<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
OMNICARE, INC.
----------------------------------------------
(Name of Registrant as Specified In Its Charter)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------
<PAGE> 2
[ LOGO ]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1995
The Annual Meeting of Stockholders of Omnicare, Inc. will be held at
The Phoenix Club, 812 Race Street, Cincinnati, Ohio, on Monday, May 15, 1995 at
10:00 a.m. The purpose of the Annual Meeting is to consider and act upon:
(1) the election of directors;
(2) the adoption of an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of
Common Stock from 22,000,000 to 44,000,000;
(3) the approval of the Company's 1995 Premium Stock Option Plan;
(4) the ratification of the selection of Price Waterhouse LLP as
independent accountants of the Company; and
(5) any other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on April 3, 1995 are
entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
Whether or not you plan to attend the meeting, please complete, date
and sign the enclosed proxy and return it in the enclosed envelope at your
earliest convenience. No postage is required if it is mailed in the United
States.
Cheryl D. Hodges
Secretary
Cincinnati, Ohio
April 10, 1995
<PAGE> 3
OMNICARE, INC.
2800 CHEMED CENTER
255 EAST FIFTH STREET
CINCINNATI, OHIO 45202-4728
_________________________________
PROXY STATEMENT
This Proxy Statement is furnished to stockholders in connection with
the solicitation by the Board of Directors of Omnicare, Inc. (the "Company") of
proxies to be used at the Annual Meeting of Stockholders of the Company to be
held on May 15, 1995, and any adjournments thereof ("Annual Meeting").
Stockholders of record as of the close of business on April 3, 1995 are
entitled to vote at the Annual Meeting or any adjournments thereof. As of such
date, the Company had outstanding _______________ shares of Common Stock, par
value $1 per share ("Common Stock"), having one vote per share.
To constitute a quorum at the Annual Meeting, the presence, in person
or by proxy, of the holders of a majority of the outstanding shares of Common
Stock is necessary. Shares represented by proxies received by the Company will
be counted as present at the Annual Meeting for the purpose of determining the
existence of a quorum, regardless of how or whether such shares are voted on a
specific proposal. Abstentions will be treated as votes cast on a particular
proposal as well as shares present at the Annual Meeting. Where nominee
stockholders are not permitted to vote on a specific issue because they did not
receive specified instructions on the specific issue from the beneficial owners
of the shares ("Broker Nonvotes"), such Broker Nonvotes will be treated as not
present at the meeting for purposes of calculating the results of the vote on
the specific issue. Accordingly, abstentions and Broker Nonvotes have the
effect of a negative vote on any proposal where the vote required to pass the
proposal is a percentage of the outstanding shares, but only abstentions have
the effect of a negative vote when the vote required to pass a proposal is a
percentage of the shares present at the Annual Meeting. Shares represented by
properly executed proxies received in the accompanying form will be voted in
accordance with the instructions contained therein. In the absence of contrary
instructions, such shares will be voted (1) to elect as directors the 17
persons named below; (2) to adopt the proposed amendment to the Company's
Certificate of Incorporation; (3) to approve the Company's 1995 Premium Stock
Option Plan; and (4) to ratify the selection of Price Waterhouse LLP as
independent accountants of the Company for 1995. A proxy may be revoked at any
time prior to its exercise by the execution of a proxy signed at a later date
or by the giving of written notice of revocation to the Secretary of the
Company. A revocation during the Annual Meeting will not affect any vote
previously taken.
This Proxy Statement and the accompanying proxy was first mailed to
stockholders on or about April 10, 1995.
ELECTION OF DIRECTORS
The number of Directors to be elected at the Annual Meeting has been
fixed by the Board of Directors at seventeen. Directors are to be elected to
serve until the following annual meeting of stockholders and until their
respective successors are duly elected and qualified. Set forth below are the
names of the persons to be nominated by the Board of Directors, together with a
description of each person's principal occupation during at least the past five
years and other pertinent information. Each of the nominees for election as a
director is currently a director of the Company.
The Company has a program under which certain nominations for
membership on the Board of Directors are generally rotated among senior
operating executives of the Company and its subsidiaries. The persons
considered to be in the rotating group are Messrs. Timothy E. Bien, Ronald K.
Baur, Richard L. Doane, Tracy Finn, Thomas W. Ludeke, and Jeffrey M. Stamps and
Ms. Mary Lou Fox. Mr. Baur and Ms. Fox are being nominated from that group
this year. It is anticipated that additional executives of the Company will be
included in such rotating group in future years.
1
<PAGE> 4
No persons may be nominated for election as a director unless written
notice of intention to nominate such person (which notice shall contain the
prospective nominee's name, address and occupation) has been given to the
Chairman, the President or the Secretary of the Company by a stockholder
entitled to notice of, and to attend, a meeting of stockholders at which
directors are to be elected, not later than 15 business days before such
meeting.
Unless authority is withheld for individual nominees or all nominees,
it is intended that the shares represented by each proxy will be voted for the
nominees listed. The Company anticipates that all nominees listed in this
Proxy Statement will be candidates when the election is held. However, if for
any reason any nominee is not a candidate at that time, proxies will be voted
for a substitute nominee designated by the Board of Directors and for the
remaining nominees (except where a proxy withholds authority with respect to
the election of directors).
NOMINEES
EDWARD L. HUTTON Mr. Hutton is Chairman of the Company and has held
Director since 1981 this position since May 1981. Additionally, he is
Age: 75 Chairman and Chief Executive Officer and a director
of Chemed Corporation, Cincinnati, Ohio (a
diversified public corporation with interests in
plumbing and drain cleaning services, janitorial
supplies and health care services)(hereinafter
"Chemed") and has held these positions since November
1993 and April 1970, respectively. Previously, he
was President and Chief Executive Officer of Chemed,
positions he had held from April 1970 to November
1993. Mr. Hutton is a director of Sonic Corporation.
He is also Chairman and a director of Roto-Rooter,
Inc., Cincinnati, Ohio (plumbing and drain cleaning
services)(hereinafter "Roto-Rooter"), and is Chairman
and a director of National Sanitary Supply Company,
Cincinnati, Ohio (sanitary and maintenance supplies
distributor) (hereinafter "National Sanitary"). Mr.
Hutton is the father of Thomas C. Hutton who is a
director of the Company.
JOEL F. GEMUNDER Mr. Gemunder is President of the Company and has held
Director since 1981 this position since May 1981. From January 1981
Age: 55 until July 1981, he served as Chief Executive Officer
of the partnership organized as a predecessor to the
Company for the purpose of owning and operating
certain health care businesses of Chemed and Daylin,
Inc., each then a subsidiary of W.R. Grace & Co. Mr.
Gemunder was an Executive Vice President of Chemed
and Group Executive of its Health Care Group from May
1981 through July 1981 and a Vice President of Chemed
from 1977 until May 1981. Mr. Gemunder is a director
of Chemed.
RONALD K. BAUR Mr. Baur is Regional Vice President-Operations of the
Director since 1994 Company, a position he has held since February 1994.
Age: 53 Previously, he was Regional Vice President-Operations
of the Company's Pharmacy Services Group (a group of
subsidiaries engaged in providing pharmacy services
to nursing homes) (hereinafter "Pharmacy Services
Group") from March 1993 to February 1994 when the
Pharmacy Services Group was integrated into the
corporate management structure of the Company. He is
also President of Interlock Pharmacy Systems, Inc.,
St. Louis, Missouri (pharmacy services for nursing
homes)(hereinafter "Interlock"), a subsidiary of the
Company. He has held this position since the
Company's acquisition of Interlock in July 1992.
From 1973 to July 1992, he was the sole stockholder
and the President of Interlock.
2
<PAGE> 5
KENNETH W. CHESTERMAN Mr. Chesterman is an Executive Vice President of the
Director since 1984 Company and has held this position since 1984. He
Age: 54 had also served as President of the Pharmacy Services
Group from August 1989 to February 1994. From August
1984 to August 1989, he held the position of
President of the Company's subsidiary, HPI Health
Care Services, Inc., Los Angeles, California (health
care services)(hereinafter "HPI"), which was sold in
August 1989.
CHARLES H. ERHART, JR. Mr. Erhart retired as President of W.R. Grace & Co.,
Director since 1981 Boca Raton, Florida (international specialty
Age: 69 chemicals and health care) (hereinafter "Grace") in
August 1990. He had held this position since July
1989. From November 1986 to July 1989, he was
Chairman of the Executive Committee of Grace. From
May 1981 to November 1986, he served as Vice Chairman
and Client Administrative Officer of Grace. Mr.
Erhart is a director of Grace, Chemed, Roto-Rooter,
National Sanitary and National Life Insurance Co.
MARY LOU FOX Ms. Fox is Vice President-Marketing of the Company
Director since 1993 and has held this position since February 1994. From
Age: 64 July 1993 to February 1994, she was Vice
President-Marketing of the Pharmacy Services Group.
She is also President of Westhaven Services Co.,
Toledo, Ohio (pharmacy services for nursing homes)
(hereinafter "Westhaven"), a subsidiary of the
Company. She has held this position since the
Company's acquisition of Westhaven in October 1992.
From 1976 to October 1992 she was the sole
stockholder and the President of Westhaven.
J. PETER GRACE Mr. Grace is Chairman and a director of Grace and
Director since 1981 served as its Chief Executive Officer from 1945 to
Age: 81 1992. He also serves as Chairman of the Board of
Directors of Chemed. Mr. Grace is also a director of
Milliken & Company, Stone & Webster, Incorporated,
Roto-Rooter and National Sanitary. Mr. Grace is also
a trustee emeritus of Atlantic Mutual Insurance
Company, Atlantic Reinsurance Company and Centennial
Insurance Co., a director emeritus of Ingersoll-Rand
Company and an Honorary Director of Brascan Ltd.
CHERYL D. HODGES Ms. Hodges is Senior Vice President and Secretary of
Director since May 1992 the Company and has held these positions since
Age: 43 February 1994. From August 1986 to February 1994,
she was Vice President and Secretary of the Company.
From August 1982 to August 1986, she served as Vice
President-Corporate and Investor Relations. Ms.
Hodges has also served as a director of the Company
for four prior terms, 1984-85; 1986-87; 1988-89 and
1990-91.
3
<PAGE> 6
THOMAS C. HUTTON Mr. Hutton is a Vice President of Chemed and has held
Director since 1983 this position since February 1988. Mr. Hutton is a
Age: 44 director of Chemed, Roto-Rooter and National
Sanitary. He is the son of Edward L. Hutton,
Chairman of the Company.
PATRICK E. KEEFE Mr. Keefe is Senior Vice President-Operations of the
Director since 1993 Company and has held this position since February
Age: 49 1994. From April 1993 to February 1994, he was Vice
President-Operations of the Company. From April 1992
to April 1993, he served as Vice President-Pharmacy
Management Programs of Diagnostek, Inc., Albuquerque,
New Mexico (mail-service pharmacy and health care
services) (hereinafter "Diagnostek"). From September
1990 to April 1992, Mr. Keefe served as President of
HPI, a subsidiary of Diagnostek, which was acquired
from the Company in August 1989. From August 1984 to
September 1990, he served as Executive Vice President
of HPI.
SANDRA E. LANEY Ms. Laney is Senior Vice President and Chief
Director since 1987 Administrative Officer of Chemed and has held these
Age: 51 positions since November 1993 and May 1991,
respectively. From May 1984 to November 1993, she
was a Vice President of Chemed. Ms. Laney is a
director of Chemed, Roto-Rooter and National
Sanitary.
ANDREA R. LINDELL, Dr. Lindell is Dean and Professor in the College of
DNSC, RN Nursing and Health at the University of Cincinnati, a
Director since 1992 position she has held since December 1990. She also
Age: 51 serves as Director - Center for Allied Health at the
University of Cincinnati. From August 1981 to August
1990, Dr. Lindell served as Dean and a Professor in
the School of Nursing at Oakland University,
Rochester, Michigan.
SHELDON MARGEN, M.D. Dr. Margen is a Professor Emeritus in the School of
Director since 1983 Public Health, University of California, Berkeley, a
Age: 75 position he has held since May 1989. He had served
as a Professor of Public Health at the University of
California, Berkeley, since 1979.
KEVIN J. MCNAMARA Mr. McNamara is President of Chemed and has held this
Director since 1986 position since August 1994. From November 1993 to
Age: 41 August 1994, Mr. McNamara was Executive Vice
President, Secretary and General Counsel of Chemed.
Previously, from May 1992 to November 1993, he held
the positions of Vice Chairman, Secretary and General
Counsel of Chemed. From August 1986 to May 1992, he
served as Vice President, Secretary and General
Counsel of Chemed. From November 1990 to December
1992, Mr. McNamara served as an Executive Vice
President and Chief Operating Officer of the Company.
From November 1989 to November 1990, he served as a
Vice President of the Company. Mr. McNamara also
serves as Vice Chairman of Roto-Rooter and National
Sanitary. He is a director of Chemed, Roto-Rooter
and National Sanitary.
4
<PAGE> 7
JOHN M. MOUNT Mr. Mount is a Principal of Lynch-Mount Associates,
Previously a Director Cincinnati, Ohio (management consulting) and has held
from May 1988 to April this position since November 1993. From April 1991
1991 and since May 1994 to November 1993, Mr. Mount was Senior Vice President
Age: 53 of Diversey Corporation, Detroit, Michigan (specialty
chemicals) (hereinafter "Diversey"), and President of
Diversey's DuBois Industrial Division. Previously,
from May 1989 to April 1991, Mr. Mount was an
Executive Vice President of Chemed and President of
Chemed's then wholly-owned subsidiary, DuBois
Chemicals, Inc. He held the latter position from
September 1986 to April 1991. He is a director of
Chemed.
TIMOTHY S. O'TOOLE Mr. O'Toole is an Executive Vice President and the
Director since 1989 Treasurer of Chemed, positions he has held since May
Age: 39 1992. From February 1989 to May 1992, he was a Vice
President and Treasurer of Chemed. From May 1988 to
February 1989, he served as Vice President and
Director of Taxes of Chemed. He is a director of
Chemed, Roto-Rooter, National Sanitary and Vitas
Healthcare Corporation, Miami, Florida (hospice
management).
D. WALTER ROBBINS, JR. Mr. Robbins is a retired Vice Chairman and consultant
Director since 1981 to Grace, a position he has held since January 1987.
Age: 75 He is a director of Grace, Chemed, Roto-Rooter and
National Sanitary.
COMMITTEES AND MEETINGS OF THE BOARD
The Company has an Incentive Committee, a Compensation Committee and
an Audit Committee of the Board of Directors. The Company does not have a
Nominating Committee.
The Incentive Committee (a) administers the Company's stock-based
incentive plans under which it makes determinations concerning the grant of
stock options and stock awards to key employees of the Company and (b) makes
recommendations to the Board of Directors concerning additional year-end
contributions by the Company under the Company's Employees' Savings and
Investment Plan. The Incentive Committee consists of Messrs. Erhart, Mount and
Robbins. The Incentive Committee met on three occasions during 1994.
The Compensation Committee makes recommendations to the Board of
Directors concerning (a) salary and incentive compensation payable to officers
and certain other key employees of the Company, (b) establishment of incentive
compensation plans and programs generally and (c) adoption and administration
of certain employee benefit plans and programs. The Compensation Committee
consists of Mr. Robbins, Dr. Margen and Ms. Laney. The Compensation Committee
met on six occasions during 1994.
The Audit Committee (a) recommends to the Board of Directors a firm of
independent accountants to audit the Company and its consolidated subsidiaries,
(b) reviews and reports to the Board of Directors on the Company's annual
financial statements and the independent accountants' report on such financial
statements and (c) meets with the Company's senior financial officers, internal
auditors and independent accountants to review audit plans and work and other
matters regarding the Company's accounting, financial reporting and internal
control systems. The Audit Committee consists of Messrs. Erhart and Robbins
and Dr. Lindell. The Audit Committee met on two occasions during 1994.
5
<PAGE> 8
During 1994, there were seven meetings of the Board of Directors and
each director attended at least 75% of the aggregate of (a) the total number of
meetings held by the Board of Directors during the period for which he or she
has been a director and (b) the total number of meetings held by all Committees
of the Board of Directors during the period for which he or she served.
REMUNERATION OF DIRECTORS
Throughout 1994, each member of the Board of Directors who was not a
regular employee of the Company was paid $1,200 for his or her attendance at
each meeting of the Board and $500 for each meeting of a Committee of the Board
of which he or she was a member. The Chairmen of the Committees of the Board
were paid an additional $1,200 per year. During 1994, each member of the Board
of Directors was granted an annual unrestricted stock award covering 100 shares
of the Company's Common Stock under the 1992 Long-Term Stock Incentive Plan
("1992 Plan"). In consideration of special services to the Company during
1994, Messrs. T.C. Hutton and O'Toole each received additional stock awards
covering 300 shares and Ms. Laney received additional stock awards covering 400
shares, all of which were granted under the Company's 1992 Plan. Each of these
individuals was a director of the Company but did not serve as a member of the
Incentive Committee of either the Company or an affiliated company or as a
regular employee of the Company at the date of grant. Also during 1994,
Messrs. Erhart and Robbins each received an additional annual fee of $8,000 and
Mr. T.C. Hutton received an additional annual fee of $5,000. Messrs. Neal
Gilliatt and James Cunningham, members of the Board of Directors until May
1994, received an additional fee from January 1994 to May 1994 of $2,666 and
$1,000, respectively. Such fees were paid in lieu of stock options granted to
directors in previous years. These individuals were members of the Incentive
Committee of either the Company or an affiliated company on the dates of such
grants and thus were ineligible to participate. Also in 1994, Ms. Laney
received a payment of $12,000 for consultation in connection with a public
offering of securities by the Company.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
of the Company's most highly compensated executive officers (the "named
executives") for services to the Company and its subsidiaries during 1994, 1993
and 1992.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
-----------------------
Annual Compensation Awards
---------------------- ----------------------- All Other
# of Shares Compen-
Restricted Underlying sation
Name and Principal Position Year Salary Bonus Stock (5) Options (6)(7)
- - --------------------------------------- ---- -------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton - Chairman 1994 $364,471(1) $595,000(3) 470,000 --
1993 328,839(1) 313,350(4) 325,268 17,000 --
1992 269,844(1) 130,680 247,563 60,000 --
J. F. Gemunder - President 1994 $336,975 $595,000(3) 470,000 -- 139,523
1993 309,350 264,450(4) 325,268 17,000 92,434
1992 291,158 91,550 247,563 60,000 47,374
K.W. Chesterman - Executive Vice 1994 $174,605 $190,000(3) 270,250 -- 55,306
President 1993 163,630 144,025(4) 187,041 11,000 52,636
1992 154,005 79,200 145,624 35,000 28,994
P.E. Keefe - Senior Vice President - 1994 $128,750 $146,500(3) 211,500 -- 41,601
Operations 1993 86,846(2) 79,415(4) 146,378 25,000 20,362
1992 --(2) -- -- -- 0
C.D. Hodges - Senior Vice President and 1994 $109,468 $130,000(3) 169,200 -- 43,185
Secretary 1993 96,560 87,225(4) 117,109 6,000 34,994
1992 85,843 21,780 58,250 15,000 13,390
<FN>
- - ----------------------
(1) The amounts shown include $72,487 for 1992, $119,149 for 1993 and
$140,773 in 1994 representing annual compensation deferred by Mr.
Hutton. Mr. Hutton participates in a deferred compensation plan in
lieu of participation in the Company's Pension and other benefit
plans. This deferred compensation plan provides that an amount equal
to 20% of the total compensation paid to Mr. Hutton by the Company,
plus a market rate interest equivalent thereon, will accumulate in an
account for Mr. Hutton's benefit. The plan further provides that
annually, beginning December 1, 1991, a specified percentage (20% in
1991 and 50% in 1992 and thereafter) of the then current balance of
his account is to be paid to him, and upon his death, any remaining
balance is to be paid in a lump sum payment to his beneficiaries.
(2) Mr. Keefe was employed by the Company on April 11, 1993.
(3) Includes special bonus related to the successful completion of a
public offering of 4,140,000 shares of Common Stock in November 1994
in the following amounts: Mr. Hutton -- $345,000; Mr. Gemunder --
$345,000; Mr. Chesterman -- $62,000; Mr. Keefe -- $44,000 and Ms.
Hodges -- $90,000 (See Joint Report of the Compensation and Incentive
Committees on Executive Compensation on page 10).
7
<PAGE> 10
(4) Includes special bonus related to the successful completion of the
Company's $80,500,000 convertible note offering in October 1993 in the
following amounts: Mr. Hutton -- $150,000, Mr. Gemunder -- $150,000,
Mr. Chesterman -- $45,000, Mr. Keefe -- $20,000 and Ms. Hodges --
$60,000.
(5) Under the Company's stock award program, shares of Common Stock are
issued in lieu of payment of incentive compensation earned or to be
earned by the named executives and other key employees. Restricted
shares vest in three, five or seven equal annual installments as
determined by the Incentive Committee. If the recipient's employment
terminates due to death, disability, retirement under a retirement
plan of the Company, or change in control of the Company, the
restrictions terminate. Otherwise, in the event of termination of
employment, unvested shares are forfeited. Recipients receive
dividends on the awarded shares. Restricted stock awards were granted
in December 1992, February 1994 and February 1995 as incentive
compensation earned in 1992, 1993 and 1994, respectively. The numbers
of restricted shares granted to the named executives are as follows:
Mr. Hutton -- 8,500 shares in 1992, 10,535 shares in 1993 and 10,000
shares in 1994; Mr. Gemunder -- 8,500 shares in 1992, 10,535 shares in
1993 and 10,000 shares in 1994; Mr. Chesterman - - 5,000 shares in
1992, 6,058 shares in 1993 and 5,750 shares in 1994; Mr. Keefe --
4,741 shares in 1993 and 4,500 shares in 1994; and Ms. Hodges -- 2,000
shares in 1992, 3,793 shares in 1993 and 3,600 shares in 1994. As of
December 31, 1994, the number and value of the aggregate restricted
stock holdings of the named executives were: Mr. Hutton -- 24,981
shares or $910,854; Mr. Gemunder -- 24,981 shares or $910,854; Mr.
Chesterman -- 13,734 shares or $511,152; Mr. Keefe -- 9,241 shares or
$357,878; and Ms. Hodges -- 8,416 shares or $313,033.
(6) All amounts shown include the dollar value of shares of the Company's
Common Stock allocated to the named executives' accounts in the
Company's Employee Stock Ownership Plan (the "ESOP") which are
attributable to the Company's contributions to the ESOP. Participants
are entitled to receive the fully vested shares allocated to their
accounts upon death, disability, retirement or termination of
employment. To the extent benefits under the ESOP are otherwise
limited by provisions of the Internal Revenue Code, the Company's
Excess Benefits Plan provides that the Company will provide from its
general funds a benefit to an employee equal to the benefit which
would have been provided but for the limitations of the Internal
Revenue Code. The benefits shown include those provided under the
Excess Benefits Plan. The numbers of shares attributable to these
plans and the dollar values thereof included in the table for each
named executive are as follows: Mr. Gemunder -- 1,814 shares or
$45,981 in 1992, 3,592 shares or $90,904 in 1993 and 3,393 shares or
$133,223 in 1994; Mr. Chesterman -- 1,076 shares or $28,121 in 1992,
1,995 shares or $51,414 in 1993 and 1,401 shares or $52,501 in 1994;
Mr. Keefe -- 741 shares or $19,995 in 1993 and 1,107 shares or $40,940
in 1994; and Ms. Hodges -- 508 shares or $12,988 in 1992, 1,314 shares
or $34,480 in 1993 and 1,083 shares or $42,581 in 1994. Mr. E.L.
Hutton does not participate in the ESOP.
(7) All amounts shown also include the following premium amounts paid by
the Company for life insurance policies for the benefit of the named
executives: Mr. Gemunder -- $1,393 in 1992, $1,530 in 1993 and $6,300
in 1994; Mr. Chesterman -- $873 in 1992, $1,222 in 1993 and $2,805 in
1994; Mr. Keefe -- $367 in 1993 and $661 in 1994; and Ms. Hodges --
$402 in 1992, $514 in 1993 and $604 in 1994. Mr. E.L. Hutton does
not participate in the life insurance program.
</TABLE>
8
<PAGE> 11
<TABLE>
The following table sets forth information regarding stock options
exercised by the named executives during 1994 and the value of in- the-money
unexercised options held by the named executives as of December 31, 1994:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Shares Number of Shares Underlying Value of Unexercised In-
Acquired Unexercised Options at The-Money Options at
on Fiscal Year-End (#) Fiscal Year-End ($)
Exercise Value Realized ---------------------------- ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - ---------------- -------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
E.L. Hutton 24,250 $410,196 -0- 42,750 $ -0- $1,103,903
J.F. Gemunder 10,000 265,000 89,250 42,750 2,639,892 1,103,903
K.W. Chesterman 30,000 795,938 66,250 25,750 2,076,657 592,153
P.E. Keefe 6,250 134,750 -0- 18,750 -0- 526,125
C.D. Hodges 4,000 79,440 5,000 12,000 125,950 311,820
</TABLE>
PENSION PLAN
The Company has a pension plan qualified under the Internal Revenue
Code (the "Code") which provides retirement benefits to employees of certain
business units (the "Qualified Plan") and an excess benefits plan (the "Excess
Benefits Plan") which provide retirement payments to participants in the amount
necessary so that they receive what they would have received under the
Qualified Plan if payments to them under the Qualified Plan were not limited by
the Code and other restrictions. The named executives, other than Mr. E. L.
Hutton, participate in the Qualified Plan and the Excess Benefits Plan.
Retirement benefits under the Qualified Plan are calculated on the
basis of the employee's earnings during the highest consecutive 60- month
period during the employee's last 120 months of employment ("Final Average
Compensation") and are subject to partial offset for social security benefits
and payments under the Company's prior pension plans. The following table
shows the estimated maximum annual retirement benefits payable at normal
retirement (age 65) under the Pension Plan and the Excess Benefits Plan at
selected compensation levels after various years of service. Amounts are shown
on a 10-year certain and life form, after the applicable reduction for social
security benefits.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years of Service (2)
Final Average ---------------------------------------------------------------------
Compensation (1) 15 20 25 30 35
- - ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 $ 29,434 $ 39,245 $ 49,056 $ 58,867 $ 66,367
200,000 40,684 54,245 67,806 81,367 91,367
300,000 63,184 84,245 105,306 126,367 141,367
400,000 85,684 114,245 142,806 171,367 191,367
500,000 108,184 144,245 180,306 216,367 241,367
600,000 130,684 174,245 217,806 261,367 291,367
700,000 153,184 204,245 255,306 306,367 341,367
9
<PAGE> 12
<FN>
_____________________________
(1) For purposes of the Pension Plan, such earnings generally
include base salary and incentive compensation which for the
named executives is set forth in the "Salary" and "Bonus"
columns of the Summary Compensation Table as well as the
value of stock awards vesting during the year.
(2) As of December 31, 1994, Messrs. Gemunder, Chesterman and
Keefe and Ms. Hodges had 31, 18, 2 and 13 years of service,
respectively. Mr. E.L. Hutton does not participate in the
Pension Plan; however, Mr. Hutton participates in a deferred
compensation plan. See "Summary Compensation Table."
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain of its
executive officers. Mr. Gemunder's employment agreement provides for his
continued employment as President of the Company through August 3, 1999,
subject to earlier termination under certain circumstances, at a base salary of
$342,500 per annum or such higher amounts as the Board of Directors may
determine as well as participation in incentive compensation plans, stock
incentive plans and other employee benefit plans. The agreement also provides
for his continued nomination as a director of the Company. In the event of
termination without cause or a material reduction in authority or
responsibility, the agreement provides that Mr. Gemunder will receive severance
payments equal to 150% of his then current base salary plus the amount of
incentive compensation most recently paid or approved in respect of the
previous year and the fair market value of all stock awards which have vested
during the twelve months prior to termination ("Covered Compensation") for the
balance of the term of the agreement. Ms. Hodges' employment agreement is
essentially identical to that of Mr. Gemunder, except that her agreement
provides for a base salary of $112,050 per annum and provides for her
nomination as a director, no less frequently than bi-annually. Messrs.
Chesterman and Keefe each have employment agreements which are also essentially
identical to that of Mr. Gemunder except that minimum base salaries are
$176,800 and $120,000, respectively, director nomination is not stipulated and
severance payments resulting from the conditions described above would equal
100% of Covered Compensation.
Mr. Gemunder also participates in the Company's Executive Salary
Protection Plan ("Salary Plan"). The Salary Plan provides that, in the event
of the death of certain of the Company's executives prior to retirement, the
Company will continue to pay a portion of the deceased executive's salary to
his or her beneficiary for a period of not less than five or more than ten
years (depending upon the participant's age at death). In general, payments
made pursuant to the Salary Plan will equal 100% of the deceased executive's
salary for the first year following his or her death and 50% for each year
thereafter.
JOINT REPORT OF THE COMPENSATION AND INCENTIVE
COMMITTEES ON EXECUTIVE COMPENSATION
The Company believes that executive compensation must align executive
officers' interests with those of the Company's stockholders and that such
interests are best served by having compensation directly and materially linked
to stock appreciation and to financial and operating performance criteria which
when successfully achieved will enhance shareholder value.
The Company attempts to achieve these objectives with an executive
compensation package for its senior executives which combines base salary,
annual cash incentive compensation, and long-term incentive compensation in the
form of stock options and restricted stock awards along with various benefit
plans, including pension plans, savings plans and medical benefits generally
available to the employees of the Company.
The executive compensation program is administered through the
coordinated efforts of the Compensation Committee and the Incentive Committee
of the Board of Directors. The membership of both committees is comprised of
outside directors (i.e. non-employees of the Company). The Compensation
Committee is responsible for the
10
<PAGE> 13
review, approval and recommendation to the Board of Directors of matters
concerning base salary and annual cash incentive compensation for key
executives of the Company. The recommendations of the Compensation Committee
on such matters must be approved by the full Board of Directors. The Incentive
Committee administers the Company's stock incentive plans under which it
reviews and makes grants of stock options and restricted stock awards.
Both the Compensation and Incentive Committees may use their
discretion to set executive compensation where, in their collective judgment,
external, internal or individual circumstances warrant.
In determining base salary levels for the Company's executive
officers, the Compensation Committee takes into account the magnitude of
responsibility of the position, individual experience and performance and
specific issues particular to the Company. In general, base salaries are set
at levels believed by the Compensation Committee to be sufficient to attract
and retain qualified executives when considered with the other components of
the Company's compensation program.
The Compensation Committee believes that a significant portion of
total cash compensation should be linked to annual performance criteria.
Consequently, the purpose of annual incentive compensation for senior
executives and key managers is to provide a direct financial incentive in the
form of an annual cash bonus to these executives to achieve their business
unit's and the Company's annual goals. Operational and financial goals are
established at the beginning of each fiscal year and generally take into
account such measures of performance as sales and earnings growth,
profitability, cash flow and return on investment. Other non-financial
measures of performance relate to organizational development, product or
service expansion and strategic positioning of the Company's assets. Specific
relative weights are not assigned to each such performance factor, since the
relative importance of each factor varies depending upon each executive's
specific job responsibilities. Instead, each compensation decision is made on
a case-by-case basis and will ultimately depend upon the judgment of the
Compensation Committee.
Individual performance is also taken into account in determining
individual bonuses. It is the Committee's belief that bonuses as a percent of
a senior executive's salary should be sufficiently high to provide a major
incentive for achieving annual performance targets. Bonuses for senior
executives of the Company generally range from 25%-75% of base salary.
The stock option and restricted stock program forms the basis of the
Company's long-term incentive plan for executive officers and key managers.
The objective of this program is to align executive and long-term stockholder
interests by creating a strong and direct link between executive compensation
and shareholder return.
Stock options and restricted stock awards are granted annually and are
generally regarded as the primary incentive for long-term performance as they
are granted at fair market value and have vesting restrictions which generally
lapse over three to seven year periods. The Incentive Committee considers each
grantee's current option and award holdings in making such grants. Both the
amounts of restricted stock awards and the proportion of stock options increase
as a function of higher salary and position of responsibility within the
Company.
The Compensation and Incentive Committees have considered and are
continuing to review the implications of Section 162(m) of the Internal Revenue
Code which limits to $1,000,000 the amount that may be deducted by a
publicly-held company for compensation paid each year to each of its five most
highly-paid executive officers. Federal tax law excludes compensation from the
$1,000,000 limit if it is paid under specified conditions, including that the
compensation is performance-based and is approved by a committee of
disinterested directors and by the stockholders. The Company currently does
not expect any tax deduction limitations as a result of this tax law.
Mr. Gemunder's base salary rate during 1994 was $342,500, the amount
to which it was increased in March 1994. The cash bonus paid to Mr. Gemunder
in the ordinary course in respect of 1994 services was $250,000, which
represents an increase of 118.4% over his 1993 bonus paid for services in the
ordinary course and constituted 73.0% of his 1994 base salary rate. In
addition, Mr. Gemunder received a special bonus of $345,000 in 1994 in
connection with the successful public offering in November 1994 of 4,140,000
shares of the Company's Common Stock (see discussion below). Restricted awards
granted to Mr. Gemunder in respect of 1994 services are consistent with his
responsibilities and relative position in the Company and are shown in the
Summary Compensation Table. In determining these amounts, the Incentive
Committee also took into consideration data provided by Buck Consultants,
11
<PAGE> 14
consultants to the Compensation and Incentive Committees on executive
compensation, which indicated these amounts were in line with the amounts paid
to principal executives of comparable companies within the health care
industry.
In March 1994, Mr. Gemunder's base salary was increased to $342,500,
representing an annualized increase of 8.0% since his last increase in November
1992. This salary increase reflects both an inflation-related adjustment as
well as a merit increase based on the performance criteria listed above.
Increases in 1994 cash bonuses as well as stock award grants are consistent
with performance as measured by the factors listed above which have led to the
strong performance of the Company and the resultant increases in shareholder
value over this period. Among the factors considered in determining Mr.
Gemunder's compensation, along with other members of senior management of the
Company, is the successful completion of the Company's restructuring program.
Despite a challenging business climate in health care, Mr. Gemunder, along with
the senior management of the Company, has overseen the disposition since 1985
of eleven different businesses deemed to be lacking in significant future
growth potential. As part of the Company's repositioning, senior management
undertook a commitment in 1990 to fully redeploy all Company assets in the
long-term care pharmacy business through a strategy which combined an
aggressive acquisition program in this market with internal growth of the
companies previously acquired. Since the Company's initial acquisition in the
long-term care pharmacy business late in 1988, twenty-five acquisitions have
been completed and long-term care pharmacy is now the Company's sole business
focus. This acquisition program, along with internal growth, has resulted in
substantial sales and earnings growth. From 1990 to 1994, sales have grown
from $38.8 million to $275.7 million, or at an average annual rate of 63.3%,
operating income has increased from $320,000 to $29.1 million (excluding
non-recurring items), or at an average annual rate of 208.8%, and net income
from continuing operations has grown from $639,000 to $15.3 million (excluding
non-recurring items), or at an average annual rate of 121.1%. At year-end
1990, the Company's common stock closed at $8.00 per share and at year-end
1994, the stock closed at $43.75 per share. The successful execution of this
strategy has thus resulted in exceptional increases in shareholder value over
this period as shown in the Five-Year Cumulative Total Return Graph on page 14.
The Compensation/Incentive Committees believe that senior executives
should be sufficiently rewarded for their assumption of calculated risks for
the benefit of the Company and its stockholders and the management of resources
to achieve superior results. Increases in Mr. Gemunder's incentive
compensation reflect performance not only in 1994, but also reflect the
cumulative performance of the Company since its strategic decision to redeploy
fully its assets in the long-term care pharmacy business. From 1990 until the
current year, Mr. Gemunder's salary increased at an average annual rate of 6.4%
and his cash bonus increased at an annual average rate of 17.3%. When viewed
in context of the Company's performance over this period, the Compensation
Committee determined that the increase in Mr. Gemunder's incentive compensation
for 1994 services should more adequately reflect these cumulative results.
In 1994, the Compensation Committee recommended to the Board of
Directors that special bonuses be paid to Mr. Gemunder and certain other
officers of the Company in connection with the successful completion in
November 1994 of a public offering of 4,140,000 shares of Common Stock,
including 540,000 shares sold pursuant to the overallotment option. A total of
1,623,741 shares were sold by the Company and 2,516,259 shares were sold in a
secondary distribution. In determining to make those bonus awards, the
Committee and the Board considered the importance and success of the offering
to the timely implementation of the Company's acquisition-driven business
strategy, the size and pricing of the offering in light of the ongoing
uncertainty of investors over the impact of potential reforms of the health
care system, and the relative weakness in the capital markets at the time of
the offering. As a result of the offering and price appreciation in the Common
Stock, and assuming the conversion of the Company's convertible securities
(convertible into common stock at $28.875), the market capitalization of the
Company at year end 1994 was $675.2 million, reflecting a 74.3% increase over
the market capitalization at year-end 1993 and nearly a tenfold increase since
year-end 1990. The Committee and the Board consider the process of raising
capital in the external capital markets to be essential to a company with an
acquisition-driven strategy; therefore, in the Board's view, the key
executives' ability to raise capital at favorable prices to a timely basis to
fund the Company's growth, particularly in a period of uncertainty in the
health care market, warranted these special bonuses.
Compensation Committee: Incentive Committee:
D. Walter Robbins, Jr., Chairman Charles H. Erhart, Jr., Chairman
Sandra E. Laney John M. Mount
Sheldon Margen, M.D. D. Walter Robbins, Jr.
12
<PAGE> 15
COMPENSATION AND INCENTIVE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. E. L. Hutton and Gemunder, executive officers of the Company,
are directors of Chemed. Ms. Laney, an executive officer of Chemed, is a
member of the Compensation Committee of the Company. In addition, all members
of the Compensation and Incentive Committee, except Dr. Margen, are directors
of Chemed.
CERTAIN TRANSACTIONS
The Company has contracted with a division of Chemed, a 6%
stockholder, to assist in the development of a new data processing system to
integrate and standardize all operational and financial reporting functions of
the Company. The Company also subleases its corporate offices from Chemed and
is charged for the occasional use of Chemed's corporate aviation department and
other incidental expenses based on Chemed's cost. The Company reimburses
Chemed for all such services at rates which are essentially equal to those
which would have been incurred if the Company were operating as an unaffiliated
entity. During 1994, such reimbursements totalled $2,951,000.
13
<PAGE> 16
COMPARATIVE STOCK PERFORMANCE
The following graph summarizes the cumulative total return on $100
invested in the Company's Common Stock, the Standard & Poor's 500 Stock Index,
and the Standard & Poor's Health Care Composite Index. The graph assumes
dividend reinvestment.
CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE YEAR PERIOD ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION> December 31,
--------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Omnicare, Inc. 100.00 95.45 239.34 374.02 390.63 536.83
S&P 500 100.00 96.89 126.42 136.05 149.76 151.74
S&P Health Care Composite 100.00 117.45 180.89 151.42 138.70 156.89
</TABLE>
The total return calculations reflected in the foregoing graph were
performed by Standard & Poor's Compustat Services, Inc.
14
<PAGE> 17
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth information as of February 28, 1995
with respect to each person known to the Company to beneficially own more than
5% of the shares of its Common Stock:
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (A) CLASS (A)
- - -------------------------- ------------------------ ------------
<S> <C> <C>
Chemed Corporation 722,000 5.9%
2600 Chemed Center
255 East Fifth Street
Cincinnati, OH 45202
Pilgrim Baxter & Associates 697,670 (b) 5.7%
1255 Drummers Lane
Suite 300
Wayne, PA 19087-1549
<FN>
__________________________
(a) Under applicable Securities and Exchange regulations, shares are
treated as "beneficially owned" if a person has or shares voting or
dispositive power with respect to the shares or has a right to acquire
the shares within 60 days of February 28, 1995. Unless otherwise
indicated, sole voting power and sole dispositive power are exercised
by the named person. In calculating "Percent of Class" for a person,
shares which may be acquired by the person within such 60-day period
are treated as owned by the person and as outstanding shares.
(b) Such person has shared voting power but sole dispositive power with
respect to such shares.
</TABLE>
The following table sets forth information as of February 28, 1995
with respect to the shares of Common Stock beneficially owned by each of the
nominees and directors, each of the named executives, and all its directors and
executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES AND PERCENT OF
INDIVIDUAL OR GROUP NATURE OF BENEFICIAL OWNERSHIP CLASS (A)(B)
- - --------------------------------- ------------------------------ -------------------------
<S> <C> <C>
E.L. Hutton 33,097 (c)
1,000 (e)
J.F. Gemunder 76,131 (c) 1.4%
89,250 (d)
R.K. Baur 3,966 (c)
K.W. Chesterman 38,695 (c)
66,250 (d)
C.H. Erhart, Jr. 1,800 (c)
</TABLE>
15
<PAGE> 18
<TABLE>
<S> <C>
M.L. Fox 3,553 (c)
J.P. Grace 4,095 (c)
P.E. Keefe 11,412 (c)
3,750 (d)
C.D. Hodges 18,570 (c)
5,000 (d)
T.C. Hutton 3,052 (c)
1,000 (e)
4,719 (f)
S.E. Laney 4,711 (c)
250 (d)
4,719 (f)
A.R. Lindell 200 (c)
S. Margen 3,519 (c)
K.J. McNamara 1,381 (c)
4,719 (f)
J.M. Mount 400 (c)
T.S. O'Toole 1,229 (c)
D.W. Robbins, Jr. 800 (c)
ALL DIRECTORS AND EXECUTIVE 211,767 (c)
OFFICERS AS A GROUP (19 PERSONS) 164,500 (d)
1,000 (e)
4,719 (f) 3.1%
<FN>
_________________________________
(a) Under applicable Securities and Exchange regulations, shares are
treated as "beneficially owned" if a person has or shares voting or
dispositive power with respect to the shares or has a right to acquire
the shares within 60 days of February 28, 1995. Unless otherwise
indicated, sole voting power and sole dispositive power are exercised
by the named person. In calculating "Percent of Class" for a person,
shares which may be acquired by the person within such 60-day period
are treated as owned by the person and as outstanding shares.
(b) Percent of Class is not shown if less than 1%.
(c) Shares held in individual capacity (or together with a member of his
or her household) as to which such person has (or shares) voting and
dispositive powers (and includes shares allocated, as of December 31,
1994, to the account of each named person or member of the group under
the Company's Employees' Savings and Investment Plan and its Employee
Stock Ownership Plan).
(d) Shares subject to outstanding options and/or warrants exercisable
within 60 days from February 28, 1995.
(e) Messrs. E. L. Hutton and T. C. Hutton are trustees of the E. L. Hutton
Foundation which holds 4,719 shares of Common Stock over which the
trustees share both voting and dispositive powers.
(f) Messrs. T.C. Hutton and K. J. McNamara and Ms. Laney are trustees of
the Chemed Foundation which holds 1,000 shares of Common Stock over
which the trustees share both voting and dispositive powers.
</TABLE>
16
<PAGE> 19
Under Section 16(a) of the Securities Exchange Act of 1934, as
amended, persons deemed to be executive officers of the Company, directors of
the Company, and beneficial owners of more than 10% of the Common Stock are
required to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. The Company believes that during 1994 all such
persons complied with these filing requirements. In making these statements,
the Company has relied upon the facts of which it is specifically aware and, in
the case of its directors and officers, upon their written representations.
PROPOSAL TO INCREASE NUMBER OF AUTHORIZED
SHARES OF COMMON AND PREFERRED STOCK
The Board of Directors has approved, declared advisable and recommends
to the stockholders that an amendment to the Company's Certificate of
Incorporation (the "Certificate of Incorporation") be adopted increasing the
number of authorized shares of Common Stock from 22,000,000 to 44,000,000 (the
"Proposed Amendment"). At April 3, 1995, there were ___________ shares of
Common Stock outstanding, 2,787,878 shares reserved for issuance upon exercise
of the Company's 5.75% Convertible Debentures, ____________ reserved for
potential exercise of stock options previously granted, ___________ reserved
for possible grant under the Company's 1992 Long-Term Stock Incentive Plan,
630,000 shares reserved for the proposed 1995 Premium Stock Option Plan
(subject to stockholder approval), ____________ shares reserved for issuance
upon exercise of outstanding warrants, and approximately ________________
shares reserved for issuance in connection with obligations of the Company in
certain acquisition transactions. This leaves _____________ shares of Common
Stock available for issuance out of the 22,000,000 presently authorized. Upon
adoption of the Proposed Amendment, _____________ shares of Common Stock would
be available for issuance by the Board of Directors for purposes which are not
currently reserved. The number of authorized shares of Common Stock was last
increased by stockholders in May 1983.
The Board of Directors believes that it is desirable and in the best
interests of the Company and its stockholders that there be a substantial
number of authorized shares of Common Stock available for issuance in the
future. Such shares may be used for general corporate purposes, including
stock splits and stock dividends, acquisitions, public offerings, stock option
and other employee incentive plans. Authorized but unissued shares are
available for issuance from time to time to such persons and for such
consideration as the Board of Directors may determine, without requiring
further action by the stockholders, except as may be required by law, the
Certificate of Incorporation or pursuant to the rules of any stock exchange on
which the shares may then be listed. The Company has no present plans to issue
any of the additional shares of the Common Stock which would be authorized by
adoption of the Proposed Amendment, and there are no pending negotiations,
discussions, agreements or understandings which would obligate the Company to
the issuance of any such shares.
While the Board of Directors believes that it is in the best interests
of the stockholders for the Board to have the flexibility to issue additional
shares in any or all of the circumstances described in the preceding paragraph,
the holders of Common Stock do not have pre- emptive rights and the issuance of
additional shares other than on a pro rata basis to current stockholders, would
have the effect of diluting the voting power of current stockholders. In
addition, the availability of sufficient authorized and unissued shares could,
in certain circumstances, discourage an attempt by another person or entity to
acquire control of the Company. The proposal has not, however, been prompted
by an attempt by anyone to acquire control of the Company, and the Company is
not aware of any such attempt.
If the Proposed Amendment is adopted, the first sentence of Article 4
of the Certificate of Incorporation would be amended to read as follows:
4. The total number of shares of stock which the Corporation
shall have authority to issue is Forty-Five Million (45,000,000), of
which Forty-Four Million (44,000,000) shares of the par value of One
Dollar ($1.00) each, amounting in the aggregate to Forty-Four Million
Dollars ($44,000,000), shall be common stock and of which One Million
(1,000,000) shares, without par value, shall be preferred stock.
17
<PAGE> 20
Adoption of the Proposed Amendment requires the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDMENT.
PROPOSAL TO ADOPT 1995 PREMIUM STOCK OPTION PLAN
At the Annual Meeting, stockholders will vote on approval of
the Company's 1995 Premium Stock Option Plan (the "Plan"). The Plan was
approved by the Board of Directors on March 1, 1995, subject to approval by
stockholders. A copy of the Plan is annexed as Exhibit A to this Proxy
Statement. Approval of the Plan requires the affirmative vote of the holders
of a majority of the shares of Common Stock present or represented, and
entitled to vote, at the Annual Meeting.
The Board believes that a stock option plan which ties the
principal financial incentives available to senior executives to increases in
stockholder value is a superior method of closely aligning the interests of
such executives with those of stockholders. The purpose of the Plan is to
provide incentives that will motivate and reward key senior executives only
if stockholders enjoy significant appreciation in market value of the Common
Stock. The Board is seeking to challenge senior executives to maximize
shareholder value due to the importance of stock appreciation to the
implementation of the Company's acquisition-driven business strategy. The Plan
seeks to achieve these objectives by providing that the option exercise price
will be 125% of the fair market value of a share on the date of grant. As a
result, optionees will not begin to realize any value from an option granted
under the Plan until the market price of the Common Stock has increased 25%.
GENERAL INFORMATION
The Plan will be administered by a committee of two or more
directors of the Company. All members of the committee will be "disinterested
persons" within the meaning of Rule 16b-3 promulgated by the Securities and
Exchange Commission ("SEC Rule 16b-3") and "outside directors" for purposes of
Section 162(m) of the Internal Revenue Code. The Board has determined that its
current Incentive Committee, comprised of three directors, will also act as the
Committee under the Plan. Senior executive employees who are either officers
of the Company or a key executive of a subsidiary of the Company will be
eligible to receive options under the Plan. From the approximately 35 persons
who currently would be eligible to be granted options, the Committee is
authorized to grant options to persons whom it determines can contribute
significantly to the growth and successful operations of the Company. Subject
to the provisions of the Plan, the Committee will also determine the number of
shares to be subject to each option and the times at which the option may be
exercised.
The maximum number of shares of Common Stock that may be
subject to options granted under the Plan is 630,000. The shares that may be
issued under the Plan may be authorized but unissued shares or treasury shares.
The maximum number of shares that may be subject to options granted to one
person in any three consecutive calendar years is 315,000. If there is a stock
split, stock dividend, recapitalization, spin-off of assets, or other relevant
change affecting the Common Stock, the maximum number of shares issuable under
the Plan or to any optionee and the number of shares subject to, and the option
price of, outstanding options will be equitably adjusted by the Committee.
TERM OF OPTIONS
An option entitles the holder to purchase the number of shares subject
to the option at the option exercise price specified in the Plan. For all
options granted under the Plan, the option exercise price will be equal to 125%
of the fair market value of a share of Common Stock on the date of grant. No
option may be exercised within one year after the date of grant, and then may
become exercisable in full or in part and at such time as the
18
<PAGE> 21
Committee determines at the time of grant. No incentive stock options, within
the meaning of the Code, will be granted under the Plan.
The option exercise price may be paid in cash or, unless the Committee
determines otherwise, in shares of Common Stock (including shares withheld by
the Company from the shares issuable upon exercise of the option) or in a
combination of cash and such shares. Withholding taxes due upon exercise of an
option may also be paid by the optionee in the same manner as the option
exercise price.
Unless otherwise provided in the option, each option will expire on
the tenth anniversary of the date of grant. Options terminate upon the
termination of the optionee's employment, except that in the case of cessation
of employment with approval of the Committee, options may be exercised within
three months of cessation of employment and in the case of death, incapacity or
retirement under a retirement Plan of the Company, options may be exercised
within 15 months after cessation of employment.
Options are not transferable except by will, by the laws of descent
and distribution, or pursuant to a qualified domestic relations order. The
Committee may, however, permit a transfer of any option to a family member of
the optionee, to a trust for the benefit of the optionee's family members, or
to a partnership comprised of the optionee's family members if any such
transfer will not result in the loss of any exemption under SEC Rule 16b-3 for
any option which is not so transferred.
CHANGE OF CONTROL
Notwithstanding any provision of the Plan or any vesting schedule
established by the Committee with respect to an option at the time of grant,
all outstanding options will become immediately exercisable in full upon the
occurrence of a change of control of the Company. A "change of control" is
deemed to occur if any person becomes the beneficial owner of 15% or more of
the voting power of the Company; the stockholders approve (i) an agreement to
merge or consolidate with another corporation and the Company is not the
surviving corporation or (ii) an agreement to sell all, or substantially all,
of the assets of the Company or a plan of liquidation of the Company; or (iii)
during any two- year period, the directors who were in office at the beginning
of such two-year period do not constitute at least a majority of the Board,
unless each director elected during the period was nominated for election by at
least half of the persons who were directors at the beginning of the two-year
period.
PLAN AMENDMENTS
The Board, upon the recommendation of the Committee, may amend the
Plan subject, in the case of specified amendments, to stockholder approval.
The Plan may be discontinued at any time by the Board. No amendment or
termination of the Plan will, without the consent of the optionee, adversely
affect any stock option held by him.
FEDERAL INCOME TAXES
The grant of an option does not result in income for the optionee or
in a deduction for the Company. The exercise of an nonqualified stock option
results in ordinary income for the optionee and a deduction for the Company
measured by the excess of the fair market value of the stock received at the
time of exercise over the option exercise price for the stock. Income tax
withholding by the Company is required. Any appreciation in the value of the
stock after the date of exercise is considered as long or short-term capital
gain depending upon whether the stock was held longer than one year from the
date of exercise.
Amendments to the Internal Revenue Code in 1993 adding Section 162(m)
to the Code and the regulations promulgated thereunder provide that certain
employee compensation for years beginning after December 31, 1993 in excess of
$1,000,000 will not be deductible for federal income tax purposes. Section
162(m), however, enumerated certain types of compensation which will not be
subject to the $1,000,000 limitation, including "performance-based"
compensation. Among other requirements, Section 162(m) requires that in order
for compensation to qualify as performance based, the material terms of the
compensation and the performance goals on which payment of such compensation is
conditioned must be disclosed to, and approved by,
19
<PAGE> 22
stockholders before payment is made. The Plan satisfies the requirements of
Section 162(m), and Section 162(m) will not limit the federal income deduction
available to the Company in connection with the exercise of options granted
under the Plan.
EXISTING PLAN
The Company's 1992 Long-Term Stock Incentive Plan authorizes the
committee which administers the 1992 Plan to grant various stock incentives,
including stock options, to key employees of the Company and its subsidiaries.
Under the 1992 Plan, the option exercise price for any options granted may not
be less than 100% of the fair market value of a share of Common Stock on the
date of grant. The number of shares of Common Stock available as of any given
date for stock incentives under the 1992 Plan may not exceed that number of
shares equal to (i) 5% of the Company's issued and outstanding Common Stock as
of the preceding December 31 reduced by (ii) the total number of stock
incentives granted under the 1992 Plan at any time during the then current
calendar year and during the immediately preceding two calendar years (the
"Granting Period") increased by (iii) the total number of shares covered by
previously granted stock incentives forfeited during the Granting Period. As
of April 3, 1995, there were ____________ shares of Common Stock available for
award under the 1992 Plan.
Stockholder Resolution
In order to effect approval and adoption of the Plan by stockholders,
the following resolution will be presented to the Annual Meeting:
"RESOLVED, that the Omnicare, Inc. 1995 Premium Stock
Option Plan as set forth at Exhibit A to the Proxy Statement
for the Annual Meeting of Stockholders of the Company to be
held on May 15, 1995, be, and the same is hereby, approved and
adopted.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND ADOPTION
OF THE PLAN.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse LLP
as independent accountants for the Company and its consolidated subsidiaries
for the year 1995. That firm has acted as independent accountants for the
Company and its consolidated subsidiaries since 1981. Although the submission
of this matter to the stockholders is not required by law or the By-Laws of the
Company, the selection of Price Waterhouse LLP will be submitted for
ratification at the Annual Meeting. The affirmative vote of a majority of the
shares represented at the meeting is necessary to ratify the selection of Price
Waterhouse LLP. If the selection is not ratified at the meeting, the Board of
Directors will reconsider its selection of independent accountants.
It is expected that a representative of Price Waterhouse LLP will be
present at the Annual Meeting. Such representative will have the opportunity
to make a statement if he or she desires to do so and will be available to
respond to questions raised at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be included in the proxy
materials for presentation at the 1996 Annual Meeting of Stockholders must be
in writing and received by the Secretary of the Company not later than December
11, 1995.
20
<PAGE> 23
OTHER MATTERS
As of the date of this Proxy Statement, neither the Board of Directors
nor management knows of other matters which will be presented for consideration
at the Annual Meeting. However, if any other business should come before the
meeting, the persons named in the enclosed proxy (or their substitutes) will
have discretionary authority to take such action as shall be in accordance with
their best judgment.
EXPENSES OF SOLICITATION
The expense of soliciting proxies in the accompanying form will be
borne by the Company. The Company will request banks, brokers and other
persons holding shares beneficially owned by others to send proxy materials to
the beneficial owners and to secure their voting instructions, if any. The
Company will reimburse such persons for their expenses in so doing. In
addition to solicitation by mail, officers and regular employees of the Company
may, without extra remuneration, solicit proxies personally, by telephone or by
telegram from some stockholders, if such proxies are not promptly received.
The Company also expects to retain D.F. King & Co., Inc., a proxy soliciting
firm, to assist in the solicitation of such proxies at a cost which will not
exceed $6,500 plus reasonable expenses.
By Order of the Board of Directors
Cheryl D. Hodges
Secretary
April 10, 1995
21
<PAGE> 24
EXHIBIT A
OMNICARE, INC.
1995 PREMIUM STOCK OPTION PLAN
1. PURPOSE: The purpose of this Plan is to provide incentives
that will motivate and reward selected Key Senior Executives appropriately if
the stockholders of the Company continue to enjoy superior appreciation in the
Fair Market Value of the Common Stock.
2. DEFINITIONS: Unless otherwise required by the context, the
following terms when used in this Plan shall have the meanings set forth in
this section 2.
Board of Directors: The Board of Directors of the Company.
Change of Control: The Company obtains actual knowledge that any of
the following events has occurred: (i) any person other than the Company or
any Subsidiary has become the beneficial owner of 15% or more of the combined
voting power of the Company's then outstanding voting securities; (ii) the
stockholders of the Company have approved: (1) an agreement to merge or
consolidate with or into another corporation and the Company or another
corporation wholly-owned by the Company, is not the surviving corporation, or
(2) an agreement to sell or otherwise dispose of all or substantially all of
the assets of the Company (including a plan of liquidation); or (iii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute at
least a majority of the Board of Directors, unless the nomination for the
election by the Company's stockholders of each new director was approved by a
vote of at least one-half of the persons who were directors at the beginning of
the two-year period.
For purposes of this definition, a person shall be deemed the
"beneficial owner" of any securities (i) which such person or any of its
Affiliates or Associates beneficially owns, directly or indirectly; or (ii)
which such person or any of its Affiliates or Associates, has directly or
indirectly, (1) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (2) the right to vote
pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other person with which such
person or any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
securities.
1
<PAGE> 25
For purposes of this definition, a "person" shall mean any individual,
firm, company, partnership, other entity or group, and the terms "Affiliate" or
"Associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as in effect on
the date the Plan is approved by the stockholders of the Company and becomes
effective.
Code: The Internal Revenue Code of 1986, as amended and from time to
time in effect. References in the Plan to any section of the Code also shall
be deemed to refer to any related Treasury regulations, whether proposed,
temporary or final.
Common Stock: The Common Stock of the Company, par value $1.00 per
share.
Company: Omnicare, Inc., a Delaware corporation.
Fair Market Value: As applied to any date, the mean between the high
and low sales prices of a share of Common Stock on the principal stock exchange
on which the Company is listed, or, if it is not so listed, the mean between
the bid and the ask prices of a share of Common Stock in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System on such date or if no such sales or prices were made or quoted
on such date, on the next preceding date on which there were sales or quotes of
Common Stock on such exchange or market, as the case may be; provided, however,
that, if the Common Stock is not so listed or quoted, Fair Market Value shall
be determined in accordance with the method approved by the Board of Directors.
Incentive Committee: The Incentive Committee designated to administer
this Plan pursuant to the provisions of section 9.
Key Senior Executive: An employee of the Company or a Subsidiary who
is an officer of the Company or a key executive and who in the opinion of the
Incentive Committee can contribute significantly to the growth and successful
operations of the Company or a Subsidiary. The grant of a Premium Stock Option
to a senior executive by the Incentive Committee shall be deemed a
determination by the Incentive Committee that such person is a Key Senior
Executive.
Nonqualified Option: An option which is not intended to qualify as an
incentive stock option under the provisions of Section 422 of the Code.
Option: A Premium Stock Option granted under this Plan.
2
<PAGE> 26
Plan: The Premium Stock Option Plan herein set forth as the same may
from time to time be amended.
Premium Stock Option: An option granted under this Plan to purchase
shares of Common Stock on the terms and conditions set forth in paragraph 5(a)
of the Plan and such other terms and conditions as the Incentive Committee may
impose or as may apply under the Plan.
Rule 16b-3: Rule 16b-3 of the General Rules and Regulations
promulgated by the U.S. Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, as such Rule may from time to time be in
effect.
Subsidiary: A company or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power
are owned or controlled, directly or indirectly, by the Company.
3. GRANTS OF PREMIUM STOCK OPTIONS: Subject to the provisions of
this Plan, the Incentive Committee may at any time, or from time to time, grant
Premium Stock Options under this Plan. Only Key Senior Executives shall be
eligible to be granted such Options. Subject to Section 6 below, the maximum
number of shares with respect to which Premium Stock Options may be granted to
any Key Senior Executive during any three consecutive calendar years during the
term of this Plan shall be 315,000.
4. STOCK SUBJECT TO THIS PLAN: Subject to sections 3 and 6
of the Plan, the total number of shares of Common Stock, with respect to which
Premium Stock Options may be granted shall be 630,000; provided, however, that
any shares covered by Premium Stock Options which expire, terminate, are
forfeited, or are cancelled unexercised again shall be available for the grant
of Options under the Plan. Shares of Common Stock which may be issued pursuant
to Options may be either authorized but unissued shares or shares held in the
Company's treasury, or any combination thereof.
5. OPTIONS: Premium Stock Options shall be subject to the
following provisions:
(a) Each Premium Stock Option shall entitle the optionee
to purchase the shares of Common Stock with respect to which such Premium
Stock Option is granted at a price per share not less than 125% of the Fair
Market Value of such share on the date such Premium Stock Option is granted.
(b) All Options granted under the Plan shall be
Nonqualified Options.
(c) Upon the exercise of an Option, the purchase price
shall be paid in cash or, unless otherwise provided by the Incentive Committee
(and subject to such terms and conditions as are specified in the Option or by
the Incentive Committee), in shares of Common Stock delivered to the Company by
3
<PAGE> 27
the optionee or by the withholding of shares issuable upon exercise of the
Option or in a combination of such payment methods. Shares of Common Stock
thus delivered or withheld shall be valued at their Fair Market Value on the
date of the exercise.
(d) Each Option shall become exercisable in full or in
part not less than one year after the date the Option is granted, or may become
exercisable in one or more installments at such later time or times as the
Incentive Committee shall determine. Unless otherwise provided in the Option,
an Option, to the extent it is or becomes exercisable, may be exercised at any
time in whole or in part until the expiration or termination of the Option.
Unless otherwise provided in the Option, any term or provision in any
outstanding Option specifying that the Option not be immediately exercisable or
that it be exercisable in installments may be modified at any time during the
life of the Option by the Incentive Committee; provided, however, that no such
modification of an outstanding Option shall, without the consent of the
optionee, adversely affect any Option theretofore granted to him. Unless
otherwise provided in the Option, the term of each Option granted under this
Plan shall be ten years.
(e) Subject to paragraph 5(g) below, each Option shall be
exercisable during the life of the optionee only by him and, after his death,
only by his estate or by a person who acquired the right to exercise the Option
by will or the laws of descent and distribution. An Option, to the extent that
it shall not have been exercised, shall terminate when the optionee ceases to
be an employee of the Company or a Subsidiary, unless he ceases to be an
employee because of his resignation with the consent of the Incentive Committee
(which consent may be given before or after resignation), or by reason of his
death, incapacity or retirement under a retirement plan of the Company or a
Subsidiary. Except as provided in the next sentence, if the optionee ceases to
be an employee by reason of such a resignation, the Option shall terminate
three months after he ceases to be an employee. If the optionee ceases to be
an employee by reason of such death, incapacity or retirement, or if he should
die during the three-month period referred to in the preceding sentence, the
Option shall terminate fifteen months after he ceases to be an employee. Where
an Option is exercised more than three months after the optionee ceased to be
an employee, the Option may be exercised only to the extent it could have been
exercised on the date three months after he ceased to be an employee. A leave
of absence for military or governmental service or for other purposes shall
not, if approved by the Incentive Committee, be deemed a termination of
employment within the meaning of this paragraph (e); provided, however, that an
Option may not be exercised during any such leave of absence. Notwithstanding
the foregoing provisions of this paragraph (e) or any other provisions of this
Plan, no Option shall be exercisable after the tenth anniversary of the date it
was granted.
(f) Neither the Company nor any Subsidiary may directly
or indirectly lend any money to any person for the purpose of assisting him to
purchase or carry shares of Common Stock issued or transferred upon the
exercise of an Option.
4
<PAGE> 28
(g) No Option nor any right thereunder may be assigned or
transferred by the optionee except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Code or the Employee Retirement Income Security Act of 1974, as amended);
provided, however, that if so provided in the instrument evidencing the
Option, the Incentive Committee may permit any optionee to transfer the Option
during his lifetime to one or more members of his family, to one or more trusts
for the benefit of one or more members of his family, or to a partnership or
partnerships of members of his family, provided that no consideration is paid
for the transfer and that such transfer would not result in the loss of any
exemption under Rule 16b-3 for any Option that the Incentive Committee does not
permit to be so transferred. The transferee of an Option shall be subject to
all restrictions, terms and conditions applicable to the Option prior to its
transfer, except that the Option shall not be further transferable inter vivos
by the transferee. The Incentive Committee may impose on any transferable
Option and on the shares of Common Stock to be issued upon the exercise of an
Option such limitations and conditions as the Committee deems appropriate.
(h) If so provided in the Option or if so authorized by
the Incentive Committee and subject to such terms and conditions as are
specified in the Option or by the Incentive Committee, the Company shall have
the right, upon or without the request of the holder of the Option and at any
time or from time to time, to cancel all or a portion of the Option then
subject to exercise and either (i) pay the holder an amount of money equal to
the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so cancelled over the aggregate
purchase price of such shares, or (ii) issue or transfer shares of Common Stock
to the holder with a Fair Market Value, at such time or times, equal to such
excess.
(i) Each Option shall be evidenced by a written
instrument, which shall contain such terms and conditions and shall be in such
form, as the Incentive Committee may determine, provided the Option is
consistent with this Plan and incorporates it by reference. Notwithstanding
the preceding sentence, an Option if so determined by the Incentive Committee,
may include restrictions and limitations in addition to those provided for in
this Plan.
(j) Any federal, state or local withholding taxes payable
by an optionee upon the exercise of an Option shall be paid in cash, by the
surrender of shares of Common Stock or the withholding of shares of Common
Stock to be issued to the optionee, or in any combination thereof, or in such
other form, as the Incentive Committee may from time to time determine in its
sole discretion. All such shares so surrendered or withheld shall be valued at
Fair Market Value on the date they are surrendered to the Company or authorized
to be withheld.
6. ADJUSTMENT PROVISIONS: In the event that any spinoff of
assets, recapitalization, reclassification, split-up or consolidation of shares
of Common Stock shall be effected, or the outstanding shares of Common Stock
are, in connection with a merger or consolidation of the Company or a sale by
5
<PAGE> 29
the Company of all or a part of its assets, exchanged for a different number or
class of shares of stock or other securities of the Company or for shares of
the stock or other securities of any other company, or a record date for
determination of holders of Common Stock entitled to receive a dividend payable
in Common Stock shall occur, (a) the number and class of shares or other
securities that may be issued or transferred pursuant to Options, (b) the
number and class of shares or other securities which have not been issued or
transferred under outstanding Options, (c) the maximum number of shares or
other securities which may be granted to any Key Senior Executive, and (d) the
purchase price to be paid per share or other security under outstanding
Options, shall in each case be equitably adjusted.
7. CHANGE IN CONTROL PROVISIONS: In the event of a Change of
Control, and notwithstanding any provision of the Plan to the contrary, any
Option then outstanding shall be immediately exercisable (without regard to any
limitation imposed by the Plan or the Incentive Committee at the time the
Options were granted, which permits all or any part of the Options to be
exercised only after the lapse of time or the fulfillment of other conditions
to exercise) and shall remain exercisable until the expiration of the Option.
8. TERM: This Plan shall be deemed adopted and shall become
effective if and when it is approved and adopted by the stockholders of the
Company. If not so approved and adopted, the Plan shall be null, void and of
no force or effect. If so approved and adopted, this Plan shall remain in
effect until such time as it is terminated by the Board of Directors.
9. ADMINISTRATION:
(a) The Plan shall be administered by the Incentive
Committee, which shall consist of not less than two directors of the Company
designated by the Board of Directors in accordance with Article IV of the
By-Laws of the Company; provided, however, that no director shall be designated
as or continue to be a member of the Incentive Committee unless he shall at the
time of designation and service be a "disinterested person" within the meaning
of Rule 16b-3 and an "outside director" within the meaning of section
162(m)(4)(C)(i) of the Code. No member of the Incentive Committee shall be
eligible to be granted a Premium Stock Option. Grants of Options may be made
by the Incentive Committee either in or without consultation with employees
and, anything in this Plan to the contrary notwithstanding, the Incentive
Committee shall have full authority to act in the matter of selection of all
Key Senior Executives and in granting Options to them.
(b) The Incentive Committee may establish such rules and
regulations, not inconsistent with the provisions of this Plan, as it deems
necessary to determine eligibility to participate in this Plan and for the
proper administration of this Plan, and may amend or revoke any rule or
regulation so established. The Incentive Committee may make such
determinations and interpretations under or in connection with this Plan as it
deems necessary or advisable. All such rules, regulations, determinations and
interpretations
6
<PAGE> 30
shall be binding and conclusive upon the Company, its Subsidiaries, its
stockholders and all employees, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them.
(c) Members of the Board of Directors and members of the
Incentive Committee acting under this Plan shall be fully protected in relying
in good faith upon the advice of counsel and shall incur no liability except
for gross negligence or willful misconduct in the performance of their duties.
10. GENERAL PROVISIONS
(a) Nothing in this Plan or in any instrument executed
pursuant hereto shall confer upon any employee any right to continue in the
employ of the Company or a Subsidiary, or shall affect the right of the Company
or of a Subsidiary to terminate the employment of any employee with or without
cause.
(b) No shares of Common Stock shall be issued or
transferred pursuant to the exercise of an Option unless and until all legal
requirements applicable to the issuance or transfer of such shares, in the
opinion of counsel to the Company, have been complied with. In connection with
any such issuance or transfer the person acquiring the shares shall, if
requested by the Company, give assurances, satisfactory to counsel to the
Company, that the shares are being acquired for investment and not with a view
to resale or distribution thereof and assurances in respect of such other
matters as the Company or a Subsidiary may deem desirable to assure compliance
with all applicable legal requirements.
(c) No employee (individually or as a member of a group),
and no beneficiary or other person claiming under or through him, shall have
any right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Option except as to
shares of Common Stock, if any, as shall have been issued or transferred to
him.
(d) The Company or a Subsidiary may, with the approval of
the Incentive Committee, enter into an agreement or other commitment to grant
an Option in the future to a person who is or will be a Key Senior Executive at
the time of grant, and, notwithstanding any other provision of this Plan, any
such agreement or commitment shall not be deemed the grant of an Option until
the date on which the Company takes action to implement such agreement or
commitment.
(e) The Company or a Subsidiary may make such provisions
as it may deem appropriate for the withholding of any taxes which the Company
or a Subsidiary determines it is required to withhold in connection with any
Option.
7
<PAGE> 31
(f) Nothing in this Plan is intended to be a substitute
for, or shall preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or fringe
benefits to employees generally, or to any class or group of employees, which
the Company or any Subsidiary or other affiliate now has or may hereafter
lawfully put into effect, including, without limitation, any retirement,
pension, group insurance, stock purchase, stock bonus, stock option or stock
incentive plan.
(g) Any provision of the Plan to the contrary
notwithstanding: (i) the Incentive Committee may impose such conditions on any
Option as such Committee may determine, on the advice of counsel, are necessary
or desirable to satisfy the provisions of Rule 16b-3; (ii) transactions by and
with respect to officers and directors of the Company who are subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended shall comply
with any applicable conditions of Rule 16b-3 unless the Incentive Committee
determines otherwise; (iii) transactions with respect to persons whose
remuneration is subject to the provisions of section 162(m) of the Code shall
conform to the requirements of section 162(m)(4)(C) of the Code unless the
Incentive Committee determines otherwise; (iv) Options are intended to qualify
as performance-based compensation under Code section 162(m)(4)(C); and (v) any
provision of the Plan that would frustrate the intention of the preceding
provisions of this paragraph shall be administered, interpreted and construed
to carry out such intention and any provision that cannot be so administered,
interpreted and construed shall to that extent be disregarded.
11. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors
upon the recommendation of the Incentive Committee, provided that, without the
approval of the stockholders of the Company, no amendment shall be made which
requires stockholder approval under Delaware law, Code section 162(m), Rule
16b-3, any securities exchange or system on which the Common Stock is then
listed or reported, or the laws, rules or regulations of any other regulatory
entity having jurisdiction with respect to the Plan.
(b) The Board of Directors may, by resolution adopted by
a majority of the entire Board of Directors, discontinue this Plan.
(c) No amendment or discontinuance of this Plan by the
Board of Directors or the stockholders of the Company shall, without the
consent of the optionee, adversely affect any Option theretofore granted to
him.
8
<PAGE> 32
OMNICARE, INC.
2800 CHEMED CENTER PLEASE MARK, SIGN, DATE AND
255 EAST FIFTH STREET RETURN PROXY CARD PROMPTLY
CINCINNATI, OHIO 45202-4728 USING THE ENCLOSED ENVELOPE.
- - -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS, MAY 15, 1995.
The undersigned hereby appoints E. L. Hutton, J. F. Gemunder and C. D. Hodges
as Proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of Omnicare, Inc. held of record by the undersigned as of April 3, 1995
at the Annual Meeting of Stockholders to be held on May 15, 1995, or at any
adjournment thereof.
ELECTION OF DIRECTORS
Nominees:
Edward L. Hutton J. Peter Grace Sheldon Margen, M.D.
Joel F. Gemunder Cheryl D. Hodges Kevin J. McNamara
Ronald K. Baur Thomas C. Hutton John M. Mount
Kenneth W. Chesterman Patrick E. Keefe Timothy S. O'Toole
Charles H. Erhart, Jr. Sandra E. Laney D. Walter Robbins, Jr.
Mary Lou Fox Andrea R. Lindell
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
(continued from other side)
(1) Election of Directors (see reverse)
<TABLE>
<S> <C> <C> <C>
____ FOR ALL NOMINEES ____ WITHHOLD ALL
listed (except those whose AUTHORITY to
names are inserted on the vote in the election
line to the right) of directors
---------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
(2) To adopt an amendment to the Company's Certificate
of Incorporation increasing the number of authorized
shares of Common Stock from 22,000,000 to 44,000,000.
--- --- ---
FOR AGAINST ABSTAIN
(3) To approve and adopt the 1995 Premium Stock Option Plan.
--- --- ---
FOR AGAINST ABSTAIN
(4) To ratify the selection of independent accountants.
--- --- ---
FOR AGAINST ABSTAIN
(5) In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before
the meeting.
</TABLE>
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS (1)(2)(3)(4)
AND (5).
When signed on behalf of a corporation,
partnership, estate, trust, or other
stockholder, state your title or
capacity or otherwise indicate that you
are authorized to sign.
DATED: _________________________, 1995
(Be sure to date Proxy)
SIGNED: _______________________________
<PAGE> 33
________________________________________
(Please sign exactly as name(s) appear
at left)
