<Page>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
OMNICARE, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<Page>
[Omnicare Logo]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 2002
The Annual Meeting of Stockholders of Omnicare, Inc. (the 'Company') will be
held at The Metropolitan Club, 50 E. RiverCenter Boulevard, Covington, Kentucky,
on Monday, May 20, 2002 at 10:00 a.m. The purpose of the Annual Meeting is to
consider and act upon:
(1) the election of directors;
(2) the re-approval of amendments to the Company's 1992 Long-Term Stock
Incentive Plan;
(3) the ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants of the Company; and
(4) any other business as may properly be brought before the meeting.
Stockholders of record at the close of business on March 25, 2002 are
entitled to notice of, and to vote at, the meeting and any adjournments thereof.
Whether or not you plan to attend the meeting, please sign and date the
enclosed proxy and mail it in the enclosed envelope at your earliest
convenience. No postage is required if it is mailed in the United States.
By Order of the Board of Directors
CHERYL D. HODGES
Secretary
Covington, Kentucky
April 10, 2002
YOUR VOTE IS IMPORTANT! TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING, PLEASE TAKE A MOMENT TO SIGN, DATE AND PROMPTLY MAIL YOUR PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<Page>
OMNICARE, INC.
100 EAST RIVERCENTER BOULEVARD
COVINGTON, KENTUCKY 41011
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to stockholders in connection with the
solicitation by the Board of Directors of Omnicare, Inc. (the 'Company') of
proxies to be used at the Annual Meeting of Stockholders of the Company to be
held on May 20, 2002, and any adjournment thereof ('Annual Meeting').
Stockholders of record as of the close of business on March 25, 2002 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. As of such date, the Company had outstanding 94,401,423 shares of its
Common Stock, par value $1 per share ('Common Stock'), having one vote per
share.
To constitute a quorum at the Annual Meeting, the presence, in person or by
proxy, of the holders of a majority of the outstanding shares of Common Stock is
necessary. Shares represented by proxies received by the Company will be counted
as present at the Annual Meeting for the purpose of determining the existence of
a quorum, regardless of how or whether such shares are voted on a specific
proposal. Abstentions will be treated as votes cast on a particular proposal as
well as shares present at the Annual Meeting. Where nominee stockholders are not
permitted to vote on a specific issue because they did not receive specified
instructions on the specific issue from the beneficial owners of the shares
('Broker Nonvotes'), such Broker Nonvotes will be treated as not present at the
meeting for purposes of calculating the results of the vote on the specific
issue. Accordingly, abstentions and Broker Nonvotes have the effect of a
negative vote on any proposal where the vote required to pass the proposal is a
percentage of the outstanding shares, but only abstentions have the effect of a
negative vote when the vote required to pass a proposal is a percentage of the
shares present at the Annual Meeting. Shares represented by properly executed
proxies received in the accompanying form will be voted in accordance with the
instructions contained therein. In the absence of contrary instructions, such
shares will be voted (1) to elect as directors the 12 persons named below;
(2) to re-approve the amendments to the Company's 1992 Long-Term Stock Incentive
Plan; and (3) to ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the Company for 2002. A proxy may be revoked at any
time prior to its exercise by the execution of a proxy signed at a later date or
by the giving of written notice of revocation to the Secretary of the Company. A
revocation during the Annual Meeting will not affect any vote previously taken.
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about April 10, 2002.
ELECTION OF DIRECTORS
The number of directors to be elected at the Annual Meeting has been fixed
by the Board of Directors at 12. Directors are to be elected to serve until the
following annual meeting of stockholders and until their respective successors
are duly elected and qualified. Set forth below are the names of the persons to
be nominated by the Board of Directors, together with a description of each
person's principal occupation during at least the past five years and other
pertinent information. Each of the nominees for election as a director is
currently a director of the Company.
The Company has a program under which certain nominations for membership on
the Board of Directors are on occasion rotated among senior operating executives
of the Company and its subsidiaries. The persons considered to be in the
rotating group are Messrs. Timothy E. Bien, Leo P. Finn, David W. Froesel, Jr.,
Gary W. Kadlec, Thomas W. Ludeke, David Morra and Jeffrey M. Stamps. Messrs.
Froesel and Bien are currently directors and are being nominated from that group
this year. It is anticipated that additional executives of the Company will be
included in such rotating group in future years.
No person may be nominated for election as a director unless written notice
of intention to nominate such person (which notice shall contain the prospective
nominee's name, address and occupation) has been given to the Chairman, the
President or the Secretary of the Company by a stockholder entitled to notice
of, and to attend, a meeting of stockholders at which directors are to be
elected, not later than 15 business days before such meeting.
<Page>
Unless authority is withheld for individual nominees or all nominees, it is
intended that the shares represented by each proxy will be voted for the
nominees listed below. The Company anticipates that all nominees listed in this
Proxy Statement will be candidates when the election is held. However, if for
any reason any nominee is not a candidate at that time, proxies will be voted
for a substitute nominee designated by the Board of Directors and for the
remaining nominees (except where a proxy withholds authority with respect to the
election of directors).
NOMINEES
<Table>
EDWARD L. HUTTON .......... Mr. Hutton is Chairman of the Company and has held this position
Director since 1981 since May 1981. Additionally, he is Chairman and a director of
Age: 82 Chemed Corporation, Cincinnati, Ohio (a diversified public
corporation with interests in plumbing and drain cleaning services,
major appliance and heating and ventilation and air conditioning
repair services, and health care services) (hereinafter 'Chemed')
and has held these positions since November 1993 and April 1970,
respectively. Previously, he was President and Chief Executive
Officer of Chemed, positions he had held from April 1970 to
November 1993, and was Chairman and Chief Executive Officer of
Chemed from November 1993 until May 2001.
JOEL F. GEMUNDER .......... Mr. Gemunder is President and Chief Executive Officer of the
Director since 1981 Company and has held these positions since May 1981 and May 2001,
Age: 62 respectively. Mr. Gemunder was an Executive Vice President of
Chemed and Group Executive of its Health Care Group from May 1981
through July 1981 and a Vice President of Chemed from 1977 until
May 1981. Mr. Gemunder is a director of Chemed and Ultratech
Stepper, Inc. (a manufacturer of photo-lithography equipment for
the computer industry).
TIMOTHY E. BIEN ........... Mr. Bien is Senior Vice President -- Professional Services and
Director since 2001 Purchasing of the Company, a position he has held since May 1996.
Age: 51 From May 1992 until May 1996, he served as Vice President of
Professional Services and Purchasing of the Company. Prior to
that, he was Vice President and a former owner of Home Care
Pharmacy, a wholly-owned subsidiary that the Company acquired in
December 1988. Mr. Bien has also served as a director for two
prior terms: 1998-1999 and 1999-2000.
CHARLES H. ERHART, JR. ... Mr. Erhart retired as President of W.R. Grace & Co., Columbia,
Director since 1981 Maryland (international specialty chemicals, construction and
Age: 76 packaging) (hereinafter 'Grace') in August 1990. He had held this
position since July 1989. From November 1986 to July 1989, he was
Chairman of the Executive Committee of Grace. From May 1981 to
November 1986, he served as Vice Chairman and Chief
Administrative Officer of Grace. Mr. Erhart is a director of
Chemed.
DAVID W. FROESEL, JR. ..... Mr. Froesel is Senior Vice President and Chief Financial Officer of
Director since 2000 the Company and has held these positions since March 1996. From
Age: 50 May 1993 to February 1996, Mr. Froesel was Vice President of
Finance and Administration at Mallinckrodt Veterinary, Inc., a
subsidiary of Mallinckrodt, Inc. From July 1989 to April 1993 he
was worldwide Corporate Controller of Mallinckrodt Medical, Inc.,
a subsidiary of Mallinckrodt, Inc.
CHERYL D. HODGES .......... Ms. Hodges is Senior Vice President and Secretary of the Company
Director since 1992 and has held these positions since February 1994. From August
Age: 50 1986 to February 1994, she was Vice President and Secretary of
the Company. From August 1982 to August 1986, she served as Vice
President -- Corporate and Investor Relations. Ms. Hodges has
also served as a director of the Company for four prior terms:
1984-85; 1986-87; 1988-89; and 1990-91.
</Table>
2
<Page>
<Table>
PATRICK E. KEEFE .......... Mr. Keefe is Executive Vice President -- Operations of the
Director since 1993 Company and has held this position since February 1997.
Age: 56 Previously, he was Senior Vice President -- Operations
since February 1994. From April 1993 to February 1994, he
was Vice President -- Operations of the Company. From
April 1992 to April 1993, he served as Vice
President -- Pharmacy Management Programs of Diagnostek,
Inc., Albuquerque, New Mexico (mail-service pharmacy and
health care services) (hereinafter 'Diagnostek'). From
September 1990 to April 1992, Mr. Keefe served as
President of HPI Health Care Services, Inc. (hereinafter
'HPI'), a subsidiary of Diagnostek that was acquired from
the Company in August 1989. From August 1984 to September
1990, he served as Executive Vice President of HPI.
SANDRA E. LANEY ........... Ms. Laney is Senior Vice President and Chief Administrative
Director since 1987 Officer of Chemed and has held these positions since
Age: 58. November 1993 and May 1991, respectively. From May 1984 to
November 1993, she was a Vice President of Chemed. Ms.
Laney is a director of Chemed.
ANDREA R. LINDELL, ........ Dr. Lindell is Dean and Professor in the College of Nursing
DNSC, RN at the University of Cincinnati, a position she has held
Director since 1992 since December 1990. Dr. Lindell is also Associate Senior
Age: 58 Vice President for Interdisciplinary Education Programs
for the Medical Center at the University of Cincinnati,
since July 1998. She also serves as Interim Dean of the
College of Allied Health Sciences at the University of
Cincinnati. From August 1981 to August 1990, Dr. Lindell
served as Dean and a Professor in the School of Nursing at
Oakland University, Rochester, Michigan.
SHELDON MARGEN, M.D. ..... Dr. Margen is a Professor Emeritus in the School of Public
Director since 1983 Health, University of California, Berkeley, a position he
Age: 82 has held since May 1989. He had served as a Professor of
Public Health at the University of California, Berkeley,
since 1979.
KEVIN J. MCNAMARA ......... Mr. McNamara is President and Chief Executive Officer of
Director since 1986 Chemed and has held these positions since August 1994 and
Age: 48 May 2001, respectively. From November 1993 to August 1994,
Mr. McNamara was Executive Vice President, Secretary and
General Counsel of Chemed. Previously, from May 1992 to
November 1993, he held the positions of Vice Chairman,
Secretary and General Counsel of Chemed. From August 1986
to May 1992, he served as Vice President, Secretary and
General Counsel of Chemed. He is a director of Chemed.
JOHN H. TIMONEY ........... Mr. Timoney is a retired executive of Applied Bioscience
Director since 2000 International Inc. (research organization serving the
Age: 68 pharmaceutical and biotechnology industries) ('Applied
Bioscience'), at which he held a number of positions from
1986 through 1996. From December 1995 through September
1996, he was Chief Executive Officer of Clinix
International, Inc., a wholly-owned subsidiary of Applied
Bioscience. From June 1992 to September 1996, Mr. Timoney
was Senior Vice President of Applied Bioscience. From
September 1986 through June 1992, he was Vice President,
Chief Financial Officer, Secretary and Treasurer of
Applied Bioscience. In addition, from September 1986
through June 1995 he was a director of Applied Bioscience.
Mr. Timoney has also held financial and executive
positions with IMS Health Incorporated (market research
firm serving the pharmaceutical and health care
industries), Chemed and Grace.
</Table>
3
<Page>
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors of the Company has a Compensation and Incentive
Committee, an Audit Committee, a Nominating Committee and an Executive
Committee.
The Compensation and Incentive Committee makes recommendations to the Board
of Directors concerning (a) salary and incentive compensation payable to
officers and certain other key employees of the Company, (b) establishment of
incentive compensation plans and programs generally, (c) additional year-end
contributions by the Company under the Company's Employees' Savings and
Investment Plan and (d) adoption and administration of certain employee benefit
plans and programs. In addition, the Compensation and Incentive Committee
administers the Company's stock-based incentive plans under which it makes
determinations concerning the grant of stock options and stock awards to key
employees of the Company. The Compensation and Incentive Committee consists of
Doctors Margen and Lindell and Mr. Erhart. The Compensation and Incentive
Committee met on six occasions during 2001.
The Audit Committee (a) recommends to the Board of Directors a firm of
independent accountants to audit the Company's consolidated financial
statements, (b) reviews and reports to the Board of Directors on the Company's
annual financial statements and the independent accountants' report on such
financial statements, (c) meets with the Company's senior financial officers,
internal auditors and independent accountants to review audit plans and other
matters regarding the Company's accounting, financial reporting and internal
control systems and (d) assists the Board of Directors in monitoring compliance
by the Company with legal and regulatory requirements. The Audit Committee
Charter, adopted by the Board and included as Appendix A to the Company's 2001
Proxy Statement, more specifically sets forth the duties and responsibilities of
the Audit Committee. The Audit Committee consists of Messrs. Erhart and Timoney,
Ms. Laney and Dr. Lindell. The Audit Committee met on six occasions during 2001.
The Nominating Committee (a) recommends to the Board of Directors the
candidates for election to the Board of Directors to fill newly created
directorships and to replace directors who are not standing for election at each
Annual Meeting of Stockholders of the Company, (b) recommends to the Board of
Directors candidates for election by the Board of Directors to fill director
vacancies and (c) considers director candidates submitted by directors, officers
and stockholders. The Nominating Committee consists of Messrs. Erhart and
Timoney and Dr. Margen. The Nominating Committee was established in March 2001
and held its first meeting in March 2002.
The Executive Committee is empowered to act for the full Board in intervals
between Board meetings, with the exception of certain matters that by law or the
Company's By-Laws may not be delegated. The Committee meets as necessary, and
all actions by the committee are reported at the next Board of Directors
meeting. The Executive Committee consists of Messrs. Erhart, Hutton, Gemunder
and Keefe. The Executive Committee met on four occasions during 2001.
During 2001, there were seven meetings of the Board of Directors and each
director attended at least 75% of the aggregate of (a) the total number of
meetings held by the Board of Directors during the period for which he or she
has been a director and (b) the total number of meetings held by all Committees
of the Board of Directors during the period for which he or she served.
REMUNERATION OF DIRECTORS
Each non-employee director is paid a $20,000 annual retainer fee (payable at
the director's election in cash or restricted stock). Each non-employee director
is also granted an annual restricted stock award having a value of $20,000. In
addition, non-employee directors who are the Chairman of one or more Committees
of the Board (except for the Executive Committee) receive an additional $15,000
retainer fee, and directors who are members of one or more Committees of the
Board, but not the Chairman of any, receive an additional $10,000 retainer fee
(in each case payable at the director's election in cash or restricted stock).
During 2001, each member of the Board of Directors was granted an annual
unrestricted stock award covering 400 shares of Common Stock. During 2001, Mr.
Erhart received an additional annual fee of $8,000. Such fee was paid in lieu of
stock options granted to directors in previous years. Mr. Erhart was a member of
the Compensation and Incentive Committee of either the Company or an affiliated
company on the dates of such grants and thus was ineligible to participate.
4
<Page>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation of
the Company's most highly compensated executive officers (the 'named
executives') for services to the Company and its subsidiaries during 2001, 2000
and 1999.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ------------------------
AWARDS
------------------------
# OF SHARES
RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS OTHER(1) STOCK(2) OPTIONS COMPENSATION
- --------------------------------- ---- ------ ----- -------- -------- ------- ------------
E.L. Hutton ..................... 2001 $389,958 $ 316,125 $38,038 $1,693,998 210,000 $1,154,575(3)
Chairman 2000 475,000 441,125 38,807 2,244,225 255,000 2,070,115
1999 448,333 541,125 42,208 1,882,660 630,000 2,454,476
J.F. Gemunder ................... 2001 950,000 1,289,216 68,828 3,629,998 395,366 80,617(4)
President and Chief Executive 2000 900,000 588,800 69,913 2,947,529 328,430 878,179
Officer 1999 816,667 580,978 63,755 2,310,000 1,400,000 97,218
P.E. Keefe ...................... 2001 325,000 274,012 12,960 1,001,009 105,000 30,443(4)
Executive Vice President -- 2000 287,500 173,913 13,129 861,129 100,000 178,452
Operations 1999 255,750 173,838 -- 703,000 182,000 36,741
D.W. Froesel, Jr. ............... 2001 310,000 283,092 7,485 858,002 105,000 69,799(4)
Senior Vice President and 2000 285,000 143,042 7,589 720,929 85,000 222,944
Chief Financial Officer 1999 251,667 143,002 -- 565,000 153,000 53,144
C.D. Hodges ..................... 2001 250,000 180,252 4,858 769,131 86,188 20,127(4)
Senior Vice President and 2000 226,000 85,222 4,928 657,114 70,674 272,641
Secretary 1999 208,083 85,200 -- 515,000 148,000 26,638
</Table>
- ---------
(1) These amounts represent payments made to the executive officer as required
to offset the tax liability associated with premiums paid by the Company on
behalf of the officer under split dollar life insurance policies.
(2) Under the Company's stock award program, restricted shares of Common Stock
were issued as incentive compensation to the named executives and other key
employees. Restricted shares vest generally in seven annual installments as
determined by the Compensation and Incentive Committee with a greater
proportion vesting in the latter years. If the recipient's employment
terminates due to death, disability, retirement under a retirement plan of
the Company, or change in control of the Company, the restrictions
terminate. Otherwise, in the event of termination of employment, unvested
shares are generally forfeited. Recipients receive dividends on the awarded
shares. Restricted stock awards were granted in February 2002 for 2001
services as incentive compensation. The numbers of restricted shares granted
in February 2002 to the named executives are as follows: Mr.
Hutton -- 79,981 shares; Mr. Gemunder -- 171,388 shares; Mr. Keefe -- 47,262
shares; Mr. Froesel -- 40,510 shares; and Ms. Hodges -- 36,314 shares. As of
December 31, 2001, the number and value of the aggregate restricted stock
holdings of the named executives were: Mr. Hutton -- 462,285 shares or
$11,501,651; Mr. Gemunder -- 639,766 shares or $15,917,378; Mr.
Keefe -- 192,962 shares or $4,800,895; Mr. Froesel -- 146,125 shares or
$3,635,590; and Ms. Hodges -- 144,562 shares or $3,596,703.
(3) Mr. Hutton does not participate in the Company's tax-qualified pension
plans. The amount represents a deferral under a deferred compensation
arrangement, which is designed to provide him retirement benefits comparable
to other executives. Such deferred amounts accrue interest at market rates
and are paid in future years.
(4) This amount includes the dollar value of shares of Common Stock allocated to
the named executives' accounts in the Company's Employee Stock Ownership
Plan (the 'ESOP') which are attributable to the Company's contributions to
the ESOP. Participants are entitled to receive the fully vested shares
allocated to their accounts upon death, disability, retirement or
termination of
(footnotes continued on next page)
5
<Page>
(footnotes continued from previous page)
employment. To the extent benefits under the ESOP are otherwise limited by
provisions of the Internal Revenue Code, the Company's Excess Benefits Plan
provides that the Company will provide from its general funds a benefit to
an employee equal to the benefit which would have been provided but for the
limitations of the Internal Revenue Code. The benefits shown include those
provided under the Excess Benefits Plan. For 2001, the numbers of shares
attributable to these plans and the dollar values thereof included in the
table for each named executive are as follows: Mr. Gemunder 2,435 shares or
$52,559; Mr. Keefe 699 shares or $15,247; Mr. Froesel 569 shares or $12,465;
and Ms. Hodges 464 shares or $10,344. This column also includes (a) life
insurance premiums paid by the Company (Mr. Gemunder -- $6,342; Mr.
Keefe -- $1,160; Mr. Froesel -- $1,167; and Ms. Hodges -- $891); (b) the
present value to the recipient of future benefits derived from premium
payments made by the Company for the benefit of the recipient under a split
dollar life insurance policy, which provides for the refund of premiums to
the Company upon termination of the policy (unrelated to term life insurance
coverage) (Mr. Gemunder -- $21,716; Mr. Keefe -- $14,036; Mr.
Froesel -- $12,538; and Ms. Hodges -- $8,892); and (c) as to Mr. Froesel,
also includes $43,629 which the Company credited to a deferred account
established for him in lieu of his participation in the Company's pension
plan.
STOCK OPTIONS
The following table sets forth information regarding stock options granted
to the named executives during 2001.
OPTION GRANTS IN 2001
<Table>
<Caption>
INDIVIDUAL GRANTS
------------------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES
SHARES GRANTED TO OF STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM ($)
OPTIONS IN FISCAL PRICE EXPIRATION ----------------------------
NAME GRANTED YEAR ($/SHARE) DATE 5% 10%
---- ------- ---- --------- ---- -- ---
E.L. Hutton................. 210,000(1) 11.9% $19.83 11/07/11 $2,618,906 $ 6,636,822
J.F. Gemunder............... 390,000(1) 22.2 19.83 11/07/11 4,863,682 12,325,526
1,366(2) 0.1 21.11 02/09/11 18,135 45,958
1,372(2) 0.1 20.97 05/10/11 18,094 45,853
1,174(2) 0.1 23.98 08/10/11 17,705 44,868
1,454(2) 0.1 19.74 11/05/11 18,051 45,744
P.E. Keefe.................. 105,000(1) 6.0 19.83 11/07/11 1,309,453 3,318,411
D.W. Froesel, Jr............ 105,000(1) 6.0 19.83 11/07/11 1,309,453 3,318,411
C.D. Hodges................. 85,000(1) 4.8 19.83 11/07/11 1,060,033 2,686,333
312(2) -- 21.11 02/09/11 4,142 10,497
300(2) -- 20.97 05/10/11 3,956 10,026
258(2) -- 23.98 08/10/11 3,891 9,860
318(2) -- 19.74 11/05/11 3,948 10,004
</Table>
- ---------
(1) All such options were granted on November 7, 2001, provide for the purchase
of shares of Common Stock at a price equal to the fair market value on the
date of grant, become exercisable in four equal annual installments
commencing one year from the date of grant, and expire 10 years after date
of grant unless previously exercised.
(2) Such options were granted on February 9, May 10, August 10 and November 5,
2001, respectively, and were granted in connection with the Company's
broad-based employee stock purchase program. These options provide for the
purchase of shares of Common Stock at a price equal to the fair market value
on the date of grant, become exercisable in full four years from the date of
grant (provided the optionee has held certain related shares of Common Stock
purchased under the program for a minimum of two years), and expire
10 years from the date of grant unless previously exercised.
6
<Page>
The following table sets forth information regarding stock options exercised
by the named executives during 2001 and the value of unexercised options held by
the named executives as of December 31, 2001.
AGGREGATED OPTION EXERCISES IN 2001 AND
FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END ($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ------------ ----------- ------------- ----------- -------------
E.L. Hutton.......... 346,250 $2,332,099 207,500 748,750 $ 0 $ 5,831,075
J.F. Gemunder........ 280,000 4,992,000 1,401,750 1,380,046 12,510,872 10,907,475
P.E. Keefe........... 135,500 1,336,226 163,250 285,250 682,203 2,102,594
D.W. Froesel, Jr..... 49,000 421,841 119,000 256,000 436,897 1,850,319
C.D. Hodges.......... 62,487 823,011 194,763 222,862 1,283,522 1,636,304
</Table>
PENSION PLAN
The Company has a pension plan in which the named executives, other than
Messrs. Hutton and Froesel, participate. Retirement benefits under the pension
plan are calculated on the basis of the executive's earnings during the highest
consecutive 60-month period during the executive's last 120 months of employment
('Final Average Compensation') and years of service. Benefits payable under the
pension plan are reduced for payments under a prior Company pension plan and are
partially reduced for social security benefits. The following table shows the
estimated maximum annual retirement benefits payable at normal retirement (age
65) under the pension plan at selected compensation levels after various years
of service. Amounts are shown on a 10-year certain and life form, after the
applicable reduction for social security benefits.
PENSION PLAN TABLE
<Table>
<Caption>
YEARS OF SERVICE(2)
FINAL AVERAGE ----------------------------------------------------------------------------------------
COMPENSATION(1) 15 20 25 30 35 40
--------------- -- -- -- -- -- --
$ 500,000............ $106,524 $ 142,032 $ 177,540 $ 213,048 $ 250,548 $ 288,048
600,000............ 129,024 172,032 215,040 258,048 303,048 348,048
700,000............ 151,524 202,032 252,540 303,048 355,548 408,048
800,000............ 174,024 232,032 290,040 348,048 408,048 468,048
900,000............ 196,524 262,032 327,540 393,048 460,548 528,048
1,000,000........... 219,024 292,032 365,040 438,048 513,048 588,048
1,300,000........... 286,524 382,032 477,540 573,048 670,548 768,048
1,600,000........... 354,024 472,032 590,040 708,048 828,048 948,048
1,900,000........... 421,524 562,032 702,540 843,048 985,548 1,128,048
2,200,000........... 489,024 652,032 815,040 978,048 1,143,048 1,308,048
2,500,000........... 556,524 742,032 927,540 1,113,048 1,300,548 1,488,048
2,800,000........... 624,024 832,032 1,040,040 1,248,048 1,458,048 1,668,048
3,100,000........... 691,524 922,032 1,152,540 1,383,048 1,615,548 1,848,048
3,400,000........... 759,024 1,012,032 1,265,040 1,518,048 1,773,048 2,028,048
3,700,000........... 826,524 1,102,032 1,377,540 1,653,048 1,930,548 2,208,048
</Table>
- ---------
(1) For purposes of the pension plan, such compensation generally includes base
salary and incentive compensation which for the named executives are set
forth in the 'Salary' and 'Bonus' columns of the Summary Compensation Table
as well as the value of stock awards vesting during the year. Covered
compensation for 2001 for Messrs. Gemunder and Keefe and Ms. Hodges was
$3,062,311, $968,789 and $702,577, respectively.
(2) As of December 31, 2001, Messrs. Gemunder and Keefe and Ms. Hodges had 38,
20 and 22 years of service, respectively.
7
<Page>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain of its
executive officers. Mr. Gemunder's employment agreement provides for his
continued employment as President of the Company through August 3, 2007, subject
to earlier termination under certain circumstances, at his base salary as last
set by the Board of Directors as well as participation in incentive compensation
plans, stock incentive plans and other employee benefit plans. The agreement
also provides for his continued nomination as a director of the Company. In the
event of termination without cause or a material reduction in authority or
responsibility, the agreement provides that Mr. Gemunder will receive severance
payments equal to 150% of his then-current base salary, the amount of incentive
compensation most recently paid or approved in respect of the previous year and
the fair market value of all stock awards which have vested during the 12 months
prior to termination ('Covered Compensation') for the balance of the term of the
agreement. The provisions of Ms. Hodges' employment agreement are essentially
identical to those of Mr. Gemunder, except that her agreement provides for her
nomination as a director, no less frequently than bi-annually. Mr. Keefe is
employed under an agreement that is also essentially identical to that of Mr.
Gemunder except that director nomination is not stipulated and severance
payments resulting from the conditions described above would equal 100% of
Covered Compensation. Mr. Froesel is employed under an agreement with a term
expiring on March 3, 2005, except that the agreement automatically renews at
that time for a three-year period unless advance notice of termination is given
by either party. In the event the Company were to terminate Mr. Froesel's
employment on account of a change of control of the Company, he would be
entitled to be paid his then-current base salary and cash bonus compensation for
the then remaining term of the agreement, plus an additional two-year period,
subject to certain limitations specified in the agreement.
REPORT OF THE COMPENSATION AND INCENTIVE
COMMITTEE ON EXECUTIVE COMPENSATION
The Company believes that executive compensation should be directly and
materially linked to the financial and operating performance of the Company and
increases in stockholder value. The Company's executive compensation program
combines base salary, annual incentive compensation, and long-term incentive
compensation in the form of stock options and restricted stock awards with
various benefit plans, including pension plans, savings plans and medical
benefits generally available to salaried employees of the Company.
The executive compensation program is administered through the Compensation
and Incentive Committee of the Board of Directors. The membership of the
Committee is comprised of outside directors (i.e., non-employees of the
Company). The Committee is responsible for the review, approval and
recommendation to the Board of Directors of matters concerning base salary and
annual cash incentive compensation for key executives of the Company, which
recommendations must be approved by the full Board of Directors. The Committee
also administers the Company's stock incentive plans under which it reviews and
makes grants of stock options and restricted stock awards. The Committee may
use, subject to the provisions of the Company's compensation plans, its
discretion to set executive compensation where, in its judgment, external,
internal or individual circumstances warrant.
BASE SALARY AND ANNUAL INCENTIVE OPPORTUNITY
In determining base salary levels, the Committee considers the executive's
responsibilities, experience, performance and specific issues particular to the
Company. The Committee also considers the compensation practices and
performances of other companies that are likely to compete with the Company for
executive talent. In general, base salaries are set at levels believed by the
Committee to be sufficient to attract and retain qualified executives when
considered with the other components of the Company's compensation program.
Annual incentive compensation provides a direct financial incentive to
executives, in the form of an annual bonus, to achieve their business unit's and
the Company's annual goals. The Committee believes that bonuses as a percent of
an executive's salary should be sufficiently high to provide a major incentive
for achieving annual performance targets.
At the beginning of each fiscal year, financial and operational goals are
established, which generally take into account such measures of performance as
sales and earnings growth, profitability, cash flow and return on investment.
Non-financial measures of performance used by the Committee in
8
<Page>
determining the annual cash bonus award include organizational development,
product or service expansion and strategic positioning of the Company's assets.
Specific relative weights are not assigned to each performance factor, since the
relative importance of each factor varies depending upon the executive's
specific job responsibilities. Instead, each individual compensation decision is
made on a case-by-case basis and will ultimately depend upon the judgment of the
Committee. However, when fixing the annual bonus of the executive officers
listed in the Summary Compensation Table (the 'named executives'), the Committee
acts within the parameters provided for in the Annual Incentive Plan for Senior
Executives, approved by stockholders on May 20, 1996 and re-approved on May 21,
2001. Under that plan, the amount of the annual cash bonus for 2001 was
dependent on the level of the Company's pretax income, before adjustments for
the cumulative effect of accounting changes, acquisition expenses related to
pooling-of-interests transactions and special charges, reaching certain target
levels established at the beginning of the year.
LONG-TERM INCENTIVE COMPENSATION
The stock option and restricted stock program forms the basis of the
Company's long-term incentive plan for executives. This program seeks to align
executive and long-term stockholder interests by creating a strong and direct
link between executive compensation and stockholder return.
Stock options and restricted stock awards are granted annually and are
generally the primary incentive for long-term performance as they are granted at
or above fair market value and have vesting restrictions which generally lapse
over four to seven-year periods. The Committee considers each grantee's current
stock option and award holdings in making such grants. Both the amounts of
restricted stock awards and the proportion of stock options increase as a
function of higher salary and position of responsibility within the Company.
For the named executives, the restricted share awards for 2001 under the
1992 Long-Term Stock Incentive Plan were dependent upon the growth of the
Company's earnings per share, before the cumulative effect of accounting
changes, acquisition expenses and non-recurring charges, for fiscal year 2001
meeting certain thresholds established at the beginning of the year.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) limits to $1,000,000 the amount that may be deducted by a
publicly held company for compensation paid each year to each of its five most
highly paid executive officers. Federal law excludes compensation from the
$1,000,000 limit if it is paid under specified conditions, including that the
compensation is based on performance goals determined by a committee of
'outside' directors and approved by the Company's stockholders. The Annual
Incentive Plan for Senior Executive Officers, approved by stockholders on May
20, 1996 (and re-approved on May 21, 2001), and amendments to the 1992 Long-Term
Stock Incentive Plan, approved by stockholders on May 19, 1997 (such amendments
are being submitted for re-approval this year; see 'Re-approval of Amendments to
1992 Plan' herein), brought the plans into compliance with Section 162(m)
relating to performance-based compensation. The Committee's present intention is
to comply in the future with Section 162(m) unless the Committee believes that
such compliance would not be in the best interests of the Company and its
stockholders.
STOCK OWNERSHIP GUIDELINES
Historically, the Company has encouraged the ownership of Company stock in a
number of ways. For example, a broad group of employees, including all members
of senior management, are paid a significant portion of their annual incentive
compensation in the form of restricted stock. In addition, periodic stock option
grants are made to key employees, including senior management. Non-employee
directors of the Company are paid 50 percent of their annual retainer fees in
the form of restricted stock with the option to receive all of such fees in such
stock, and all directors receive annual unrestricted stock awards. All employees
of the Company are provided the opportunity to own Company stock through various
benefit programs such as the Company's 401(k) Plan and the Omnicare StockPlus
Program, a broad-based employee stock purchase and stock option program.
In order to further encourage executive stock ownership, the Company adopted
stock ownership guidelines in February 2002 to encourage each executive to
achieve and maintain an appropriate ownership stake in the Company. The
ownership levels are based on a multiple of base salary, ranging from a goal of
five times base salary for the President and Chief Executive Officer and from
one to three and one-half times for other corporate officers. Mr. Gemunder has
met the established guidelines.
9
<Page>
Until an executive has reached his or her target ownership, he or she will be
required to hold one-half of the after-tax number of shares acquired by the
executive upon the exercise of stock options or the vesting of restricted stock
awards.
COMPENSATION OF THE COMPANY'S PRESIDENT AND CHIEF EXECUTIVE OFFICER
In determining Mr. Gemunder's overall compensation and each component
thereof, the Committee took into consideration the report of The Hay Group,
independent professional compensation consultants, and the financial measures
cited above. Mr. Gemunder's salary was increased to $950,000 on July 1, 2000
from the $850,000 that had been his base salary since May 1, 1999. This increase
was based on a survey performed by The Hay Group. No adjustment was made to his
salary in 2001.
In determining incentive compensation for the Company's executives,
including Mr. Gemunder, the Committee reviewed the reports and recommendations
of The Hay Group as well as the Company's performance particularly in view of
the challenging business environment in 2001. The Company experienced strong
earnings growth in 2001, the product of solid sales growth leveraged by the cost
reduction and productivity enhancement initiatives implemented during the
1999-2000 period. Sales rose 9.5% to $2.2 billion and pretax income (excluding
restructuring and other special charges) increased 36% to $142.9 million.
Additionally, the Company continued to enhance its cash flow and maintained a
healthy balance sheet in 2001. Cash flow from operations reached a record $183
million (excluding fourth quarter purchases of pharmaceuticals in advance of
price increases), up 38% versus 2000. Based on the strength of its cash flow, in
2001 the Company was able to pay down $40 million of bank debt and successfully
refinance its credit facilities, extending the maturity of its debt and
increasing borrowing capacity. In determining Mr. Gemunder's compensation, the
Committee also considered the Company's performance versus its competitors, the
fact that stock-based awards in particular should provide substantial incentive
to Mr. Gemunder to achieve the long-term goals of the Company, and the advice of
its consultants. The Hay Group had concluded that Mr. Gemunder's overall
compensation in 2001 was representative of the Company's current marketplace,
strong financial performance and position, and operating environment.
Annual performance not only drives the payout of the Annual Incentive Plan
but it also is used in determining the size of the long-term incentive grant of
restricted stock awards. Acknowledging the success the Company had achieved in
2001 over the financial results for 2000, the Committee recommended an overall
increase in incentive compensation versus the prior year. The Committee noted
that there has been a significant diminution in incentive compensation over the
past several years as management dealt with difficult market conditions. The
Committee noted that Mr. Gemunder's base cash bonus had declined since 1997 and
that the amount he received in respect of his services for 2000 was 44.4% less
than the amount he received for 1997 services. Accordingly, the Committee
recommended that the cash portion of incentive compensation be increased over
the prior year, while still placing a significant portion of overall incentive
compensation in stock-based incentives. The Committee awarded Mr. Gemunder a
base cash bonus of $1,200,000 for 2001; and, the Committee granted Mr. Gemunder
171,388 shares of restricted stock for 2001. Such shares vest over a seven-year
period with a greater proportion vesting in the latter years. In addition, in
2001, as long-term compensation, Mr. Gemunder was granted options to purchase
390,000 shares of Common Stock at option prices equal to the fair market value
at the date of grant.
The Committee believes that it is key to the Company's success that it
primarily motivate and reward Mr. Gemunder for increasing top and bottom line
results and for implementing a financial and business strategy that will promote
growth and enhance stockholder value. Accordingly, the Committee believes that
in granting 2001 incentive compensation it has put in place substantial
incentives that most directly align the interest of management with those of the
stockholders.
Compensation and Incentive Committee:
Sheldon Margen, M.D., Chairman
Andrea R. Lindell, DNSc, RN
Charles H. Erhart, Jr.
COMPENSATION AND INCENTIVE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. E.L. Hutton and Gemunder, executive officers of the Company, are
directors of Chemed. In addition, Mr. Erhart, a member of the Compensation and
Incentive Committee, is a director of Chemed.
10
<Page>
CERTAIN TRANSACTIONS
The Company subleases offices from Chemed and is charged for consulting
services pertaining to information systems development, the occasional use of
Chemed's corporate aviation department, rent and other incidental expenses based
on Chemed's cost. The Company reimburses Chemed for all such services at rates
that are essentially equal to those which would have been incurred if the
Company had obtained such services from other parties. During 2001, such
reimbursements totaled $1.0 million.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total return for the last five
years on a $100 investment on December 31, 1996 in each of the Company's Common
Stock, the Standard & Poor's 500 Stock Index and the OCR Peer Group Index.
CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDED DECEMBER 31, 2001
[GRAPH]
<Table>
<Caption>
DECEMBER 31,
------------------------------------------------------
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Omnicare, Inc. .......................... $100 $ 96.74 $108.71 $ 37.76 $ 68.51 $ 79.15
S&P 500.................................. 100 133.36 171.48 207.56 188.66 166.24
OCR Peer Group........................... 100 124.73 102.66 45.07 62.55 75.54
</Table>
The OCR Peer Group Index includes the following companies: Alterra
Healthcare Corp., Beverly Enterprises Inc., Genesis Health Ventures Inc., Manor
Care Inc., NCS Healthcare Inc., Parexel International Corp., Pharmaceutical
Product Development Inc., PSS World Medical Inc., and Sunrise Assisted Living
Inc. In constructing the OCR Peer Group Index for 2001, the Company has
eliminated Bergen Brunswig Corp. because that company ceased to trade publicly
during 2001 as a result of its merger with AmeriSource Health Corporation. The
total return calculations reflected in the foregoing graph were performed by
Standard & Poor's Compustat Services, Inc.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 2001, with
respect to the only person known to the Company to beneficially own more than 5%
of the shares of its Common Stock:
<Table>
<Caption>
NUMBER OF SHARES
NAME AND AND NATURE
ADDRESS OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(A) CLASS(A)
---------------- ------------ --------
T. Rowe Price Associates, Inc. ............................ 11,992,012(b) 12.8%
100 E. Pratt Street
Baltimore, MD 21202
</Table>
(footnotes on next page)
11
<Page>
(footnotes from previous page)
(a) Under applicable Securities and Exchange Commission regulations, shares are
treated as 'beneficially owned' if a person has or shares voting or
dispositive power with respect to the shares or has a right to acquire the
shares within 60 days of December 31, 2001. Unless otherwise indicated,
sole voting power and sole dispositive power are exercised by the named
person. In calculating 'Percent of Class' for a person, shares which may be
acquired by the person within such 60-day period are treated as owned by
the person and as outstanding shares.
(b) T. Rowe Price Associates, Inc. ('Price Associates') is an investment
adviser that has sole dispositive power with respect to 11,891,000 of the
listed shares and sole voting power with respect to 1,941,912 of the shares
and neither shared voting nor shared dispositive power with respect to any
of the shares. These securities are owned by various individual and
institutional investors including T. Rowe Price Mid-Cap Growth Fund, Inc.
(which owns 4,900,000 shares, representing 5.2% of the shares outstanding),
for which Price Associates serves as investment adviser with power to
direct investments and/or sole power to vote the securities. For purposes
of the reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
-------------------
The following table sets forth information as of March 25, 2002, with
respect to the shares of Common Stock beneficially owned by each of the nominees
and directors, each of the named executives, and all directors and executive
officers of the Company as a group:
<Table>
<Caption>
NUMBER OF SHARES
AND NATURE OF PERCENT OF
INDIVIDUAL OR GROUP OWNERSHIP CLASS(A)(B)
------------------- --------- -----------
E.L. Hutton................................................. 546,737(c)
271,250(d)
4,408(e)
J.F. Gemunder............................................... 1,172,611(c) 2.8%
1,483,000(d)
14,963(f)
T.E. Bien................................................... 157,562(c)
69,000(d)
C.H. Erhart, Jr. ........................................... 29,007(c)
D.W. Froesel, Jr. .......................................... 201,813(c)
140,250(d)
C.D. Hodges................................................. 288,325(c)
212,263(d)
P.E. Keefe.................................................. 269,343(c)
188,250(d)
S.E. Laney.................................................. 72,540(c)
67,210(d)
A.R. Lindell, DNSc, RN...................................... 4,632(c)
S. Margen, M.D. ............................................ 22,499(c)
K.J. McNamara............................................... 11,754(c)
J.H. Timoney................................................ 9,342(c)
All directors, nominees, and executive officers as a group 2,794,956(c) 5.4%
(13 persons).............................................. 2,453,473(d)
4,408(e)
14,963(f)
</Table>
- ---------
(a) Under applicable Securities and Exchange Commission regulations, shares are
treated as 'beneficially owned' if a person has or shares voting or
dispositive power with respect to those shares or has a right to acquire
the shares within 60 days of March 25, 2002. Unless otherwise indicated,
sole voting power and sole dispositive power are exercised by the named
person. In calculating 'Percent of Class' for a person, shares which may be
acquired within such 60-day period are treated as owned by the person and
as outstanding shares.
(footnotes continued on next page)
12
<Page>
(footnotes continued from previous page)
(b) Percent of Class is not shown if less than 1%.
(c) Shares held in individual capacity (or together with a member of his or her
household) as to which such person has voting and dispositive powers (and
includes shares allocated as of December 31, 2001, to the account of each
named person or member of the group under the Company's Employees' Savings
and Investment Plan and its Employee Stock Ownership Plan).
(d) Shares subject to outstanding options exercisable within 60 days from March
25, 2002.
(e) Mr. E.L. Hutton is a trustee of the E.L. Hutton Foundation, which holds
4,408 shares of Common Stock over which he holds both voting and
dispositive powers.
(f) Mr. Gemunder is a trustee of the Joel F. Gemunder Foundation, which holds
14,963 shares of Common Stock over which he holds both voting and
dispositive powers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
persons deemed to be executive officers of the Company, directors of the
Company, and beneficial owners of more than 10% of the Common Stock are required
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. The Company believes that during 2001 all such persons complied
with these filing requirements. In making these statements, the Company has
relied upon the facts of which it is specifically aware and, in the case of its
directors and officers, upon their written representations.
RE-APPROVAL OF AMENDMENTS TO 1992 PLAN
The Board of Directors of the Company normally seeks to implement
compensation programs in a manner which maximizes the deductibility for federal
income taxes of compensation paid by the Company. Accordingly, in 1997 the Board
and stockholders approved certain amendments to the 1992 Long-Term Stock
Incentive Plan (the 'Plan'). The amendments were intended to ensure that awards
under the Plan to executives listed in the Summary Compensation Table ('Named
Officers') would be tax deductible as 'performance-based compensation' under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the 'Code').
For stock awards to the Named Officers to qualify as performance-based
compensation under the Code, the issuance or retention of the award must be
contingent on the achievement of certain performance objectives. In addition,
the Code requires that the performance objectives previously added to the Plan
by amendment (the 'Amendments') be approved by stockholders every five years. At
the meeting, stockholders are being asked to re-approve the performance
objectives applicable to stock awards which were set forth in the Amendments
which were originally adopted in 1997. No changes are being made in the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RE-APPROVAL OF THE
PERFORMANCE OBJECTIVES CONTAINED IN THE PLAN BY ADOPTING THE FOLLOWING
RESOLUTION:
RESOLVED, that the 'Performance Objectives' at Section 2 of the 1992
Long-Term Stock Incentive Plan be, and the same are hereby, approved.
Adoption of the resolution requires the affirmative vote of the holders of a
majority of the shares of Common Stock represented in person or by proxy and
entitled to vote at the meeting.
A copy of the Plan is included as Appendix A to this proxy statement. The
performance objectives contained in the Plan are discussed in the following
section.
EXPLANATION OF PERFORMANCE-BASED STOCK AWARDS AND PERFORMANCE OBJECTIVES
Under Section 162(m) of the Code, the amount which the Company may deduct on
its tax returns for compensation paid to Named Officers in any taxable year is
generally limited to $1 million per individual. However, compensation that
qualifies as 'performance-based compensation' is not subject to the $1 million
deduction limit. In order for compensation to qualify as 'performance-based' for
this
13
<Page>
purpose, it must meet certain conditions, one of which is that the material
terms of the performance goals under which the compensation is to be paid must
be disclosed to and approved by stockholders, and thereafter approved every five
years that the Plan continues in effect.
The Compensation and Incentive Committee of the Board may make stock awards
under the Plan to key employees. When stock awards are made to persons who are
executive officers of the Company and whose annual incentive compensation for
any taxable year of the Company may not be deductible by the Company in whole or
in part unless the incentive compensation qualifies as 'performance-based' under
Section 162(m), the Committee will normally grant the stock award in a manner
which would qualify it as 'performance-based' compensation. Based on this
standard, six persons, including the Named Officers, received
'performance-based' stock awards with respect to fiscal 2001.
Under the Plan, the Committee determines the amount of the compensation
subject to their award, selects the performance criteria and the performance
goals for each year, and administers and interprets the Plan. No later than 90
days after the commencement of each year, the Committee will select the persons
who will participate in the Plan in such year and establish in writing the
performance goals for that year as well as the amount of the award which each
such participant will receive in shares if such performance goals are attained
in whole or in part. The performance criteria will be stated in terms of an
objective formula or standard that precludes discretion to increase the amount
that will be due upon attainment of the goals. The maximum amount of
compensation that may be paid under the Plan as stock awards to any participant
for any year is 500,000 shares of Common Stock (or the equivalent amount of
cash). The Committee retains discretion to reduce an award at any time before it
is paid.
The performance objectives on which the issuance or retention of shares
under stock awards may be made contingent by the Committee may be based on the
fair market value or book value of Common Stock or on any of the following other
business criteria, on either a consolidated or business unit or divisional
level, as the Committee may determine: level of sales, earnings per share,
income before income taxes and the cumulative effect of accounting changes,
income before the cumulative effect of accounting changes, net income, net
worth, return on total assets, return on net assets, return on equity, return on
capital employed, total stockholder return, market valuation, and completion of
acquisitions.
The foregoing terms shall have any reasonable definitions that the Committee
may specify, which may include or exclude any or all of the following items, as
the Committee may specify: discontinued operations; extraordinary, unusual or
non-recurring items; effects of accounting changes; effects of currency
fluctuations; effects of financing activities (e.g., effect on earnings per
share of issuing convertible debt securities); changes in the statutory
corporate Federal, state and local tax rates; expenses for restructuring or
productivity initiatives; non-operating items; acquisition expenses; and effects
of divestitures.
The performance objectives that were established by the Committee for 2001
were based on consolidated income before income taxes, the cumulative effect of
accounting changes, acquisition expenses and non-recurring charges.
Awards may be paid under the Plan for any year only if and to the extent the
stock awards are earned on account of the attainment of the performance goals
applicable to such year and the participant is continuously employed throughout
such year. Unless the Committee provides otherwise, all payments pursuant to the
Plan are to be made in stock when the Committee certifies that the performance
goals for the year have been satisfied.
14
<Page>
For services in 2001, the Company issued the following shares to Named
Officers as stock awards under the Plan. These shares were issued as restricted
shares which vest over seven years with a greater portion vesting in the latter
years.
<Table>
<Caption>
NUMBER
OF SHARES
---------
E.L. Hutton................................................. 79,981
J.F. Gemunder............................................... 171,388
P.E. Keefe.................................................. 47,262
D.W. Froesel, Jr. .......................................... 40,510
C.D. Hodges................................................. 36,314
All executive officers a group.............................. 401,968
</Table>
Payment of 'performance-based' stock awards under the Plan relating to
services to be performed in calendar year 2002 and future years is contingent on
stockholder re-approval of the performance objectives contained in the Plan. If
such approval is not obtained, no such awards will be paid, although other
incentive awards may be paid at the discretion of the Committee.
SUMMARY OF THE GENERAL PROVISIONS OF THE PLAN
Eligibility: The persons who are eligible to be selected to participate in
the Plan are employees of the Company or a subsidiary who, in the opinion of the
Committee, can contribute significantly to the growth and successful operations
of the Company or a subsidiary. It is estimated that approximately 200 persons
are eligible to be selected to participate.
Administration: The Plan is administered by a Committee consisting of at
least three directors designated by the Board of Directors of the Company.
Committee members must be outside directors within the meaning of Section
162(m). The Committee selects participants from among those persons eligible,
determines the type, size and time of grant of stock incentive awards,
determines the terms and conditions of awards, subject to the terms and
conditions of the Plan, and makes all other determinations necessary or
advisable for the administration of the Plan.
Limitation on Available Shares: The number of shares of Common Stock that
may be subject to stock incentives granted under the Plan may not on any given
date exceed that number of shares equal to (i) 5% of the Company's issued and
outstanding Common Stock as of the preceding December 31 reduced by (ii) the
total number of stock incentives granted under the Plan at any time during the
then-current calendar year and during the immediately preceding two calendar
years (the 'Granting Period') increased by (iii) the total number of shares
covered by previously granted stock incentives forfeited during the Granting
Period.
Types of Awards: Stock incentives which may be issued under the Plan consist
of stock options, SARs, stock awards or any combination of the foregoing.
Stock Awards: Described above.
Stock Options: A stock incentive in the form of a stock option provides
for the purchase of shares of Common Stock in the future at an option price
per share which may not be less than 100% of the fair market value of the
shares covered thereby on the date the stock option is granted. Options may
be granted for such lawful consideration as the Committee may determine.
Each option shall be exercisable in full or in part six months after the
date the option is granted, or may become exercisable in one or more
installments and at such later time or times, as the Committee shall
determine. All stock options granted under the Plan expire within 11 years
from the date of grant (or 10 years, in the case of incentive options).
Stock Appreciation Rights: A SAR entitles the holder to receive from the
Company cash, shares of Common Stock, or a combination of cash and such
shares having an aggregate value equal to the excess of the fair market
value of one share of Common Stock on the date of exercise of the SAR over
the fair market value of one such share on the date of grant of the SAR.
Each SAR shall be exercisable in full or in part six months after the date
it is granted, or may become
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exercisable in one or more installments and at such later time or times, as
the Committee specifies. All SARs that may be granted under the Plan expire
within 10 years from the date of grant.
Change of Control: Notwithstanding any vesting schedule or other limitation
contained in any stock incentives granted under the Plan, if a change of control
of the Company occurs, any outstanding stock incentives under the Plan will
immediately vest or immediately become exercisable in full without regard to
such vesting schedules or other limitations. A change of control is defined to
have occurred if (i) any person (individual, entity or group) becomes the
beneficial owner of securities of the Company representing 15% or more of the
combined voting power of the Company's then-outstanding securities; (ii) there
is a merger or consolidation involving the Company and stockholders of the
Company immediately before the effective date of the transaction own less than
50% of the surviving entity in the transaction; (iii) 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 (iv) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to constitute at least a
majority of the Board of Directors, unless the nomination for the election by
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.
Plan Amendments: The Board of Directors, upon recommendation of the
Committee, may amend the Plan, subject to stockholder approval in the case of
specified amendments. The Plan may be discontinued at any time by the Board of
Directors.
Term of the Plan: The Plan shall remain in effect until such time as it is
terminated by the Board of Directors of the Company.
Certain Federal Income Tax Consequences Applicable to Stock Awards: An
employee who receives cash or shares of Common Stock pursuant to a stock award
will generally recognize ordinary income equal to the sum of the cash and the
fair market value of the shares received, and the Company will generally be
entitled to a corresponding deduction from its income. However, an employee who
pursuant to a stock award receives Common Stock that is restricted as to
transferability and subject to a substantial risk of forfeiture, will not
recognize taxable income at the time the stock is issued unless the employee
makes a special election in accordance with applicable Treasury regulations to
be taxed (at ordinary income rates) on the fair market value of the shares at
that time (with fair market value determined for this purpose without regard to
any restrictions other than restrictions, if any, which by their terms will
never lapse), in which case the Company would be entitled to a deduction at the
same time equal to the amount of income realized by the employee but would not
be entitled to deduct any dividends thereafter paid on the shares. Absent such
an election, an employee who has been awarded such restricted stock will not
recognize taxable income until the shares become transferable or cease to be
subject to a substantial risk of forfeiture, at which time the recipient will
recognize ordinary income and the Company will be entitled to a corresponding
deduction equal to the excess of the fair market value of the shares at that
time over the amount (if any) paid by the recipient for the shares. Dividends
paid to the recipient on the restricted shares prior to that time will be
ordinary compensation income to the recipient and deductible by the Company.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD
The Audit Committee is comprised of four members of the Company's Board of
Directors. Each member of the Audit Committee is independent as 'independence'
is defined at Sections 303.01(B)(2)(a) and (B)(3) of the New York Stock
Exchange's listing standards. The duties and responsibilities of the Audit
Committee are set forth in the Audit Committee Charter, which the Board of
Directors adopted on May 15, 2000. The Audit Committee, among other things,
recommends to the Board of Directors (i) that the audited financial statements
be included in the Company's Annual Report on Form 10-K and (ii) the selection
of the independent accountants' to audit the books and records of the Company.
The Audit Committee has (i) reviewed and discussed the Company's audited
financial statements for the year ended December 31, 2001 with the Company's
management and with the Company's independent auditors; (ii) discussed with the
Company's independent auditors the matters required to
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be discussed by SAS 61 (Codification for Statements on Auditing Standards); and
(iii) received and discussed the written disclosures and the letter from the
Company's independent auditors required by Independence Standards Board
Statement No. 1 (Independence discussions with Audit Committees). Based on such
review and discussions with management and the independent auditors, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001 for filing with the U.S. Securities and Exchange
Commission.
The Audit Committee:
Charles H. Erhart, Jr.
Sandra E. Laney
Andrea R. Lindell, DNSc, RN
John H. Timoney
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as independent accountants for the Company and its consolidated subsidiaries for
the year 2002. The Board engaged PricewaterhouseCoopers LLP to audit Omnicare's
consolidated financial statements and to perform certain other non-audit
services.
Audit Fees. The aggregate fees billed by PricewaterhouseCoopers LLP for
professional services required for the audit of the Company's audited
consolidated financial statements for fiscal 2001 and the reviews of the interim
consolidated financial statements included in the Company's Forms 10-Q for that
year were approximately $0.7 million.
All Other Fees. The aggregate fees billed for additional services rendered
by PricewaterhouseCoopers LLP in fiscal 2001, other than the services described
above, were approximately $1.8 million (none of which was for financial
information systems design or implementation), primarily for the following
professional services (in millions):
<Table>
Audit-related services(a)................................... $1.6
Other(b).................................................... $0.2
</Table>
- ---------
(a) Audit-related fees include fees for issuance of consents and comfort
letters in connection with SEC filings, audits of the Company's employee
benefit plans, agreed-upon procedures for deferred payments related to
acquisitions and financial due diligence.
(b) Other fees include services provided by PricewaterhouseCoopers LLP's
Transaction Services group.
-------------------
In engaging PricewaterhouseCoopers LLP for these additional services,
management considered whether the provision of these services was compatible
with maintaining PricewaterhouseCoopers' independence.
PricewaterhouseCoopers LLP (and its predecessor) has acted as independent
accountants for the Company and its consolidated subsidiaries since 1981.
Although the submission of this matter to the stockholders is not required by
law or the By-Laws of the Company, the selection of PricewaterhouseCoopers LLP
will be submitted for ratification at the Annual Meeting. The affirmative vote
of a majority of the shares represented at the meeting is necessary to ratify
the selection of PricewaterhouseCoopers LLP. If the selection is not ratified at
the meeting, the Board of Directors will reconsider its selection of independent
accountants.
It is expected that a representative of PricewaterhouseCoopers LLP will be
present at the Annual Meeting. Such representative will have the opportunity to
make a statement if he or she desires to do so and will be available to respond
to questions raised at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
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STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be considered for inclusion in the
proxy materials for presentation at the 2003 Annual Meeting of Stockholders must
be in writing and received by the Secretary of the Company not later than
December 11, 2002. If any stockholder who intends to propose any other matter to
be acted on at the 2003 Annual Meeting of Stockholders does not inform the
Company of such matter by February 24, 2003, the persons named as proxies for
the 2003 Annual Meeting of Stockholders will be permitted to exercise
discretionary authority to vote on such matter even if the matter is not
discussed in the proxy statement for that meeting.
OTHER MATTERS
As of February 24, 2002, the Company did not know of any other matter, which
will be presented for consideration at the Annual Meeting. However, if any other
matter should come before the meeting, the persons named in the enclosed proxy
(or their substitutes) will have discretionary authority to vote on the matter.
EXPENSES OF SOLICITATION
The expense of soliciting proxies in the accompanying form will be borne by
the Company. The Company will request banks, brokers and other persons holding
shares beneficially owned by others to send proxy materials to the beneficial
owners and to secure their voting instructions, if any. The Company will
reimburse such persons for their expenses in so doing. In addition to
solicitation by mail, officers and regular employees of the Company may, without
extra remuneration, solicit proxies personally, by telephone or by telegram from
some stockholders, if such proxies are not promptly received. The Company also
expects to retain D. F. King & Co., Inc., a proxy-soliciting firm, to assist in
the solicitation of such proxies at a cost that will not exceed $7,500 plus
reasonable expenses.
By Order of the Board of Directors
Cheryl D. Hodges
Secretary
April 10, 2002
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APPENDIX A
OMNICARE, INC.
1992 LONG-TERM STOCK INCENTIVE PLAN
1. PURPOSES: The purposes of this Plan are (a) to secure for the Company the
benefits of incentives inherent in ownership of Common Stock by Key Employees,
(b) to encourage Key Employees to increase their interest in the future growth
and prosperity of the Company and to stimulate and sustain constructive and
imaginative thinking by Key Employees, (c) to further the identity of interest
of those who hold positions of major responsibility in the Company and its
Subsidiaries with the interests of the Company's stockholders, (d) to induce the
employment or continued employment of Key Employees and (e) to enable the
Company to compete with other organizations offering similar or other incentives
in obtaining and retaining the services of competent executives.
2. DEFINITIONS: Unless otherwise required by the context, the following
terms when used in this Plan shall have the meanings set forth in this section
2.
Board of Directors: The Board of Directors of the Company.
Change of Control: The occurrence of one of the following events: (i) any
Person becomes a beneficial owner, directly or indirectly, of securities of the
Company representing 15% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) 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; (iii)
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 (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute at
least a majority of the Board of Directors, unless the nomination for the
election by 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.
For purposes of this definition, a 'Person' shall mean any individual, firm,
company, partnership, other entity or group, but excluding the Company, its
affiliates, any employee benefit plan maintained by the Company, or an
underwriter temporarily holding securities pursuant to an offering of such
securities.
For purposes of this definition, a Person shall be deemed the 'beneficial
owner' of any securities (i) which such Person or any of its Affiliates or
Associates beneficially owns, directly or indirectly; or (ii) which such Person
or any of its Affiliates or Associates, has directly or indirectly, (1) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or options, or
otherwise, or (2) the right to vote pursuant to any agreement, arrangement or
understanding; or (iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any securities.
For purposes of this definition, the terms 'Affiliate' or 'Associate' shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as in effect on May 17, 1999.
Code: The Internal Revenue Code of 1986, as amended and from time to time in
effect. References in the Plan to any section of the Code also shall be deemed
to refer to any related Treasury regulations, whether proposed, temporary or
final.
Common Stock: The Common Stock of the Company, par value $1.00 per share.
Company: Omnicare, Inc., a Delaware corporation.
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Fair Market Value: As applied to any date, the mean between the high and low
sales prices of a share of Common Stock on the principal stock exchange on which
the Common Stock is listed, or, if it is not so listed, the mean between the bid
and the ask prices of a share of Common Stock in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System on such date or if no such sales or prices were made or quoted on such
date, on the next preceding date on which there were sales or quotes of Common
Stock on such exchange or market, as the case may be; provided, however, that,
if the Common Stock is not so listed or quoted, Fair Market Value shall be
determined in accordance with the method approved by the Board of Directors,
and, provided further, if any of the foregoing methods of determining Fair
Market Value shall not be consistent with the regulations of the Secretary of
the Treasury or his delegate at the time applicable to a Stock Incentive of the
type involved, Fair Market Value in the case of such Stock Incentive shall be
determined in accordance with such regulations and shall mean the value as so
determined.
Incentive Committee: The Incentive Committee designated to administer this
Plan pursuant to the provisions of section 12.
Incentive Compensation: Bonuses, extra and other compensation payable in
addition to a salary or other base amount, whether contingent or discretionary
or required to be paid pursuant to an agreement, resolution or arrangement, and
whether payable currently, or on a deferred basis, in cash, Common Stock or
other property, awarded by the Company or a Subsidiary prior or subsequent to
the date of the approval and adoption of this Plan by the stockholders of the
Company (including, without limitation, incentive compensation awarded under
section 8.05 or any successor provision of the By-Laws of the Company).
Incentive Option: An option granted under this Plan which is designated to
be an incentive stock option under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended; and any provisions elsewhere in this Plan or
in any such Incentive Option which would prevent such option from being an
incentive stock option may be deleted and/or voided retroactively to the date of
the granting of such option, by action of the Incentive Committee.
Key Employee: An employee of the Company or of a Subsidiary who in the
opinion of the Incentive Committee can contribute significantly to the growth
and successful operations of the Company or a Subsidiary. The recommendation of
the grant of a Stock Incentive to an employee by the Incentive Committee shall
be deemed a determination by the Incentive Committee that such employee is a Key
Employee. For the purposes of this Plan, a director or officer of the Company or
of a Subsidiary shall be deemed an employee regardless of whether or not such
director or officer is on the payroll of, or is otherwise paid for services by,
the Company or a Subsidiary.
Nonqualified Option: An option granted under this Plan which is not an
incentive stock option under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended; and which is exercisable even though there is
outstanding an Incentive Option which was granted before the granting of the
Non-Qualified Option to the same participant. Such Non-Qualified Option shall
not be affected by any actions taken retroactively as provided above with
respect to Incentive Options.
Option: An option to purchase shares of Common Stock.
Performance Objectives: Stated criteria which may, but need not be, set
forth in a Stock Incentive at the discretion of the Incentive Committee, the
successful attainment of which is specified in the Stock Incentive as a
condition precedent to the issuance, transfer or retention of some or all of the
shares of Common Stock covered by the Stock Incentive. Performance Objectives
shall be based on (a) the Fair Market Value or book value of Common Stock, (b)
any of the following, on either a consolidated or business unit or divisional
level, as the Incentive Committee may determine: level of sales, earnings per
share, income before income taxes and cumulative effect of accounting changes,
income before cumulative effect of accounting changes, net income, net worth,
return on total assets, return on net assets, return on equity, return on
capital employed, total stockholder return, market valuation, and completion of
acquisitions, or (c) a combination of any two or more of the business criteria
set forth in (a) and/or (b). The foregoing business criteria shall have any
reasonable definitions that the Incentive Committee may specify, which may
include or exclude any or all of the following items, as the Incentive Committee
may specify: discontinued operations; extraordinary, unusual or non-recurring
items; effects
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of accounting changes; effects of currency fluctuations; effects of financing
activities (e.g., effect on earnings per share of issuing convertible debt
securities); changes in the statutory corporate Federal, state and local tax
rates; expenses for restructuring or productivity initiatives; non-operating
items; acquisitions expenses (e.g., pooling of interests); and effects of
divestitures.
Plan: The 1992 Long-Term Stock Incentive Plan herein set forth as the same
may from time to time be amended.
Reload Feature: A provision which the Incentive Committee may, but shall not
be required to include in any Option granted under this Plan to the effect that
at such time as the Option is exercised, the optionee shall automatically be
granted a new Option pursuant hereto to purchase a number of shares equal to the
number of shares purchased pursuant to the exercise or the number of shares
utilized by the optionee to pay the option exercise price and/or the federal,
state or local income tax to be withheld with respect to the exercise, or any
fraction, multiple or combination thereof as the Incentive Committee may
determine.
Stock Appreciation Right (SAR): A right to receive cash, shares of Common
Stock, or a combination thereof, as the case may be, having an aggregate value
equal to the excess of the Fair Market Value of one share of Common Stock on the
date of exercise of such right over the Fair Market Value of one such share on
the date of grant of such right.
Stock Award: An issuance or transfer of shares of Common Stock at the time
the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future.
Stock Incentive: A stock incentive granted under this Plan in one of the
forms provided for in section 3.
Subsidiary: A company or other form of business association of which shares
(or other ownership interests) having 50% or more of the voting power are owned
or controlled, directly or indirectly, by the Company.
3. GRANTS OF STOCK INCENTIVES:
(a) Subject to the provisions of this Plan, the Incentive Committee may
at any time, or from time to time, grant Stock Incentives under this Plan
to, and only to, Key Employees. Directors shall also be entitled to
automatic grants of Stock Awards under section 5(f).
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a SAR, or
(iv) a combination of a Stock Award, an Option and/or a SAR.
(c) Stock Incentives contingently granted prior to the approval of this
Plan by the Company's stockholders but subject to such approval shall be
deemed to be granted hereunder as of the date of such stockholder approval.
4. STOCK SUBJECT TO THIS PLAN:
The total number of shares of Common Stock subject to Stock Incentives
granted under this Plan shall not, on any given date during the term of this
Plan (Determination Date), exceed that number of shares equal to (i) 5% of the
Company's issued and outstanding Common Stock as of the close of business on the
December 31 immediately preceding the Determination Date, reduced by (ii) the
total number of shares that were issued or designated for issuance pursuant to
Stock Incentives granted under the Plan at any time during the then-current
calendar year to date or during the immediately preceding two calendar years
(Granting Period), increased by (iii) the total number of shares covered by
previously granted Stock Incentives forfeited during the Granting Period. For
purposes of this Section 4, if any shares of Common Stock subject to a Stock
Incentive shall not be issued or transferred and shall cease to be issuable or
transferable because of the termination, in whole or in part, of such Stock
Incentive or for any other reason, or if any such shares shall, after issuance
or transfer, be
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reacquired by the Company or a Subsidiary because of an employee's failure to
comply with the terms and conditions of a Stock Incentive, then such shares
shall constitute forfeited shares. The maximum number of shares of Common Stock
with respect to which Options or SARs may be granted to any Key Employee during
any calendar year shall be 1.5 million shares of Common Stock. The maximum
amount of compensation that may be paid to any Key Employee pursuant to Stock
Awards granted in any calendar year shall be 500,000 shares of Common Stock (or
the equivalent amount of cash), including any dividends thereon. Shares of
Common Stock which may be issued pursuant to Stock Incentives granted under this
Plan may be either authorized but unissued shares or shares held in the
Company's treasury, or any combination thereof.
5. STOCK AWARDS: Stock Incentives in the form of Stock Awards shall be
subject to the following provisions:
(a) A Stock Award shall be granted for such lawful consideration as the
Incentive Committee may determine.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Common Stock subject to such Stock Award shall be
valued at not less than 100% of the Fair Market Value of such shares on the
date such Stock Award is granted, regardless of whether or when such shares
are issued or transferred to the Key Employee and whether or not such shares
are subject to restrictions which affect their value.
(c) Shares of Common Stock subject to a Stock Award may be issued or
transferred to the Key Employee at the time the Stock Award is granted, or
at any time subsequent thereto, or in installments from time to time, as the
Incentive Committee shall determine. In the event that any such issuance or
transfer shall not be made to the Key Employee at the time the Stock Award
is granted, the Incentive Committee may provide for payment to such Key
Employee, either in cash or in shares of Common Stock from time to time or
at the time or times such shares shall be issued or transferred to such Key
Employee, of amounts not exceeding the dividends which would have been
payable to such Key Employee in respect of such shares (as adjusted under
section 9) if they had been issued or transferred to such Key Employee at
the time such Stock Award was granted. Any amount payable in shares of
Common Stock under the terms of a Stock Award may, at the discretion of the
Company, be paid in cash, on each date on which delivery of shares would
otherwise have been made, in an amount equal to the Fair Market Value on
such date of the shares which would otherwise have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other disposition of
the Stock Award or of the shares issued or transferred pursuant to such
Stock Award, as the Incentive Committee shall determine; provided, however,
that upon the issuance or transfer of shares pursuant to a Stock Award, the
recipient shall, with respect to such shares, be and become a stockholder of
the Company fully entitled to receive dividends, to vote and to exercise all
other rights of a stockholder except to the extent otherwise provided in the
Stock Award. The Incentive Committee may, in its sole discretion, but shall
not be required to, specify in any Stock Award that the issuance, transfer
and/or retention of some or all of the shares of Common Stock covered by the
Stock Award shall be subject to the attainment of Performance Objectives.
Any such Stock Award may (but need not) be granted in a manner which
qualifies as performance-based compensation under Section 162(m)(4)(C) of
the Code. Each Stock Award shall be evidenced by a written instrument in
such form as the Incentive Committee shall determine, provided such written
instrument is consistent with this Plan and incorporates it by reference.
(e) In the event the holder of shares of Common Stock subject to a Stock
Award dies prior to the time such shares are no longer subject to forfeiture
pursuant to the terms of the Stock Award, the estate of such holder may
retain such shares subject to the restrictions set forth in the Stock Award.
(f) Each director holding office immediately following the Company's
annual meeting of stockholders each year commencing in 1992 shall
automatically receive a nondiscretionary, unrestricted Stock Award of 400
shares (Nondiscretionary Award).
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6. OPTIONS: Stock Incentives in the form of Options shall be subject to the
following provisions:
(a) Upon the exercise of an Option, the purchase price shall be paid in
cash or, unless otherwise provided by the Incentive Committee (and subject
to such terms and conditions as are specified in the Option or by the
Incentive Committee), in shares of Common Stock delivered to the Company by
the optionee or by the withholding of shares issuable upon exercise of the
Option or in a combination of such payment methods. Shares of Common Stock
thus delivered or withheld shall be valued at their Fair Market Value on the
date of the exercise. The purchase price per share shall be not less than
100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted.
(b) Each Option shall be exercisable in full or in part not less than
six months after the date the Option is granted, or may become exercisable
in one or more installments at such later time or times as the Incentive
Committee shall determine. Unless otherwise provided in the Option, an
Option, to the extent it is or becomes exercisable, may be exercised at any
time in whole or in part until the expiration or termination of the Option.
Any term or provision in any outstanding Option specifying that the Option
not be immediately exercisable or that it be exercisable in installments may
be modified at any time during the life of the Option by the Incentive
Committee, provided, however, no such modifications of an outstanding Option
shall, without the consent of the optionee, adversely affect any Option
theretofore granted to him.
(c) An Option, to the extent that it shall not have been exercised,
shall terminate when the optionee ceases to be an employee of the Company or
a Subsidiary, unless he ceases to be an employee because of his resignation
with the consent of the Incentive Committee (which consent may be given
before or after resignation), or by reason of his death, incapacity or
retirement under a retirement plan of the Company or a Subsidiary. Except as
provided in the next sentence, if the optionee ceases to be an employee by
reason of such resignation, the Option shall terminate three months after he
ceases to be an employee. If the optionee ceases to be an employee by reason
of such death, incapacity or retirement, or if he should die during the
three-month period referred to in the preceding sentence, the Option shall
terminate 15 months after he ceases to be an employee. Where an Option is
exercised more than three months after the optionee ceased to be an
employee, the Option may be exercised only to the extent it could have been
exercised on the date three months after he ceased to be an employee. A
leave of absence for military or governmental service or for other purposes
shall not, if approved by the Incentive Committee, be deemed a termination
of employment within the meaning of this paragraph (c); provided, however,
that an Option may not be exercised during any such leave of absence.
Notwithstanding the foregoing provisions of this paragraph (c) or any other
provisions of this Plan, no Option shall be exercisable after expiration of
the term for which the Option was granted, which shall in no event exceed 11
years. Where an Option is granted for a term of less than 11 years, the
Incentive Committee may, at any time prior to the expiration of the Option,
extend its terms for a period ending not later than 11 years from the date
the Option was granted. Such an extension shall not be deemed the grant of
an Option under this Plan.
(d) Options shall be granted for such lawful consideration as the
Incentive Committee shall determine.
(e) Neither the Company nor any Subsidiary may directly or indirectly
lend any money to any person for the purpose of assisting him to purchase or
carry shares of Common Stock issued or transferred upon the exercise of an
Option.
(f) No option nor any right thereunder may be assigned or transferred by
the optionee except by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined in the Code or
the Employee Retirement Income Security Act of 1974), provided, however, the
Incentive Committee may by written action permit any holder of a
Nonqualified Option, either before or after the time of grant, to transfer a
Nonqualified Option during his lifetime to one or more members of his
family, to one or more trusts for the benefit of one or more members of his
family, or to a partnership or partnerships of members of his family,
provided that such transfer would not result in the loss of any exemption
under Rule 16b-3 for any option granted under any plan of the Company. The
transferee of a Nonqualified Option shall be subject
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to all restrictions, terms and conditions applicable to the Nonqualified
Option prior to its transfer. The Incentive Committee may impose on any
transferable Nonqualified Option and on the shares of Common Stock to be
issued upon the exercise of a Nonqualified Option such limitations and
conditions as the Committee deems appropriate. If so provided in the Option
or if so authorized by the Incentive Committee and subject to such terms and
conditions as are specified in the Option or by the Incentive Committee, the
Company shall have the right, upon or without the request of the holder of
the Option and at any time or from time to time, to cancel all or a portion
of the Option then subject to exercise and either (i) pay the holder an
amount of money equal to the excess, if any, of the Fair Market Value, at
such time or times, of the shares subject to the portion of the Option so
cancelled over the aggregate purchase price of such shares, or (ii) issue or
transfer shares of Common Stock to the holder with a Fair Market Value, at
such time or times, equal to such excess.
(g) Each Option shall be evidenced by a written instrument, which shall
contain such terms and conditions (including, without limitation,
Performance Objectives and/or a Reload Feature), and shall be in such form,
as the Incentive Committee may determine, provided the Option is consistent
with this Plan and incorporates it by reference. Notwithstanding the
preceding sentence, an Option if so recommended by the Incentive Committee,
may include restrictions and limitations in addition to those provided for
in this Plan.
(h) Any federal, state or local withholding taxes payable by an optionee
upon the exercise of an Option shall be paid in cash or, unless otherwise
provided by the Incentive Committee, by the surrender of shares of Common
Stock or the withholding of shares of Common Stock to be issued to the
optionee, or in any combination thereof, or in such other form as the
Incentive Committee may authorize from time to time. All such shares so
surrendered or withheld shall be valued at Fair Market Value on the date
they are surrendered to the Company or authorized to be withheld.
(i) Options may be either Incentive Options or Nonqualified Options at
the discretion of the Incentive Committee. Options not otherwise designated
shall be Nonqualified Options. Notwithstanding any other provisions herein,
the following provisions shall apply to Incentive Options: (i) the exercise
price of any Incentive Option granted to any person who on the date of grant
owns (within the meaning of Section 425(d) of the Internal Revenue Code)
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary shall not be less than
110% of the Fair Market Value of the stock on the date of grant; (ii) the
maximum term of any Incentive Option granted hereunder shall be 10 years,
except that the maximum term of any Incentive Option granted to a person
described in section 6(i)(i) above shall be five years; (iii) no Incentive
Option may be granted subsequent to the tenth anniversary of the date of
stockholder approval of this Plan; (iv) Incentive Options may only be
granted to persons who are employees of the Company or any Subsidiary within
the meaning of the Internal Revenue Code; and (v) Incentive Options may not
be granted with respect to more than an aggregate of 500,000 shares of
Common Stock under this Plan.
(j) Notwithstanding any limitation with respect to the vesting or
exercisability of Options imposed by the Plan or set forth in a written
agreement evidencing an Option, in the event that, on or after July 1, 1999,
an optionee's employment with the Company or a Subsidiary is terminated due
to his death or disability, or is otherwise terminated by the Company or a
Subsidiary for reasons other than for cause, all outstanding Options held by
the optionee shall become immediately exercisable in full. As used in this
Plan, (i) 'disability' shall mean a bodily injury or mental or physical
disease which would permanently prevent the optionee from performing the
customary duties of his regular position with the Company or Subsidiary and
(ii) 'cause' shall mean embezzlement or misappropriation of corporate funds,
commission of a felony, misconduct resulting in material injury to the
Company or any Subsidiary, significant activities harmful to the reputation
of the Company or any Subsidiary, a significant violation of Company or
Subsidiary policy, willful refusal to perform, or substantial disregard of,
the duties properly assigned to the optionee, or a significant violation of
any contractual obligation to the Company or any Subsidiary. Notwithstanding
the foregoing, in the event an optionee is party to an employment (or
similar) agreement with the Company or any Subsidiary that defines the term
'disability' and/or 'cause',
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such definition shall apply for purposes of the Plan. The Board of Directors
shall have the power to determine the date on which a termination of
employment occurs and whether the optionee has been terminated due to
disability or for cause. Any such determination shall be final, conclusive
and binding upon the optionee.
7. STOCK APPRECIATION RIGHTS: Stock Incentives in the form of Stock
Appreciation Rights (SARs) shall be subject to the following provisions:
(a) Each SAR shall be evidenced by a written instrument (the SAR
Agreement) specifying the number of shares of Common Stock to which it
relates and containing such other terms and conditions (which may, but need
not, include Performance Objectives), and shall be in such form as the
Incentive Committee may determine, provided the SAR is consistent with this
Plan and incorporates it by reference.
(b) Each SAR Agreement shall specify the period during which the
pertinent SAR(s) may be exercised and shall provide that the SAR(s) shall
expire at the end of such period (or periods); provided that such expiration
date shall not be later than 10 years from the date of grant thereof. Except
as otherwise provided herein, any SAR must be exercised during the period of
the holder's employment with the Company. Each SAR may be exercisable in
full or in part six months after the date the SAR is granted, or may become
exercisable in one or more installments at such later time or times as the
Incentive Committee shall determine. Unless otherwise provided in the SAR
Agreement, a SAR, to the extent it is or becomes exercisable, may be
exercised at any time in whole or in part until the expiration or
termination of the SAR. Any term or provisions in any outstanding SAR
specifying that the SAR not be immediately exercisable or that it is to be
exercisable in installments may be modified at any time during the life of
the SAR by the Incentive Committee, provided, however, no such modifications
of any outstanding SAR shall, without the consent of the grantee adversely
affect any SAR theretofore granted to him.
(c) Each SAR shall be exercisable during the life of the grantee only by
him and, after his death, only by his estate or by a person who acquired the
right to exercise the SAR by will or the laws of descent and distribution. A
SAR, to the extent that it shall not have been exercised, shall terminate
when the grantee ceases to be an employee of the Company or a Subsidiary,
unless he ceases to be an employee because of his resignation with the
consent of the Incentive Committee (which consent may be given before or
after resignation), or by reason of his death, incapacity or retirement
under a retirement plan of the Company or a Subsidiary. Except as provided
in the next sentence, if the grantee ceases to be an employee by reason of
such resignation, the SAR shall terminate three months after he ceases to be
an employee. If the grantee ceases to be an employee by reason of such
death, incapacity or retirement, or if he should die during the three-month
period referred to in the preceding sentence, the SAR shall terminate 15
months after he ceases to be an employee. Where a SAR is exercised more than
three months after the grantee ceased to be an employee the SAR may be
exercised only to the extent it could have been exercised on the date three
months after he ceased to be an employee. A leave of absence for military or
governmental service or for other purposes shall not, if approved by the
Incentive Committee, be deemed a termination of employment within the
meaning of this paragraph (c); provided, however, that a SAR may not be
exercised during any such leave of absence.
(d) No SAR may be assigned or transferred by the grantee except by will
or the laws of descent and distribution.
(e) If the form of consideration to be received upon exercise of the SAR
is not specified in the agreement governing the SAR, upon the exercise
thereof, the holder may request the form of consideration he wishes to
receive in satisfaction of such SAR, which may be in shares of Common Stock
(valued at Fair Market Value on the date of exercise of the SAR), or in
cash, or partly in cash and partly in shares of Common Stock, as the holder
shall request; provided, however, that the Incentive Committee, in its sole
discretion, may consent to or disapprove any request of the grantee to
receive cash in full or partial settlement of such SAR.
(f) Any federal, state or local withholding taxes payable by the grantee
upon the exercise of a SAR shall be paid in cash or, unless otherwise
provided by the Incentive Committee, by the
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surrender of shares of Common Stock in the case of a SAR to be paid in the
form of Common Stock, or by the withholding of shares of Common Stock to be
issued to the grantee, or in any combination thereof, or in such other form
as the Incentive Committee may authorize from time to time. All such shares
so surrendered or withheld shall be valued at Fair Market Value on the date
they are surrendered to the Company or authorized to be withheld.
8. COMBINATIONS OF STOCK AWARDS AND OPTIONS: Stock Incentives authorized by
paragraph (b)(iv) of section 3 in the form of combinations of Stock Awards,
Options and/or SAR's shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award
with any form of Option and/or with any form of SAR; provided, however, that
the terms and conditions of such Stock Incentive pertaining to a Stock Award
are consistent with section 5, the terms and conditions of such Stock
Incentive pertaining to an Option are consistent with section 6, and the
terms and conditions of such Stock Incentive pertaining to a SAR are
consistent with section 7.
(b) Such combination Stock Incentive shall be subject to such other
terms and conditions as the Incentive Committee may determine, including,
without limitation, a provision terminating in whole or in part a portion
thereof upon the exercise in whole or in part of another portion thereof.
Such combination Stock Incentive shall be evidenced by a written instrument
in such form as the Incentive Committee shall determine, provided it is
consistent with this Plan and incorporates it by reference.
9. ADJUSTMENT PROVISIONS: In the event that any spinoff of assets,
recapitalization, reclassification, split-up or consolidation of shares of
Common Stock shall be effected, or the outstanding shares of Common Stock are,
in connection with a merger or consolidation of the Company or a sale by the
Company of all or a part of its assets, exchanged for a different number of
class of shares of stock or other securities of the Company or for shares of the
stock or other securities of any other company, or a record date for
determination of holders of Common Stock entitled to receive a dividend payable
in Common Stock shall occur, (a) the number and class of shares or other
securities that may be issued or transferred pursuant to Stock Incentives or
with respect to which a cash payment pursuant to the Stock Incentive is
determinable, (b) the number and class of shares or other securities which have
not been issued or transferred under outstanding Stock Incentives, (c) the
purchase price to be paid per share or other security under outstanding Options,
(d) the price to be paid by the Company or a Subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Company or a Subsidiary to reacquire such shares or other
securities, and (e) the maximum number of shares with respect to which Options
or SARs may be granted to any Key Employee during any calendar year and the
maximum number of shares or equivalent amount of cash which any Key Employee may
be paid pursuant to Stock Awards granted in any calendar year, shall in each
case be equitably adjusted.
10. ACCELERATION: In the event of a Change of Control, any Stock Incentives
outstanding hereunder shall be immediately exercisable (without regard to any
limitation imposed by the Plan or the Compensation and Incentive Committee at
the time the Stock Incentive was granted, which permits all or any part of the
Stock Incentive to vest only after the lapse of time or the attainment of
Performance Objectives or other conditions to vesting), and shall remain
exercisable until the expiration of the original term of the Stock Incentive
(without regard to any early termination provisions of the Plan or the written
instrument evidencing the Stock Incentive).
11. TERM: This Plan shall be deemed adopted and shall become effective on
the date it is approved and adopted by the stockholders of the Company. This
Plan shall remain in effect until such time as it is terminated by the Board of
Directors; provided, however, that no Incentive Options may be granted hereunder
after May 18, 2002.
12. ADMINISTRATION:
(a) The Plan shall be administered by the Incentive Committee, which
shall consist of not less than three directors of the Company designated by
the Board of Directors in accordance with Article IV of the By-Laws of the
Company; provided, however, that unless the Board determines otherwise no
director shall be designated as or continue to be a member of the Incentive
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Committee unless he shall at the time of designation and service be a
non-employee director within the meaning of Rule 16b-3 of the Securities and
Exchange Commission (or any successor provision at the time in effect) and
an outside director within the meaning of Section 162(m)(4)(C)(i) of the
Code. A member of the Incentive Committee shall not be eligible to be
granted a Stock Incentive while serving on the Incentive Committee, except a
Nondiscretionary Award under section 5(f). Grants of Stock Incentives may be
recommended by the Incentive Committee either in or without consultation
with employees, but, anything in this Plan to the contrary notwithstanding,
the Incentive Committee shall have full authority to act in the matter of
selection of all Key Employees and in recommending Stock Incentives to be
granted to them.
(b) The Incentive Committee may establish such rules and regulations,
not inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to participate in this Plan and for the proper
administration of this Plan, and may amend or revoke any rule or regulation
so established. The Incentive Committee may make such determinations and
interpretations under or in connection with this Plan as it deems necessary
or advisable. All such rules, regulations, determinations and
interpretations shall be binding and conclusive upon the Company, its
Subsidiaries, its stockholders and all employees, and upon their respective
legal representatives, beneficiaries, successors and assigns and upon all
other persons claiming under or through any of them.
(c) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for
gross negligence or willful misconduct in the performance of their duties.
13. ACQUISITIONS: If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire the whole or
part of the business of, another company, the Company in connection therewith,
upon the recommendation of the Incentive Committee and the approval of the Board
of Directors, (a) may assume, in whole or in part and with or without
modifications or conditions, any stock options granted by the acquired company
to its employees, in their capacity as such, or (b) may grant new Options in
substitution therefor; provided that the granting of an Option with the terms
and conditions of the assumed or substitute options is permissible under either
this Plan or a plan approved by the shareholders of the acquired company. For
the purposes of the preceding sentence, the permissibility of the granting of an
option under a plan shall be determined as of the date of grant of the original
option by the acquired company and not as of the date of assumption or
substitution by the Company.
14. GENERAL PROVISIONS:
(a) Nothing in this Plan nor in any instrument executed pursuant hereto
shall confer upon any employee any right to continue in the employ of the
Company or a Subsidiary, or shall affect the right of the Company or of a
Subsidiary to terminate the employment of any employee with or without
cause.
(b) No shares of Common Stock shall be issued or transferred pursuant to
a Stock Incentive unless and until all legal requirements applicable to the
issuance or transfer of such shares, in the opinion of counsel to the
Company, have been complied with. In connection with any such issuance or
transfer the person acquiring the shares shall, if requested by the Company,
give assurances, satisfactory to counsel to the Company, that the shares are
being acquired for investment and not with a view to resale or distribution
thereof and assurances in respect of such other matters as the Company or a
Subsidiary may deem desirable to assure compliance with all applicable legal
requirements.
(c) No employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Incentive
except as to shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) The Company or a Subsidiary may, with the approval of the Incentive
Committee, enter into an agreement or other commitment to grant a Stock
Incentive in the future to a person who is or will be a Key Employee at the
time of grant, and, notwithstanding any other provision of this
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Plan, any such agreement or commitment shall not be deemed the grant of a
Stock Incentive until the date on which the Company takes action to
implement such agreement or commitment.
(e) In the case of a grant of a Stock Incentive to an employee of a
Subsidiary, such grant may, if the Incentive Committee so directs, be
implemented by the Company issuing or transferring the shares, if any,
covered by the Stock Incentive to the Subsidiary, for such lawful
consideration as the Incentive Committee may specify, upon the condition or
understanding that the Subsidiary will transfer the shares to the employee
in accordance with the terms of the Stock Incentive specified by the
Incentive Committee pursuant to the provisions of this Plan. Notwithstanding
any other provision hereof, such Stock Incentive may be issued by and in the
name of the Subsidiary and shall be deemed granted on the date it is
approved by the Incentive Committee on the date it is delivered by the
Subsidiary or on such other date between said two dates, as the Incentive
Committee shall specify.
(f) The Company or a Subsidiary may make such provisions as it may deem
appropriate for the withholding of any taxes which the Company or a
Subsidiary determines it is required to withhold in connection with any
Stock Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or fringe benefits
to employees generally, or to any class or group of employees, which the
Company or any Subsidiary or other affiliate now has or may hereafter
lawfully put into effect, including, without limitation, any retirement,
pension, group insurance, stock purchase, stock bonus or stock option plan.
(h) Any provision of the Plan to the contrary notwithstanding: (i) the
Plan is intended to give the Incentive Committee the authority to grant
awards that qualify as performance-based compensation under Section
162(m)(4)(C) of the Code as well as awards that do not so qualify; and (ii)
any provision of the Plan that would prevent the Incentive Committee from
exercising the authority referred to in clause (i) above or that would
prevent an award that the Incentive Committee intends to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code from
so qualifying, shall be administered, interpreted and construed to carry out
such intention and any provision that cannot be so administered, interpreted
and construed shall to that extent be disregarded.
15. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Incentive Committee, provided that, without the
approval of the stockholders of the Company, no amendment shall be made
which (i) increases the maximum aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Stock Incentives as provided
in section 4 or requires stockholder approval under the Code (including
Sections 162(m) and 422 thereof), (ii) withdraws the administration of this
Plan from the Incentive Committee or amends the provisions of paragraph (a)
of section 12 with respect to eligibility and disinterest of members of the
Incentive Committee, (iii) permits any person who is not at the time a Key
Employee of the Company or of a Subsidiary to be granted a Stock Incentive,
(iv) permits any Option to be exercised more than 11 years after the date it
is granted, (v) amends section 11 to extend the date set forth therein or
(vi) amends this section 15; and provided that any permitted amendments to
section 5(f) above shall not be made more than once every six months other
than to comport with changes in the Internal Revenue Code or the rules
thereunder.
(b) The Board of Directors may by resolution adopted by a majority of
the entire Board of Directors discontinue this Plan.
(c) No amendment or discontinuance of this Plan by the Board of
Directors or the stockholders of the Company shall, without the consent of
the employee, adversely affect any Stock Incentive theretofore granted to
him.
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Appendix 1
PROXY
OMNICARE, INC.
100 E. RiverCenter Boulevard
Covington, Kentucky 41011
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS, MAY 20, 2002.
The undersigned hereby appoints E. L. Hutton, J. F. Gemunder and C. D. Hodges as
Proxies, each with the power to appoint a substitute, and hereby authorizes them
to represent and to vote, as designated below, all the shares of common stock of
Omnicare, Inc. held of record by the undersigned as of March 25, 2002 at the
Annual Meeting of Stockholders to be held on May 20, 2002, or at any adjournment
thereof.
Election of Directors
Nominees:
Edward L. Hutton
Joel F. Gemunder
Timothy E. Bien
Charles H. Erhart, Jr.
David W. Froesel, Jr.
Cheryl D. Hodges
Patrick E. Keefe
Sandra E. Laney
Andrea R. Lindell, DNSc
Sheldon Margen, M.D.
Kevin J. McNamara
John H. Timoney
(Continued and to be signed on other side)
SEE REVERSE SIDE
_ FOLD AND DETACH HERE _
3694 Please mark your votes as in this example.
1. Election of Directors. FOR WITHHELD
(see reverse)
2. To re-approve amendments to the Company's 1992 Long-Term Stock Incentive
Plan. FOR AGAINST ABSTAIN
3. To ratify the selection of independent accountants. FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. For, except vote withheld from
the following nominee(s):
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS (1), (2) AND
(3). When signed on behalf of a corporation, partnership, estate, trust, or
other stockholder, state your title or capacity or otherwise indicate that you
are authorized to sign. (Please sign exactly as name(s) appear at left) PLEASE
MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
SIGNATURE (S) DATE
_ FOLD AND DETACH HERE _