<PAGE> 1
AS ELECTRONICALLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 26, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OMNICARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 31-1001351
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
2800 CHEMED CENTER, 255 EAST FIFTH STREET, CINCINNATI, OHIO 45202; (513)
762-6666
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
CHERYL D. HODGES, 2800 CHEMED CENTER, 255 E. FIFTH STREET
CINCINNATI, OHIO 45202; (513) 762-6666
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
<TABLE>
<S> <C>
Joseph M. Rigot Robert Rosenman
Thompson Hine & Flory P.L.L. Cravath, Swaine & Moore
312 Walnut Street, 14th Floor Worldwide Plaza, 825 Eighth Avenue
Cincinnati, Ohio 45202 New York, New York, 10019
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment, please check the following box: / /
If this Form is filed to register additional securities of an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock.................. 5,750,000 shares $44.875 $258,031,250 $88,977
- --------------------------------------------------------------------------------------------------
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</TABLE>
(1) Includes 750,000 shares subject to the over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average of the high and low
prices of the Common Stock reported on the New York Stock Exchange Composite
Tape on February 21, 1996.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This registration statement contains two forms of prospectus, one of which
is to be used in connection with an offering in the United States and Canada
(the "U.S. Prospectus"), and the other of which is to be used in connection with
a concurrent offering outside the United States and Canada (the "International
Prospectus"). The U.S. Prospectus and the International Prospectus are identical
except for the front and back cover pages, the inside front cover pages, the
text under the captions "Underwriting" and "Subscription and Sale" in the U.S.
Prospectus and the International Prospectus, respectively, the omission of the
caption "Notice to Canadian Residents" and the text thereunder in the
International Prospectus, the omission of the caption "Certain United States
Federal Tax Consequences to Non-U.S. Holders" and the text thereunder in the
U.S. Prospectus, and certain cross references relating to such sections. The
form of the U.S. Prospectus is included herein and is followed by those pages to
be used in the International Prospectus which differ from those in the U.S.
Prospectus. Each of the pages for the International Prospectus included herein
is labeled "I-." Final forms of such prospectuses will be filed with the
Securities and Exchange Commission pursuant to Rule 424(b), if necessary.
i
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 26, 1996
5,000,000 Shares
LOGO
Common Stock
($1 par value)
------------------
Of the 5,000,000 shares being offered, 4,000,000 shares are initially being
offered in the United States and Canada (the "U.S. Shares") by the U.S.
Underwriters (the "U.S. Offering") and 1,000,000 shares are initially
being concurrently offered outside the United States and Canada (the
"International Shares") by the Managers (the "International
Offering" and, together with the U.S. Offering, the
"Offerings"). The offering price and underwriting discounts
and commissions of the U.S. Offering and the International
Offering are identical. On February 23, 1996, the
reported last sale price of the Common Stock on the
New York Stock Exchange Composite Tape was
$46 1/2 per share.
------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE
COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 5.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Company(1)
---------------------------------------
<S> <C> <C> <C>
Per Share.............................................. $ $ $
Total(2).............................................. $ $ $
</TABLE>
(1) Before deduction of expenses payable by the Company estimated at
$ .
(2) The Company has granted the U.S. Underwriters and the Managers an option,
exercisable by CS First Boston Corporation for 30 days from the date of this
Prospectus, to purchase a maximum of 750,000 additional shares solely to
cover over-allotment of shares. If the option is exercised in full, the
total Price to Public will be $ , Underwriting Discounts and
Commissions will be $ and Proceeds to Company will be
$ . See "Underwriting."
------------------
The U.S. Shares are offered by the several U.S. Underwriters when, as and
if delivered to and accepted by the U.S. Underwriters and subject to their right
to reject orders in whole or in part. It is expected that the U.S. Shares will
be ready for delivery on or about March , 1996.
CS First Boston
Montgomery Securities
William Blair & Company
PaineWebber Incorporated
Smith Barney Inc.
The date of this Prospectus is , 1996.
<PAGE> 4
IN CONNECTION WITH THE OFFERINGS, CS FIRST BOSTON CORPORATION ON BEHALF OF
THE U.S. UNDERWRITERS AND THE MANAGERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DURING THE OFFERINGS, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES 10B-6,
10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
AVAILABLE INFORMATION
Omnicare, Inc. ("Omnicare" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
These reports, proxy statements and other information may be inspected and
copied at the public reference facilities maintained by the commission at its
principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials also can
be obtained from the Public Reference Section of the Commission at prescribed
rates at the principal offices of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Common Stock is listed on the New York
Stock Exchange (Symbol: OCR) and reports and information concerning the Company
can be inspected at such exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933 (the "Act") with respect to the shares of
Common Stock offered hereby (including all amendments and supplements thereto,
the "Registration Statement"). This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits filed therewith, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of such
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference. The Registration Statement and the exhibits thereto
can be inspected and copied at the public reference facilities and regional
offices referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates into this Prospectus by reference the
following documents heretofore filed with the Commission pursuant to the
Exchange Act: (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as amended by the Company's Form 10-K/A-1 filed August 23,
1995; (ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995, and September 30, 1995; and (iii) the Company's
Current Reports on Form 8-K filed on August 23, 1995 and February 26, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
termination of the Offerings shall be deemed to be incorporated in this
Prospectus by reference and to be part hereof from the respective dates of the
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is,
or is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically incorporated by
reference into such documents. Requests for such copies should be directed to
Cheryl D. Hodges, Secretary, Omnicare, Inc., 2800 Chemed Center, 255 East Fifth
Street, Cincinnati, Ohio 45202-4728, or telephone (513) 762-6666.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. Except as otherwise noted, the information in this
Prospectus (i) assumes no exercise of the over-allotment option granted to the
U.S. Underwriters and Managers and (ii) gives effect for all periods to a
two-for-one stock split distributed on June 21, 1995. See "Underwriting."
THE COMPANY
General. Omnicare is a leading independent provider of pharmacy services
to long-term care institutions such as nursing homes, retirement centers and
other institutional health care facilities. The Company purchases, repackages
and dispenses pharmaceuticals, both prescription and non-prescription, and
provides computerized medical recordkeeping and third-party billing for patients
in such facilities. The Company also provides consultant pharmacists services,
including evaluating monthly patient drug therapy, monitoring the control,
distribution and administration of drugs within the nursing facility and
assisting in compliance with state and federal regulations. In addition, the
Company provides ancillary services, such as infusion therapy, and distributes
medical supplies to its client nursing facilities. The Company provides these
services to approximately 225,000 residents in approximately 2,600 nursing homes
and other long-term care facilities principally in the states of Alabama,
Connecticut, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts,
Michigan, Missouri, New York, North Carolina, Ohio, Oklahoma, Oregon, South
Carolina, Virginia, Washington and West Virginia.
Institutional Pharmacy Industry. The U.S. market for pharmacy services in
long-term care facilities is estimated by the Company to total approximately $4
billion (including consulting services and related supplies) and is highly
fragmented. The Company believes that the long-term care institutional pharmacy
industry will benefit from the rapid growth of the elderly population in the
U.S., the continued utilization of pharmaceuticals as the most cost-efficient
means of treating chronic ailments which afflict the elderly and the trend
toward delivering care in the lowest cost setting. Moreover, nursing homes
increasingly seek specialized pharmacy providers with trained consultant
pharmacists and computerized documentation programs to help ensure compliance
with increasing federal and state regulatory requirements.
Business Strategy for Growth. Recognizing these factors, along with the
fragmented nature of the long-term care pharmacy industry, the Company initiated
its pharmacy business in December 1988 following the acquisition of its first
institutional pharmacy provider. Since that time, the Company has been building
its institutional pharmacy business into a national organization dedicated to
serving the long-term care market in a cost-effective manner. The Company's
strategy combines an acquisition program with the development and support of
internal growth in the businesses acquired. Through December 31, 1995, the
Company made 33 acquisitions in the institutional pharmacy market for a total
capital investment of approximately $290 million. Since December 31, 1995, the
Company has completed four additional acquisitions for a total capital
investment of approximately $12 million. In addition, the Company has entered
into letters of intent for the acquisition of two additional institutional
pharmacy businesses. If such transactions are completed, the aggregate cost to
the Company is currently estimated to be approximately $41 million. The Company
also seeks to achieve strong internal growth through increased market
penetration, expansion of services and improved operating efficiencies. The
total number of nursing home residents served by the Company on February 23,
1996, was approximately 225,000, up 47% since February 23, 1995. This increase
reflects acquisitions as well as internal growth.
The Company believes that the changes that have occurred in the health care
industry in recent years have emphasized the objective of providing high quality
services at the lowest cost. As a result of its growth strategy, the Company has
addressed this objective, developing the critical mass necessary for realizing
economies of scale, establishing a national market position, becoming a low cost
provider and positioning the Company to address the needs of the health care
industry as regulatory changes take place. For example, recognizing that a drug
formulary should not only recommend lower cost alternatives for frequently
prescribed medications, but also address the clinical effectiveness of drug
therapy, in June 1994 the Company introduced
3
<PAGE> 6
its proprietary formulary, the OMNICARE GERIATRIC PHARMACEUTICAL CARE
GUIDELINES(TM) (the "OMNICARE GUIDELINES"). The Company believes that the
OMNICARE GUIDELINES is the first clinically based formulary for elderly
residents of long-term care institutions. The Company believes that since its
implementation the OMNICARE GUIDELINES has generated significant cost savings
for payors and provided improved clinical outcomes for the nursing facility
residents served.
The Company's executive offices are located at 2800 Chemed Center, 255 East
Fifth Street, Cincinnati, Ohio 45202-4728, and its telephone number is (513)
762-6666.
THE OFFERINGS
<TABLE>
<S> <C> <C>
Common Stock Offered
U.S. Offering................... 4,000,000 shares
International Offering.......... 1,000,000 shares
---------
Total........................... 5,000,000 shares
=========
Common Stock Outstanding
Pre-Offerings................... 26,545,284 shares
Post-Offerings.................. 31,545,284 shares
Use of Proceeds...................... The net proceeds of the Offerings will be used to
fund
business acquisitions and for general corporate
purposes. See "Use of Proceeds."
NYSE Symbol.......................... OCR
</TABLE>
4
<PAGE> 7
RISK FACTORS
Prospective investors should carefully consider the following matters,
together with the other information contained in this Prospectus, in evaluating
the Company and its business before making an investment decision with respect
to the Common Stock offered hereby.
Acquisition Program. In accordance with its strategy for growth, which is
to build its institutional pharmacy business into a national organization
dedicated to serving the long-term care market, Omnicare is presently engaged in
a geographic expansion program which incorporates an active acquisition program
in the long-term care pharmacy industry. The success of Omnicare's acquisition
program and of its underlying growth strategy will depend, among other things,
on the continued availability of suitable acquisition candidates. Although there
presently are numerous acquisition candidates nationwide and Omnicare to date
has not had difficulty in identifying suitable acquisition candidates, there can
be no assurance that Omnicare will consummate any additional acquisitions due to
the potential for increased competition for acquisitions from other firms
seeking to enter this market or to enhance their institutional pharmacy
businesses.
The Company's strategy also contemplates the continued internal growth of
the acquired businesses. Any business acquisition, however, involves inherent
uncertainties, such as the effect on the acquired businesses of integration into
a larger organization and the availability of management resources to oversee
the operations of acquired businesses. Even though an acquired business may have
enjoyed excellent growth as an independent company prior to the acquisition,
there can be no assurance that such growth would continue thereafter.
Regulation and Reimbursement. Omnicare's pharmacy business is subject to
federal, state and local regulations, and its pharmacies are required to be
licensed in the states in which they are located. The failure to obtain or renew
any required regulatory approvals or licenses could adversely affect the
continued operation of Omnicare's business. In addition, the long-term care
facilities that contract for Omnicare's services are also subject to federal,
state and local regulations and are required to be licensed in the states in
which they are located. The failure by these institutions to comply with such
regulations or to obtain or renew any required licenses could result in the loss
of the Company's ability to provide pharmacy services to their residents. The
Company is also subject to federal and state laws that prohibit certain direct
and indirect payments between health care providers that are intended, among
other things, to induce or encourage the referral of patients to, or the
recommendation of, a particular provider of items or services. Violation of
these laws can result in loss of licensure, civil and criminal penalties and
exclusion from the Medicare and Medicaid programs.
Approximately one-half of Omnicare's pharmacy services billings are
reimbursed by government sponsored programs, largely Medicaid and to a lesser
extent Medicare, and the remainder is paid or reimbursed by individual patients,
long-term care facilities and other third party payers, including private
insurers. Medicaid and Medicare are highly regulated. The failure, even if
inadvertent, of Omnicare and/or its client institutions to comply with
applicable reimbursement regulations could adversely affect Omnicare's business.
Additionally, changes in such reimbursement programs or in regulations related
thereto, such as reductions in the allowable reimbursement levels, modifications
in the timing or processing of payments and other changes intended to limit or
decrease the growth of Medicaid and Medicare expenditures, could adversely
affect the Company's business. See "Business--Government Regulation."
Health Care Reform and Federal Budget Legislation. In recent years, a
number of legislative proposals have been introduced in Congress that would
effect major changes in the health care system, either nationally or at the
state level. Currently, Congress is considering various initiatives to establish
a framework for balancing the federal budget. While President Clinton vetoed the
budget bill passed by Congress in November 1995, many of the budget reduction
proposals may still become part of final budget reconciliation legislation. The
bill passed by Congress would have resulted in significant reductions in
payments to providers under the Medicare program and a major restructuring of
the current Medicaid program. With respect to Medicare, proposals included
establishment of a prospective payment system for skilled nursing facilities
("SNFs"); limits on payments to Medicare SNFs for certain non-routine services,
including, among others, prescription drugs, diagnostic services, and physical
therapy and other rehabilitative services; requiring consolidated billing by a
SNF for all Part A and B claims for SNF residents; and other limits on
reimbursement of costs for Medicare SNF services.
5
<PAGE> 8
The budget legislation would have also replaced the current Medicaid
program with a new "MediGrant" program involving federal block grants to states
for medical assistance provided to low income individuals. While the states
would be subject to certain federal requirements, states would also have broad
flexibility to establish coverage, eligibility and payment standards. Given the
fixed federal funds that would be available under this Medicaid reform proposal,
there can be no assurance that, if enacted, this or any Medicaid reform proposal
would not have a material adverse effect on the business of Omnicare. While
budget negotiations are continuing, the Company cannot predict when, or whether,
such legislation will be enacted. In addition, several states are considering or
have enacted various health care reforms, including reforms through Medicaid
managed care demonstration projects. Several states in which the Company
operates have applied for, or received, approval from the Department of Health
and Human Services ("HHS") for waivers from certain Medicaid requirements, which
are generally required for such managed care projects. Although these
demonstration projects generally exempt institutional care, including nursing
facility and institutional pharmacy services, no assurances can be given that
these waiver projects ultimately will not change the reimbursement system for
long-term care, including pharmacy services, from fee-for-service to managed
care negotiated or capitated rates. It is not possible to predict the effect of
recent reforms of the health care system on Omnicare's business or the prospects
for or effects of additional reforms. See "Business--Government Regulation."
USE OF PROCEEDS
The net proceeds to the Company from the Offerings are estimated to be
approximately $ (or approximately $ if the over-allotment
option granted to the U.S. Underwriters and the Managers is exercised in full)
after deduction of underwriting discounts and estimated offering expenses. Such
net proceeds will be used to fund business acquisitions and for general
corporate purposes. Pending application, the net proceeds will be invested in
interest-bearing securities with maturity dates of less than one year or money
market funds.
Omnicare is engaged in an ongoing program of acquiring institutional
pharmacy businesses in selected markets throughout the United States. The
Company is in various stages of discussions with potential acquisition
candidates and has entered into letters of intent for the acquisition of two
institutional pharmacy businesses. There can be no assurance that these or any
other potential acquisitions in fact will be consummated.
6
<PAGE> 9
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is traded on the New York Stock Exchange under the symbol
OCR. The table below sets forth the high and low closing prices of the Common
Stock as reported on the New York Stock Exchange Composite Tape as reported in
The Wall Street Journal and quarterly cash dividends declared per share of
Common Stock during the periods indicated. For a recent closing price of the
Common Stock, see the cover page of this Prospectus.
<TABLE>
<CAPTION>
PRICE RANGE CASH
----------------------- DIVIDENDS
LOW HIGH DECLARED
------- ------- ---------
<S> <C> <C> <C>
1993
First Quarter ended March 31, 1993................ $ 8.69 $ 15.50 $.020
Second Quarter ended June 30, 1993................ 7.00 9.69 .020
Third Quarter ended September 30, 1993............ 9.00 12.07 .020
Fourth Quarter ended December 31, 1993............ 11.07 16.07 .020
1994
First Quarter ended March 31, 1994................ 14.50 17.50 .0225
Second Quarter ended June 30, 1994................ 13.50 17.07 .0225
Third Quarter ended September 30, 1994............ 16.82 20.07 .0225
Fourth Quarter ended December 31, 1994............ 18.25 22.56 .0225
1995
First Quarter ended March 31, 1995................ 20.63 26.69 .025
Second Quarter ended June 30, 1995................ 22.44 28.13 .025
Third Quarter ended September 30, 1995............ 26.88 39.00 .025
Fourth Quarter ended December 31, 1995............ 34.13 44.75 .025
1996
First Quarter (through February 23, 1996)......... 39.38 47.38 .030
</TABLE>
The Company has paid quarterly dividends since March 2, 1989. On February
7, 1996, Omnicare's Board of Directors elected to increase the quarterly cash
dividend by 20% to $.03 per share. Future dividend policy will depend on the
Company's earnings, capital requirements, financial condition and other factors
considered relevant by the Company's Board of Directors. As of January 31, 1996,
there were 1,827 holders of record of the Common Stock.
7
<PAGE> 10
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at December 31, 1995, and as adjusted to reflect the issuance and sale
by the Company of 5,000,000 shares of Common Stock in the Offerings.
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-------------------------
AS
ACTUAL ADJUSTED
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt................................ $ 1,051 $
-------- --------
Long-term obligations, net of current portion:
Revolving Bank Loan (a) -- --
5 3/4% Convertible Subordinated Notes due 2003.............. 80,445
Other (primarily ESOP loan guaranty)........................ 2,247
-------- --------
Total long-term obligations............................ 82,692
-------- --------
Stockholders' equity:
Common Stock, $1 par value, 44,000,000 shares authorized,
26,344,588 shares issued as of December 31, 1995 (b), and
31,344,588 shares as adjusted............................. 26,345
Additional paid-in capital.................................. 99,686
Retained earnings........................................... 93,598
Treasury stock -- at cost (24,268 shares)........................ (482)
Deferred Compensation and ESOP................................... (4,386)
-------- --------
Total stockholders' equity.................................. 214,761
-------- --------
Total capitalization........................................ $298,504
======== ========
</TABLE>
- ---------------
(a) The Company has a $135 million unsecured revolving credit agreement with six
banks that expires on March 31, 2000. The Company is required to pay a
commitment fee on the unused portion of such facility ranging from 10 to 25
basis points, based upon the Company's level of performance under certain
debt covenants. No amounts were outstanding at December 31, 1995 under the
credit facility.
(b) Excludes 1,636,886 shares of Common Stock issuable upon the exercise of
outstanding stock options and stock warrants as of December 31, 1995.
8
<PAGE> 11
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data as of and for each of the years in
the three-year period ended December 31, 1995, have been derived from and should
be read in conjunction with the related consolidated financial statements and
notes thereto contained in the Company's Current Report on Form 8-K, filed
February 26, 1996 and incorporated herein by reference. The information below
should also be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" herein.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INCOME STATEMENT DATA: (A)
Sales............................................ $399,636 $307,655 $223,129
Cost of sales.................................... 287,715 227,533 165,714
-------- -------- --------
Gross profit..................................... 111,921 80,122 57,415
Selling, general and administrative expenses..... 66,970 50,111 38,243
Acquisition expenses - pooling of interests...... 1,292(b) 2,380(c) --
-------- -------- --------
Operating income................................. $ 43,659 $ 27,631 $ 19,172
======== ======== ========
Income before accounting change.................. $ 24,760(b) $ 13,531(c) $ 10,970(d)
Accounting change................................ -- -- 280(e)
-------- -------- --------
Net income....................................... $ 24,760(b) $ 13,531(c) $ 11,250(d)
======== ======== ========
Earnings per share:
Primary:
Income before accounting change........ $ .94(b) $ .60(c) $ .52(d)
Accounting change...................... -- -- .01(e)
-------- -------- --------
Net income............................. $ .94(b) $ .60(c) $ .53(d)
======== ======== ========
Fully Diluted............................... $ .86(b) $ .59(c) $ .53(d)
======== ======== ========
Dividends per share.............................. $ .10 $ .09 $ .08
======== ======== ========
Weighted average number of common shares
outstanding
Primary..................................... 26,198 22,479 21,253
Fully Diluted............................... 32,642 28,429 22,861
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, 1995
-------------------------
AS
ACTUAL ADJUSTED
-------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.................................. $106,384 $
Total assets..................................... 360,836
Long-term debt................................... 82,692
Stockholders' equity............................. 214,761
</TABLE>
- ---------------
(a) Includes operating results for all periods of Evergreen Pharmaceutical, Inc.
and an affiliated company (collectively, "Evergreen") and Specialized
Pharmacy Services, Inc. ("Specialized"), which were acquired on September
30, 1994 and June 30, 1995, respectively, in pooling of interests
transactions. As required by the accounting rules for pooling of interests
transactions, the expenses associated with these transactions were charged
to operating income upon completion of the acquisitions. See footnotes (b)
and (c).
(b) Includes pooling of interests expenses of $1,292,000 relating to the
Specialized transaction. Such expenses, on an aftertax basis, were $989,000,
or $.04 per primary share ($.03 on a fully diluted basis). Net income,
excluding pooling of interests expenses, for the year ended December 31,
1995 was $25,749,000, or $.98 per primary share ($.89 on a fully diluted
basis).
(c) Includes pooling of interests expenses of $2,380,000 relating to the
Evergreen transaction. Such expenses, on an aftertax basis, were $1,860,000,
or $.08 per primary share ($.07 on a fully diluted basis). Net income,
excluding pooling of interests expenses, for the year ended December 31,
1994 was $15,391,000, or $.68 per primary share ($.66 on a fully diluted
basis).
(d) Includes a one-time cumulative tax benefit of $450,000, or $.02 per share,
arising from a change in tax laws enacted in August 1993 relating to
amortization of intangibles.
(e) Aftertax gain representing the cumulative effect of a change in accounting
for income taxes.
9
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
On June 30, 1995, the Company issued 403,185 shares of its Common Stock for
all the outstanding common stock of Specialized. Specialized is a leading
provider of institutional pharmacy services for long-term care facilities in
Michigan with $32 million in sales for the year ended December 31, 1994. On
September 30, 1994, the Company issued 2,222,644 shares of its Common Stock for
all the outstanding common stock of Evergreen. Evergreen had $34 million in
sales for the year ended December 31, 1993. These acquisitions were accounted
for as poolings of interests and, accordingly, the Company's consolidated
financial statements have been restated for all periods to include the results
of operations, financial position and cash flow of Specialized and Evergreen. In
accordance with accounting rules for pooling of interests transactions, charges
to operating income for acquisition-related expenses were recorded upon
completion of these acquisitions. These pooling of interests expenses totaled
$1,292,000, or $989,000 after taxes, for the Specialized acquisition and
$2,380,000, or $1,860,000 after taxes, for the Evergreen acquisition.
The following table presents the Company's results of operations excluding
certain unusual items of income and expense, which are comprised of pooling of
interests expenses, the cumulative effect of an accounting change and a one-time
favorable tax adjustment (in thousands except per share amounts):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Net income, as reported............................... $24,760 $13,531 $11,250
Acquisition expenses-pooling of interests, net of
taxes............................................... 989 1,860 --
Cumulative effect of accounting change................ -- -- (280)
Favorable tax adjustment.............................. -- -- (450)
------- ------- -------
Pro forma net income.................................. $25,749 $15,391 $10,520
======= ======= =======
Pro forma earnings per share:
Net income, as reported............................... $.94 $.60 $ .53
Acquisition expenses-pooling of interests, net of
taxes............................................... .04 .08 --
Cumulative effect of accounting change................ -- -- (.01)
Favorable tax adjustment.............................. -- -- (.02)
------- ------- -------
Primary............................................. $.98 $.68 $ .50
======= ======= =======
Fully diluted....................................... $.89 $.66 $ .50
======= ======= =======
</TABLE>
Excluding the impact of charges taken for acquisitions accounted for as
pooling of interests transactions, net income for the year ended December 31,
1995 increased 67% over net income earned in 1994. Primary earnings per share,
on this basis, for the full year 1995 increased 44% over 1994, and fully diluted
earnings per share increased 35%.
Pro forma net income for the year ended December 31, 1994 increased 46%
over 1993. Primary earnings per share, on a pro forma basis, increased 36% over
1993, and fully diluted earnings per share increased 32%. The 1994 pro forma
adjustment consisted of the Evergreen pooling of interests expenses. The 1993
pro forma adjustments were comprised of $450,000 arising from a change in tax
laws related to the amortization of intangibles and $280,000 related to the
change in accounting for income taxes.
Net income as reported for 1995 was $24,760,000, or $.94 per primary share
($.86 fully diluted), while 1994 net income was $13,531,000, or $.60 per primary
share ($.59 fully diluted), and 1993 net income was $11,250,000, or $.53 per
primary and fully diluted share.
10
<PAGE> 13
Sales for 1995 were 30% higher than in 1994. For 1994, sales were 38%
higher than in 1993. Omnicare entered the long-term pharmacy business with its
first acquisition of an institutional pharmacy provider in December 1988.
Omnicare has completed a total of thirty-three institutional pharmacy provider
acquisitions -- one in 1988, two in 1990, three in 1991, seven in 1992, four in
1993, seven in 1994 and nine in 1995. Except for the acquisitions of
Specialized, Evergreen and Lo-Med Prescription Services, Inc. ("Lo-Med"),
purchase accounting was used to record the acquisitions. The acquisitions of
Specialized and Evergreen are included in the financial results of all years
presented as these acquisitions were accounted for as poolings of interests. The
acquisition of Lo-Med in 1994 was also accounted for as a pooling of interests;
however, its operations were immaterial to the Company's results prior to 1994
and, therefore, prior year financial statements were not restated for this
business combination. Sales increases were caused by acquisitions, coupled with
the internal growth of the businesses previously acquired.
Increases in gross profit over the three-year period have generally
remained in line with or exceeded increases in sales, with margins of 25.7%,
26.0% and 28.0% for 1993, 1994 and 1995, respectively. Such increases were
caused primarily by changes in sales mix and the Company's increasing purchasing
leverage. Additionally, after excluding the aforementioned pro forma
adjustments, operating income as a percent of sales has increased from 8.6% to
9.8% to 11.2% in 1993, 1994 and 1995, respectively, reflecting the increased
gross profit margins.
NON-OPERATING INCOME AND EXPENSE
Investment income increased by 120% to $3,475,000 in 1995, as the Company
received the full-year benefit of invested cash during 1995 due to receipt of
$59.2 million of cash proceeds from the November 1994 stock offering. Investment
income increased by 149% to $1,580,000 in 1994 from $635,000 in 1993 due to the
increase in invested cash during 1994 resulting from the cash proceeds from the
October 1993 offering of $80.5 million in 5.75% Convertible Subordinated Notes
due 2003 (the "Notes").
Interest expense decreased by 9% from $6,533,000 in 1994 to $5,954,000 in
1995, due to reductions in outstanding debt associated with Specialized and
Evergreen prior to acquisition by the Company. Interest expense increased by
$3,709,000 in 1994 as a result of a full year's interest on the Notes as
compared to only three months in 1993.
INCOME TAXES
The Company's effective tax rates for 1993, 1994 and 1995 were 35.4%, 40.3%
and 39.9%, respectively. The 1995 and 1994 effective tax rates are slightly
higher than statutory rates due to the nondeductibility of certain acquisition
costs. As a result of the Omnibus Budget Reconciliation Act of 1993, the Company
was permitted to deduct from taxable income amortization of intangibles arising
from certain business acquisitions retroactive to July 1991. Accordingly, the
Company's effective tax rate in 1993 was favorably impacted by the tax benefit
of amortization of intangibles.
LIQUIDITY AND CAPITAL RESOURCES
In November 1994, the Company completed a public offering of 3,247,482
shares of Common Stock, resulting in net proceeds of $59,211,000.
In line with Omnicare's plan to invest in the long-term pharmacy market,
acquisitions completed during 1995 required an aggregate capital investment of
approximately $63.7 million. Such acquisitions were financed with cash and cash
equivalents on hand as well as Common Stock of the Company. Shares of Common
Stock with a market value of approximately $22.7 million (879,919 shares) were
issued in connection with 1995 acquisitions. Additionally, $10.6 million of
other acquisition-related payments were made during 1995 related to businesses
acquired prior to 1995. Additional amounts totaling $11.2 million may become
payable through the year 2000 pursuant to the terms of various acquisition
agreements. Omnicare ended the year with $40,137,000 in cash and cash
equivalents and marketable securities as compared to $79,798,000 at year-end
1994. At December 31, 1995, the Company had invested $32,522,000 in U.S.
Treasury-backed repurchase agreements which represent investments under
agreements to resell, usually overnight, but in no case greater
11
<PAGE> 14
than 30 days. The Company has a collateralized interest in the underlying
securities which are segregated in the accounts of the counterparty bank.
Management believes these investments do not create any exposure to the
Company's liquidity. Omnicare's current ratio decreased to 2.9 to 1 at December
31, 1995 from 3.8 to 1 at December 31, 1994, and working capital at December 31,
1995 decreased to $106,384,000 from year-end 1994 working capital of
$125,550,000. This decrease is attributable to the cash outlays required for the
Company's 1995 acquisitions net of cash generated from 1995 operations. Book
value per common share increased to $8.16 per share as of December 31, 1995 from
$7.01 per share at the prior year-end, primarily attributable to current year
net income, less dividends paid.
On February 7, 1996, Omnicare's Board of Directors elected to increase the
quarterly cash dividend by 20% to 3 cents per share for an indicated annual rate
of 12 cents per share for 1996.
In February 1995, the Company entered into an agreement with a consortium
of six banks for a five-year $135 million revolving credit facility, replacing
the prior $50 million facility. Interest rates and commitment fees for this new
facility are based on the Company's level of performance under certain debt
covenants. No amounts were outstanding at December 31, 1995 under the credit
facility.
The Company believes that its sources of liquidity and capital are adequate
for its operating needs. There are no material commitments outstanding, other
than additional acquisition-related payments to be made. The Company believes
that the net proceeds of the Offerings, together with amounts available under
its credit facility, are sufficient to fund its current acquisition program.
12
<PAGE> 15
BUSINESS
General. Omnicare is a leading independent provider of pharmacy services
to long-term care institutions such as nursing homes, retirement centers and
other institutional health care facilities. The Company purchases, repackages
and dispenses pharmaceuticals, both prescription and non-prescription, and
provides computerized medical recordkeeping and third-party billing for patients
in such facilities. The Company also provides consultant pharmacists services,
including evaluating monthly patient drug therapy, monitoring the control,
distribution and administration of drugs within the nursing facility and
assisting in compliance with state and federal regulations. In addition, the
Company provides ancillary services, such as infusion therapy, and distributes
medical supplies to its client nursing facilities. The Company provides these
services to approximately 225,000 residents in approximately 2,600 nursing homes
and other long-term care facilities principally in the states of Alabama,
Connecticut, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts,
Michigan, Missouri, New York, North Carolina, Ohio, Oklahoma, Oregon, South
Carolina, Virginia, Washington and West Virginia.
Institutional Pharmacy Industry. The U.S. market for pharmacy services in
long-term care facilities is estimated by the Company to total approximately $4
billion (including consulting services and related supplies) and is highly
fragmented. The Company believes that the long-term care institutional pharmacy
industry will benefit from the rapid growth of the elderly population in the
U.S., the continued utilization of pharmaceuticals as the most cost-efficient
means of treating chronic ailments which afflict the elderly and the trend
toward delivering care in the lowest cost setting. Moreover, nursing homes
increasingly seek specialized pharmacy providers with trained consultant
pharmacists and computerized documentation programs to help ensure compliance
with increasing federal and state regulatory requirements.
Business Strategy for Growth. Recognizing these factors, along with the
fragmented nature of the long-term care pharmacy industry, the Company initiated
its pharmacy business in December 1988 following the acquisition of its first
institutional pharmacy provider. Since that time, the Company has been building
its institutional pharmacy business into a national organization dedicated to
serving the long-term care market in a cost-effective manner. The Company's
strategy combines an acquisition program with the development and support of
internal growth in the businesses acquired. Through December 31, 1995, the
Company made 33 acquisitions in the institutional pharmacy market for a total
capital investment of approximately $290 million. Since December 31, 1995, the
Company has completed four additional acquisitions for a total capital
investment of approximately $12 million. In addition, the Company has entered
into letters of intent for the acquisition of two additional institutional
pharmacy businesses. If such transactions are completed, the aggregate cost to
the Company is currently estimated to be approximately $41 million. The Company
also seeks to achieve strong internal growth through increased market
penetration, expansion of services and improved operating efficiencies. The
total number of nursing home residents served by the Company on February 23,
1996, was approximately 225,000, up 47% since February 23, 1995. This increase
reflects acquisitions as well as internal growth.
The Company believes that the changes that have occurred in the health care
industry in recent years have emphasized the objective of providing high quality
services at the lowest cost. As a result of its growth strategy, the Company has
addressed this objective, developing the critical mass necessary for realizing
economies of scale, establishing a national market position, becoming a low cost
provider and positioning the Company to address the needs of the health care
industry as regulatory changes take place. For example, recognizing that a drug
formulary should not only recommend lower cost alternatives for frequently
prescribed medications, but also address the clinical effectiveness of drug
therapy, in June 1994 the Company introduced its proprietary formulary, the
OMNICARE GUIDELINES. The Company believes that the OMNICARE GUIDELINES is the
first clinically based formulary for elderly residents of long-term care
institutions. The Company believes that since its implementation the OMNICARE
GUIDELINES has generated significant cost savings for payors and provided
improved clinical outcomes for the nursing facility residents served.
13
<PAGE> 16
GOVERNMENT REGULATION
Institutional pharmacies, as well as the long-term care facilities they
serve, are subject to extensive federal, state and local regulation. These
regulations cover required qualifications, day-to-day operations, reimbursement
and the documentation of activities. Omnicare continuously monitors the effects
of regulatory activity on its operations.
Licensure, Certification and Regulation. States generally require that
companies operating a pharmacy within the state be licensed by the state board
of pharmacy. The Company currently has pharmacy licenses in each of the 19
states in which it operates a pharmacy. In addition, the Company currently
delivers prescription products from its licensed pharmacies to 5 states in which
the Company does not operate a pharmacy. These states regulate out-of-state
pharmacies, however, as a condition to the delivery of prescription products to
patients in such states. Omnicare's pharmacies hold the requisite licenses
applicable in these states. In addition, Omnicare's pharmacies are registered
with the appropriate state and federal authorities pursuant to statutes
governing the regulation of controlled substances.
Client nursing facilities are also separately required to be licensed in
the states in which they operate and, if serving Medicare or Medicaid patients,
must be certified to be in compliance with applicable program participation
requirements. Client nursing facilities are also subject to the nursing home
reforms of the Omnibus Budget Reconciliation Act of 1987, which imposed strict
compliance standards relating to quality of care for nursing home operations,
including vastly increased documentation and reporting requirements. In
addition, pharmacists, nurses and other health care professionals who provide
services on the Company's behalf are in most cases required to obtain and
maintain professional licenses and are subject to state regulation regarding
professional standards of conduct.
Federal and State Laws Affecting the Repacking, Labelling, and Interstate
Shipping of Drugs. Federal and state laws impose certain repackaging,
labelling, and package insert requirements on pharmacies that repackage drugs
for distribution beyond the regular practice of dispensing or selling drugs
directly to patients at retail. A drug repackager must register with the Food
and Drug Administration. The Company holds all required registrations and
licenses, and its repackaging operations are in compliance with applicable state
and federal requirements.
Medicare and Medicaid. The nursing home pharmacy business has long
operated under regulatory and cost containment pressures from state and federal
legislation primarily affecting Medicaid and, to a lesser extent, Medicare.
As is the case for nursing home services generally, Omnicare receives
reimbursement from the Medicaid and Medicare programs, directly from individual
residents (private pay), and from other payors such as third-party insurers. The
Company believes that its reimbursement mix is in line with nursing home
expenditures nationally. For the year ended December 31, 1995, Omnicare's payor
mix was approximately as follows: 53% private pay and nursing homes, 42%
Medicaid, 4% Medicare and 1% insurance and other private sources.
For those patients who are not covered by government-sponsored programs or
private insurance, Omnicare generally directly bills the patient or the
patient's responsible party on a monthly basis. Depending upon local market
prices, Omnicare may alternatively bill private patients through the nursing
facility. Pricing for private pay patients is based on prevailing regional
market rates or "usual and customary" charges.
The Medicaid program is a cooperative federal-state program designed to
enable states to provide medical assistance to aged, blind, or disabled
individuals, or members of families with dependent children whose income and
resources are insufficient to meet the costs of necessary medical services.
State participation in the Medicaid program is voluntary. To become eligible to
receive federal funds, a state must submit a Medicaid "state plan" to the
Secretary of the Department of Health and Human Services ("HHS") for approval.
The federal Medicaid statute specifies a variety of requirements which the state
plan must meet, including requirements relating to eligibility, coverage of
services, payment and administration.
14
<PAGE> 17
Federal law and regulations contain a variety of requirements relating to
the furnishing of prescription drugs under Medicaid. First, states are given
broad authority, subject to certain standards, to limit or specify conditions to
the coverage of particular drugs.
Second, federal Medicaid law establishes standards affecting pharmacy
practice. These standards include general requirements relating to patient
counseling and drug utilization review and more specific requirements for
nursing facilities relating to drug regimen reviews for Medicaid patients in
such facilities. Recent regulations clarify that, under federal law, a pharmacy
is not required to meet the general standards for drugs dispensed to nursing
facility residents if the nursing facility complies with the drug regimen review
requirements. However, the regulations indicate that states may nevertheless
require pharmacies to comply with the general standards, regardless of whether
the nursing facility satisfies the drug regimen review requirement, and the
states in which the Company operates currently do require its pharmacies to
comply therewith.
Third, federal regulations impose certain requirements relating to
reimbursement for prescription drugs furnished to Medicaid patients.
In addition to requirements imposed by federal law, states have substantial
discretion to determine administrative, coverage, eligibility and payment
policies under their state Medicaid programs which may affect the Company's
operations. For example, some states have enacted "freedom of choice"
requirements which may prohibit a nursing facility from requiring its residents
to purchase pharmacy or other ancillary medical services or supplies from
particular providers that deal with the nursing home. Such limitations may
increase the competition which the Company faces in providing services to
nursing facility patients.
The Medicare program is a federally funded and administered health
insurance program for individuals age 65 and over or who are disabled. The
Medicare program consists of two parts: Part A, which covers, among other
things, inpatient hospital, skilled nursing facility, home health care and
certain other types of health care services; and Medicare Part B, which covers
physicians' services, outpatient services, and certain items and services
provided by medical suppliers. Medicare Part B also covers a limited number of
specifically designated prescription drugs. The Medicare program establishes
certain requirements for participation of providers and suppliers in the
Medicare program. Pharmacies are not subject to such certification requirements.
Skilled nursing facilities and suppliers of medical equipment and supplies,
however, are subject to specified standards. Failure to comply with these
requirements and standards may adversely affect an entity's ability to
participate in the Medicare program and receive reimbursement for services
provided to Medicare beneficiaries.
The Medicare and Medicaid programs are subject to statutory and regulatory
changes, retroactive and prospective rate adjustments, administrative rulings,
and freezes and funding reductions, all of which may adversely affect the
Company's business. There can be no assurance that payments for pharmaceutical
supplies and services under governmental reimbursement programs will continue to
be based on the current methodology or remain comparable to present levels. In
this regard, the Company may be subject to rate reductions as a result of
federal budgetary legislation related to the Medicare and Medicaid programs. In
addition, various state Medicaid programs periodically experience budgetary
shortfalls which may result in Medicaid payment delays to the Company. To date,
the Company has not experienced any material adverse effect due to any such
budgetary shortfall.
In addition, the failure, even if inadvertent, of Omnicare and/or its
client institutions to comply with applicable reimbursement regulations could
adversely affect Omnicare's business. Additionally, changes in such
reimbursement programs or in regulations related thereto, such as reductions in
the allowable reimbursement levels, modifications in the timing or processing of
payments and other changes intended to limit or decrease the growth of Medicaid
and Medicare expenditures, could adversely affect the Company's business.
Referral Restrictions. The Company is subject to federal and state laws
which govern financial and other arrangements between health care providers.
These laws include the federal anti-kickback statute, which was originally
enacted in 1977 and amended in 1987, and which prohibits, among other things,
knowingly and
15
<PAGE> 18
willfully soliciting, receiving, offering or paying any remuneration directly or
indirectly in return for or to induce the referral of an individual to a person
for the furnishing of any item or service for which payment may be made in whole
or in part under Medicare or Medicaid. Many states have enacted similar statutes
which are not necessarily limited to items and services for which payment is
made by Medicare or Medicaid. Violations of these laws may result in fines,
imprisonment, and exclusion from the Medicare and Medicaid programs or other
state-funded programs. Federal and state court decisions interpreting these
statutes are limited, but have generally construed the statutes to apply if "one
purpose" of remuneration is to induce referrals or other conduct within the
statute.
Federal regulations establish "safe harbors," which give immunity from
criminal or civil penalties to parties in good faith compliance. While the
failure to satisfy all criteria for a safe harbor does not mean that an
arrangement violates the statute, it may subject the arrangement to review by
the HHS Office of Inspector General ("OIG"), which is charged with administering
the federal anti-kickback statute. There are no procedures for obtaining binding
interpretations or advisory opinions from the OIG on the application of the
federal anti-kickback statue to an arrangement or its qualification for a safe
harbor upon which the Company can rely.
The OIG issues "Fraud Alerts" identifying certain questionable arrangements
and practices which it believes may implicate the federal anti-kickback statute.
The OIG has issued a Fraud Alert providing its views on certain joint venture
and contractual arrangements between health care providers. The OIG also issued
a Fraud Alert concerning prescription drug marketing practices that could
potentially violate the federal statute. Pharmaceutical marketing activities may
implicate the federal anti-kickback statute because drugs are often reimbursed
under the Medicaid program. According to the Fraud Alert, examples of practices
that may implicate the statute include certain arrangements under which
remuneration is made to pharmacists to recommend the use of a particular
pharmaceutical product.
In addition, a number of states have recently undertaken enforcement
actions against pharmaceutical manufacturers involving pharmaceutical marketing
programs, including programs containing incentives to pharmacists to dispense
one particular product rather than another. These enforcement actions arose
under state consumer protection laws which generally prohibit false advertising,
deceptive trade practices, and the like.
Further, a number of states involved in these enforcement actions have
requested that the Federal Food and Drug Administration ("FDA") exercise greater
regulatory oversight in the area of pharmaceutical promotional activities by
pharmacists. It is not possible to determine whether FDA will act in this regard
or what effect, if any, FDA involvement would have on the Company's operations.
The Company believes its contract arrangements with other health care
providers, its pharmaceutical suppliers and its pharmacy practices are in
compliance with these laws. There can be no assurance that such laws will not,
however, be interpreted in the future in a manner inconsistent with the
Company's interpretation and application.
Health Care Reform and Federal Budget Legislation. The Clinton
administration and members of Congress have proposed plans to reform the health
care system. Currently, Congress is considering such reforms in the context of
federal budget reconciliation legislation. This legislation could result in
significant reductions in payments to providers under the Medicare program and a
complete restructuring and reduced payments to providers under the Medicaid
program. With respect to Medicare, proposals include establishment of a
prospective payment system for SNFs; limits on payments to Medicare SNFs for
certain non-routine services, including, among others, prescription drugs,
diagnostic services, and physical therapy and other rehabilitative services;
requiring consolidated billing by a SNF for all Part A and B claims for SNF
residents; and other limits on reimbursement of costs for Medicare SNF services.
If enacted, there can be no assurance that such proposals could not have a
material adverse effect on the business of Omnicare. While budget negotiations
are continuing, the future of any reform proposals in Congress is unknown.
In addition, a number of states have enacted and are considering various
health care reforms, including reforms through Medicaid demonstration projects.
Federal law allows HHS to authorize waivers of federal
16
<PAGE> 19
Medicaid program requirements, including requirements relating to coverage, free
choice of providers and payment for health care services, in connection with
state demonstration projects that promote Medicaid program objectives. HHS
published procedures and public notice requirements designed to open the waiver
approval process to public comment and to expedite processing. Legal actions
have been initiated challenging the waiver process and the authority of HHS to
approve waivers for broad-based Medicaid managed care programs. The federal
budget legislation restructuring the Medicaid program would effectively
eliminate Medicaid managed care demonstration projects.
Several state Medicaid programs have established mandatory statewide
managed care programs for Medicaid beneficiaries to control costs through
negotiated or capitated rates, as opposed to traditional cost-based
reimbursement for Medicaid services, and propose to use savings achieved through
these programs to expand coverage to those not previously eligible for Medicaid.
HHS has approved waivers for statewide managed care demonstration projects in
several states, and are pending for several other states. These demonstration
projects generally exempt institutionalized care, including nursing facility
services, from the programs, and the Company's operations have not been
adversely affected in the one state (Oregon) with a managed care demonstration
project in effect. The Company is unable to predict what impact, if any, future
projects might have on the Company's operations.
Because there are currently various reform proposals under consideration at
the federal and state levels, it is uncertain at this time what health care
reform initiatives, if any, will be implemented, or whether there will be other
changes in the administration of governmental health care programs or
interpretations of governmental policies or other changes affecting the health
care system. There can be no assurance that future health care or budget
legislation or other changes will not have an adverse effect on the business of
the Company.
17
<PAGE> 20
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 44,000,000 shares
of Common Stock, par value $1.00 per share, and 1,000,000 shares of preferred
stock, without par value. At February 23, 1996, 26,545,284 shares of Common
Stock were issued and outstanding. The Board of Directors, without further
action by the stockholders, is authorized to issue preferred stock in one or
more series and to designate as to any such series the dividend rate, redemption
prices, preferences on liquidation or dissolution, sinking fund terms,
conversion rights, voting rights and any other preferences or special rights and
qualifications. As of the date of this Prospectus, there is no preferred stock
issued or outstanding, and the Board of Directors has not authorized the
issuance of any preferred stock.
COMMON STOCK
The Common Stock has no preemptive rights and no redemption, sinking fund
or conversion provisions. All shares of Common Stock have one vote on any matter
submitted to the vote of stockholders. The Common Stock does not have cumulative
voting rights. Upon any liquidation of the Company, the holders of Common Stock
are entitled to receive, on a pro rata basis, all assets then legally available
for distribution after payment of debts and liabilities and preferences on
preferred stock, if any. Holders of Common Stock are entitled to receive
dividends when and as declared by the Board of Directors out of funds legally
available therefor (subject to the prior rights of preferred stock, if any). All
outstanding shares of Common Stock are fully paid and nonassessable.
CERTAIN ANTITAKEOVER PROVISIONS
With certain exceptions, in the event a person owns 10% or more of the
Company's stock entitled to vote, a majority of the shares not so owned is
required to authorize (1) any merger of the Company with such person, (2) any
sale, lease or other disposition of all or substantially all of the Company's
assets to such person or (3) certain issuances and transfers of securities of
the Company to such person. Directors may be removed without cause only by the
affirmative vote of the holders of two-thirds of the Company's capital stock
entitled to vote on the election of directors. The Board of Directors of the
Company, when evaluating any offer of another person to make a tender or
exchange offer, merge or purchase or otherwise acquire all or substantially all
of the assets of the Company, shall, in connection with the exercise of its
judgment in determining what is in the best interests of the Company and its
stockholders, give due consideration to all relevant factors, including the
social and economic effects on employees, customers, suppliers and other
constituents of Omnicare and on the communities in which Omnicare operates or is
located. The sections of the Company's Restated Certificate of Incorporation
described in this paragraph may not be altered, amended or repealed without
approval of two-thirds of the outstanding shares of each class entitled to vote
thereon as a class.
TRANSFER AGENT
Omnicare's transfer agent for its Common Stock is the Chemical Mellon
Shareholder Services, LLC, Ridgefield Park, New Jersey.
18
<PAGE> 21
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Common Stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of Common Stock are effected. Accordingly, any resale of the Common
Stock in Canada must be made in accordance with applicable securities laws which
will vary depending on the relevant jurisdiction, and which may require resales
to be made in accordance with available statutory exemptions or pursuant to a
discretionary exemption granted by the applicable Canadian securities regulatory
authority. Purchasers are advised to seek legal advise prior to any resale of
the Common Stock.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company and the dealer from whom
such purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Common Stock without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions."
RIGHTS OF ACTION AND ENFORCEMENT
The securities being offered are of a foreign issuer and Ontario purchasers
will not receive the contractual right of action prescribed by Section 32 of the
Regulation under the Securities Act (Ontario). As a result, Ontario purchasers
must rely on other remedies that may be available, including common law rights
of action for damages or rescission or rights of action under the civil
liability provisions of the U.S. federal securities laws.
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Common Stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Common Stock acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #88/5, a copy of which may be obtained from the Company. Only one such
report must be filed in respect of Common Stock acquired on the same date and
under the same prospectus exemption.
19
<PAGE> 22
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1996 (the "U.S. Underwriting
Agreement"), the underwriters named below (the "U.S. Underwriters"), for whom CS
First Boston Corporation, Montgomery Securities, William Blair & Company,
L.L.C., PaineWebber Incorporated and Smith Barney Inc. are acting as
representatives (the "Representatives"), have severally but not jointly agreed
to purchase from the Company the following respective numbers of U.S. Shares:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER U.S. SHARES
---------------------------------------------------------------- -----------
<S> <C>
CS First Boston Corporation.....................................
Montgomery Securities...........................................
William Blair & Company, L.L.C..................................
PaineWebber Incorporated........................................
Smith Barney Inc................................................
---------
Total.........................................................
=========
</TABLE>
The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters are subject to certain conditions precedent and that the U.S.
Underwriters will be obligated to purchase all the U.S. Shares offered hereby if
any are purchased. The U.S. Underwriting Agreement provides that, in the event
of a default by a U.S. Underwriter, in certain circumstances the purchase
commitments of non-defaulting U.S. Underwriters may be increased or the U.S.
Underwriting Agreement may be terminated.
The Company has entered into a Subscription Agreement (the "Subscription
Agreement") with the Managers of the International Offering (the "Managers")
providing for the concurrent offer and sale of the International Shares outside
the United States and Canada. The closing of the U.S. Offering is a condition to
the closing of the International Offering and vice versa.
The Company has granted to the U.S. Underwriters and the Managers an
option, exercisable by CS First Boston Corporation, expiring at the close of
business on the 30th day after the date of this Prospectus, to purchase up to
750,000 additional shares at the public offering price less the underwriting
discounts and commissions, all as set forth on the cover page of this
Prospectus. The U.S. Underwriters and the Managers may exercise such option only
to cover over-allotments in the sale of the shares of Common Stock offered in
the Offerings. To the extent that this option to purchase is exercised, each
U.S. Underwriter and each Manager will become obligated, subject to certain
conditions, to purchase approximately the same percentage of additional shares
being sold to the U.S. Underwriters and the Managers as the number of U.S.
Shares set forth next to such U.S. Underwriter's name in the preceding table
bears to the total number of U.S. Shares in such table and as the number set
forth next to such Manager's name in the corresponding table in the prospectus
relating to the International Offering bears to the total number of
International Shares in such table.
The Company has been advised by the Representatives that the U.S.
Underwriters propose to offer the U.S. Shares in the United States and Canada to
the public initially at the public offering price set forth on the cover page of
this Prospectus and, through the Representatives, to certain dealers at such
price less a concession of $ per share, and the U.S. Underwriters and such
dealers may allow a discount of $ per share on sales to certain other
dealers. After the initial public offering, the public offering price and
concession and discount to dealers may be changed by the Representatives.
The public offering price, the aggregate underwriting discounts and
commissions per share and per share concession and discount to dealers for the
U.S. Offering and the concurrent International Offering will be identical.
Pursuant to an Agreement Between the U.S. Underwriters and Managers (the
"Intersyndicate Agreement") relating to the Offerings, changes in the public
offering price, concession and discount to dealers will be made only upon the
mutual agreement of CS First Boston Corporation, as representative of the U.S.
Underwriters, and CS First Boston Limited ("CSFBL"), on behalf of the Managers.
20
<PAGE> 23
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed that, as part of the distribution of the U.S. Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares of Common Stock or distribute any prospectus
relating to the Common Stock to any person outside the United States or Canada
or to any other dealer who does not so agree. Each of the Managers has agreed or
will agree that, as part of the distribution of the International Shares and
subject to certain exceptions, it has not offered or sold, and will not offer or
sell, directly or indirectly, any shares of Common Stock or distribute any
prospectus relating to the Common Stock in the United States or Canada or to any
other dealer who does not so agree. The foregoing limitations do not apply to
stabilization transactions or to transactions between the U.S. Underwriters and
the Managers pursuant to the Intersyndicate Agreement. As used herein, "United
States" means the United States of America (including the States and the
District of Columbia), its territories, possessions and other areas subject to
its jurisdictions, "Canada" means Canada, its provinces, territories,
possessions and other areas subject to its jurisdiction, and an offer or sale
shall be in the United States or Canada if it is made to (i) any individual
resident in the United States or Canada or (ii) any corporation, partnership,
pension, profit-sharing or other trust or other entity (including any such
entity acting as an investment adviser with discretionary authority) whose
office most directly involved with the purchase is located in the United States
or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
U.S. Underwriters and the Managers of such number of shares of Common Stock as
may be mutually agreed. The price of any shares so sold will be the public
offering price, less such amount as may be mutually agreed upon by CS First
Boston Corporation, as representative of the U.S. Underwriters, and CSFBL, on
behalf of the Managers, but not exceeding the selling concession applicable to
such shares. To the extent there are sales between the U.S. Underwriters and the
Managers pursuant to the Intersyndicate Agreement, the number of shares of
Common Stock initially available for sale by the U.S. Underwriters or by the
Managers may be more or less than the amount appearing on the cover page of this
Prospectus. Neither the U.S. Underwriters nor the Managers are obligated to
purchase from the other any unsold shares of Common Stock.
This Prospectus may be used by underwriters and dealers in connection with
sales of International Shares to persons located in the United States, to the
extent such sales are permitted by the contractual limitations on sales
described above.
The Company has agreed to indemnify the U.S. Underwriters and the Managers
against certain liabilities, including civil liabilities under the Securities
Act, or to contribute to payments that the U.S. Underwriters and the Managers
may be required to make in respect thereof.
EXPERTS
The audited consolidated financial statements incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, as amended, and the Current Report on Form
8-K filed February 26, 1996, which includes the audited financial statements of
the Company for the three year period ended December 31, 1995, have been so
incorporated in reliance on the reports of Price Waterhouse LLP and BDO Seidman,
LLP, independent accountants, whose reports are incorporated by reference
herein, to the extent and for the periods appearing therein. Such financial
statements have been so incorporated in reliance on the reports of such
independent accountants given on the authority of such firms as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock and certain
other legal matters in connection with the Offerings will be passed upon by
Thompson Hine & Flory P.L.L., Cincinnati, Ohio, counsel to the Company. Certain
matters relating to health care regulation will be passed upon by Reed, Smith,
Shaw & McClay, Washington, D.C., special health care counsel to the Company.
Cravath, Swaine & Moore, New York, New York, will pass on certain legal matters
for the U.S. Underwriters and the Managers. Cravath, Swaine & Moore has from
time to time represented, and may continue to represent, Omnicare in connection
with certain legal matters.
21
<PAGE> 24
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY U.S. UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Risk Factors.......................... 5
Use of Proceeds....................... 6
Price Range of Common Stock and
Dividends........................... 7
Capitalization........................ 8
Selected Consolidated Financial
Data................................ 9
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 10
Business.............................. 13
Description of Capital Stock.......... 18
Notice to Canadian Residents.......... 19
Underwriting.......................... 20
Experts............................... 21
Legal Matters......................... 21
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
LOGO
5,000,000 Shares
Common Stock
($1 par value)
PROSPECTUS
CS First Boston
Montgomery Securities
William Blair & Company
PaineWebber Incorporated
Smith Barney Inc.
, 1996
- ------------------------------------------------------
<PAGE> 25
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 26, 1996
5,000,000 Shares
LOGO
Common Stock
($1 par value)
------------------
Of the 5,000,000 shares being offered, 1,000,000 shares are initially being
offered outside the United States and Canada (the "International Shares") by
the Managers (the "International Offering") and 4,000,000 shares are
initially being concurrently offered in the United States and Canada (the
"U.S. Shares") by the U.S. Underwriters (the "U.S. Offering" and, together
with the International Offering, the "Offerings"). The offering price
and underwriting discounts and commissions of the International
Offering and the U.S. Offering are identical. On February 23, 1996,
the reported last sale price of the Common Stock on the New York
Stock Exchange Composite Tape was $46 1/2 per share.
------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 5.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Company(1)
---------------------------------------
<S> <C> <C> <C>
Per Share............................................. $ $ $
Total(2).............................................. $ $ $
</TABLE>
(1) Before deduction of expenses payable by the Company estimated at
$ .
(2) The Company has granted the U.S. Underwriters and the Managers an option,
exercisable by CS First Boston Corporation for 30 days from the date of this
Prospectus, to purchase a maximum of 750,000 additional shares solely to
cover over-allotment of shares. If the option is exercised in full, the
total Price to Public will be $ , Underwriting Discounts and
Commissions will be $ and Proceeds to Company will be
$ . See "Subscription and Sale."
------------------
The International Shares are offered by the several Managers when, as and
if delivered to and accepted by the Managers and subject to their right to
reject orders in whole or in part. It is expected that the International Shares
will be ready for delivery on or about March , 1996.
CS First Boston
<TABLE>
<S> <C>
Montgomery Securities William Blair & Company
PaineWebber International Smith Barney Inc.
</TABLE>
The date of this Prospectus is , 1996.
<PAGE> 26
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY MANAGER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
In this Prospectus, references to "dollars" and "$" are to United States
dollars.
AVAILABLE INFORMATION
Omnicare, Inc. ("Omnicare" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
These reports, proxy statements and other information may be inspected and
copied at the public reference facilities maintained by the commission at its
principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices located at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials also can
be obtained from the Public Reference Section of the Commission at prescribed
rates at the principal offices of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Common Stock is listed on the New York
Stock Exchange (Symbol: OCR) and reports and information concerning the Company
can be inspected at such exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933 (the "Act") with respect to the shares of
Common Stock offered hereby (including all amendments and supplements thereto,
the "Registration Statement"). This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits filed therewith, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of such
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference. The Registration Statement and the exhibits thereto
can be inspected and copied at the public reference facilities and regional
offices referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The company hereby incorporates this Prospectus by reference the following
documents heretofore filed with the Commission pursuant to the Exchange Act: (i)
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
as amended by the Company's Form 10-K/A-1 filed August 23, 1995; (ii) the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995, and September 30, 1995; and (iii) the Company's Current Reports
on Form 8-K filed on August 23, 1995 and February 26, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
termination of the Offerings shall be deemed to be incorporated in this
Prospectus by reference and to be part hereof from the respective dates of the
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is,
or is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute part of this Prospectus.
I-2
<PAGE> 27
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically incorporated by
reference into such documents. Requests for such copies should be directed to
Cheryl D. Hodges, Secretary, Omnicare, Inc., 2800 Chemed Center, 255 East Fifth
Street, Cincinnati, Ohio 45202-4728, or telephone (513) 762-6666.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................................. I-2
Incorporation of Certain Documents by Reference....................................... I-2
Prospectus Summary....................................................................
Risk Factors..........................................................................
Use of Proceeds.......................................................................
Price Range of Common Stock and Dividends.............................................
Capitalization........................................................................
Selected Consolidated Financial Data..................................................
Management's Discussion and Analysis of Financial Condition and Results of
Operations..........................................................................
Business..............................................................................
Description of Capital Stock..........................................................
Certain United States Federal Tax Consequences to Non-U.S. Holders.................... I-4
Subscription and Sale................................................................. I-6
Experts...............................................................................
Legal Matter..........................................................................
</TABLE>
IN CONNECTION WITH THE OFFERINGS, CS FIRST BOSTON CORPORATION ON BEHALF OF THE
U.S. UNDERWRITERS AND THE MANAGERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ONT HE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DURING THE OFFERINGS, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES 10B-6,
10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
I-3
<PAGE> 28
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-U.S. HOLDERS
The following is a general discussion of the principal United States
Federal tax consequences of the ownership and disposition of Common Stock by a
holder that, for United States Federal income tax purposes, is not a "United
States person" (a "Non-United States Holder"). This discussion is not intended
to be exhaustive and is based on statutes, regulations, rulings and court
decisions as currently in effect all of which may be changed either
retroactively or prospectively. This discussion does not consider any specific
facts or circumstances that may apply to a particular Non-United States Holder
and applies only to Non-United States Holders that hold Common Stock as a
capital asset. Prospective investors are urged to consult their tax advisors
regarding the United States Federal tax consequences of acquiring, holding and
disposing of Common Stock (including such investor's status as a United States
person or Non-United States Holder) as well as any tax consequences that may
arise under the laws of any state, municipality or other taxing jurisdiction.
For purposes of this discussion, "United States person" means a citizen or
resident of the United States, a corporation or partnership created or organized
in the United States or under the laws of the United States or of any political
subdivision thereof, or an estate or trust whose income is includible in gross
income for United States Federal income tax purposes regardless of its source.
DIVIDENDS
Dividends paid to a Non-United States Holder generally will be subject to
withholding of United States Federal income tax at the rate of 30%, unless the
withholding rate is reduced under an applicable income tax treaty between the
United States and the country of tax residence of the Non-United States Holder.
No U.S. dividend withholding will apply if the dividend is effectively connected
with a trade or business conducted within the United States by the Non-United
States Holder (or, alternatively, where an income tax treaty applies, if the
dividend is effectively connected with a permanent establishment maintained
within the United States by the Non-United States Holder), but, instead, the
dividend will be subject to the United States Federal income tax on net income
that applies to United States persons (and, with respect to corporate holders,
may also be subject to the branch profits tax). A Non-United States Holder may
be required to satisfy certain certification requirements in order to claim
treaty benefits or to otherwise claim a reduction of or exemption from
withholding under the foregoing rules. A Non-United States Holder that is
eligible for a reduced rate of U.S. withholding tax pursuant to a tax treaty may
obtain a refund of any excess amounts currently withheld by filing an
appropriate claim for refund with the United States Internal Revenue Service
(the "Service").
GAIN ON DISPOSITION
Subject to special rules described below, a Non-United States Holder will
generally not be subject to United States Federal income tax on gain recognized
on a sale or other disposition of Common Stock unless the gain is effectively
connected with a trade or business conducted within the United States by the
Non-United States Holder or by a partnership, trust or estate in which the
Non-United States Holder is a partner or beneficiary (or, alternatively, where
an income tax treaty applies, unless the gain is effectively connected with a
permanent establishment maintained within the United States by the Non-United
States Holder or by a partnership, trust or estate in which the Non-United
States Holder is a partner or beneficiary). Any such effectively connected gain
would be subject to the United States Federal income tax on net income that
applies to United States persons (and, with respect to corporate holders, may
also be subject to the branch profits tax). Such tax is not collected by
withholding.
In addition, an individual Non-United States Holder who holds Common Stock
would generally be subject to tax at a 30% rate on any gain recognized on the
disposition of such Common Stock if such individual is present in the United
States for 183 days or more in the taxable year of disposition and either (i)
has a "tax home" in the United States (as specifically defined for purposes of
the United States Federal income tax) or (ii) maintains an office or other fixed
place of business in the United States and the income from the sale of the stock
is attributable to such office or other fixed place of business. Individual
Non-United
I-4
<PAGE> 29
States Holders may also be subject to tax pursuant to provisions of United
States Federal income tax law applicable to certain United States expatriates.
Non-United States Holders should consult applicable income tax treaties, which
may provide for different rules.
Also, special rules apply to Non-United States Holders if the Company is or
becomes a "United States real property holding corporation" for United States
Federal income tax purposes. The Company believes that it has not been, is not
currently, and is not likely to become, a United States real property holding
corporation. If the Company were a United States real property holding
corporation, gain or loss on a sale of the Common Stock by any Non-United States
Holder (or, under certain circumstances, only a Non-United States Holder that
owns or owned (directly or constructively) more than 5% of the Common Stock)
would be treated as income effectively connected with the conduct of a trade or
business within the United States by the holder, subject to the net income tax
described above.
UNITED STATES FEDERAL ESTATE TAXES
Common Stock owned or treated as owned by an individual who is not a
citizen or resident (as specially defined for United States Federal estate tax
purposes) of the United States at the date of death, or Common Stock subject to
certain lifetime transfers made by such an individual, will be included in such
individual's estate for United States Federal estate tax purposes and may be
subject to United States Federal estate tax, unless an applicable estate tax
treaty provides otherwise. Estates of nonresident aliens are generally allowed a
credit that is equivalent to an exclusion of $60,000 of assets from the estate
for United States Federal estate tax purposes.
LEGISLATIVE DEVELOPMENTS
Legislation was proposed in 1990, 1992 and again in 1995 that, if enacted,
would have resulted under certain circumstances in the imposition of United
States Federal income tax on gain realized from the disposition of Common Stock
by certain Non-U.S. Holders who own or owned 10% or more of the Common Stock.
It is impossible to predict whether or in what form any such legislation or
other legislation might be enacted and what the scope or effective date of any
such legislation might be.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Service and to each Non-United
States Holder the amount of dividends paid to, and the tax withheld with respect
to, such holder, regardless of whether any tax was actually withheld. That
information may also be made available to the tax authorities of the country in
which a Non-United States Holder resides.
United States Federal backup withholding tax (which, generally, is imposed
at the rate of 31% on certain payments to persons not otherwise exempt who fail
to furnish information required under United States information reporting
requirements) generally will not apply to dividends paid to a Non-United States
Holder either at an address outside the United States (provided that the payor
does not have actual knowledge that the payee is a United States person) or if
the dividends are subject to withholding at the 30% rate (or lower treaty rate).
As a general matter, information reporting and backup withholding also will not
apply to a payment of the proceeds of a sale of Common Stock by a foreign office
of a broker. However, information reporting requirements (but not backup
withholding) will apply to a payment of the proceeds of a sale of Common Stock
by a foreign office of a broker that is a United States person, or by a foreign
office of a foreign broker that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United States, or
by a foreign office of a foreign broker that is a "controlled foreign
corporation" as to the United States, unless the broker has documentary evidence
in its records that the holder is a Non-United States Holder and certain
conditions are met, or the holder otherwise establishes an exemption. Payment by
a United States office of a broker of the proceeds of a sale of Common Stock is
subject to both backup withholding and information reporting unless the holder
certifies as to its name, address and non-United States status under penalties
of perjury or otherwise establishes an exemption (and the broker has no actual
knowledge to the contrary). The backup withholding tax is not an additional tax
and may be credited against
I-5
<PAGE> 30
the Non-United States Holder's United States Federal income tax liability or
refunded to the extent excess amounts are withheld, provided that required
information is furnished to the Service.
The backup withholding and information reporting rules are currently under
review by the Treasury Department, and their application to the Common Stock is
subject to change.
SUBSCRIPTION AND SALE
The institutions named below (the "Managers") have, pursuant to a
Subscription Agreement dated , 1996 (the "Subscription Agreement"),
severally and not jointly, agreed with the Company to subscribe and pay for the
following respective numbers of International Shares as set forth opposite their
names:
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL
MANAGER SHARES
------- -------------
<S> <C>
CS First Boston Limited.........................................
Montgomery Securities...........................................
William Blair & Company, L.L.C..................................
PaineWebber International.......................................
Smith Barney Inc................................................
Total.................................................
===========
</TABLE>
The Subscription Agreement provides that the obligations of the Managers
are such that, subject to certain conditions precedent, the Managers will be
obligated to purchase all the International Shares offered hereby if any are
purchased. The Subscription Agreement provides that, in the event of a default
by a Manager, in certain circumstances the purchase commitments of
non-defaulting Managers may be increased or the Subscription Agreement may be
terminated.
The Company has entered into an Underwriting Agreement (the "Underwriting
Agreement") with the U.S. Underwriters of the U.S. Offering (the "U.S.
Underwriters") providing for the concurrent offer and sale of the U.S. Shares in
the United States and Canada. The closing of the U.S. Offering is a condition to
the closing of the International Offering and vice versa.
The Company has granted to the Managers and the U.S. Underwriters an
option, exercisable by CS First Boston Corporation, as a representative of the
U.S. Underwriters, expiring at the close of business on the 30th day after the
date of this Prospectus, to purchase up to 750,000 additional shares at the
public offering price, less the underwriting discounts and commissions, all as
set forth on the cover page of this Prospectus. The Managers and the U.S.
Underwriters may exercise such option only to cover over-allotments in the sale
of the shares of Common Stock offered in the Offerings. To the extent that this
option to purchase is exercised, each Manager and each U.S. Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of additional shares being sold to the Managers and the U.S.
Underwriters as the number of International Shares set forth next to such
Manager's name in the preceding table bears to the total number of International
Shares in such table and as the number set forth next to such U.S. Underwriter's
name in the corresponding table in the prospectus relating to the U.S. Offering
bears to the total number of U.S. Shares in such table.
The Company has been advised by CS First Boston Limited, on behalf of the
Managers, that the Managers propose to offer the International Shares outside
the United States and Canada initially at the public offering price set forth on
the cover page of this Prospectus and, through the Managers, to certain dealers
at such price less a commission of $ per share, and the Managers may reallow
a commission of $ per share on sales to certain other dealers. After the
initial public offering, the public offering price and commission and
reallowance may be changed.
I-6
<PAGE> 31
The public offering price and the aggregate underwriting discounts and
commissions per share for the International Offering and the concurrent U.S.
Offering will be identical. Pursuant to an Agreement Between the U.S.
Underwriters and Managers (the "Intersyndicate Agreement") relating to the
Offerings, changes in the offering price, the aggregate underwriting discounts
and commissions per share and per share commission and realllowance to dealers
will be made only upon the mutual agreement of CS First Boston Limited, on
behalf of the Managers, and CS First Boston Corporation, as representative of
the U.S. Underwriters, on behalf of the U.S. Underwriters.
Pursuant to the Intersyndicate Agreement, each of the Managers has agreed
that, as part of the distribution of International Shares and subject to certain
exceptions, it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares of Common Stock or distribute any prospectus relating to
the Common Stock in the United States or Canada or to any other dealer who does
not so agree. Each of the U.S. Underwriters has agreed that, as part of the
distribution of the U.S. Shares and subject to certain exceptions, it has not
offered or sold and will not offer or sell, directly or indirectly, any shares
of Common Stock or distribute any prospectus relating to the Common Stock to any
person outside the United States and Canada or to any other dealer who does not
so agree. The foregoing limitations do not apply to stabilization transactions
or to transactions between the Managers and the U.S. Underwriters pursuant to
the Intersyndicate Agreement. As used herein, "United States" means the United
States of America (including the States and the District of Columbia), its
territories, possessions and other areas subject to its jurisdiction, "Canada"
means, Canada, its provinces, territories, possessions and other areas subject
to its jurisdiction, and an offer or sale shall be in the United States or
Canada if it is made to (i) any individual resident in the United States or
Canada or (ii) any corporation, partnership, pension, profit-sharing or other
trust or other entity (including any such entity acting as an investment adviser
with discretionary authority) whose office most directly involved with the
purchase is located in the United States or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
Managers and the U.S. Underwriters of such number of shares of Common Stock as
may be mutually agreed upon. The price of any shares so sold will be the public
offering price less such amount agreed upon by CS First Boston Limited, on
behalf of the Managers, and CS First Boston, as representative of the U.S.
Underwriters, but not exceeding the selling concession applicable to such
shares. To the extent there are sales between the Managers and the U.S.
Underwriters pursuant to the Intersyndicate Agreement, the number of shares of
Common Stock initially available for sale by the Managers or by the U.S.
Underwriters may be more or less than the amount appearing on the cover page of
this Prospectus. Neither the Managers nor the U.S. Underwriters are obligated to
purchase from the other any unsold shares of Common Stock.
Each of the Managers and the U.S. Underwriters severally represents and
agrees that (i) it has not offered or sold, and will not offer to sell, in the
United Kingdom, by means of any document, any shares of Common Stock other than
to persons whose ordinary business it is to buy or sell shares or debentures,
whether as a principal or agent, or in circumstances which do not constitute an
offer to the public within the meaning of the Companies Act 1985, (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act of 1986 with respect to anything done by it in relation to any
shares of Common Stock in, from or otherwise involving the United Kingdom, and
(iii) it has only issued or passed on and will only issue or pass on to any
person in the United Kingdom any document received by it in connection with the
issue of any shares of Common Stock if the person is of a kind described in
Article 9(3) of the Financial Services Act of 1986 (Investment Advertisements)
(Exemptions) Order 1988 (as amended by Article 6(c) of the Financial Services
Act of 1986 (Investment Advertisements) Order 1992) or is a person to whom the
document may otherwise lawfully be issued or passed on.
The Company has agreed to indemnify the Managers and the U.S. Underwriters
against certain liabilities or to contribute to payments that the Managers and
the U.S. Underwriters may be required to make in respect thereof.
I-7
<PAGE> 32
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of the expenses (all but the SEC
Registration fees and NASD fees are estimates) in connection with the issuance
of the shares of Common Stock being registered hereunder.
<TABLE>
<S> <C>
SEC Registration fees............................................. $ 88,977
Transfer agent fees............................................... $ 5,000
Blue Sky fees and expenses........................................ $ 12,000
Printing and engraving expenses................................... $ 90,000
Legal fees and expenses........................................... $ 90,000
Accounting fees and expenses...................................... $100,000
NASD fees......................................................... $ 26,304
Miscellaneous..................................................... $ 97,719
--------
Total........................................................ $510,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation and Bylaws of Omnicare, and
separate Indemnification Agreements, provide for the indemnification of each
director and officer of Omnicare in connection with any claim, action, suit or
proceeding brought or threatened by reason of his or her position with Omnicare.
In addition, the General Corporation Law of the State of Delaware ("Delaware
Law") permits Omnicare to indemnify its directors, officers and others against
judgments, fines, amounts paid in settlement and attorneys' fees resulting from
various types of legal actions or proceedings if the actions of the party being
indemnified meet the standards of conduct specified in the Delaware Law.
The Company's directors and officers, are, in addition, insured against
loss arising from any claim against them for a wrongful act or omission with
certain exceptions and limitations.
ITEM 16. EXHIBITS
Each of the following Exhibits is filed with this Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------------------------
<C> <S>
1.1 Form of U.S. Underwriting Agreement
1.2 Form of Subscription Agreement
5 Opinion of Thompson Hine & Flory P.L.L., counsel to the Registrant
Consent of Thompson Hine & Flory P.L.L., counsel to the Registrant (contained in
23.1 Exhibit 5)
23.2 Consent of Price Waterhouse LLP
23.3 Consent of BDO Seidman, LLP
24 Powers of Attorney *
</TABLE>
* A power of attorney whereby various individuals authorize the signing of their
names to any and all amendments to this Registration Statement and other
documents submitted in connection therewith is contained on the first page of
the signature pages following Part II of this Registration Statement.
II-1
<PAGE> 33
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 (the "Act"), each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that: (1) For purposes of
determining any liability under the Act, the information omitted from the form
of prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and (2) For the
purpose of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 34
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON A FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF OHIO ON THE 26TH DAY OF
FEBRUARY, 1996.
OMNICARE, INC.
By:/s/ JOEL F. GEMUNDER
JOEL F. GEMUNDER, PRESIDENT
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS EDWARD L. HUTTON, JOEL F. GEMUNDER
AND CHERYL D. HODGES HIS OR HER TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS,
WITH FULL POWER OF SUBSTITUTION, AND EACH WITH POWER TO ACT ALONE, TO SIGN AND
EXECUTE ON BEHALF OF THE UNDERSIGNED ANY AMENDMENT OR AMENDMENTS TO THIS
REGISTRATION STATEMENT ON FORM S-3, AND TO PERFORM ANY ACTS NECESSARY TO BE DONE
IN ORDER TO FILE SUCH AMENDMENT WITH EXHIBITS THERETO AND OTHER DOCUMENTS IN
CONNECTION THEREWITH WITH THE SECURITIES AND EXCHANGE COMMISSION, AND EACH OF
THE UNDERSIGNED DOES HEREBY RATIFY AND CONFIRM ALL THAT SAID ATTORNEYS-IN-FACT
AND AGENTS, OR THEIR SUBSTITUTES, SHALL DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Principal Executive Officers:
<TABLE>
<C> <S> <C>
/s/ EDWARD L. HUTTON Chairman and Director February 26, 1996
- ----------------------------------------
EDWARD L. HUTTON
/s/ JOEL F. GEMUNDER President and Director February 26, 1996
- ----------------------------------------
JOEL F. GEMUNDER
Principal Financial and Accounting Officer:
/s/ THOMAS R. MARSH Vice President, Controller February 26, 1996
- ---------------------------------------- and Acting Treasurer
THOMAS R. MARSH
Directors of the Company:
/s/ RONALD K. BAUR February 26, 1996
- ----------------------------------------
RONALD K. BAUR
/s/ KENNETH W. CHESTERMAN February 26, 1996
- ----------------------------------------
KENNETH W. CHESTERMAN
/s/ CHARLES H. ERHART, JR. February 26, 1996
- ----------------------------------------
CHARLES H. ERHART, JR.
/s/ MARY LOU FOX February 26, 1996
- ----------------------------------------
MARY LOU FOX
</TABLE>
II-3
<PAGE> 35
<TABLE>
<C> <S> <C>
/s/ CHERYL D. HODGES February 26, 1996
- -----------------------------------------
CHERYL D. HODGES
/s/ THOMAS C. HUTTON February 26, 1996
- -----------------------------------------
THOMAS C. HUTTON
/s/ PATRICK E. KEEFE February 26, 1996
- -----------------------------------------
PATRICK E. KEEFE
/s/ SANDRA E. LANEY February 26, 1996
- -----------------------------------------
SANDRA E. LANEY
/s/ ANDREA R. LINDELL February 26, 1996
- -----------------------------------------
ANDREA R. LINDELL
/s/ SHELDON MARGEN February 26, 1996
- -----------------------------------------
SHELDON MARGEN
/s/ KEVIN J. MCNAMARA February 26, 1996
- -----------------------------------------
KEVIN J. MCNAMARA
/s/ JOHN M. MOUNT February 26, 1996
- -----------------------------------------
JOHN M. MOUNT
/s/ TIMOTHY S. O'TOOLE February 26, 1996
- -----------------------------------------
TIMOTHY S. O'TOOLE
/s/ D. WALTER ROBBINS, JR. February 26, 1996
- -----------------------------------------
D. WALTER ROBBINS, JR.
</TABLE>
II-4
<PAGE> 1
Exhibit 1.1
5,000,000 Shares
OMNICARE, INC.
Common Stock
($1 Par Value)
UNDERWRITING AGREEMENT
[ ], 1996
CS FIRST BOSTON CORPORATION
MONTGOMERY SECURITIES
WILLIAM BLAIR & COMPANY
PAINEWEBBER INCORPORATED, L.L.C.
SMITH BARNEY INC.
As Representatives of the Several Underwriters,
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, NY 10055.
Dear Madames or Sirs:
1. Introductory. Omnicare, Inc., a Delaware corporation
("Company"), proposes to issue and sell to the several Underwriters named in
Schedule A hereto ("Underwriters") 4,000,000 shares of its Common Stock, $1 par
value per share ("Securities"; such 4,000,000 shares of Securities being
hereinafter referred to as the "U.S. Firm Securities"). The Company also
proposes to issue and sell to the Underwriters and the Managers (as defined
below), at the option of the Underwriters and the Managers, an aggregate of not
more than 750,000 additional shares ("Optional Securities") of Securities as
set forth below. The U.S. Firm Securities and the Optional Securities that may
be sold to the Underwriters ("U.S. Optional Securities") are herein
collectively called the "U.S. Securities".
It is understood that the Company is concurrently entering
into a Subscription Agreement, dated the date hereof ("Subscription
Agreement"), with CS First Boston Limited ("CSFBL"), Montgomery Securities,
PaineWebber Incorporated, Smith Barney Inc. and William Blair & Company
("Managers") relating to the concurrent offering and sale by the Company of
1,000,000 shares of Securities (such 1,000,000 shares of Securities being
hereinafter referred to as the "International Firm Securities", which together
with the Optional Securities that may be sold to the Managers by the Company
("International Optional Securities") are hereinafter called
<PAGE> 2
2
the "International Securities")), outside the United States and Canada
("International Offering"). The U.S. Securities and the International
Securities are collectively referred to as the "Offered Securities". To
provide for the coordination of their activities, the Underwriters and the
Managers have entered into an Agreement Between U.S. Underwriters and Managers
which permits them, among other things, to sell the Offered Securities to each
other for purposes of resale.
The Company hereby agrees with the several Underwriters as
follows:
2. Representations and Warranties of the Company The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement (No. 333-[ ]), relating to
the Offered Securities, including forms of prospectus relating to the
U.S. Securities and the International Securities, has been filed with
the Securities and Exchange Commission ("Commission") and either (i)
has been declared effective under the Securities Act of 1933 ("Act")
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("initial registration statement") has been declared effective, either
(i) an additional registration statement ("additional registration
statement") relating to the Offered Securities may have been filed
with the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the
Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement and, if
applicable, the additional registration statement or (ii) such an
additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has
been filed with the Commission prior to the execution and delivery of
this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and
<PAGE> 3
3
delivery of this Agreement, was declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c), or (ii)
if the Company has advised the Representatives that it proposes to
file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with
respect to such additional registration statement means that date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to
the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all material incorporated by reference therein, including
all information contained in the additional registration statement (if
any) and including all information (if any) deemed to be a part of the
initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of
its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration
Statement". The additional registration statement, as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the U.S. Securities
and the form of prospectus relating to the International Securities,
each as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing
is required) as included in a Registration Statement, including all
material incorporated by reference in such prospectus, is hereinafter
referred to as the "U.S. Prospectus", and the "International
Prospectus", respectively; and the U.S. Prospectus and the
International Prospectus are hereinafter collectively referred to as
the "Prospectuses". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(i) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of
<PAGE> 4
4
the Commission ("Rules and Regulations") and did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time
of filing of each of the Prospectuses pursuant to Rule 424(b) or (if
no such filing is required) at the Effective Date of the Additional
Registration Statement in which each of the Prospectuses is included,
each Registration Statement and each of the Prospectuses will conform,
in all respects to the requirements of the Act and the Rules and
Regulations, and none of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and each of
the Prospectuses will conform in all respects to the requirements of
the Act and the Rules and Regulations, and none of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do
not apply to statements in or omissions from a Registration Statement
or either of the Prospectuses based upon written information furnished
to the Company by any Underwriter through the Representatives or by
any Manager through CSFBL specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b).
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectuses; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification.
(d) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of
<PAGE> 5
5
its incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectuses;
and each subsidiary of the Company is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification; all of the issued and
outstanding capital stock of each subsidiary of the Company has been
duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(e) The Offered Securities and all other outstanding shares
of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities have been delivered and paid for in accordance with
this Agreement and the Subscription Agreement on each Closing Date (as
defined below), the Offered Securities will have been, validly issued,
fully paid and nonassessable and will conform to the description
thereof contained in the Prospectuses; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(f) There are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter or Manager for a
brokerage commission, finder's fee or other like payment in connection
with the sale of the Offered Securities.
(g) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities in
the securities registered pursuant to a Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Act, except for such
contracts and agreements as to which the Company has already satisfied
its obligation to file a registration statement under the Act or to
include securities in a registration statement filed by the Company
under the Act.
(h) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement or the Subscription Agreement in connection with the
issuance and sale of Offered Securities by the Company, except such as
have been obtained and made under the Act and such as may be required
under state securities laws.
<PAGE> 6
6
(i) The execution, delivery and performance of this Agreement
and the Subscription Agreement and the issuance and sale of the
Offered Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or domestic or foreign order of any
governmental agency or body or any court, having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any such
subsidiary is subject, or the charter or by-laws of the Company or any
such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by
this Agreement and the Subscription Agreement, respectively.
(j) This Agreement and the Subscription Agreement have been
duly authorized, executed and delivered by the Company.
(k) The Company and its subsidiaries have good and marketable
title in fee simple to all real properties and good and marketable
title to all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by them; and all leased real and personal property held
by the Company or any of its subsidiaries is held under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by the Company and its
subsidiaries.
(l) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
(m) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(n) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other
<PAGE> 7
7
intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of
or conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(o) Neither the Company nor any of its subsidiaries is in
violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), or is subject to any
claim relating to any environmental laws, which violation
or claim would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole;
and the Company is not aware of any pending investigation which might
lead to such a claim.
(p) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the condition (financial
or other), business, prospects, results of operations or general
affairs of the Company and its subsidiaries taken as a whole, or would
materially and adversely affect the ability of the Company to perform
its obligations under this Agreement or the Subscription Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(q) To the Company's knowledge, the accountants who certified
the financial statements and supporting schedules included or
incorporated by reference in each Registration Statement are
independent public accountants as required by the Act and the Rules
and Regulations.
(r) The financial statements included in each Registration
Statement and the Prospectuses present fairly the financial position
of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with
the generally accepted accounting
<PAGE> 8
8
principles in the United States applied on a consistent basis (except
as set forth in the accompanying footnotes) and comply with the
requirements of the Act; and the schedules present fairly the
information required to be stated therein and comply with the
requirements of the Act. The financial information and statistical
data set forth in each of the Prospectuses under the captions
"Capitalization,", "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" have been prepared on a basis consistent with
the consolidated financial statements of the Company. The pro forma
financial information incorporated by reference in each Registration
Statement complies with the requirements of the Act and the Rules and
Regulations; the assumptions of management described in the notes to
such pro forma financial information provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions described in such notes; the related pro forma
adjustments give appropriate effect to those assumptions and the pro
forma column reflects the proper application of those adjustments to
the historical financial statement amounts in the pro forma condensed
balance sheet and the pro forma condensed statement of income.
(s) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses, there has
been no material adverse change, nor any development or event that may
result in a prospective material adverse change, in the condition
(financial or other), business, prospects, results of operations or
general affairs of the Company and its subsidiaries taken as a whole,
and, except as disclosed in or contemplated by the Prospectuses, there
has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(t) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectuses, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(u) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes and the Company agrees to comply with such Section if prior
to the completion of the distribution of the Offered Securities it
commences doing such business.
(v) Except where the failure to file would not have a
material adverse effect, all tax returns required to be filed by the
Company or any of its subsidiaries, in any jurisdiction, have been so
filed, and all material taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be
due from such entities have been paid, other than
<PAGE> 9
9
those being contested in good faith and for which adequate reserves
have been provided or those currently payable without material penalty
or interest. No material proposed additional tax assessments have
been asserted in writing against the Company or any of its
subsidiaries.
(w) The Offered Securities have been approved for listing on
the New York Stock Exchange (the "Stock Exchange") subject to official
notice of issuance.
3. Purchase, Sale and Delivery of Offered Securities. On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Company at a purchase price of $[ ] per
share, the respective numbers of shares of U.S. Firm Securities set forth
opposite the names of the Underwriters in Schedule A hereto.
The Company will deliver the U.S. Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price by certified or official bank check or checks in New York
Clearing House (next day) funds drawn to the order of the Company at the office
of Cravath, Swaine & Moore, at 9:30 A.M., New York time, on [ ], 1996,
or at such other time not later than seven full business days thereafter as CS
First Boston Corporation ("CSFBC") and the Company determine, such time being
herein referred to as the "First Closing Date". For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, the First Closing Date (if later
than the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the Offerings. The certificates for the U.S. Firm Securities so to
be delivered will be in definitive form, in such denominations and registered
in such names as CSFBC requests and will be made available for checking and
packaging at the above office of Cravath, Swaine & Moore, at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the
Company from time to time not more than 30 days subsequent to the date of the
initial public offering of the Offered Securities, the Underwriters and the
Managers may purchase all or less than all of the Optional Securities, which in
the case of the Underwriters shall be at the purchase price per Security to be
paid for the U.S. Firm Securities. Unless otherwise agreed between CSFBL and
CSFBC, the U.S. Optional Securities to be purchased by the Underwriters on any
Optional Closing Date (as defined below) shall be in the same proportion to all
the Optional Securities to be purchased by the Underwriters and Managers on
such Optional Closing Date as the U.S. Firm Securities bear to all the Offered
Securities. The Company agrees to sell to the Underwriters such U.S. Optional
Securities and the Underwriters agree, severally and
<PAGE> 10
10
not jointly, to purchase such U.S. Optional Securities. Such U.S. Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of U.S. Firm Securities set forth opposite
such Underwriter's name bears to the total number of shares of U.S. Firm
Securities (subject to adjustment by CSFBC to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the U.S. Firm Securities. No Optional
Securities shall be sold or delivered unless the U.S. Firm Securities and the
International Firm Securities previously have been, or simultaneously are, sold
and delivered. The right to purchase the Optional Securities or any portion
thereof may be exercised from time to time upon written or telegraphic notice
by the Underwriters to the Company setting forth the number of Optional
Securities as to which the several Underwriters are exercising the Option and
to the extent not previously exercised may be surrendered and terminated at any
time upon notice by CSFBC on behalf of Underwriters and the Managers to the
Company.
Each time for the delivery of and payment of the U.S. Optional
Securities, being herein referred to as an "Optional Closing Date", which may
be the First Closing Date (the First Closing Date and each Optional Closing
Date, if any, being sometimes referred to as a "Closing Date"), shall be
determined by CSFBC but shall be not later than five full business days after
written or telegraphic notice of election to purchase Optional Securities is
given. The Company will deliver the U.S. Optional Securities being purchased
on each Optional Closing Date to the Representatives for the accounts of the
several Underwriters, against payment of the purchase price therefor by
certified or official bank check or checks in New York Clearing House (next
day) funds drawn to the order of the Company, at the above office of Cravath,
Swaine & Moore. The certificates for the U.S. Optional Securities will be in
definitive form, in such denominations and registered in such names as CSFBC
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the above office of Cravath,
Swaine & Moore, at a reasonable time in advance of the such Optional Closing
Date.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the U.S. Securities for sale to the
public as set forth in the U.S. Prospectus.
5. Certain Agreements of the Company. The Company agrees
with the several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
the Company will file the Prospectuses with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the
<PAGE> 11
11
fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement and an additional registration statement is
necessary to register a portion of the Offered Securities under the
Act but the Effective Time thereof has not occurred as of such
execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective
amendment thereto with the Commission pursuant to and in accordance
with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date
of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make
such filing at such later date as shall have been consented to by CS
First Boston.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any registration statement as
filed or the related prospectus or the Initial Registration Statement,
the Additional Registration Statement (if any) or either of the
Prospectuses and will not effect such amendment or supplementation
without CSFBC's prior consent; and the Company will also advise CSFBC
promptly of the effectiveness of each Registration Statement (if the
Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or either of the Prospectuses and of the institution by the
Commission of any stop order proceedings in respect of a Registration
Statement and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if
issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any Underwriter, Manager or dealer, any event occurs as
a result of which either or both of the Prospectuses as then amended
or supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend either or
both of the Prospectuses to comply with the Act, the Company will
promptly notify CSFBC of such event and will promptly prepare and, in
the case of the U.S. Prospectus, file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriter's delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its security
<PAGE> 12
12
holders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional
Registration Statement) which will satisfy the provisions of Section
11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes the
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
the Registration Statements (five of which will be signed and will
include all exhibits), each preliminary prospectus relating to the
U.S. Securities, and, so long as delivery of a prospectus relating to
the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the U.S.
Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as CSFBC
requests. The U.S. Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. The Company will pay the expenses
of printing and distributing all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions in
the United States and Canada as CSFBC designates and will continue
such qualifications in effect so long as required for the
distribution.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report or definitive proxy statement of
the Company filed with the Commission under the Securities Exchange
Act of 1934 or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as CSFBC may reasonably
request.
(h) The Company will indemnify and hold harmless the
Underwriters against any documentary, stamp or similar issuance tax,
including any interest and penalties, on the creation, issuance and
sale of the Offered Securities and on the execution and delivery of
this Agreement. All payments to be made by the Company hereunder
shall be made without withholding or deduction or on account of any
present or future taxes, duties or governmental charges
<PAGE> 13
13
whatsoever unless the Company is compelled by law to deduct or
withhold such taxes, duties or charges. In that event, the Company
shall pay such additional amounts as may be necessary in order that
the net amounts received after such withholding or deduction shall
equal the amounts that would have been received if no withholding or
deduction had been made.
(i) The Company will reimburse the Underwriters (if and to
the extent incurred by them) for any travel expenses of the Company's
officers and employees and other expenses of the Company in connection
with attending or hosting meetings with prospective purchasers of the
Offered Securities.
(j) The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the
obligations of the Company under this Agreement and will reimburse the
Underwriters (if and to the extent incurred by them) for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred by them in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions in the United
States and Canada as CSFBC designates and the printing of memoranda
relating thereto, for the filing fee of the National Association of
Securities Dealers, Inc. relating to the Offered Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectuses (including any amendments and supplements thereto) to the
Underwriters.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the U.S. Firm
Securities on the First Closing Date and the U.S. Optional Securities to be
purchased on each Optional
<PAGE> 14
14
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of officers of the Company made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to such filing of the amendment or post-effective amendment to
the registration statement to be filed shortly prior to such Effective
Time), of Price Waterhouse LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect
set forth in Schedule B hereto.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this
Agreement, the Effective Time shall have occurred not later than 10:00
P.M., New York time, on the date of this Agreement or such later date
as shall have been consented to by CSFBC. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectuses are printed
and distributed to any Underwriter, or shall have occurred at such
later date as shall have been consented to by CS First Boston. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the U.S. Prospectus shall
have been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including the Representatives, materially impairs the
investment quality of the Offered Securities; (ii) any downgrading in
the rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under
<PAGE> 15
15
the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the U.S. Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Thompson Hine & Flory P.L.L., counsel for the
Company, to the effect that:
(i) the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectuses; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or leasing of property or
the conduct of its business requires such qualification other
than jurisdictions in which the failure to so qualify would
not have a material adverse effect on the Company and its
subsidiaries taken as one enterprise;
(ii) each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own its properties and
conduct its business as described in the Prospectuses; and
each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or leasing of
property or the conduct of its business requires such
qualification other than jurisdictions in which the failure to
so qualify would not have a material adverse effect on the
Company and its subsidiaries taken as one enterprise; all of
the issued and outstanding capital stock of each subsidiary of
the Company has been duly authorized and validly issued and
is, to such counsel's knowledge, fully paid and nonassessable;
and
<PAGE> 16
16
the capital stock of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free and clear of any perfected
security interests, and, to such counsel's knowledge, free and clear
of any other security interests, claims, liens, encumbrances and
defects;
(iii) the Company's authorized capital stock is as
set forth in the Prospectuses under "Description of Capital
Stock--General"; the Offered Securities delivered on such
Closing Date and all other outstanding shares of the Common
Stock of the Company have been duly authorized and validly
issued, are, to such counsel's knowledge, fully paid and
nonassessable and conform to the description thereof contained
in the Prospectuses; the Offered Securities are duly
authorized for listing, subject to official notice of
issuance, on the Stock Exchange; the certificates for the
Offered Securities are in valid form; and the stockholders of
the Company have no preemptive rights or similar rights with
respect to the Offered Securities;
(iv) no consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement or the Subscription Agreement
in connection with the issuance or sale of the Offered
Securities by the Company, except such as have been obtained
and made under the Act and such as may be required under state
securities laws;
(v) the execution, delivery and performance of this
Agreement and the Subscription Agreement and the issuance and
sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any agreement or instrument
known to such counsel to which the Company or any such
subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or
by-laws of the Company or any such subsidiary, and the Company
has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement and the
Subscription Agreement, respectively;
(vi) the Initial Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Additional Registration Statement (if any)
was filed and became effective under the Act as of the date
and time (if determinable)
<PAGE> 17
17
specified in such opinion, the Prospectuses either were filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or were included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act; and such counsel do not know of any legal
or governmental proceedings required to be described in a Registration
Statement or the Prospectuses which are not described as required or
of any franchises, contracts or documents of a character required to
be described in a Registration Statement or the Prospectuses or to be
filed as exhibits to the Registration Statements which are not
described and filed as required;
(vii) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
to which any of the properties of the Company or any of its
subsidiaries is subject that is required to be disclosed in a
Registration Statement which is not adequately disclosed in
the Prospectuses;
(viii) this Agreement and the Subscription Agreement
have been duly authorized, executed and delivered by the
Company;
(ix) the statements in the Prospectuses under the
headings "Description of Capital Stock" and, in the case of
the International Prospectus, "Certain United States Federal
Tax Consequences to Non-U.S. Holders" fairly summarize, in all
material respects, the matters therein described; and
(x) to such counsel's knowledge, no holders of
securities of the Company have rights to the registration of
such securities.
In giving their opinion, Thompson Hine & Flory P.L.L. shall
additionally state that although they are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Prospectuses (except
as set forth in paragraph (ix) under Section 6(d) hereof) and they have not
made any independent check or verification thereof, they have participated in
conferences with officers and other representatives of the Company, counsel for
the Company, and representatives of the independent public accountants for the
Company, at which conferences the contents of the Registration Statements and
the Prospectuses were discussed and, on
<PAGE> 18
18
the basis of the foregoing, (x) no facts have come to their attention that
would lead them to believe that the Registration Statements and the U.S.
Prospectus, and each amendment or supplement thereto (except the financial
statements contained therein), as of their respective effective or issue dates,
did not comply as to form in all material respects with the requirements of the
Act and the Rules and Regulations; and (y) such counsel have no reason to
believe either that any Registration Statement or either of the Prospectuses,
or any such amendment or supplement, as of their respective effective or issue
dates or as of such Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Reed Smith Shaw & McClay, healthcare counsel for
the Company, to the effect as follows:
(i) the issuance, sale and delivery of the Common
Stock of the Company pursuant to this Agreement and the
Subscription Agreement does not require any consent of any
healthcare agency or other healthcare regulatory body of any
State in which the Company or any of its subsidiaries operate
or any Federal Medicare or Medicaid laws and regulations; and
(ii) the statements in the Prospectus under the
caption "Business--[Reimbursement and Billing" and
"]Government Regulation" insofar as they purport to constitute
summaries of healthcare laws, regulations, policies and
interpretation, are accurate and fairly present the legal
issues purported to be described therein, and such counsel are
not aware of any other healthcare laws, rules, regulations,
policies or interpretations which are material to the
operations of the Company and its subsidiaries which have not
been adequately and accurately disclosed in the Prospectus.
(f) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Underwriters, such opinions and
letters, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectuses and other
related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice- President and a
principal financial or accounting officer of the Company in which such
officers, to the best of
<PAGE> 19
19
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are
true and correct, that the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date, that no stop order
suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission, that the Additional Registration
Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including
payment of the applicable filing fee in accordance with Rule 111(a) or
(b) under the Act, prior to the time the Prospectus was printed and
distributed to any Underwriter, and that, subsequent to the date of
the most recent financial statements in the Prospectuses, there has
been no material adverse change in the financial position or results
of operation of the Company and its subsidiaries except as set forth
in or contemplated by the Prospectuses or as described in such
certificate.
(h) The Representatives shall have received a letter, dated
such Closing Date, of Price Waterhouse LLP, which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than five days prior to such Closing Date for the purpose of this
subsection.
(i) On such Closing Date, the Managers shall have purchased
the International Firm Securities or the International Optional
Securities, as the case may be, pursuant to the Subscription
Agreement.
(j) The Company will furnish the Representatives with such
conformed copies of such opinions, certificates, letters and documents
as the Representatives reasonably request.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable in any
<PAGE> 20
20
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only information furnished by any Underwriter consists of
the information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, either of the Prospectuses, or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the U.S. Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legend concerning
over-allotments and stabilizing on the inside front cover page and the
concession and reallowance figures appearing in the paragraph under the caption
"Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the
<PAGE> 21
21
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion between the Company and the Underwriters as is appropriate
to reflect the relative benefits received by the Company on the one hand and
the Underwriters on the other from the offering of the U.S. Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Underwriters, respectively, in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriters shall be deemed to be in the same
proportion as the total net proceeds from the offering of the U.S. Securities
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amounts in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to
<PAGE> 22
22
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or
Underwriters default in their obligations to purchase U.S. Securities
hereunder on either the First Closing Date or any Optional Closing Date and the
aggregate number of shares of U.S. Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase does not exceed 10% of the total
number of shares of U.S. Securities that the Underwriters are obligated to
purchase on such Closing Date, CSFBC may make arrangements satisfactory to the
Company for the purchase of such U.S. Securities by other persons, including
any of the Underwriters, but if no such arrangements are made by such Closing
Date the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the U.S.
Securities that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of shares of U.S. Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of U.S.
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to CSFBC and the Company for the purchase of such
U.S. Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9
(provided that if such default occurs with respect to U.S. Optional Securities
after the First Closing Date, this Agreement will not terminate as to the U.S.
Firm Securities or any U.S. Optional Securities purchased prior to such
termination). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of their
respective representatives, officers or
<PAGE> 23
23
directors or any controlling person, and will survive delivery of and payment
for the U.S. Securities. If this Agreement is terminated pursuant to Section 8
or if for any reason the purchase of the U.S. Securities by the Underwriters is
not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by them pursuant to Section 5 and the respective obligations
of the Company and the Underwriters pursuant to Section 7 shall remain in
effect and if any U.S. Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the U.S. Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (iii), (iv), or (v) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the U.S. Securities.
10. Notices. All communications hereunder will be in
writing and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representatives, c/o CS First Boston
Corporation, Park Avenue Plaza, New York, NY 10055, Attention: Investment
Banking Department--Transactions Advisory Group, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 2800 Chemed
Center, 255 East Fifth Street, Cincinnati, Ohio 45202, Attention: Cheryl D.
Hodges; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will
act for the several Underwriters in connection with this financing, and any
action under this Agreement taken by the Representatives jointly or by CSFBC
will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
<PAGE> 24
24
15. Miscellaneous. The Company hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to us a counterpart
hereof, whereupon this Agreement will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
by
-----------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
CS FIRST BOSTON CORPORATION
MONTGOMERY SECURITIES
WILLIAM BLAIR & COMPANY, L.L.C.
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
Acting on behalf of themselves and as
the Representatives of the several
Underwriters.
By CS FIRST BOSTON CORPORATION
by
---------------------------------------
Name:
Title:
<PAGE> 25
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter U.S. Firm Securities
----------- --------------------
<S> <C>
CS First Boston Corporation . . . . . . . . . . . . . . [ ]
Montgomery Securities . . . . . . . . . . . . . . . . . [ ]
William Blair & Company, L.L.C. . . . . . . . . . . . . [ ]
PaineWebber Incorporated . . . . . . . . . . . . . . . [ ]
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . [ ]
---------
Total . . . . . . . . . . . . [ ]
==========
</TABLE>
<PAGE> 26
SCHEDULE B
LETTER OF INDEPENDENT PUBLIC ACCOUNTANTS
REFERRED TO IN SECTION 6(a)
(i) in their opinion the financial statements, including the
financial statement schedules, examined by them and included in the
Registration Statements comply in form in all material respects with the
applicable accounting requirements of the Act and the Rules and Regulations
with respect to registration statements on Form S-3;
[(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No. 71,
Interim Financial Information, on the unaudited financial statements included
in the Registration Statements;]
(iii) on the basis of [the review referred to in clause
(ii)above,] a reading of the latest available interim financial statements of
the Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing came
to their attention that caused them to believe that:
[(A) the unaudited financial statements {and summary
of earnings} included in the Registration Statements do not comply as to form
in all material respects with the applicable accounting requirements of the Act
and the Rules and Regulations or any material modifications should be made to
such unaudited financial statements [and summary of earnings] for them to be in
conformity with generally accepted accounting principles;]
(B) at the date of the latest available interim
financial information read by such accountants, or at a subsequent specified
date not more than five days prior to the date of this Agreement, there was any
change in the capital stock or any increase in short-term obligations or
long-term obligations of the Company and its consolidated subsidiaries or any
decrease in consolidated net current assets or stockholder's equity, as
compared with amounts shown on the latest balance sheet included in the
Prospectuses, except in all instances for changes or increases or decreases
which the Registration Statements disclose have occurred or may occur; or
(C) for the period from the closing date of the
latest income statement included in the Prospectuses to the closing date of the
latest available income statement read by such accountants, there were any
decreases, as compared with the corresponding period of the previous year and,
to the extent possible, with the period of corresponding length beginning on
the first day of the last completed
<PAGE> 27
2
quarter included in the latest income statement included in the Prospectuses,
in consolidated net sales, or income from operations, or in the total or per
share amounts of consolidated income from continuing operations or net income,
except in all instances for changes or decreases which the Registration
Statements disclose have occurred or may occur;
(D) the financial and other information appearing in
the Prospectuses under the captions "Selected Consolidated Financial Data" for
the [three]-year period ended December 31, 1995, or incorporated by reference
into the Registration Statements, do not comply in form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial information
contained in the Registration Statements and, to the extent possible, with the
period of corresponding length beginning on the first day of the last completed
quarter included in the latest income statement included in the Prospectuses,
(in each case to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting records of the
Company and its subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in such
letter.
For purposes of Section 6(a), (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery of
this Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the execution
and delivery of this Agreement but the Effective Time of the Additional
Registration is subsequent to such execution and delivery, "Registration
Statements" shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be amended by
the post-effective amendment to be filed shortly prior to its Effective Time,
and (iii) "Prospectuses" shall mean the prospectuses included in the
Registration Statements. All financial statements and schedules included in
material incorporated by reference into the Prospectuses shall be deemed
included in the Registration Statements for purposes of this subsection.
<PAGE> 1
Exhibit 1.2
5,000,000 Shares
OMNICARE, INC.
Common Stock
($1 Par Value)
SUBSCRIPTION AGREEMENT
London, England
[ ], 1996
To: CS FIRST BOSTON LIMITED
MONTGOMERY SECURITIES
WILLIAM BLAIR & COMPANY, L.L.C.
PAINEWEBBER INTERNATIONAL
SMITH BARNEY INC.
c/o: CS First Boston Limited ("CSFBL")
One Cabot Square
London, England E14 4QJ
Dear Madames or Sirs:
1. Introductory. Omnicare, Inc., a Delaware corporation
("Company"), proposes to issue and sell to the several Managers named in
Schedule A hereto ("Managers") 1,000,000 shares of its Common Stock, $1 par
value per share ("Securities"; such 1,000,000 shares of Securities being
hereinafter referred to as the "International Firm Securities"). The Company
also proposes to issue and sell to the Managers and the U.S. Underwriters (as
defined below), at the option of the Managers and the U.S. Underwriters, an
aggregate of not more than 750,000 additional shares ("Optional Securities") of
Securities as set forth below. The International Firm Securities and the
Optional Securities that may be sold to the Managers ("International Optional
Securities") are herein collectively called the "International Securities".
It is understood that the Company is concurrently entering
into an Underwriting Agreement, dated the date hereof ("Underwriting
Agreement"), with certain United States Underwriters listed in Schedule A
thereto (the "U.S. Underwriters") for whom CS First Boston Corporation
("CSFBC"), Montgomery Securities, PaineWebber Incorporated, Smith Barney Inc.
and William Blair & Company are acting as representatives (the "U.S.
Representatives"), relating to the concurrent offer and sale by the Company of
4,000,000 shares of Securities (such 4,000,000 shares of Securities being
hereinafter referred to as the "U.S. Firm
<PAGE> 2
2
Securities", which together with the Optional Securities that may be sold to
the U.S. Underwriters by the Company ("U.S. Optional Securities") are
hereinafter called the "U.S. Securities")), in the United States and Canada
("U.S. Offering"). The U.S. Securities and the International Securities are
collectively referred to as the "Offered Securities". To provide for the
coordination of their activities, the U.S. Underwriters and the Managers have
entered into an Agreement Between U.S. Underwriters and Managers which permits
them, among other things, to sell the Offered Securities to each other for
purposes of resale.
The Company hereby agrees with the several Managers as
follows:
2. Representations and Warranties of the Company and the
Selling Stockholders. The Company represents and warrants to, and agrees with,
the several Managers that:
(a) A registration statement (No. 333-[ ]), relating to
the Offered Securities, including forms of prospectus relating to the
U.S. Securities and the International Securities, has been filed with
the Securities and Exchange Commission ("Commission") and either (i)
has been declared effective under the Securities Act of 1933 ("Act")
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("initial registration statement") has been declared effective, either
(i) an additional registration statement ("additional registration
statement") relating to the Offered Securities may have been filed
with the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the
Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement and, if
applicable, the additional registration statement or (ii) such an
additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has
been filed with the Commission prior to the execution and delivery of
this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed
prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised CSFBL
<PAGE> 3
3
that it does not propose to amend such registration statement, the
date and time as of which such registration statement, or the most
recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c), or (ii) if the Company has advised CSFBL that it proposes to
file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement,
as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with
respect to such additional registration statement means that date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to
the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all material incorporated by reference therein, including
all information contained in the additional registration statement (if
any) and including all information (if any) deemed to be a part of the
initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions
of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of
its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Act, is hereinafter referred to as the "Initial Registration
Statement". The additional registration statement, as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the U.S. Securities
and the form of prospectus relating to the International Securities,
each as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing
is required) as included in a Registration Statement, including all
material incorporated by reference in such prospectus, is hereinafter
referred to as the "U.S. Prospectus", and the "International
Prospectus", respectively; and the U.S. Prospectus and the
International Prospectus are hereinafter collectively referred to as
the "Prospectuses". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
<PAGE> 4
4
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(i) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time
of filing of each of the Prospectuses pursuant to Rule 424(b) or (if
no such filing is required) at the Effective Date of the Additional
Registration Statement in which each of the Prospectuses is included,
each Registration Statement and each of the Prospectuses will conform,
in all respects to the requirements of the Act and the Rules and
Regulations, and none of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and each of
the Prospectuses will conform in all respects to the requirements of
the Act and the Rules and Regulations, and none of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do
not apply to statements in or omissions from a Registration Statement
or either of the Prospectuses based upon written information furnished
to the Company by any Underwriter through the Representatives or by
any Manager through CSFBL specifically for use therein, it being
understood and agreed that the only such information is that described
as such in Section 7(b).
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectuses; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in
<PAGE> 5
5
which its ownership or lease of property or the conduct of its business
requires such qualification.
(d) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority
to own its properties and conduct its business as described in the
Prospectuses; and each subsidiary of the Company is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; all of the issued
and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(e) The Offered Securities and all other outstanding shares
of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities have been delivered and paid for in accordance with
this Agreement and the Underwriting Agreement on each Closing Date (as
defined below), the Offered Securities will have been, validly issued,
fully paid and nonassessable and will conform to the description
thereof contained in the Prospectuses; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(f) There are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Manager or U.S. Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with the sale of the Offered Securities.
(g) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities in
the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Act except for such contracts
and agreements as to which the Company has already satisfied its
obligation to file a registration statement under the Act or to
include securities in a registration statement filed by the Company
under the Act.
(h) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the
<PAGE> 6
6
consummation of the transactions contemplated by this Agreement or the
Underwriting Agreement in connection with the issuance and sale of
Offered Securities by the Company, except such as have been obtained
and made under the Act and such as may be required under state
securities laws.
(i) The execution, delivery and performance of this Agreement
and the Underwriting Agreement and the issuance and sale of the
Offered Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or domestic or foreign order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any such
subsidiary is subject, or the charter or by-laws of the Company or any
such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by
this Agreement and the Underwriting Agreement, respectively.
(j) This Agreement and the Underwriting Agreement have been
duly authorized, executed and delivered by the Company.
(k) The Company and its subsidiaries have good and marketable
title in fee simple to all real properties and good and marketable
title to all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by them; and all leased real and personal property held
by the Company or any of its subsidiaries is held under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by the Company and its
subsidiaries.
(l) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
(m) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might
<PAGE> 7
7
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(n) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(o) Neither the Company nor any of its subsidiaries is in
violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), or is subject to any
claim relating to any environmental laws, which violation
or claim would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole;
and the Company is not aware of any pending investigation which might
lead to such a claim.
(p) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the condition (financial
or other), business, prospects, results of operations or general
affairs of the Company and its subsidiaries taken as a whole, or would
materially and adversely affect the ability of the Company to perform
its obligations under this Agreement or the Underwriting Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(q) To the Company's knowledge, the accountants who certified
the financial statements and supporting schedules included or
incorporated by reference in each Registration Statement are
independent public accountants as required by the Act and the Rules
and Regulations.
<PAGE> 8
8
(r) The financial statements included in each Registration
Statement and the Prospectuses present fairly the financial position
of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with
the generally accepted accounting principles in the United States
applied on a consistent basis (except as set forth in the accompanying
footnotes) and comply with the requirements of the Act; and the
schedules present fairly the information required to be stated therein
and comply with the requirements of the Act. The financial
information and statistical data set forth in each of the Prospectus
under the captions "Capitalization," "Selected Consolidated Financial
Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" have been prepared on a basis consistent
with the consolidated financial statements of the Company. The pro
forma financial information incorporated by reference in each
Registration Statement comply with the requirements of the Act and the
Rules and Regulations; the assumptions of management described in the
notes to such pro forma financial information provide a reasonable
basis for presenting the significant effects directly attributable to
the transactions described in such notes; the related pro forma
adjustments give appropriate effect to those assumptions and the pro
forma column reflects the proper application of those adjustments to
the historical financial statement amounts in the pro forma condensed
balance sheet and the pro forma condensed statement of income.
(s) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses, there has
been no material adverse change, nor any development or event that may
result in a prospective material adverse change, in the condition
(financial or other), business, prospects, results of operations or
general affairs of the Company and its subsidiaries taken as a whole,
and, except as disclosed in or contemplated by the Prospectuses, there
has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(t) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectuses, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(u) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes and the Company agrees to comply with such Section if prior
to the completion of the distribution of the Offered Securities it
commences doing such business.
<PAGE> 9
9
(v) Except where the failure to file would not have a
material adverse effect, all tax returns required to be filed by the
Company or any of its subsidiaries, in any jurisdiction, have been so
filed, and all material taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be
due from such entities have been paid, other than those being
contested in good faith and for which adequate reserves have been
provided or those currently payable without material penalty or
interest. No material proposed additional tax assessments have been
asserted in writing against the Company or any of its subsidiaries.
(w) The Offered Securities have been approved for listing on
the New York Stock Exchange (the "Stock Exchange") subject to official
notice of issuance.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
sell to the Managers and the Managers agree, severally and not jointly, to
purchase from the Company at a purchase price of U.S.$[ ] per share, the
respective numbers of shares of International Firm Securities set forth
opposite the names of the Managers in Schedule A hereto.
The Company will deliver the International Firm Securities to
CSFBL for the accounts of the Managers, against payment of the purchase price
in U.S. dollars by certified or official bank check or checks in New York
Clearing House (next day) funds drawn to the order of the Company at the office
of Cravath, Swaine & Moore, at 9:30 A.M., New York time, on [ ], 1996, or
at such other time not later than seven full business days thereafter as CSFBL
and the Company determine, such time being herein referred to as the "First
Closing Date". For purposes of Rule 15c6-1 under the Securities Exchange Act
of 1934, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the Offerings.
The certificates for the International Firm Securities so to be delivered will
be in definitive form, in such denominations and registered in such names as
CSFBL requests and will be made available for checking and packaging at the
above office of Cravath, Swaine & Moore, at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from CSFBC given to the
Company from time to time not more than 30 days subsequent to the date of the
initial public offering of the Offered Securities, the Managers may purchase
all or less than all of the International Optional Securities, at the purchase
price per Security to be paid for the International Firm Securities. Unless
otherwise agreed between CSFBL and CSFBC, the International Optional Securities
to be purchased by the Managers on any
<PAGE> 10
10
Optional Closing Date (as defined below) shall be in the same proportion to all
the Optional Securities to be purchased by the Managers and U.S. Underwriters
on such Optional Closing Date as the International Firm Securities bear to all
the Offered Securities. The Company agrees to sell to the Managers such
International Optional Securities and the Managers agree, severally and not
jointly, to purchase such International Optional Securities. Such
International Optional Securities shall be purchased for the account of each
Manager in the same proportion as the number of shares of International Firm
Securities set forth opposite such Manager's name bears to the total number of
shares of International Firm Securities (subject to adjustment by CSFBL to
eliminate fractions) and may be purchased by the Managers only for the purpose
of covering over-allotments made in connection with the sale of the
International Firm Securities. No Optional Securities shall be sold or
delivered unless the International Firm Securities and the U.S. Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time upon written or telegraphic notice by the Underwriters to the
Company setting forth the number of Optional Securities as to which the several
Underwriters are exercising the Option and to the extent not previously
exercised may be surrendered and terminated at any time upon notice by CSFBC on
behalf of the Managers and the U.S. Underwriters to the Company and Chemed.
Each time for the delivery of and payment of the International
Optional Securities, being herein referred to as an "Optional Closing Date",
which may be the First Closing Date (the First Closing Date and each Optional
Closing Date, if any, being sometimes referred to as a "Closing Date"), shall
be determined by CSFBC but shall be not later than five full business days
after written or telegraphic notice of election to purchase Optional Securities
is given. The Company will deliver the International Optional Securities being
purchased on each Optional Closing Date to CSFBL for the accounts of the
several Managers, against payment of the purchase price therefor by certified
or official bank check or checks in New York Clearing House (next day) funds
drawn to the order of the Company and Chemed, for their respective shares, at
the above office of Cravath, Swaine & Moore. The certificates for the
International Optional Securities will be in definitive form, in such
denominations and registered in such names as CSFBL requests upon reasonable
notice prior to such Optional Closing Date and will be made available for
checking and packaging at the above office of Cravath, Swaine & Moore, at a
reasonable time in advance of the such Optional Closing Date.
4. Offering by Managers. It is understood that the several
Managers propose to offer the International Securities for sale to the public
as set forth in the International Prospectus.
In connection with the distribution of the International
Securities, the Managers, through a stabilizing manager, may over-allot or
effect transactions on any
<PAGE> 11
11
exchange, in any over-the-counter market or otherwise which stabilize or
maintain the market prices of the International Securities at levels other than
those which might otherwise prevail, but in such event and in relation thereto,
the Managers will act for themselves and not as agents of the Company, and any
loss resulting from over-allotment and stabilization will be borne, and any
profit arising therefrom will be beneficially retained, by the Managers. Such
stabilizing, if commenced, may be discontinued at any time.
5. Certain Agreements of the Company. The Company agrees
with the several Managers that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
the Company will file each of the Prospectuses with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable
and if consented to by CSFBL, subparagraph (4)) of Rule 424(b) not
later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth business
day after the Effective Date of the Initial Registration Statement.
The Company will advise CSFBL promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a
portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the
Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on
or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have
been consented to by CSFBC.
(b) The Company will advise CSFBL promptly of any proposal to
amend or supplement the initial or any registration statement as filed
or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or either of the
Prospectuses and will not effect such amendment or supplementation
without CSFBL's prior consent; and the Company will also advise CSFBL
promptly of the effectiveness of each Registration Statement (if the
Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or either of the Prospectuses and of the institution by the
Commission of any stop order proceedings in respect of a Registration
Statement and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if
issued.
<PAGE> 12
12
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by any U.S. Underwriter, Manager or dealer, any event
occurs as a result of which either or both of the Prospectuses as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
either or both of the Prospectuses to comply with the Act, the Company
will promptly notify CSFBL of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBL's consent
to, nor the Managers' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of
the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes the Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Managers copies of the
Registration Statements (five of which will be signed and will include
all exhibits), each preliminary prospectus relating to the
International Securities, and until completion of the distribution of
the International Securities as determined by CSFBL, the International
Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as CSFBL
requests. The Company will pay the expenses of printing and
distributing to the Managers all such documents. The International
Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement.
(f) No action has been or, prior to the completion of the
distribution of the Offered Securities, will be taken by the Company
in any jurisdiction outside the United States and Canada that would
permit a public offering of the Offered Securities, or possession or
distribution of the International Prospectus, or any amendment or
supplement thereto, or any related
<PAGE> 13
13
preliminary prospectus issued in connection with the offering of the
Offered Securities, or any other offering material, in any country or
jurisdiction where action for that purpose is required.
(g) During the period of five years hereafter, the Company
will furnish to CSFBL and, upon request, to each of the other
Managers, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the
Company will furnish to the CSFBL (i) as soon as available, a copy of
each report or definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as CSFBL may reasonably request.
(h) The Company will indemnify and hold harmless the Managers
against any documentary, stamp or similar issuance tax, including any
interest and penalties, on the creation, issuance and sale of the
Offered Securities and on the execution and delivery of this
Agreement. All payments to be made by the Company hereunder shall be
made without withholding or deduction or on account of any present or
future taxes, duties or governmental charges whatsoever unless the
Company is compelled by law to deduct or withhold such taxes, duties
or charges. In that event, the Company shall pay such additional
amounts as may be necessary in order that the net amounts received
after such withholding or deduction shall equal the amounts that would
have been received if no withholding or deduction had been made.
(i) The Company will reimburse the Managers (if and to the
extent incurred by them) for any travel expenses of the Company's
officers and
<PAGE> 14
14
employees and other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the
Offered Securities.
(j) The Company agrees with the several Managers that the
Company will pay all expenses incident to the performance of the
obligations of the Company under this Agreement and will reimburse the
Managers (if and to the extent incurred by them) for any filing fees
and other expenses (including fees and disbursements of counsel)
incurred by them in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions in the United
States and Canada as CSFBL designates and the printing of memoranda
relating thereto, for the filing fee of the National Association of
Securities Dealers, Inc. relating to the Offered Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectuses (including any amendments and supplements thereto) to the
Managers.
6. Conditions of the Obligations of the Managers. The
obligations of the several Managers to purchase and pay for the International
Firm Securities on the First Closing Date and the International Optional
Securities to be purchased on each Optional Closing Date will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) The Managers shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Price Waterhouse LLP, in the agreed form.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this
Agreement, the Effective Time shall have occurred not later than 10:00
P.M., New York time, on the date of this Agreement or such later date
as shall have been consented to by CSFBL. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectuses are printed
and distributed to any Manager, or shall have occurred at such later
date as shall have been consented to by CSFBL. If the Effective Time
of the Initial
<PAGE> 15
15
Registration Statement is prior to the execution and delivery of this
Agreement, each of the Prospectuses shall have been filed with the
Commission in accordance with the Rules and Regulations and Section
5(a) of this Agreement. Prior to such Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Managers, shall
be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) a change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of
CSFBL, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the International Securities, whether
in the primary market or in respect of dealings in the secondary
market; (ii) any change, or any development involving a prospective
change, in or affecting particularly the business or properties of the
Company or its subsidiaries which, in the judgment of CSFBL,
materially impairs the investment quality of the Offered Securities;
(iii) any downgrading in the rating of any debt securities of the
Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading, of such rating); (iv) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (v) any
banking moratorium declared by Federal or New York authorities; or
(vi) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if,
in the judgment of CSFBL, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the
International Securities.
(d) The Managers shall have received an opinion, dated such
Closing Date, of Thompson Hine & Flory P.L.L., counsel for the
Company, in the agreed form.
(e) The Managers shall have received an opinion, dated such
Closing Date, of Reed Smith Shaw & McClay, healthcare counsel for the
Company, in the agreed form.
<PAGE> 16
16
(f) The Managers shall have received from Cravath, Swaine &
Moore, counsel for the Managers, such opinions and letters, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectuses and other related matters as
the Representatives may require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(g) The Managers shall have received a certificate, dated
such Closing Date, of the President or any Vice- President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such
Closing Date, that no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission,
that the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing
fee in accordance with Rule 111(a) or (b) under the Act, prior to the
time the Prospectus was printed and distributed to any Manager, and
that, subsequent to the date of the most recent financial statements
in the Prospectuses, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries except as set forth in or contemplated by the
Prospectuses or as described in such certificate.
(h) The Representatives shall have received a letter, dated
such Closing Date, of Price Waterhouse LLP, which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than five days prior to such Closing Date for the purpose of this
subsection.
(i) On such Closing Date, the U.S. Underwriters shall have
purchased the U.S. Firm Securities or the U.S. Optional Securities, as
the case may be, pursuant to the Underwriting Agreement.
Documents described as being "in the agreed form" are
documents which are in the forms which have been initialled for the purpose of
identification by Cravath, Swaine & Moore, copies of which are held by the
Company and CSFBL with such changes as CSFBL may approve. The Company will
furnish the Managers with such conformed copies of such opinions, certificates,
letters and documents as the Managers reasonably request. CSFBL may in its
sole discretion waive on behalf
<PAGE> 17
17
of the Managers compliance with any conditions to the obligations of the
Managers hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Manager against any losses, claims, damages or
liabilities, joint or several, to which such Manager may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Manager for any legal or other expenses
reasonably incurred by such Manager in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Manager
through CSFBL specifically for use therein, it being understood and agreed that
the only information furnished by any Manager consists of the information
described as such in subsection (b) below.
(b) Each Manager will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, either of the
Prospectuses, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Manager
through CSFBL specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Manager consists of the following information in
the International Prospectus furnished on behalf of each Manager: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Managers, the legend concerning over-allotments and stabilizing on the
inside front cover page and the concession and reallowance figures appearing in
the paragraph under the caption "Subscription and Sale".
<PAGE> 18
18
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion between the Company and the Managers as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Managers on the other from the offering of the International Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Managers, respectively, in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Managers shall be deemed to be in the same proportion as
the total net proceeds from the offering of the International Securities
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Managers. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Managers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission.
<PAGE> 19
19
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Managers shall be required to contribute
any amounts in excess of the amount by which the total price at which the
International Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Manager has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Managers' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Manager within the meaning of the Act; and the obligations of the
Managers under this Section shall be in addition to any liability which the
respective Managers may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Managers. If any Manager or Managers default
in their obligations to purchase International Securities hereunder on either
the First Closing Date or any Optional Closing Date and the aggregate number of
shares of International Securities that such defaulting Manager or Managers
agreed but failed to purchase does not exceed 10% of the total number of shares
of International Securities that the Managers are obligated to purchase on such
Closing Date, CSFBL may make arrangements satisfactory to the Company for the
purchase of such International Securities by other persons, including any of
the Managers, but if no such arrangements are made by such Closing Date the
non-defaulting Managers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the International Securities that
such defaulting Managers agreed but failed to purchase on such Closing Date.
If any Manager or Managers so default and the aggregate number of shares of
International Securities with respect to which such default or defaults occur
exceeds 10% of the total number of shares of International Securities that the
Managers are obligated to purchase on such Closing Date and arrangements
satisfactory to CSFBL and the Company for the purchase of such International
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Manager or the Company, except as provided in Section 9
(provided that if
<PAGE> 20
20
such default occurs with respect to International Optional Securities after the
First Closing Date, this Agreement will not terminate as to the International
Firm Securities or any International Optional Securities purchased prior to
such termination). As used in this Agreement, the term "Manager" includes any
person substituted for a Manager under this Section. Nothing herein will
relieve a defaulting Manager from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Managers set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Manager, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the International Securities. If this
Agreement is terminated pursuant to Section 8 or if for any reason the purchase
of the International Securities by the Managers is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5 and the respective obligations of the Company and the
Managers pursuant to Section 7 shall remain in effect and if any International
Securities have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the International Securities by the Managers is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (iii),
(iv), or (v) of Section 6(c), the Company will reimburse the Managers for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the International
Securities.
10. Notices. All communications hereunder will be in
writing and, if sent to the Managers, will be mailed, delivered or telexed and
confirmed to CSFBL at One Cabot Square, London E14 4QJ England, Attention:
Company Secretary, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 2800 Chemed Center, 255 East Fifth Street,
Cincinnati, Ohio 45202, Attention: Cheryl D. Hodges; provided, however, that
any notice to a Manager pursuant to Section 7 will be mailed, delivered or
telexed and confirmed to such Manager.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
<PAGE> 21
21
12. Representation of Managers. CSFBL will act for the
several Managers in connection with this financing, and any action under this
Agreement taken by CSFBL will be binding upon all the Managers.
13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
15. Miscellaneous. The Company hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Managers'
understanding of our agreement, kindly sign and return to us a counterparts
hereof, whereupon this Agreement will become a binding agreement between the
Company and the several Managers in accordance with its terms.
Very truly yours,
OMNICARE, INC.
by
-------------------------------
Name:
Title:
<PAGE> 22
22
The foregoing Subscription Agreement
is hereby confirmed and accepted as
of the date first above written.
CS FIRST BOSTON LIMITED
MONTGOMERY SECURITIES
WILLIAM BLAIR & COMPANY, L.L.C.
PAINEWEBBER INTERNATIONAL
SMITH BARNEY INC.
By CS FIRST BOSTON LIMITED
by
---------------------------
Name:
Title:
<PAGE> 23
23
SCHEDULE A
<TABLE>
<CAPTION>
Number of International
Manager Firm Securities
------- -----------------------
<S> <C>
CS First Boston Limited. . . . . . . . . . . . . . . [ ]
Montgomery Securities. . . . . . . . . . . . . . . . [ ]
William Blair & Company, L.L.C.. . . . . . . . . . . [ ]
PaineWebber International. . . . . . . . . . . . . . [ ]
Smith Barney Inc.. . . . . . . . . . . . . . . . . . [ ]
_____
Total . . . . . . . . . . . [ ]
======
</TABLE>
<PAGE> 1
EXHIBIT 5
THOMPSON HINE & FLORY P.L.L.
ATTORNEYS AT LAW
312 WALNUT STREET
CINCINNATI, OHIO 45202
February 26, 1996
Omnicare, Inc.
2800 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
Ladies and Gentlemen:
Reference is made to the offering by Omnicare, Inc., a Delaware corporation
(the "Company"), of up to 5,750,000 shares of the Company's Common Stock, par
value $1.00 per share (the "Shares"), pursuant to a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Registration
Statement"). The Shares include 750,000 shares which are subject to an
over-allotment option granted by the Company to the Underwriters and Managers
named in the Registration Statement.
As counsel for the Company, we have examined and are familiar with the
Company's Restated Certificate of Incorporation and By-Laws, as amended, and
various corporate records and proceedings relating to the organization of the
Company and the issuance of the Shares. Based upon the foregoing and upon
investigation of such other matters as we consider appropriate to permit us to
render an informed opinion, it is our opinion that:
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
2. The Shares have been duly authorized and, upon issuance thereof and
payment therefor in accordance with the Underwriting Agreement or the
Subscription Agreement filed as Exhibits to the Registration Statement,
will be duly authorized, validly issued, fully paid and nonassessable.
This opinion is solely for your information in connection with the
Registration Statement and is not to be quoted or otherwise referred to in any
of your financial statements or public releases, filed with any governmental
agency, or given to any other person without our prior written consent. This
opinion may not be relied upon by any other person, or used by you for any other
purpose, without our prior written consent.
We consent to the use of this opinion as an Exhibit to the Registration
Statement, and we consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ THOMPSON HINE & FLORY P.L.L.
JMR: WHC
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 5, 1996 appearing on page 4 of the Company's consolidated financial
statements for the three year period ended December 31, 1995 included in the
Form 8-K dated February 26, 1996. We also consent to the incorporation by
reference in such Prospectus of our report dated February 1, 1995 appearing on
page 19 of the Company's Annual Report on Form 10-K for the year ended December
31, 1994, as amended by the Company's Form 10-K/A filed August 23, 1995. Those
reports refer to our reliance on other auditors with respect to the financial
position of Evergreen Pharmaceutical, Inc. and Evergreen Pharmaceutical East,
Inc. at December 31, 1993 and their results of operations and cash flows for the
years ended December 31, 1993 and 1992. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
Cincinnati, Ohio
February 26, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of our report
dated July 29, 1994 relating to the combined financial statements of Evergreen
appearing in the Company's current report on Form 8-K dated February 26, 1996.
We also consent to the incorporation by reference in such Prospectus of our
report dated July 29, 1994 in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, as amended by the Company's Form 10-K/A filed
August 23, 1995.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ BDO SEIDMAN, LLP
Seattle, Washington
February 23, 1996
