OMNICARE INC, DEF 14A, 1999-03-31

OMNICARE INC
DEF 14A, 1999-03-31
DRUG STORES AND PROPRIETARY STORES

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SECURITIES AND EXCHANGE COMMISSION
------------------------
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [x]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

[x] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to 'SS'240.14a-11(c) or 'SS'240.14a-12

OMNICARE, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

------------------------

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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________________________________________________________________________________

[Logo]

OMNICARE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 1999

The Annual Meeting of Stockholders of Omnicare, Inc. (the 'Company') will
be held at The Metropolitan Club, 50 E. RiverCenter Boulevard, Covington,
Kentucky, on Monday, May 17, 1999 at 10:00 a.m. The purpose of the Annual
Meeting is to consider and act upon:

(1) the election of directors;

(2) the ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants of the Company; and

(3) any other business as may properly be brought before the meeting.

Stockholders of record at the close of business on March 22, 1999 are
entitled to notice of, and to vote at, the meeting and any adjournments thereof.

Whether or not you plan to attend the meeting, please sign and date the
enclosed proxy and mail it in the enclosed envelope at your earliest
convenience. No postage is required if it is mailed in the United States.

By Order of the Board of Directors

CHERYL D. HODGES
Secretary

Covington, Kentucky
March 31, 1999

YOUR VOTE IS IMPORTANT! TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING, PLEASE TAKE A MOMENT TO SIGN, DATE AND PROMPTLY MAIL YOUR PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.

OMNICARE, INC.
100 E. RIVERCENTER BOULEVARD
COVINGTON, KENTUCKY 41011
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is furnished to stockholders in connection with the
solicitation by the Board of Directors of Omnicare, Inc. (the 'Company') of
proxies to be used at the Annual Meeting of Stockholders of the Company to be
held on May 17, 1999, and any adjournment thereof ('Annual Meeting').
Stockholders of record as of the close of business on March 22, 1999 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. As of such date, the Company had outstanding 90,860,494 shares of its
Common Stock, par value $1 per share ('Common Stock'), having one vote per
share.

To constitute a quorum at the Annual Meeting, the presence, in person or by
proxy, of the holders of a majority of the outstanding shares of Common Stock is
necessary. Shares represented by proxies received by the Company will be counted
as present at the Annual Meeting for the purpose of determining the existence of
a quorum, regardless of how or whether such shares are voted on a specific
proposal. Abstentions will be treated as votes cast on a particular proposal as
well as shares present at the Annual Meeting. Where nominee stockholders are not
permitted to vote on a specific issue because they did not receive specified
instructions on the specific issue from the beneficial owners of the shares
('Broker Nonvotes'), such Broker Nonvotes will be treated as not present at the
meeting for purposes of calculating the results of the vote on the specific
issue. Accordingly, abstentions and Broker Nonvotes have the effect of a
negative vote on any proposal where the vote required to pass the proposal is a
percentage of the outstanding shares, but only abstentions have the effect of a
negative vote when the vote required to pass a proposal is a percentage of the
shares present at the Annual Meeting. Shares represented by properly executed
proxies received in the accompanying form will be voted in accordance with the
instructions contained therein. In the absence of contrary instructions, such
shares will be voted (1) to elect as directors the 13 persons named below; and
(2) to ratify the selection of PricewaterhouseCooopers LLP as independent
accountants of the Company for 1999. A proxy may be revoked at any time prior to
its exercise by the execution of a proxy signed at a later date or by the giving
of written notice of revocation to the Secretary of the Company. A revocation
during the Annual Meeting will not affect any vote previously taken.

This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about March 31, 1999.

ELECTION OF DIRECTORS

The number of directors to be elected at the Annual Meeting has been fixed
by the Board of Directors at 13. Directors are to be elected to serve until the
following annual meeting of stockholders and until their respective successors
are duly elected and qualified. Set forth below are the names of the persons to
be nominated by the Board of Directors, together with a description of each
person's principal occupation during at least the past five years and other
pertinent information. Each of the nominees for election as a director, except
for Geraldine A. Henwood, is currently a director of the Company.

The Company has a program under which certain nominations for membership on
the Board of Directors are on occasion rotated among senior operating executives
of the Company and its subsidiaries. The persons considered to be in the
rotating group are Messrs. Ronald K. Baur, Timothy E. Bien, Richard L. Doane,
Leo P. Finn, David W. Froesel, Jr., Gary W. Kadlec, Thomas W. Ludeke, Jeffrey M.
Stamps, Ms. Mary Lou Fox and Ms. Geraldine A. Henwood. Mr. Bien, Ms. Fox and Ms.
Henwood are being nominated from that group this year. Messrs. Baur and Bien and
Ms. Fox are currently directors. It is anticipated that additional executives of
the Company will be included in such rotating group in future years.

No person may be nominated for election as a director unless written notice
of intention to nominate such person (which notice shall contain the prospective
nominee's name, address and

occupation) has been given to the Chairman, the President or the Secretary of
the Company by a stockholder entitled to notice of, and to attend, a meeting of
stockholders at which directors are to be elected, not later than 15 business
days before such meeting.

Unless authority is withheld for individual nominees or all nominees, it is
intended that the shares represented by each proxy will be voted for the
nominees listed below. The Company anticipates that all nominees listed in this
Proxy Statement will be candidates when the election is held. However, if for
any reason any nominee is not a candidate at that time, proxies will be voted
for a substitute nominee designated by the Board of Directors and for the
remaining nominees (except where a proxy withholds authority with respect to the
election of directors).

NOMINEES

<TABLE>
<S> <C>
EDWARD L. HUTTON ........... Mr. Hutton is Chairman of the Company and has held this position since May
Director since 1981 1981. Additionally, he is Chairman and Chief Executive Officer and a
Age: 79 director of Chemed Corporation, Cincinnati, Ohio (a diversified public
corporation with interests in plumbing and drain cleaning services,
janitorial supplies and health care services) (hereinafter 'Chemed') and
has held these positions since November 1993 and April 1970, respectively.
Previously, he was President and Chief Executive Officer of Chemed,
positions he had held from April 1970 to November 1993. Mr. Hutton is the
father of Thomas C. Hutton, who is a director of the Company.
JOEL F. GEMUNDER ........... Mr. Gemunder is President of the Company and has held this position since May
Director since 1981 1981. From January 1981 until July 1981, he served as Chief Executive
Age: 59 Officer of the partnership organized as a predecessor to the Company for
the purpose of owning and operating certain health care businesses of
Chemed and Daylin, Inc., each then a subsidiary of W.R. Grace & Co. Mr.
Gemunder was an Executive Vice President of Chemed and Group Executive of
its Health Care Group from May 1981 through July 1981 and a Vice President
of Chemed from 1977 until May 1981. Mr. Gemunder is a director of Chemed
and Ultratech Stepper, Inc. (a manufacturer of photolithography equipment
for the computer industry).
TIMOTHY E. BIEN ............ Mr. Bien is Senior Vice President -- Professional Services and Purchasing of
Director since 1998 the Company, a position he has held since May 1996. From May 1992 until May
Age: 48 1996, he served as Vice President of Professional Services and Purchasing
of the Company. Prior to that, he was Vice President and a former owner of
Home Care Pharmacy, a wholly-owned subsidiary that the Company acquired in
December 1988.
CHARLES H. ERHART, JR. ..... Mr. Erhart retired as President of W.R. Grace & Co., Boca Raton, Florida
Director since 1981 (international specialty chemicals, construction and packaging)
Age: 73 (hereinafter 'Grace') in August 1990. He had held this position since July
1989. From November 1986 to July 1989, he was Chairman of the Executive
Committee of Grace. From May 1981 to November 1986, he served as Vice
Chairman and Chief Administrative Officer of Grace. Mr. Erhart is a
director of Chemed.
MARY LOU FOX ............... Ms. Fox is Senior Vice President-Marketing of the Company and has held this
Director since 1993 position since May 1996. Previously she served as Vice
Age: 67 President -- Marketing for the Company since February 1994. From July 1993
to February 1994, she was Vice President -- Marketing of the Company's
Pharmacy Services Group (a group of subsidiaries engaged in providing
pharmacy services to long-term care facilities). She also served as
President of Westhaven Services Co., Toledo, Ohio (pharmacy services for
long-term care facilities) (hereinafter 'Westhaven'), a subsidiary of the
Company, from October 1992 to May 1998. From 1976 until the Company's
acquisition of Westhaven in October 1992, she was the sole stockholder and
the President of Westhaven.
</TABLE>

<TABLE>
<S> <C>
GERALDINE A. HENWOOD ....... Ms. Henwood is President and Chief Executive Officer of IBAH, Inc., Blue
Nominee Bell, Pennsylvania (pharmaceutical contract research) (hereinafter 'IBAH'),
Age: 47 a wholly-owned subsidiary of the Company since its acquisition in June
1998. Ms. Henwood has held this position since 1994. She was the founder,
Chairman of the Board, Chief Executive Officer and President of Bio-Pharm
Clinical Services, Inc. (pharmaceutical contract research) (hereinafter
'Bio-Pharm') from its inception in 1985 until the merger of that company
and IBAH in 1994. Prior to founding Bio-Pharm, Ms. Henwood held a variety
of management positions with predecessors of SmithKline Beecham
Corporation.
CHERYL D. HODGES ........... Ms. Hodges is Senior Vice President and Secretary of the Company and has held
Director since 1992 these positions since February 1994. From August 1986 to February 1994, she
Age: 47 was Vice President and Secretary of the Company. From August 1982 to August
1986, she served as Vice President -- Corporate and Investor Relations. Ms.
Hodges has also served as a director of the Company for four prior terms:
1984-85; 1986-87; 1988-89; and 1990-91.
THOMAS C. HUTTON ........... Mr. Hutton is a Vice President of Chemed and has held this position since
Director since 1983 February 1988. Mr. Hutton is a director of Chemed. He is the son of Edward
Age: 48 L. Hutton, Chairman of the Company.
PATRICK E. KEEFE ........... Mr. Keefe is Executive Vice President -- Operations of the Company and has
Director since 1993 held this position since February 1997. Previously he was Senior Vice
Age: 53 President -- Operations since February 1994. From April 1993 to February
1994, he was Vice President -- Operations of the Company. From April 1992
to April 1993, he served as Vice President -- Pharmacy Management Programs
of Diagnostek, Inc., Albuquerque, New Mexico (mail-service pharmacy and
health care services) (hereinafter 'Diagnostek'). From September 1990 to
April 1992, Mr. Keefe served as President of HPI Health Care Services, Inc.
(hereinafter 'HPI'), a subsidiary of Diagnostek, which was acquired from
the Company in August 1989. From August 1984 to September 1990, he served
as Executive Vice President of HPI.
SANDRA E. LANEY ............ Ms. Laney is Senior Vice President and Chief Administrative Officer of Chemed
Director since 1987 and has held these positions since November 1993 and May 1991,
Age: 55 respectively. From May 1984 to November 1993, she was a Vice President of
Chemed. Ms. Laney is a director of Chemed.
ANDREA R. LINDELL, ......... Dr. Lindell is Dean and Professor in the College of Nursing at the University
DNSC, RN of Cincinnati, a position she has held since December 1990. Dr. Lindell is
Director since 1992 also Associate Senior Vice President for Interdisciplinary Education
Age: 55 Programs for the Medical Center at the University of Cincinnati, since July
1998. She also serves as Interim Dean of the College of Allied Health
Sciences at the University of Cincinnati. From August 1981 to August 1990,
Dr. Lindell served as Dean and a Professor in the School of Nursing at
Oakland University, Rochester, Michigan.
SHELDON MARGEN, M.D. ....... Dr. Margen is a Professor Emeritus in the School of Public Health, University
Director since 1983 of California, Berkeley, a position he has held since May 1989. He had
Age: 79 served as a Professor of Public Health at the University of California,
Berkeley, since 1979.
KEVIN J. MCNAMARA .......... Mr. McNamara is President of Chemed and has held this position since August
Director since 1986 1994. From November 1993 to August 1994, Mr. McNamara was Executive Vice
Age: 45 President, Secretary and General Counsel of Chemed. Previously, from May
1992 to November 1993, he held the positions of Vice Chairman, Secretary
and General Counsel of Chemed. From August 1986 to May 1992, he served as
Vice President, Secretary and General Counsel of Chemed. From November 1990
to December 1992, Mr. McNamara served as an Executive Vice President and
Chief Operating Officer of the Company. He is a director of Chemed.
</TABLE>

COMMITTEES AND MEETINGS OF THE BOARD

The Board of Directors of the Company has a Compensation and Incentive
Committee, an Audit Committee and an Executive Committee. The Company does not
have a Nominating Committee.

The Compensation and Incentive Committee makes recommendations to the Board
of Directors concerning (a) salary and incentive compensation payable to
officers and certain other key employees of the Company, (b) establishment of
incentive compensation plans and programs generally, (c) additional year-end
contributions by the Company under the Company's Employees' Savings and
Investment Plan and (d) adoption and administration of certain employee benefit
plans and programs. In addition, the Compensation and Incentive Committee
administers the Company's stock-based incentive plans under which it makes
determinations concerning the grant of stock options and stock awards to key
employees of the Company. The Compensation and Incentive Committee consists of
Doctors Margen and Lindell and Mr. Erhart. The Compensation and Incentive
Committee, and its predecessor committees, the Incentive Committee and the
Compensation Committee, met on eight occasions during 1998.

The Audit Committee (a) recommends to the Board of Directors a firm of
independent accountants to audit the Company and its consolidated subsidiaries,
(b) reviews and reports to the Board of Directors on the Company's annual
financial statements and the independent accountants' report on such financial
statements and (c) meets with the Company's senior financial officers, internal
auditors and independent accountants to review audit plans and other matters
regarding the Company's accounting, financial reporting and internal control
systems. The Audit Committee consists of Mr. Erhart, Dr. Lindell and Ms. Laney.
The Audit Committee met on two occasions during 1998.

The Executive Committee is empowered to act for the full Board in intervals
between Board meetings, with the exception of certain matters that by law or the
Company's By-Laws may not be delegated. The committee meets as necessary, and
all actions by the committee are reported at the next Board of Directors
meeting. The Executive Committee consists of Messrs. Erhart, Hutton, Gemunder
and Keefe. The Executive Committee met on eight occasions during 1998.

During 1998, there were eight meetings of the Board of Directors and each
director attended at least 75% of the aggregate of (a) the total number of
meetings held by the Board of Directors during the period for which he or she
has been a director and (b) the total number of meetings held by all Committees
of the Board of Directors during the period for which he or she served.

REMUNERATION OF DIRECTORS

In 1998, each member of the Board of Directors who was not a regular
employee of the Company was paid $1,300 for his or her attendance at each
meeting of the Board, and $750 for each meeting of a Committee of the Board of
which he or she was a member. The non-employee members of the Executive
Committee received $1,300 for each meeting of the Executive Committee. The
Chairmen of the Committees of the Board (except for the Executive Committee)
were paid an additional $2,000 per year. During 1998, each member of the Board
of Directors was granted an annual unrestricted stock award covering 400 shares
of the Company's Common Stock under the 1992 Long-Term Stock Incentive Plan
('1992 Plan'). In consideration of special services to the Company during 1998,
Mr. T.C. Hutton received additional stock awards covering 1,334 shares, Mr.
McNamara received 1,334 shares and Ms. Laney received 3,710 shares, all of which
were granted under the Company's 1992 Plan. Each of these individuals was a
director of the Company but did not serve as a member of the Compensation and
Incentive Committee of either the Company or an affiliated company or as a
regular employee of the Company at the date of grant. Also during 1998, Mr.
Erhart received an additional annual fee of $8,000 and Mr. T.C. Hutton received
an additional annual fee of $5,000. Such fees were paid in lieu of stock options
granted to directors in previous years. These individuals were members of the
Compensation and Incentive Committee of either the Company or an affiliated
company on the dates of such grants and thus were ineligible to participate.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation of
the Company's most highly compensated executive officers (the 'named
executives') for services to the Company and its subsidiaries during 1998, 1997
and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
AWARDS
ANNUAL COMPENSATION -------------------------
---------------------------------------------- # OF SHARES
NAME AND PRINCIPAL SPECIAL RESTRICTED UNDERLYING ALL OTHER
POSITIONS YEAR SALARY BONUS BONUS(2) OTHER(3) STOCK(4) OPTIONS COMPENSATION
- ----------------------- ---- -------- -------- ---------- -------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E.L. Hutton ........... 1998 $419,333 $828,625 $ -- $42,208 $2,003,835 130,000 $1,763,801(5)
Chairman 1997 391,000 941,125 -- 42,208 2,474,750 60,000 394,857
1996 370,500 641,125 1,685,000 42,208 2,742,731 100,000 660,605

J.F. Gemunder ......... 1998 750,000 868,282 -- 82,910 3,258,750 150,000 2,162,134(6)
President 1997 558,600 980,625 -- 82,749 2,605,000 60,000 1,209,732
1996 539,067 680,379 1,819,000 82,496 2,879,450 100,000 1,513,972

P.E. Keefe ............ 1998 226,062 265,802 -- -- 992,438 57,000 654,857(6)
Executive Vice 1997 199,500 301,773 -- -- 797,781 20,000 367,645
President -- 1996 182,708 205,730 276,000 -- 877,534 30,000 386,182
Operations

D.W. Froesel, Jr. ..... 1998 235,000 181,231 -- -- 770,250 43,000 539,444(6)
Senior Vice President 1997 197,500 206,623 -- -- 618,688 17,000 273,846
and Chief Financial 1996 157,724 119,848 155,000 -- 575,901 28,000 81,866
Officer(1)

C.D. Hodges ........... 1998 187,500 131,189 -- -- 725,813 38,000 410,361(6)
Senior Vice President 1997 165,000 149,180 -- -- 586,125 17,000 275,858
and Secretary 1996 150,000 101,165 470,000 -- 658,157 28,000 372,944
</TABLE>

- ------------

(1) Mr. Froesel was employed by the Company on March 4, 1996.

(2) The special bonus relates to the successful completion of a public offering
of Common Stock in March 1996. A portion of the special bonus was paid in
1996, and payment of the balance was deferred and paid in 1997 and 1998.

(3) These amounts represent payments made to the executive officer as required
to offset the tax liability associated with premiums paid by the Company on
behalf of the officer under split dollar life insurance policies.

(4) Under the Company's stock award program, restricted shares of Common Stock
were issued as incentive compensation to the named executives and other key
employees. Restricted shares vest generally in seven annual installments as
determined by the Compensation and Incentive Committee. If the recipient's
employment terminates due to death, disability, retirement under a
retirement plan of the Company, or change in control of the Company, the
restrictions terminate. Otherwise, in the event of termination of
employment, unvested shares are forfeited. Recipients receive dividends on
the awarded shares. Restricted stock awards were granted in February 1999
for 1998 services as incentive compensation. The numbers of restricted
shares granted in February 1999 to the named executives are as follows: Mr.
Hutton -- 67,640 shares; Mr. Gemunder -- 110,000 shares; Mr. Keefe -- 33,500
shares; Mr. Froesel -- 26,000 shares; and Ms. Hodges -- 24,500 shares. As of
December 31, 1998, the number and value of the aggregate restricted stock
holdings of the named executives were: Mr. Hutton -- 294,692 shares or
$10,240,547; Mr. Gemunder -- 303,547 shares or $10,548,258; Mr.
Keefe -- 94,947 shares or $3,299,408; Mr. Froesel -- 51,813 or $1,800,502;
and Ms. Hodges -- 74,240 shares or $2,579,840.

(5) Mr. Hutton does not participate in the Company's pension plans. The amount
represents a deferral under a deferred compensation arrangement which is
designed to provide him retirement benefits comparable to other executives.
The deferred amounts accrue interest at market rates and are paid in future
years.

(footnotes continued on next page)

(footnotes continued from previous page)

(6) This column includes the dollar value of shares of Common Stock allocated to
the named executives' accounts in the Company's Employee Stock Ownership
Plan (the 'ESOP') which are attributable to the Company's contributions to
the ESOP. Participants are entitled to receive the fully vested shares
allocated to their accounts upon death, disability, retirement or
termination of employment. To the extent benefits under the ESOP are
otherwise limited by provisions of the Internal Revenue Code, the Company's
Excess Benefits Plan provides that the Company will provide from its general
funds a benefit to an employee equal to the benefit which would have been
provided but for the limitations of the Internal Revenue Code. The benefits
shown include those provided under the Excess Benefits Plan. For 1998, the
numbers of shares attributable to these plans and the dollar values thereof
included in the table for each named executive are as follows: Mr.
Gemunder -- 55,023 shares or $2,138,296; Mr. Keefe -- 16,572 shares or
$636,136; Mr. Froesel -- 12,875 shares or $491,395; and Ms. Hodges -- 10,563
shares or $397,479. This column also includes (a) life insurance premiums
paid by the Company (Mr. Gemunder -- $5,100; Mr. Keefe -- $714; Mr.
Froesel -- $714; and Ms. Hodges -- $1,530); (b) the present value to the
recipient of future benefits derived from premium payments made by the
Company for the benefit of the recipient under a split dollar life insurance
policy, which provides for the refund of premiums to the Company upon
termination of the policy (unrelated to term life insurance coverage) (Mr.
Gemunder -- $18,738; Mr. Keefe -- $18,007; Mr. Froesel -- $15,595; and Ms.
Hodges -- $11,352); and (c) as to Mr. Froesel, also includes $31,740 which
the Company credited to a deferred account established for him in lieu of
his participation in the Company's pension plans.

STOCK OPTIONS

The following table sets forth information regarding stock options granted
to the named executives during 1998:

OPTION GRANTS IN 1998

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK PRICE
SHARES GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM($)
OPTIONS IN FISCAL PRICE EXPIRATION ------------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
- ----------------------------------- ---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
E.L. Hutton........................ 130,000 16.16% $36.7188 08/05/08 $3,001,993 $7,607,640

J.F. Gemunder...................... 150,000 18.65 36.7188 08/05/08 3,463,838 8,778,047

P.E. Keefe......................... 57,000 7.09 36.7188 08/05/08 1,316,259 3,335,658

D.W. Froesel, Jr................... 43,000 5.35 36.7188 08/05/08 992,967 2,516,373

C.D. Hodges........................ 38,000 4.72 36.7188 08/05/08 877,506 2,223,772
</TABLE>

- ------------

(1) All such options were granted on August 5, 1998, provide for the purchase of
shares of the Company's common stock at a price equal to the fair market
value on the date of grant, become exercisable in four equal annual
installments commencing one year from the date of grant, and expire 10 years
after date of grant unless previously exercised.

------------------------

The following table sets forth information regarding stock options
exercised by the named executives during 1998 and the value of unexercised
options held by the named executives as of December 31, 1998.

AGGREGATED OPTION EXERCISES IN 1998 AND
FISCAL YEAR-END OPTION VALUES

NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END ($)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
E.L. Hutton............... 50,000 $ 1,320,315 15,000 295,000 $ 67,968 $ 2,214,214
20,000 498,750
30,000 283,125
20,000 201,874

J.F. Gemunder............. 49,998 1,662,434 703,000 315,000 18,365,698 2,214,214

P.E. Keefe................ 15,000 467,100 97,500 109,500 1,984,212 704,999
10,000 308,275

D.W. Froesel, Jr.......... 7,000 61,031 11,250 69,750 78,976 177,210

C.D. Hodges............... 8,750 270,834 111,500 80,750 2,588,894 539,210
</TABLE>

PENSION PLAN

The Company has a pension plan in which the named executives, other than
Messrs. E.L. Hutton and Froesel, participate. Retirement benefits under the
pension plan are calculated on the basis of the executive's earnings during the
highest consecutive 60-month period during the executive's last 120 months of
employment ('Final Average Compensation') and years of service. Benefits payable
under the pension plan are reduced for payments under a prior Company pension
plan and are partially reduced for social security benefits. The following table
shows the estimated maximum annual retirement benefits payable at normal
retirement (age 65) under the pension plan at selected compensation levels after
various years of service. Amounts are shown on a 10-year certain and life form,
after the applicable reduction for social security benefits.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE(2)
FINAL AVERAGE ----------------------------------------------------------------
COMPENSATION(1) 15 20 25 30 35
- ------------------------------------------- -------- -------- -------- ---------- ----------

<S> <C> <C> <C> <C> <C>
$ 200,000.................................. $ 40,057 $ 53,410 $ 66,762 $ 80,114 $ 95,114

400,000................................. 85,057 113,410 141,762 170,114 200,114

600,000................................. 130,057 173,410 216,762 260,114 305,114

800,000................................. 175,057 233,410 291,762 350,114 410,114

1,000,000................................. 220,057 293,410 366,762 440,114 515,114

1,200,000................................. 265,057 353,410 441,762 530,114 620,114

1,400,000................................. 310,057 413,410 516,762 620,114 725,114

1,600,000................................. 355,057 473,410 591,762 710,114 830,114

1,800,000................................. 400,057 533,410 666,762 800,114 935,114

2,000,000................................. 445,057 593,410 741,762 890,114 1,040,114

2,200,000................................. 490,057 653,410 816,762 980,114 1,145,114

2,400,000................................. 535,057 713,410 891,762 1,070,114 1,250,114
</TABLE>

(footnotes on next page)

(footnotes from previous page)

(1) For purposes of the pension plan, such compensation generally includes base
salary and incentive compensation which for the named executives are set
forth in the 'Salary' and 'Bonus' columns of the Summary Compensation Table
as well as the value of stock awards vesting during the year.

(2) As of December 31, 1998, Messrs. Gemunder and Keefe and Ms. Hodges had 35,
10, and 17 years of service, respectively.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with certain of its
executive officers. Mr. Gemunder's employment agreement provides for his
continued employment as President of the Company through August 3, 2004, subject
to earlier termination under certain circumstances, at his base salary as last
set by the Board of Directors as well as participation in incentive compensation
plans, stock incentive plans and other employee benefit plans. The agreement
also provides for his continued nomination as a director of the Company. In the
event of termination without cause or a material reduction in authority or
responsibility, the agreement provides that Mr. Gemunder will receive severance
payments equal to 150% of his then-current base salary plus the amount of
incentive compensation most recently paid or approved in respect of the previous
year and the fair market value of all stock awards which have vested during the
12 months prior to termination ('Covered Compensation') for the balance of the
term of the agreement. The provisions of Ms. Hodges' employment agreement are
essentially identical to those of Mr. Gemunder, except that her agreement
provides for her nomination as a director, no less frequently than bi-annually.
Mr. Keefe is employed under an agreement which is also essentially identical to
that of Mr. Gemunder except that director nomination is not stipulated and
severance payments resulting from the conditions described above would equal
100% of Covered Compensation. Mr. Froesel is employed under an agreement with a
term expiring on March 3, 2002, except that the agreement automatically renews
at that time for a three-year period unless advance notice of termination is
given by either party. In the event the Company were to terminate Mr. Froesel's
employment on account of a change of control of the Company, he would be
entitled to be paid his then-current base salary and cash bonus compensation for
the then remaining term of the agreement, plus an additional two-year period,
subject to certain limitations specified in the agreement.

REPORT OF THE COMPENSATION AND INCENTIVE
COMMITTEE ON EXECUTIVE COMPENSATION

The Company believes that executive compensation should be directly and
materially linked to the financial and operating performance of the Company and
increases in stockholder value. The Company's executive compensation program
combines base salary, annual incentive compensation, and long-term incentive
compensation in the form of stock options and restricted stock awards with
various benefit plans, including pension plans, savings plans and medical
benefits generally available to salaried employees of the Company.

The executive compensation program is administered through the Compensation
and Incentive Committee of the Board of Directors. The membership of the
Committee is comprised of outside directors (i.e., non-employees of the
Company). The Compensation and Incentive Committee is responsible for the
review, approval and recommendation to the Board of Directors of matters
concerning base salary and annual cash incentive compensation for key executives
of the Company, which recommendations must be approved by the full Board of
Directors. The Committee also administers the Company's stock incentive plans
under which it reviews and makes grants of stock options and restricted stock
awards. The Compensation and Incentive Committee may use, subject to the
provisions of the Company's compensation plans, its discretion to set executive
compensation where, in their judgment, external, internal or individual
circumstances warrant.

BASE SALARY AND ANNUAL INCENTIVE OPPORTUNITY

In determining base salary levels, the Committee considers the executive's
responsibilities, experience, performance and specific issues particular to the
Company. The Committee also considers the compensation practices and
performances of other companies that are likely to compete with the Company for
executive talent. In general, base salaries are set at levels believed by the
Committee to be sufficient to attract and retain qualified executives when
considered with the other components of the Company's compensation program.

Annual incentive compensation provides a direct financial incentive to
executives, in the form of an annual bonus, to achieve their business unit's and
the Company's annual goals. The Committee believes that bonuses as a percent of
an executive's salary should be sufficiently high to provide a major incentive
for achieving annual performance targets.

At the beginning of each fiscal year, financial and operational goals are
established, which generally take into account such measures of performance as
sales and earnings growth, profitability, cash flow and return on investment.
Non-financial measures of performance used by the Committee in determining the
annual cash bonus award include organizational development, product or service
expansion and strategic positioning of the Company's assets. Specific relative
weights are not assigned to each performance factor, since the relative
importance of each factor varies depending upon the executive's specific job
responsibilities. Instead, each individual compensation decision is made on a
case-by-case basis and will ultimately depend upon the judgment of the
Committee. However, when fixing the annual bonus of the executive officers
listed in the Summary Compensation Table (the 'named executives'), the Committee
acts within the parameters provided for in the 'Annual Incentive Plan for Senior
Executives,' approved by stockholders on May 20, 1996. Under that plan, an
annual cash bonus for 1998 was dependent on the level of the Company's pretax
income before adjustments for the cumulative effect of accounting changes,
acquisition expenses related to pooling-of-interests transactions and
nonrecurring charges exceeding the target level established at the beginning of
the year.

LONG-TERM INCENTIVE COMPENSATION

The stock option and restricted stock program forms the basis of the
Company's long-term incentive plan for executives. This program seeks to align
executive and long-term stockholder interests by creating a strong and direct
link between executive compensation and stockholder return.

Stock options and restricted stock awards are granted annually and are
generally the primary incentive for long-term performance as they are granted at
or above fair market value and have vesting restrictions which generally lapse
over four to seven-year periods. The Compensation and Incentive Committee
considers each grantee's current stock option and award holdings in making such
grants. Both the amounts of restricted stock awards and the proportion of stock
options increase as a function of higher salary and position of responsibility
within the Company.

For the named executives, restricted share awards for 1998 under the 1992
Long-Term Stock Incentive Plan were to be made only if the percentage increase
for the last fiscal year in the Company's earnings per share before the
cumulative effect of accounting changes and acquisition expenses related to
pooling-of-interests transactions and nonrecurring expenses exceeded a threshold
established at the beginning of the year.

POLICY ON DEDUCTIBILITY OF COMPENSATION

Section 162(m) limits to $1,000,000 the amount that may be deducted by a
publicly held company for compensation paid each year to each of its five most
highly-paid executive officers. Federal law excludes compensation from the
$1,000,000 limit if it is paid under specified conditions, including that the
compensation is based on performance goals determined by a committee of
'outside' directors and approved by the Company's stockholders. The Annual
Incentive Plan for Senior Executive Officers, approved by stockholders on May
20, 1996, and amendments to the 1992 Long-Term Stock Incentive Plan, approved by
stockholders on May 19, 1997, brought the plans into compliance with Section
162(m) relating to performance-based compensation. The Committee's present
intention is to comply in

the future with Section 162(m) unless the Committee believes that such
compliance would not be in the best interests of the Company and its
stockholders.

COMPENSATION OF THE COMPANY'S PRESIDENT

In determining Mr. Gemunder's overall compensation and each component
thereof, the Committee took into consideration the report of the Hay Group,
independent professional compensation consultants, and the financial measures
cited above. In 1998, Mr. Gemunder's salary was increased to $750,000 from
$558,600 which had been his base salary since 1996. This increase was based on a
survey performed by the Hay Group. The base salary established for Mr. Gemunder
in 1998 was below the 75th percentile for the Company's comparator group.

In determining incentive compensation for the Company's executives,
including Mr. Gemunder, the Committee reviewed the reports and recommendations
of the Hay Group as well as the Company's performance and market conditions. The
Company's results in 1998 were greater than the strong performance of 1997.
Therefore, the Committee recommended an overall increase in incentive
compensation over the prior year. Annual performance not only drives the payout
of the Annual Incentive Plan but it also is used in determining the size of the
long-term incentive grant of restricted stock awards. The Committee decided to
shift the mix of these two awards to more heavily focus on the future long-term
performance of the Company. The 1998 annual bonuses actually decreased versus
1997 while the restricted stock awards increased to reflect both the shift in
mix as well as the continued improvement in performance. This shift places more
pay at risk while the restricted stock vests over seven years and aligns the
interests of the executives with that of the Company's stockholders.

Accordingly, the Committee awarded Mr. Gemunder a cash bonus of $787,500
for 1998 which was 12.5% below that for 1997; however, the Committee granted Mr.
Gemunder 110,000 shares of restricted stock for 1998 as compared with 80,000
shares in 1997, for an increase of 30,000 shares. Such shares vest over a
seven-year period. In addition, in 1998, as long-term compensation, Mr. Gemunder
was granted options to purchase 150,000 shares of Common Stock, at option prices
equal to the fair market value of a share on the date of grant. In determining
Mr. Gemunder's compensation, the Committee took into consideration that the
Company significantly exceeded the threshold measure for bonus awards under the
Annual Incentive Plan for Senior Executive Officers and the performance criteria
of the 1992 Long-Term Stock Incentive Plan, the Company's strong performance in
1998 in the areas which it believes are key measures of the Company's success,
the fact that stock-based awards should provide substantial incentive to Mr.
Gemunder to achieve the long-term goals of the Company and the advice of its
consultants. The Committee also considered the report of the Hay Group in which
it was concluded that Mr. Gemunder's overall compensation in 1998 is
representative of the Company's current marketplace, strong financial
performance and rapid growth rate.

The Committee believes that it is key to the Company's success that Mr.
Gemunder be primarily motivated and rewarded on the basis of the Company's
successful execution of its growth strategy. The Company experienced another
robust year in 1998 in acquisition activity, completing pharmacy acquisitions
which added 99,200 new long-term care facility residents to the Company's
existing clients. This increase in clients through acquisitions, coupled with
strong internal growth, brought the number of residents served to 578,700 at
year-end 1998, a 31% increase over the prior year. The Company also met a major
strategic objective in successfully entering the pharmaceutical research
outsourcing business through the acquisition of two contract research
organizations. As a result, sales in 1998 increased 47% to $1.5 billion, net
income (excluding acquisition expenses related to pooling-of-interests
transactions and nonrecurring charges) increased 48% to $96.9 million, and
diluted earnings per share (excluding the aforementioned charges) increased 42%
to $1.08.

Compensation and Incentive Committee:

Sheldon Margen, M.D., Chairman
Andrea R. Lindell, DNSc
Charles H. Erhart, Jr.

COMPENSATION AND INCENTIVE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. E.L. Hutton and Gemunder, executive officers of the Company, are
directors of Chemed. In addition, Mr. Erhart, a member of the Compensation and
Incentive Committee, is a director of Chemed.

CERTAIN TRANSACTIONS

The Company subleases offices from Chemed, and is charged for the
occasional use of Chemed's corporate aviation department, consulting services
pertaining to information systems development and other incidental expenses
based on Chemed's cost. The Company reimburses Chemed for all such services at
rates which are essentially equal to those which would have been incurred if the
Company had obtained such services from other parties. During 1998, such
reimbursements totaled $2,162,000.

The Company has contracted with MLF Co. to provide advisory and consulting
services with respect to the Company's institutional pharmacy business for a
period of five years commencing February 1, 1996. Mary Lou Fox, a director of
the Company and nominee for re-election as a director, has an ownership interest
in MLF Co. Under the consulting agreement, MLF Co. receives $12,500/month for
its services.

COMPARATIVE STOCK PERFORMANCE

The following graph compares the cumulative total return for the last five
years on a $100 investment on January 1, 1994 in each of the Company's Common
Stock, the Standard & Poor's 500 Stock Index, and the Standard & Poor's Health
Care-500 Index. The graph assumes dividend reinvestment.

CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDED DECEMBER 31, 1998

[PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------
1993 1994 1995 1996 1997 1998
----- ------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C> <C>
Omnicare, Inc. ......................................... 100.0 137.43 282.12 405.97 392.73 441.32
S&P 500................................................. 100.0 101.32 139.40 171.40 228.59 293.91
S&P Health Care -- 500.................................. 100.0 113.12 178.55 215.61 309.86 446.87
</TABLE>

The total return calculations reflected in the foregoing graph were
performed by Standard & Poor's Compustat Services, Inc.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of December 31, 1998, with
respect to the only persons known to the Company to beneficially own more than
5% of the shares of its Common Stock:

<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND AND NATURE
ADDRESS OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(a) CLASS(a)
- ---------------------- ---------------- ----------

<S> <C> <C>
Putnam Investments, Inc. .......................................................... 8,289,032(b) 9.2%
One Post Office Square
Boston, MA 02109
Public Employees Retirement ....................................................... 5,082,800(c) 5.6
System of Ohio
277 East Town Street
Columbus, OH 43215
Amvescap PLC ...................................................................... 4,909,806(d) 5.4
11 Devonshire Square
London EC2M 4YR
England
</TABLE>

- ------------

(a) Under applicable Securities and Exchange Commission regulations, shares are
treated as 'beneficially owned' if a person has or shares voting or
dispositive power with respect to the shares or has a right to acquire the
shares within 60 days of December 31, 1998. Unless otherwise indicated,
sole voting power and sole dispositive power are exercised by the named
person. In calculating 'Percent of Class' for a person, shares which may be
acquired by the person within such 60-day period are treated as owned by
the person and as outstanding shares.

(b) Wholly-owned investment advisers have shared dispositive power with respect
to all of the listed shares and shared voting power with respect to 171,957
of the shares.

(c) Public Employees Retirement System of Ohio is an employee benefit plan or
pension fund with sole dispositive power and sole voting power with respect
to all of the shares listed.

(d) Wholly-owned investment advisers have shared dispositive power and sole
investment power with respect to all of the listed shares.

The following table sets forth information as of March 22, 1999 with
respect to the shares of Common Stock beneficially owned by each of the nominees
and directors, each of the named executives, and all directors and executive
officers of the Company as a group:

<TABLE>
<CAPTION>
NUMBER OF SHARES AND
NATURE OF BENEFICIAL PERCENT OF
INDIVIDUAL OR GROUP OWNERSHIP CLASS(a)(b)
- ------------------------------------------------------------------------------ -------------------- -----------

<S> <C> <C>
E.L. Hutton................................................................... 325,347(c)
40,000(d)
18,864(e)
J.F. Gemunder................................................................. 672,058(c) 1.6%
798,000(d)
20,758(f)
R.K. Baur..................................................................... 41,471(c)
11,000(d)
T.E. Bien..................................................................... 101,393(c)
37,750(d)
C.H. Erhart, Jr............................................................... 8,800(c)
M.L. Fox...................................................................... 69,458(c)
40,750(d)
D.W. Froesel, Jr.............................................................. 94,739(c)
18,250(d)
G.A. Henwood.................................................................. 100,156(c)
9,757(d)
C.D. Hodges................................................................... 179,516(c)
134,500(d)
T.C. Hutton................................................................... 7,816(c)
18,864(e)
P.E. Keefe.................................................................... 168,669(c)
127,500(d)
S.E. Laney.................................................................... 32,301(c)
3,350(d)
A.R. Lindell, DNSc............................................................ 2,400(c)
K.J. McNamara................................................................. 6,779(c)
S. Margen, M.D................................................................ 16,188(c)
All directors, nominees, and executive officers as a group
(15 persons)................................................................ 1,827,091(c) 3.4%
1,220,857(d)
18,864(e)
20,758(f)
</TABLE>

- ------------

(a) Under applicable Securities and Exchange Commission regulations, shares are
treated as 'beneficially owned' if a person has or shares voting or
dispositive power with respect to the shares or has a right to acquire the
shares within 60 days of March 22, 1999. Unless otherwise indicated, sole
voting power and sole dispositive power are exercised by the named person.
In calculating 'Percent of Class' for a person, shares which may be
acquired by the person within such 60-day period are treated as owned by
the person and as outstanding shares.

(b) Percent of Class is not shown if less than 1%.

(c) Shares held in individual capacity (or together with a member of his or her
household) as to which such person has voting and dispositive powers (and
includes shares allocated, as of December 31, 1998, to the account of each
named person or member of the group under the Company's Employees' Savings
and Investment Plan and its Employee Stock Ownership Plan).

(d) Shares subject to outstanding options exercisable within 60 days from March
22, 1999.

(e) Messrs. E.L. Hutton and T.C. Hutton are trustees of the E.L. Hutton
Foundation, which holds 18,864 shares of Common Stock over which the
Trustees share both voting and dispositive powers.

(f) Mr. Gemunder is a trustee of the Joel F. Gemunder Foundation, which holds
20,758 shares of Common Stock, over which he holds both voting and
dispositive powers.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
persons deemed to be executive officers of the Company, directors of the
Company, and beneficial owners of more than 10% of the Common Stock are required
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. The Company believes that during 1998 all such persons complied
with these filing requirements. In making these statements, the Company has
relied upon the facts of which it is specifically aware and, in the case of its
directors and officers, upon their written representations.

RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS

The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as independent accountants for the Company and its consolidated subsidiaries for
the year 1999. Price Waterhouse LLP (predecessor of PricewaterhouseCoopers LLP)
had acted as independent accountants for the Company and its consolidated
subsidiaries since 1981. Although the submission of this matter to the
stockholders is not required by law or the By-Laws of the Company, the selection
of PricewaterhouseCoopers LLP will be submitted for ratification at the Annual
Meeting. The affirmative vote of a majority of the shares represented at the
meeting is necessary to ratify the selection of PricewaterhouseCoopers LLP. If
the selection is not ratified at the meeting, the Board of Directors will
reconsider its selection of independent accountants.

It is expected that a representative of PricewaterhouseCoopers LLP will be
present at the Annual Meeting. Such representative will have the opportunity to
make a statement if he or she desires to do so and will be available to respond
to questions raised at the meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.

STOCKHOLDER PROPOSALS

Any stockholder proposal intended to be considered for inclusion in the
proxy materials for presentation at the 2000 Annual Meeting of Stockholders must
be in writing and received by the Secretary of the Company not later than
December 1, 1999. If any stockholder who intends to propose any other matter to
be acted on at the 2000 Annual Meeting of Stockholders does not inform the
Company of such matter by February 15, 2000, the person named as proxies for the
2000 Annual Meeting of Stockholders will be permitted to exercise discretionary
authority to vote on such matter even if the matter is not discussed in the
proxy statement for that meeting.

OTHER MATTERS

As of February 15, 1999, the Company did not know of any other matter which
will be presented for consideration at the Annual Meeting. However, if any other
matter should come before the meeting, the persons named in the enclosed proxy
(or their substitutes) will have discretionary authority to vote on the matter.

EXPENSES OF SOLICITATION

The expense of soliciting proxies in the accompanying form will be borne by
the Company. The Company will request banks, brokers and other persons holding
shares beneficially owned by others to send proxy materials to the beneficial
owners and to secure their voting instructions, if any. The Company will
reimburse such persons for their expenses in so doing. In addition to
solicitation by mail, officers and regular employees of the Company may, without
extra remuneration, solicit proxies personally, by telephone or by telegram from
some stockholders, if such proxies are not promptly received. The Company also
expects to retain D.F. King & Co., Inc., a proxy soliciting firm, to assist in
the solicitation of such proxies at a cost which will not exceed $7,500 plus
reasonable expenses.

By Order of the Board of Directors

Cheryl D. Hodges

Secretary

March 31, 1999

APPENDIX 1
----------
PROXY

OMNICARE, INC.
100 E. RiverCenter Boulevard
Covington, Kentucky 41011

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS, MAY 17, 1999.

The undersigned hereby appoints E. L. Hutton, J. F. Gemunder and C. D.
Hodges as Proxies, each with the power to appoint a substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
common stock of Omnicare, Inc. held of record by the undersigned as of March 22,
1999 at the Annual Meeting of Stockholders to be held on May 17, 1999, or at any
adjournment thereof.

Election of Directors

Nominees:

<TABLE>
<S> <C> <C>
Edward L. Hutton Geraldine A. Henwood Andrea R. Lindell, DNSc
Joel F. Gemunder Cheryl D. Hodges Sheldon Margen, M.D.
Timothy E. Bien Thomas C. Hutton Kevin J. McNamara
Charles H. Erhart, Jr. Patrick E. Keefe
Mary Lou Fox Sandra E. Laney
</TABLE>

(Continued and to be signed on other side)

see reverse side

<PAGE>

[X] Please mark your votes as in this example.

(1) Election of Directors (see reverse)

[ ] FOR

[ ] WITHHELD

For, except vote withheld from the following nominee(s):

----------------------------------------------------------

(2) To ratify the selection of independent accountants.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(3) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

IF NO CHOICE IS SPECIFIED,
THIS PROXY WILL BE VOTED FOR
PROPOSALS (1) AND (2). When
signed on behalf of a
corporation, partnership,
estate, trust, or other
stockholder, state your title
or capacity or otherwise
indicate that you are
authorized to sign.

(Please sign exactly as name(s) appear at left)

PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

--------------------------------------------

--------------------------------------------
SIGNATURE(S) DATE

STATEMENT OF DIFFERENCES

The section symbol shall be expressed as...................................'SS'

<PAGE>

APPENDIX 2
[LOGO OF OMNICARE, INC.]
OMNICARE, INC.

March 31, 1999

To Our Employees:

We are writing to you in connection with the Annual Meeting of Stockholders
of Omnicare, Inc. to be held in Cincinnati on May 17, 1999.

Under the terms of the Omnicare Employees Savings and Investment Plan
("S&I Plan"), each participant has the right to instruct the Trustee of the
Plan on how to vote the vested shares of Omnicare stock allocated to his or her
account.

Under the terms of the Omnicare Employee Stock Ownership Plan ("ESOP"), each
participant has the right to instruct the Trustee of the plan on how to vote
the shares of Omnicare stock allocated to his or her account.

Enclosed for your information is a copy of the proxy solicitation material
for Omnicare's 1999 Annual Meeting of Stockholders. Also attached is a form
to provide the Charles Schwab Trust Company, as Trustee of both plans, with
confidential instructions on how to vote the vested shares of Omnicare stock
allocated to your S&I Plan account and/or the shares of stock allocated to
your ESOP account.

Please complete, date and sign the detachable form below and return it
directly to the Fifth Third Bank, Tabulator for the Trustee, at your earliest
convenience in the envelope provided. No postage is required if mailed
within the United States.

Upon receipt, the Charles Schwab Trust Company will vote the shares of
Omnicare stock as instructed. Further, we wish to assure you that the Charles
Schwab Trust Company as well as the Fifth Third Bank have been advised that
instructions received from individual participants will not be divulged or
released to any outside person, including officers or employees of Omnicare,
Inc. The Charles Schwab Trust Company, however, has the right, as Trustee, to
vote any shares of Omnicare stock for which voting instructions have not been
received, or where shares are not vested or allocated, in the same proportion
and in the same manner as shares in the other stock accounts are voted.

We look forward to seeing many of you at the Annual Meeting.

<TABLE>

<S> <C>
Edward L. Hutton Joel F. Gemunder
Chairman President

</TABLE>

<TABLE>
<S> <C>
OMNICARE, INC. PLEASE MARK, SIGN, DATE AND RETURN PROXY
100 E. RIVERCENTER BOULEVARD CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
COVINGTON, KENTUCKY 41011
- --------------------------------------------------------------------------------------------
</TABLE>

The Charles Schwab Trust Company, as trustee, is hereby instructed to vote
the shares of OMNICARE stock allocated to my account under the Employee
Stock Ownership Plan and OMNICARE Employees Savings and Investment Plan as
follows:

Election of Directors--Nominees:

<TABLE>

<S> <C> <C> <C> <C>
Edward L. Hutton Charles H. Erhart, Jr. Cheryl D. Hodges Sandra E. Laney Kevin J. McNamara
Joel F. Gemunder Mary Lou Fox Thomas C. Hutton Andrea R. Lindell, DNSC
Timothy E. Bien Geraldine A. Henwood Patrick E. Keefe Sheldon Margen, M.D.

</TABLE>

<TABLE>

1. Election of Directors / / FOR All Nominees (except those listed on line below) / / WITHHOLD All Authority
-----------------------------------------------------

</TABLE>

<TABLE>

<S> <C> <C> <C> <C>
2. To ratify the selection of independent accountants. / / FOR / / AGAINST / / ABSTAIN

</TABLE>

3. In their discretion, the Proxies are authorized to vote upon such other
business as many properly come before the meeting.

<PAGE>

[LOGO OF OMNICARE, INC.]

OMNICARE, INC.
c/o Corporate Trust Services
Mail Drop 10AT66--4129
38 Fountain Square Plaza
Cincinnati, OH 45263

fold and detach here
- ------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THE TRUSTEE WILL VOTE THE SHARES IN ACCORDANCE WITH THE PLANS.

Dated:---------------, 1999

-------------------------
Signature of Stockholder

--------------------------
Signature of Stockholder

Please sign exactly as your
name appears on the envelope
in which this card was mailed.
When signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If
shares are held jointly, each
holder should sign.