<Page>
Offer to Purchase for Cash
All Outstanding Shares of
Class A Common Stock and Class B Common Stock
of
NCS HEALTHCARE, INC.
at
$3.50 NET PER SHARE
by
NCS ACQUISITION CORP.,
a wholly-owned subsidiary of
OMNICARE, INC.
<Table>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER 5,
2002, UNLESS THE OFFER IS EXTENDED.
</Table>
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER
THAT NUMBER OF SHARES (AS DEFINED BELOW) REPRESENTING, TOGETHER WITH THE SHARES
OWNED BY OMNICARE, INC. ('OMNICARE'), AT LEAST A MAJORITY OF THE TOTAL VOTING
POWER OF ALL OF THE OUTSTANDING SECURITIES OF NCS HEALTHCARE, INC. (THE
'COMPANY') ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OR IN A
MERGER, CALCULATED ON A FULLY DILUTED BASIS AFTER CONSUMMATION OF THE OFFER (THE
'MINIMUM CONDITION'), (2) THE AGREEMENT AND PLAN OF MERGER, DATED AS OF JULY 28,
2002, BY AND AMONG GENESIS HEALTH VENTURES, INC. ('GENESIS'), GENEVA SUB, INC.
AND THE COMPANY (AS MAY BE AMENDED, THE 'GENESIS AGREEMENT') HAVING BEEN
TERMINATED ON SUCH TERMS AS MAY BE SATISFACTORY TO OMNICARE (THE 'GENESIS
AGREEMENT CONDITION'), (3) THE VOTING AGREEMENT BY AND AMONG JON H. OUTCALT, THE
COMPANY AND GENESIS AND THE VOTING AGREEMENT BY AND AMONG KEVIN B. SHAW, THE
COMPANY AND GENESIS, EACH DATED AS OF JULY 28, 2002 (AS EACH MAY BE AMENDED,
COLLECTIVELY, THE 'VOTING AGREEMENTS'), HAVING BEEN TERMINATED ON SUCH TERMS AS
MAY BE SATISFACTORY TO OMNICARE (THE 'VOTING AGREEMENTS CONDITION'), (4) THE
PROVISIONS OF SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW NOT APPLYING
TO OR OTHERWISE RESTRICTING THE OFFER AND THE PROPOSED MERGER OR ANY SUBSEQUENT
BUSINESS COMBINATION INVOLVING THE COMPANY AND OMNICARE (THE 'SECTION 203
CONDITION'), (5) ANY WAITING PERIODS UNDER APPLICABLE ANTITRUST LAWS HAVING
EXPIRED OR TERMINATED, (6) THE COMPANY'S STOCKHOLDERS NOT HAVING APPROVED THE
GENESIS AGREEMENT (THE 'APPROVAL CONDITION'), (7) THE COMPANY NOT HAVING ENTERED
INTO OR EFFECTUATED ANY AGREEMENT OR TRANSACTION WITH ANY PERSON OR ENTITY
HAVING THE EFFECT OF IMPAIRING OMNICARE'S ABILITY TO ACQUIRE THE COMPANY OR
OTHERWISE DIMINISHING THE EXPECTED ECONOMIC VALUE TO OMNICARE OF THE ACQUISITION
OF THE COMPANY (THE 'IMPAIRMENT CONDITION'), (8) THE PROVISIONS OF ARTICLE VI OF
THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION BEING
INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER (THE 'CHARTER CONDITION') AND
(9) THE TERMINATION FEE PROVISION IN THE GENESIS AGREEMENT HAVING BEEN
INVALIDATED OR THE OBLIGATION TO PAY ANY AMOUNTS PURSUANT TO SUCH PROVISION
HAVING BEEN TERMINATED, WITHOUT ANY TERMINATION FEE, OR ANY PORTION THEREOF,
HAVING BEEN PAID BY THE COMPANY OR ANY OF ITS AFFILIATES PURSUANT TO THE GENESIS
AGREEMENT (THE 'BREAK-UP FEE CONDITION'). THE SATISFACTION OR EXISTENCE OF ANY
OF THE CONDITIONS TO THE OFFER, INCLUDING THOSE SET FORTH IN CLAUSES (1) THROUGH
(9) ABOVE, WILL BE DETERMINED BY OMNICARE IN ITS SOLE DISCRETION. ANY AND ALL OF
THE CONDITIONS TO THE OFFER, INCLUDING THOSE SET FORTH IN CLAUSES (1) THROUGH
(9) ABOVE, MAY BE WAIVED (TO THE EXTENT LEGALLY PERMISSIBLE) BY OMNICARE OR NCS
ACQUISITION CORP., A WHOLLY-OWNED SUBSIDIARY OF OMNICARE ('PURCHASER'), IN THEIR
SOLE DISCRETION. THE OFFER IS NOT CONDITIONED ON OBTAINING FINANCING. SEE
SECTIONS 15 AND 16.
---------------------
IMPORTANT
OMNICARE IS SEEKING TO NEGOTIATE WITH THE COMPANY WITH RESPECT TO THE
ACQUISITION OF THE COMPANY BY OMNICARE OR PURCHASER. OMNICARE AND PURCHASER
RESERVE THE RIGHT TO (1) AMEND THE OFFER (INCLUDING AMENDING THE NUMBER OF
SHARES TO BE PURCHASED AND AMENDING THE PURCHASE PRICE) UPON ENTERING INTO A
MERGER AGREEMENT WITH THE COMPANY OR (2) NEGOTIATE A MERGER AGREEMENT WITH THE
COMPANY THAT DOES NOT INVOLVE A TENDER OFFER, PURSUANT TO WHICH MERGER AGREEMENT
PURCHASER WOULD TERMINATE THE OFFER AND THE SHARES WOULD, UPON CONSUMMATION OF
THE MERGER CONTEMPLATED BY SUCH MERGER AGREEMENT, BE CONVERTED INTO CASH, COMMON
STOCK OF OMNICARE AND/OR OTHER SECURITIES IN SUCH AMOUNTS AS ARE NEGOTIATED BY
OMNICARE AND THE COMPANY.
---------------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
August 8, 2002
<Page>
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
If you wish to tender all or any part of your shares of class A common stock
or class B common stock (collectively, the 'Shares') prior to the expiration
date of the Offer, you should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal included with this Offer to Purchase, have your signature
thereon guaranteed if required by Instruction 1 of the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile thereof) and any
other required documents to the depositary for the Offer and either deliver the
certificates for such Shares to the depositary for the Offer along with the
Letter of Transmittal (or a facsimile thereof) or deliver such Shares pursuant
to the procedures for book-entry transfers set forth in 'The Offer -- Procedure
for Tendering Shares' of this Offer to Purchase, or (2) request your broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for you. If you have Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee, you must contact such
broker, dealer, commercial bank, trust company or other nominee if you desire to
tender your Shares.
If you desire to tender your Shares and your certificates for such Shares
are not immediately available, or you cannot comply with the procedures for
book-entry transfers described in this Offer to Purchase on a timely basis, you
may tender such Shares by following the procedures for guaranteed delivery set
forth in 'The Offer -- Procedure for Tendering Shares.'
A summary of the principal terms of the Offer appears on pages 1-5 of this
Offer to Purchase.
Questions or requests for assistance may be directed to Innisfree M&A
Incorporated, the Information Agent, or Merrill Lynch & Co., the Dealer Manager,
at their respective addresses and telephone numbers set forth on the back cover
of this Offer to Purchase. You can also obtain additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
from the Information Agent or your broker, dealer, commercial bank, trust
company or other nominee.
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
SUMMARY TERM SHEET.......................................... 1
Introduction................................................ 6
The Offer................................................... 8
1. Terms of the Offer; Expiration Date................. 8
2. Extension of Tender Period; Termination;
Amendment.............................................. 8
3. Acceptance for Payment and Payment.................. 9
4. Procedure for Tendering Shares...................... 10
5. Withdrawal Rights................................... 12
6. Certain U.S. Federal Income Tax Consequences........ 13
7. Price Range of Class A Common Stock; Dividends...... 14
8. Certain Information Concerning the Company.......... 14
9. Certain Information Concerning Purchaser and
Omnicare............................................... 15
10. Source and Amount of Funds.......................... 16
11. Background of the Offer............................. 17
12. Purpose and Structure of the Offer; Plans for the
Company............................................. 23
13. Effect of the Offer on the Market for the Class A
Common Stock; Registration under the Exchange Act... 24
14. Dividends and Distributions......................... 24
15. Conditions to the Offer............................. 25
16. Certain Legal Matters; Regulatory Approvals......... 28
17. Fees and Expenses................................... 33
18. Legal Proceedings................................... 34
19. Miscellaneous....................................... 34
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF OMNICARE AND
PURCHASER................................................. 35
SCHEDULE II TRANSACTIONS IN SHARES IN THE PAST 60 DAYS...... 39
</Table>
<Page>
SUMMARY TERM SHEET
This summary term sheet is a brief description of the offer being made by
Omnicare, Inc. through NCS Acquisition Corp., a wholly-owned subsidiary of
Omnicare, to purchase all of the outstanding shares of class A common stock and
all of the outstanding shares of class B common stock of NCS HealthCare, Inc.,
at a price of $3.50 per share net to the seller in cash, without interest. The
following are some of the questions you, as a stockholder of NCS HealthCare, may
have and answers to those questions. You should carefully read this offer to
purchase and the related letter of transmittal in their entirety, because the
information in this summary term sheet is not complete and additional important
information is contained in the remainder of this offer to purchase and the
related letter of transmittal.
WHO IS OFFERING TO BUY MY SECURITIES? WHY?
Our name is Omnicare, Inc. We are a Delaware corporation and are making the
offer through our wholly-owned subsidiary, NCS Acquisition Corp., a Delaware
corporation, which was formed for the purpose of making this tender offer for
all of the outstanding shares of class A common stock and class B common stock
of NCS HealthCare. The tender offer is the first step in our plan to acquire all
of the outstanding shares of NCS HealthCare. We intend, promptly after
completion of the offer, to seek to have NCS HealthCare consummate a merger of
our wholly-owned subsidiary with and into NCS HealthCare, in which each
remaining share of NCS HealthCare that is not owned by us (other than shares
owned by NCS HealthCare or held by stockholders, if any, who properly exercise
their appraisal rights under Delaware law) would be converted according to the
terms of our proposed merger into the right to receive an amount in cash equal
to the per share price paid in the offer, without interest. Stockholders of NCS
HealthCare whose shares are not purchased in the offer will have appraisal
rights in the merger.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding shares of class A common
stock and class B common stock of NCS HealthCare. On the date of this offer to
purchase, Omnicare beneficially owned 1,000 shares of class A common stock. NCS
HealthCare's recent public disclosure stated that as of July 28, 2002, there
were 18,460,599 shares of class A common stock (exclusive of 1,000 shares of
such class owned by Omnicare) and 5,255,210 shares of class B common stock
outstanding. The number of outstanding shares is contained in the Current Report
on Form 8-K filed by NCS HealthCare on July 30, 2002.
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM OF
PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $3.50 per share for class A common stock and class B
common stock of NCS HealthCare, net to you in cash, without interest. If you
tender your shares to us in the offer, you will not have to pay brokerage fees,
commissions or similar expenses. If you own your shares through a broker or
other nominee, and your broker tenders your shares on your behalf, your broker
or nominee may charge you a fee for doing so. You should consult your broker or
nominee to determine whether any charges will apply.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. We will need approximately $95 million to purchase all of the
outstanding shares of class A common stock and class B common stock of NCS
HealthCare (assuming the exercise of all outstanding stock options) pursuant to
the offer and to pay related fees and expenses. In addition, we currently intend
after the proposed merger with Omnicare to pay off NCS HealthCare's line of
credit (approximately $206 million outstanding as of March 31, 2002) and redeem
NCS HealthCare's 5 3/4% convertible subordinated debentures in accordance with
their terms (approximately $102 million outstanding as of March 31, 2002). Since
we will have sufficient cash, working capital and available
1
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borrowing capacity under our existing bank facilities available to us to buy all
of the shares outstanding, pay related fees and expenses, pay off NCS
HealthCare's line of credit and redeem NCS HealthCare's 5 3/4% convertible
subordinated debentures, our offer is not subject to any financing conditions.
We already have obtained the necessary consents from our lenders under our
existing bank facilities to pay off NCS HealthCare's line of credit and to
redeem NCS HealthCare's 5 3/4% convertible subordinated debentures. See 'The
Offer -- Source and Amount of Funds.'
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
Since we have sufficient cash, working capital and available borrowing
capacity under our existing bank facilities to purchase all of the outstanding
shares of class A common stock and class B common stock of NCS HealthCare
(assuming the exercise of all outstanding stock options), to pay all fees and
expenses relating to the offer and to pay off NCS HealthCare's line of credit
and redeem NCS HealthCare's 5 3/4% convertible subordinated debentures, our
offer is not subject to any financing condition. Therefore, we believe our
financial condition is not material to your decision whether to tender your
shares in the offer. If you do not tender your shares in the offer, in the
subsequent merger (if it occurs), you will receive, for each share you hold, the
same cash price paid under the terms of the offer. If you would like additional
information about our financial condition, please see 'The Offer -- Certain
Information Concerning Purchaser and Omnicare -- Available Information.'
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You have until at least 12:00 Midnight, New York City time, on Thursday,
September 5, 2002, to decide whether to tender your shares in the offer.
Further, if you cannot deliver everything required to make a valid tender to The
Bank of New York, the depositary for the offer, prior to such time, you may be
able to use a guaranteed delivery procedure to tender your shares in the offer,
which is described in 'The Offer -- Procedure for Tendering Shares.'
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
We may, in our sole discretion, extend the offer at any time or from time to
time. We may extend, for instance, if any of the conditions specified in 'The
Offer -- Conditions to the Offer' are not satisfied prior to the scheduled
expiration date of the offer.
We may also elect to provide a 'subsequent offering period' for the offer. A
subsequent offering period, if we include one, will be an additional period of
time beginning after we have purchased shares tendered during the offer, during
which stockholders may tender their shares and receive payment for shares
validly tendered. We do not currently intend to include a subsequent offering
period, although we reserve the right to do so. See 'The Offer -- Terms of the
Offer; Expiration Date.'
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we decide to extend the offer, we will inform The Bank of New York, the
depositary for the offer, of that fact and will make a public announcement of
the extension, not later than 9:00 a.m., New York City time, on the business day
after the day on which the offer was scheduled to expire.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The most significant conditions to the offer are the following, any or all
of which may be waived, to the extent legally permissible, by us in our sole
discretion:
-- NCS HealthCare's stockholders having validly tendered and not properly
withdrawn prior to the expiration date of the offer that number of
shares representing, together with the shares owned by Omnicare, at
least a majority of the total voting power of all the outstanding
securities of NCS HealthCare entitled to vote generally in the election
of directors or in a merger, calculated on a fully diluted basis after
consummation of the offer.
2
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-- The merger agreement between NCS HealthCare and Genesis Health Ventures
having been terminated on such terms as may be satisfactory to
Omnicare.
-- The voting agreement among NCS HealthCare, Genesis and Jon H. Outcalt
and the voting agreement among NCS HealthCare, Genesis and Kevin B.
Shaw having been terminated on such terms as may be satisfactory to
Omnicare.
-- The provisions of Section 203 of the Delaware General Corporation Law
not applying to or otherwise restricting the offer and the proposed
merger or any subsequent business combination involving NCS HealthCare
and Omnicare.
-- Any waiting periods under applicable antitrust laws having expired or
terminated.
-- NCS HealthCare's stockholders not having approved the Genesis merger
agreement.
-- NCS HealthCare not having entered into or effectuated any agreement or
transaction with any person or entity having the effect of impairing
Omnicare's ability to acquire NCS HealthCare or otherwise diminishing
the expected economic value to Omnicare of the acquisition of NCS
HealthCare.
-- The provisions of Article VI of NCS HealthCare's amended and restated
certificate of incorporation being inapplicable to the offer and the
proposed merger.
-- The termination fee provision in the Genesis merger agreement having
been invalidated or the obligation to pay any amounts pursuant to such
provision having been terminated, without any termination fee, or any
portion thereof, having been paid by NCS HealthCare or any of its
affiliates pursuant to the Genesis merger agreement.
The satisfaction or existence of any of the conditions to our offer, including
those summarized above, will be determined by Omnicare in its sole discretion.
For a complete list of the conditions to the offer, see 'The Offer -- Conditions
to the Offer.'
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to The Bank of New
York, the depositary for the offer, not later than the time the offer expires.
If your shares are held in street name by your broker, dealer, commercial bank,
trust company or other nominee, such nominee can tender your shares through The
Depository Trust Company. If you cannot deliver everything required to make a
valid tender to the depositary prior to the expiration of the offer, you may
have a limited amount of additional time by having a broker, a bank or other
fiduciary which is a member of the Securities Transfer Agents Medallion Program
or other eligible institution guarantee that the missing items will be received
by the depositary within three business days after the expiration of the offer.
However, the depositary must receive the missing items within that three
business day period. See 'The Offer -- Procedures for Tendering Shares.'
UNTIL WHAT TIME CAN I WITHDRAW TENDERED SHARES?
You can withdraw tendered shares at any time until the offer has expired
and, if we have not agreed to accept your shares for payment by October 6, 2002,
you can withdraw them at any time after such date until we accept shares for
payment. If we decide to provide a subsequent offering period, we will accept
shares tendered during that period immediately and thus you will not be able to
withdraw shares tendered in the offer during any subsequent offering period. See
'The Offer -- Withdrawal Rights.'
HOW DO I WITHDRAW TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to The Bank of New York, the
depositary for the offer, while you have the right to withdraw the shares. See
'The Offer -- Withdrawal Rights.'
3
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WHEN AND HOW WILL I BE PAID FOR MY TENDERED SHARES?
Subject to the terms and conditions of the offer, we will pay for all
validly tendered and not properly withdrawn shares promptly after the expiration
date of the offer, subject to the satisfaction or waiver of the conditions to
the offer, as set forth in 'The Offer -- Conditions to the Offer.' We will pay
for your validly tendered and not properly withdrawn shares by depositing the
purchase price with The Bank of New York, the depositary for the offer, which
will act as your agent for the purpose of receiving payments from us and
transmitting such payments to you. In all cases, payment for tendered shares
will be made only after timely receipt by The Bank of New York of certificates
for such shares (or of a confirmation of a book-entry transfer of such shares as
described in 'The Offer -- Procedure for Tendering Shares') and a properly
completed and duly executed letter of transmittal and any other required
documents for such shares.
HAVE YOU HELD DISCUSSIONS WITH NCS HEALTHCARE?
We have tried repeatedly to discuss with NCS HealthCare the potential
acquisition of NCS HealthCare by Omnicare. Prior to the announcement of the
Genesis transaction, we made a proposal to acquire all of the outstanding shares
of class A common stock and class B common stock of NCS HealthCare in a
negotiated merger transaction, but did not receive any response from NCS
HealthCare. We are prepared to discuss with NCS HealthCare all aspects of our
proposal to acquire NCS HealthCare. See 'The Offer -- Background of the Offer.'
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the proposed merger with Omnicare takes place, stockholders not tendering
in the offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer, subject to any appraisal
rights properly exercised under Delaware law. Therefore, if the proposed merger
with Omnicare takes place and you do not exercise appraisal rights, the only
difference to you between tendering your shares and not tendering your shares is
that you will be paid earlier if you tender your shares. However, if the
proposed merger with Omnicare does not take place and the offer is consummated,
the number of stockholders and shares that are still in the hands of the public
may be so small that there will no longer be an active public trading market,
or, possibly, any public trading market, for the shares, which may affect prices
at which shares trade. Also, as described below, NCS HealthCare may cease making
filings with the SEC or otherwise cease being subject to the SEC rules relating
to publicly held companies.
ARE APPRAISAL RIGHTS AVAILABLE IN EITHER THE OFFER OR THE PROPOSED MERGER?
Appraisal rights are not available in the offer. If the proposed merger with
Omnicare is consummated, holders of shares at the effective time of that merger
who do not vote in favor of, or consent to, the proposed merger with Omnicare
will have rights under Section 262 of the Delaware General Corporation Law to
demand appraisal of their shares. Under Section 262, stockholders who demand
appraisal and comply with the applicable statutory procedures will be entitled
to receive a judicial determination of the fair value of their shares, exclusive
of any element of value arising from the accomplishment or expectation of the
proposed merger with Omnicare, and to receive payment of that fair value in
cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of shares could be based upon factors other
than, or in addition to, the price per share to be paid in the proposed merger
with Omnicare or the market value of the shares. The value so determined could
be more or less than the price per share to be paid in the proposed merger with
Omnicare.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On July 26, 2002, the last full trading day before the date NCS HealthCare
entered into the Genesis merger agreement, the closing price of a share class A
common stock of NCS HealthCare was $0.74. On July 31, 2002, the last full
trading day before we announced our intention to commence the offer, the
4
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closing price of a share of class A common stock of NCS HealthCare was $1.73. On
August 7, 2002, the last full trading day before we commenced the offer, the
closing price of a share of class A common stock of NCS HealthCare was $2.25.
The shares of class B common stock of NCS HealthCare are not publicly traded. We
advise you to obtain a recent quotation for shares before deciding whether to
tender your shares.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call Innisfree M&A Incorporated, the information agent for the
offer, at (888) 750-5834 (toll free) or (212) 750-5833 (call collect), or
Merrill Lynch & Co., the dealer manager for the offer, at (866) 276-1462 (toll
free).
5
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TO: THE HOLDERS OF CLASS A COMMON STOCK AND CLASS B
COMMON STOCK OF NCS HEALTHCARE, INC.
INTRODUCTION
Omnicare, Inc., a Delaware corporation ('Omnicare'), through its
wholly-owned subsidiary NCS Acquisition Corp., a Delaware corporation
('Purchaser'), hereby offers to purchase all of the outstanding shares of
class A common stock, par value $0.01 per share ('Class A Common Stock'), and
all of the outstanding shares of class B common stock, par value $0.01 per share
('Class B Common Stock' and, together with Class A Common Stock, the 'Shares'),
of NCS HealthCare, Inc. (the 'Company'), at a price of $3.50 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together, as amended, supplemented or otherwise modified from
time to time, constitute the 'Offer').
If you tender your Shares to us in the Offer, you will not be obligated to
pay brokerage fees, commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the sale of your Shares pursuant to the
Offer. If you own your Shares through a broker or other nominee, and your broker
tenders Shares on your behalf, your broker or nominee may charge you a fee for
doing so. You should consult your broker or nominee to determine whether any
such charges will apply. We will pay all charges and expenses of Merrill Lynch &
Co. (the 'Dealer Manager'), The Bank of New York (the 'Depositary') and
Innisfree M&A Incorporated (the 'Information Agent') incurred in connection with
the Offer. See 'The Offer -- Fees and Expenses.'
The purpose of the Offer and the proposed second-step merger is to enable
Omnicare to acquire control of, and the entire equity interest in, the Company.
Omnicare currently intends, as soon as practicable following consummation of the
Offer, to seek to have Purchaser consummate a merger with and into the Company
(the 'Proposed Merger'), with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of Omnicare. Pursuant to the Proposed
Merger, at the effective time of the Proposed Merger (the 'Effective Time'),
each Share then-outstanding that is not owned by Omnicare, Purchaser or other
subsidiaries of Omnicare (other than Shares owned by NCS HealthCare or held by
stockholders, if any, who properly exercise their appraisal rights under the
Delaware General Corporation Law (the 'DGCL')) would be converted, pursuant to
the terms of the Proposed Merger, into the right to receive an amount in cash
equal to the per Share price paid pursuant to the Offer, without interest (the
'Merger Consideration').
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER
THAT NUMBER OF SHARES REPRESENTING, TOGETHER WITH THE SHARES OWNED BY OMNICARE,
AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF ALL THE OUTSTANDING SECURITIES
OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OR IN A
MERGER, CALCULATED ON A FULLY DILUTED BASIS AFTER CONSUMMATION OF THE OFFER (THE
'MINIMUM CONDITION'); (2) THE AGREEMENT AND PLAN OF MERGER DATED AS OF JULY 28,
2002 BY AND AMONG THE COMPANY, GENESIS HEALTH VENTURES, INC. ('GENESIS') AND
GENEVA SUB, INC. ('GENEVA SUB' AND, SUCH AGREEMENT, AS MAY BE AMENDED, THE
'GENESIS AGREEMENT') HAVING BEEN TERMINATED ON SUCH TERMS AS MAY BE SATISFACTORY
TO OMNICARE (THE 'GENESIS AGREEMENT CONDITION'); (3) THE VOTING AGREEMENT BY AND
AMONG JON H. OUTCALT, THE COMPANY AND GENESIS AND THE VOTING AGREEMENT BY AND
AMONG KEVIN B. SHAW, THE COMPANY AND GENESIS, EACH DATED AS OF JULY 28, 2002 (AS
EACH AGREEMENT MAY BE AMENDED, COLLECTIVELY, THE 'VOTING AGREEMENTS'), HAVING
BEEN TERMINATED ON SUCH TERMS AS MAY BE SATISFACTORY TO OMNICARE (THE 'VOTING
AGREEMENTS CONDITION'); (4) THE PROVISIONS OF SECTION 203 OF THE DGCL NOT
APPLYING TO OR OTHERWISE RESTRICTING THE OFFER AND THE PROPOSED MERGER OR ANY
SUBSEQUENT BUSINESS COMBINATION INVOLVING THE COMPANY AND OMNICARE (THE 'SECTION
203 CONDITION'); (5) ANY WAITING PERIODS UNDER
6
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APPLICABLE ANTITRUST LAWS HAVING EXPIRED OR BEEN TERMINATED; (6) THE COMPANY'S
STOCKHOLDERS NOT HAVING APPROVED THE GENESIS AGREEMENT (THE 'APPROVAL
CONDITION'); (7) THE COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY
AGREEMENT OR TRANSACTION WITH ANY PERSON OR ENTITY HAVING THE EFFECT OF
IMPAIRING OMNICARE'S ABILITY TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE
EXPECTED ECONOMIC VALUE TO OMNICARE OF THE ACQUISITION OF THE COMPANY (THE
'IMPAIRMENT CONDITION'); (8) THE PROVISIONS OF ARTICLE VI OF THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION BEING INAPPLICABLE TO THE
OFFER AND THE PROPOSED MERGER (THE 'CHARTER CONDITION'); AND (9) THE TERMINATION
FEE PROVISION IN THE GENESIS AGREEMENT HAVING BEEN INVALIDATED OR THE OBLIGATION
TO PAY ANY AMOUNTS PURSUANT TO SUCH PROVISION HAVING BEEN TERMINATED, WITHOUT
ANY TERMINATION FEE, OR ANY PORTION THEREOF, HAVING BEEN PAID BY THE COMPANY OR
ANY OF ITS AFFILIATES PURSUANT TO THE MERGER AGREEMENT (THE 'BREAK-UP FEE
CONDITION'). THE SATISFACTION OR EXISTENCE OF ANY OF THE CONDITIONS TO THE
OFFER, INCLUDING THOSE SET FORTH IN CLAUSES (1) THROUGH (9) ABOVE, WILL BE
DETERMINED BY OMNICARE IN ITS SOLE DISCRETION. ANY OR ALL OF THE CONDITIONS TO
THE OFFER, INCLUDING THOSE SET FORTH IN CLAUSES (1) THROUGH (9) ABOVE, MAY BE
WAIVED (TO THE EXTENT LEGALLY PERMISSIBLE) BY OMNICARE OR PURCHASER IN THEIR
SOLE DISCRETION. THE OFFER IS NOT CONDITIONED ON OBTAINING FINANCING. THE OFFER
IS ALSO SUBJECT TO OTHER CONDITIONS. SEE 'THE OFFER -- CONDITIONS TO THE OFFER.'
In the event the Offer is terminated or not consummated, or after the
expiration of the Offer and pending the consummation of the Proposed Merger, in
accordance with applicable law and any merger agreement that it may enter into
with the Company, Omnicare may explore any and all options which may be
available. In this regard, and after expiration or termination of the Offer,
Omnicare may seek to acquire additional Shares, through open market purchases,
block trades, privately negotiated transactions, a tender offer or exchange
offer or otherwise, upon such terms and at such prices as Omnicare may
determine, which may be more or less than the price offered or paid per Share
pursuant to the Offer and could be for cash or other consideration.
THIS OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
STOCKHOLDERS OF THE COMPANY OR A SOLICITATION OF AGENT DESIGNATIONS TO CALL A
SPECIAL MEETING OF STOCKHOLDERS OF THE COMPANY. ANY SOLICITATION OF PROXIES
WHICH PURCHASER OR OMNICARE MIGHT MAKE WILL BE MADE ONLY PURSUANT TO SEPARATE
PROXY OR CONSENT SOLICITATION MATERIALS COMPLYING WITH THE REQUIREMENTS OF
SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE 'EXCHANGE ACT').
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
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THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
On the terms and subject to the conditions set forth in this Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), we will accept for payment and pay for all Shares
that are validly tendered prior to the Expiration Date and not properly
withdrawn.
'Expiration Date' means 12:00 Midnight, New York City time, on Thursday,
September 5, 2002, unless we extend the period of time for which the Offer is
open, in which event 'Expiration Date' means the latest time and date on which
the Offer, as so extended, shall expire.
The Offer is conditioned upon, among other things, (1) the Minimum Condition
having been satisfied, (2) the Genesis Agreement Condition having been
satisfied, (3) the Voting Agreements Condition having been satisfied, (4) the
Section 203 Condition having been satisfied, (5) any waiting periods under
applicable antitrust laws having expired or been terminated, (6) the Approval
Condition having been satisfied, (7) the Impairment Condition having been
satisfied, (8) the Charter Condition having been satisfied and (9) the Break-Up
Fee Condition having been satisfied. The Offer is also subject to other
conditions as described in 'The Offer -- Conditions to the Offer.' If any such
condition is not satisfied, we may: (a) terminate the Offer and return all
tendered Shares; (b) extend the Offer and, subject to certain conditions and to
your withdrawal rights as set forth in 'The Offer -- Withdrawal Rights,' retain
all Shares until the expiration date of the Offer as so extended; or (c) waive
the Minimum Condition and, subject to any requirement to extend the period of
time during which the Offer must remain open, purchase all Shares validly
tendered prior to the Expiration Date and not properly withdrawn or delay
acceptance for payment or payment for Shares, subject to applicable law, until
satisfaction or waiver of the conditions to the Offer. For a description of our
right to extend, amend, delay or terminate the Offer, see 'The
Offer -- Extension of Tender Period; Termination; Amendment' and 'The
Offer -- Conditions to the Offer.'
Under the Exchange Act Rule 14d-11, Purchaser may, subject to certain
conditions, provide a subsequent offering period of from three to 20 business
days following the Expiration Date. A subsequent offering period would be an
additional period of time, following the expiration of the Offer and the
purchase of Shares in the Offer, during which stockholders may tender Shares not
tendered in the Offer. A subsequent offering period, if one is included, is not
an extension of the Offer, which already would have been completed.
Purchaser does not currently intend to include a subsequent offering period
in the Offer, although it reserves the right to do so in its sole discretion.
Under Exchange Act Rule 14d-7, no withdrawal rights apply to Shares tendered
during a subsequent offering period and no withdrawal rights apply during the
subsequent offering period with respect to Shares tendered in the Offer and
accepted for payment. Purchaser will pay the same consideration to stockholders
tendering Shares in the Offer or in a subsequent offering period, if it includes
one.
On the date of this Offer to Purchase, Omnicare beneficially owns 1,000
shares of Class A Common Stock. According to the Company's Current Report on
Form 8-K filed July 30, 2002, there were 18,460,599 shares of Class A Common
Stock (exclusive of 1,000 shares of such class owned by Omnicare) and 5,255,210
shares of Class B Common Stock outstanding as of July 28, 2002. For purposes of
the Minimum Condition, 'fully diluted basis' assumes that all outstanding stock
options are presently exercisable, and, 'after consummation of the Offer'
assumes that all outstanding shares of Class B Common Stock have converted into
shares of Class A Common Stock in accordance with the Amended and Restated
Certificate of Incorporation of the Company. The actual minimum number of Shares
required to satisfy the Minimum Condition will depend on the facts as they exist
on the date of purchase.
2. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
We reserve the right to extend the Expiration Date, in our sole discretion,
if at the scheduled Expiration Date any of the conditions to the Offer have not
been satisfied or waived. We also have the right to extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the 'SEC') or the SEC Staff applicable to
the Offer or any
8
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period required by applicable law. We expressly reserve the right to waive (to
the extent legally permissible) any of the conditions to the Offer, to make any
change in the terms of our conditions to the Offer and to provide a subsequent
offering period for the Offer in accordance with the Exchange Act Rule 14d-11.
If we increase or decrease the percentage of Shares being sought or increase
or decrease the consideration to be paid for Shares pursuant to the Offer and
the Offer is scheduled to expire at any time before the expiration of 10
business days from, and including, the date that notice of such increase or
decrease is first published, sent or given in the manner specified below, the
Offer will be extended until the expiration of 10 business days from, and
including, the date of such notice. If we make a material change in the terms of
the Offer (other than a change in the price to be paid in the Offer or the
percentage of securities sought) or in the information concerning the Offer, or
waive a material condition of the Offer, we will extend the Offer, if required
by applicable law, for a period sufficient to allow you to consider the amended
terms of the Offer. In a published release, the SEC has stated its view that an
offer must remain open for a minimum period of time following a material change
in the terms of such offer and that the waiver of a condition such as the
Minimum Condition is a material change in the terms of an offer. The release
states that an offer should remain open for a minimum of five business days from
the date that the material change is first published, sent or given to
stockholders, and that if material changes are made with respect to information
that approaches the significance of the price to be paid in the Offer or the
percentage of Shares sought in the Offer, a minimum of 10 business days may be
required to allow adequate dissemination and investor response. 'Business day'
means any day other than Saturday, Sunday or a federal holiday and consists of
the time period from 12:01 a.m. through 12:00 Midnight, New York City time.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement, in the case of an extension of
the Offer to be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirements of the Exchange Act Rule 14e-1(d). Subject
to applicable law (including the Exchange Act Rules 14d-4(d) and 14d-6(c), which
require that material changes in the information published, sent or given to any
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform them of such changes),
and without limiting the manner in which we may choose to make any public
announcement, we have no obligation to publish, advertise or otherwise
communicate any public announcements other than by issuing a press release
through PR Newswire.
If we extend the time during which the Offer is open, or if we are delayed
in its acceptance for payment of or payment for Shares pursuant to the Offer for
any reason, then, without prejudice to our rights under the Offer, the
Depositary may retain tendered Shares on our behalf and those Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described herein under 'The Offer -- Withdrawal Rights.' However, our
ability to delay the payment for Shares that we have accepted for payment is
limited by the Exchange Act Rule 14e-1(c), which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
stockholders promptly after the termination or withdrawal of the bidder's offer.
Pursuant to the Exchange Act Rule 14d-5 and Section 220 of the DGCL,
requests are being made to the Company for the use of the Company's stockholder
lists and security position listings for the purpose of disseminating the Offer
to holders of Shares. Upon compliance by the Company with such requests, this
Offer to Purchase and the related Letter of Transmittal will be mailed to record
holders of Shares and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists for subsequent transmittal to beneficial owners
of Shares.
3. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), we will accept for payment and pay for all Shares that are validly
tendered on or prior to the Expiration Date and not properly withdrawn pursuant
to the Offer as soon as we are permitted to do so under applicable law, subject
to
9
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the satisfaction or waiver of the conditions set forth in 'The
Offer -- Conditions to the Offer.' In addition, we reserve the right, subject to
compliance with the Exchange Act Rule 14e-1(c), to delay the acceptance for
payment or payment for Shares pending receipt of any regulatory or governmental
approvals to the Offer as described under the caption 'The Offer -- Certain
Legal Matters; Regulatory Approvals.' For a description of our right to
terminate the Offer and not accept for payment or pay for Shares or to delay
acceptance for payment or payment for Shares, see 'The Offer -- Extension of
Tender Period; Termination; Amendment.'
For purposes of the Offer, we shall be deemed to have accepted for payment
tendered Shares when, as and if we give oral or written notice of our acceptance
to the Depositary. We will pay for Shares accepted for payment pursuant to the
Offer by depositing the purchase price with the Depositary. The Depositary will
act as your agent for the purpose of receiving payments from us and transmitting
such payments to you. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or of a confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in 'The Offer -- Procedure for Tendering Shares')) and a properly
completed and duly executed Letter of Transmittal and any other required
documents. Accordingly, payment may be made to tendering stockholders at
different times if delivery of the Shares and other required documents occurs at
different times. For a description of the procedure for tendering Shares
pursuant to the Offer, see 'The Offer -- Procedure for Tendering Shares.'
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE CONSIDERATION PAID FOR
SHARES PURSUANT TO THE OFFER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT. IF
WE INCREASE THE CONSIDERATION TO BE PAID FOR SHARES PURSUANT TO THE OFFER, WE
WILL PAY SUCH INCREASED CONSIDERATION FOR ALL SHARES PURCHASED PURSUANT TO THE
OFFER.
We reserve the right to transfer or assign, in whole or, from time to time,
in part, to one or more of our affiliates the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve us
of our obligations under the Offer or prejudice your rights to receive payment
for Shares validly tendered and accepted for payment. If any tendered Shares are
not purchased pursuant to the Offer for any reason, or if certificates are
submitted for more Shares than are tendered, certificates for such unpurchased
or untendered Shares will be returned (or, in the case of Shares tendered by
book-entry transfer, such Shares will be credited to an account maintained at
the Book-Entry Transfer Facility, as defined below), without expense to you, as
promptly as practicable following the expiration or termination of the Offer.
4. PROCEDURE FOR TENDERING SHARES.
VALID TENDER OF SHARES. To tender Shares pursuant to the Offer, either
(1) the Depositary must receive at one of its addresses set forth on the back
cover of this Offer to Purchase (A) a properly completed and duly executed
Letter of Transmittal and any other documents required by the Letter of
Transmittal and (B) the share certificate(s) evidencing the Shares (the 'Share
Certificates') to be tendered or delivery of such Shares pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery, including an Agent's Message (as defined below) if the tendering
stockholder has not delivered a Letter of Transmittal), in each case by the
Expiration Date, or (2) the guaranteed delivery procedure described below must
be complied with.
The method of delivery of Share Certificates and all other required
documents, including delivery through the Book-Entry Transfer Facility (as
defined below), is at the option and risk of the tendering stockholder, and the
delivery will be deemed made only when actually received by the Depositary
including, in the case of a book-entry transfer, by Agent's Message. If delivery
is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the 'Book-Entry Transfer
Facility') for purposes of the Offer within two business days after the date of
this Offer to Purchase, and any financial institution that is a participant in
the system of the Book-Entry Transfer Facility may make delivery of Shares by
causing the Book-Entry
10
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Transfer Facility to transfer such Shares into the Depositary's account in
accordance with the procedures of the Book-Entry Transfer Facility. However,
although delivery of Shares may be effected through book-entry transfer, the
Letter of Transmittal properly completed and duly executed together with any
required signature guarantees or an Agent's Message and any other required
documents must, in any case, be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase by the
Expiration Date, or the guaranteed delivery procedure described below must be
complied with. 'Agent's Message' means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
book-entry confirmation which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of such book-entry
confirmation which such participant has received, and agrees to be bound by, the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against such participant.
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution (including
most banks, savings and loan associations and brokerage houses) that is a member
of a recognized Medallion Program approved by The Securities Transfer
Association, Inc. (each an 'Eligible Institution'). Signatures on a Letter of
Transmittal need not be guaranteed (1) if the Letter of Transmittal is signed by
the registered holder of the Shares tendered therewith and such holder has not
completed the box entitled 'Special Payment Instructions' on the Letter of
Transmittal or (2) if such Shares are tendered for the account of an Eligible
Institution. See Instructions 1, 5, 6 and 7 of the Letter of Transmittal.
GUARANTEED DELIVERY. If you wish to tender Shares pursuant to the Offer and
cannot deliver such Share Certificates and all other required documents to the
Depositary by the Expiration Date, or cannot complete the procedure for delivery
by book-entry transfer on a timely basis, you may nevertheless tender such
Shares if all of the following conditions are met:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery in
the form provided by Purchaser is received by the Depositary (as
provided below) by the Expiration Date; and
(c) the Share Certificates (or a confirmation of a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantee or an Agent's
Message and any other documents required by the Letter of Transmittal,
are received by the Depositary within three business days after the date
of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice. The method of
delivery of Shares and all other required documents, including through the
Book-Entry Transfer Facility, is at your option and risk, and the delivery will
be deemed made only when actually received by the Depositary. If certificates
for Shares are sent by mail, we recommend registered mail with return receipt
requested, properly insured.
BACKUP WITHHOLDING. Under U.S. federal income tax law, the Depositary may be
required to withhold a portion of any payments made to certain stockholders
pursuant to the Offer or the Proposed Merger. In order to avoid such backup
withholding, you must provide the Depositary with your correct taxpayer
identification number ('TIN') and certify that you are not subject to such
backup withholding by completing the Substitute Form W-9 included in the Letter
of Transmittal. Certain stockholders (including, among others, all corporations
and certain foreign individuals and entities) are not subject to backup
withholding. If a stockholder does not provide its correct TIN or fails to
provide the certifications described above, the Internal Revenue Service may
impose a penalty on the stockholder, and payment of cash to the stockholder
pursuant to the Offer may be subject to backup withholding. All stockholders
tendering Shares pursuant to the Offer should complete and sign the Substitute
Form
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W-9 included in the Letter of Transmittal to provide the information necessary
to avoid backup withholding. If you are a non-resident alien or foreign entity
not subject to backup withholding, you must give the Depositary a properly
completed Form W-8BEN (or successor form) in order to avoid backup withholding
with respect to payments made to you.
GRANT OF PROXY. By executing a Letter of Transmittal (or delivering an
Agent's Message), you irrevocably appoint designees of Purchaser as your proxies
in the manner set forth in the Letter of Transmittal to the full extent of your
rights with respect to the Shares tendered and accepted for payment by us (and
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after the date of this Offer to Purchase). All such proxies
are irrevocable and coupled with an interest in the tendered Shares. Such
appointment is effective only upon our acceptance for payment of such Shares.
Upon such acceptance for payment, all prior proxies and consents granted by you
with respect to such Shares and other securities will, without further action,
be revoked, and no subsequent proxies may be given nor subsequent written
consents executed (and, if previously given or executed, will cease to be
effective). Our designees will be empowered to exercise all your voting and
other rights as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the Company's stockholders, by written consent
or otherwise. We reserve the right to require that, in order for Shares to be
validly tendered, immediately upon our acceptance for payment of such Shares, we
are able to exercise full voting rights with respect to such Shares and other
securities (including voting at any meeting of stockholders then scheduled or
acting by written consent without a meeting).
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer. The Offer does not constitute a solicitation of
proxies, absent a purchase of Shares, for any meeting of the Company's
stockholders, which will be made only pursuant to separate proxy solicitation
materials complying with the Exchange Act.
The tender of Shares pursuant to any one of the procedures described above
will constitute your acceptance of the Offer, as well as your representation and
warranty that (1) you own the Shares being tendered and (2) you have the full
power and authority to tender, sell, assign and transfer the Shares tendered, as
specified in the Letter of Transmittal. Our acceptance for payment of Shares
tendered by you pursuant to the Offer will constitute a binding agreement
between us with respect to such Shares, upon the terms and subject to the
conditions of the Offer.
VALIDITY. We will determine, in our sole discretion, all questions as to the
form of documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares, and our determination shall be
final and binding. We reserve the absolute right to reject any or all tenders of
Shares that we determine not to be in proper form or the acceptance for payment
of or payment for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in any tender of
Shares. Our interpretation of the terms and conditions of the Offer will be
final and binding. None of Omnicare, Purchaser, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defect or irregularity in tenders or waiver of any such
defect or irregularity or incur any liability for failure to give any such
notification.
5. WITHDRAWAL RIGHTS.
You may withdraw tenders of Shares made pursuant to the Offer at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after October 6, 2002 unless such Shares are accepted
for payment as provided in this Offer to Purchase. If we extend the period of
time during which the Offer is open, are delayed in accepting for payment or
paying for Shares pursuant to the Offer for any reason or are unable to accept
Shares for payment pursuant to the Offer for any reason, then, without prejudice
to our rights under the Offer, the Depositary may, on our behalf, retain all
Shares tendered, and such Shares may not be withdrawn except as otherwise
provided in this section.
To withdraw tendered Shares, a written or facsimile transmission notice of
withdrawal with respect to the Shares must be timely received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase,
and the notice of withdrawal must specify the name of the person who
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tendered the Shares to be withdrawn and the number of Shares to be withdrawn and
the name of the registered holder of Shares, if different from that of the
person who tendered such Shares. If the Shares to be withdrawn have been
delivered to the Depositary, a signed notice of withdrawal with (except in the
case of Shares tendered by an Eligible Institution) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered by again following one of the procedures described in 'The Offer
-- Procedures for Tendering Shares' at any time prior to the Expiration Date.
We will determine, in our sole discretion, all questions as to the form and
validity (including time of receipt) of any notice of withdrawal, and our
determination shall be final and binding. None of Omnicare, Purchaser, the
Depositary, the Dealer Manager, the Information Agent or any other person will
be under any duty to give notification of any defect or irregularity in any
notice of withdrawal or waiver of any such defect or irregularity or incur any
liability for failure to give any such notification.
If Purchaser provides a subsequent offering period following the Offer, no
withdrawal rights will apply to Shares tendered during that subsequent offering
period or to Shares tendered in the Offer and accepted for payment.
6. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain U.S. federal income tax consequences
of the Offer and the Proposed Merger to stockholders of the Company whose shares
are tendered and accepted for payment pursuant to the Offer, or whose shares are
converted to cash in the Proposed Merger. The summary is based on the Internal
Revenue Code of 1986, as amended (the 'Code'), applicable Treasury Regulations,
and administrative and judicial interpretations thereof, each as in effect as of
the date of this Offer to Purchase, all of which may change, possibly with
retroactive effect. The summary is for general information only and does not
purport to address all of the tax consequences that may be relevant to
particular stockholders in light of their personal circumstances. The summary
applies only to stockholders who hold their shares as capital assets and may not
apply to stockholders subject to special rules under the Code, including,
without limitation, persons who acquired their Shares upon the exercise of stock
options or otherwise as compensation, financial institutions, brokers, dealers
or traders in securities or commodities, insurance companies, partnerships or
other entities treated as partnerships or flow-through entities for U.S. federal
income tax purposes, tax-exempt organizations, persons who are subject to
alternative minimum tax, persons who hold Shares as a position in a 'straddle'
or as part of a 'hedging' or 'conversion' transaction or other integrated
investment, or persons that have a functional currency other than the United
States dollar. This summary does not discuss the U.S. federal income tax
consequences to any stockholder of the Company who, for U.S. federal income tax
purposes, is a non-resident alien individual, foreign corporation, foreign
partnership or foreign estate or trust, and does not address any state, local or
foreign tax consequences of the Offer or the Proposed Merger.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH STOCKHOLDER SHOULD CONSULT
SUCH STOCKHOLDER'S TAX ADVISOR REGARDING THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
STOCKHOLDER OF THE OFFER AND THE PROPOSED MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
The receipt of cash in exchange for Shares pursuant to the Offer or the
Proposed Merger will be a taxable transaction for U.S. federal income tax
purposes. In general, a stockholder who sells Shares pursuant to the Offer or
receives cash in exchange for Shares pursuant to the Proposed Merger will
recognize gain or loss for U.S. federal income tax purposes equal to the
difference, if any, between the amount of cash received and the holder's
adjusted tax basis in the Shares sold pursuant to the Offer or
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exchanged for cash pursuant to the Proposed Merger. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or exchanged for
cash pursuant to the Proposed Merger. Any such gain or loss generally will be
long-term capital gain or loss if the stockholder has held the Shares for more
than one year. Long-term capital gain of noncorporate stockholders is generally
taxable at a maximum rate of 20%. Certain limitations apply to the use of
capital losses.
7. PRICE RANGE OF CLASS A COMMON STOCK; DIVIDENDS.
The Class A Common Stock is traded on the Over-The-Counter Bulletin Board
(the 'OTCBB') under the symbol 'NCSS.OB.' The shares of Class B Common Stock are
not publicly traded. Each share of Class B Common Stock is convertible at any
time into one share of Class A Common Stock at the option of the holder of the
share of Class B Common Stock. The following table sets forth, for each of the
periods indicated based on the Company's fiscal year that ends on June 30, the
high and low intra-day sales prices per share of the Class A Common Stock on the
OTCBB based on published financial sources. The Company has not declared or paid
cash dividends on its stock for the periods represented below.
<Table>
<Caption>
HIGH LOW
---- ---
Fiscal 2001
First Quarter........................................... $0.78 $0.19
Second Quarter.......................................... 0.55 0.10
Third Quarter........................................... 0.50 0.10
Fourth Quarter.......................................... 0.37 0.16
Fiscal 2002
First Quarter........................................... $0.25 $0.16
Second Quarter.......................................... 0.24 0.12
Third Quarter........................................... 0.21 0.07
Fourth Quarter.......................................... 0.26 0.11
Fiscal 2003
First Quarter through August 7, 2002.................... $2.92 $0.26
</Table>
On July 26, 2002, the last full trading day before the date the Company
entered into the Genesis Agreement, the closing price per share of the Class A
Common Stock was $0.74.
On July 31, 2002, the last full trading day before Omnicare's intention to
commence the Offer was announced, the reported closing price per share of Class
A Common Stock was $1.73.
On August 7, 2002, the last full trading day before the commencement of the
Offer, the reported closing price per share of the Class A Common Stock was
$2.25.
WE URGE YOU TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES OF CLASS A
COMMON STOCK.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. The Company is a Delaware corporation, with principal executive
offices at 3201 Enterprise Parkway, Beachwood, Ohio 44122. The telephone number
of the Company's executive offices is (216) 378-6800. The Company is a leading
independent provider of pharmacy services to long-term care institutions,
including skilled nursing facilities, assisted living facilities and other
institutional health care settings. The Company purchases and dispenses
prescription and non-prescription pharmaceuticals and provides client facilities
with related management services, automated medical record keeping, drug therapy
evaluation and regulatory assistance. The Company also provides various
ancillary health care services to complement its core pharmacy services,
including infusion therapy, nutrition management, software services, and other
services.
AVAILABLE INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular dates,
concerning the
14
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Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company. Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the SEC's regional offices at 233 Broadway,
New York, New York 10279 and 175 W. Jackson Boulevard, Suite 900, Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference facilities. Copies of such material can also be obtained at the
Web site maintained by the SEC at http://www.sec.gov.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the SEC or otherwise publicly
available. Although we have no knowledge that would indicate that any statements
contained herein based upon such reports and documents are untrue, we take no
responsibility for the accuracy or completeness of the information contained in
such reports and other documents or for any failure by the Company to disclose
events that may have occurred and may affect the significance or accuracy of any
such information but that are unknown to us.
9. CERTAIN INFORMATION CONCERNING PURCHASER AND OMNICARE.
GENERAL. Purchaser is a Delaware corporation incorporated on July 31, 2002,
with principal executive offices at 100 East RiverCenter Boulevard, Covington,
Kentucky 41011. The telephone number of Purchaser's principal executive offices
is (859) 392-3300. Purchaser was formed solely for the purposes of engaging in
the Offer and the Proposed Merger. To date, Purchaser has engaged in no
activities other than those incident to Purchaser's formation and the
commencement of the Offer. Purchaser is a wholly-owned subsidiary of Omnicare.
Omnicare is a Delaware corporation with principal executive offices at 100
East RiverCenter Boulevard, Covington, Kentucky 41011. The telephone number of
Omnicare's executive offices is (859) 392-3300. Omnicare is a leading provider
of pharmacy services to long-term care institutions such as skilled nursing
facilities, assisted living facilities and other institutional health care
facilities. Omnicare also provides comprehensive clinical research for the
pharmaceutical and biotechnology industries. Omnicare operates in two business
segments. The largest segment, pharmacy services, provides distribution of
pharmaceuticals, related pharmacy consulting, data management services and
medical supplies to long-term care facilities. Pharmacy services purchases,
repackages and dispenses pharmaceuticals, both prescription and
non-prescription, and provides computerized medical record-keeping and
third-party billing for residents in such facilities. Omnicare also provides
consultant pharmacist services, including evaluating residents' drug therapy,
monitoring the control, distribution and administration of drugs within the
nursing facility and assisting in compliance with state and federal regulations.
In addition, Omnicare provides ancillary services, such as infusion therapy and
dialysis, distributes medical supplies and offers clinical and financial
software information systems to its client long-term care facilities. At March
31, 2002, Omnicare provided pharmacy services to approximately 729,500 residents
in long-term care facilities in 45 states. Omnicare also provides pharmaceutical
case management services for those over 65 who have drug benefits under
corporate-sponsored retirement programs. The pharmacy services segment provides
no services outside of the United States.
Omnicare's other business segment is contract research organization services
('CRO Services'). CRO Services is a leading international provider of
comprehensive product development and research services to client companies in
the pharmaceutical, biotechnology, medical device and diagnostics industries,
operating in 27 countries around the world.
The name, business address, principal occupation or employment, five-year
employment history and citizenship of each director and executive officer of
Omnicare and Purchaser and certain other information are set forth on Schedule I
to this Offer to Purchase. Except as set forth in this Offer to Purchase, during
the past two years, none of us, nor, to our best knowledge, any of the persons
listed on Schedule I hereto, has had any business relationship or entered into
any transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the SEC applicable to the Offer. Except as set forth in this Offer to Purchase,
none of the persons listed in Schedule I, nor any of their respective associates
or majority-owned subsidiaries,
15
<Page>
beneficially owns any securities of the Company. Except as set forth in this
Offer to Purchase, there have been no contacts, negotiations or transactions
between us or any of our subsidiaries or, to our best knowledge, any of the
persons listed in Schedule I to this Offer to Purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets. None of
the persons listed in Schedule I has, during the past five years, been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
Except as described in Schedule I, none of the persons listed in Schedule I has,
during the past five years, been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
As of the date of this Offer to Purchase, Omnicare beneficially owns 1,000
shares of Class A Common Stock, representing less than 1% of the outstanding
Shares. Transactions in the Shares by Omnicare effected in the past 60 days are
described in Schedule II to this Offer to Purchase. All such transactions were
effected by Omnicare in the open market within the price ranges per share of
Class A Common Stock indicated on Schedule II.
AVAILABLE INFORMATION. Omnicare is subject to the informational requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. Omnicare is required to disclose in such
proxy statements certain information, as of particular dates, concerning its
directors and officers, their remuneration, stock options granted to them, the
principal holders of its securities and any material interests of such persons
in transactions with Omnicare. Such reports, proxy statements and other
information should be available for inspection and copying at the offices of the
SEC in the same manner as set forth with respect to the Company in 'Certain
Information Concerning the Company -- Available Information.'
10. SOURCE AND AMOUNT OF FUNDS.
The offer is not subject to any financing conditions. We will need
approximately $95 million to purchase all of the outstanding Shares (assuming
the exercise of all outstanding stock options) pursuant to the Offer and to pay
related fees and expenses. In addition, we currently intend, after the Effective
Time, to pay off the Company's line of credit pursuant to the Credit Agreement,
dated as of June 1, 1998, among the Company and the lending institutions named
therein as lenders, which had approximately $206 million outstanding as of
March 31, 2002 (the 'Line of Credit'). We also currently intend, after the
Effective Time, to redeem the Company's 5 3/4% convertible subordinated
debentures in accordance with their terms, of which approximately $102 million
were outstanding as of March 31, 2002 (the '5 3/4% Notes'). Omnicare will ensure
that Purchaser has sufficient funds to acquire all of the outstanding Shares
pursuant to the Offer and the Proposed Merger, pay off the Line of Credit and
redeem the 5 3/4% Notes.
Omnicare has possession of, or has available to it, sufficient funds to
close the Offer and the Proposed Merger. Omnicare intends to obtain the
necessary funds from available cash and working capital and expects to obtain
the balance of the funds required to close the Offer from Omnicare's current
revolving credit facility which is provided by Bank One, NA, having its
principal office in Chicago, Illinois ('Bank One'), as administrative agent,
Banc One Capital Markets, Inc., as joint lead arranger and sole book runner, UBS
Warburg LLC, as joint lead arranger and syndication agent, Lehman Commercial
Paper Inc., as syndication agent, SunTrust Bank, as documentation agent, and
Deutsche Bank AG, New York Branch, as documentation agent (the 'Revolving Credit
Facility').
The Revolving Credit Facility consists of a $500 million revolving loan
commitment, inclusive of a $25 million letter of credit subfacility, that has a
final maturity of March 20, 2004 and allows us to reduce the commitment in
increments of $5 million. The $25 million letter of credit subcommitment allows
for the issuance of letters of credit that have a maximum duration not to exceed
the maturity of the facility. The Revolving Credit Facility is guaranteed by
subsidiaries that, together with Omnicare in the aggregate, account for at least
90% of our consolidated assets and revenues. Loans under the Revolving Credit
Facility bear interest, at our option, at a rate equal to either (i) the higher
of (a) Bank One's
16
<Page>
prime rate or (b) the federal funds rate plus 0.50% or (ii)(a) the quotient of
(A) the interest rate in the London interbank market for loans of the same
general interest period duration, divided by (B) one minus the maximum aggregate
reserves imposed on Eurocurrency liabilities, plus (b) between one and
one-quarter percent and two and one-half percent, depending on certain senior
long-term debt ratings.
The Revolving Credit Facility limits, among other things, our ability to
incur contingent obligations, to make investments, to make additional
acquisitions or merge with another entity, to sell or to create or incur liens
on assets, to repay other indebtedness prior to its stated maturity and to amend
certain indentures to which we are a party. In addition, the Revolving Credit
Facility requires us to meet certain financial tests. We can reborrow amounts
repaid under the Revolving Credit Facility prior to maturity. Omnicare currently
has made no plans or arrangements to finance or repay such borrowings.
The foregoing summary of the Revolving Credit Facility is qualified in its
entirety by reference to the text of the Revolving Credit Facility, a copy of
which has been incorporated by reference as an exhibit to the Schedule TO filed
by Omnicare and Purchaser in connection with the Offer. The Revolving Credit
Facility may be inspected at, and copies may be obtained from, the same places
and in the manner set forth in 'The Offer -- Certain Information Concerning
Purchaser and Omnicare -- Available Information.'
As of the date of this Offer to Purchase, Omnicare has obtained the
necessary consents from its lenders under its existing bank facilities to pay
off the Line of Credit and to redeem the 5 3/4% Notes in connection with the
Offer and Proposed Merger.
11. BACKGROUND OF THE OFFER.
As part of the continuous evaluation of its business, Omnicare regularly
considers a variety of strategic options and potential transactions. As part of
this process, Omnicare has evaluated various alternatives for expanding its
business, including a potential acquisition of the Company, and has completed
numerous acquisitions in the institutional pharmacy industry since 1988.
On April 21, 2000, the Company received a formal notice of default from the
bank group for its senior credit facility. The Company's closing stock price on
the last trading day before April 21 was $1.38. Over the next few months, the
Company's stock price fell to $0.31 per share and, on August 18, 2000, the
Company stated publicly that it had engaged UBS Warburg LLC, as its financial
advisor, to assist the Company in exploring strategic alternatives. Despite the
Company's efforts to identify strategic alternatives, none were announced.
During this period, the Company's stock price continued to fall and by the end
of the year, the Company's stock price was $0.10 per share. The Company,
thereafter, elected not to make the semi-annual $2.875 million interest payment
due February 15, 2001 on the 5 3/4% Notes. The Company also engaged Brown,
Gibbons, Lang & Company L.P., a firm that provides financial advisory services
in connection with corporate restructurings ('Brown Gibbons'), to act as the
Company's sole financial advisor in its discussions with its bank group with
respect to certain defaults under its senior credit facility and in its
discussions with an ad hoc committee of holders (the 'Ad Hoc Committee') of the
5 3/4% Notes regarding a possible restructuring of that indebtedness.
In June 2001, Omnicare retained Merrill Lynch and Dewey Ballantine as its
financial and legal advisors, respectively, to assist it in negotiating a
transaction with the Company. At an industry conference in July 2001, Omnicare's
president and chief executive officer met with the chief executive officer of
the Company, and, during this meeting, Omnicare's president and chief executive
officer expressed an interest in a potential acquisition by Omnicare of the
Company. Thereafter, on July 20, 2001, the Company's chief executive officer
contacted Omnicare's president and chief executive officer and indicated that
the Company's Board of Directors would review Omnicare's interest in an
acquisition of the Company. Later that day, in a letter addressed to the
Company's chief executive officer (with a copy to each of the members of the
Company's Board of Directors), Omnicare reiterated its interest in an
acquisition of the Company and provided additional detail regarding its
proposal. In that letter, Omnicare's president and chief executive officer
indicated that Omnicare was prepared to offer approximately $225 million in cash
to acquire the assets of the Company and to discuss the details of its proposal.
The July 20 letter indicated that Omnicare would require limited due diligence
to confirm certain key assumptions. In an effort to facilitate discussions
regarding a potential transaction and the exchange of information, Omnicare and
the Company, through their respective legal and financial
17
<Page>
advisors, began negotiating the terms of a confidentiality agreement. By letter
dated August 9, 2001, the Company's counsel requested that Omnicare indicate in
writing specifically the limited due diligence materials that it would need to
review. The letter further stated that representatives of Omnicare should not
directly contact representatives of the Company, but rather that all future
communications should be conducted through the parties' respective advisors. On
August 17, 2001, the Company stated publicly that, along with its financial
advisor Brown Gibbons, it was also discussing various strategic alternatives
with third parties.
On August 29, 2001, frustrated by the slow pace of the negotiation of the
confidentiality agreement, Omnicare sent a written proposal to the Company, in
which Omnicare offered to pay $270 million in cash to acquire the Company,
excluding cash and certain liabilities. In light of the Company's then-existing
financial situation, and the fact that the Company's stock was trading at $0.21
per share, Omnicare's proposal contemplated a purchase by Omnicare of the
Company pursuant to Section 363 of the United States Bankruptcy Code. In its
written proposal on August 29, Omnicare indicated that it was willing to discuss
the details of its proposal and any alternative transaction structures. The
proposal also was sent to the Company's and the Ad Hoc Committee's legal and
financial advisors. The Company never responded to Omnicare's written proposal.
In late September 2001, however, advisors to the parties continued to
negotiate and finally agreed to the terms of a confidentiality agreement, which
was dated as of August 29, 2001, the date of Omnicare's original proposal. At
the end of September 2001, Brown Gibbons provided Merrill Lynch with certain
limited non-public business and financial information regarding the Company,
including its current fiscal year estimated financial forecast through June 30,
2002. Unfortunately, this information was of limited value because it lacked
sufficient detail or explanation regarding the manner in which the forecast was
derived. Despite repeated requests from Merrill Lynch to provide the necessary
detail, the Company did not provide any information regarding the Company's
pharmaceutical purchases, including volume and pricing information for key
drugs, or its costs of distribution on a per distribution center basis. Omnicare
viewed this information as necessary for an assessment of the potential
synergies that could be achieved from a transaction with the Company, which, in
turn, would provide Omnicare with a basis for potentially increasing its offer.
In October 2001, Merrill Lynch and Brown Gibbons met to discuss the
confidential information that had been provided to Omnicare to date. Brown
Gibbons provided Merrill Lynch with a schedule that indicated that a combination
of the businesses of Omnicare and the Company could result in synergies of
approximately $77 million to $87 million. Brown Gibbons, however, refused to
provide Merrill Lynch with sufficient detail to support the synergy data. At the
October 2001 meeting, Brown Gibbons also proposed a transaction pursuant to
which, among other things, Omnicare would buy the Company, make a modest cash
payment to the equity holders and repay the Notes at a modest discount to par.
Omnicare ultimately concluded, along with Merrill Lynch, that the forecast
provided by Brown Gibbons lacked sufficient detail to be meaningful and, as a
consequence, Omnicare did not rely on such forecast and did not believe that it
had sufficient data to evaluate Brown Gibbons' proposal.
Although the Company was experiencing financial difficulty and had
previously stated publicly that it had retained financial advisors to explore
strategic alternatives, during the period from August to mid-November 2001, the
Company failed to respond to Omnicare's repeated requests for the information
described above or to engage in any meaningful discussions regarding a potential
transaction with Omnicare.
Frustrated by the lack of any response from the Company's senior management,
Omnicare arranged a meeting with a representative of the Ad Hoc Committee,
together with its financial and legal advisors, to discuss Omnicare's interest
in acquiring the Company. On November 15, 2001, representatives of Omnicare and
the Ad Hoc Committee met to discuss a potential transaction involving the
Company. The Ad Hoc Committee stated that it believed that it could obtain the
Company's support for a transaction in which Omnicare would acquire the assets
of the Company, if Omnicare and the Ad Hoc Committee reached an agreement as to
the appropriate price. Following the November 15, 2001 meeting, Omnicare and the
Ad Hoc Committee continued to discuss a potential transaction involving the
Company. On January 29, 2002, Omnicare and the Ad Hoc Committee agreed
18
<Page>
that Omnicare would acquire the assets of the Company for approximately
$313,750,000 in cash. At the conclusion of this meeting, the Ad Hoc Committee
indicated that it could obtain the Company's support for the proposed
transaction.
From late January until early March 2002, the Ad Hoc Committee and Omnicare
negotiated a term sheet for the potential transaction. In early March 2002,
Omnicare was advised by counsel to the Ad Hoc Committee that the Company had not
been participating with the Ad Hoc Committee in the review and negotiation of
the term sheet. At that point, Omnicare and the Ad Hoc Committee agreed that, in
an effort to make progress on the transaction, Omnicare would produce a draft
asset purchase agreement for the proposed transaction reflecting the
negotiations to date, and that the Ad Hoc Committee would present the draft to
the Company. Omnicare urged that the Company become directly involved in the
process. On March 25, 2002, Omnicare delivered a draft asset purchase agreement
to the Ad Hoc Committee and was advised by the Ad Hoc Committee and its counsel
that the draft would be conveyed to, and discussed with, the Company. After
repeated inquiries as to the status of these discussions with the Company
concerning the draft, the Ad Hoc Committee sent a revised version of the asset
purchase agreement to Omnicare on May 22, 2002. Omnicare was advised by counsel
to the Ad Hoc Committee that the revised document reflected the Company's
comments.
Omnicare and its advisors were concerned that the revised draft asset
purchase agreement delivered to Omnicare resolved virtually no issues between
the parties and again urged that the parties meet to negotiate. On July 15,
2002, the Company's stock price rose from $0.28 to $0.45 and the trading volume
increased from approximately 17,000 shares on the prior trading day to
approximately 320,000 shares per day. The dramatic increase in the Company's
stock price and trading volume, coupled with the fact that Omnicare was still
unable to obtain a meeting with, or get a response from, the Company, led
Omnicare to become increasingly concerned that the Company was negotiating with
others to the exclusion of Omnicare. During the week of July 22, 2002,
Omnicare's lawyers contacted counsel to the Ad Hoc Committee to schedule a
meeting for the week of July 30, 2002. Omnicare's lawyers were advised by the Ad
Hoc Committee's counsel that the Ad Hoc Committee's counsel would see if their
clients were available on those dates and would get back to Omnicare. While
Omnicare awaited confirmation of the meeting date, it became even more concerned
that the Company might be negotiating a transaction with another party. It had
then been approximately one year since Omnicare had submitted its initial
written proposal expressing an interest in acquiring the Company, Omnicare had
made repeated requests to discuss its proposal with the Company, the Company was
experiencing financial difficulties and Omnicare still had not been able to hold
any discussions with the Company regarding Omnicare's interest in acquiring the
Company. In an effort to focus the Company on its proposal, on July 26, 2002,
Omnicare sent the following letter to the Company and each of its board members:
19
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[LETTERHEAD OF OMNICARE, INC.]
July 26, 2002
CONFIDENTIAL
Mr. Jon H. Outcalt
Chairman of the Board of Directors
NCS Healthcare, Inc.
3201 Enterprise Parkway
Suite 220
Beachwood, Ohio 44122
Dear Mr. Outcalt:
As you know, Omnicare and representatives of NCS have held discussions over
an extended period of time regarding an acquisition of NCS by Omnicare. We
are disappointed that these discussions have not progressed in any material
way.
We continue to believe that there are clear and compelling advantages to
both Omnicare and NCS from the combination of our two companies and that
such a transaction would create significant value for each of our companies
and our respective security holders. In an effort to consummate a mutually
beneficial transaction, our Board has authorized us to propose that Omnicare
acquire NCS through a negotiated merger transaction in which (i) NCS
stockholders would receive $3.00 in cash for each share of outstanding
common stock, representing a premium of more than 410% over your closing
stock price on July 25, 2002 and (ii) Omnicare would assume and/or retire
existing NCS debt at its full principal amount plus accrued interest. If you
prefer, we would also consider a stock transaction in order to allow NCS
stockholders to share in the upside of the combined companies. We believe
this proposal provides exceptional value to the NCS security holders.
As I am sure you are aware, Omnicare is an important participant in the
institutional pharmacy business, with annual sales in excess of $2.1 billion
during its last fiscal year. We have, as you do, an enviable reputation for
the quality of our products and service. We are extremely impressed with the
businesses you and your management team have developed and the manner in
which they complement our businesses. We believe the complementary aspects
of our two companies' services, customers and distribution capabilities
would enable the combined entity to be an even more effective competitor.
Of course, our proposal contemplates, among other things, the negotiation
and execution of a mutually acceptable definitive merger agreement, which we
believe can be accomplished very quickly. The definitive merger and other
agreements will contain provisions customary for transactions of this type,
including the receipt of any required regulatory and third party approvals
and consents. Please note that we will not request voting or similar
agreements from any NCS stockholder, since we believe that the stockholders
should have the option to choose a transaction providing them with the
greatest value. In addition, since we have not yet been afforded the
opportunity to conduct any meaningful due diligence, we would like to
conduct an expedited due diligence investigation of NCS, which we expect can
be completed in seven to ten days from the date materials are made available
to us.
We hope that you and the other members of the NCS Board of Directors will
view this proposal as we do -- an excellent opportunity for the equity and
debt holders of NCS to realize full value for their securities to an extent
not likely to be available to them in the marketplace. In the context of a
negotiated transaction, we are prepared to discuss all aspects of our
proposal with you, including structure, economics and your views as to the
proper roles for our respective management and employees in the combined
company. We wish, and are prepared, to meet immediately with you
20
<Page>
and your directors, management and advisors to answer any questions about
our proposal and to proceed with negotiations leading to the execution of a
definitive merger agreement.
We trust that you and the other members of the NCS Board of Directors will
give this proposal prompt and serious consideration. At this point we expect
that this letter and its contents will remain confidential. We are sending
copies of this letter to Mr. Kevin Shaw and the other members of the Board
of Directors so they can familiarize themselves with our proposal. We would
request a response as soon as possible and hope this transaction can be
concluded on a consensual basis.
We look forward to hearing from you.
Sincerely,
Joel F. Gemunder
President and Chief Executive Officer
cc: NCS Board of Directors
In addition, on July 26, 2002, Omnicare's president and chief executive
officer, attempted to contact the Company's chairman and its chief executive
officer to advise them that the proposal was being sent to their offices and to
offer to meet and discuss Omnicare's proposal as soon as possible. Although
Omnicare's president and chief executive officer was not able to reach either
the Company's chairman or chief executive officer directly, he did leave each of
them a voicemail message regarding the proposal and his interest in hearing from
them as soon as possible. In addition, Omnicare's legal and financial advisors
attempted to contact the Company's legal and financial advisors and left
messages for each of them requesting a return phone call to discuss the
proposal.
In response to the July 26, 2002 letter, a representative of the Ad Hoc
Committee contacted the president and chief executive officer of Omnicare and
acknowledged that the Company was in discussions with another potential
purchaser. Omnicare received no response to its July 26 letter from either the
Company or its advisors. On July 29, compelled by the Company's failure to
respond to Omnicare's July 26 letter and telephone calls, Omnicare sent the
following letter to the Company and made its contents public:
[LETTERHEAD OF OMNICARE, INC.]
July 28, 2002
Mr. Jon H. Outcalt
Chairman of the Board of Directors
NCS Healthcare, Inc.
3201 Enterprise Parkway
Suite 220
Beachwood, Ohio 44122
Dear Mr. Outcalt:
We are writing to express our disappointment that NCS and its
representatives have continued to refuse to meet with us to discuss our
proposal to acquire NCS. Consequently, we feel obligated to send you this
letter and make it public so your equity and debt holders are aware of our
proposal. As you know, we have previously proposed that Omnicare would
acquire NCS in a merger transaction pursuant to which NCS stockholders would
receive $3.00 per share in cash (representing more than 4x your current
stock price, which is already at its highest level in two years) and
Omnicare would assume and/or retire existing NCS debt at its full principal
amount plus accrued interest. This proposal would provide almost $400
million in cash to your security holders. We continue to believe this
proposal provides exceptional value to the NCS security holders.
21
<Page>
Our Board has authorized this proposal, and we are prepared to negotiate
quickly and execute a mutually acceptable definitive merger agreement. To
help clarify our proposal, we have enclosed a draft merger agreement, which
contains provisions customary for transactions of this type. Please note
that our proposal is not subject to any financing contingencies. Also, we
will not request voting or similar agreements from any NCS stockholder, and
we are not requesting a 'break-up' or similar fee that might act as a
deterrent to someone willing to provide greater value to NCS's equity and
debt holders. We believe that the security holders of NCS should have the
option to choose a transaction providing them with the greatest value
without any impediment to that choice or the payment of any penalty for that
choice.
As I am sure you are aware, Omnicare is an important participant in the
institutional pharmacy business, with annual sales in excess of $2.1 billion
during its last fiscal year, and has completed numerous acquisitions in this
industry since 1988. In addition, we have been analyzing a combination of
our two companies for quite some time with the assistance of Merrill Lynch,
our financial advisor, and Dewey Ballantine, our legal counsel. We have done
extensive due diligence on NCS's public filings and are extremely
comfortable with that information. Consequently, we need to do only
confirmatory due diligence, which would involve only a review of certain
non-public information typical for a transaction of this type. We believe
that, with your cooperation, we can complete our confirmatory due diligence
and execute a definitive merger agreement in one week.
We hope that you and the other members of the NCS Board of Directors will
view this proposal as we do -- an excellent opportunity for the equity and
debt holders of NCS to realize full value for their securities to an extent
not likely to be available to them in the marketplace. In the context of a
negotiated transaction, we are prepared to discuss all aspects of our
proposal with you, including structure, economics and your views as to the
proper roles for our respective management and employees in the combined
company. We would also consider a stock transaction in order to allow NCS
stockholders to share in the upside of the combined companies. With respect
to structure, we would be willing to discuss acquiring the securities of NCS
in a tender offer. We wish, and are prepared, to meet immediately with you
and the other directors, management and advisors to answer any questions
about our proposal and to proceed with negotiations leading to the execution
of a definitive merger agreement.
We continue to believe that there are clear and compelling advantages to
both Omnicare and NCS from the combination of our two companies and that
such a transaction would create significant value for each of our companies
and our respective security holders. We trust that you and the other members
of the NCS Board of Directors will give this proposal immediate and serious
consideration. Your fiduciary duties to your equity and debt holders require
no less.
We look forward to hearing from you promptly.
Sincerely,
Joel F. Gemunder
President and Chief Executive Officer
cc: NCS Board of Directors
On July 29, 2002, after Omnicare's letter was sent to the Company and made
public, the Company announced that it had entered into an agreement to be
acquired by Genesis.
By August 1, 2002, Omnicare still had not been contacted by the Company
regarding its proposal. In light of the Company's continued refusal to respond
to its proposal, Omnicare reluctantly concluded that it had no choice but to
file suit. On that same day, Omnicare commenced an action in Delaware Chancery
Court seeking, among other things, injunctive relief prohibiting the Company's
Board of Directors, Genesis and Geneva Sub from taking further steps with
respect to the Genesis Agreement and declaring that agreement and the related
Voting Agreements null and void. The Complaint alleges, among other things, that
the Genesis Agreement is a low-premium acquisition of the Company for far
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less than what Omnicare has offered and that the members of the Company's Board
of Directors have breached their fiduciary duties to the Company's stockholders
by declining even to consider Omnicare's superior offer and by agreeing to terms
in the Genesis Agreement that effectively 'lock up' Genesis's acquisition of the
Company, thereby forcing an inferior deal upon the Company's stockholders and
making it impossible for Omnicare's offer, or any other offer from any other
bidder, to be accepted.
Omnicare also announced that it would commence a tender offer to acquire the
Shares and to increase its offer price per share to $3.50. Omnicare issued the
following press release announcing this course of action:
Omnicare Files Lawsuit to Set Aside Merger Agreement
Between Genesis Health Ventures and NCS HealthCare
Intends to Commence Cash Tender Offer for NCS at $3.50 per Share
COVINGTON, Ky. -- August 1, 2002 -- Omnicare, Inc. (NYSE: OCR), a leading
provider of pharmaceutical care for the elderly, today announced that it has
filed a lawsuit in Delaware Chancery Court to set aside the merger agreement
between Genesis Health Ventures, Inc. (NASDAQ: GHVI) and NCS HealthCare, Inc.
(NCSS.OB) and certain related voting agreements.
On July 26, Omnicare made an offer to NCS to acquire all the outstanding
shares of NCS for $3.00 per share in cash. Omnicare made the offer public on
July 29 after receiving no response from NCS or its advisors. Later on July 29,
NCS announced that they had entered into an agreement to be acquired by Genesis
Health Ventures despite the fact that the Genesis stock offer was approximately
half the value of Omnicare's all-cash offer.
Omnicare also announced today that it intends to commence shortly a cash
tender offer for all of the outstanding shares of common stock of NCS. Omnicare
stated that it will raise its offer to $3.50 per share.
Joel F. Gemunder, president and chief executive officer of Omnicare, said,
'We are taking these steps after continued refusals by NCS to discuss Omnicare's
offer to acquire the company. We believe that the board of directors of NCS has
breached its fiduciary duties by entering into the Genesis agreement while they
were fully aware of our superior offer. Omnicare's offer will deliver more than
twice the value to NCS stockholders, and the NCS board should not prevent their
stockholders from accepting this offer.'
Dewey Ballantine LLP is acting as legal counsel to Omnicare and Merrill
Lynch is acting as financial advisor.
On August 8, 2002, Purchaser and Omnicare commenced the Offer.
12. PURPOSE AND STRUCTURE OF THE OFFER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER. The purpose of the Offer is to acquire control of, and
ultimately the entire equity interest in, the Company. The Offer, as the first
step in the acquisition of the Company, is intended to facilitate the
acquisition of the Company. The purpose of the Proposed Merger is to acquire all
outstanding Shares not tendered and purchased pursuant to the Offer. If the
Offer is successful, we intend to consummate the Proposed Merger as promptly as
practicable.
If Purchaser owns 90% or more of the outstanding shares of each class of
Shares, following consummation of the Offer, Purchaser intends to consummate the
Proposed Merger as a 'short-form' merger pursuant to Section 253 of the DGCL.
Under such circumstances, neither the approval of any holder of Shares (other
than Purchaser) nor the Company's Board of Directors would be required. Upon
consummation of the Proposed Merger, the Company will become a wholly-owned
subsidiary of Omnicare.
If Purchaser owns less than 90% of the outstanding Shares, following the
consummation of the Offer, the Company's Board of Directors will be required to
submit the Proposed Merger to the Company's stockholders for approval at a
stockholders' meeting convened for that purpose in
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accordance with Delaware law. If the Minimum Condition, the Section 203
Condition and the Charter Condition are satisfied, we will, upon consummation of
the Offer, have sufficient voting power to ensure approval of the Proposed
Merger at the stockholders' meeting without the affirmative vote of any other
stockholder.
PLANS FOR THE COMPANY. In connection with this Offer, Omnicare has reviewed
and will continue to review various possible business strategies that it might
consider in the event that Purchaser acquires control of the Company, whether
pursuant to the Offer, the Proposed Merger or otherwise. Following a review of
additional information regarding the Company, such changes could include, among
other things, changes in the Company's business, operations, personnel, employee
benefit plans, corporate structure, capitalization and management.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE CLASS A COMMON STOCK; REGISTRATION
UNDER THE EXCHANGE ACT.
According to the Company's annual report on Form 10-K for the fiscal year
ended June 30, 2001 (the 'Annual Report'), (i) prior to December 8, 1999, shares
of Class A Common Stock were traded on the Nasdaq National Market, (ii) between
December 8, 1999 and October 9, 2000, shares of Class A Common Stock were traded
on the Nasdaq SmallCap Market and (iii) since October 9, 2000, shares of Class A
Common Stock have been trading on the over-the-counter market Pink Sheets
Electronic Quotation Service. According to publicly available information,
shares of Class A Common Stock are now quoted on the OTCBB. The purchase of
shares of Class A Common Stock by Purchaser pursuant to the Offer will reduce
the number of shares that might otherwise trade publicly and will reduce the
number of holders of shares, which could adversely affect the liquidity and
market value of the remaining shares held by the public. The extent of the
public market for the shares of Class A Common Stock and the availability of
quotations reported in the over-the-counter market depends upon the number of
shareholders holding the shares, the aggregate market value of the shares
remaining at such time, the interest of maintaining a market in the shares on
the part of any securities firms, and other factors.
According to the Company's Annual Report, there were approximately 228
holders of record of the Class A Common Stock, and approximately 21 holders of
record of Class B Common Stock as of September 20, 2001. Also according to the
Company's Annual Report, these figures do not include stockholders with shares
held under beneficial ownership in nominee name or within clearinghouse
positions of brokerage firms and banks. Purchaser believes that the shares of
Class A Common Stock are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the SEC if the
shares of Class A Common Stock are not listed on a 'national securities
exchange' and there are fewer than 300 record holders. This would substantially
reduce the information required to be furnished by the Company to holders of
shares of Class A Common Stock and to the SEC and would make certain provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement in connection
with stockholders' meetings and the requirements of the Exchange Act Rule 13e-3
with respect to 'going private' transactions, no longer applicable to the shares
of Class A Common Stock. In addition, 'affiliates' of the Company and persons
holding 'restricted securities' of the Company may be deprived of the ability to
dispose of such securities pursuant to Rule 144 under the Securities Act of
1933, as amended.
The shares of Class B Common Stock are not publicly traded and are not
registered under the Exchange Act.
14. DIVIDENDS AND DISTRIBUTIONS.
If on or after the date of this Offer to Purchase, the Company should split,
combine or otherwise change the Shares or its capitalization, acquire or
otherwise cause a reduction in the number of outstanding Shares or issue or sell
any additional Shares (other than Shares issued pursuant to and in accordance
with the terms in effect on the date of this Offer to Purchase of employee stock
options outstanding prior to such date), shares of any other class or series of
capital stock, other voting
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securities or any securities convertible into, or options, rights, or warrants,
conditional or otherwise, to acquire, any of the foregoing, then, without
prejudice to our rights under 'The Offer -- Conditions to the Offer,' we may, in
our sole discretion, make such adjustments in the purchase price and other terms
of the Offer as we deem appropriate including the number or type of securities
to be purchased.
15. CONDITIONS TO THE OFFER.
Notwithstanding any other provision of the Offer, we are not required to
accept for payment or pay for any Shares, and we may terminate the Offer, if
prior to the Expiration Date, any of the Minimum Condition, the Genesis
Agreement Condition, the Voting Agreements Condition, the Section 203 Condition,
the Approval Condition, the Impairment Condition, the Charter Condition or the
Break-Up Fee Condition has not been satisfied, or any waiting periods under
applicable antitrust laws shall not have expired or been terminated.
Furthermore, notwithstanding any other provision of the Offer, prior to the
Expiration Date, we are not required to accept for payment or pay for any
Shares, and we may terminate the Offer, if at any time on or after the date of
this Offer to Purchase and prior to the Expiration Date, any of the following
conditions exist:
(a) there shall have been any law or order promulgated, entered,
enforced, enacted, issued or deemed applicable to the Offer or the
Proposed Merger by any court of competent jurisdiction or other competent
governmental or regulatory authority which, directly or indirectly,
(1) prohibits, or imposes any limitations on, Purchaser's or Omnicare's
ownership or operation (or that of any of their respective subsidiaries
or affiliates) of any portion of their businesses or assets or any
material portion of the Company's businesses or assets, or compels
Omnicare or Purchaser (or their respective subsidiaries or affiliates) to
dispose of or hold separate any portion of their assets or any material
portion of the Company's business or assets, (2) prohibits, restrains or
makes or seeks to make illegal the acceptance for payment, payment for or
purchase of Shares pursuant to the Offer or the consummation of the
Proposed Merger, (3) imposes material limitations on the ability of
Purchaser or Omnicare (or any of their respective subsidiaries or
affiliates) effectively to acquire or to hold or to exercise full rights
of ownership of the Shares purchased pursuant to the Offer including,
without limitation, the right to vote such Shares on all matters properly
presented to the Company's stockholders, (4) imposes limitations on the
ability of Purchaser or Omnicare (or any of their respective subsidiaries
or affiliates) effectively to control in any material respect any
material portion of the business, assets, liabilities, capitalization,
stockholder's equity, condition (financial or otherwise), licenses or
franchises or results of operations of the Company and its subsidiaries
taken as a whole, (5) seeks to require divestiture by Omnicare, Purchaser
or any affiliate of Omnicare of any Shares, (6) imposes or seeks to
impose any material condition to the Offer which is unacceptable to
Omnicare or Purchaser, (7) could result in a diminution of the value of
the Shares or the benefits expected to be derived by Omnicare as a result
of the Offer or the Proposed Merger, (8) restrains or prohibits or seeks
to restrain or prohibit the performance of any of the contracts or other
arrangements entered into by Omnicare, Purchaser or any of their
affiliates in connection with the acquisition of the Company or obtains
or seeks to obtain any material damages or otherwise directly or
indirectly relates to the Offer or (9) otherwise materially adversely
affects the Company and its subsidiaries or Omnicare or any of its
Subsidiaries, including Purchaser, taken as a whole;
(b) there shall be threatened or pending any action, suit,
proceeding, application or counterclaim brought by or before a
governmental or regulatory authority or by any other person, domestic or
foreign (whether brought by the Company, an affiliate of the Company, or
any other person) (1) challenging or seeking to make illegal the
acquisition by Omnicare or Purchaser of Shares or otherwise seeking to
restrain, delay or prohibit the making or consummation of the Offer, the
Proposed Merger or any other subsequent business transaction with the
Company, (2) challenging or seeking to, or which is reasonably likely to,
make illegal, materially delay or otherwise directly or indirectly
restrain or prohibit or seeking to, or which is reasonably likely to,
impose voting, procedural, price or other requirements in connection with
making the Offer, the acceptance for payment of, or payment for, any
Shares by
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Purchaser or any other affiliate of Omnicare or the Proposed Merger or
other business combination with the Company, or seeking to obtain
material damages in connection therewith, or (3) that could reasonably be
expected to result, directly or indirectly, in any of the consequences
referred to in clauses (1) through (9) of paragraph (a) above;
(c) there shall have occurred (1) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market in excess of one
day, (2) a commencement of a war, armed hostilities, terrorist attacks or
other international or national calamity directly or indirectly involving
the United States, (3) any limitation (whether or not mandatory) by any
United States governmental or regulatory authority on the extension of
credit by banks or other financial institutions, (4) any decline in
either the Dow Jones Industrial Average, the Standard & Poor's 500 Index
or the Nasdaq National Market by an amount in excess of 15% measured from
the close of business on the date of the Offer to Purchase or (5) in the
case of any of the foregoing (other than clause (4)) existing at the time
of the Offer, a material acceleration or worsening thereof;
(d) there shall have been any change, event or development having, or
that could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), business, assets, liabilities or results of operations of the
Company and its subsidiaries taken as a whole;
(e) any person (which includes a 'person' as such term is defined in
Section 13(d)(3) of the Exchange Act), other than Omnicare, Purchaser,
any of their affiliates, or any group of which any of them is a member,
shall have acquired beneficial ownership of more than 5% of the
outstanding Shares, (other than the beneficial ownership that Genesis may
be deemed to have acquired solely pursuant to the Voting Agreements as in
effect prior to the date of this Offer to Purchase), or any group shall
have been formed which beneficially owns more than 5% of the outstanding
Shares, in each case other than any person or group that has disclosed
such ownership prior to the date of the Offer, and no such person (other
than Omnicare, Purchaser, any of their affiliates, or any group of which
any of them is a member) or group shall have increased its beneficial
ownership in the Company by more than 1% of the outstanding Shares or
shall have filed a Notification and Report Form under the HSR Act or made
a public announcement reflecting an intent to acquire the Company or any
subsidiaries or material assets of the Company (other than a filing
pursuant to the HSR Act by Genesis in respect of the Genesis Agreement);
(f) the Company or any of its subsidiaries, joint ventures or
partners or other affiliates shall have, directly or indirectly:
(i) split, combined or otherwise changed, or authorized or proposed a
split, combination or other change of, the Shares or its
capitalization;
(ii) acquired or otherwise caused a reduction in the number of, or
authorized or proposed the acquisition or other reduction in the
number of, outstanding Shares or other securities of the Company
(other than as aforesaid);
(iii) issued, pledged, sold, authorized, proposed or announced the
issuance, distribution or sale of, additional Shares (other
than the issuance of Shares under options issued prior to the
date of this Offer to Purchase, in accordance with the terms of
such options as such terms have been publicly disclosed prior
to the date of this Offer to Purchase), shares of any other
class of capital stock, other voting securities or any
securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing;
(iv) declared or paid, or proposed to declare or pay, any dividend or
other distribution, whether payable in cash, securities or other
property, on or with respect to any shares of capital stock of
the Company or issued, authorized, recommended or proposed the
issuance or payment of any distribution;
(v) altered or proposed to alter any material term of any outstanding
security;
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(vi) incurred any debt other than in the ordinary course of business
and consistent with past practices or any debt containing
burdensome covenants;
(vii) except with respect to the Genesis Agreement, authorized,
recommended, proposed or entered into an agreement, agreement
in principle or arrangement or understanding with respect to
any merger, consolidation, liquidation, dissolution, business
combination, acquisition of assets, disposition of assets,
release or relinquishment of any material contractual right or
other right of the Company or any of its subsidiaries or any
comparable event not in the ordinary course of business;
(viii) except with respect to the Genesis Agreement, authorized,
recommended, proposed or entered into, or announced its
intention to authorize, recommend, propose or enter into, any
agreement, arrangement or understanding with any person or
group that, in the sole judgment of Purchaser, could adversely
affect either the value of the Company or any of its
subsidiaries, joint ventures or partnerships or the value of
the Shares to Omnicare or Purchaser, including an amendment to
the Genesis Agreement;
(ix) transferred into escrow any amounts required to fund any
existing benefit, employment or severance agreement with any of
the Company's employees other than in the ordinary course of
business and consistent with past practice, or entered into or
amended any employment, change in control, severance, executive
compensation or similar agreement, arrangement or plan with or
for the benefit of any of its employees, consultants or
directors, or made grants or awards thereunder, other than in
the ordinary course of business or entered into or amended any
agreements, arrangements or plans so as to provide for increased
or accelerated benefits to any such persons;
(x) except as may be required by law, taken any action to terminate
or amend any employee benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended)
of the Company or any of its subsidiaries, or Omnicare shall have
become aware of any such action that was not disclosed in
publicly available filings prior to the date of this Offer to
Purchase;
(xi) amended or authorized or proposed any amendment to the Company's
amended and restated certificate of incorporation or by-laws, or
Omnicare shall have become aware that the Company or any of its
subsidiaries shall have proposed or adopted any such amendment
that was not disclosed in publicly available filings prior to
the date of this Offer to Purchase;
(xii) issued, sold, or authorized or announced or proposed the
issuance of or sale to any person of any debt securities or any
securities convertible into or exchangeable for debt securities
or any rights, warrants or options entitling the holder thereof
to purchase or otherwise acquire any debt securities or
incurred or announced its intention to incur any debt otherwise
than in the ordinary course of business and consistent with
past practice; or
(xiii) agreed in writing or otherwise to take any of the forgoing
actions or Omnicare or Purchaser shall have learned about any
such action which has not previously been publicly disclosed
by the Company and also set forth in filings with the SEC;
(g) any required approval, permit, authorization, extension, action
or non-action, waiver or consent of any governmental authority or agency
(including a control bid filing with the Ohio Division of Securities and
other matters described or referred to in 'The Offer -- Certain Legal
Matters; Regulatory Approvals') shall not have been obtained on terms
satisfactory to Omnicare;
(h) Omnicare or Purchaser shall have reached an agreement or
understanding with the Company providing for termination of the Offer or
postponing the payment for the Shares thereunder, or Omnicare, Purchaser
or any other affiliate of Omnicare shall have entered into a definitive
agreement or announced an agreement in principle with the Company
providing
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for a merger or other business combination with the Company or the
purchase of stock or assets of the Company; or
(i) (1) any covenant, term or condition in any of the Company's or
any of its subsidiaries', joint ventures' or partnerships' instruments,
licenses, or agreements is or may be materially adverse to the value of
the Shares in the hands of Purchaser (including, but not limited to, any
event of default that may ensue as a result of the consummation of the
Offer or the Proposed Merger or the acquisition by Omnicare of control of
the Company) or (2) any material contractual right, intellectual property
or supply agreement of the Company or any of its subsidiaries or
affiliates shall be impaired or otherwise adversely affected or any
material amount of indebtedness of the Company or any of its
subsidiaries, joint ventures or partnerships shall become accelerated or
otherwise become due before its stated due date, in either case, with or
without notice or the lapse of time or both, as a result of the Offer or
the Proposed Merger;
which, in the judgment of Omnicare or Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Omnicare or Purchaser
or any of their affiliates) giving rise to any such condition, makes it
inadvisable to proceed with the Offer or with such acceptance for payment.
The satisfaction or existence of any of the foregoing conditions to the
Offer will be determined by Omnicare in its sole discretion. The foregoing
conditions are for the sole benefit of Omnicare and Purchaser and may be
asserted by Omnicare or Purchaser regardless of the circumstances giving rise to
any such condition or may be waived (to the extent legally permissible) by
Omnicare or Purchaser in whole or in part at any time and from time to time in
their sole discretion. The failure by Omnicare or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Any determination by Omnicare or
Purchaser concerning the events described in 'The Offer -- Conditions to the
Offer' will be final and binding on all parties.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. We are not aware of any governmental license or regulatory permit
that appears to be material to the Company's business that might be adversely
affected by our acquisition of Shares pursuant to the Offer or, except as set
forth below, of any approval or other action by any government or governmental
administrative or regulatory authority or agency, domestic or foreign, that
would be required for our acquisition or ownership of Shares pursuant to the
Offer. Should any such approval or other action be required, we currently
contemplate that, such approval or other action will be sought. There can be no
assurance that any such approval or other action, if needed, would be obtained
(with or without substantial conditions) or that if such approvals were not
obtained or such other actions were not taken adverse consequences might not
result to the Company's business or certain parts of the Company's, Omnicare's,
Purchaser's or any of their respective subsidiaries' businesses might not have
to be disposed of or held separate, any of which could cause us to elect to
terminate the Offer without the purchase of Shares thereunder. Our obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions. See 'The Offer -- Conditions to the Offer.'
STATE TAKEOVER LAWS. The Offer is conditioned upon, among other things,
Omnicare being satisfied, in its sole discretion, that the provisions of Section
203 of the DGCL are inapplicable to and do not otherwise restrict the Offer and
the Proposed Merger.
Section 203 of the DGCL, in general, prohibits a Delaware corporation, such
as the Company, from engaging in a 'Business Combination' (defined as a variety
of transactions, including mergers) with an 'Interested Stockholder' (defined,
generally, as a person that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock) for a period of three years following
the time that such person became an Interested Stockholder, unless: (a) prior to
the time such person became an Interested Stockholder, the board of directors of
the corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an Interested Stockholder; (b) upon
consumma-
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tion of the transaction that resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
stock held by directors who are also officers of the corporation and employee
stock ownership plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer; or (c) on or subsequent to the date such person became
an Interested Stockholder, the Business Combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders, and
not by written consent, by the affirmative vote of the holders of a least
66 2/3% of the outstanding voting stock of the corporation not owned by the
Interested Stockholder.
Under Section 203, the restrictions described above do not apply if, among
other things, (a) the corporation's original certificate of incorporation
contains a provision expressly electing not to be governed by Section 203;
(b) the corporation, by action of its stockholders, adopts an amendment to its
certificate of incorporation or bylaws expressly electing not to be governed by
Section 203; provided that, in addition to any other vote required by law, such
amendment of the certificate of incorporation or bylaws must be approved by the
affirmative vote of a majority of the shares entitled to vote, which amendment
would not be effective until 12 months after the adoption of such amendment and
would not apply to any Business Combination between the corporation and any
person who became an Interested Stockholder of the corporation on or prior to
the date of such adoption; (c) the corporation does not have a class of voting
stock that is (1) listed on a national securities exchange, (2) authorized for
quotation on The NASDAQ Stock Market or (3) held of record by more than 2,000
stockholders, unless any of the foregoing results from action taken, directly or
indirectly, by an Interested Stockholder or from a transaction in which a person
became an Interested Stockholder; or (d) a stockholder becomes an Interested
Stockholder 'inadvertently' and thereafter divests itself of a sufficient number
of shares so that such stockholder ceases to be an Interested Stockholder. Under
Section 203, the restrictions described above also do not apply to certain
Business Combinations proposed by an Interested Stockholder following the
announcement or notification or one of certain extraordinary transactions
involving the corporation and a person who had not been an Interested
Stockholder during the previous three years or who became an Interested
Stockholder with the approval of a majority of the corporation's directors.
Section 203 provides that, during such three-year period, the corporation
may not merge or consolidate with an Interested Stockholder or any affiliate or
associate thereof, and also may not engage in certain other transactions with an
Interested Stockholder or any affiliate or associate thereof, including, without
limitation, (a) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets (except proportionately as a stockholder of the
corporation) having an aggregate market value equal to 10% or more of the
aggregate market value of all assets of the corporation determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
a corporation; (b) any transaction which results in the issuance or transfer by
the corporation or by certain subsidiaries thereof of any stock of the
corporation or such subsidiaries to the Interested Stockholder, except pursuant
to a transaction which effects a pro rata distribution to all stockholders of
the corporation; (c) any transaction involving the corporation or any
subsidiaries thereof which has the effect of increasing the proportionate share
of the stock of any class or series, or securities convertible into the stock of
any class or series, of the corporation or any such subsidiary which is owned
directly or indirectly by the Interested Stockholder (except as a result of
immaterial changes due to fractional share adjustments); or (d) any receipt of
the Interested Stockholder of the benefit (except proportionately as a
stockholder of such corporation) of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the corporation.
The foregoing description of Section 203 does not purport to be complete and
is qualified in its entirety by reference to the provisions of Section 203.
The Company is incorporated under the laws of the State of Delaware and its
operations are conducted throughout the United States. A number of states have
adopted takeover laws and regulations that purport to be applicable to attempts
to acquire securities of corporations that are incorporated in those states or
that have substantial assets, stockholders, principal executive offices or
principal places of business in those states. To the extent that these state
takeover statutes purport to
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apply to the Offer or the Proposed Merger, we believe that those laws conflict
with U.S. federal law and are an unconstitutional burden on interstate commerce.
In 1982, the Supreme Court of the United States, in Edgar v. MITE Corp.,
invalidated on constitutional grounds the Illinois Business Takeover Statute,
which, as a matter of state securities law, made takeover of corporations
meeting certain requirements more difficult. The reasoning in that decision is
likely to apply to certain other state takeover statutes. In 1987, however, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana could as a matter of corporate law and, in
particular, those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders, as
long as those laws were applicable only under certain conditions. Subsequently,
in TLX Acquisition Corp. v. Telex Corp., a federal district court in Oklahoma
ruled that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma, because they would subject those
corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v.
McReynolds, a federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United State Court of
Appeals for the Sixth Circuit. In December 1988, a federal district court in
Florida held, in Grand Metropolitan PLC v. Butterworth, that the provisions of
the Florida Affiliated Transactions Act and Florida Control Share Acquisition
Act were unconstitutional as applied to corporations incorporated outside of
Florida.
Except as described herein, we have not attempted to comply with any state
takeover statutes in connection with this Offer or the Proposed Merger. We
reserve the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer or the Proposed Merger, and nothing in this
Offer to Purchase nor any action that we take in connection with the Offer is
intended as a waiver of that right. In the event that it is asserted that one or
more takeover statutes apply to the Offer or the Proposed Merger, and it is not
determined by an appropriate court that the statutes in question do not apply or
are invalid as applied to the Offer or the Proposed Merger, as applicable, we
may be required to file certain documents with, or receive approvals from, the
relevant state authorities, and we might be unable to accept for payment or
purchase Shares tendered in the Offer or be delayed in continuing or
consummating the Offer. In that case, we may not be obligated to accept for
purchase, or pay for, any Shares tendered. See 'The Offer -- Conditions to the
Offer.'
Consummation of the Offer is conditioned upon the expiration of the period
during which the Ohio Division of Securities may suspend the Offer pursuant to
Sections 1707.01, 1707.041 and 1707.042 (collectively, the 'control bid law') of
the Ohio Revised Code, without the occurrence of any such suspension or the
invalidity of the control bid law.
The control bid law regulates the purchase or offer to purchase of any
equity security of a subject company from a resident of Ohio if, after the
purchase, the offeror would directly or indirectly be the beneficial owner of
more than 10% of any class of issued and outstanding equity securities of such
company (a 'control bid'). A subject company includes an issuer (such as the
Company) that (i) either (a) has its principal place of business or principal
executive offices located in Ohio or (b) owns or controls assets located in Ohio
that have a fair market value of at least $1.0 million and (ii) has more than
10% of its beneficial or record equity security holders resident in Ohio, has
more than 10% of its equity securities owned, beneficially or of record, by
residents of Ohio or has 1,000 beneficial or record equity security holders who
are resident in Ohio.
The control bid law prohibits an offeror from making a control bid for
securities of a subject company pursuant to a tender offer until the offeror has
filed specified information with the Ohio Division of Securities. In addition,
the offeror is required to deliver a copy of such information to the subject
company not later than the offeror's filing with the Ohio Division of Securities
and to send or deliver such information and the material terms of the proposed
offer to all offerees in Ohio as soon as practicable after the offeror's filing
with the Ohio Division of Securities.
Within five calendar days of such filing, the Ohio Division of Securities
may, by order, summarily suspend the continuation of the control bid if it
determines that the offeror has not provided all of the specified information or
that the control bid materials provided to offerees do not provide full
disclosure of all material information concerning the control bid. If the Ohio
Division of Securities
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<Page>
summarily suspends a control bid, it must schedule and hold a hearing within 10
calendar days of the date on which the suspension is imposed and must make its
determination within three calendar days after the hearing has been completed
but no later than 14 calendar days after the date on which the suspension is
imposed. The Ohio Division of Securities may maintain its suspension of the
continuation of the control bid if, based upon the hearing, it determines that
all of the information required to be provided by the control bid law has not
been provided by the offeror, that the control bid materials provided to
offerees do not provide full disclosure of all material information concerning
the control bid or that the control bid is in material violation of any
provision of the Ohio securities laws. If, after the hearing, the Ohio Division
of Securities maintains the suspension, the offeror has the right to correct the
disclosure and other deficiencies identified by the Ohio Division of Securities
and to reinstitute the control bid by filing new or amended information pursuant
to the control bid law.
On August 8, 2002, Omnicare filed the information required under the control
bid law.
ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the 'HSR Act'), and the rules that have been promulgated thereunder
by the Federal Trade Commission (the 'FTC'), certain acquisition transactions
may not be consummated unless certain information has been furnished to the
Antitrust Division of the Department of Justice (the 'Antitrust Division') and
the FTC and certain waiting period requirements have been satisfied. The
purchase of Shares pursuant to the Offer is subject to such requirements.
Pursuant to the requirements of the HSR Act, Omnicare intends to file a
Notification and Report Form with respect to the Offer and the Proposed Merger
with the Antitrust Division and the FTC on or about August 8, 2002. As a result,
we anticipate that the waiting period applicable to the purchase of Shares
pursuant to the Offer is scheduled to expire at 11:59 p.m., New York City time,
on or about Friday, August 23, 2002. However, prior to such time, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
information or documentary material relevant to the Offer from us. If such a
request is made, the waiting period will be extended until 11:59 p.m., New York
City time, on the tenth day after our substantial compliance with such request.
Thereafter, such waiting period can be extended only by court order or as agreed
to by Omnicare. A request will be made pursuant to the HSR Act for early
termination of the waiting period applicable to the Offer. There can be no
assurance, however, that the HSR Act waiting period will be terminated early.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. See 'The Offer -- Conditions to the Offer.' Subject to
certain circumstances described in 'The Offer -- Extension of Tender Period;
Termination; Amendment,' any extension of the waiting period will not give rise
to any withdrawal rights not otherwise provided for by applicable law. See 'The
Offer -- Withdrawal Rights.' If our acquisition of Shares is delayed pursuant to
a request by the Antitrust Division or the FTC for additional information or
documentary material pursuant to the HSR Act, the Offer may be extended.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as our acquisition of Shares pursuant to
the Offer. At any time before or after the consummation of any such
transactions, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or
seeking divestiture of the Shares so acquired or divestiture of Omnicare's or
the Company's material assets. Private parties (including individual states) may
also bring legal actions under the antitrust laws. Based on an examination of
the publicly available information relating to the businesses in which the
Company is engaged, we do not believe that the consummation of the Offer will
result in a violation of any applicable antitrust laws. However, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made,
or if such a challenge is made, what the result will be. See 'The
Offer -- Conditions to the Offer' for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
APPRAISAL RIGHTS. Appraisal rights are not available in the Offer. If the
Proposed Merger is consummated, however, holders of Shares at the effective time
of the merger who do not vote in favor of, or consent to, the Proposed Merger
will have rights under Section 262 of the DGCL to demand appraisal of their
Shares. Under Section 262, stockholders who demand appraisal and comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of
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their Shares, exclusive of any element of value arising from the accomplishment
or expectation of the Proposed Merger, and to receive payment of that fair value
in cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of Shares could be based upon factors other
than, or in addition to, the price per Share to be paid in the Proposed Merger
or the market value of the Shares. The value so determined could be more or less
than the price per Share to be paid in the Proposed Merger.
THE FOREGOING SUMMARY OF SECTION 262 DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SECTION 262. FAILURE TO FOLLOW THE
STEPS SECTION 262 REQUIRES FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE
LOSS OF THOSE RIGHTS.
ARTICLE VI OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION. Article
VI of the amended and restated certificate of incorporation of the Company
provides that any business combination with a Related Person (as defined below)
must be approved by at least 66 2/3% of the votes of the Shares outstanding
(which must include 51% of the voting power of the Shares held by holders other
than the Related Person) and the requisite vote of the holders of any preferred
stock entitled to vote, if any. According to its terms, the supermajority
provision does not apply if (a) the proposed business combination has been
approved by a majority of all directors then in office or (b) if the
stockholders are asked to approve or authorize a particular business combination
as to which both of the following conditions are satisfied:
(1) The aggregate consideration per Share equals or exceeds the greatest of:
(x) the highest price per share paid or agreed to be paid by the Related
Person to acquire beneficial ownership of the Shares;
(y) the highest price at which Class A Common Stock or Class B Common
Stock has been trading in the 24-month period immediately before the
stockholder vote to approve the business combination; or
(z) the per share book value of Class A Common Stock at the end of the
calendar quarter immediately before the stockholder vote to approve
the business combination; and
(2) The consideration to be paid is in the same form and kind as the most
favorable form and kind of consideration paid by the Related Person when
it acquired beneficial ownership of the Shares.
A 'Related Person' is any individual, corporation, partnership or other
person or entity which, together with its affiliates and associates,
beneficially owns 5% or more of the voting power of the outstanding Shares, and
any affiliate or associate of any such person or entity. Shares held or
controlled by a trustee, plan administrator or other such person under an
employee benefit plan of the Company or its affiliates are not deemed to be
beneficially owned for purposes of this definition.
The determination of a majority of the 'Disinterested Directors' (as defined
in Article VI of the amended and restated certificate of incorporation of the
Company), made in good faith and based upon information known to them after
reasonable inquiry, shall be conclusive as to all facts necessary for compliance
with such Article VI, including without limitation, (i) whether any person,
partnership, corporation or firm is a Related Person or affiliate or associate
as defined therein and (ii) the most favorable form and kind of consideration
paid by the Related Person in acquiring beneficial ownership of the Shares.
The term 'business combination' shall mean (a) any merger or consolidation
of the Company with or into a Related Person, (b) any sale, lease, exchange,
transfer or other disposition, including, without limitation, a mortgage or any
other security device, of all or any substantial part of the assets of the
Company (including, without limitation, any voting securities of a subsidiary)
or of a subsidiary, to a Related Person, (c) any merger or consolidation of a
Related Person with or into the Company or a subsidiary of the Company, (d) any
sale, lease, exchange, transfer or other disposition of all or any substantial
part of the assets of a Related Person to the Company or a subsidiary of the
Company, (e) the reclassification of the shares of stock of the Company
generally possessing voting rights in elections for directors, the purchase by
the Company of such shares, or the issuance by the Company of shares of
32
<Page>
any securities convertible thereto or exchangeable therefor which in any such
case has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Company which are directly or indirectly owned by any Related Person or
(f) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of business combination.
The term 'Disinterested Director' means any member of the Board of Directors
of the Company who is not the Related Person or an affiliate or associate of the
Related Person and was a member of the Board prior to the time that the Related
Person became the Related Person, and any successor of a Disinterested Director
who is not the Related Person or an affiliate or associate of the Related Person
and is recommended to succeed a Disinterested Director by a majority of the
Disinterested Directors then in office.
17. FEES AND EXPENSES.
Merrill Lynch is acting as the Dealer Manager in connection with the Offer
and as financial advisor to Omnicare in connection with the Offer and the
Proposed Merger. Under an engagement letter, dated August 1, 2001, as amended,
between Omnicare and Merrill Lynch, Omnicare agreed to pay Merrill Lynch (i) a
fee of $600,000 upon the commencement of a tender offer to effect an
'Acquisition Transaction,' which is generally defined to include, among other
things, an acquisition of a majority of the outstanding capital stock or debt of
the Company, whether by way of a tender offer, exchange offer, negotiated
purchase or other means, or a merger, consolidation, reorganization or other
business combination pursuant to which the business of the Company is combined
with Omnicare or its affiliate, (ii) a fee of $500,000 upon the execution of a
definitive agreement to effect an aquisition transaction and (iii) an additional
fee of $2,650,000 if, during the period Merrill Lynch is retained by Omnicare or
within eighteen months thereafter, (a) an Acquisition Transaction is consummated
or (b) Omnicare or its affiliate enters into a definitive agreement with the
Company which subsequently results in an Acquisition Transaction. Omnicare also
will pay Merrill Lynch's reasonable out-of-pocket expenses, including reasonable
fees and disbursement of legal counsel, incurred in connection with Merrill
Lynch's activities under the engagement letter, except that reimbursement for
expenses relating to Merrill Lynch's legal counsel in excess of $75,000 is
subject to the reasonable consent of Omnicare. Omnicare and Purchaser have
agreed to indemnify Merrill Lynch against certain liabilities in connection with
its services as the Dealer Manager and financial advisor, including certain
liabilities under the U.S. federal securities laws. At any time, Merrill Lynch
may trade the Shares for its own account or for the accounts of customers and,
accordingly, may hold a long or short position in the Shares.
We have retained Innisfree M&A Incorporated as Information Agent in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee stockholders to forward material relating to
the Offer to beneficial owners of Shares. We will pay the Information Agent
reasonable and customary compensation for these services in addition to
reimbursing the Information Agent for its reasonable out-of-pocket expenses. We
have agreed to indemnify the Information Agent against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
U.S. federal securities laws.
In addition, we have retained The Bank of New York as the Depositary. We
will pay the Depositary reasonable and customary compensation for its services
in connection with the Offer, will reimburse the Depositary for its reasonable
out-of-pocket expenses and will indemnify the Depositary against certain
liabilities and expenses, including certain liabilities under the U.S. federal
securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer. We will reimburse brokers, dealers, commercial banks and trust companies
and other nominees, upon request, for customary clerical and mailing expenses
incurred by them in forwarding offering materials to their customers.
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<Page>
18. LEGAL PROCEEDINGS
On August 1, 2002, Omnicare commenced litigation against the Company and the
Company's Board of Directors and Genesis and Geneva Sub in the Court of Chancery
of the State of Delaware seeking, among other things, an order:
(a) enjoining the Company, the Company's Board of Directors, Genesis and
Geneva Sub and their respective agents and employees from taking any
further steps or any actions with respect to the Voting Agreements
and/or the Genesis Agreement;
(b) declaring the Genesis Agreement and the Voting Agreements null and void;
and
(c) enjoining Genesis and Geneva Sub from aiding and abetting the breach by
the Company's Board of Directors of their fiduciary duties under
Delaware Law.
To date, four purported class action lawsuits have been filed against the
Company and the Company's Board of Directors in the Delaware Court of Chancery
seeking, among other things, an order:
(a) declaring the lawsuits to be class actions and certifying the respective
plaintiffs as the class representative;
(b) enjoining the proposed transaction between the Company and Genesis;
(c) if the transaction is consummated prior to the entry of the Court's
final judgment, rescinding it or awarding to the respective plaintiffs
and the Class rescissory damages;
(d) directing that defendants account to the respective plaintiffs and other
members of the Class for all damages caused by them and account for all
profits and any special benefits obtained as a result of their breaches
of their fiduciary duties; and
(e) awarding the respective plaintiffs their costs and disbursements,
including a reasonable allowance for the fees and expenses of
plaintiffs' attorneys and experts.
The first action was filed by Dr. Dorrin Beirch and Robert M. Miles. The
second action was filed by Anthony Noble on August 1, 2002. The third and fourth
actions were filed by Jeffrey Treadway and Tillie Saltzman on August 2, 2002.
19. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, we may, in our discretion, take such action as we may
deem necessary to make the Offer in any such jurisdiction and extend the Offer
to holders of Shares in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Purchaser or Omnicare not contained in this Offer to
Purchase or in the related Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
We have filed with the SEC a Tender Offer Statement on Schedule TO, together
with exhibits, pursuant to the Exchange Act Rule 14d-3 furnishing certain
additional information with respect to the Offer. The Schedule TO and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the offices of the SEC in the manner set forth in 'The
Offer -- Certain Information Concerning the Company -- Available Information' of
this Offer to Purchase.
NCS ACQUISITION CORP.
August 8, 2002
34
<Page>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF OMNICARE AND PURCHASER
The name, current principal occupation or employment and material
occupations, positions, offices or employment for the past five years, of each
director and executive officer of Omnicare are set forth below. References
herein to 'Omnicare' mean Omnicare, Inc. Unless otherwise indicated below, the
business address of each director and officer is c/o Omnicare, Inc., 100 East
RiverCenter Boulevard, Covington, Kentucky 41011. Where no date is shown, the
individual has occupied the position indicated for the past five years. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Omnicare. Except as described herein, none of the
directors and officers of Omnicare listed below has, during the past five years,
(1) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (2) been a party to any judicial or administrative
proceeding that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws. All directors and officers listed below are citizens of the
United States.
<Table>
<Caption>
PRESENT PRINCIPAL
OCCUPATION AND FIVE YEAR
NAME TITLE EMPLOYMENT HISTORY
---- ----- ------------------
Edward L. Hutton..... Chairman Mr. Hutton is Chairman of Omnicare and has held
this position since May 1981. Additionally, he is
Chairman and a director of Chemed Corporation,
2600 Chemed Center, 255 East 5th Street,
Cincinnati, Ohio 45202 (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) ('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...... Director, President and Mr. Gemunder is President and Chief Executive Officer
and Chief Executive of Omnicare and has held these positions since May
Officer 1981 and May 2001, 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., 3050 Zanker Road,
San Jose, California 95134 (a manufacturer of photo-
lithography equipment for the computer industry).
</Table>
35
<Page>
<Table>
<Caption>
PRESENT PRINCIPAL
OCCUPATION AND FIVE YEAR
NAME TITLE EMPLOYMENT HISTORY
---- ----- ------------------
Patrick E. Keefe...... Director, Executive Mr. Keefe is Executive Vice President --
Vice President -- Operations of Omnicare and has held this
Operations position since February 1997. Previously, he
was Senior Vice President -- Operations since
February 1994. From April 1993 to February
1994, he was Vice President -- Operations of
Omnicare. From April 1992 to April 1993, he
served as Vice President -- Pharmacy
Management Programs of Diagnostek, Inc., 4500
Alexander Blvd. NE, Albuquerque, New Mexico
87107 (mail-service pharmacy and health care
services) ('Diagnostek'). From September 1990
to April 1992, Mr. Keefe served as President
of HPI Health Care Services, Inc. ('HPI'), a
subsidiary of Diagnostek that was acquired
from Omnicare in August 1989. From August
1984 to September 1990, he served as
Executive Vice President of HPI.
Timothy E. Bien....... Director, Senior Vice Mr. Bien is Senior Vice
President -- President -- Professional Services and
Professional Services Purchasing of Omnicare, a position he has
and Purchasing held since May 1996. From May 1992 until May
1996, he served as Vice President of
Professional Services and Purchasing of
Omnicare. Prior to that, he was Vice
President and a former owner of Home Care
Pharmacy, address c/o Omnicare (skilled
nursing care facilities), a wholly-owned
subsidiary that Omnicare acquired in December
1988.
Cheryl D. Hodges...... Director, Senior Vice Ms. Hodges is Senior Vice President and
President and Secretary Secretary of Omnicare and has held these
positions since February 1994. From August
1986 to February 1994, she was Vice President
and Secretary of Omnicare. From August 1982
to August 1986, she served as Vice
President -- Corporate and Investor
Relations.
David W. Froesel, Director, Senior Vice Mr. Froesel is Senior Vice President and
Jr.................. President and Chief Chief Financial Officer of Omnicare and has
Financial Officer held these positions since March 1996. From
May 1993 to February 1996, Mr. Froesel was
Vice President of Finance and Administration
at Mallinckrodt Veterinary, Inc., a
subsidiary of Mallinckrodt, Inc. 675
McDonnell Blvd., P.O. Box 5840, St. Louis,
Missouri, 63134 (in vitro and in vitro
diagnostic substances) ('Mallinckrodt'). From
July 1989 to April 1993 he was worldwide
Corporate Controller of Mallinckrodt Medical,
Inc., a subsidiary of Mallinckrodt.
</Table>
36
<Page>
<Table>
<Caption>
PRESENT PRINCIPAL
OCCUPATION AND FIVE YEAR
NAME TITLE EMPLOYMENT HISTORY
---- ----- ------------------
Peter Laterza......... Vice President and Mr. Laterza is Vice President and General
General Counsel Counsel of Omnicare and has held these
positions since August 1998. From October
1993 to June 1998, Mr. Laterza was Assistant
General Counsel of The Pittston Company, 1801
Bayberry Court, P.O. Box 18100, Richmond,
Virginia 23058 (security services, freight
transportation and mining and mineral
exploration).
Charles H. Erhart, Director Mr. Erhart retired as President of W.R. Grace
Jr.................. & Co., 7500 Grace Drive, Columbia, Maryland
21044 (international specialty chemicals,
construction and packaging) ('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.
Sandra E. Laney....... Director Ms. Laney is Senior Vice President and Chief
Administrative Officer of Chemed and has held
these positions since 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, ... Director Dr. Lindell is Dean and Professor in the
DNSc, RN College of Nursing at the University of
Cincinnati, a position she has held since
December 1990. Dr. Lindell is also Associate
Senior Vice President and Vice Provost for
the Medical Center at the University of
Cincinnati, since July 1998 and June 2002,
respectively. 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, Director Dr. Margen is a Professor Emeritus in the
M.D................. School of Public Health, University of
California, Berkeley, a position he has held
since May 1989. He had served as a Professor
of Public Health at the University of
California, Berkeley, since 1979.
</Table>
37
<Page>
<Table>
<Caption>
PRESENT PRINCIPAL
OCCUPATION AND FIVE YEAR
NAME TITLE EMPLOYMENT HISTORY
---- ----- ------------------
Kevin J. McNamara..... Director Mr. McNamara is President and Chief Executive
Officer of Chemed and has held these
positions since August 1994 and 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....... Director Mr. Timoney is a retired executive of Applied
Bioscience International Inc., 3151 17th
Street Extension, Wilmington, North Carolina
28401 (research organization serving the
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., address c/o Applied
Bioscience (research and consulting services
in the life and environmental sciences), 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, 200
Nyala Farms, Westport, Connecticut 06880
(market research firm serving the
pharmaceutical and health care industries),
Chemed and Grace.
</Table>
The name and position with Purchaser of each director and officer of
Purchaser are set forth below. The business address, Omnicare principal
occupation or employment, five-year employment history and citizenship of each
such person is set forth above.
<Table>
<Caption>
NAME TITLE
---- -----
Joel F. Gemunder.............................. President, Chief Executive Officer and Director
Vice President, Chief Financial Officer and
Director
David W. Froesel, Jr..........................
Patrick E. Keefe.............................. Vice President and Secretary
</Table>
38
<Page>
SCHEDULE II
TRANSACTIONS IN SHARES IN THE PAST 60 DAYS
<Table>
<Caption>
DATE NO. OF SHARES PURCHASED PRICE PER SHARE*
---- ----------------------- ----------------
7/29/02............................................. 1,000 $1.72
</Table>
- ---------
* Net of Brokerage Commissions
39
<Page>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates for Shares and any other
required documents should be sent to the Depositary at one of the addresses set
forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<Table>
By Mail: By Facsimile By Hand or Overnight Courier:
(for Eligible Institutions
only):
Tender & Exchange Department (212) 815-6433 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station For Confirm Only Telephone: Receive and Deliver Window
New York, NY 10286-1248 (212) 815-6212 New York, NY 10286
</Table>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone numbers
set forth below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent at its address and telephone numbers set forth below. Holders
of Shares may also contact their broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[Innisfree Logo]
501 Madison Avenue
New York, New York 10022
Stockholders Call Toll-Free: (888) 750-5834
or
Banks and Brokers Call Collect: (212) 750-5833
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
4 World Financial Center
New York, New York 10080
(866) 276-1462
(Call Toll Free)