Exhibit 99.3
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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ANTHONY NOBLE, :
: Civil Action No.
Plaintiff, : 19807
:
-against- :
:
NCS HEALTHCARE, INC., RICHARD L. OSBORNE, :
JON H. OUTCALT, BOAK A. SELLS, KEVIN B. SHAW, :
:
Defendants. :
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SHAREHOLDER CLASS ACTION COMPLAINT
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Plaintiff, by his attorneys, for his complaint against defendants, alleges
as follows:
PARTIES
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1. Plaintiff Anthony Noble owns common stock of NCS Healthcare, Inc.
("NCS").
2. Defendant NCS Healthcare, Inc. is a Delaware corporation with executive
offices at 3201 Enterprise Parkway, Suite 2200, Beachwood, Ohio 44122. As of
February 7, 2002, there were 18,461,599 shares of Class A stock and 5,255,210
shares of Class B stock outstanding. The Class B stock carries ten votes per
share and is convertible any time into Class A stock on a one-for-one basis. The
Board of Directors of NCS has three classes of Directors. The NCS certificate of
incorporation sets the size of the Board at seven, but there are currently only
four directors of NCS.
3. Defendant Richard L. Osborne is a Director of NCS. Osborne beneficially
owns 101,403 shares of Class B stock.
4. Defendant Jon H. Outcalt is Chairman of the Board and a Director of NCS.
Outcalt
beneficially owns 3,476,086 shares of Class B stock.
5. Defendant Boak A. Sells is a Director of NCS. Sells beneficially owns
92,185 shares of Class B stock.
6. Defendant Kevin B. Shaw is President, Chief Executive Officer and
Secretary and a Director of NCS. Shaw beneficially owns 1,141,134 shares of
Class B stock.
7. The foregoing individuals ("Individual Defendants") as directors of NCS
owe the NCS public shareholders fiduciary duties.
CLASS ACTION ALLEGATIONS
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8. Plaintiff brings this action on his own behalf and as a class action
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all NCS
stockholders (except defendants herein and any person, firm, trust, corporation
or other entity related to or affiliated with any of the defendants) and their
successors in interest, who are or will be threatened with injury arising from
defendants' actions as more fully described herein.
9. This action is properly maintainable as a class action.
10. The class of stockholders for whose benefit this action is brought is
so numerous that joinder of all Class members is impracticable.
11. There are questions of law and fact which are common to the Class
including, INTER ALIA, the following:
(a) whether the Individual Defendants have breached their fiduciary
and other common law duties owed by them to plaintiff and the members of the
Class:
(b) whether plaintiff and the other members of the Class will be
damaged irreparably by defendants' failure to take action designed to inform
themselves regarding the best value for the public shareholders' interest in
NCS.
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12. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interests as the other members of the Class. Accordingly,
plaintiff will fairly and adequately represent the Class.
13. The prosecution of separate actions by individual members of the Class
would create a risk of inconsistent or varying adjudications with respect to
individual members of the Class and establish incompatible standards of conduct
for the party opposing the Class.
14. Defendants have acted and are about to act on grounds generally
applicable to the Class, thereby making appropriate final injunctive relief with
respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
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15. On Sunday, July 28, 2002, Joel F. Gemunder, President and Chief
Executive Officer of Omnicare, Inc., forwarded a letter to Defendant Outcalt
communicating an offer by Omnicare to purchase NCS for $3 per share in cash and
the assumption of debt. According to Omnicare, the NCS Board has refused to meet
with Omnicare regarding a potential acquisition.
16. On July 29, 2002, NCS announced that it agreed to be acquired by
Genesis Health Ventures Inc., in a transaction in which NCS stock will be
exchanged for Genesis stock, valuing NCS at approximately $1.60 per share.
Reportedly, NCS shareholders holding approximately 65% of the voting power of
NCS agreed to the Genesis transaction. On Friday, July 26, 2002, NCS stock
closed at $.74 per share.
17. On August 1, 2002, Omnicare announced its intention to commence a cash
tender offer for all of the outstanding shares of common stock of NCS at $3.50
per share.
18. The NCS Board is obligated to protect the interests of the public
stockholders and to inform itself regarding the value of alternatives in order
to act in the best interest of the stockholders.
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The Board's failure to inform itself and investigate the offer by Omnicare and
the agreement with Genesis in the face of the offer by Omnicare without so
informing itself constitute breaches of fiduciary duties to the public
stockholders. The cash offer by Omnicare, on its face, represents twice the
value to the public stockholders of NCS. Further, NCS has only four directors,
two of whom are executive officers.
19. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the acquisition by Genesis
under the terms presently proposed pending due consideration of information
regarding alternatives, including Omnicare;
C. to the extent, if any, that the transaction complained of is
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
D. directing that defendants account to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
F. granting such other and further relief as the Court deems appropriate.
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Dated: August 1, 2002 CHIMICLES & TIKELLIS LLP
/s/ Pamela S. Tikellis
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Pamela S. Tikellis
Robert J. Kriner, Jr.
One Rodney Square
P.O. Box 1035
Wilmington, Delaware 19899
(302) 656-2500
Attorneys for Plaintiff
OF COUNSEL:
WOLF, HALDENSTEIN, ADLER FREEMAN & HERZ, LLP
270 Madison Avenue
New York, NY 10016
(212) 545-4600
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