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Exhibit (a)(1)(HHH)
Supplement to the
Offer to Purchase for Cash
NCS ACQUISITION CORP.,
a wholly-owned subsidiary of
OMNICARE, INC.
Has Increased the Price of its Offer to Purchase for Cash
All Outstanding Shares of
Class A Common Stock and Class B Common Stock
of
NCS HEALTHCARE, INC.
to
$5.50 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, JANUARY 7, 2003, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF NCS HEALTHCARE, INC. (THE 'COMPANY'), BY UNANIMOUS
VOTE, (1) HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE PROPOSED MERGER
(EACH AS DEFINED HEREIN); (2) HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE
PROPOSED MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY AND THE COMPANY STOCKHOLDERS AND (3) RECOMMENDS THAT THE COMPANY
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS DEFINED HEREIN) TO
PURCHASER PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
HEREIN) THAT NUMBER OF SHARES 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 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 OFFER IS NOT CONDITIONED ON OBTAINING
FINANCING. CERTAIN OTHER CONDITIONS ARE DESCRIBED IN SECTION 9 ('CONDITIONS TO
THE OFFER') OF THIS SUPPLEMENT.
---------------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
December 23, 2002
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IMPORTANT
If you wish to tender all or any part of your shares of class A common stock
or class B common stock of the Company (collectively, the 'Shares') prior to the
expiration date of the Offer, you should either (1) complete and sign the
revised (yellow) Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions in the revised Letter of Transmittal included with this
Supplement, have your signature thereon guaranteed if required by Instruction 1
of the revised Letter of Transmittal, mail or deliver the revised 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 revised Letter of Transmittal (or a
facsimile thereof) or deliver such Shares pursuant to the procedures for
book-entry transfers set forth in Section 4 ('Procedure for Tendering Shares')
of the Offer to Purchase (as defined herein), 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 the Offer to Purchase on a timely basis, you
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 4 ('Procedure for Tendering Shares') of the Offer to Purchase.
A summary of the principal terms of the Offer begins on page 1 of this
Supplement.
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 Supplement. You can also obtain additional copies of the Offer to
Purchase, this Supplement, the revised Letter of Transmittal and the revised
Notice of Guaranteed Delivery from the Information Agent or your broker, dealer,
commercial bank, trust company or other nominee.
THIS SUPPLEMENT, THE OFFER TO PURCHASE AND THE RELATED REVISED (YELLOW)
LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY
READ THEM IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE
OFFER.
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TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
SUMMARY TERM SHEET.......................................... 1
INTRODUCTION................................................ 4
THE OFFER................................................... 7
1. Amended Terms of the Offer; Expiration Date......... 7
2. Extension of the Tender Period; Termination;
Amendment.............................................. 7
3. Procedures for Tendering Shares..................... 8
4. Price Range of Class A Common Stock; Dividends...... 8
5. Source and Amount of Funds.......................... 8
6. Background of the Offer............................. 9
7. Purpose and Structure of the Offer; Plans for the
Company................................................ 14
8. The Merger Agreement................................ 14
9. Conditions to the Offer............................. 25
10. Certain Legal Matters; Regulatory Approvals......... 26
11. Legal Proceedings................................... 27
12. Miscellaneous....................................... 32
</Table>
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SUMMARY TERM SHEET
This summary term sheet is a brief description of the amendments to the
offer being made by Omnicare, Inc. through NCS Acquisition Corp., a wholly-owned
subsidiary of Omnicare, to purchase all of the issued and outstanding shares of
class A common stock and all of the issued and outstanding shares of class B
common stock of NCS HealthCare, Inc., at a price of $5.50 per share net to the
seller in cash, without interest and less required withholding taxes. 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 supplement,
the offer to purchase and the related revised (yellow) 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 supplement, the offer to purchase and the related revised (yellow) letter
of transmittal.
WHY IS OMNICARE AMENDING THE OFFER?
On December 17, 2002, we entered into a merger agreement with NCS HealthCare
to acquire all of the outstanding shares of class A common stock and all of the
outstanding shares of class B common stock of NCS HealthCare. We are amending
the terms of the offer in accordance with the merger agreement.
WHAT DOES THE BOARD OF DIRECTORS OF NCS HEALTHCARE THINK OF THIS OFFER?
We are making the offer pursuant to our merger agreement with NCS
HealthCare, which has been unanimously approved by the board of directors of NCS
HealthCare. The board of directors of NCS HealthCare also has unanimously
determined that the terms of the offer and the proposed merger, which are
described in this supplement, are advisable, fair to, and in the best interests
of, NCS HealthCare and its stockholders. The board of directors of NCS
HealthCare recommends that NCS HealthCare's stockholders accept the offer and
tender their shares to us pursuant to the offer. See 'Introduction' and Section
6 ('Background of the Offer') of this supplement. A copy of NCS HealthCare's
Schedule 14D-9 containing NCS HealthCare's board of directors' recommendations
and reasons therefor is being mailed together with this supplement.
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 $5.50 per share of class A common stock and class B
common stock of NCS HealthCare, net to you in cash, without interest and less
required withholding taxes. 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 $180 million in cash to purchase all of the
outstanding shares of class A common stock and class B common stock of NCS
HealthCare pursuant to the offer and to pay related fees and expenses. In
addition, pursuant to the merger agreement, as soon as practicable after we
accept shares for payment pursuant to the offer, we will cause NCS HealthCare to
repay its senior credit facility (approximately $206 million outstanding as of
September 30, 2002) and redeem its 5 3/4% convertible subordinated debentures in
accordance with their terms (approximately $102 million outstanding as of
September 30, 2002, plus accrued and unpaid interest and the redemption
premium). Since we will have sufficient cash, working capital and available
borrowing capacity under our existing credit facilities available to us to buy
all of the shares of class A common stock and class B common stock outstanding,
pay related fees and expenses, repay NCS HealthCare's senior credit facility 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 repay NCS
HealthCare's senior credit facility and to redeem NCS
<Page>
HealthCare's 5 3/4% convertible subordinated debentures. See Section 10 ('Source
and Amount of Funds') of the offer to purchase and Section 5 ('Source and Amount
of Funds') of this supplement.
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 Section 4 ('Procedure for Tendering Shares') of the
offer to purchase and Section 3 ('Procedure for Tendering Shares') of this
supplement.
IF I ALREADY TENDERED MY SHARES IN THE OFFER, DO I HAVE TO DO ANYTHING NOW?
No. You do not have to take any action with respect to any shares of class A
common stock or class B common stock previously validly tendered and not
properly withdrawn. If the offer is completed, these shares will be accepted for
payment and you will receive the increased offer price of $5.50 per share, net
to you in cash, without interest and less required withholding taxes. See
Section 3 ('Procedure for Tendering Shares') of this supplement.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
The offer has been extended. You now have until 12:00 Midnight, New York
City time, on Tuesday, January 7, 2003, 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 Section 4 ('Procedure for Tendering
Shares') of the offer to purchase. See Section 4 ('Procedure for Tendering
Shares') of the offer to purchase and Section 3 ('Procedure for Tendering
Shares') of this supplement.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Yes. Pursuant to the merger agreement, we will extend the offer beyond the
scheduled expiration date, or any subsequent extended expiration, of the offer
if any of the conditions to the offer, which are described in Section 9
('Conditions to the Offer') of this supplement, are not satisfied or waived. We
also may extend the offer for any period required by the United States
Securities and Exchange Commission or by applicable law. In addition, we may
extend the offer for an aggregate of ten business days beyond the latest
expiration date provided for by the two preceding sentences.
We may also elect to provide one or more 'subsequent offering periods' for
the offer of up to 20 business days in the aggregate. 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. During
a subsequent offering period, stockholders may not withdraw tendered shares. We
do not currently intend to include a subsequent offering period, although we
reserve the right to do so. See Sections 1 ('Terms of the Offer; Expiration
Date') and 2 ('Extension of Tender Period; Termination; Amendment') of the offer
to purchase and Sections 1 ('Amended Terms of the Offer; Expiration Date') and 2
('Extension of Tender Period; Termination; Amendment') of this supplement.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The conditions to the offer have been amended. The offer is conditioned
upon, among other things, NCS HealthCare's stockholders having validly tendered
and not properly withdrawn prior to the expiration date that number of shares
representing, together with the shares owned by Omnicare, at least a majority of
the total voting power of all of the outstanding securities of NCS HealthCare
entitled
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<Page>
to vote generally in the election of directors or in a merger (calculated on a
fully diluted basis after consummation of the offer). We refer to this condition
as the 'minimum condition.'
The offer is subject to a number of other conditions, which are described in
this supplement. We can waive any of the conditions in our reasonable
discretion, except that we cannot waive the minimum condition without the
consent of NCS HealthCare. The satisfaction or existence of any of the
conditions to our offer, including those summarized above, will be determined by
Omnicare in its reasonable discretion. For a complete list of the conditions to
the offer, see Section 9 ('Conditions to the Offer') of this supplement.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On December 20, 2002, the last full trading day before we amended the offer
upon the terms set forth in this supplement, the closing price of a share of
class A common stock of NCS HealthCare was $5.40. The shares of class B common
stock of NCS HealthCare are not publicly traded. We advise you to obtain a
recent quotation for shares of class A common stock before deciding whether to
tender your shares. See Section 4 ('Price Range of Class A Common Stock;
Dividends') of this supplement.
HAVE ANY STOCKHOLDERS ALREADY AGREED TO TENDER THEIR SHARES?
NCS HealthCare has been advised by each of the directors and executive
officers of NCS HealthCare that each such person intends to tender all of the
shares owned by such person in the offer. We have been advised by NCS HealthCare
that, as a group, all of the directors and executive officers of NCS HealthCare
own approximately 1,173,738 shares of class A common stock and approximately
4,810,806 shares of class B common stock.
WHAT WILL HAPPEN TO NCS HEALTHCARE?
The merger agreement provides that, following consummation of the offer, NCS
HealthCare will take action to cause representatives of Omnicare and NCS
Acquisition Corp. to constitute a majority of the members of the NCS HealthCare
board of directors and its subsidiaries' boards of directors. In addition, if
the offer is consummated, provided that certain conditions are met, NCS
Acquisition Corp. will be merged with and into NCS HealthCare, with NCS
HealthCare surviving as a wholly-owned subsidiary of Omnicare. See Section 7
('Purpose and Structure of the Offer; Plans for the Company') of this
supplement.
WILL THE TENDER OFFER BE FOLLOWED BY THE PROPOSED MERGER IF ALL OF THE SHARES
ARE NOT TENDERED IN THE OFFER?
If the offer is consummated, provided that certain conditions are met, we
will cause NCS Acquisition Corp. to merge with and into NCS HealthCare with the
approval of NCS HealthCare's stockholders by voting all of the shares of NCS
HealthCare common stock that we acquire in the offer (which will represent at
least a majority of the total voting power of all of the outstanding securities
of NCS HealthCare on a fully diluted basis after consummation of the offer) in
favor of the proposed merger. If, after the consummation of the offer, we own
90% or more of each class of common stock of NCS HealthCare, we will cause the
proposed merger to take place without action by stockholders in accordance with
Delaware law.
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).
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TO: THE HOLDERS OF CLASS A COMMON STOCK AND
CLASS B COMMON STOCK OF NCS HEALTHCARE, INC.
INTRODUCTION
The following information (the 'Supplement') amends and supplements the
Offer to Purchase, dated August 8, 2002 (the 'Offer to Purchase'), of NCS
Acquisition Corp., a Delaware corporation (the 'Purchaser') and a wholly-owned
subsidiary of Omnicare, Inc., a Delaware corporation ('Omnicare'), pursuant to
which Purchaser is offering to purchase all of the issued and outstanding shares
of class A common stock, par value $0.01 per share ('Class A Common Stock'), and
all of the issued and 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., a Delaware corporation (the 'Company'),
at a price of $5.50 per Share, net to the seller in cash, without interest and
less required withholding taxes, upon the terms and subject to the conditions
set forth in the Offer to Purchase, this Supplement and the related revised
(yellow) Letter of Transmittal (which together, as amended, supplemented or
otherwise modified from time to time, constitute the 'Offer').
This Supplement should be read in conjunction with the Offer to Purchase.
Except as otherwise set forth in this Supplement and the revised (yellow) Letter
of Transmittal, the terms and conditions previously set forth in the Offer to
Purchase and related original (blue) Letter of Transmittal remain applicable in
all respects to the Offer. Unless the context requires otherwise, all
capitalized terms used but not defined in this Supplement have the meanings
ascribed to them in the Offer to Purchase.
Procedures for tendering Shares are set forth in Section 4 ('Procedure for
Tendering Shares') of the Offer to Purchase as amended by Section 3 ('Procedure
for Tendering Shares') of this Supplement. Tendering stockholders may continue
to use the original (blue) Letter of Transmittal and the original (pink) Notice
of Guaranteed Delivery previously circulated with the Offer to Purchase, or the
revised (yellow) Letter of Transmittal and the revised (grey) Notice of
Guaranteed Delivery circulated with this Supplement. Although the original
(blue) Letter of Transmittal previously circulated with the Offer to Purchase
refers only to the Offer to Purchase, stockholders using such document to tender
their Shares will nevertheless be deemed to be tendering pursuant to the amended
Offer (including the amendments and supplements made by this Supplement) and
will receive $5.50 per Share, net to the seller in cash, without interest and
less required withholding taxes, for each Share validly tendered and not
properly withdrawn and accepted for payment pursuant to the Offer, subject to
the conditions of the Offer.
SHARES PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN CONSTITUTE
VALID TENDERS FOR PURPOSES OF THE OFFER. STOCKHOLDERS ARE NOT REQUIRED TO TAKE
ANY FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE INCREASED
OFFER PRICE IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY PURCHASER
PURSUANT TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY
PROCEDURE IF SUCH PROCEDURE WAS UTILIZED.
The purpose of the Offer is to acquire for cash as many of the outstanding
Shares as possible as a first step in acquiring the entire equity interest in
the Company. The Company, Omnicare and Purchaser have entered into an Agreement
and Plan of Merger, dated as of December 17, 2002 (the 'Merger Agreement'),
which provides for, among other things, (1) an increase in the price per Share
to be paid pursuant to the Offer from $3.50 per Share to $5.50 per Share, net to
the seller in cash, without interest thereon and less required withholding
taxes, (2) the modification of the conditions of the Offer to conform to the
conditions or events as set forth in their entirety in Section 9 ('Conditions to
the Offer') of this Supplement, (3) the amendment of the Offer to conform to the
terms of the Merger Agreement and (4) the merger of Purchaser with and into the
Company (the 'Proposed Merger') following consummation of the Offer. In the
Proposed Merger, each Share issued and outstanding immediately prior to the
Proposed Merger (other than Shares held in the treasury of the Company, by any
subsidiary of the Company, by Omnicare or by any subsidiary of Omnicare and
other than Dissenting Shares (as defined in the Merger Agreement)) shall be
converted into the right to receive an amount in cash equal to the highest per
Share price paid pursuant to the Offer, payable to the holder thereof, without
interest
4
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thereon and less required withholding taxes, upon surrender of the certificate
formerly representing such Share in accordance with the terms of the Merger
Agreement.
THE BOARD OF DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE, (1) HAS APPROVED
THE MERGER AGREEMENT, THE OFFER AND THE PROPOSED MERGER, (2) HAS DETERMINED THAT
THE TERMS OF THE OFFER AND THE PROPOSED MERGER ARE ADVISABLE, FAIR TO, AND IN
THE BEST INTERESTS OF, THE COMPANY AND THE COMPANY STOCKHOLDERS AND
(3) RECOMMENDS THAT THE COMPANY STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES TO PURCHASER PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
HEREIN) THAT NUMBER OF SHARES REPRESENTING, TOGETHER WITH THE SHARES OWNED BY
OMNICARE, AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF ALL OF 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'). THE SATISFACTION OR
EXISTENCE OF ANY OF THE CONDITIONS TO THE OFFER, INCLUDING THE MINIMUM
CONDITION, WILL BE DETERMINED BY OMNICARE IN ITS REASONABLE DISCRETION. THE
OFFER IS NOT CONDITIONED ON OBTAINING FINANCING. CERTAIN OTHER CONDITIONS ARE
DESCRIBED IN SECTION 9 ('CONDITIONS TO THE OFFER') OF THIS SUPPLEMENT.
IN A LETTER DATED DECEMBER 20, 2002, COUNSEL TO THE NCS HEALTHCARE
STOCKHOLDER-PLAINTIFFS REQUESTED THAT NCS HEALTHCARE CONFIRM BY THE CLOSE OF
BUSINESS ON DECEMBER 23, 2002 THAT ITS PRIOR DEMAND FOR THE PAYMENT OF FEES AND
EXPENSES IN THE AMOUNT OF $13,500,000 WOULD BE HONORED. PLAINTIFFS' COUNSEL HAS
ADVISED NCS HEALTHCARE THAT THEY BELIEVED THAT THEIR LEGAL FEES AND EXPENSES
WERE COVERED BY THE COMPANY'S OFFICERS' AND DIRECTORS' LIABILITY INSURANCE
POLICY. IF THE PLAINTIFFS' DEMAND WAS NOT HONORED ON OR BEFORE DECEMBER 26,
2002, PLAINTIFFS' COUNSEL STATED, THEY WOULD SEEK IMMEDIATE RELIEF FROM THE
DELAWARE CHANCERY COURT TO PERMIT WITHHOLDING A PORTION OF THE PAYMENT TO BE
MADE TO THE HOLDERS OF SHARES PURSUANT TO THE OFFER IN AN AMOUNT SUFFICIENT TO
INSURE PAYMENT OF THEIR FEES AND EXPENSES.
We have been advised by the Company that the Company's financial advisor,
Candlewood Partners, LLC, has delivered to the Company's board of directors a
written opinion, dated December 17, 2002, that, as of that date and based upon
and subject to the matters stated in the opinion, the consideration to be
received by the holders of Shares in the Offer and the Proposed Merger is fair
to those holders from a financial point of view. This opinion is set forth in
full as Annex A to the Company's Amendment No. 17 to the
Solicitation/Recommendation Statement on Schedule 14D-9 filed on December 23,
2002, a copy of which is being mailed together with this Supplement, and should
be read in its entirety.
According to the Company, as of December 20, 2002, 18,523,502 shares of
Class A Common Stock and 5,193,307 shares of Class B Common Stock were issued
and outstanding and 2,422,724 shares of Class A Common Stock and 94,858
shares of Class B Common Stock were subject to stock option grants. As of the
date of this Supplement, Omnicare beneficially owns 1,000 shares of Class A
Common Stock. The actual minimum number of Shares required to be validly
tendered and not properly withdrawn prior to the expiration of the Offer in
order for the Minimum Condition to be satisfied will depend on the facts as they
exist on the date of purchase. If the Minimum Condition is satisfied and
Purchaser accepts for payment the Shares tendered pursuant to the Offer,
Omnicare and Purchaser will be able to elect a majority of the members of the
Company's board of directors and to effect the Proposed Merger without the
affirmative vote of any other stockholder of the Company.
According to the Company, the Company has been advised by each of its
directors and executive officers that each such person intends to tender all
Shares owned by such person in the Offer. We have
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been advised by the Company that as a group, all of the directors and executive
officers of the Company own approximately 1,173,738 shares of Class A Common
Stock and approximately 4,810,806 shares of Class B Common Stock.
Consummation of the Proposed Merger is subject to the satisfaction or waiver
of a number of conditions, including, if required, the approval and adoption of
the Merger Agreement by the requisite vote or consent of the holders of Shares.
Under the Delaware General Corporation Law (the 'DGCL'), the affirmative vote of
the holders of at least a majority of the outstanding Shares is required to
approve and adopt the Merger Agreement. If Purchaser owns 90% or more of the
outstanding shares of each class of Shares, following consummation of the Offer,
Purchaser would be able to consummate the Proposed Merger pursuant to the
'short-form' merger provisions of Section 253 of the DGCL, without any action by
any other stockholder. In such event, Purchaser intends to effect the Proposed
Merger as promptly as practicable following the final purchase of Shares in the
Offer.
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 SUPPLEMENT, THE OFFER TO PURCHASE AND THE RELATED REVISED (YELLOW)
LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY
READ THEM IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE
OFFER.
6
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THE OFFER
1. AMENDED TERMS OF THE OFFER; EXPIRATION DATE.
The discussion set forth in Section 1 ('Terms of the Offer; Expiration
Date') of the Offer to Purchase is hereby amended and supplemented as follows:
Pursuant to the Merger Agreement, the Purchaser has agreed to purchase all
outstanding Shares at a price of $5.50 per Share, net to the seller in cash,
without interest thereon and less required withholding taxes, upon the terms and
subject to the conditions of the Offer. All stockholders whose Shares are
validly tendered and not properly withdrawn and accepted for payment pursuant to
the Offer (including Shares tendered and not properly withdrawn prior to the
date of this Supplement) will receive this increased Offer consideration.
The Offer has been extended. The Offer will now expire at 12:00 Midnight,
New York City time, on Tuesday, January 7, 2003, unless and until the Purchaser
shall have further extended the period during which the Offer is open.
'Expiration Date' means 12:00 Midnight, New York City time, on Tuesday, January
7, 2003, unless we further 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.
As of the close of business on December 20, 2002, approximately 10,759,862
shares of Class A Common Stock and 24,782 shares of Class B Common Stock had
been tendered and not properly withdrawn pursuant to the Offer. See Section 8
('The Merger Agreement') of this Supplement for a description of the provisions
of the Merger Agreement regarding extensions of the Offer by the Purchaser.
Under Exchange Act Rule 14d-11, Purchaser may, subject to certain
conditions, provide a subsequent offering period of from three to 20 business
days in length following the expiration of the Offer on 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 will
have been completed.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION AND EACH OF THE OTHER CONDITIONS DESCRIBED IN SECTION 9
('CONDITIONS TO THE OFFER') OF THIS SUPPLEMENT.
The Company has agreed to provide Purchaser with the Company's stockholder
list and security position listings for the purpose of disseminating the Offer
to stockholders. Following receipt of such lists from the Company, Purchaser
will mail this Supplement, the revised (yellow) Letter of Transmittal and other
relevant materials to record holders of Shares whose names appear on the
Company's stockholder list and will furnish these materials to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's stockholder list or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. EXTENSION OF THE TENDER PERIOD; TERMINATION; AMENDMENT.
The discussion set forth in Section 2 ('Extension of the Tender Period;
Termination; Amendment') of the Offer to Purchase is hereby amended and
supplemented as follows:
As provided in the Merger Agreement, Omnicare and Purchaser reserve the
right to modify the terms of the Offer or waive any condition to the Offer,
except that, without the consent of the Company, Omnicare and Purchaser may not
(1) waive the Minimum Condition, (2) reduce the number of Shares subject to the
Offer, (3) reduce the price per Share to be paid in the Offer, (4) amend or add
to the conditions to the Offer, (5) except as provided below, extend the Offer,
(6) change the form of or reduce the consideration payable in the Offer or (7)
amend any other term of the Offer in any manner adverse to the stockholders of
the Company.
Notwithstanding the foregoing, Omnicare and Purchaser (1) shall extend the
Offer for no longer than five business days at any one time, if at the scheduled
or extended expiration date of the Offer any of the conditions to the Offer are
not satisfied or waived, until such time as such conditions are satisfied
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or waived, (2) may extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the 'SEC') applicable to the Offer, (3) may extend the Offer for any reason on
one or more occasions for an aggregate period of not more than ten business days
beyond the latest expiration date that would otherwise be permitted under clause
(1) or (2) of this sentence or (4) may extend the Offer for one or more
subsequent offering periods of up to an additional 20 business days in the
aggregate pursuant to Rule 14d-11 of the Exchange Act; provided that, in the
case of clause (4) above, Purchaser shall immediately accept for payment and
promptly pay for all Shares validly tendered and not properly withdrawn during
the offering period in accordance with Rule 14d-11 of the Exchange Act.
3. PROCEDURES FOR TENDERING SHARES.
The discussion set forth in Section 4 ('Procedures for Tendering Shares') of
the Offer to Purchase is hereby amended and supplemented as follows:
Tendering stockholders may continue to use the original (blue) Letter of
Transmittal and the original (pink) Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase, or the revised (yellow) Letter of
Transmittal and the revised (grey) Notice of Guaranteed Delivery circulated with
this Supplement. Although the original (blue) Letter of Transmittal previously
circulated with the Offer to Purchase refers only to the Offer to Purchase,
stockholders using such document to tender their Shares will nevertheless be
deemed to be tendering pursuant to the amended Offer (including the amendments
and supplements made by this Supplement) and will receive $5.50 per Share, net
to the seller in cash, without interest and less required withholding taxes, for
each Share validly tendered and not properly withdrawn and accepted for payment
pursuant to the Offer, subject to the conditions of the Offer. Procedures for
tendering Shares are set forth in Section 4 ('Procedures for Tendering Shares')
of the Offer to Purchase.
SHARES PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN CONSTITUTE
VALID TENDERS FOR PURPOSES OF THE OFFER. STOCKHOLDERS ARE NOT REQUIRED TO TAKE
ANY FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE INCREASED
OFFER PRICE IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY PURCHASER
PURSUANT TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY
PROCEDURE IF SUCH PROCEDURE WAS UTILIZED.
4. PRICE RANGE OF CLASS A COMMON STOCK; DIVIDENDS.
The discussion set forth in Section 7 ('Price Range of Class A Common Stock;
Dividends') of the Offer to Purchase is hereby amended and supplemented as
follows:
The high and low intra-day sales prices per share of the Class A Common
Stock on the Over-The-Counter Bulletin Board based on published financial
sources for the first fiscal quarter of 2003 were $2.92 and $0.26, respectively,
and for the second fiscal quarter of 2003 were $5.43 and $1.68, respectively
(through December 20, 2002). On December 20, 2002, the last full trading day
prior to Omnicare amending the Offer upon the terms set forth in this
Supplement, the reported closing price per share of Class A Common Stock was
$5.40. The Company has not declared or paid any dividends on its stock for the
periods represented above.
WE URGE YOU TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES OF CLASS A
COMMON STOCK.
5. SOURCE AND AMOUNT OF FUNDS.
The first paragraph under Section 10 ('Source and Amount of Funds') of the
Offer to Purchase is hereby amended and restated in its entirey as follows:
The Offer is not subject to any financing conditions. We will need
approximately $180 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, pursuant to the Merger Agreement, as
soon as practicable after Purchaser accepts Shares for payment pursuant to the
Offer, Omnicare will cause the Company (1) to repay all amounts outstanding
under the Company's Credit Agreement, dated
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as of June 1, 1998, among the Company and the lending institutions named therein
as lenders (the 'Senior Credit Facility'), which had approximately $206 million
outstanding as of September 30, 2002 and (2) to redeem the Company's 5 3/4%
convertible subordinated debentures, due 2004 (the '5 3/4% Notes') in accordance
with their terms, of which approximately $102 million were outstanding as of
September 30, 2002, plus accrued and unpaid interest and the redemption premium.
6. BACKGROUND OF THE OFFER.
The discussion set forth in Section 11 ('Background of the Offer') of the
Offer to Purchase is hereby amended and supplemented as follows:
On August 8, 2002, Omnicare and Purchaser commenced the Offer for all of the
outstanding Shares at a price of $3.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
and related Letter of Transmittal. The Offer represented more than twice the
value of the proposed transaction between the Company and Genesis Health
Ventures, Inc. ('Genesis').
Later that day, Omnicare sent a letter to the Company's board of directors
announcing that it had commenced the Offer. In its letter, Omnicare pointed out
that its Offer was clearly superior to the Company's proposed transaction with
Genesis and had to be seriously considered by the Company's board of directors.
Omnicare explained that it had commenced the Offer only after repeated attempts
to contact members of the Company's senior management and board of directors
were unsuccessful and that it would prefer to work together with the Company in
structuring and consummating a transaction that would provide the greatest value
to the Company and all of its stakeholders. Omnicare also indicated that it was
prepared to execute a merger agreement that was substantively similar to the
merger agreement between the Company and Genesis, dated July 28, 2002 (the
'Genesis Agreement'), but with less restrictions on the Company, and that it was
willing to discuss all aspects of its proposal to acquire the Company, including
structure, price and the form of consideration to be paid to the Company's
stockholders. Omnicare added that its proposal was not in any way subject to
financing and that it was prepared to consummate a negotiated transaction with
the Company quickly.
On August 9, 2002, the Company filed a Solicitation/Recommendation Statement
on Schedule 14D-9 (the 'Schedule 14D-9') announcing that (1) it was advising its
stockholders to take no action with respect to the Offer at that time, (2) the
Offer was under consideration by the Company's board of directors and (3) on or
before August 22, 2002, the Company would advise the stockholders of its
position with respect to the Offer and the reasons for its position.
In an effort to quickly consummate a transaction that would provide
substantial value to the Company's stockholders, as well as its bondholders and
other creditors, on August 15, 2002, Omnicare sent a merger agreement to the
Company's board of directors, which Omnicare indicated it was willing to
execute. The merger agreement was substantively similar to the Genesis
Agreement, which already had been negotiated and executed by the Company, except
that the merger agreement prepared by Omnicare (1) reflected Omnicare's $3.50
per Share cash offer, (2) did not include any 'break-up' fee, (3) did not
require or otherwise contemplate that any stockholder of the Company would
execute a voting agreement and (4) included a 'fiduciary-out,' which would
enable the Company to terminate its agreement with Omnicare if it received a
'superior proposal.' Omnicare agreed in the merger agreement delivered to the
Company to treat the Company's bondholders and other creditors in the same
manner as they were to be treated in the Company's proposed merger with Genesis.
Once again, Omnicare stated that it was willing to discuss all aspects of its
proposal, including price and the form of consideration to be paid to the
Company's stockholders.
On August 20, 2002, the Company filed a Schedule 14D-9 announcing that the
Company's board of directors had recommended that the Company's stockholders
reject Omnicare's Offer. Omnicare issued a press release, later that day,
stating that it was disappointed with the board of directors' recommendation
against the Offer and that Omnicare continued to be willing to discuss with the
Company all aspects of its Offer.
On August 26, 2002, Omnicare announced that the waiting period under the HSR
Act had expired with respect to the Offer.
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In response to the Company's Schedule 14D-9 filing of August 20th and
certain other public statements regarding Omnicare's Offer made by the Company,
on August 27, 2002, Omnicare sent a letter to the Company's board of directors
pointing out that, notwithstanding the Company's statement to the contrary,
Omnicare's proposal to acquire the Company was not conditioned on due diligence.
The Offer, Omnicare explained, included conditions that were customary for
transactions like the Offer. In addition, Omnicare reminded the Company's board
of directors that its proposal was superior to the proposed transaction between
the Company and Genesis and that it had committed publicly to treat the
Company's bondholders and other creditors exactly as they were proposed to be
treated by Genesis. Omnicare also reiterated that it was willing to discuss all
aspects of its proposal to acquire the Company, including price and the form of
consideration to be paid to the Company's stockholders.
On September 6, 2002, Omnicare announced that it had extended the Offer
until 12:00 Midnight, New York City time, on September 19, 2002 and that as of
the close of business on September 5, 2002, approximately 58% of the outstanding
shares of Class A Common Stock and less than 1% of the outstanding shares of
Class B Common Stock had been tendered into the Offer.
On September 12, 2002, the Company announced that, at its request, Genesis
had provided the Company with a waiver, dated September 10, 2002, from certain
provisions of the Genesis Agreement, which permitted the Company to engage in
discussions with Omnicare regarding Omnicare's proposal to acquire the Company.
Given the provisions of the Genesis Agreement and the Voting Agreements, the
Company explained, the Company's board of directors believed that it was
unlikely that a business combination with Omnicare would be consummated.
On September 13, 2002, Joel F. Gemunder, President and Chief Executive
Officer of Omnicare, together with Omnicare's legal and financial advisors, met
with the Company's legal and financial advisors. During the meeting, the parties
discussed the terms of Omnicare's proposal to acquire all of the outstanding
shares of Class A Common Stock and Class B Common Stock. Following the meeting,
Omnicare's advisors engaged in discussions from time-to-time with the Company's
advisors regarding Omnicare's proposal, the terms of the merger agreement
delivered to the Company by Omnicare on August 15th and a potential transaction
between the Company and Omnicare.
On September 20, 2002, Omnicare announced that it had again extended the
Offer until 12:00 Midnight, New York City time, on October 3, 2002, which was
again extended, on October 4, 2002, until 12:00 Midnight, New York City time, on
October 21, 2002.
Following several discussions between Omnicare's legal advisor and the
Company's legal advisor regarding the terms of a potential transaction involving
the Company and Omnicare, as well as certain of the provisions of the merger
agreement delivered to the Company by Omnicare on August 15, 2002, on
October 6, 2002, Omnicare sent the Company a revised merger agreement, which had
been executed by Omnicare. As with the August 15th merger agreement, the
executed merger agreement delivered by Omnicare on October 6 was substantively
similar to the Genesis Agreement; however, the Omnicare merger agreement
included few restrictions on the Company's board of directors. In a letter
attaching the merger agreement, Omnicare set out certain material differences
between the Omnicare and Genesis merger agreements:
Omnicare agreed to pay each stockholder of the Company $3.50 per Share in
cash, which represented more than twice the value of the consideration to
be paid to the stockholders in the proposed transaction with Genesis.
The Omnicare merger agreement provided for a tender offer followed by a
merger, which had the benefit of providing the Company's stockholders with
$3.50 per Share more quickly than in a one-step merger, like the
transaction proposed by Genesis. In fact, the Company's stockholders could
receive the consideration as soon as ten business days after Omnicare's
tender offer was amended to reflect the terms of the Omnicare merger
agreement.
Unlike the Genesis Agreement, the Omnicare merger agreement did not include
a 'break-up' fee or other provisions intended to preclude a superior
proposal and provided the Company with a 'fiduciary-out' of the merger
agreement, which enabled the Company to terminate the Omnicare merger
agreement in order to accept a superior proposal.
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By delivering an executed merger agreement, Omnicare agreed to be bound by
terms of the agreement for the time period set forth in the letter attaching the
agreement, and the Company was advised that it could accept the Omnicare merger
agreement by simply executing and returning a copy of the agreement to Omnicare
within the time period specified in Omnicare's cover letter.
On October 8, 2002, the Company announced that it was in the process of
reviewing the terms and conditions of the Omnicare merger agreement with its
financial and legal advisors, in light of the Company's then-current contractual
commitments with Genesis. The Company further announced that neither the
Company's board of directors nor the committee of the Company's board of
directors comprised of outside directors (the 'Special Committee') had taken any
action with respect to Omnicare's October 6th letter or the executed merger
agreement attached to the letter and, accordingly, their recommendation to
reject Omnicare's Offer and not tender their Shares pursuant to the Offer
remained unchanged. The Company also announced that the Special Committee and
the Company's board of directors reserved the right to revise their
recommendation as a result of Omnicare's letter, the Omnicare merger agreement
or any other changed circumstances.
On October 22, 2002, the Company issued a press release announcing that the
Company's board of directors had withdrawn its recommendation that the Company's
stockholders vote in favor of the merger with Genesis. In response to this
announcement by the Company, Genesis announced that the decision of the
Company's board of directors to withdraw their recommendation in favor of the
merger with Genesis did not affect the binding nature of either the Genesis
Agreement or the Voting Agreements and that, therefore, Genesis was confident
that its proposed merger with the Company would still be consummated. On that
same date, Omnicare announced that it had extended the Offer until 12:00
Midnight, New York City time, on November 4, 2002.
On October 25, 2002, the Court of Chancery of the State of Delaware (the
'Chancery Court') issued a ruling with respect to Omnicare's fiduciary duty
claims against the Company, its board of directors, Genesis and Geneva Sub, a
wholly-owned subsidiary of Genesis. The Chancery Court held that, because
Omnicare was not a stockholder of the Company on July 28, 2002, the date on
which the Company's board of directors approved the Genesis Agreement and the
Voting Agreements, it did not have standing to assert claims that the Company's
directors breached their fiduciary duties. As a result, the court dismissed
Omnicare's fiduciary duty claims. On October 28, 2002, Omnicare issued a press
release regarding the court's decision. See Section 11 ('Legal Proceedings') of
this Supplement.
On October 29, 2002, the Chancery Court issued a ruling denying a motion for
summary judgment made by Omnicare as to the first count of Omnicare's complaint,
which sought a declaration that the execution of the Voting Agreements by Jon H.
Outcalt and Kevin B. Shaw, in connection with the proposed Genesis merger,
resulted in the automatic conversion of their shares of Class B Common Stock
(ten votes per share) into shares of Class A Common Stock (one vote per share),
and granted summary judgment in favor of the defendants. On October 30, 2002,
Omnicare issued a press release regarding the court's decision. In its press
release, Omnicare indicated that it intended to file an appeal with respect to
the court's October 25 and 29 rulings and seek an expedited decision on its
appeal. See Section 11 ('Legal Proceedings') of this Supplement.
On November 1, 2002, Genesis filed an amendment to its registration
statement on Form S-4, which was initially filed on August 29, 2002, relating to
the proposed acquisition of the Company, which included, among other things, the
unanimous recommendation of the Company's board of directors that the
stockholders of the Company vote against the merger with Genesis.
On November 5, 2002, Omnicare announced that it had extended the Offer until
12:00 Midnight, New York City time, on November 18, 2002, which was again
extended, on November 19, 2002, until 12:00 Midnight, New York City time, on
December 3, 2002.
On November 22, 2002, the Chancery Court issued an order denying a motion
brought by certain stockholders of the Company, on behalf of all of the
Company's stockholders, for a preliminary injunction seeking to enjoin the
acquisition of the Company by Genesis on the grounds that the members of the
Company's board of directors breached their fiduciary duties in approving the
Genesis transaction. In a press release issued on November 25, 2002, Omnicare
indicated that the stockholder-plaintiffs planned to seek an expedited appeal
with respect to the Chancery Court's ruling. On November 26, 2002, the Chancery
Court and the Supreme Court of the State of Delaware (the
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'Supreme Court') denied the Company stockholder-plaintiffs' application for an
interlocutory appeal from the November 22, 2002 decision of the Chancery Court
denying their motion for a preliminary injunction in the consolidated
shareholders litigation brought against the Company. See Section 11 ('Legal
Proceedings') of this Supplement.
On December 3, 2002, the Supreme Court ordered that Omnicare's appeals from
orders of the Chancery Court's rulings on October 25 and 29, which had been
heard earlier that day by a panel of three Supreme Court Justices, be reheard
and determined by the entire Supreme Court sitting en banc on December 4, 2002.
See Section 11 ('Legal Proceedings') of this Supplement.
On December 4, 2002, Omnicare announced that it had extended the Offer until
12:00 Midnight, New York City time, on December 12, 2002.
Later that day, the Supreme Court issued an order (1) vacating its
November 26th order denying the Company stockholder-plaintiffs' application for
an interlocutory appeal from the Chancery Court order denying their Motion for a
Preliminary Injunction and granting the plaintiffs' application for an
interlocutory appeal from that order and (2) finding that, because the Company
stockholder-plaintiffs' appeal and Omnicare's appeals arose from the same
operative facts, they should, therefore, be consolidated and heard by the court
at the same time. The consolidated appeals were scheduled to be heard by the
Supreme Court sitting en banc on December 10, 2002. See Section 11 ('Legal
Proceedings') of this Supplement. On December 5, 2002, Omnicare issued a press
release relating to the Supreme Court's December 4, 2002 orders.
On December 4, 2002, the Company announced that, as a result of the Supreme
Court's order, it was postponing its stockholder meeting to consider the merger
of the Company and Genesis, which was scheduled for December 5, 2002, until
December 12, 2002.
On December 6, 2002, the Company's financial advisor discussed Omnicare's
proposal to acquire the Company with Mr. Gemunder. During the conversation, the
Company's financial advisor suggested that Omnicare consider increasing its
Offer to acquire the Company.
On December 9, 2002, Omnicare sent a letter to the board of directors of the
Company again reiterating that Omnicare was willing to discuss all aspects of
its Offer, including the price to be paid to the Company's stockholders in a
transaction with Omnicare. In the letter, Mr. Gemunder invited the directors or
their advisors to call Omnicare or its advisors regarding Omnicare's proposal.
On December 10, 2002, the Supreme Court ordered that the Chancery Court
enter a preliminary injunction precluding the implementation of the merger of
the Company and Genesis. In its order, the Supreme Court (1) reversed the order
of the Chancery Court, dated November 22, 2002, denying the
stockholder-plaintiffs' application for a preliminary injunction, (2) reversed
the Chancery Court's order, dated October 29, 2002, dismissing Omnicare's claim
that Messrs. Outcalt's and Shaw's shares of Class B Common Stock (ten votes per
share) automatically converted into shares of Class A Common Stock (one vote per
share) when the Voting Agreements were executed and granting summary judgment in
favor of defendants with respect to this claim, to the extent that the Chancery
Court's decision permitted implementation of the Voting Agreements contrary to
the Supreme Court's order on the Company stockholder-plaintiffs' fiduciary duty
claims, (3) dismissed Omnicare's appeal as to standing on the ground that the
appeal was moot and (4) remanded the case to the Chancery Court for the entry of
a preliminary injunction precluding the implementation of the merger of the
Company and Genesis. Later that day, Genesis issued a press release announcing
the Supreme Court's order. See Section 11 ('Legal Proceedings') of this
Supplement.
On December 11, 2002, Omnicare and the Company each issued press releases
relating to the Supreme Court's December 10th order. Later that day, the
Chancery Court, at the direction of the Supreme Court, entered an order
enjoining the Company, Genesis and anyone acting in concert with either of them
from taking any actions to consummate, implement, effectuate, validate or
enforce the Genesis Agreement, including, without limitation, presenting the
Genesis Agreement to the Company's stockholders for approval. See Section 11
('Legal Proceedings') of this Supplement.
After the Chancery Court issued the preliminary injunction, the Company
announced that the special meeting of stockholders to consider the Genesis
Agreement was postponed.
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Later that day, on December 11, 2002, the Company's advisors contacted
Omnicare's advisors to discuss Omnicare's offer, the terms of the executed
merger agreement, which was delivered to the Company by Omnicare on
October 6th, and the preliminary injunction issued by the Chancery Court.
Omnicare, through its financial advisor, also had a preliminary discussion with
Genesis concerning their respective efforts to acquire the Company, including
the possibility of Genesis terminating the Genesis Agreement.
Also on December 11, 2002, representatives of Genesis contacted
representatives of the Company and offered to increase the consideration to be
paid by Genesis in a merger with the Company to $3.50 per Share in Genesis
common stock. Under the original terms of the Genesis Agreement, Company
stockholders would have received 0.1 of a share of Genesis common stock for each
Share held by the stockholder. Based on the closing price of Genesis common
stock on December 11, 2002, the original Genesis transaction consideration had a
value of approximately $1.65 per Share.
On December 12, 2002, Omnicare extended the Offer until 12:00 Midnight, New
York City time, on December 27, 2002.
On December 12, 2002, Omnicare was advised of Genesis' revised offer. Later
that day, the Omnicare board of directors met telephonically, with Omnicare's
legal and financial advisors participating in the meeting, to review the status
of Omnicare's Offer and its proposal to acquire the Company, to discuss the
increased Genesis offer and to consider Omnicare's response to the increase,
including whether Omnicare should increase its Offer. Following discussion among
Omnicare's board of directors and Omnicare's legal and financial advisors, the
board of directors unanimously approved increasing the Offer price to $5.50 per
Share and authorized management to send the Company a revised merger agreement
executed by Omnicare to reflect the increased offer price. The Omnicare board of
directors also authorized management to negotiate further, if necessary, the
terms of the merger agreement with the Company and its advisors.
Subsequently, on December 12, 2002, Omnicare sent the Company a revised
merger agreement, which, again, was executed by Omnicare and reflected
Omnicare's offer to acquire all of the outstanding Shares for $5.50 per Share in
cash. Given the increased offer price, the revised merger agreement included a
break-up fee proportionate to the break-up fee in the Genesis Agreement, but was
otherwise substantially identical to the merger agreement delivered to the
Company by Omnicare on October 6th. The Company was informed that it could
accept the revised merger agreement by executing and returning a copy of the
agreement to Omnicare within the time period set forth in the letter attaching
the revised agreement.
On December 13, 2002, the Company invited Omnicare and Genesis each to
submit its 'best and highest offer' to acquire all of the outstanding shares of
Class A Common Stock and Class B Common Stock of the Company by 6:00 p.m.
(E.S.T.) on December 15, 2002. In addition, the Company provided Omnicare and
Genesis with Rules and Procedures for Submission of Proposals for the Company
setting forth the rules and procedures established by the Company for the
submission of proposals.
Following receipt of the request for proposals from the Company, Genesis
contacted Omnicare's financial advisor on December 15, 2002, and stated that it
was considering terminating the Genesis Agreement. Thereafter, Genesis and
Omnicare discussed termination of the Genesis Agreement by Genesis and
negotiated and executed a Termination and Settlement Agreement, dated as of
December 15, 2002 (the 'Termination Agreement'). The Termination Agreement
provided for, among other things, the termination by Genesis of the Genesis
Agreement in accordance with its terms by sending written notice of such
termination to the Company on December 16, 2002 (which would also result in
termination of the Voting Agreements). In addition, Genesis and Omnicare each
agreed to release the other party from any claims arising from the Genesis
Agreement and not to commence any action against the other party arising out of
or in connection with the Genesis Agreement. Omnicare also agreed that, prior to
the closing of a transaction with the Company, it would pay Genesis an amount in
cash equal to $22 million less any termination fees paid by or on behalf of the
Company to Genesis under the Genesis Agreement. Omnicare then informed NCS of
the Termination Agreement and that Omnicare would not raise its bid above $5.50
per Share.
On December 16, 2002, Omnicare and Genesis each issued press releases
announcing the execution of the Termination and Settlement Agreement. On the
same day, Genesis provided the Company with
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written notice of its termination of the Genesis Agreement. On December 16 and
17, 2002, representatives of the Company and Omnicare discussed Omnicare's
proposal to acquire the Company and negotiated certain terms of the Merger
Agreement.
On the morning of December 18, 2002, Omnicare and the Company announced that
they had executed the Merger Agreement on December 17, 2002. The Company also
announced that its board of directors unanimously approved the Merger Agreement
and the transactions contemplated thereby, including the Offer.
7. PURPOSE AND STRUCTURE OF THE OFFER; PLANS FOR THE COMPANY.
The discussion set forth in Section 12 ('Purpose and Structure of the Offer;
Plans for the Company -- Purpose of the Offer') of the Offer to Purchase is
hereby amended and restated in its entirety as follows:
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. Purchaser currently intends, promptly after the
consummation of the Offer, to designate a majority of the directors to the
Company's board of directors, as provided in the Merger Agreement. In the Merger
Agreement, Omnicare and the Company have agreed to effect the Proposed Merger in
accordance with the provisions of the Merger Agreement as promptly as
practicable following the consummation of the Offer.
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 of each class of
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 accordance with Delaware law. If the Minimum Condition is 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.
8. THE MERGER AGREEMENT.
The following is a summary of the material provisions of the Merger
Agreement and is qualified in its entirety by reference to the full text of the
Merger Agreement, a copy of which is filed with the SEC as Exhibit (d)(2) to the
Schedule TO, and is incorporated herein by reference. The Merger Agreement
should be read in its entirety for a more complete description of the matters
summarized below.
THE OFFER. The Merger Agreement provides that, subject to the provisions of
the Merger Agreement, Omnicare and Purchaser have agreed to amend the Offer
(1) to increase the price per Share to be paid pursuant to the Offer from $3.50
per Share to $5.50 per Share, net to the seller in cash, without interest
thereon and less required withholding taxes and (2) to amend and restate the
conditions to the Offer as set forth in their entirety in Section 9 ('Conditions
to the Offer') of this Supplement. Purchaser's obligation to accept for payment
and pay for Shares tendered pursuant to the Offer is subject to the satisfaction
of the Minimum Condition and the other conditions described in Section 9
('Conditions to the Offer') of this Supplement. The Merger Agreement provides
that each stockholder of the Company who tenders Shares in the Offer will
receive $5.50 for each Share tendered, net to the holder in cash, without
interest and less required withholding taxes. Omnicare and Purchaser each
reserve the right to modify the terms of the Offer, except that, without the
consent of the Company, Omnicare and Purchaser have agreed that they will not:
waive the Minimum Condition;
reduce the number of Shares subject to the Offer;
reduce the price per Share to be paid in the Offer;
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amend or add conditions to the Offer;
except as provided below, extend the Offer;
change the form of or reduce the consideration to be paid in the Offer; or
amend any other term of the Offer in any manner adverse to the stockholders
of the Company.
EXTENSIONS OF THE OFFER. Pursuant to the Merger Agreement, Omnicare and
Purchaser (1) shall extend the Offer for no longer than five business days at
any one time, if at the scheduled or extended expiration date of the Offer any
of the conditions to the Offer are not satisfied or waived, until such time as
such conditions are satisfied or waived, (2) may extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC
applicable to the Offer or (3) may extend the Offer for any reason on one or
more occasions for an aggregate period of not more than ten business days beyond
the latest expiration date that would otherwise be permitted under clause (1) or
(2) of this sentence.
The Merger Agreement obligates Purchaser to accept for payment, as promptly
as permitted under applicable law, and pay for, as promptly as practicable after
the date on which Purchaser first accepts Shares for payment in the Offer (the
'Acceptance Date'), all Shares validly tendered (and not properly withdrawn) in
the Offer.
SUBSEQUENT OFFERING PERIOD. If at the expiration of the Offer all conditions
of the Offer have been satisfied or waived and Purchaser has accepted for
payment all Shares tendered in the Offer, the Merger Agreement permits Omnicare
and Purchaser to provide for, in compliance with applicable law, subsequent
offering periods of up to an additional 20 business days in the aggregate.
DIRECTORS. The Merger Agreement provides that, promptly upon the acceptance
for payment of Shares pursuant to the Offer, Omnicare and Purchaser will be
entitled to designate a majority of the directors to the board of directors of
the Company. The Company is required under the Merger Agreement to take all
actions necessary to cause Omnicare's and Purchaser's designees to be elected or
appointed to the board of directors of the Company. Subject to applicable law
and applicable stock exchange regulations, the Company will also cause
individuals designated by Omnicare and Purchaser to constitute a majority of the
members on each committee of the board of directors of the Company and the board
of directors of each subsidiary of the Company (and each committee thereof). The
Merger Agreement provides that following the election or appointment of
Omnicare's and Purchaser's designees to the Company's board of directors, until
such time as the Proposed Merger becomes effective (the 'Effective Time'), the
Company's board of directors must have at least two directors who were directors
on the date of the Merger Agreement and who are not officers or employees of the
Company (the 'Non-Employee Directors').
Following the election or appointment of Omnicare's and Purchaser's
designees to the board of directors of the Company and until the Effective Time,
the approval of a majority of the Non-Employee Directors will be required to
authorize:
any amendment or termination of the Merger Agreement by the Company;
any exercise or waiver of any of the Company's rights or remedies under the
Merger Agreement;
any extension of the time for performance of Omnicare's and Purchaser's
respective obligations under the Merger Agreement; and
any agreement with Omnicare, Purchaser or their respective affiliates that
would prevent or materially delay the consummation of the Proposed Merger.
THE MERGER. The Merger Agreement provides that, at the Effective Time,
Purchaser will be merged with and into the Company in accordance with the DGCL.
At that time, the separate existence of Purchaser will cease, and the Company
will continue as a wholly-owned subsidiary of Omnicare (the 'Surviving
Corporation').
Under the terms of the Merger Agreement, at the Effective Time, each Share
then outstanding will be converted into the right to receive an amount in cash
equal to the per Share amount paid in the Offer, without interest and less
required withholding taxes. Notwithstanding the foregoing, the Merger
Consideration will not be payable in respect of Shares held in the treasury of
the Company, Shares held by any subsidiary of the Company, Shares held by
Omnicare or any of its subsidiaries and Dissenting
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Shares held by stockholders who have properly perfected appraisal rights under
Section 262 of the DGCL.
STOCK OPTIONS. The Merger Agreement provides that, prior to the Effective
Time, Omnicare and the Company shall take all such actions necessary to cause
each unexpired and unexercised outstanding option granted or issued under the
Company stock option or equity-incentive plans in effect on the date of the
Merger Agreement (each, a 'Company Option') to be automatically converted at the
Effective Time into the right to receive an amount in cash (less any required
tax withholdings) determined by multiplying (1) the excess, if any, of the
Merger Consideration over the applicable exercise price of such Company Option
by (2) the number of Shares subject to such Company Option (each, an 'Option
Payment'). Prior to the Effective Time, the Company shall obtain any consents
from holders of the Company Options to make any amendments to the terms of the
applicable stock option plans or arrangements that are necessary to give effect
to the transactions described above. An Option Payment may be withheld in
respect of any Company Option until the necessary consent is obtained. The
conversion of a Company Option into the right to receive the payment shall be
deemed a cancellation of such Company Option and a release of any and all rights
the holder had or may have had in respect of such Company Option. As a result,
any Company Option with a per share exercise price equal to or in excess of
$5.50 (or such higher price as is paid in the Offer) will be cancelled without
payment. Omnicare and the Company shall use reasonable efforts to take the
actions described above as soon as practicable following the Acceptance Date.
APPRAISAL RIGHTS. See Section 16 ('Certain Legal Matters; Regulatory
Approvals -- Appraisal Rights') of the Offer to Purchase.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, Omnicare
and Purchaser have made customary representations and warranties to the Company,
including representations relating to organization and standing, corporate power
and authority, no conflicts, consents and approvals, information supplied,
litigation and Purchaser's operations.
In addition, pursuant to the Merger Agreement, the Company has made
customary representations and warranties to Omnicare and Purchaser, including
representations relating to organization and standing, subsidiaries, corporate
power and authority, capitalization, no conflicts, consents and approvals,
brokerage and finder's fees and expenses, SEC documents, information supplied,
compliance with law, litigation, absence of changes, taxes, intellectual
property, title to and condition of properties, employee benefit plans,
contracts, labor matters, undisclosed liabilities, licenses, permits and
compliance, institutional pharmacy business, environmental matters, accounts
receivable, accounts payable, inventories, insurance, opinion of the Company's
financial advisor, related parties, the Company's board of directors' approval
and the Company stockholders' approval, Section 203 of the DGCL and no rights
agreement.
Certain of the representations and warranties made by Omnicare and the
Company are qualified by 'materiality' or 'Material Adverse Effect.' For
purposes of the Merger Agreement and this Supplement, the term 'Material Adverse
Effect' means (1) with respect to the Company, any change, event, occurrence,
effect or state of facts that, individually or aggregated with other such
matters, (a) is materially adverse to the business, assets (including intangible
assets), properties, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, or (b) materially impairs the ability of
the Company to perform its obligations under the Merger Agreement or ability to
consummate the Offer or the Proposed Merger or otherwise materially delay
consummation of the Offer or the Proposed Merger or (2) with respect to
Omnicare, any change, event, occurrence, effect or state of facts that,
individually or aggregated with other such matters, materially impairs the
ability of Omnicare to perform its respective obligations under the Merger
Agreement or ability to consummate the Offer or the Proposed Merger or otherwise
materially delays consummation of the Offer or the Proposed Merger; provided
that none of the following shall be considered in determining whether a Material
Adverse Effect has occurred (a) with respect to the Company, any adverse change
in the stock price of the Company, and with respect to Omnicare, any adverse
change in the stock price of Omnicare; (b) with respect to either party, any
adverse change, event, circumstance, development or effect resulting from a
change in general economic, industry or financial market conditions (including a
change in general economic, industry or financial market conditions resulting
from any acts of terrorism
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or war) to the extent that such adverse change, event, circumstance, development
or effect does not disproportionately affect the relevant party and its
subsidiaries; (c) with respect to either party, any adverse change, event,
circumstance, development or effect resulting from a breach of the Merger
Agreement by the other party and (d) with respect to either party, any adverse
change, event, circumstance, development or effect directly resulting from the
announcement or pendency of the Offer and the Proposed Merger, including the
loss by such party or any of its subsidiaries of any of such party's customers
or employees.
REASONABLE EFFORTS; NOTIFICATION. The Merger Agreement provides that each of
Omnicare and the Company will use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other party in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by the Merger Agreement, including (1) the obtaining
of all other necessary actions or nonactions, waivers, consents, licenses,
permits, authorizations, orders and approvals from governmental authorities and
the making of all other necessary registrations and filings, (2) the obtaining
of all consents, approvals or waivers from third parties related to or required
in connection with the Offer and the Proposed Merger that are necessary to
consummate the transactions contemplated by the Merger Agreement or required to
prevent a Material Adverse Effect on Omnicare or the Company from occurring
prior to or after the Effective Time, (3) the preparation of the proxy statement
or information statement relating to the vote of the Company's stockholders with
respect to the Merger Agreement, if required, (4) the execution and delivery of
any additional instruments reasonably necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, the Merger Agreement
and (5) the providing of all such information concerning such party, its
subsidiaries, its affiliates and its subsidiaries' and affiliates' officers,
directors, employees and partners as may be reasonably requested in connection
with any of the matters set forth in this paragraph.
Notwithstanding anything to the contrary in the Merger Agreement, at the
request of Omnicare, the Company and its subsidiaries shall agree to hold
separate (including by trust or otherwise) or to divest any of their respective
businesses, subsidiaries or assets, or to take or agree to take any action with
respect to, or agree to any limitation on, any of their respective businesses,
subsidiaries or assets; provided that any such action is conditioned upon the
consummation of the Offer and the Proposed Merger. The Company agrees that
neither it nor any of its subsidiaries shall, without Omnicare's prior written
consent, agree to hold separate (including by trust or otherwise) or to divest
any of their respective businesses, subsidiaries or assets, or to take or agree
to take any action with respect to, or agree to any limitation on, any of their
respective businesses, subsidiaries or assets. Notwithstanding anything to the
contrary in the Merger Agreement, Omnicare and its subsidiaries shall not be
required to hold separate (including by trust or otherwise) or to divest any of
the respective businesses, subsidiaries or assets of Omnicare and any of its
subsidiaries and/or the Company and any of its subsidiaries, or to take or agree
to take any action with respect to, or agree to any limitation on, any of their
respective businesses in order to satisfy any of their respective obligations
under the Merger Agreement.
The Merger Agreement further provides that Omnicare and the Company shall,
promptly upon receiving knowledge thereof, deliver to the other party written
notice of any event or development that would (1) render any statement,
representation or warranty of Omnicare or the Company, as the case may be, in
the Merger Agreement inaccurate or incomplete in any material respect or (2)
constitute or result in a breach by Omnicare or the Company, as the case may be,
of, or a failure by Omnicare or the Company, as the case may be, to comply with
any agreement or covenant in the Merger Agreement; provided that no such
disclosure shall be deemed to avoid or cure any such misrepresentation or
breach.
OUTSTANDING NOTES AND CREDIT AGREEMENT. The Merger Agreement provides that
if the Company takes all actions as are required to be taken in advance of the
Acceptance Date, including, without limitation, providing any required notices
in order to permit the Company to redeem the 5 3/4% convertible subordinated
debentures, due 2004, of the Company (the '5 3/4% Notes') as soon as practicable
following the Acceptance Date in accordance with the terms of the Indenture,
dated as of August 13, 1997, relating to the 5 3/4% Notes (the 'Indenture'),
Omnicare shall cause the Company to redeem the 5 3/4% Notes, in accordance with
the terms of the Indenture, as soon as practicable following the Acceptance
Date.
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The Merger Agreement further provides that if the Company takes all actions
as are required to be taken in advance of the Acceptance Date in order to permit
the Company to repay on, or as soon as practicable following, the Acceptance
Date, all amounts outstanding under the Credit Agreement, dated as of June 1,
1998, among the Company, KeyBank National Association and the other lenders
named therein, as amended (the 'Credit Agreement'), on such date, including,
without limitation, (1) providing any required notices on a timely basis, (2)
obtaining a payoff letter, in a form reasonably satisfactory to Omnicare and (3)
obtaining a release, in a form reasonably satisfactory to Omnicare, of any and
all liens under or related to the Credit Agreement and the return of any
collateral under the Credit Agreement, Omnicare shall cause the Company to repay
the Credit Agreement as soon as practicable following the Acceptance Date.
MUTUAL RELEASE. Pursuant to the Merger Agreement, each of Omnicare and its
affiliates on the one hand and the Company and its affiliates on the other hand,
agreed to a mutual release from all past, present, and future claims and any
liabilities of any kind arising from the Genesis Agreement and/or the action
filed in the Court of Chancery of the State of Delaware in and for New Castle
County captioned Omnicare v. NCS HealthCare, Inc., et al., CA. No. 19800 and the
action filed in the United States District Court for the Northern District of
Ohio (Eastern Division) captioned NCS HealthCare, Inc. v. Omnicare, Inc., Case
No. 1:02CV1635.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Merger Agreement provides
that, from and after the Acceptance Date, Omnicare shall cause the Surviving
Corporation to indemnify and hold harmless the present and former officers and
directors of the Company in respect of acts or omissions occurring prior to the
Effective Time to the extent provided under the Company's amended and restated
certificate of incorporation or the Company's by-laws as in effect as of the
date of the Merger Agreement.
The Merger Agreement further provides that, Omnicare shall use all
reasonable efforts to cause the Surviving Corporation or Omnicare to maintain in
effect the Company's fully paid existing directors' or officers' liability
insurance and, to the extent the existing policy cannot be maintained, to obtain
for a period of six years after the Effective Time, policies of directors' and
officers' liability insurance at no cost to the beneficiaries thereof with
respect to acts or omissions occurring prior to the Effective Time, with
substantially the same coverage and containing substantially similar terms and
conditions as existing policies; provided that neither the Surviving Corporation
nor Omnicare shall be required to pay an aggregate premium for such insurance
coverage in excess of 200% of the amount of such premium on the date of the
Merger Agreement, but in such case shall purchase as much coverage as reasonably
practicable for such amount.
EMPLOYEE BENEFITS. The Merger Agreement provides that, for a period of 12
months after the date of the closing of the Proposed Merger (the 'Closing
Date'), Omnicare or the Surviving Corporation shall provide employees of the
Surviving Corporation with (1) wages or salaries, and commissions, as applicable
and (2) employee pension and welfare benefits, in each case, that are
substantially similar in the aggregate to those provided to such employees
immediately prior to the Closing Date or those provided to similarly situated
employees of Omnicare and its affiliates or their subsidiaries at the sole
discretion of Omnicare. Subject to the preceding sentence, Omnicare and the
Surviving Corporation shall have the right to amend or terminate any benefit
plan, program or arrangement. Notwithstanding any provision in the Merger
Agreement to the contrary, nothing shall prevent, limit or restrict in any way
Omnicare's or the Surviving Corporation's right to terminate the employment or
services of any person at any time following the Closing Date, nor shall it be
construed as a guarantee of employment to any person.
MAINTENANCE OF OPERATIONS AT BEACHWOOD LOCATION. The Merger Agreement
provides that Omnicare shall cause the Surviving Corporation to maintain
business operations at the Beachwood, Ohio facility for a period of one year
from the Closing Date.
PAYMENTS PURSUANT TO THE GENESIS MERGER AGREEMENT. The Merger Agreement
provides that at such time as the Company becomes obligated to pay a termination
fee pursuant to the Genesis Agreement, Omnicare will make a cash payment to the
Company of an equal amount to the amount payable by the Company to Genesis
pursuant to Section 7.2 of the Genesis Agreement (the 'Genesis Payment'). The
Genesis Payment shall be returned to Omnicare immediately upon the earliest to
occur
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of the following: (1) at such time as the termination fee provided for in the
Merger Agreement is payable to Omnicare; (2) the termination of the Merger
Agreement by Omnicare pursuant to paragraph (e) under 'Termination' below or
(3) the termination of the Merger Agreement by the Company other than pursuant
to (i) paragraph (d) under 'Termination' below or (ii) after the Outside Date
(as defined below), pursuant to paragraphs (b) or (f) under 'Termination' below.
Pursuant to this provision, on December 18, 2002, Omnicare reimbursed to the
Company the $6 million termination fee paid by the Company to Genesis upon the
termination of the Genesis Agreement.
EMPLOYMENT ARRANGEMENTS. The Merger Agreement provides that Omnicare agrees
to be bound by the terms of the employment agreements and arrangements solely
between the Company and its employees set forth in the Company's public filings
with the SEC prior to the date of the Merger Agreement (other than the Binding
Term Sheet Agreement among Jon H. Outcalt, the Company and Genesis Health
Ventures, Inc., dated July 28, 2002, or any other agreement or arrangement that
Omnicare determines, after consultation with its legal advisor, could result in
a violation of Rule 14d-10 under the Exchange Act).
THE COMPANY STOCKHOLDER MEETING. If approval of the Company's stockholders
of the Proposed Merger is required by law, the Company has agreed in the Merger
Agreement to (1) as promptly as practicable following the expiration of the
Offer, take all action necessary to hold a special meeting of stockholders on
the earliest practicable date determined in consultation with Omnicare for the
purpose of voting on the adoption of the Merger Agreement and (2) take all
lawful action to solicit the approval of its stockholders in favor of adoption
of the Merger Agreement. Regardless of whether the board of directors of the
Company changes, withdraws or modifies its recommendation for the Proposed
Merger, or an Acquisition Proposal or Superior Proposal (each as defined in
'Acquisition Proposals' below) is commenced, publicly proposed or disclosed or
communicated to the Company, the Company has agreed to submit the Merger
Agreement to the stockholders for their approval.
CONDUCT OF THE COMPANY. The Merger Agreement provides that, until such time
as Omnicare's designees shall constitute a majority of the members of the board
of directors of the Company, the Company shall conduct its operations in the
ordinary course consistent with past practice, and shall use all commercially
reasonable efforts to maintain and preserve its business organization and its
material rights and to retain the services of its officers and key employees and
maintain relationship with customers, suppliers, lessees, licensees and other
third parties, and to maintain all of its operating assets in their current
condition. Without limiting the foregoing, during the period from the date of
the Merger Agreement until such time as Omnicare's designees shall constitute a
majority of the members of the board of directors of the Company, the Company
and each of its subsidiaries shall not, except as otherwise expressly
contemplated by the Merger Agreement or as set forth in the Company's public
filings with the SEC filed prior to the date of the Merger Agreement, without
the prior written consent of Omnicare:
(a) do or effect any of the following actions with respect to its
securities: (1) adjust, split, combine or reclassify its capital stock,
(2) make, declare or pay any dividend or distribution on, or directly
or indirectly redeem, purchase or otherwise acquire, any shares of its
capital stock (other than dividends or distributions from any directly
or indirectly wholly-owned subsidiary of the Company to the Company or
another directly or indirectly wholly-owned subsidiary of the Company)
or any securities or obligations convertible into or exchangeable for
any shares of its capital stock, (3) grant any person any right or
option to acquire any shares of its capital stock, (4) issue, deliver
or sell or agree to issue, deliver or sell any additional shares of its
capital stock or any securities or obligations convertible into or
exchangeable or exercisable for any shares of its capital stock or such
securities (except pursuant to the exercise of Company Options that are
outstanding as of the date of the Merger Agreement) or (5) enter into
any agreement, understanding or arrangement with respect to the sale,
voting, registration or repurchase of the Company capital stock;
(b) directly or indirectly sell, transfer, lease, pledge, mortgage,
encumber or otherwise dispose of any non-de minimis portion of its
property or assets other than in the ordinary course of business
consistent with past practice;
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(c) make or propose any changes in its certificate of incorporation,
by-laws or other similar governing documents;
(d) merge or consolidate with any other person or dissolve, liquidate,
restructure or otherwise alter the corporate structure of the Company
or any of its subsidiaries;
(e) acquire a material amount of assets or capital stock of any other
person;
(f) incur, create, assume or otherwise become liable for any indebtedness
for borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible or liable for the obligations of any
other person other than trade payables in the ordinary course of
business, consistent with past practice;
(g) create any subsidiaries;
(h) enter into or modify any employment, severance, termination or similar
agreements or arrangements with, or grant any bonuses, salary
increases, severance or termination pay to, any officer, director,
consultant or employee other than in the ordinary course of business
consistent with past practice with respect to non-officer employees of
the Company (except for severance agreements, which, in all cases,
shall require the prior written consent of Omnicare), or otherwise
increase the compensation or benefits provided to any officer,
director, consultant or employee, except as may be required by
applicable law or existing contractual arrangements disclosed to
Omnicare prior to the date of the Merger Agreement, or grant, reprice,
or accelerate the exercise or payment of any Company Options or other
equity-based awards;
(i) enter into, adopt or amend any employee benefit plan of the Company,
except as shall be required by applicable law;
(j) take any action that could give rise to severance benefits (including
payments under any employment, consulting, severance, salary
continuation, change in control, parachute or similar agreements or
employee benefit plan of the Company), including taking any action that
could give rise to a claim of 'good reason' termination or similar
claim by any such person;
(k) change any material method or principle of tax or financial accounting,
except to the extent required by law or generally accepted accounting
principles as advised by the Company's regular independent accountants;
(l) settle any actions, whether now pending or made or brought after the
date of the Merger Agreement involving, individually or in the
aggregate, an amount in excess of $250,000;
(m) modify, amend or terminate, or waive, release or assign any material
rights or claims, or fail to exercise a right of renewal, with respect
to, any material agreement or other contract to which the Company or a
subsidiary is a party or any confidentiality agreement to which the
Company or a subsidiary is a party;
(n) enter into any confidentiality agreements or arrangements other than in
the ordinary course of business consistent with past practice (other
than as permitted in 'Acquisition Proposals' below);
(o) make any change to the terms of payment or payment practices that,
individually or in the aggregate, amounts to a material change to the
terms of payment or payment practices with respect to a non-de minimis
portion (by dollar value or number of customers or number of suppliers)
of the Company's accounts receivable or accounts payable;
(p) incur, make or commit to any capital expenditures not provided for in
the Company's annual capital expenditures budget, which has been
approved by the board of directors of the Company prior to the date of
the Merger Agreement;
(q) fail to use all commercially reasonable efforts to collect the
Company's outstanding receivables;
(r) generate, create or allow any receivables other than in the ordinary
course of business consistent with past practice;
(s) other than with respect to transactions between the Company and its
directly or indirectly wholly-owned subsidiaries or between two or more
of the Company's directly or indirectly
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wholly-owned subsidiaries, make any payments in respect of policies of
directors' and officers' liability insurance other than premiums paid
in respect of its current policies not in excess of the amount paid
prior to the date of the Merger Agreement;
(t) make any payment to, or engage in any transaction with, or guarantee or
assume any obligation or indebtedness of, or relieve any obligation to
the Company or any of its subsidiaries of, any affiliate of the
Company, or any affiliate of any such affiliate of the Company, other
than pursuant to employee benefit plans of the Company (to the extent
permissible in light of clause (h) above) and other than reimbursement
for or advancement of routine expenses;
(u) incur, make or commit to any fees related to the Merger Agreement and
the transactions contemplated thereby (including fees of attorneys,
accountants and investment bankers, including regular fees and any
success-based fees or fees contingent upon such transactions) such that
the aggregate of such fees that are incurred, made or committed during
the period from the date of the Merger Agreement until such time as
Omnicare's designees shall constitute a majority of the members of the
board of directors of the Company and are payable as of the Closing
Date or, thereafter, as a result of the Closing exceeds $2,000,000;
(v) enter into or carry out any other material transaction other than in
the ordinary and usual course of business;
(w) except in the ordinary course of business consistent with past practice
(1) make, revoke or amend any material tax election, (2) settle or
compromise any material claim or assessment with respect to taxes, but
only if such settlement or compromise would either individually result
in a tax liability in excess of $250,000 or in combination with all
other material tax claims or assessments settled or compromised since
the date of the Merger Agreement result in aggregate tax liabilities in
excess of $250,000, (3) execute any consent to any waivers extending
the statutory period of limitations with respect to the collection or
assessment of any material taxes or (4) amend any material tax returns
except in connection with the settlement or compromise of a claim or
assessment that would not either individually result in a tax liability
in excess of $250,000 or in combination with all other material tax
claims or assessments settled or compromised since the date of the
Merger Agreement result in aggregate tax liabilities in excess of
$250,000;
(x) other than pursuant to the Merger Agreement, adopt a plan of complete
or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company
or any of its subsidiaries that is inconsistent with the prompt
consummation of the transactions contemplated by the Merger Agreement,
or otherwise would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company;
(y) make any payment or distribution to, on or in respect of, or set aside
any funds or establish any 'sinking' or similar fund for or in respect
of the 5 3/4% Notes, whether in respect of interest, repayment of
principal or otherwise;
(z) take any action that could reasonably be expected to result in the
representations and warranties under 'Representations and Warranties'
above becoming false or inaccurate in any material respect;
(aa) permit or cause any of its subsidiaries to do any of the foregoing or
agree or commit to do any of the foregoing; or
(bb) agree in writing or otherwise to take any of the foregoing actions.
ACQUISITION PROPOSALS. From the date of the Merger Agreement until the
earlier of the time Omnicare's designees shall constitute a majority of the
members of the board of directors of the Company or the termination of the
Merger Agreement in accordance with its terms, the Company has agreed that it
and its subsidiaries will not, and the Company and its subsidiaries will not,
permit their representatives to:
solicit, initiate, encourage (including by way of furnishing information),
knowingly facilitate or induce (directly or indirectly) any inquiries with
respect to, or the making, submission or
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announcement of, any proposal that constitutes, or could reasonably be
expected to result in, a proposal or an offer for an Acquisition Proposal;
participate in any discussions or negotiations regarding, or furnishing to
any person any nonpublic information with respect to, or take any other
action to knowingly facilitate any inquiries or the making of any proposal
that constitutes or may reasonably be expected to lead to, an Acquisition
Proposal;
approve, endorse or recommend any Acquisition Proposal; or
enter into any letter of intent or similar document or contract, agreement
or commitment contemplating or otherwise relating to any Acquisition
Proposal or transaction contemplated thereby.
In addition, the Merger Agreement provides that within two business days
after receipt of an Acquisition Proposal or any request for nonpublic
information or inquiry that the Company reasonably believes could lead to an
Acquisition Proposal, the Company shall provide Omnicare with (1) notice of the
material terms and conditions of, (2) the identity of the person making any and
(3) a copy of all written materials provided in connection with, such
Acquisition Proposal, request or inquiry. In addition, the Company must provide
Omnicare, as promptly as practicable, with notice setting forth all such
information as is reasonably necessary to keep Omnicare informed in all material
respects of the status and details (including material amendments or proposed
material amendments) of any such Acquisition Proposal, request or inquiry and
shall promptly provide to Omnicare a copy of all written materials subsequently
provided in connection with the Acquisition Proposal, request or inquiry.
Notwithstanding the foregoing, the Company shall not release any person from, or
waive any provision of, or fail to enforce, any standstill agreement or similar
agreement to which it is a party related to, or that could affect, an
Acquisition Proposal. The Company shall, and shall cause, its subsidiaries and
representatives to, immediately cease and cause to be terminated all discussions
and negotiations, if any, that have taken place prior to the date of the Merger
Agreement with respect to any Acquisition Proposal and at the request of
Omnicare shall request the return or destruction of all confidential information
provided to any such person.
Notwithstanding the foregoing, the Company and the board of directors of the
Company may, (1) prior to the Acceptance Date, furnish nonpublic information to,
or enter into discussions with, any person in connection with an unsolicited
bona fide written Acquisition Proposal by such person if and only to the extent
that (a) the Company is not then in breach of its obligations with respect to
Acquisition Proposals under the Merger Agreement; (b) the Company board of
directors believes in good faith (after consultation with its legal and
financial advisors) that such Acquisition Proposal is, or is likely to result
in, a Superior Proposal and (c) prior to furnishing such nonpublic information
to, or entering into discussions or negotiations with, such person, such board
of directors receives from such person an executed confidentiality agreement or
(2) comply with Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act with
regard to an Acquisition Proposal.
'Acquisition Proposal' means any offer or proposal for, or any indication of
interest in, any (1) direct or indirect acquisition or purchase of the Company
or any of its subsidiaries that constitutes 10% or more of the net revenues, net
income or assets of the Company and its subsidiaries, taken as a whole; (2)
direct or indirect acquisition or purchase of 10% or more of any class of equity
securities, or 10% of the voting power, of the Company or any of its
subsidiaries whose business constitutes 10% or more of the net revenues, net
income or assets of the Company and its subsidiaries, taken as a whole, or 40%
or more of the face value of the 5 3/4% Notes; (3) tender offer or note exchange
offer that, if consummated, would result in any person or entity beneficially
owning 10% or more of any class of equity securities, or 10% of the voting
power, of the Company or any of its subsidiaries whose business constitutes 10%
or more of the net revenues, net income or assets of the Company and its
subsidiaries, taken as a whole; (4) the direct or indirect repurchase,
retirement, exchange, refinancing or restructuring of 10% or more of the
Company's outstanding 5 3/4% Notes or (5) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries whose business constitutes 10%
or more of the net revenue, net income or assets of the Company and its
subsidiaries, taken as a whole, other than the transactions contemplated by the
Merger Agreement.
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'Superior Proposal' means any bona fide written Acquisition Proposal
obtained for or in respect of all of the outstanding Company capital stock and
all of the outstanding 5 3/4% Notes, on terms that the board of directors of the
Company determines in its good faith judgment (after consultation with its
financial advisors and taking into account all the terms and conditions of the
Acquisition Proposal and the Merger Agreement deemed relevant by such board of
directors, including any break-up fees, expense reimbursement provisions,
conditions to and expected timing and risks of consummation, and the ability of
the party making such proposal to obtain financing for such Acquisition Proposal
and taking into account all other legal, financial, regulatory and all other
aspects of such proposal) are more favorable to the persons to whom it owes
fiduciary duties under applicable laws than the Offer and the Proposed Merger.
SUBSEQUENT FINANCIAL STATEMENTS. The Merger Agreement provides that until
the time at which Omnicare's designees constitute a majority of the members of
the board of directors of the Company, the Company will provide Omnicare with
its financial results for any period after the date of the Merger Agreement and
prior to filing any documents with the SEC after the date of the Merger
Agreement.
DISPOSAL OF ILLINOIS SUB. The Merger Agreement provides that at the request
of Omnicare, the Company shall use all reasonable efforts to sell or dispose of
all of its right, title and interest in NCS HealthCare of Illinois, Inc.,
including all shares of capital stock and any other debt or equity interests in
NCS HealthCare of Illinois, Inc., on such terms and conditions as Omnicare may
so specify in writing, including as to the retention of liability.
CONDITIONS TO THE OFFER. See Section 9 ('Conditions to the Offer') of this
Supplement.
CONDITIONS TO THE PROPOSED MERGER. The obligations of each party to complete
the Proposed Merger are subject to the satisfaction of the following conditions:
if required by applicable law, adoption by the Company's stockholders of
the Merger Agreement;
the absence of any statute, rule, regulation, injunction or other order or
decree (whether temporary, preliminary or permanent) by any governmental
authority prohibiting or making the consummation of the Proposed Merger
illegal; and
the purchase of Shares pursuant to the Offer; provided that this condition
shall not be applicable to the obligations of Omnicare or Purchaser if,
notwithstanding the satisfaction of each of the conditions to the Offer set
forth in Section 9 ('Conditions to the Offer') of this Supplement,
Purchaser fails to accept for payment and pay for any Shares validly
tendered and not properly withdrawn pursuant to the Offer.
TERMINATION. The Merger Agreement may be terminated and the Proposed Merger
abandoned at any time prior to the Effective Time (notwithstanding any approval
of the Merger Agreement by the Company's stockholders):
(a) by mutual written consent of each of Omnicare and the Company;
(b) by either Omnicare or the Company, if there shall be any law or
regulation that makes consummation of the Offer or the Proposed Merger
illegal or otherwise prohibited, or if a court or other competent
governmental authority has issued an order, decree or ruling enjoining
Omnicare or the Company from consummating the Offer or the Proposed
Merger, and such order, decree or ruling or other action has become
final and nonappealable;
(c) by either Omnicare or the Company, if the Offer has not been completed
by February 28, 2003 (the 'Outside Date'); provided that, if the Offer
and Proposed Merger shall not have been completed by such date solely
due to any required governmental approvals not having been received,
then the Outside Date shall be extended to April 30, 2003; provided,
further, that neither party has the right to terminate the Merger
Agreement under this clause if its own failure to fulfill any material
covenant or obligation under the Merger Agreement caused the failure of
the Offer to be completed on or before such date;
(d) by the Company, if, prior to the Acceptance Date, Omnicare has breached
in any material respect any of the representations, warranties or failed
to perform in any material respect any of the covenants or other
agreements contained in the Merger Agreement, which breach or failure to
perform (1) is not capable of being cured or (2) if capable of being
cured, is not cured
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prior to the earlier of (i) the business day prior to the Outside Date
or (ii) the date that is 30 days from the date that the Company is
notified of such breach;
(e) by Omnicare, if, prior to the Acceptance Date, the Company has breached
in any respect any of the representations, warranties (without regard to
any 'materiality,' 'Material Adverse Effect' or similar qualifier
contained therein), or failed to perform in any material respect any of
the covenants or other agreements (without regard to any 'materiality,'
'Material Adverse Effect' or similar qualifier contained therein)
contained in the Merger Agreement, which breach or failure to perform
would render unsatisfied any condition contained in clauses (a) or (b)
of Annex A of the Merger Agreement or any of the conditions under
'Conditions to the Proposed Merger' above; provided that with respect to
a failure to perform a covenant that would render unsatisfied any of the
conditions under 'Conditions to the Proposed Merger' above, the Company
shall have failed to perform in all material respects such covenant, and
which breach or failure (1) is incapable of being cured or (2) if
capable of being cured, is not cured, prior to the earlier of (i) the
business day prior to the Outside Date or (ii) the date that is 30 days
from the date that Omnicare is notified of such breach;
(f) by either Omnicare or the Company, upon written notice to the other
party, if a court of competent jurisdiction or other competent
governmental authority has issued an order, decree or ruling or taken
any other action (which order, decree, ruling or other action the party
seeking to terminate shall have used all reasonable efforts to resist,
resolve or lift, as applicable), enjoining or otherwise prohibiting the
Offer, the Proposed Merger or the other transactions, and such order,
decree, ruling or other action has become final and nonappealable;
(g) by Omnicare, if (1) the board of directors of the Company has withdrawn
or changed or modified its recommendations of the Merger Agreement, the
Offer and the Proposed Merger in a manner adverse to Omnicare or (2) the
board of directors of the Company has approved, or determined to
recommend to the Company's stockholders that they approve an Acquisition
Proposal other than that contemplated by the Merger Agreement; or
(h) by the Company, if, prior to the Acceptance Date, (1) the board of
directors of the Company has received a Superior Proposal, (2) the board
of directors of the Company determines in good faith, after consultation
with outside legal counsel, that such action is consistent with the
fiduciary duties of the board of directors of the Company to the persons
to whom it owes fiduciary duties under applicable law and (3) the
Company has complied with the obligations described under 'Acquisition
Proposals' above; provided that the board of directors of the Company
shall only be able to terminate the Merger Agreement pursuant to this
provision after (i) three business days following Omnicare's receipt of
written notice advising Omnicare that the board of directors of the
Company is prepared to do so, and only if, during such three business
day period, the Company and its advisors will have negotiated in good
faith with Omnicare to make such adjustments in the terms and conditions
of the Merger Agreement as would enable the parties to proceed with the
transactions contemplated therein on such adjusted terms and (ii) if,
concurrent with such termination, the Company refunds the Genesis
Payment to Omnicare and pays Omnicare the termination fee pursuant to
the terms of the Merger Agreement.
EFFECT OF TERMINATION. In the event that the Merger Agreement is terminated
pursuant to the provisions of 'Termination' above, the Merger Agreement (other
than the provisions described in this Section and under 'Termination Fees' and
'Fees and Expenses' below), shall become void and have no effect, without any
liability on the part of any party to the Merger Agreement or their respective
directors, officers, or stockholders or shareholders, as the case may be;
provided that nothing in this section shall relieve any party to the Merger
Agreement of liability for willful breach, and if a court determines that
termination of the Merger Agreement was caused by a willful breach, then, in
addition to other remedies at law or equity for breach of the Merger Agreement,
the party found to have intentionally breached the Merger Agreement shall
indemnify and hold harmless the other parties to the Merger Agreement for their
respective out-of-pocket costs, fees and expenses of their counsel, accountants,
financial advisors and other experts and advisors as well as fees and expenses
incident to
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negotiation, preparation and execution of the Merger Agreement and related
documentation and stockholders' meetings and consents.
The Merger Agreement further provides that, in the event that the Merger
Agreement is terminated prior to the Acceptance Date, other than pursuant to
clauses (e), (g) and (h) of 'Termination' above, then for a period of two years
from the date of such termination, Omnicare and its affiliates shall not
purchase Shares unless such purchases are (1) at a price per Share at least
equal to the highest price paid in the Offer (taking into account any dividends,
reclassifications, recapitalizations, splits or combinations or any similar
actions affecting the Shares) or (2) approved by the affirmative vote of a
majority of the Non-Employee Directors then in office.
TERMINATION FEES. The Company has agreed in the Merger Agreement to pay
Omnicare a fee in immediately available funds equal to $8,800,000 in cash if:
(a) the Merger Agreement is terminated by Omnicare pursuant to clause (g)
under 'Termination' above;
(b) the Merger Agreement is terminated by the Company pursuant to clause (h)
under 'Termination' above; or
(c) (1) the Merger Agreement is terminated by either Parent or the Company
pursuant to clause (c) under 'Termination' above or by Omnicare pursuant
to clause (e) under 'Termination' above and (2) within 12 months after
the termination of the Merger Agreement, the Company enters into an
agreement with respect to an Acquisition Proposal with any person (other
than Omnicare or its subsidiaries) or an Acquisition Proposal is
consummated; provided that for purposes of this paragraph, all
references to '10%' in the definition of 'Acquisition Proposal' shall be
deemed to be a reference to '25%.'
AMENDMENTS; WAIVERS. Subject to the approval of a majority of the
Non-Employee Directors then in office, if required, the Merger Agreement may be
amended or waived prior to the Effective Time if in writing and signed, in the
case of an amendment, by each party, or in the case of a waiver, by the party
against whom the waiver is to be effective. After the stockholders approve the
Merger Agreement, however, no amendment to the Merger Agreement can be made
without further approval by the stockholders as required by law.
FEES AND EXPENSES. Except as provided in 'Effect of Termination' and
'Termination Fees' above, all costs and expenses incurred in connection with the
Merger Agreement will be paid by the party incurring such costs and expenses.
9. CONDITIONS TO THE OFFER.
The discussion set forth in Section 15 ('Conditions to the Offer') of the
Offer to Purchase is hereby amended and restated in its entirety as follows:
Notwithstanding any other terms of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for any Shares tendered pursuant
to the Offer unless prior to the Expiration Date (1) the Minimum Condition shall
have been satisfied and (2) each of the following conditions has been
satisfied (or to the extent legally permissible, waived):
(a) except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, each of the
representations and warranties of the Company set forth in the Merger
Agreement are true and correct in all respects (without regard to any
'materiality,' 'Material Adverse Effect' or similar qualifier contained
in the Merger Agreement) on the date of the Merger Agreement and on or
before the Expiration Date as though made on and as of the Expiration
Date (except for representations and warranties made as of a specified
date, the accuracy of which will be determined only as of the specified
date);
(b) except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, the Company has
performed or complied with, in all respects,
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each obligation, agreement and covenant to be performed or complied with
by the Company under the Merger Agreement at or prior to the Expiration
Date;
(c) no governmental authority has enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
that is in effect and which has the effect of prohibiting or making
illegal consummation of the Offer or the Proposed Merger;
(d) there is not pending any action by a governmental authority (1)
challenging or seeking to restrain or prohibit the consummation of the
Offer or the Proposed Merger or any of the other transactions
contemplated by the Merger Agreement, (2) seeking to impose any
prohibition or limitation, or to require any divestiture, disposal or
other action, that Omnicare would not be required to accept or do under
the Merger Agreement, (3) seeking to impose limitations on the ability
of Omnicare to acquire or hold, or exercise full rights of ownership of,
any shares of the Surviving Corporation capital stock or (4) seeking to
prohibit Omnicare or any of its subsidiaries from effectively
controlling in any material respect the business or operations of
Omnicare or any of its subsidiaries;
(e) Omnicare, the Company and their respective subsidiaries, as applicable,
have obtained the consent or approval of any person (excluding any
governmental authority) whose consent or approval is required under any
agreement or instrument in order to permit the consummation of the Offer
and the Proposed Merger or any of the other transactions contemplated by
the Merger Agreement, except those that the failure to obtain, would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company if the closing of the Proposed
Merger were to occur; and
(f) all required governmental approvals have been obtained pursuant to final
orders, free of any conditions that Omnicare would not be required to
accept pursuant to the Merger Agreement, and all other consents,
approval, authorizations or filings the absence of which would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company if the closing of the Proposed
Merger were to occur, have been obtained or made.
The foregoing conditions are for the sole benefit of Omnicare and Purchaser
and may, subject to the terms of the Merger Agreement, be waived by Omnicare and
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 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 Section 9 ('Conditions to the Offer') of this Supplement,
will be final and binding on all parties.
All conditions to the Offer, other than those involving receipt of necessary
government approvals, must be satisfied or waived on or before the Expiration
Date.
10. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
A. The discussion set forth under Section 16 ('Certain Legal Matters;
Regulatory Approvals -- State Takeover Laws') of the Offer to Purchase is hereby
amended and supplemented as follows:
On September 23, 2002, Omnicare delivered a copy of the information filed
with the Ohio Division of Securities to the Company and sent such information
and the material terms of the Offer to all Company stockholders in Ohio.
B. The discussion set forth under Section 16 ('Certain Legal Matters;
Regulatory Approvals -- Antitrust') of the Offer to Purchase is hereby amended
and supplemented as follows:
On August 8, 2002, Omnicare filed a Notification and Report Form under the
HSR Act with the FTC and the Antitrust Division in connection with the purchase
of Shares in the Offer and the Proposed Merger. The waiting period under the HSR
Act expired on August 23, 2002.
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11. LEGAL PROCEEDINGS.
A. The first paragraph under Section 18 ('Legal Proceedings') of the Offer
to Purchase is hereby amended and restated in its entirety as follows:
On August 1, 2002, Omnicare commenced litigation against the Company, the
Company's board of directors and Genesis and Geneva Sub (collectively, the
'Genesis Defendants') in the Court of Chancery of the State of Delaware (the
'Chancery Court') alleging, among other things, that the Company's board of
directors violated their fiduciary and statutory duties to the Company's
stockholders by entering into the Genesis Agreement and the Voting Agreements.
B. The discussion set forth under Section 18 ('Legal Proceedings') of the
Offer to Purchase is hereby amended and supplemented as follows:
On August 1, 2002, Michael Petrovic filed a class action lawsuit against the
Company and the Company's board of directors in the Court of Common Pleas in
Cuyahoga County, Ohio, seeking, among other things, an order:
(a) declaring the lawsuit to be a class action and certifying the plaintiff
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 the plaintiff and the Class
rescissory damages;
(d) directing that defendants account to the plaintiff 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 plaintiff costs and disbursements, including a reasonable
allowance for the fees and expenses of plaintiff's attorneys and
experts.
On August 7, 2002, Dolphin Limited Partnership, LLP, filed a class action
complaint against the Company and the Company's board of directors in the
Chancery Court seeking, among other things, an order:
(a) declaring the action to be a class action and certifying plaintiff as
the class representative and its counsel as class counsel;
(b) enjoining, preliminarily and permanently, the proposed merger between
the Company and Genesis;
(c) directing defendants to condition the Genesis merger on the approval of
the holders of Class A Common Stock voting as a separate class;
(d) in the event that the transaction is consummated prior to the entry of
the Chancery Court's final judgment, rescinding it or awarding plaintiff
and the class rescissory damages;
(e) directing that defendants account to plaintiff and the 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
(f) awarding plaintiff the costs and disbursements of this action, including
a reasonable allowance for fees and expenses of plaintiff's attorneys
and experts.
On August 12, 2002, Omnicare filed a First Amended Complaint in the Delaware
lawsuit which alleged, among other things and in addition to the breaches of
fiduciary duties by the Company's board of directors, that the grant by Messrs.
Outcalt and Shaw of an irrevocable proxy, coupled with an interest, to Genesis
to vote all of their shares of the Class B Common Stock violated the Company's
amended and restated certificate of incorporation and irrevocably converted
those shares of Class B Common Stock (holding ten votes per share) into shares
of Class A Common Stock (holding only one vote per share). Accordingly, Omnicare
sought an order:
(a) declaring that the Voting Agreements violate the Company's amended and
restated certificate of incorporation and by entering into these Voting
Agreements, Messrs. Outcalt and Shaw automatically and irrevocably
converted their shares of Class B Common Stock into shares of Class A
Common Stock as provided in the Company's amended and restated
certificate of incorporation;
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(b) in the alternative, declaring that the Company's board of directors
violated Section 141 of the DGCL in agreeing to the terms of the Genesis
Agreement and the associated Voting Agreements, and, therefore, that the
Genesis Agreement is null and void;
(c) in the alternative, preliminarily and permanently enjoining (1) the
Genesis Defendants and their respective officers, directors, employees,
agents and all persons acting on their behalf from taking further steps
or any actions with respect to the Voting Agreements and/or the Genesis
Agreement; and (2) Genesis and Geneva Sub, and their respective
officers, directors, employees, agents and all persons acting on their
behalf from aiding and abetting the Company's board of directors'
breaches of their fiduciary duties; and
(d) declaring that the termination fee provision in the Genesis Agreement is
unreasonable, invalid and unenforceable; and
(e) granting Omnicare such further relief as may be just and proper,
including the costs and disbursements of this action and reasonable
attorneys' fees.
On August 20, 2002, the Company filed a lawsuit in the United States
District Court for the Northern District of Ohio, against Omnicare. The Company
amended its complaint on August 21, 2002. This Ohio lawsuit alleged, among other
things, that the Offer to Purchase is materially false and misleading because
(1) it fails to disclose due diligence conditions to the offer and (2) it
represents that the Company has been unresponsive to Omnicare's expressions of
interest and uninterested in serious negotiations with Omnicare, without
explaining that Omnicare's proposals contemplated bankruptcy filings for the
Company with no recovery to the Company's equity holders. The Company sought
(1) a judgment preliminarily and permanently enjoining the Offer to Purchase
until Omnicare made appropriate corrective disclosures directly to the
stockholders of the Company, and (2) such further and additional relief as the
Court deemed fair and equitable. On August 23, 2002, Omnicare announced that it
believed this lawsuit was without merit and that it intended to vigorously
defend this action.
Omnicare filed a Motion to Dismiss the First Amended Complaint in the Ohio
lawsuit on September 13, 2002. The motion sought a judgment dismissing the first
amended complaint for failure to state a claim under Section 14(e) of the
Exchange Act and failure to comply with the pleading requirements of Section
21(D) of the Exchange Act and Rule 9(b) of the Federal Rules of Civil Procedure.
On September 30, 2002, the Company filed its opposition to Omnicare's Motion
to Dismiss the Ohio lawsuit and also filed a Motion for Preliminary Injunction
in that same proceeding seeking to preliminarily enjoin Omnicare from proceeding
with the Offer until Omnicare made corrective disclosures to the stockholders of
the Company. On that same date, Omnicare filed a Motion for Summary Judgment as
to Count I of its First Amended Complaint in the Delaware lawsuit. The motion
sought a judgment declaring that the Voting Agreements violate the Company's
amended and restated certificate of incorporation and that by entering into the
Voting Agreements, Messrs. Outcalt and Shaw automatically and irrevocably
converted their shares of Class B Common Stock (ten votes per share) into shares
of Class A Common Stock (one vote per share) pursuant to the terms of the
Company's amended and restated certificate of incorporation.
On October 3, 2002, the Company filed a Motion to Dismiss Omnicare's Second
Amended Complaint in the Delaware lawsuit. The motion asserted, among other
things, that because Omnicare did not own Company stock on the date of the
Company's board of directors' alleged breach of fiduciary duty, Omnicare was
owed no duty and, as such, lacked standing to bring a claim for breach of such
duty. The Company's motion was supported by Genesis.
On October 15, 2002, Omnicare filed a Reply Memorandum of Law in Further
Support of its Motion to Dismiss the First Amended Complaint in the Ohio
lawsuit. The memorandum responded to the opposition to Omnicare's Motion to
Dismiss filed by the Company on September 30, 2002. In the memorandum, Omnicare
refuted the Company's contention that the Offer violated Section 14(e) of the
Exchange Act, by stating, among other things, that, despite the Company's
assertion to the contrary, Omnicare's obligation to consummate the Offer is not,
and was never, subject to a due diligence condition.
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On October 16, 2002, the Chancery Court granted Omnicare's Motion to Amend
the First Amended Complaint in the Delaware lawsuit and Omnicare's Second
Amended Complaint was deemed filed. The Second Amended complaint alleged, among
other things and in addition to the breaches of fiduciary duties by the
Company's board of directors previously asserted, that certain of the director
defendants have entered into lucrative self-dealing transactions as part of the
proposed merger between Genesis and the Company and that the Company's board of
directors failed to take steps to obtain for the Company's stockholders the
highest price reasonably available after having initiated an active bidding
contest for the Company in violation of the Company's board of directors'
fiduciary duty to maximize the consideration to be received by stockholders in
the merger.
On October 17, 2002, Omnicare filed a Memorandum of Law in Opposition to
Plaintiff's Motion for Preliminary Injunction in the Ohio lawsuit. The
memorandum argued, among other things, that the Company's motion to
preliminarily enjoin Omnicare's Offer must be denied because the Company's
likelihood of success on the merits of such a claim was remote given the absence
of any due diligence condition in the Offer and that Omnicare's disclosures in
connection with its Offer negate any possibility of irreparable harm. On that
same date, Omnicare filed a Memorandum of Law in Opposition to the Company's
Motion to Dismiss the Second Amended Complaint. The memorandum responded to the
Company's arguments by stating, among other things, that Omnicare had suffered
unique individual harm as a potential acquiror and therefore had standing to
maintain its lawsuit. In addition, on that date, the Company, its board of
directors and Genesis filed with the Chancery Court memoranda in opposition to
Omnicare's Motion for Summary Judgment. In their memoranda, the defendants
opposed Omnicare's argument that the irrevocable proxies granted to Genesis
under the Voting Agreements automatically and irrevocably converted their shares
of Class B Common Stock (ten votes per share) into Class A Common Stock (one
vote per share) pursuant to the terms of the Company's amended and restated
certificate of incorporation.
On October 22, 2002, Omnicare filed a Reply Memorandum of Law in Further
Support of its Motion for Summary Judgment as to Count I of the Second Amended
Complaint in the Delaware lawsuit. Although the motion was addressed to Count I
of the First Amended Complaint, Omnicare requested that the Court deem the
motion to apply to that Count in the Second Amended Complaint, which, at the
time of filing the motion, Omnicare had not yet been granted leave to file.
Omnicare's memorandum responded to the opposition to Omnicare's Motion for
Summary Judgment filed in separate memoranda by the Genesis Defendants on
October 17, 2002. In the memorandum, Omnicare refuted the Defendants' arguments
in opposition to Omnicare's Motion for Summary Judgment on the grounds that,
among other things, (1) the irrevocable proxies granted to Genesis under the
Voting Agreements automatically and irrevocably converted their shares of
Class B Common Stock (ten votes per share) into shares of Class A Common Stock
(one vote per share) pursuant to the terms of the Company's amended and restated
certificate of incorporation, (2) the irrevocable proxies granted by Messrs.
Outcalt and Shaw to Genesis were not given in connection with a solicitation of
proxies subject to Section 14 of the Exchange Act and (3) there was no genuine
issue of material fact precluding summary judgment.
On that same date, the Genesis Defendants filed with the Chancery Court
reply memoranda in support of their motions to dismiss Omnicare's Second Amended
Complaint. In their memoranda, the Genesis Defendants opposed, among other
things, Omnicare's argument that it has suffered unique harm as a potential
acquiror and therefore has standing to maintain its lawsuit.
On October 25, 2002, the Chancery Court issued a ruling with respect to the
Motions to Dismiss Omnicare's Second Amended Complaint filed by the Genesis
Defendants. The Chancery Court held that Omnicare had standing to assert a claim
that by executing the Voting Agreements with Genesis, Messrs. Outcalt's and
Shaw's shares of Class B Common Stock (ten votes per share) automatically
converted into shares of Class A Common Stock (one vote per share). The Chancery
Court also found that because Omnicare was not a stockholder of the Company on
July 28, 2002, the date on which the Company's board of directors approved the
Genesis Agreement and the Voting Agreements, it did not have standing to assert
claims that the Company's directors breached their fiduciary duties. On
October 28, 2002, Omnicare issued a press release regarding this ruling.
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On October 29, 2002, the Chancery Court issued a ruling with respect to
Omnicare's Motion for Summary Judgment as to Count I of Omnicare's Second
Amended Complaint. The Chancery Court denied Omnicare's motion for summary
judgment as to the first count of Omnicare's complaint, which sought a
declaration that the execution of the Voting Agreements by Messrs. Outcalt and
Shaw, in connection with the proposed Genesis merger, resulted in the automatic
conversion of their shares of Class B Common Stock (ten votes per share) into
shares of Class A Common Stock (one vote per share), and granted summary
judgment in favor of the Genesis Defendants. On October 30, 2002, Omnicare
issued a press release regarding this ruling. In the press release, Omnicare
indicated that it intended to file an appeal with respect to the court's ruling
and seek an expedited decision on its appeal.
On November 14, 2002, Omnicare filed with the Supreme Court of the State of
Delaware (the 'Supreme Court') a memorandum of law in support of its appeal of
the Chancery Court's rulings (1) granting in part the Motions to Dismiss
Omnicare's Second Amended Complaint filed by the Company, its board of directors
and Genesis and (2) denying the Motion for Summary Judgment as to Count I of
Omnicare's Second Amended Complaint filed by Omnicare and granting summary
judgment in favor of the Genesis Defendants. With respect to the ruling on the
Motions to Dismiss, Omnicare argued that the Chancery Court erred in rejecting
Omnicare's argument that it had standing to pursue its lawsuit because, among
other things, Omnicare had suffered unique individual harm as a potential
acquiror and current stockholder. With respect to the ruling on the Motion for
Summary Judgment, Omnicare argued that the Chancery Court erred in concluding
that the Voting Agreements did not violate the Company's amended and restated
certificate of incorporation and automatically and irrevocably convert their
shares of Company Class B Common Stock (ten votes per share) into shares of
Company Class A Common Stock (one vote per share) pursuant to the terms of the
Company's amended and restated certificate of incorporation.
On November 22, 2002, the Chancery Court issued an order denying a motion
brought by the Company stockholder-plaintiffs, on behalf of all of the Company's
stockholders, for a preliminary injunction seeking to enjoin the acquisition of
the Company by Genesis on the grounds that the members of the Company's board of
directors breached their fiduciary duties in approving the Genesis transaction.
In a press release issued on November 25, 2002, Omnicare indicated that the
stockholder-plaintiffs planned to seek an expedited appeal with respect to the
Chancery Court's ruling. On the same day, the Genesis Defendants filed with the
Supreme Court memoranda of law in opposition to Omnicare's appeal of the
Chancery Court's rulings (1) granting in part the Motions to Dismiss and
(2) denying the Motion for Summary Judgment and granting summary judgment in
favor of the Genesis Defendants. With respect to Omnicare's appeal of the ruling
on the Motions to Dismiss, the Genesis Defendants opposed Omnicare's argument
that the Chancery Court erred in rejecting Omnicare's argument that it had
standing to pursue its lawsuit because, among other things, Omnicare suffered
unique individual harm as a potential acquiror and current stockholder. With
respect to Omnicare's appeal of the ruling on the Motion for Summary Judgment,
the Genesis Defendants opposed Omnicare's argument that the Chancery Court erred
in concluding that the Voting Agreements did not violate the Company's amended
and restated certificate of incorporation and that their shares of Company
Class B Common Stock (ten votes per share) were not automatically and
irrevocably converted into shares of Company Class A Common Stock (one vote per
share) pursuant to the terms of the Company's amended and restated certificate
of incorporation.
On November 26, 2002, the Chancery Court and the Supreme Court denied the
Company stockholder-plaintiffs' request for an interlocutory appeal from the
November 22, 2002 decision of the Chancery Court denying their motion for a
preliminary injunction in the consolidated shareholders litigation brought
against the Company.
On December 3, 2002, the Supreme Court ordered that Omnicare's appeals from
orders of the Chancery Court's rulings on October 25 and 29, which had been
heard earlier that day by a panel of three Supreme Court Justices, would be
reheard and determined by all members of the Supreme Court sitting en banc on
December 4, 2002.
On December 4, 2002, the Supreme Court issued an order (1) vacating its
November 26th order denying the Company stockholder-plaintiffs' application for
an interlocutory appeal from the Delaware Chancery Court order denying their
Motion for a Preliminary Injunction and granting the Company
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stockholder-plaintiffs' application for an interlocutory appeal from that order
and (2) finding that, because the Company stockholder-plaintiffs' appeal and
Omnicare's appeals arose from the same operative facts, they should, therefore,
be consolidated and heard by the Supreme Court sitting en banc on December 10,
2002.
On December 5, 2002, Omnicare issued a press release relating to the Supreme
Court's December 4, 2002 orders.
The Company announced, on December 4, 2002, that, as a result of the Supreme
Court's order, it was postponing its stockholder meeting to consider the merger
of the Company and Genesis, which was scheduled for December 5, 2002, until
December 12, 2002.
On December 10, 2002, the Supreme Court ordered that the Chancery Court
enter a preliminary injunction precluding the implementation of the merger of
the Company and Genesis. In its order, the Supreme Court (1) reversed the order
of the Chancery Court, dated November 22, 2002, denying the Company
stockholder-plaintiffs' application for a preliminary injunction, (2) reversed
the Chancery Court's order, dated October 29, 2002, dismissing Omnicare's claim
that Messrs. Outcalt's and Shaw's shares of Class B Common Stock (ten votes per
share) automatically converted into shares of Class A Common Stock (one vote per
share) when the Voting Agreements were executed and granting summary judgment in
favor of defendants with respect to this claim, to the extent that the Chancery
Court's decision permits implementation of the Voting Agreements contrary to the
Supreme Court's order on the Company stockholder-plaintiffs' fiduciary duty
claims, (3) dismissed Omnicare's appeal as to standing on the ground that the
appeal was moot and (4) remanded the case to the Chancery Court for the entry of
a preliminary injunction precluding the implementation of the Genesis merger.
On December 11, 2002, Omnicare and the Company each issued a press release
relating to the Supreme Court's December 10th order. Later that day, the
Chancery Court, at the direction of the Supreme Court, entered an order
enjoining the Genesis Defendants and anyone acting in concert with them from any
actions to consummate, implement, effectuate, validate, or enforce the Genesis
Agreement, including, without limitation, presenting the Genesis Agreement to
the Company stockholders for approval.
After the Chancery Court issued the preliminary injunction, the Company
announced that the special meeting of stockholders to consider the Genesis
Agreement was postponed.
On December 15, 2002, Genesis and Omnicare discussed termination of the
Genesis Agreement and negotiated and executed a Termination and Settlement
Agreement, dated December 15, 2002 (the 'Termination Agreement'). The
Termination Agreement provided for, among other things, the termination by
Genesis of the Genesis Agreement in accordance with its terms by sending written
notice of such termination to the Company on December 16, 2002 (which also
resulted in termination of the Voting Agreements). In addition, Genesis and
Omnicare each agreed to release the other party from any claims arising from the
Genesis Agreement and not to commence any action against the other party arising
out of or in connection with the Genesis Agreement. Omnicare also agreed that
prior to the closing of a transaction with the Company, it would pay Genesis an
amount in cash equal to $22 million less any termination fees paid by or on
behalf of the Company to Genesis under the Genesis Agreement.
On the morning of December 18, 2002, Omnicare and the Company announced that
they had executed the Merger Agreement. In the Merger Agreement, the Company and
Omnicare agreed to release one another from all past, present and future claims
of any kind of nature whatsoever arising out of the Genesis Agreement, the
Delaware litigation commenced by Omnicare and the Ohio litigation commenced by
the Company. Later that day, on December 17, 2002, the Company voluntarily
dismissed the Ohio lawsuit.
On December 19, 2002, counsel for the Company received a letter from counsel
to the stockholder-plaintiffs setting forth a demand for legal fees and expenses
in the amount of $13,500,000. In the letter, plaintiffs' counsel stated that
they believed that their legal fees and expenses are covered by the Company's
officers' and directors' liability insurance policy. Counsel urged the Company
to bring its demand to the attention of its officers' and directors' liability
insurance carrier. Plaintiffs' counsel added that if their demand was not
honored prior to the acceptance of Shares by Purchaser in the Offer, they would
seek an order from the Chancery Court withholding a portion of the payment to be
made to the
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holders of Shares pursuant to the Offer in an amount sufficient to insure
payment of such legal fees and expenses.
In a letter dated December 20, 2002, plaintiffs' counsel requested that the
Company confirm by the close of business on December 23, 2002 that its demand
for the payment of fees and expenses would be honored. If not, plaintiffs'
counsel stated, on or before December 26, 2002, they would seek immediate relief
from the Chancery Court withholding a portion of the payment to be made to the
holders of Shares pursuant to the Offer in an amount sufficient to insure
payment of their fees and expenses.
12. MISCELLANEOUS.
The discussion set forth in Section 19 ('Miscellaneous') of the Offer to
Purchase is hereby amended and restated in its entirety as follows:
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 revised 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 and
amendments thereto, together with exhibits, pursuant to the Exchange Act Rule
14d-3 furnishing certain additional information with respect to the Offer. The
Schedule TO and amendments thereto, including exhibits, may be examined and
copies may be obtained from the offices of the SEC in the manner set forth in
Section 14 ('Certain Information Concerning the Company -- Available
Information') of the Offer to Purchase.
THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE.
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT AND THE REVISED (YELLOW) LETTER
OF TRANSMITTAL, THE TERMS AND CONDITIONS PREVIOUSLY SET FORTH IN THE OFFER TO
PURCHASE AND RELATED ORIGINAL (BLUE) LETTER OF TRANSMITTAL REMAIN APPLICABLE IN
ALL RESPECTS TO THE OFFER.
Neither the delivery of this Supplement or the Offer to Purchase nor any
purchase pursuant to the Offer shall, under any circumstances, create any
implication that there has been no change in the affairs of Omnicare, Purchaser
or the Company or any of their respective subsidiaries since the date as of
which information is furnished or the date of this Supplement.
NCS ACQUISITION CORP.
December 23, 2002
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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
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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, this Supplement,
the revised (yellow) Letter of Transmittal and the revised (grey) 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)