NEIGHBORCARE, INC. DEFERRED COMPENSATION PLAN

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Exhibit 10.4

NEIGHBORCARE, INC.

DEFERRED COMPENSATION PLAN

(f/k/a Genesis Health Ventures, Inc.

Deferred Compensation Plan)

Restated Effective December 1, 2003

NEIGHBORCARE, INC.

DEFERRED COMPENSATION PLAN

        NEIGHBORCARE, INC. currently maintains a deferred compensation plan for a limited group of executives which allows them to defer receipt of compensation and supplement retirement savings under the NeighborCare, Inc. 401(k) Plan; and

        NEIGHBORCARE, INC. now intends to amend and restate this deferred compensation plan in order to reflect its corporate reorganization and incorporate previous amendments thereto.

        NOW, THEREFORE, to effectuate its intentions, the Employer hereby amends and restates the NeighborCare, Inc. Deferred Compensation Plan (f/k/a the Genesis Health Ventures Deferred Compensation Plan) effective as of the 1st day of December, 2003.

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Table of Contents

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SECTION 1

DEFINITIONS

1.1

Accelerated Shares Deferral Agreement means a written agreement between a Member and the Employer whereby a Member agrees to defer all or any portion of his/her the Restricted Stock Award for which restrictions lapse on May 23, 2003.

1.2

Account means a recordkeeping of the balance of Plan benefits attributable to a Member.

1.3

Administrator means the individual or committee appointed to administer this Plan pursuant to Section 6. In the absence of such appointment, the Employer shall be the Administrator.

1.4

Base Pay means an Eligible Employee's annualized base compensation.

1.5

Beneficiary means the person, persons, trust or other entity that a Member designates to receive payments in the event of his/her death by a written revocable designation filed with the Administrator. A Member may designate a different Beneficiary with respect to each Account established for his/her benefit.

1.6

Board means the Board of Directors of NeighborCare, Inc., a Pennsylvania Corporation.

1.7

Bonus means any cash remuneration paid to an Eligible Employee as a specific incentive award pursuant to any incentive plan, commission schedule or any arrangement adopted by the Board, including any amount which would have been paid but for the Member's election to make a contribution therefrom to this Plan or the Employer's plan which includes a qualified cash or deferred arrangement under Section 401(k) of the Code.

1.8

Change in Control means the occurrence of any of the following:

A.

A sale of all or substantially all of the business or assets of the Employer, or any subsidiary or division thereof employing the Member; or

B.

(1) any person, including a "group" as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes (other than as a result of a purchase from the Employer) the beneficial owner of shares of the Company having 30% or more of the total number of votes that may be cast for the election of directors of the Employer (excluding shares of the Employer owned by such person prior to the date of this Agreement), and such beneficial ownership continues for five consecutive days or (2) within a period of two consecutive years, as the result of, or in connection with, any cash tender or exchange offer (other than by the Employer), merger or other business combination, sale of assets or contested election or any combination of the foregoing transactions, the persons who were directors of the Employer prior to such event shall cease for any reason to constitute at least a majority of the Board of the Employer or any successor.

For purposes of this definition, Employer shall mean Genesis Health Ventures, Inc.

1.9

Code means the Internal Revenue Code of 1986, as amended, and the same as may be further amended from time to time.

1.10

Deferral Agreement means a written agreement between a Member and the Employer whereby a Member agrees to defer a portion of his/her Base Pay, Bonus and/or any other form of remuneration and the Employer agrees to provide Plan benefits.

1.11

Deferral Contribution means a Member's elective contribution described in Section 3.

1.12

Determination Date means June 30 and December 31 of each calendar year and, for each Member, his/her date of death, Retirement, Disability or other termination of employment.

1.13

Disability means an illness or injury which completely prevents a Member from performing the Member's occupation or which otherwise entitles the Member to receive long-term disability

benefits under a plan or program for such benefits sponsored by the Employer. Disability shall be determined in a uniform manner by the Administrator.

1.14

Effective Date means March 1, 2000.

1.15

Eligible Employee means any individual whose combined Base Pay and Bonus for the prior Plan Year was in excess of the dollar threshold of Section 414(q)(1)(B). If an individual was employed for less than twelve months in the prior Plan Year, he/she shall be an Eligible Employee if his/her annualized Base Pay rate is in excess of the dollar threshold of 414(q)(1)(B). The above notwithstanding, an individual shall not be deemed an Eligible Employee if his or her terms and conditions of employment are determined through collective bargaining with a third party unless the terms of such collective bargaining provide for inclusion of such individual as an Eligible Employee. For periods prior to January 1, 2004, "Eligible Employee" shall mean any individual who has annualized Base Pay in excess of the dollar threshold of Section 414(q)(1)(B).

1.16

Eligible Dependent means an individual who is a child, stepchild, grandchild, niece or nephew, or who is otherwise identified as a dependent of a Member for purposes of the Code who is living at any time throughout the Enrollment Period and who is younger than age 18 but for whom a subaccount was initially established pursuant to Section 5.2 prior to his attaining age 14.

1.17

Employer means NeighborCare, Inc., and any successor thereto, and any affiliated company which is a member of a controlled group of corporations within the meaning of Section 1563(a) of the Code with NeighborCare, Inc. and which adopts this Plan with consent of the Board.

1.18

Employment Agreement Amendment Consideration means any cash remuneration paid to an Eligible Employee as specific consideration for an amendment to the terms of an employment agreement by and between such Eligible Employee and the Employer.

1.19

Enrollment Period means the period within 30 days prior to any entry date

1.20

Entry Date means every January 1 ^st , April 1 ^st , July 1 ^st , or October 1 ^st .

1.21

Executive Retention Bonus means a Bonus payment to certain executive Employees pursuant to the February 23, 2001 Order of the Bankruptcy Court (BC).

1.22

Investment Fund(s) means the investment option(s) designated by the Employer from time to time which serve as a means to measure value increases or decreases with respect to a Member's Accounts.

1.23

Member means any Eligible Employee who has elected to participate in the Plan.

1.24

Plan means the NeighborCare, Inc. Deferred Compensation Plan as described in this instrument.

1.25

Plan Year means the twelve (12) consecutive month period beginning on each January 1 ^st and ending on the following December 31 ^st . The Plan Year which begins on April 1, 2001 shall end on December 31, 2001.

1.26

Restatement Effective Date means October 1, 2001.

1.27

Restricted Stock Award means any grant of common stock of the Employer which, when made to an Employee, is subject to forfeiture and restrictions on transferability.

1.28

Retirement means any severance from service by a Member for any reason other than death or Disability after attaining age 65 or after attaining age 55 and completing five (5) Years of Service.

1.29

Special Recognition Bonus means a Bonus payment to Employees grades 42-69, for the purpose of providing appropriate incentives for employment performance through the period of the Employer's reorganization.

1.30

Years of Service means each period of twelve consecutive months beginning on the Employee's first day of employment and each anniversary.

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SECTION 2

MEMBERSHIP IN THE PLAN

2.1

Commencement of Membership . Each Eligible Employee shall become a Member as of the Restatement Effective Date of this Plan. Any individual who becomes an Eligible Employee after such date shall become a Member as of the first day of any January, April, July or October immediately following his/her satisfaction of the requirements of Section 2.2.

2.2

Procedure For and Effect of Admission . Each Eligible Employee who desires to participate in this Plan shall complete such forms and provide such data as is reasonably required by the Employer during the appropriate Enrollment Period. By becoming a Member, an Eligible Employee shall be deemed to have consented to the provisions of this Plan and all amendments hereto.

2.3

Cessation of Membership . A Member shall cease to be an Active Member on the earlier of:

A.

the date on which the Plan terminates, or

B.

the date on which he/she ceases to be an Eligible Employee.

A former Active Member will be considered a Member for all purposes, except with respect to the right to make contributions, as long as he/she retains an Account.

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SECTION 3

CONTRIBUTIONS

3.1

Deferral of Base Pay and Bonuses . Each Member may authorize the Employer to reduce: (i) up to fifty percent (50%) of his/her Base Pay with respect to a Plan Year; and (ii) up to one hundred percent (100%) of his/her Bonus (other than Special Recognition Bonus and Executive Retention Bonus) with respect to a Plan Year; and have such amounts credited to his/her Account. The Member must complete and file a Deferral Agreement with the Administrator during the Enrollment Period which precedes the Plan Year in which the Base Pay would have been paid or Bonus would have been be earned. A deferral shall be made from Base Pay or Bonus as the Member shall specify however, to the extent the deferral is to be made from Bonus and no Bonus, or an insufficient Bonus, is payable, the deferral shall be reduced by the amount to cover all applicable taxes and payroll deductions. The Deferral Agreement shall state the amount to be deferred as a percentage of the Member's Base Pay or Bonus.

3.2

Deferral of Special Recognition Bonus and Executive Retention Bonus . Each Member may authorize the Employer to reduce his/her Special Recognition Bonus and/or Executive Retention Bonus by any amount and have such amount credited to his/her Account. The Member shall complete and file a Deferral Agreement with respect to such Bonus with the Administrator during a special enrollment period which shall begin on September 21, 2001 and shall end on October 5, 2001. The Deferral Agreement shall state whether the deferral is to be made from the Special Recognition Bonus or the Executive Retention Bonus and shall state the amount to be deferred as a percentage of such Bonus. Any deferral made pursuant to this Section 3.2 shall only apply to that portion of such Bonus which is unpaid as of the last day of the September 30, 2001.

3.3

Deferral of Restricted Stock Award(s) . Each Member may authorize the Employer to defer receipt of all or any number of shares to be granted pursuant to a Restricted Stock Award and to have the number of deferred shares credited to a notational subaccount of the Member's Account(s). The Deferral Agreement shall be made no later than June 30 ^th of the calendar year preceding the calendar year in which all restrictions on the stock lapse. Such election shall state the amount of shares to be deferred as a percentage of the Member's Restricted Stock Award and shall identify the Account(s) to which the deferred shares are to be allocated. In no event, however, shall a Member's Restricted Stock Award be allocated to an Account which would require distribution of deferred shares prior to the date upon which the restrictions on stock lapse. The deferred shares credited to the notational subaccount shall be subject to all restrictions applicable to the Restricted Stock shares actually received by the Member including, but not limited to, forfeiture provisions. The Member shall complete and file a Deferral Agreement with the Administrator during a special deferral election period which shall end no later than the anticipated date on which the Restricted Stock Award is to be granted. Upon lapse of the restrictions of the Restricted Stock Award, common stock of the Employer (or its cash equivalent) may be credited to the Member's Account at the discretion of the Administrator.

With respect to that portion of a Member's Restricted Stock Award for which restrictions lapse on May 23, 2003 pursuant to the offer to acquire, a Member may enter into an Accelerated Shares Deferral Agreement. The member must enter into such Accelerated Shares Deferral Agreement on or before May 12, 2003. Except as otherwise stated above, the provisions of this Section 3.3 shall apply to Accelerated Shares Deferral Agreements in the same manner as applicable to Deferral Agreements.

3.4

Deferral of Certain Restricted Stock Award(s) . In the event that a Member is granted a Restricted Stock Award and, as of the date of the grant, the Member cannot otherwise enter into a Deferral Agreement within the time period prescribed by Section 3.3, the Member shall be entitled to enter into a Deferral Agreement pursuant to this Section 3.4. In such case, the Member may enter into a

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Deferral Agreement provided that the Deferral Agreement is made at least thirty (30) days prior to the date on which the first restrictions lapse on shares subject to the Restricted Stock Award. The Deferral Agreement may be made with respect to all or any portion of the Restricted Stock Award described in this Section 3.4.

3.5

Deferral of Employment Agreement Consideration . Each Member may authorize the Employer to reduce his/her Employment Agreement Amendment Consideration by any amount and have such amount credited to his/her Account. Each Member who has been designated to transfer to Genesis HealthCare Corporation in connection with the anticipated corporate reorganization shall complete and file a Deferral Agreement during a special enrollment period which shall begin on July 18, 2003 and shall end on July 31, 2003. (The above notwithstanding, such Deferral Agreement shall be void and without effect if the Member is not transferred to Genesis HealthCare Corporation as provided for in this Section 3.5.) Any other Member shall complete and file a Deferral Agreement during a special enrollment period which shall begin on November 14, 2003 and shall end on December 1, 2003. Deferral Agreements under this Section 3.5 shall state the amount to be deferred as a dollar amount or a percentage of such Employee's Employment Agreement Amendment Consideration.

3.6

Rules Governing Deferral Contributions .

A.

Each election to defer is irrevocable during the Plan Year or other period to which it applies.

B.

The amount that a Member elects to defer shall be credited to the Member's Accounts as soon as practicable, but no later than 30 days following the date on which the Member is paid the non-deferred portion of the compensation which is the source of the deferral. (In the case of a Member electing to defer one hundred percent (100%) of his/her Bonus, the amount shall be credited to the Member's Account no later than 30 days following the date on which the Bonus would have been paid had the Member not elected to defer such Bonus.)

The minimum amount that a Member may defer for any Plan Year shall be $1,000.00.

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SECTION 4

MEMBER ACCOUNTS

4.1

Establishment of Accounts . The following Accounts shall be established with respect to each Member:

A.

Retirement Account,

B.

Education Account, and

C.

Fixed Period Account.

4.2

Benefit Allocation . Each Member shall submit to the Plan Administrator before the close of the Enrollment Period for each Plan Year a written statement designating the Member's allocation of anticipated contributions among the Accounts established in Section 4.1. Any Member who was a Member prior to the Restatement Effective Date shall designate the allocation of amounts currently credited to his Account among the Accounts established in Section 4.1.

4.3

Irrevocable Allocation . An Eligible Employee may not modify, alter, amend or revoke his allocation for a Plan Year after such Plan Year begins.

4.4

Directed Adjustment of Certain Accounts . A Member may direct by written instruction delivered to the Administrator that his Accounts be valued as if they were invested in one or more of the Inve