, excluding incentive and discretionary bonuses, commissions, reimbursements and other non-regular remuneration, received from the Company prior to reduction for any salary deferrals under benefit plans sponsored by the Company, including but not limited to, plans established pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).

1.3 “ Beneficiary ” or “ Beneficiaries ” shall mean the person, persons or entity designated as such pursuant to Section 7.1.

1.4 “ Benefit Commencement Date ” shall be as defined in Section 3.4(a).

1.5 “ Board ” shall mean the Board of Directors of Company.

1.6 “ Bonus(es) ” shall mean amounts paid to the Participant by the Company annually in the form of discretionary or incentive compensation or any other bonus designated by the Committee before reductions for contributions to or deferrals under any pension, deferred compensation or benefit plans sponsored by the Company.

1.7 “ Bonus Deferral Contributions ” shall have the meaning set forth in Section 3.1(a).

1.8 “ Code ” shall mean the Internal Revenue Code of 1986, as amended, as interpreted by Treasury regulations and applicable authorities promulgated thereunder.

1.9 “ Code Section 409A ” shall mean Section 409A of the Code.

1.10 “ Committee ” shall mean the Compensation Committee of the Board or other person or persons appointed by the Compensation Committee to administer the Plan in accordance with Article 8.

Omnicare Non-Qualified Deferred Compensation Plan

1.11 “ Company Contributions ” shall be as defined in Section 4.2.

1.12 “ Company Contribution Account ” shall be as defined in Section 4.2.

1.13 “ Compensation ” shall mean all amounts eligible for deferral for a particular Plan Year under Section 3.1(a).

1.14 “ Crediting Rate ” shall mean the notional gains and losses credited on the Participant’s Account balance which are based on the Participant’s choice among the investment alternatives made available by the Committee pursuant to Section 3.3 of the Plan.

1.15 “ Deferral Contribution Account ” shall mean the Account maintained for each Participant which is credited with Participant deferrals pursuant to Section 4.1

1.16 “ Delay Period ” shall have the meaning set forth in section 9.14(b) hereof.

1.17 “ Discretionary Company Contributions ” shall have the meaning set forth in Section 3.2 of the Plan.

1.18 “ Disability ” shall mean (consistent with the requirements of Section 409A) that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. The Committee may require that the Participant submit evidence of such qualification for disability benefits in order to determine that the Participant is disabled under this Plan.

1.19 “ Distributable Amount ” shall mean the vested balance in the applicable Account as determined under Article 4.

1.20 “ Eligible Executive ” shall mean a highly compensated or management level employee of the Company or its subsidiaries selected by the Committee to be eligible to participate in the Plan.

1.21 “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended, including Department of Labor and Treasury regulations and applicable authorities promulgated thereunder.

1.22 “ Financial Hardship ” shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in IRC Section 152(a)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, (but shall in all events correspond to the meaning of the term “unforseeable emergency” under Code Section 409A(a)(2)(v)).

1.23 “ Fund ” or “ Funds ” shall mean one or more of the investments selected by the Committee pursuant to Section 3.3 of the Plan.

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Omnicare Non-Qualified Deferred Compensation Plan

1.24 “ Hardship Distribution ” shall mean an accelerated distribution of benefits or a reduction or cessation of current deferrals pursuant to Section 6.5 to a Participant who has suffered a Financial Hardship.

1.25 “ Matching Contribution ” shall have the meaning set forth in Section 3.2 of the Plan.

1.26 “ Participant ” shall mean any Eligible Employee who becomes a Participant in this Plan in accordance with Article 2.

1.27 “ Participant Election(s) ” shall mean the forms or procedures by which a Participant makes elections with respect to (1) voluntary deferrals of his/her Compensation, (2) the investment Funds which shall act as the basis for crediting of funds on Account balances, and (3) the form and timing of distributions from Accounts. Participant Elections may take the form of an electronic communication followed by appropriate confirmation according to specifications established by the Committee.

1.28 “ Plan Year ” shall mean the calendar year except that the first Plan Year shall begin on the Effective Date and end on the last day of the calendar year in which the Effective Date occurs.

1.29 “ Qualified Plan ” shall mean the Omnicare Savings & Investment Plan, as amended or such other Company sponsored qualified pension plan as may be designated by the Plan Administrator.

1.30 “ Retirement ” shall mean Separation from Service after having attained age fifty-nine and a half (59 1/2 ).

1.31 “ Salary Deferral Contributions ” shall have the meaning set forth in Section 3.1(a).

1.32 “ Separation from Service ” shall mean a “separation from service” within the meaning of Code Section 409A. The determination of whether and when a Separation from Service has occurred for purposes of this Plan shall be made in accordance with the presumptions set forth in Section 1.409A-1(h) of the Treasury Regulations.

1.33 “ Specified Year ” shall have the meaning set forth in Section 3.4(a).

1.34 “ Specified Employee ” shall have the meaning set forth in section 9.14(b) hereof.

1.35 “ Change In Control ” shall be deemed to have occurred upon any of the following:

a. any Person becomes a beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities;

b. the merger or consolidation of the Company with or into another entity (or other similar reorganization), whether or not the Company is the surviving corporation, in which the stockholders of the Company immediately prior to the effective date of such transaction own less than 50% of the voting power in the surviving entity;

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Omnicare Non-Qualified Deferred Compensation Plan

1.36 “ Years of Service ” shall mean the cumulative consecutive years of continuous full-time employment with the Company (including approved leaves of absence of six months or less or legally protected leaves of absence), beginning on the date the Participant first began service with the Company, and counting each anniversary thereof.

1.35 “ Plan Administrator ” shall mean the party selected by the Committee to administer the Plan as outlined in this document, and to uphold the obligations committed to in managing the ongoing maintenance, investments and/or distributions of the Plan as agreed in writing.

ARTICLE II PARTICIPATION

An Eligible Executive shall become a Participant in the Plan by completing and submitting to the Plan Administrator the appropriate Participant Elections, including such other documentation and information as the Committee may reasonably request, during the enrollment period established by the Committee prior to the beginning of the first Plan Year in which the Eligible Employee shall be eligible to participate in the Plan.

ARTICLE III CONTRIBUTIONS & DEFERRAL ELECTIONS

3.1 Elections to Defer Compensation .

c. the sale or other disposition of all or substantially all of the assets of the Company, or a complete liquidation or dissolution of the Company; or

d. during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority of such Board, unless the nomination for the election the Company's stockholders of each new director was approved by a vote of at least one-half of the persons who were directors at the beginning of the two-year period.

i. Form of Elections . A Participant may only elect to defer Compensation attributable to services provided after the time an election is made (a “Deferral Contribution”). Elections shall take the form of a flat dollar amount or a whole percentage (less applicable payroll withholding requirements for Social Security and income taxes and employee benefit plans as determined in the sole and absolute discretion of the Committee) of up to

1. 50% of Base Salary (the “Salary Deferral Contributions”)

2. 100% of Bonuses (the “Bonus Deferral Contribution”)

ii. Duration of Compensation Deferral Election . An Eligible Employee must file a Participant Election to defer Compensation during the enrollment period established by the Committee prior to the Effective Date of the Participant’s commencement of

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Omnicare Non-Qualified Deferred Compensation Plan

participation in the Plan in accordance with Code Section 409A and shall apply only to Compensation for services performed after such deferral election is processed. A Participant must file a new Participant Election prior to the beginning of each subsequent Plan Year the Participant participates in the Plan during the enrollment period established by the Committee prior to the beginning of such Plan Year, which election shall be effective on the first day of the next following Plan Year. After the beginning of the Plan Year, deferral elections with respect to Compensation for services performed during such Plan Year shall be irrevocable except in the event of Financial Hardship.

3.2 Company Contributions .

3.3 Investment Elections .

(c) Any corrective distribution payments made to participants of the Qualified 401(k) Plan as the result of compliance with IRS regulations governing discrimination testing will be treated as ordinary income and may not be redirected to this Plan.

i. Discretionary Company Contributions . The Company shall have the discretion to make discretionary company contributions (“Discretionary Company Contributions”) to the Plan at any time on behalf of any Participant. Discretionary Company Contributions shall be made in the complete and sole discretion of the Company and no Participant shall have the right to receive any Discretionary Company Contribution in any particular Plan Year regardless of whether Discretionary Company Contributions are made on behalf of other Participants.

ii. Company Matching Contributions . For any year in which a Participant makes elective deferral under the Qualified Plan, the Company shall make a matching contribution (a “Matching Contribution”) on behalf of the Participant for each Plan Year in which the Participant makes a deferral under this Plan which shall equal fifty percent (50%) of the total amount of the Deferral Contribution by the Participant under the Plan for such Plan Year up to a maximum of six percent (6%) of the Participant’s eligible Compensation for such Plan Year, minus any match made under the Qualified Plan in the same Plan Year. That is, the maximum Company contribution (50% of 6% in a single year) will be determined using the Participant’s combined contributions to the Qualified Plan and this Plan for the Plan Year.

i. Participant Designation . At the time of entering the Plan and/or of making the deferral election under the Plan, the Participant shall designate, on a Participant Election provided by the Committee or the Plan Administrator, the Funds in which the Participant’s Account or Accounts shall be deemed to be invested for purposes of determining the amount of earnings and losses to be credited to each Account. The Participant may specify that all or any percentage of his or her Account or Accounts shall be deemed to be invested, in whole percentage increments, in one or more of the Funds selected as alternative investments under the Plan from time to time by the Committee pursuant to subsection (b) of this Section. A Participant may change the designation made under this Section with the same frequency as allowed by the Qualified Plan by making a revised election, on a Participant Election Form provided by the Committee or the Plan Administrator.

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Omnicare Non-Qualified Deferred Compensation Plan

3.4 Distribution Elections .

A Participant may make different elections with respect to Distributable Amounts relating Salary Deferral Contributions, Bonus Deferral Contributions, and/or Company Contributions and may make different elections with respect to different portions of Distributable Amounts relating to any such contribution. Distributable Amounts elected to be paid in a lump sum will be paid as soon as administratively feasible following the Benefit Commencement Date (or, in the case of Benefit Commencement Date in a Specified Year, in March of such year) subject to Section 9.14. Distributable Amounts elected to be paid in annual installments shall be made in March of each year commencing in the first March following the applicable Benefit Commencement Date (or, in the case of Benefit Commencement Date in a Specified Year, in March of such year) subject to Section 9.14. Notwithstanding anything to the contrary in this Section 3.4(a), a Participant’s Distributable Amounts are subject to earlier distributions in accordance with the provisions of Section 6.2, 6.3, 6.4 and 6.5 of the Plan.

ii. Investment Funds . Prior to the beginning of each Plan Year, the Committee, or its designee, may select, in its sole and absolute discretion, each of the types of commercially available investments communicated to the Participant pursuant to subsection (a) of this Section to be the Funds. The Participant’s choice among investments shall be solely for purposes of calculation of the Crediting Rate on Accounts. The Company shall have no obligation to set aside or invest amounts as directed by the Participant and, if the Company elects to invest amounts as directed by the Participant, the Participant shall have no more right to such investments than any other unsecured general creditor.

i. Initial Election . At the time of making a deferral election under Section 3.1 of the Plan, the Participant shall elect the time that distributions of Distributable Amounts will commence and the form such distributions will take in accordance with the following:

a. Commencement of Distributions . Each Participant can elect to receive his or her distributions commencing on either the Participant’s Retirement or in a specified year in the future (a “Specified Year”)(each, the “Benefit Commencement Date”).

b. Form of Distributions . Each Participant can elect to receive his or her distributions in a lump sum or equal annual installment payments over a period of two to ten years.

ii. Modification of Election . A new distribution election may be made at the time of subsequent deferral elections with respect to deferrals in Plan Years beginning after the election is made. However, a distribution election with respect to previously deferred amounts may only be changed under the terms and conditions specified in Code Section 409A. Further, except as expressly provided in Sections 6.2, 6.3, 6.4 and 6.5, no acceleration of a distribution is permitted. A subsequent election that delays payment or changes the form of payment shall be permitted if and only if all of the following requirements are met:

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Omnicare Non-Qualified Deferred Compensation Plan

For purposes of application of the above change limitations, installment payments shall be treated as a single payment. Election changes made pursuant to this Section shall be made in accordance with rules established by the Committee, and shall comply with all requirement of Code Section 409A and applicable authorities.

ARTICLE IV DEFERRAL ACCOUNTS

4.1 Deferral Contribution Accounts . The Committee shall establish and maintain one account under the Plan with respect to each Participant’s Deferral Contributions (the “Deferral Contribution Account”). Each Participant’s Deferral Contribution Account shall be further divided into separate subaccounts (“Fund Subaccounts”), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.3(a). As soon as reasonably possible after amounts are withheld and deferred from a Participant’s Compensation, the Committee shall credit the Fund Subaccounts of the Participant’s Deferral Contribution Account with an amount equal to Compensation deferred by the Participant in accordance with the Participant’s election under Section 3.3(a); that is, the portion of the Participant’s deferred Compensation that the Participant has elected to be deemed to be invested in a Fund shall be credited to the Fund Subaccount to be deemed invested in that Fund. Each Fund SubAccounts shall be credited with notional investment gains and losses based on the investment gains and losses of the corresponding Fund. Amounts attributed to the deferral of Compensation subject to different time or form of distribution elections under Section 3.4(a) shall be accounted for in a manner which allows separate accounting for the deferral of Compensation and investment gains and losses associated with such amounts.

4.2 Company Contribution Account . The Committee shall establish and maintain an account under the Plan (the “Company Contribution Account”) for each Participant for Discretionary Company Contributions and Matching Contributions (together, the “Company Contributions”). Each Participant’s Company Contribution Account shall be further divided into separate Fund Subaccounts corresponding to the Fund elected by the Participant pursuant to Section 3.3(a). As soon as reasonably possible after a Company Contribution is made, the Company shall credit the Fund Subaccounts of the Participant’s Company Contribution Account with an amount equal to the Company Contributions, if any, made on behalf of that Participant, that is, the proportion of the Company Contributions, if any, which the Participant has elected to be deemed to be invested in a certain Fund shall be credited to the Fund Subaccount to be deemed invested in that Fund. Each Fund SubAccounts shall be credited with notional investment gains and losses based on the

1. the new election does not take effect until at least twelve (12) months after the date on which the new election is made;

2. in the case of payments made on account of Retirement or a Specified Year, the new election delays payment for at least five (5) years from the date that payment would otherwise have been made, absent the new election; and

3. in the case of payments made according to a Specified Year, the new election is made not less than twelve (12) months before the date on which payment would have been made (or, in the case of installment payments, the first installment payment would have been made) absent the new election.

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Omnicare Non-Qualified Deferred Compensation Plan

investment gains and losses of the corresponding Fund. Amounts attributed to the deferral of Compensation subject to different time or form of distribution elections under Section 3.4(a) shall be accounted for in a manner which allows separate accounting for the deferral of Compensation and investment gains and losses associated with such amounts.

4.3 Trust . The Company shall be responsible for the payment of all benefits under the Plan. At its discretion, the Company may establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the Participant from any such trust or trusts shall be considered paid by the Company for purposes of meeting the obligations of the Company under the Plan.

4.4 Statement of Accounts . The Committee shall provide each Participant with electronic statements at least quarterly setting forth the Participant’s Account balance as of the end of each calendar quarter. Such statements may be completed and distributed for the Committee by the Plan Administrator.

ARTICLE V VESTING

5.1 Vesting of Participant Deferral Contribution Accounts . The Participant shall be vested at all times in amounts credited to the Participant’s Deferral Contribution Account or Accounts.

5.2 Vesting of Company Contributions Account . Amount credited to the Participant’s Company Contributions Account shall be vested based upon the Participant’s Completed Years of Service according to the following schedule:

Vesting schedule:

In the event of Separation from Service as a result of Retirement, in the event of a Disability or death, or, in the event of a Change in Control, regardless of the Participant’s Years of Service, the Participant’s Company Contribution Account shall be fully vested.

ARTICLE VI DISTRIBUTIONS

Completed Years of Service

Percentage of Account Vested

Less than 1 0% 1 but less than 2 20% 2 but less than 3 40% 3 but less than 4 60% 4 but less than 5 80% 5 or more 100%

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Omnicare Non-Qualified Deferred Compensation Plan

6.1 Distributions . Subject to the provision of Sections 6.2, 6.3, 6.4 and 6.5 below and the provisions of Section 9.14, Distributable Amounts credited to a Participant’s Accounts on the applicable Benefit Commencement Date shall be distributed to the Participant in accordance with the Participant’s election described in Section 3.4(a). All amounts distributed under the Plan will be in cash.

6.2 Termination Payments . In the event that a Participant has a Separation from Service (other than on account of death or Disability) prior to his or her Benefit Commencement Date (or prior to attainment of age 59 ½ for elections to receive distributions on Retirement), the Distributable Amounts credited to the Participant’s Accounts on the date of such Separation from Service shall be paid in the form of a single lump sum distribution as soon as administratively feasible following the date of the Separation from Service (subject to Section 9.14).

6.3 Death or Disability . In the event that the Participant dies or is Disabled prior to the Participant’s Benefit Commencement Date, the Company shall pay to the Participant or his or her Beneficiary an amount equal to the Distributable Amount of such Account on the date of death or Disability as soon as administratively feasible following the Participant’s death or Disability. In the event that the Participant dies or is disabled after commencement of benefits payable from an Account, all remaining benefits from such Account shall be paid to the Participant or his or her Beneficiary in a single lump sum as soon as administratively feasible from the notification date that the Participant has died or become disabled..

6.4 Small Benefit Exception . If a Participant has elected to receive his or her distribution in annual installments and, if on the Benefit Commencement Date, the total balance of the Distributable Amounts payable to the Participant is less than or equal to fifty thousand dollars ($50,000), such Distributable Amount shall be paid in the form of a single lump sum distribution as soon as administratively feasible following the Benefit Commencement Date (Subject to Section 9.14).

6.5 Hardship Distribution . Upon a finding that the Participant has suffered a Financial Hardship, subject to compliance with Code Section 409A, the Committee may, at the request of the Participant, accelerate distribution of benefits or approve reduction or cessation of current deferrals under the Plan in the amount reasonably necessary to alleviate such Financial Hardship subject to the following conditions:

i. The request to take a Hardship Distribution shall be made by filing a form provided by and filed with the Committee prior to the end of any calendar month.

ii. The amount distributed pursuant to this Section with respect to a Financial Hardship shall not exceed the amount necessary to satisfy such financial emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

iii. The amount determined by the Committee as a Hardship Distribution shall be paid in a single cash lump sum as soon as practicable after the end of the calendar month in which the Hardship Distribution election is made and approved by the Committee.

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Omnicare Non-Qualified Deferred Compensation Plan

ARTICLE VII PAYEE DESIGNATIONS AND LIMITATIONS

7.1 Beneficiaries .

7.2 Payments to Minors . In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, to act as custodian, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within sixty (60) days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

7.3 Payments on Behalf of Persons Under Incapacity . In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of any and all liability of the Committee and the Company under the Plan.

7.4 Inability to Locate Payee . In the event that the Committee is unable to locate a Participant or Beneficiary within two years following the scheduled payment date, the amount allocated to the Participant’s Deferral Contribution Acount shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings.

ARTICLE VIII ADMINISTRATION

8.1 Committee . The Plan shall be administered by a Committee appointed by the Compensation Committee, which shall have the exclusive right and full discretion (a) to appoint

i. Beneficiary Designation . The Participant shall have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall be effective when it is submitted to and acknowledged by the Committee during the Participant’s lifetime in the format prescribed by the Committee.

ii. Absence of Valid Designation . If a Participant fails to designate a Beneficiary as provided above, or if every person designated as Beneficiary predeceases the Participant or dies prior to complete distribution of the Participant’s benefits, then the Committee shall direct the distribution of such benefits to the Participant’s estate.

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Omnicare Non-Qualified Deferred Compensation Plan

agents to act on its behalf, (b) to select and establish Funds, (c) to interpret the Plan, (d) to decide any and all matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or admissions), (e) to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan and (f) to make all other determinations and resolve all questions of fact necessary or advisable for the administration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of the Committee with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member of the Committee or agent thereof shall be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify and hold harmless the members of the Committee and its agents from and against any and all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission, in connection with the performance of such persons’ duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

8.2 Filing a Claim . A Participant or beneficiary of a Participant who believes that he or she is eligible for a benefit under this Plan that has not been provided may submit a written claim for benefits to the Committee. The Committee shall evaluate each properly filed claim and notify the claimant of the approval or denial of the claim within 90 days after the Committee receives the claim, unless special circumstances require an extension of time for processing the claim. If an extension of time for processing the claim is required, the Committee shall provide the claimant with written notice of the extension before the expiration of the initial 90-day period, specifying the circumstances requiring an extension and the date by which a final decision will be reached (which date shall not be later than 180 days after the date on which the Committee received the claim). If a claim is denied in whole or in part, the Committee shall provide the claimant with a written notice setting forth (a) the specific reasons for the denial, (b) references to pertinent Plan provisions upon which the denial is based, (c) a description of any additional material or information needed and an explanation of why such material or information is necessary, and (d) the claimant’s right to seek review of the denial pursuant to Section 8.3 below.

8.3 Review of Claim Denial . If a claim is denied, in whole or in part, the claimant shall have the right to (a) request that the Committee review the denial, (b) review pertinent documents, and (c) submit issues and comments in writing, provided that the claimant files a written request for review with the Committee within 60 days after the date on which the claimant received written notice from the Committee of the denial. Within 60 days after the Committee receives a properly filed request for review, the Committee shall conduct such review and advise the claimant in writing of its decision on review, unless special circumstances require an extension of time for conducting the review. If an extension of time for conducting the review is required, the Committee shall provide the claimant with written notice of the extension before the expiration of the initial 60-day period, specifying the circumstances requiring an extension and the date by which such review shall be completed (which date shall not be later than 120 days after the date on which the Committee received the request for review). The Committee shall inform the claimant of its decision on review in a written notice, setting forth the specific reason(s) for the decision and reference to Plan provisions upon which the decision is based. A decision on review shall be final and binding on all persons for all purposes.

ARTICLE IX MISCELLANEOUS

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Omnicare Non-Qualified Deferred Compensation Plan

9.1 Amendment or Termination of Plan . The Company may, at any time, direct the Committee to amend or terminate the Plan, except that no such amendment or termination may reduce a Participant’s Account balances. If the Company terminates the Plan, no further amounts shall be deferred hereunder, and amounts previously deferred or contributed to the Plan shall be fully vested and shall be paid in accordance with the provisions of the Plan as scheduled prior to the Plan termination. Notwithstanding the forgoing, to the extent permitted under Code Section 409A and applicable authorities, the Company may, in its complete and sole discretion, accelerate distributions under the Plan in the event of a “change in ownership” or “effective control” of the Company or a “change in ownership of a substantial portion of assets” or under such other terms and conditions as may be specifically authorized under Code Section 409A and applicable authorities.

9.2 Unsecured General Creditor . The benefits paid under the Plan shall be paid from the general assets of the Company, and the Participant and any Beneficiary or their heirs or successors shall be no more than unsecured general creditors of the Company with no special or prior right to any assets of the Company for payment of any obligations hereunder. It is the intention of the Company that this Plan be unfunded for purposes of ERISA and the Code.

9.3 Restriction Against Assignment . The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or entity. No part of a Participant’s Accounts shall be liable for the debts, contracts, or engagements of any Participant, Beneficiary, or their successors in interest, nor shall a Participant’s Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. No part of a Participant’s Accounts shall be subject to any right of offset against or reduction for any amount payable by the Participant or Beneficiary, whether to the Company or any other party, under any arrangement other than under the terms of this Plan.

9.4 Withholding . The Company may make such provisions as it may deem appropriate for the withholding of any taxes that the Company determines it is required to withhold in connection with any benefit or payment under the Plan, including any amounts required to be withheld from a Participant’s Account at the time of vesting pursuant to Section 3121(v) of the Code. The Company shall have the right to reduce any payment by the amount of cash sufficient to provide the amount of said taxes.

9.5 Protective Provisions . The Participant shall cooperate with the Company by furnishing any and all information requested by the Committee, in order to facilitate the payment of benefits hereunder, taking such physical examinations as the Committee may deem necessary and taking such other actions as may be requested by the Committee. If the Participant refuses to so cooperate, the Company shall have no further obligation to the Participant under the Plan. In the event of the Participant’s suicide during the first two (2) years in the Plan, or if the Participant makes any material misstatement of information or non-disclosure of medical history, then no benefits shall be payable to the Participant under the Plan, except that benefits may be payable in a reduced amount in the sole discretion of the Committee.

9.6 Errors in Account Statements, Deferrals or Distributions . In the event an error is made in an Account statement, such error shall be corrected on the next statement following the date such error is discovered. In the event of an error in deferral amount, consistent with and as permitted

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Omnicare Non-Qualified Deferred Compensation Plan

by any correction procedures established under IRC Section 409A, the error shall be corrected immediately upon discovery by, in the case of an excess deferral, distribution of the excess amount to the Participant, or, in the case of an under deferral, reduction of other compensation payable to the Participant. In the event of an error in a distribution, the over or under payment shall be corrected by payment to or collection from the Participant consistent with any correction procedures established under IRC Section 409A, immediately upon the discovery of such error. In the event of an overpayment, the Company may, at its discretion, offset other amounts payable to the Participant from the Company (including but not limited to salary, bonuses, expense reimbursements, severance benefits or other employee compensation benefit arrangements, as allowed by law and subject to compliance with IRC Section 409A) to recoup the amount of such overpayment(s).

9.7 Employment Not Guaranteed . Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to continue the provision of services in any capacity whatsoever to the Company.

9.8 Successors of the Company . The rights and obligations of the Company under the Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

9.9 Notice . Any notice or filing required or permitted to be given to the Company or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, in the case of the Company, to the principal office of the Company, directed to the attention of the Committee, and in the case of the Participant, to the last known address of the Participant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Notices to the Company may be permitted by electronic communication according to specifications established by the Committee.

9.10 Headings . Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.

9.11 Gender, Singular and Plural . All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.

9.12 Governing Law . The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA. In the event any provision of, or legal issue relating to, this Plan is not fully preempted by federal law, such issue or provision shall be governed by the laws of the State of Ohio.

9.13 Binding Arbitration . Any claim, dispute or other matter in question of any kind relating to this Plan which is not resolved by the claims procedures under this Plan shall be settled by arbitration in accordance with the applicable employment dispute resolution rules of the American Arbitration Association. Notice of demand for arbitration shall be made in writing to the opposing party and to the American Arbitration Association within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall a demand for arbitration be made after the date when the applicable statute of limitations would bar the institution of a legal or equitable proceeding

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Omnicare Non-Qualified Deferred Compensation Plan

based on such claim, dispute or other matter in question. The decision of the arbitrators shall be final and may be enforced in any court of competent jurisdiction. The arbitrators may award reasonable fees and expenses to the prevailing party in any dispute hereunder and shall award reasonable fees and expenses in the event that the arbitrators find that the losing party acted in bad faith or with intent to harass, hinder or delay the prevailing party in the exercise of its rights in connection with the matter under dispute.

9.14 Code Section 409A

(a) To the fullest extent possible, amounts and other benefits payable under the Plan are intended to be comply with or be exempt from Code Section 409A, and the Company shall have complete discretion to interpret and construe this Agreement and any associated documents in any manner that establishes an exemption from (or compliance with) the requirements of Code Section 409A. Any terms of this Plan that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply with Code Section 409A. If for any reason, such as imprecision in drafting, any provision of this Plan does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company. If, notwithstanding the foregoing provisions of this paragraph, any provision of this Plan would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company shall interpret or reform such provision in a manner intended to avoid the incurrence by the Participant of any such additional tax or interest; provided that the Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A.

(b) Any provision of this Plan to the contrary notwithstanding, if at the time of a Participant’s Separation from Service, the Company determines that the Participant is a “specified employee,” within the meaning of Code Section 409A, based on an identification date of December 31, then to the extent any distribution that the Participant becomes entitled to under this Plan on account of such Separation from Service would be considered nonqualified deferred compensation under Code Section 409A, such distribution shall not be paid prior to the date which is the earlier of (i) six (6) months and one day after such separation from service, and (ii) the date of the Participant’s death (the “Delay Period”). All distributions delayed pursuant to this paragraph shall be paid or provided to the Participant in a lump-sum and any remaining payments and benefits due under this Plan shall be paid, or provided in accordance with the normal payment dates specified for them herein, as soon as administratively feasible following the expiration of the Delay Period.

(c) Whenever a payment under this Plan specifies a payment period with reference to a number of days (for example, “payment shall be made as soon as administratively feasible following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company. In no event may

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Omnicare Non-Qualified Deferred Compensation Plan

the Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A.

IN WITNESS WHEREOF, the Compensation Committee of the Board of Directors of the Company has approved the adoption of this Plan as of the Effective Date and has caused the Plan to be executed by its duly authorized representative this 13th day of December, 2012.

Omnicare, Inc. ,

By

Steven Heyer (Chair)

Mark Emmert

Andrea Lindell

(d) The Company makes no representation or warranty and shall have no liability to the Participant or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Code Section 409A but do not satisfy an exemption from, or the conditions of, Code Section 409A.

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EXHIBIT 10.40

GOLDMAN, SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL: 212-902-1000

Opening Transaction

This confirmation (this “ Confirmation ”), dated as of November 29, 2012 is intended to set forth certain terms and provisions of the Transaction (the “ Transaction ”) entered into between Goldman, Sachs & Co. (“ GS&Co. ”) and Omnicare, Inc. (“ Counterparty ”). This Confirmation shall constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. This Confirmation evidences a complete binding agreement between Counterparty and GS&Co. as to the subject matter and terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

This Confirmation supplements, forms a part of, and is subject to an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement ”) as if GS&Co. and Counterparty had executed the Agreement on the date of this Confirmation (but without any Schedule except for (A) the election of New York law (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law) as the governing law and US Dollars (“ USD ”) as the Termination Currency, (B) the election that subparagraph (ii) of Section 2(c) will not apply to the Transaction, (C) the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to Counterparty and GS&Co. with a “Threshold Amount”, in each case, of USD 50 million; provided that Section 5(a)(vi) is amended by (x) deleting the phrase “, or becoming capable at such time of being declared,” from the seventh line thereof and (y) adding the following language at the end of such Section 5(a)(vi): “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused solely by error or omission of an administrative or operational nature; (ii) funds were available to enable the party to make the payment when due; and (iii) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.”, (D) the designation of the General Guarantee Agreement dated January 30, 2006 made by The Goldman Sachs Group, Inc. (“ GS Group ”) in favor of each person to whom GS&Co. may owe any Obligations (as defined in the General Guarantee Agreement) and filed as Exhibit 10.45 to GS Group’s Form 10-K for the fiscal year ended November 25, 2005 and any successor guarantee by GS Group in favor of each person to whom GS&Co. may owe any Obligations (as defined in the General Guarantee Agreement) as a Credit Support Document under the Agreement and (E) the designation of GS Group as a Credit Support Provider in relation to GS&Co. under the Agreement).

The Transaction shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between GS&Co. and Counterparty or any confirmation or other agreement between GS&Co. and Counterparty pursuant

To: Omnicare, Inc. 900 Omnicare Center 201 E. Fourth Street Cincinnati, OH 45202

A/C: 42736389

From: Goldman, Sachs & Co.

Re: Accelerated Stock Buyback

Ref. No: SDB4166216076

Date: November 29, 2012

to which an ISDA Master Agreement is deemed to exist between GS&Co. and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which GS&Co. and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

All provisions contained or incorporated by reference in the Agreement shall govern this Confirmation except as expressly modified herein.

If, in relation to the Transaction to which this Confirmation relates, there is any inconsistency between the Agreement, this Confirmation and the Equity Definitions, the following will prevail in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; and (iii) the Agreement.

1. The Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions. Set forth below are the terms and conditions that shall govern the Transaction.

General Terms:

Prepayment\Variable

Valuation:

2

Trade Date: As set forth in Schedule 1 to this Confirmation.

Buyer: Counterparty

Seller: GS&Co.

Shares: Common stock, par value $1.00 per share, of Counterparty (Ticker: OCR)

Exchange: New York Stock Exchange

Related Exchange(s): All Exchanges.

Obligation: Applicable

Prepayment Amount: As set forth in Schedule 1 to this Confirmation.

Prepayment Date: As set forth in Schedule 1 to this Confirmation.

VWAP Price: For any Exchange Business Day, as determined by the Calculation Agent based on the “New York” 10b-18 volume weighted average price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “OCR.N <Equity> AQR_SEC” (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s commercially reasonable judgment, manifestly incorrect, such VWAP Price shall be as reasonably determined by the Calculation Agent using a volume weighted average method. For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18

(b)(3), each under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (such trades, “Rule 10b-18 eligible transactions ”).

Forward Price

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date by a number of Exchange Business Days up to the number of Disrupted Days that occur during such period, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period by a number of Exchange Business Days up to the number of Disrupted Days that occur during such period. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall reasonably determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature

3

Forward Price: The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below.

Adjustment Amount: As set forth in Schedule 1 to this Confirmation.

Calculation Period: The period from and including the Calculation Period Start Date to and including the Termination Date, but excluding the period from and including February 11, 2013 to and including March 11, 2013.

Calculation Period Start Date: As set forth in Schedule 1 to this Confirmation.

Termination Date: The Scheduled Termination Date; provided that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “ Accelerated Termination Date ”) by delivering notice to Counterparty of any such designation prior to 11:59 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date.

Scheduled Termination Date: As set forth in Schedule 1 to this Confirmation, subject to postponement as provided in “Valuation Disruption” below.

First Acceleration Date: As set forth in Schedule 1 to this Confirmation.

Valuation Disruption: The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.

and duration of the relevant Market Disruption Event, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. Any Scheduled Trading Day on which the Exchange is scheduled to close prior to its normal close of trading shall be deemed to be a Disrupted Day in full.

If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate.

Settlement Terms:

Number of Shares

4

Settlement Procedures: If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under the Transaction. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply.

to be Delivered: A number of Shares equal to (x)(a) the Prepayment Amount divided by (b) the Divisor Amount minus (y) the number of Initial Shares.

Divisor Amount: The greater of (i) the Forward Price minus the Forward Price Adjustment Amount and (ii) $1.00.

Excess Dividend Amount: For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

Settlement Date: If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date.

Settlement Currency: USD

Initial Share Delivery: GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.

Share Adjustments:

It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for the Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent may, in good faith and in its commercially reasonable discretion, adjust any relevant terms of the Transaction to the extent necessary to account for the economic effect on the Transaction of such postponement.

Early Ordinary Dividend

Scheduled Ex-Dividend

Extraordinary Events:

Consequences of Merger Events:

5

Initial Share Delivery Date: As set forth in Schedule 1 to this Confirmation.

Initial Shares: As set forth in Schedule 1 to this Confirmation.

Potential Adjustment Event: Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event.

Extraordinary Dividend: For any calendar quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “ Dividend ”) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.

Ordinary Dividend Amount: As set forth in Schedule 1 to this Confirmation.

Method of Adjustment: Calculation Agent Adjustment

Payment: If an ex-dividend date for any Dividend that is not an Extraordinary Dividend occurs during any calendar quarter occurring (in whole or in part) during the Relevant Period (as defined below) and is prior to the Scheduled Ex-Dividend Date for such calendar quarter, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of the Transaction as the Calculation Agent in good faith and in a commercially reasonable manner determines appropriate to account for the economic effect on the Transaction of such event.

Dates: As set forth in Schedule 1 to this Confirmation.

(a) Share-for-Share: Modified Calculation Agent Adjustment

(b) Share-for-Other: Cancellation and Payment

(c) Share-for-Combined: Component Adjustment

Consequences of Tender Offers:

Nationalization,

Additional Disruption Events:

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Tender Offer: Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date.”

(a) Share-for-Share: Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

(b) Share-for-Other: Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

(c) Share-for-Combined: Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

Insolvency or Delisting: Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.

(a) Change in Law: Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words

“( including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

Maximum Stock Loan Rate: 100 basis points per annum

Hedging Party: GS&Co.

Initial Stock Loan Rate: 25 basis points per annum

Hedging Party: GS&Co.

Determining Party: For all Extraordinary Events, GS&Co.; provided that, upon receipt of written request from Counterparty, Determining Party shall promptly (but in no event later than within five (5) Exchange Business Days from the receipt of such request) provide Counterparty with a written explanation describing in reasonable detail any determination made by Determining Party (including any quotations, market data or information from internal sources used in making such calculations, but without requiring any disclosure of confidential information or GS&Co.’s proprietary models or any information that GS&Co. determines, based on the advice of counsel, is subject to a duty, whether arising by contract, regulation or operation of law, of confidentiality GS&Co. owes to any third party). Whenever Determining Party is required to act or to exercise judgment in any way, it will do so in good faith and in a commercially reasonable manner.

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(b) Failure to Deliver: Applicable

(c) Insolvency Filing: Applicable

(d) Loss of Stock Borrow: Applicable

(e) Increased Cost of Stock Borrow: Applicable

Relevant Dividend Period

Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional

(i) if the transferee is not a U.S. entity, the transferee makes appropriate payee tax representations to Counterparty to support the result stated in clause (iii) below;

(ii) no Event of Default or Termination Event shall then have occurred and be continuing or arise solely as a result of such transfer; and

(iii) (A) Counterparty will not, as a result of such transfer, be required to pay to the transferee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement greater than the amount which Counterparty would have been required to pay to GS&Co. in the absence of such transfer and (B) the transferee will not, as a result of such transfer as of the date of such transfer, be required to withhold or deduct on account of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement amounts in excess of those which GS&Co. would have been required to so withhold or deduct.

For A/C Goldman, Sachs & Co. A/C #930-1-011483 ABA: 021-000021

Counterparty’s Contact Details

GS&Co.’s Contact Details for

200 West Street New York, NY 10282-2198 Attention: Michael Voris, Equity Capital Markets Telephone: +1-212-902-4895 Facsimile: +1-212-291-5027

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Additional Termination Event(s): The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and the Transaction as the Affected Transaction.

Relevant Dividend Period: The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.

End Date: If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.

Acknowledgements: Applicable

Transfer: Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under the Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty, so long as:

GS&Co. Payment Instructions: Chase Manhattan Bank New York

for Purpose of Giving Notice: To be provided by Counterparty

Purpose of Giving Notice: Goldman, Sachs & Co.

Email: michael.voris@gs.com

With a copy to:

Attention: Bryan Goldstein, Equity Capital Markets Telephone: +1-212-855-9696 Facsimile: +1-212-256-5456

Email: bryan.goldstein@gs.com

And email notification to the following address: Eq-derivs-notifications@am.ibd.gs.com

2. Additional Mutual Representations of Each Party . In addition to the representations in the Agreement, each party represents to the other party that:

(a) Eligible Contract Participant . It is an “eligible contract participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into the Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b) Accredited Investor . Each party acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), by virtue of Section 4(2) thereof. Accordingly, each party represents to the other that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the disposition of the Transaction is restricted under this Confirmation, the Securities Act and state securities laws.

3. Additional Representations and Covenants of Counterparty . In addition to the representations and covenants in the Agreement, Counterparty represents and covenants to GS&Co. that:

(a) The purchase or writing of the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(b) It is not entering into, nor making any election with respect to, the Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise

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Calculation Agent: GS&Co.; provided that, following the occurrence of an Event of Default of the type specified in Section 5(a)(vii) of the Agreement with respect to which GS&Co. is the Defaulting Party, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Calculation Agent. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will, as promptly as practicable (but in any event no later than five (5) Exchange Business Days following the later of (i) the date of such written request and (ii) the date of such determination or calculation), provide to Counterparty by e-mail, to the e-mail address provided by Counterparty in such written request, a report (in a commonly used file format for the storage and manipulation of financial data without disclosing any proprietary models of the Calculation Agent or any information that GS&Co. determines, based on the advice of counsel, is subject to a duty, whether arising by contract, regulation or operation of law, of confidentiality GS&Co. owes to any third party) displaying in reasonable detail the basis for such determination or calculation.

or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).

(c) The Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program.

(d) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither GS&Co. nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share , ASC Topic 815, Derivatives and Hedging , or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity .

(e) As of (i) the date hereof and (ii) the Trade Date for the Transaction hereunder, Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f) Counterparty shall report the Transaction as required under the Exchange Act and the rules and regulations thereunder.

(g) The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any Regulation M Period (as defined below) for the Transaction unless Counterparty has provided written notice to GS&Co. of such restricted period not later than the end of the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 4 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 5 below.

“ Regulation M Period ” means (i) the Relevant Period (as defined below) and (ii) the Settlement Valuation Period, if any, for the Transaction.

“ Relevant Period ” means the period commencing on the Calculation Period Start Date and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as specified in Schedule 1 to this Confirmation), or such earlier day as elected by GS&Co. and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below), but excluding the period from and including February 11, 2013 to and including March 11, 2013.

(h) As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the Settlement Date for the Transaction,

Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

(i) Counterparty is not and, after giving effect to the Transaction, will not be, required to register as an “investment company” as such

term is defined in the Investment Company Act of 1940, as amended.

(j) Counterparty has not and will not enter into agreements similar to the Transaction described herein where any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if applicable, any Settlement Valuation Period under this Confirmation. In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Confirmation as a result of any

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postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap. In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Confirmation as a result of any postponement or extension of such initial hedge period, relevant period, calculation period or settlement valuation period pursuant to the terms of such other transaction, Counterparty shall promptly (and in any event prior to 8:00 a.m. New York City time on the first Exchange Business Day of such overlap) so notify GS&Co. Counterparty acknowledges that any such overlap may cause a deemed Market Disruption Event under the Transaction pursuant to Section 4 below; accordingly, Counterparty acknowledges that if it takes any action that causes such an overlap, it will do so in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5.

3A. Additional Representations and Covenants of GS&Co . In addition to the representations and covenants in the Agreement, GS&Co. represents and covenants to Counterparty that:

(a) GS&Co. has implemented and will at all relevant times maintain reasonable policies and procedures, taking into consideration the nature of its business, to ensure that individuals making investment decisions on behalf of GS&Co. related to the Transaction do not have access to material non-public information regarding Counterparty that may be in possession of other individuals at GS&Co.

(b) GS&Co. is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares), in each case in violation of the Exchange Act.

4. Regulatory Disruption . In the event that GS&Co. concludes, in its good faith and reasonable discretion and based on the advice of counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by GS&Co., but provided that such requirements, policies or procedures relate to legal or regulatory issues and are generally applicable in similar situations and applied to the Transaction in a non-discriminatory manner), for it to refrain from or decrease any market activity on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, GS&Co. may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days, and shall subsequently promptly notify (and without limiting the generality of the foregoing, shall use reasonable efforts to do so within one Exchange Business Day) Counterparty in writing of any determination by GS&Co. that it may resume market activity in connection with the Transaction.

5. 10b5-1 Plan .

(a) Counterparty represents and covenants to GS&Co. that it is entering into this Confirmation and the Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“ Rule 10b5-1 ”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares. Counterparty acknowledges that it is the intent of the parties that the Transaction entered into under this Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and the Transaction entered into under this Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c).

(b) Counterparty covenants to GS&Co. that it will not seek to control or influence GS&Co.’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under the Transaction entered into under this Confirmation, including, without limitation, GS&Co.’s decision to enter into any hedging transactions. Counterparty represents that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Confirmation under Rule 10b5-1.

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(c) Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

6. Counterparty Purchases . Counterparty (or any “affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act (“ Rule 10b-18 ” )) shall not, without the prior written consent of GS&Co., directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period, except (a) direct or indirect purchases of Shares through GS&Co.; (b) receipt of Shares in settlement of the capped call transactions entered into on March 29, 2012 pursuant to the terms of those transactions (it being understood, for the avoidance of doubt, that the prohibitions set forth in this Section 6 shall not apply to market activity by Counterparty’s counterparties to the capped call transactions that is, to the knowledge of Counterparty based on the terms of the agreement governing the capped call transactions, for such counterparties’ own account in connection with the capped call transactions); and (c) direct or indirect purchases of Shares that are not solicited by or on behalf of Counterparty, its affiliate or affiliated purchasers and not executed in the open market or expected to result in market purchases; provided that this Section 6 shall not (i) limit Counterparty’s ability, pursuant to its employee incentive plan or dividend reinvestment program, to re-acquire Shares from employees in connection with such plan or program, (ii) limit Counterparty’s ability to withhold shares to cover tax liabilities associated with such a plan, (iii) prohibit any purchases effected by or for an issuer “plan” by an “agent independent of the issuer” (each as defined in Rule 10b-18), (iv) otherwise restrict Counterparty’s or any of its affiliates’ ability to repurchase Shares under privately negotiated transactions with any of its employees, officers, directors or affiliates that are not expected to result in market transactions or (v) limit Counterparty’s ability to grant stock and options to “affiliated purchasers” (as defined in Rule 10b-18) or the ability of such affiliated purchasers to acquire such stock or options, in connection with Counterparty’s compensation policies for directors, officers and employees or any agreements with respect to the compensation of directors, officers or employees of any entities that are acquisition targets of Counterparty, and in connection with any such purchase Counterparty will be deemed to represent to GS&Co. that such purchase does not constitute a “Rule 10b-18 purchase” (as defined in Rule 10b-18) .

7. Special Provisions for Merger Transactions . Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a) Counterparty agrees that it:

(i) shall, during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for the Transaction, notify GS&Co. (A) prior to the opening of the regular trading session on the Exchange on any day on which Counterparty makes, or permits to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction (a “ Public Announcement ”), if such Public Announcement will be made during such regular trading session on the Exchange on such day; or (B) prior to making such Public Announcement, if such Public Announcement will be made outside of a regular trading session on the Exchange on any day;

(ii) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify GS&Co. following any such Public Announcement that such Public Announcement has been made; provided that failure to provide such notice, notwithstanding Section 5(a)(ii)(1) of the Agreement, will not be an Event of Default; and

(iii) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide GS&Co. with written notice specifying (i) Counterparty’s average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the

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announcement date that were not effected through GS&Co. or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act that were not effected through GS&Co. or its affiliates for the three full calendar months preceding the date of such Public Announcement. In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of the relevant Merger Transaction and the completion of the vote by target shareholders; provided that failure to provide such notice, notwithstanding Section 5(a)(ii)(1) of the Agreement, will not be an Event of Default.

(b) Counterparty acknowledges that a Public Announcement may cause the terms of the Transaction to be adjusted or the Transaction to be terminated; accordingly, Counterparty acknowledges that in making any Public Announcement, it must comply with the standards set forth in Section 5 above.

(c) Upon the occurrence of any Public Announcement (whether made by Counterparty or a third party) GS&Co. in its sole discretion may (i) make commercially reasonable adjustments to the terms of the Transaction to account for the economic effect on the Transaction of such Public Announcement, including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii) treat the occurrence of such Public Announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction as the Affected Transaction and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

“ Merger Transaction ” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

8. Special Provisions for Acquisition Transaction Announcements . (a) If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for the Transaction, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of the Transaction as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on the Transaction of such Acquisition Transaction Announcement (including adjustments to account for changes in volatility, expected dividends, stock loan rate and liquidity relevant to the Shares or to the Transaction) If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of the Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction Announcement.

(b) “ Acquisition Transaction Announcement ” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the good faith and commercially reasonable judgment of the Calculation Agent may result in an Acquisition Transaction or (v) any announcement of any material change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced Acquisition Transaction, agreement, letter of intent, understanding or intention). For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.

(c) “ Acquisition Transaction ” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “25%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 25% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board of directors has a legal

13

obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

(i) the Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement”as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

(ii) the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;

(iii) a party’s right to liquidate, terminate or accelerate the Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of the Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); and

(iv) all payments for, under or in connection with the Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).

(b) Counterparty acknowledges that:

(i) during the term of the Transaction, GS&Co. and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to the Transaction;

(ii) GS&Co. and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to the Transaction, including acting as agent or as principal and for its own account or on behalf of customers;

(iii) GS&Co. shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;

(iv) any market activities of GS&Co. and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and

(v) the Transaction is a derivatives transaction in which it has granted GS&Co. an option; GS&Co. may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the Transaction.

(c) Counterparty:

(i) is an “institutional account” as defined in FINRA Rule 4512(c);

(ii) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and will exercise independent judgment in evaluating the recommendations of GS&Co. or its associated persons; and

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9. Acknowledgments . (a) The parties hereto intend for:

(iii) will notify GS&Co. if any of the statements contained in clause (i) or (ii) of this Section 9(c) ceases to be true.

10. Credit Support Documents . The parties hereto acknowledge that the Transaction hereunder is not secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement.

11. No Set-off . Obligations under the Agreement shall not be set off by either party against any other obligations of the other party or that other party’s affiliates, whether arising under the Agreement or any other agreement between the parties by operation of law or otherwise.

12. Delivery of Shares . Notwithstanding anything to the contrary herein, GS&Co. may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “ Original Delivery Date ”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

13. Early Termination . In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “ Payment Amount ”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which the Transaction is terminated, elect to deliver or for GS&Co. to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an “ Alternative Delivery Unit ” and, the securities or property comprising such unit, “ Alternative Delivery Property ”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is made by GS&Co., the prices at which GS&Co. purchases Shares or Alternative Delivery Property to fulfill its delivery obligations under this Section 13); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

14. Calculations and Payment Date upon Early Termination . Notwithstanding anything to the contrary herein or in Section 6 of the Agreement or the Equity Definitions, if Counterparty elects to receive Shares or Alternative Delivery Property in accordance with Section 13, such Shares or Alternative Delivery Property shall be delivered by GS&Co as promptly as commercially reasonably practicable on or following the relevant Early Termination Date.

15. Automatic Termination Provisions . Notwithstanding anything to the contrary in Section 6 of the Agreement, an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction as the Affected Transaction will automatically occur without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange at any time falls below such Termination Price, and the Exchange Business Day that the price of the Shares on the Exchange at any time falls below the Termination Price will be the “Early Termination Date” for purposes of the Agreement.

16. Delivery of Cash . For the avoidance of doubt, nothing in this Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transaction contemplated by this Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity , as in effect on the relevant Trade Date (including, without limitation, where

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Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of the Transaction).

17. Claim in Bankruptcy . GS&Co. acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.

18. Governing Law . The Agreement, this Confirmation and all matters arising in connection with the Agreement and this Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).

19. Illegality . The parties agree that, for the avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and the consequences specified in the Agreement, including without limitation, the consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.

(a) The Office of GS&Co. for the Transaction is: 200 West Street, New York, New York 10282-2198.

(b) The Office of Counterparty for the Transaction is: 900 Omnicare Center, 201 E. Fourth Street, Cincinnati, Ohio 45202.

21. Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction hereunder by, among other things, the mutual waivers and certifications provided herein.

22. Submission to Jurisdiction . Section 13(b) of the Agreement is deleted in its entirety and replaced by the following:

“ Each party hereby irrevocably and unconditionally submits for itself and its property in any suit, legal action or proceeding relating to this Agreement and/or the Transaction, or for recognition and enforcement of any judgment in respect thereof, (each, “Proceedings”) to the exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof. Nothing in this Confirmation or this Agreement precludes either party from bringing Proceedings in any other jurisdiction if (A) the courts of the State of New York or the United States of America for the Southern District of New York lack jurisdiction over the parties or the subject matter of the Proceedings or declines to accept the Proceedings on the grounds of lacking such jurisdiction; (B) the Proceedings are commenced by a party for the purpose of enforcing against the other party’ s property, assets or estate any decision or judgment rendered by any court in which Proceedings may be brought as provided hereunder; (C) the Proceedings are commenced to appeal any such court’ s decision or judgment to any higher court with competent appellate jurisdiction over that court’s decisions or judgments if that higher court is located outside the State of New York or Borough of Manhattan, such as a federal court of appeals or the U.S. Supreme Court; or (D) any suit, action or proceeding has been commenced in another jurisdiction by or against the other party or against its property, assets or estate and, in order to exercise or protect its rights, interests or remedies under this Agreement or this Confirmation, the party (1) joins,

16

20. Offices .

files a claim, or takes any other action, in any such suit, action or proceeding, or (2) otherwise commences any Proceeding in that other jurisdiction as the result of that other suit, action or proceeding having commenced in that other jurisdiction.”

23. Counterparts . This Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Confirmation by signing and delivering one or more counterparts.

(i)

17

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us

by facsimile to the Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

Yours faithfully,

GOLDMAN, SACHS & CO.

By: Authorized Signatory

Agreed and Accepted By:

OMNICARE, INC.

By:

Name:

Title:

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1. The following Counterparty Settlement Provisions shall apply to the extent indicated under the Confirmation:

Settlement Method

Forward Cash Settlement

Settlement Currency: USD

Settlement Method Election: Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.

Electing Party: Counterparty

Election Date: The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be.

Default Settlement Method: Cash Settlement

Amount: The Number of Shares to be Delivered multiplied by the Settlement Price.

Settlement Price: The average of the VWAP Prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Confirmation.

Settlement Valuation Period: A number of Scheduled Trading Days selected by GS&Co. in good faith and its commercially reasonable discretion, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date.

Cash Settlement: If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

Cash Settlement

Net Share Settlement

2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “ Registered Settlement Shares ”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares ”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the realizable market value thereof to GS&Co. (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent.

3. Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a) (1) a registration statement (which may be a shelf registration statement filed pursuant to Rule 415 under the Securities Act) covering public resale of the Registered Settlement Shares by GS&Co. (the “ Registration Statement ”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; and (2) a prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “ Prospectus ”) shall have been delivered to GS&Co. on or prior to the date of delivery;

(b) the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be commercially reasonably satisfactory to GS&Co.;

(c) as of or prior to the date of delivery, GS&Co. and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to GS&Co., in its discretion; provided that, prior to receiving or being granted access to any such information, GS&Co. and its agents may be required by Counterparty to enter into a customary nondisclosure agreement with Counterparty in respect of any such due diligence investigation; and

(d) as of the date of delivery, an agreement (the “ Underwriting Agreement ”) shall have been entered into with GS&Co. in connection with the public resale of the Registered Settlement Shares by GS&Co. substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance commercially reasonably satisfactory to GS&Co., which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4. If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a) all Unregistered Settlement Shares shall be delivered to GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof;

(b) as of or prior to the date of delivery, GS&Co. and any potential purchaser of any such shares from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) identified by GS&Co. shall be afforded a

2

Payment Date: The date one Settlement Cycle following the last day of the Settlement Valuation Period.

Procedures: If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements, of similar size, of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them); provided that, prior to receiving or being granted access to any such information, GS&Co. and any potential purchaser may be required by Counterparty to enter into a customary nondisclosure agreement with Counterparty in respect of any such due diligence investigation.

(c) as of the date of delivery, Counterparty shall enter into an agreement (a “ Private Placement Agreement ”) with GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to GS&Co., which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all reasonable and documented out-of-pocket fees and expenses in connection with such resale, including all reasonable and documented out-of-pocket fees and expenses of counsel for GS&Co., and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d) in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), Counterparty shall, if reasonably requested by GS&Co., prepare, in cooperation with GS&Co., a private placement memorandum in form and substance reasonably satisfactory to GS&Co.

5. GS&Co., itself or through an affiliate (the “ Selling Agent ”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “ Settlement Shares ”) in a commercially reasonable manner delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by GS&Co., is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date ”). If the proceeds of any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary and commercially reasonable for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “ Net Proceeds ” ) exceed the absolute value of the Forward Cash Settlement Amount, GS&Co. will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, GS&Co. shall return to Counterparty on that date such unsold Shares.

6. If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or

Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward

Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement

Amount being the “ Shortfall ” and the date on which such determination is made, the “ Deficiency Determination Date ”), Counterparty shall

on the Exchange Business Day next succeeding the Deficiency Determination Date (the “ Makewhole Notice Date ”) deliver to GS&Co.,

through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on

the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares. If Counterparty elects to

deliver to GS&Co. additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph

3 or paragraph 4 above, as the case may be (the “ Makewhole Shares ”), on the first Clearance System Business Day which is also an Exchange

Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on

that Exchange Business Day equal to the Shortfall. Such Makewhole Shares shall be

3

sold by GS&Co. in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered

Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then

Counterparty shall, at its election, either make such cash payment or deliver to GS&Co. further Makewhole Shares until such Shortfall has been

reduced to zero.

7. Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares (the result of such calculation, the “ Capped Number ”). Counterparty represents and warrants (which shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than the Transaction in the Shares under this Confirmation) with all third parties that are then currently outstanding and unexercised.

“ Reserved Shares ” means 14,577,259 Shares.

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Where A = the number of authorized but unissued shares of Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and

Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges Omnicare, Inc. and Subsidiary Companies

(in thousands, except ratio)

For the 2008 year data, see the respective note in that years consolidated financial statements for additional information on the nature of the charge reflected above.

For the years ended December 31,

2012 2011 2010 2009 2008

Income from continuing operations before income taxes $ 312,075 (2) $ 272,825 (2) $ 33,508 (2) $ 331,551 (2) $ 217,055 (2)

Add fixed charges:

Interest expense 93,709 105,161 115,479 114,304 135,155

Amortization of discount on convertible notes (1) 24,073 24,195 29,536 27,977 25,934

Amortization of debt issuance expense 5,262 5,853 5,944 5,589 7,896

Interest expense-special items 12,363 (2) 25,491 (2) 14,297 (2) — —

Interest portion of rent expense 19,458 18,852 20,926 23,049 25,157

Adjusted income from continuing operations $ 466,940 $ 452,377 $ 219,690 $ 502,470 $ 411,197

Fixed charges:

Interest expense $ 93,709 $ 105,161 $ 115,479 $ 114,304 $ 135,155

Amortization of discount on convertible notes (1) 24,073 24,195 29,536 27,977 25,934

Amortization of debt issuance expense 5,262 5,853 5,944 5,589 7,896

Interest expense-special items 12,363 (2) 25,491 (2) 14,297 (2) — —

Interest portion of rent expense 19,458 18,852 20,926 23,049 25,157

Fixed charges $ 154,865 $ 179,552 $ 186,182 $ 170,919 $ 194,142

Ratio of earnings to fixed charges (3) 3.0 x 2.5 x 1.2 x 2.9 x 2.1 x

(1) See the “Debt” note of the Notes to Consolidated Financial Statements. (2) Certain of the Company’s debt agreements and indentures provide for the exclusion of various special charges/(credits) from applicable financial covenant

coverage calculations. The following listing of charges/(credits), which are included in the Company’s income from continuing operations before income taxes, includes certain of these excludable charges/(credits) for the years ended December 31 (in thousands):

2012 2011 2010 2009 2008

Settlement, litigation and other related charges (a) 49,375 55,674 113,709 77,449 99,267 Other expense (b)(c)(d)(e)(f)(g) 67,803 16,093 192,125 25,707 40,534 Total - non-interest expense special items $ 117,178 $ 71,767 $ 305,834 $ 103,156 $ 139,801

Interest expense special items (e) $ 12,363 $ 25,491 $ 14,297 $ — $ — (a) See the "Commitments and Contingencies" note of the Notes to the Consolidated Financial Statements.

(b) See the "Restructuring and Other Related Charges" note of the Notes to Consolidated Financial Statements.

(c) See the "Goodwill and Other Intangible Assets" note of the Notes to the Consolidated Financial Statements.

(d) See the "Separation, Benefit Plan Termination and Related Costs" note of the Notes to the Consolidated Financial Statements.

(e) See the "Debt" note of the Notes to the Consolidated Financial Statements.

(f) See the "Acquisitions" note of the Notes to the Consolidated Financial Statements.

(g) See the "Stock-Based Compensation" note of the Notes to Consolidated Financial Statements.

(3) The ratio of earnings to fixed charges has been computed by adding income from continuing operations before income taxes and fixed charges to derive adjusted income from continuing operations, and dividing adjusted income from continuing operations by fixed charges. Fixed charges consist of interest expense on debt (including the amortization of debt expense) and one-third (the proportion deemed representative of the interest portion) of rent expense.

EXHIBIT 21 Subsidiaries of Omnicare, Inc. The following is a list of operational subsidiaries included in the consolidated financial statements of the Company as of December 31, 2012. Other non-operational subsidiaries which have been omitted from the list would not, when considered in the aggregate, constitute a significant subsidiary. Each of the companies is incorporated under the laws of the state following its name.

State of

Doing Business As Name Incorporation/

Legal Name (if other than legal name) Organization

Advanced Care Scripts, Inc. ACS Pharmacy Florida

AMC - Tennessee, Inc. Omnicare of Nashville Delaware

APS Acquisition, LLC Omnicare Medical Supply Services Delaware

APS-Summit Care Pharmacy, LLC American Pharmaceutical Services Delaware

ASCO Healthcare of New England, Limited Partnership Omnicare of Rhode Island Maryland

ASCO Healthcare, LLC Omnicare of Annapolis Junction, Omnicare of Salisbury, NeighborCare, NeighborCare Londonderry - HME Maryland

Badger Acquisition of Kentucky, LLC Omnicare of Henderson, Kentucky Delaware

Badger Acquisition of Minnesota, LLC Omnicare of Minnesota Delaware

Badger Acquisition of Ohio, LLC Beeber Pharmacies, Omnicare Health Network Delaware

Best Care LTC Acquisition Company, LLC Best Care Pharmacy Delaware

BPNY Acquisition Corp. Omnicare Pharmacy of Western New York Delaware

Campo's Medical Pharmacy, Inc. Campo's Medical Pharmacy Louisiana

Care Pharmaceutical Services, LP Delaware

Care4 LP Omnicare of Edison Delaware

CCRx of North Carolina, LLC Mesh Pharmacy, CCRx of Charlotte, CCRx of North Carolina Delaware

CHP Acquisition Corp. Omnicare of Southern New Jersey Delaware

CIP Acquisition Corp. Carter's Institutional Pharmacy Delaware

Compass Health Services, LLC Omnicare of Morgantown West Virginia

Compscript, LLC Omnicare of Jackson Florida

Continuing Care Rx, LLC CCRx of Bethany Village Pennsylvania

CP Acquisition Corp. Central Pharmacy Company of Little Rock Oklahoma

CP Services, LLC Delaware

CSR, Inc. Kentucky

D & R Pharmaceutical Services, LLC D&R Pharmacare, D&R Pharmacare - Louisville, Omnicare of Lexington, Ky Kentucky

Delco Apothecary, Inc. Pennsylvania

Enloe Drugs, LLC Omnicare of the Quad Cities, Pharmacy Care Associates, Omnicare Infusion of Peoria Delaware

Evergreen Pharmaceutical of California, Inc. Pharmacy Suppport Services - Los Angeles, Pharmacy Support Services - Hayward, Omnicare of Lodi, Omnicare of San Diego, Broadway Long Term Care Pharmacy, Omnicare Chico, CA, Omnicare Redding, CA, Creekside Managed Care Pharmacy, Omnicare of Bakersfield, Omnicare Canoga Park, CA, Pharmacy Advantage, Broadway Medical Supplies California

Evergreen Pharmaceutical, LLC Consulting and Pharmacy Services, Omnicare of Kirkland, Omnicare of Medford, Omnicare of Portland, Omnicare of Spokane, Puget Pharmacy Services, Bridgeport Pharmacy Services, Omnicare of Spokane SPD, Omnicare of Washington SPD, Evergreen Home Care

Washington

State of

Doing Business As Name Incorporation/

Legal Name (if other than legal name) Organization

ExcelleRx, Inc. Delaware

Heartland Healthcare Services, LLC Ohio

Heartland Pharmacy of Illinois, LLC Ohio

Heartland Pharmacy of Pennsylvania, LLC Ohio

HMIS, Inc. Delaware

Home Care Pharmacy, LLC Omnicare of Ashland, Kentucky, Home Care Pharmacy, Omnicare of Nitro, West Virginia, Cincinnati Clinical Intervention Center

Delaware

Home Pharmacy Services, LLC Missouri

Interlock Pharmacy Systems, LLC Interlock Pharmacy of Columbia, Interlock Pharmacy Systems, Medicate LTC Pharmacy Missouri

JHC Acquisition, LLC Omnicare of Northern Illinois Delaware

Langsam Health Services, LLC Sequoia Health Services, Omnicare Clinical Intervention Center - Oklahoma City Delaware

Langsam Medical Products, Inc. Delaware

LCPS Acquisition, LLC Omnicare of Chandler, Southern Desert Pharmacy - Prescott, Village Southern Desert Pharmacy

Delaware

Lobos Acquisition, LLC Omnicare of Huntsville, Superior Care Pharmacy of Idaho Delaware

Lo-Med Prescription Services, LLC Omnicare Pharmacy of Wadsworth Ohio

Main Street Pharmacy, LLC NeighborCare - Riderwood, NeighborCare - Seabrook, NeighborCare - Eagles Trace, NeighborCare - Cedar Crest, NeighborCare - Greenspring Village, NeighborCare - Goodwin House, NeighborCare - Hingham, NeighborCare - Maris Grove, NeighborCare - Oak Crest Village Pharmacy, NeighborCare - Shannondell, NeighborCare - Brooksby Village, NeighborCare - Asbury Pharmacy, NeighborCare - Charlestown Pharmacy

Maryland

Managed Healthcare, Inc. Managed Health Care Pharmacy Delaware

Management and Network Services, LLC Ohio

Med World Acquisition Corp. Med World Pharmacy Delaware

Medical Arts Health Care, Inc. Georgia

MHHP Acquisition Company, LLC Stat-Care Pharmacy, McClelland Health System Delaware

NCS Healthcare of Illinois, LLC Omnicare of Herrin Illinois

NCS Healthcare of Iowa, LLC Omnicare of Urbandale Ohio

NCS Healthcare of Kansas, LLC Ohio

NCS Healthcare of Kentucky, Inc. Vangard Labs Ohio

NCS Healthcare of Montana, Inc. Omnicare of Billings Ohio

NCS Healthcare of New Mexico, Inc. NCS Healthcare of Albuquerque Ohio

NCS Healthcare of Ohio, LLC Omnicare of Dover, Omnicare of Central Ohio Ohio

NCS Healthcare of South Carolina, Inc. Omnicare of Charleston Ohio

NCS Healthcare of Tennessee, Inc. Omnicare of Memphis Ohio

NCS Healthcare of Wisconsin, LLC Omnicare of Appleton, Pinnacle Pharmacy - LaCrosse Ohio

NeighborCare of Indiana, LLC Omnicare of Ft. Wayne, Omnicare of South Bend Indiana

NeighborCare of New Hampshire, LLC Omnicare of New Hampshire New Hampshire

NeighborCare of Virginia, LLC Virginia

NeighborCare Pharmacy Services, Inc. Omnicare San Antonio, Omnicare of Scranton, Omnicare of Williamsport, Rx Services, Network Health Services, Champ Davis Pharmacy, Omnicare of Allentown

Delaware

NIV Acquisition, LLC Denman Pharmacy Services Delaware

North Shore Pharmacy Services, LLC North Shore Pharmacy Services Delaware

Omnicare Distribution Center, LLC Delaware

Omnicare ESC, LLC Delaware

State of

Doing Business As Name Incorporation/

Legal Name (if other than legal name) Organization

Omnicare Headquarters, LLC Delaware

Omnicare Holding Company Delaware

Omnicare Indiana Partnership Holding Co, LLC Delaware

Omnicare Management Company Delaware

Omnicare of Nevada, LLC Omnicare of Reno, Omnicare of Las Vegas Delaware

Omnicare of New York, LLC Omnicare of Florence, Omnicare of Golden, Omnicare of Syracuse, Omnicare of Southern Pines, Omnicare of Whippany, Omnicare of Ancora, Omnicare of Greystone, Omnicare of Hagedorn, Omnicare of Menlo Park, Omnicare of Paramus, Omnicare of Trenton, Omnicare of Hunterdon, Omnicare of New Lisbon, Omnicare of North Jersey, Omnicare of Vineland East, Omnicare of Woodbine, Omnicare of Woodbridge, Omnicare of Fay Rd. Syracuse, Omnicare of Rochester, Omnicare of New Hartford, Omnicare of Grand Junction, Pharmacy Solutions, Omnicare of Vineland, Omnicare CIC - New Hartford, Expert Care Pharmacy

Delaware

Omnicare Pharmacies of Pennsylvania East, LLC Omnicare Pharmacy Services of Eastern Pennsylvania Delaware

Omnicare Pharmacies of Pennsylvania West, LLC Omnicare Pharmacy Services of Greensburg, Omnicare Pharmacy Services of Pittsburgh Pennsylvania

Omnicare Pharmacy and Supply Services, LLC Omnicare of South Dakota South Dakota

Omnicare Pharmacy of Florida, LP Omnicare of Central Florida, Omnicare of Jacksonville, Omnicare of Tampa, Omnicare of South Florida, Omnicare of Panama City, Myerlee Pharmacy L.T.C., Medistat Wholesale Services, Medistat Pharmacy Services, Waterman Village Pharmacy

Delaware

Omnicare Pharmacy of Nebraska LLC Omnicare of Nebraska Delaware

Omnicare Pharmacy of North Carolina, LLC Omnicare of Hickory Delaware

Omnicare Pharmacy of Pueblo, LLC Omnicare of Pueblo Delaware

Omnicare Pharmacy of Tennessee, LLC Omnicare of Tennessee Delaware

Omnicare Pharmacy of Texas 1, LP Omnicare of Corpus Christi, Omnicare of Ft. Worth, Omnicare of Houston, Omnicare of Pharr, Omnicare of Nacogdoches

Delaware

Omnicare Pharmacy of Texas 2, LP Omnicare of Lubbock, Omnicare of Waco, Omnicare of Amarillo, Omnicare of Tyler Delaware

Omnicare Pharmacy of the Midwest, LLC Delaware

Omnicare Purchasing Company General Partner, Inc. Delaware

Omnicare Purchasing Company Limited Partner, Inc. Delaware

PBM Holding Co. Delaware

PBM Plus Mail Service Pharmacy, LLC Delaware

PBM-Plus, Inc. Wisconsin

Pharmacon Corp. New York

Pharmacy Associates of Glens Falls, Inc. Royal Care Pharmacy Services New York

Pharmacy Consultants, Inc. South Carolina

Pharmacy Holding # 1, LLC Delaware

Pharmacy Holding # 2, LLC Delaware

Pharmacy Services of Indiana, LLC Indiana

Pharmasource Healthcare, Inc. Georgia

Pharmed Holdings, Inc. I.V. Plus - Alexandria Delaware

PP Acquisition Company, LLC Pinnacle Pharmacy Delaware

PPS-GBMC Joint Venture, LLC Maryland

PPS-St. Agnes Joint Venture, LLC Maryland

State of

Doing Business As Name Incorporation/

Legal Name (if other than legal name) Organization

PRN Pharmaceutical Services, LP Delaware

Professional Pharmacy Services, Inc. Maryland

PSI Arkansas Acquisition, LLC Pharmacy Solutions Delaware

Rescot Systems Group, Inc. Pennsylvania

Roeschen's Healthcare, LLC Roeschen's Omnicare Pharmacy, Behavioral Health Pharmacy Wisconsin

RXC Acquisition Company RxCrossroads, RxCrossroads Third Party Logistics Delaware

Shore Pharmaceutical Providers, Inc. Shore Pharmaceutical Providers Delaware

Specialized Pharmacy Services, LLC Specialized Pharmacy Services - North, Specialized Pharmacy Services, ElderCare Pharmacy Michigan

Specialty Carts, LLC Ohio

Sterling Healthcare Services, Inc. IV Plus of Shreveport, Sterling Home Medical Services Delaware

Suburban Medical Services, LLC Omnicare of King of Prussia Pennsylvania

SunPharmacy Limited Liability Company Ohio

Superior Care Pharmacy, Inc. Superior Care Pharmacy Delaware

TCPI Acquisition Corp. Specialized Pharmacy Services - West Delaware

Three Forks Apothecary, Inc. Omnicare of Bettyville Kentucky

UC Acquisition Corp. Unicare Delaware

Uni-Care Health Services of Maine, Inc. Omnicare of Maine New Hampshire

Value Health Care Services, LLC Omnicare of Connecticut Delaware

VAPS Acquisition Company, LLC Vanguard Advanced Pharmacy Systems Delaware

Weber Medical Systems, LLC Omnicare Infusion Services Delaware

Westhaven Services Co., LLC Omnicare Pharmacy of Northwest Ohio Ohio

Williamson Drug Company, Incorporated Extended Care Associates, Williamson's Pharmacy Institutional, Williamson's Pharmacy, Rx Services Virginia

ZS Acquisition Company, LLC ZellMed Solutions Delaware

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-02667, 333-77845, 333-95949, 333-36874 and 333-120450) and Form S-3ASR (No. 333-166710) of Omnicare, Inc., of our report dated February 19, 2013 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Cincinnati, Ohio February 19, 2013

Exhibit 24

POWERS OF ATTORNEY

The undersigned directors of OMNICARE, INC. ("Company") hereby appoints JOHN L. WORKMAN, ROBERT O. KRAFT and ALEXANDER M. KAYNE as his/her true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2012, and all amendments thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact is appointed with full power to act without the other.

/s/ James D. Shelton February 13, 2013

James D. Shelton Date

/s/ Mark A. Emmert February 13, 2013

Mark A. Emmert Date

/s/ Steven J. Heyer February 13, 2013

Steven J. Heyer Date

/s/ Sam R. Leno February 13, 2013

Sam R. Leno Date

/s/ Andrea R. Lindell February 13, 2013

Andrea R. Lindell, Ph.D., RN Date

/s/ Barry Schochet February 13, 2013

Barry Schochet Date

/s/ Amy Wallman February 13, 2013

Amy Wallman Date

EXHIBIT 31.1

RULE 13a-14(a) CERTIFICATION IN ACCORDANCE WITH SEC TION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Workman, certify that:

1. I have reviewed this report on Form 10-K of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: February 19, 2013 By: /s/John L. Workman

John L. Workman

Chief Executive Officer and Director

EXHIBIT 31.2

RULE 13a-14(a) CERTIFICATION IN ACCORDANCE WITH SEC TION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert O. Kraft, certify that:

1. I have reviewed this report on Form 10-K of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: February 19, 2013 By: /s/Robert O. Kraft

Robert O. Kraft

Senior Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Workman, Chief Executive Officer of Omnicare, Inc. (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Annual Report on Form 10-K of the Company for the period ended December 31, 2012 (the "Report") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 19, 2013 By: /s/John L. Workman

John L. Workman

Chief Executive Officer and Director

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert O. Kraft, Senior Vice President and Chief Financial Officer of Omnicare, Inc. (the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Annual Report on Form 10-K of the Company for the period ended December 31, 2012 (the "Report") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 19, 2013 By: /s/Robert O. Kraft

Robert O. Kraft

Senior Vice President and Chief Financial Officer