<PAGE>
________________________________________________________________________________
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:
....................................................................
(2) Aggregate number of securities to which transaction applies:
....................................................................
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
....................................................................
(4) Proposed maximum aggregate value of transaction:
....................................................................
(5) Total fee paid:
....................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 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:
....................................................................
(2) Form, Schedule or Registration Statement No.:
....................................................................
(3) Filing Party:
....................................................................
(4) Date Filed:
....................................................................
________________________________________________________________________________
<PAGE>
[Logo]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 2000
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 15, 2000 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 23, 2000 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 30, 2000
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.
<PAGE>
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 15, 2000, and any adjournment thereof ('Annual Meeting').
Stockholders of record as of the close of business on March 23, 2000 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof. As of such date, the Company had outstanding 92,394,094 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 PricewaterhouseCoopers LLP as independent
accountants of the Company for 2000. 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 30, 2000.
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 David W. Froesel, Jr., and John H. Timoney, 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. Timothy E. Bien, Leo P. Finn, David W. Froesel, Jr.,
Gary W. Kadlec, Thomas W. Ludeke, Jeffrey M. Stamps and Ms. Mary Lou Fox.
Mr. Bien and Ms. Fox are currently directors. Mr. Froesel and Ms. Fox are being
nominated from that group this year. It is anticipated that additional
executives of the Company will be included in such rotating group in future
years.
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
<PAGE>
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
Director since 1981 position since May 1981. Additionally, he is Chairman and
Age: 80 Chief Executive Officer and a director of Chemed
Corporation, Cincinnati, Ohio (a diversified public
corporation with interests in plumbing and drain cleaning
services, janitorial supplies and health care services)
(hereinafter 'Chemed') and has held these positions since
November 1993 and April 1970, respectively. Previously, he
was President and Chief Executive Officer of Chemed,
positions he had held from April 1970 to November 1993.
Mr. Hutton is 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
Director since 1981 position since May 1981. From January 1981 until July
Age: 60 1981, he served as Chief Executive Officer of the
partnership organized as a predecessor to the Company for
the purpose of owning and operating certain health care
businesses of Chemed and Daylin, Inc., each then a
subsidiary of W.R. Grace & Co. Mr. Gemunder was an
Executive Vice President of Chemed and Group Executive of
its Health Care Group from May 1981 through July 1981 and
a Vice President of Chemed from 1977 until May 1981.
Mr. Gemunder is a director of Chemed and Ultratech
Stepper, Inc. (a manufacturer of photolithography
equipment for the computer industry).
CHARLES H. ERHART, JR. .... Mr. Erhart retired as President of W.R. Grace & Co.,
Director since 1981 Columbia, Maryland (international specialty chemicals,
Age: 74 construction and packaging) (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
Director since 1993 and has held this position since May 1996. Previously she
Age: 68 served as Vice 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.
DAVID W. FROESEL, JR. ..... Mr. Froesel is Senior Vice President and Chief Financial
Nominee Officer of the Company and has held this position since
Age: 48 March 1996. From May 1993 to February 1996, Mr. Froesel
was Vice President of Finance and Administration at
Mallinckrodt Veterinary, Inc., a subsidiary of
Mallinckrodt, Inc. From July 1989 to April 1993 he was
worldwide Corporate Controller of Mallinckrodt Medical,
Inc., a subsidiary of Mallinckrodt, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
CHERYL D. HODGES .......... Ms. Hodges is Senior Vice President and Secretary of the
Director since 1992 Company and has held these positions since February 1994.
Age: 48 From August 1986 to February 1994, she was Vice President
and Secretary of the Company. From August 1982 to August
1986, she served as Vice President -- Corporate and
Investor Relations. Ms. Hodges has also served as a
director of the Company for four prior terms: 1984-85;
1986-87; 1988-89; and 1990-91.
THOMAS C. HUTTON .......... Mr. Hutton is a Vice President of Chemed and has held this
Director since 1983 position since February 1988. Mr. Hutton is a director of
Age: 49 Chemed. He is the son of Edward L. Hutton, Chairman of the
Company.
PATRICK E. KEEFE .......... Mr. Keefe is Executive Vice President-Operations of the
Director since 1993 Company and has held this position since February 1997.
Age: 54 Previously, he was Senior Vice 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
Director since 1987 Officer of Chemed and has held these positions since
Age: 56 November 1993 and May 1991, respectively. From May 1984 to
November 1993, she was a Vice President of Chemed.
Ms. Laney is a director of Chemed.
ANDREA R. LINDELL, ........ Dr. Lindell is Dean and Professor in the College of Nursing
DNSC, RN at the University of Cincinnati, a position she has held
Director since 1992 since December 1990. Dr. Lindell is also Associate Senior
Age: 56 Vice President for Interdisciplinary Education 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
Director since 1983 Health, University of California, Berkeley, a position he
Age: 80 has held since May 1989. He had served as a Professor of
Public Health at the University of California, Berkeley,
since 1979.
KEVIN J. MCNAMARA ......... Mr. McNamara is President of Chemed and has held this
Director since 1986 position since August 1994. From November 1993 to August
Age: 46 1994, Mr. McNamara was Executive Vice President, Secretary
and General Counsel of Chemed. Previously, from May 1992
to November 1993, he held the positions of Vice Chairman,
Secretary and General Counsel of Chemed. From August 1986
to May 1992, he served as Vice President, Secretary and
General Counsel of Chemed. From November 1990 to December
1992, Mr. McNamara served as an Executive Vice President
and Chief Operating Officer of the Company. He is a
director of Chemed.
JOHN H. TIMONEY ........... Mr. Timoney is a retired executive of Applied Bioscience
Nominee International Inc. (research organization serving the
Age: 66 pharmaceutical and biotechnology industries) ('Applied
Bioscience'), at which he held a number of positions from
1986 through 1996. From December 1995 through June 1996,
he was Chief Executive Officer of Clinix International,
Inc., a wholly owned subsidiary of Applied Bioscience.
From June 1992 to September 1996, Mr. Timoney was Senior
Vice President and a director of Applied Bioscience. From
1986 through June 1992, he was Vice President, Chief
Financial Officer and a director of Applied Bioscience.
Mr. Timoney has also held financial and executive
positions with IMS Health Incorporated (market research
firm serving the pharmaceutical and healthcare
industries), Chemed and Grace.
</TABLE>
3
<PAGE>
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 met on six occasions during 1999.
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, Ms. Laney and Dr. Lindell.
The Audit Committee met on three occasions during 1999.
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 three occasions during 1999.
During 1999, there were seven meetings of the Board of Directors and each
director attended at least 75% of the aggregate of (a) the total number of
meetings held by the Board of Directors during the period for which he or she
has been a director and (b) the total number of meetings held by all Committees
of the Board of Directors during the period for which he or she served.
REMUNERATION OF DIRECTORS
In 1999, 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 1999, 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 1999,
Mr. T.C. Hutton received additional stock awards covering 4,118 shares,
Ms. Laney received 11,452 shares and Mr. McNamara received 4,118 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 1999,
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.
4
<PAGE>
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 1999, 1998
and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------ ------------------------
AWARDS
------------------------
# OF SHARES
RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS OTHER(1) STOCK(2) OPTIONS COMPENSATION
- ----------------------------------- ---- ------ ----- -------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
E.L. Hutton ....................... 1999 $448,333 $541,125 $42,208 $1,882,660 630,000 $2,454,476(3)
Chairman 1998 419,333 828,625 42,208 2,003,835 130,000 2,230,878
1997 391,000 941,125 42,208 2,474,750 60,000 394,857
J.F. Gemunder ..................... 1999 816,667 580,978 63,755 2,310,000 1,400,000 97,218(4)
President 1998 750,000 868,282 82,910 3,258,750 150,000 2,162,134
1997 558,600 980,625 82,749 2,605,000 60,000 1,209,732
P.E. Keefe ........................ 1999 255,750 173,838 -- 703,000 182,000 36,741(4)
Executive Vice 1998 226,062 265,802 -- 992,438 57,000 654,857
President -- Operations 1997 199,500 301,773 -- 797,781 20,000 367,645
D.W. Froesel, Jr. ................. 1999 251,667 143,002 -- 565,000 153,000 53,144(4)
Senior Vice President and Chief 1998 235,000 181,231 -- 770,250 43,000 539,444
Financial Officer 1997 197,500 206,623 -- 618,688 17,000 273,846
C.D. Hodges ....................... 1999 208,083 85,200 -- 515,000 148,000 26,638(4)
Senior Vice President and 1998 187,500 131,189 -- 725,813 38,000 410,361
Secretary 1997 165,000 149,180 -- 586,125 17,000 275,858
</TABLE>
- ---------
(1) 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.
(2) 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 2000
for 1999 services as incentive compensation. The numbers of restricted
shares granted in February 2000 to the named executives are as follows:
Mr. Hutton -- 193,713 shares; Mr. Gemunder -- 237,684 shares;
Mr. Keefe -- 72,334 shares; Mr. Froesel -- 58,135 shares; and
Ms. Hodges -- 52,990 shares. As of December 31, 1999, the number and value
of the aggregate restricted stock holdings of the named executives were:
Mr. Hutton -- 302,730 shares or $3,632,760; Mr. Gemunder -- 375,022 shares
or $4,500,264; Mr. Keefe -- 115,016 shares or $1,380,192;
Mr. Froesel -- 73,315 shares or $879,780; and Ms. Hodges -- 87,916 shares or
$1,054,992.
(3) 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.
(4) This amount 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
(footnotes continued on next page)
5
<PAGE>
(footnotes continued from previous page)
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 1999, 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 5,079 shares or $75,480; Mr. Keefe
1,460 shares or $19,609; Mr. Froesel 1,074 shares or $13,095; and
Ms. Hodges 1,184 shares or $14,341. 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 -- $1,456); (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 -- $16,638; Mr. Keefe -- $16,418;
Mr. Froesel -- $14,800; and Ms. Hodges -- $10,841); and (c) as to
Mr. Froesel, also includes $24,535 which the Company credited to a deferred
account established for him in lieu of his participation in the Company's
pension plan.
STOCK OPTIONS
The following table sets forth information regarding stock options granted
to the named executives during 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM($)
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(2) 3.5% $12.3438 07/01/09 $ 976,086 $ 2,504,767
500,000(3) 13.4 15.4200 07/01/09 2,216,077 8,095,618
J.F. Gemunder.............. 150,000(2) 4.0 12.3438 07/01/09 1,126,253 2,890,115
1,250,000(3) 33.5 15.4200 07/01/09 5,540,192 20,239,045
P.E. Keefe................. 57,000(2) 1.5 12.3438 07/01/09 427,976 1,098,244
125,000(3) 3.4 15.4200 07/01/09 554,019 2,023,905
D.W. Froesel, Jr........... 43,000(2) 1.2 12.3438 07/01/09 322,859 828,500
110,000(3) 2.9 15.4200 07/01/09 487,537 1,781,036
C.D. Hodges................ 38,000(2) 1.0 12.3438 07/01/09 285,317 732,163
110,000(3) 2.9 15.4200 07/01/09 487,537 1,781,036
</TABLE>
- ---------
(1) All such options were granted effective July 1, 1999, 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.
(2) All such options provide for the purchase of shares of the Company's common
stock at a price equal to the fair market value on the effective date of
grant.
(3) All such options provide for the purchase of shares of the Company's common
stock at a price equal to 125% of the fair market value on the effective
date of grant.
-------------------
The following table sets forth information regarding stock options exercised
by the named executives during 1999 and the value of unexercised options held by
the named executives as of December 31, 1999.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN 1999 AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
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............ 70,000 $713,125 87,500 782,500 -- --
J.F. Gemunder.......... -- -- 850,500 1,567,500 $3,382,920 --
P.E. Keefe............. -- -- 146,750 242,250 78,900 --
D.W. Froesel, Jr....... -- -- 33,250 200,750 -- --
C.D. Hodges............ -- -- 148,250 192,000 334,762 --
</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..................... $ 39,841 $ 53,122 $ 66,402 $ 79,682 $ 94,682
400,000..................... 84,841 113,122 141,402 169,682 199,682
600,000..................... 129,841 173,122 216,402 259,682 304,682
800,000..................... 174,841 233,122 291,402 349,682 409,682
1,000,000..................... 219,841 293,122 366,402 439,682 514,682
1,200,000..................... 264,841 353,122 441,402 529,682 619,682
1,400,000..................... 309,841 413,122 516,402 619,682 724,682
1,600,000..................... 354,841 473,122 591,402 709,682 829,682
1,800,000..................... 399,841 533,122 666,402 799,682 934,682
2,000,000..................... 444,841 593,122 741,402 889,682 1,039,682
2,200,000..................... 489,841 653,122 816,402 979,682 1,144,682
2,400,000..................... 534,841 713,122 891,402 1,069,682 1,249,682
2,600,000..................... 579,841 773,122 966,402 1,159,682 1,354,682
2,800,000..................... 624,841 833,122 1,041,402 1,249,682 1,459,682
3,000,000..................... 669,841 893,122 1,116,402 1,339,682 1,564,682
3,200,000..................... 714,841 953,122 1,191,402 1,429,682 1,669,682
3,400,000..................... 759,841 1,013,122 1,266,402 1,519,682 1,774,582
3,600,000..................... 804,841 1,073,122 1,341,402 1,609,682 1,879,682
3,800,000..................... 849,841 1,133,122 1,416,402 1,699,682 1,984,682
4,000,000..................... 894,841 1,193,122 1,491,402 1,789,582 2,089,682
4,100,000..................... 917,341 1,223,122 1,528,902 1,834,582 2,142,182
</TABLE>
(footnotes on next page)
7
<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. Covered
compensation for 1999 for Messrs. Gemunder and Keefe and Ms. Hodges was
$3,341,914, $1,085,420 and $745,078, respectively.
(2) As of December 31, 1999, Messrs. Gemunder and Keefe and Ms. Hodges had 36,
11 and 18 years of service, respectively.
SUPPLEMENTAL PENSION PLAN
In 1999, the Company established a supplemental pension plan in which the
named executives and one other executive officer of the Company participate.
Retirement benefits under the supplemental pension plan are calculated on the
basis of a specified percentage of an executive's 1997 'covered compensation'
under the plan, multiplied by the executive's years of 'credited service' under
the plan. Credited service includes all periods of service credited under the
Company's general pension plan, up to a maximum of five years. Benefits under
the plan will become vested at a rate of 20 percent per year of continued
employment by the executive, measured from March 1, 1998. The following table
summarizes the estimated maximum annual retirement benefits payable at the later
of normal retirement age (age of 65) or five years of vesting service measured
from March 1, 1998 for each of the executives after various years of benefit
service.
SUPPLEMENTAL PENSION PLAN TABLE
<TABLE>
<CAPTION>
ILLUSTRATIVE ANNUAL RETIREMENT BENEFITS(1)
-------------------------------------------------
YEARS OF BENEFIT SERVICE AT RETIREMENT(2)
-------------------------------------------------
1 2 3 4 5 OR MORE
- - - - ---------
<S> <C> <C> <C> <C> <C>
E. L. Hutton.................................. $23,269 $46,538 $69,806 $93,075 $116,344
J. F. Gemunder................................ 18,328 36,656 54,984 73,312 91,640
P. E. Keefe................................... 4,619 9,238 13,856 18,475 23,094
D. W. Froesel, Jr............................. 7,436 14,871 22,307 29,743 37,179
C. D. Hodges.................................. 12,259 24,518 36,777 49,036 61,296
</TABLE>
- ---------
(1) Benefits under the plan shown above are calculated on the basis of an
annuity for the life of the executive with 120 monthly payments guaranteed
and are not subject to any deduction for Social Security benefits or offset
amounts. For purposes of calculating pension benefits under the plan,
covered compensation includes the executive's 1997 base salary, incentive
compensation received in 1997 and the value of all stock awards that vested
during 1997. Covered compensation for 1997 for Mr. Hutton, Mr. Gemunder,
Mr. Keefe, Mr. Froesel and Ms. Hodges was $2,096,287, $2,349,744, $710,582,
$429,811 and $583,767, respectively.
(2) For purposes of calculating pension benefits under the plan, as of
December 31, 1999, with the exception of Mr. Froesel, who had 3 years and 10
months of credited service, Mr. Hutton, Mr. Gemunder, Mr. Keefe and
Ms. Hodges each had 5 years of credited service.
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, 2005, 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
8
<PAGE>
reduction in authority or responsibility, the agreement provides that
Mr. Gemunder will receive severance payments equal to 150% of his then-current
base salary, 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 that 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
9
<PAGE>
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, the amount of the annual cash bonus for 1999 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 special charges reaching certain target
levels 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, the restricted share awards for 1999 under the
1992 Long-Term Stock Incentive Plan were dependent upon the percentage increase
in the Company's earnings per share before the cumulative effect of accounting
changes and acquisition expenses related to pooling-of-interests transactions
and special charges for fiscal year 1999 meeting certain thresholds 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. Effective May 1, 1999, Mr. Gemunder's salary was increased to
$850,000 from the $750,000 that had been his base salary since January 1, 1998.
This increase was based on a survey performed by the Hay Group. The base salary
established for Mr. Gemunder in 1999 was below the 75th percentile for the
Company's comparator group.
The implementation of the Prospective Payment System ('PPS') for Medicare
residents of skilled nursing facilities created a more difficult operating
environment than expected in the long-term care industry in 1999. The impact of
PPS in 1999 was characterized by an erosion of occupancy in skilled nursing
facilities, a lower acuity level of residents in such facilities and a
deterioration in the financial condition of many skilled nursing facility
clients. Despite this turbulent operating environment, the Company's sales grew
23% to $1.86 billion and net income and diluted earnings per share of
$80,043,000
10
<PAGE>
and $0.88 (excluding special items such as acquisition expenses related to
pooling-of-interests and restructuring and other related charges), respectively,
were lower by 17% and 18%, respectively, than in 1998 (excluding special items).
More importantly in the Committee's view, given the operating environment, the
Company's financial position and ability to generate positive cash flow remained
strong with 1999 being a record-breaking year in cash flow from operations. Cash
flow from operations grew 13% to $101,114,000.
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 particularly in view of
such market conditions. In determining Mr. Gemunder's compensation, the
Committee took into consideration the success the Company had in achieving such
level of net income and the preservation of the strength of the Company's
balance sheet despite the difficult market conditions, the Company's
record-breaking generation of cash flow from operations in 1999, the performance
of the Company versus its competitors, the Company's performance in 1999 in
other areas which it believes are key measures of the Company's success, the
fact that stock-based awards in particular should provide substantial incentive
to Mr. Gemunder to achieve the long-term goals of the Company, and the advice of
its consultants, including the report of the Hay Group in which it was concluded
that Mr. Gemunder's overall compensation in 1999 is representative of the
Company's current marketplace, financial position and operating environment.
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. While acknowledging the difficulty in managing in such
market conditions, given the financial results of the Company, the Committee
recommended a decrease in incentive compensation from the prior year. Moreover,
beginning with the 1998 awards, the Committee decided to shift the mix of cash
and stock-based incentives to more heavily focus on the future long-term
performance of the Company and the Committee continued that practice with
respect to the 1999 awards. 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 $500,000 for
1999, which was 36.5% below that for 1998; and, the Committee granted
Mr. Gemunder 75,000 shares of restricted stock in recognition of the Company
having achieved the performance objective required for that level of award. In
addition, in light of the Company's success in achieving earnings per share
(excluding special items) of $0.88 despite the difficult operating environment
that occurred in 1999 and in order to provide incentive to Mr. Gemunder to
restore the Company to a record of consistent growth, the Committee determined
that it was in the best interests of the Company and its stockholders to grant
Mr. Gemunder another award of 162,684 shares. These two awards for 1999 total
237,684 shares of restricted stock as compared with a total of 110,000 shares in
1998, an increase of 116% in the number of shares but a decrease of 30% in terms
of total dollar values as compared with the 1998 grant. Both grants vest over a
seven-year period. In addition, in 1999, as long-term compensation,
Mr. Gemunder was granted options to purchase 1,400,000 shares of Common Stock at
option prices equal to 125% of fair market value on the date of grant in the
case of 1,250,000 shares and at option prices equal to the fair market value at
the date of grant with respect to 150,000 shares.
The Committee believes that it is key to the Company's success that
Mr. Gemunder be primarily motivated and rewarded on the basis of shepherding the
Company through the current operating environment while positioning the Company
for future growth. The Committee believes that the challenges facing senior
executives in difficult times try the efforts of management to a greater degree
than in better times. Accordingly, the Committee believes that in granting an
increasing percentage of stock-based compensation it has put in place
substantial incentives to restore the Company's track record of consistent
earnings growth in a manner which most directly aligns the interest of
management with that of the Company's stockholders.
Compensation and Incentive Committee:
Sheldon Margen, M.D., Chairman
Andrea R. Lindell, DNSc, RN
Charles H. Erhart, Jr.
11
<PAGE>
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 that are
essentially equal to those which would have been incurred if the Company had
obtained such services from other parties. During 1999, such reimbursements
totaled $1,890,000.
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 December 31, 1994 in each of the Company's Common
Stock, the Standard & Poor's 500 Stock Index, OCR Peer Group 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, 1999
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Omnicare, Inc................................ 100.0 205.28 295.40 285.76 321.11 111.54
S&P 500...................................... 100.0 137.58 169.17 225.60 290.08 351.12
S&P Health Care-500.......................... 100.0 157.85 190.61 273.93 395.06 362.49
OCR Peer Group............................... 100.0 115.93 126.11 169.02 169.13 63.70
</TABLE>
12
<PAGE>
This year the graph includes the OCR Peer Group Index, which is more
representative of the Company's segment of the healthcare industry than the
broader S&P Health Care-500 Index. The new index includes the following
companies: Alterra Healthcare Corp., Bergen Brunswig Corp., Beverly Enterprises
Inc., Genesis Health Ventures Inc., Manor Care Inc., NCS Healthcare Inc.,
Parexel International Corp., Pharmaceutical Product Development Inc., PSS World
Medical Inc., and Sunrise Assisted Living Inc. 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, 1999, 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>
T. Rowe Price Associates, Inc. ............................. 11,388,148(b) 12.4%
100 E. Pratt Street
Baltimore, MD 21202
Capital Research and Management Company .................... 5,410,000(c) 5.9
333 South Hope Street
Los Angeles, CA 90071
</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, 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) Investment adviser has sole dispositive power with respect to 11,287,136 of
the listed shares and sole voting power with respect to 1,858,850 of the
shares and neither shared voting nor shared dispositive power with respect
to any of the shares. These securities are owned by various individual and
institutional investors, which T. Rowe Price Associates, Inc. ('Price
Associates') serves as investment adviser with power to direct investments
and/or sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is
deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial owner of
such securities.
(c) Investment adviser has sole dispositive power with respect to all of the
listed shares and neither sole nor shared voting power with respect to any
of the listed shares.
13
<PAGE>
The following table sets forth information as of March 23, 2000 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 PERCENT OF
INDIVIDUAL OR GROUP OWNERSHIP CLASS(a)(b)
------------------- --------- -----------
<S> <C> <C>
E.L. Hutton................................................. 513,945(c)
112,500(d)
18,864(e)
J.F. Gemunder............................................... 894,517(c)
875,500(d) 1.9%
17,633(f)
T.E. Bien................................................... 145,954(c)
37,750(d)
C.H. Erhart, Jr............................................. 19,200(c)
M.L. Fox.................................................... 113,388(c)
57,750(d)
D.W. Froesel, Jr............................................ 150,000(c)
40,250(d)
C.D. Hodges................................................. 229,486(c)
155,250(d)
T.C. Hutton................................................. 12,137(c)
18,864(e)
P.E. Keefe.................................................. 236,817(c)
154,250(d)
S.E. Laney.................................................. 42,728(c)
6,600(d)
A.R. Lindell, DNSc.......................................... 2,800(c)
S. Margen, M.D.............................................. 16,597(c)
K.J. McNamara............................................... 11,062(c)
J. H. Timoney............................................... 2,000(c)
All directors, nominees, and executive officers as a group 2,395,239(c)
(15 persons).............................................. 1,442,475(d)
18,864(e) 4.1%
17,633(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 23, 2000. 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, 1999, 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 23, 2000.
(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
17,633 shares of Common Stock, over which he holds both voting and
dispositive powers.
14
<PAGE>
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 1999 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 2000. PricewaterhouseCoopers LLP (and its predecessor) 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 2001 Annual Meeting of Stockholders must
be in writing and received by the Secretary of the Company not later than
December 2, 2000. If any stockholder who intends to propose any other matter to
be acted on at the 2001 Annual Meeting of Stockholders does not inform the
Company of such matter by February 15, 2001, the person named as proxies for the
2001 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, 2000, 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 that will not exceed $7,500 plus
reasonable expenses.
By Order of the Board of Directors
Cheryl D. Hodges
Secretary
March 30, 2000
15
<PAGE>
APPENDIX 1
P R O X Y
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 15, 2000.
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 23,
2000 at the Annual Meeting of Stockholders to be held on May 15, 2000, or at any
adjournment thereof.
Election of Directors
Nominees:
<TABLE>
<S> <C> <C>
Edward L. Hutton Cheryl D. Hodges Andrea E. Lindell, DNSc
Joel F. Gemunder Thomas C. Hutton Sheldon Margen, M.D.
Charles H. Erhart, Jr. Patrick E. Keefe Kevin J. McNamara
Mary Lou Fox Sandra E. Laney John H. Timoney
David W. Froesel, Jr.
</TABLE>
(Continued and to be signed on other side)
SEE REVERSE
SIDE
FOLD AND DETACH HERE
<PAGE>
PLEASE MARK YOUR
VOTE AS IN THIS
EXAMPLE
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of 2. To ratify the selection 3. In their discretion, the
Directors. of independent Proxies are authorized to vote
(see reverse) accountants. upon such other business as may
properly come before the
- ------------------------ meeting.
For, except vote withheld from the following nominee(s)
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.
--------------------------------------------------
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SIGNATURE(S) DATE
</TABLE>
FOLD AND DETACH HERE
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as...............................'SS'
