Exhibit (a)(1)(EEE)
ATTORNEY WORK PRODUCT
PRIVILEGED AND CONFIDENTIAL
NCS HEALTHCARE, INC.
December 13, 2002
TO: Genesis Health Ventures, Inc.
c/o Mark Gordon, Esq.
Omnicare, Inc.
c/o Morton A. Pierce, Esq.
Re: Rules and Procedures for Submission of Proposals for NCS Healthcare, Inc.
Gentlemen:
It is the strongly held view of the NCS Board that a competitive
bidding process for the Company must be conducted in a fair and orderly manner.
The interests of our stockholders, employees, customers and suppliers can and
will be best served by such an approach. The NCS Board is mindful that the
process in which the Company is currently engaged does present certain risks,
particularly if the process is prolonged, including disruption to the Company's
business and overall uncertainty among the Company's constituencies as to the
Company's future. In order to mitigate these risks, the NCS Board believes that
the most prudent course of action is to attempt to bring this process to a
prompt and orderly close.
Accordingly, the NCS Board has established the rules and procedures
specified below for receiving proposals to acquire the Company ("Proposals").
The procedures are designed to constitute a single and final round of bidding,
and each of you should submit your best and highest offer.
The purpose of this letter is to invite each of you to submit
Proposals, pursuant to such rules and procedures. The NCS Board believes that
agreement to such rules and procedures is critical to mitigating the risk of the
process in which the Company is now engaged and, accordingly, submission of a
Proposal will constitute for all purposes an agreement to be bound by such rules
and procedures.
The following rules and procedures will govern the submission of
Proposals:
1. Proposals should be addressed and delivered via facsimile and
electronic transmission to each of the following:
Skadden, Arps, Slate, Meagher & Flom LLP
c/o Robert B. Pincus
Facsimile: 302-651-3001
Email: bpincus@skadden.com
Benesch, Friedlander, Coplan & Aronoff LLP
c/o Megan Mehalko
Facsimile: 216-363-4588
Email: mmehalko@bfca.com
Candlewood Partners LLC
c/o Glenn Pollack
Facsimile: 440-247-3060
Email: gpollack@candlewoodpartners.com
Proposals must be received no later than Sunday, December 15, 2002 at
6:00 p.m. Eastern Standard Time, unless extended by notice. You may not
make any Proposal, or modify or amend any pending Proposal, to purchase
the Company, except as prescribed herein.
2. The Agreement and Plan of Merger currently in effect between
the Company and Genesis or an amendment thereto, with only such changes
as are clearly marked thereon is to be used by Genesis in submitting
its Proposal. The form of the Agreement and Plan of Merger submitted by
Omnicare to NCS, pursuant to the letter dated December 12, 2002 from
Omnicare to NCS, with only such changes as are clearly marked thereon
is to be used by Omnicare in submitting its Proposal.
3. Proposals must be accompanied by (i) an executed letter
authorized by the bidder which provides that its Proposal will remain
outstanding, unchanged and irrevocable until 5:00 p.m. Eastern Standard
Time, December 18, 2002, in the case of Genesis, and 5:00 p.m. Eastern
Standard Time, February 2, 2003,(1) in the case of Omnicare, (ii) an
executed merger agreement, in the case of Omnicare, or an executed
amended merger agreement, in the case of Genesis, in each case, capable
of acceptance by NCS solely by execution of the merger agreement or the
amended merger agreement, as the case may be.
4. The merger agreement and the amended merger agreement, as the
case may be, may contain:
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(1) Obviously, the reason for this discrepancy is that NCS may be precluded
from entering into an agreement with Omnicare prior to February 1,
2003; provided, that if Omnicare has the superior Proposal, NCS intends
to move expeditiously to be in a position to enter into an agreement
with Omnicare.
o A "no shop" provision which in no event prohibits or restricts
NCS from responding to bona fide offers or providing
confidential information to any party that makes an acquisition
proposal (subject to execution of a confidentiality agreement
acceptable to the NCS Board);
o A "force the vote" provision as permitted by Section 251(c) of
the DGCL;
o A "break up" fee of up to $12 million, subject to payment under
reasonable circumstances; and
o A "drop dead" date of no later than February 28, 2003.
No other "lock-ups," voting agreements or other provisions intended to
preclude or impede superior proposals may be included in any Proposal.
5. The NCS Board will carefully evaluate the terms and conditions
of any and all Proposals received and determine which Proposal, in its
reasonable good faith judgment, provides the best value reasonably
obtainable for NCS stockholders. The NCS Board currently intends: (i)
if the Genesis Proposal is determined to be superior, to enter into an
amended merger agreement with Genesis and (ii) if the Omnicare Proposal
is determined to be superior, (A) to attempt to negotiate a reasonable
termination agreement with Genesis or (B) to seek approval of the court
for appropriate relief to enter into a merger agreement with Omnicare.
6. These procedures will be interpreted by the NCS Board in its
sole discretion.
7. Nothing contained herein shall be deemed to be a rejection of
the December 12, 2002 offer by Omnicare to acquire all of the shares of
Common Stock of NCS for $5.50 per share or provide any right of
revocation thereof to Omnicare.
8. Questions may be directed to:
Bob Pincus
(302) 651-3090 (Office)
[HOME NUMBER DELETED]
bpincus@skadden.com
or
Megan Mehalko
(216) 363-4487 (Office)
[HOME NUMBER DELETED]
mmehalko@bfca.com
9. The NCS Board reserves the right, insofar as necessary in the
proper exercise of its fiduciary duties, to change the rules and
procedures as set forth in this letter. If the NCS Board modifies these
rules and procedures, it intends to promptly notify both of you.