-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qr+XO1EvuNfYrjlSkWUAf5coXYCo0+Gkr8SKoYqCYWkMfB9tlZVS1xT3XXm8Z9JL qlDd7DfDmB0UB1TFp2rYIw== 0000950117-02-003244.txt : 20021230 0000950117-02-003244.hdr.sgml : 20021230 20021230094721 ACCESSION NUMBER: 0000950117-02-003244 CONFORMED SUBMISSION TYPE: SC TO-T/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20021230 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NCS HEALTHCARE INC CENTRAL INDEX KEY: 0001004990 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 341816187 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-T/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47039 FILM NUMBER: 02870889 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PKWY STREET 2: STE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: 2165143350 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: OMNICARE INC CENTRAL INDEX KEY: 0000353230 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 311001351 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T/A BUSINESS ADDRESS: STREET 1: 100 E RIVERCENTER BLVD STREET 2: STE 1600 CITY: COVINGTON STATE: KY ZIP: 41101 BUSINESS PHONE: 6063923300 MAIL ADDRESS: STREET 1: 100 E RIVERCENTER BLVD STREET 2: STE 1600 CITY: COVINGTON STATE: KY ZIP: 41101 SC TO-T/A 1 a34079.txt OMNICARE, INC. ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- SCHEDULE TO/A (RULE 14d-100) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AMENDMENT NO. 38 ------------------- NCS HEALTHCARE, INC. (Name of Subject Company (Issuer)) OMNICARE, INC. NCS ACQUISITION CORP. (Names of Filing Persons (Offerors)) CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 62887410 (CUSIP Number of Class A Common Stock) AND CLASS B COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) NOT APPLICABLE (CUSIP Number of Class B Common Stock) CHERYL D. HODGES SENIOR VICE PRESIDENT AND SECRETARY OMNICARE, INC. 100 EAST RIVERCENTER BOULEVARD COVINGTON, KENTUCKY 41011 TELEPHONE: (859) 392-3300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) COPY TO: MORTON A. PIERCE, ESQ. DEWEY BALLANTINE LLP 1301 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 TELEPHONE: (212) 259-8000 ------------------- CALCULATION OF FILING FEE Transaction Valuation* Amount of Filing Fee $144,283,651 $13,274.10
* Estimated for purposes of calculating the amount of the filing fee only. This amount assumes the purchase of (i) 18,523,502 shares of the class A common stock, par value $0.01, of NCS Healthcare, Inc., a Delaware corporation (the 'Company'), representing all of the issued and outstanding shares of such class as of July 28, 2002 (less 1,000 shares of such class owned by Omnicare, Inc.), (ii) 5,193,307 shares of the class B common stock, par value $0.01, of the Company, representing all of the issued and outstanding shares of such class as of July 28, 2002, (iii) 2,422,724 shares reserved for issuance upon the exercise of outstanding options to purchase class A common stock and (iv) 94,858 shares reserved for issuance upon the exercise of outstanding options to purchase class B common stock. [x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $18,363.37 Filing party: Omnicare, Inc. Form or Registration No.: SC TO Date Filed: August 8, 2002
[ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [x] third-party tender offer subject to Rule 14d-1 [ ] issuer tender offer subject to Rule 13e-4 [ ] going private transaction subject to Rule 13e-3 [ ] amendment to Schedule 13D under Rule 13d-2 Check the following box if the filing is a final amendment reporting the results of the tender offer [ ] ________________________________________________________________________________ This Amendment No. 38 amends and supplements the Tender Offer Statement on Schedule TO filed with the Securities and Exchange Commission (the 'Commission') on August 8, 2002 (the 'Schedule TO') by Omnicare, Inc., a Delaware corporation ('Omnicare'), and NCS Acquisition Corp., a Delaware corporation ('Purchaser') and a wholly-owned subsidiary of Omnicare. The Schedule TO relates to a tender offer by Purchaser to purchase all of the issued and outstanding shares of class A common stock, par value $0.01 per share, and class B common stock, par value $0.01 per share, of NCS HealthCare, Inc., a Delaware corporation (the 'Company'), at a price of $5.50 per share, net to the seller in cash, without interest and less required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 8, 2002 (the 'Offer to Purchase'), as amended and supplemented by the Supplement to the Offer to Purchase, dated December 23, 2002 (the 'Supplement'), and in the related revised Letter of Transmittal (the 'Letter of Transmittal' which, together with the Offer to Purchase and the Supplement, as hereby or hereafter amended or supplemented from time to time, constitute the 'Offer'). Copies of the Offer to Purchase, the Supplement and the related revised Letter of Transmittal are attached as Exhibits (a)(1)(A), (a)(1)(HHH) and (a)(1)(III), respectively, to the Schedule TO. Capitalized terms used and not defined herein shall have the meanings assigned such terms in the Offer to Purchase, the Supplement and the Schedule TO. Item 11. Additional Information. The eighth paragraph appearing in the Supplement under "Introduction" is amended and restated in its entirety to read as follows: ON DECEMBER 27, 2002, CERTAIN STOCKHOLDERS OF NCS HEALTHCARE FILED A COMPLAINT IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE (THE "CHANCERY COURT") AGAINST OMNICARE AND THE PURCHASER SEEKING AN ORDER (I) TEMPORARILY, PRELIMINARILY AND PERMANENTLY ENJOINING OMNICARE AND THE PURCHASER FROM DISTRIBUTING $13,500,000 OF THE AMOUNT OTHERWISE PAYABLE TO STOCKHOLDERS OF THE COMPANY IN THE OFFER AND (II) REQUIRING THAT OMNICARE AND THE PURCHASER DEPOSIT THIS SUM IN ESCROW UNTIL THE CHANCERY COURT DETERMINES THE RIGHTS OF THESE STOCKHOLDER-PLAINTIFFS AND THEIR COUNSEL TO AN ALLOWANCE OF FEES AND EXPENSES IN CONNECTION WITH THEIR ACTION AGAINST THE COMPANY AND ITS DIRECTORS ENTITLED "IN RE NCS HEALTHCARE SHAREHOLDERS LITIGATION" (C.A. NO. 19786). ON THE SAME DAY, THE NCS HEALTHCARE STOCKHOLDER-PLAINTIFFS FILED A MOTION FOR TEMPORARY RESTRAINING ORDER WITH THE CHANCERY COURT RELATING TO THE COMPLAINT. The discussion set forth under Section 18 ("Legal Proceedings") of the Offer to Purchase and Section 11 ("Legal Proceedings") of the Supplement is hereby amended and supplemented as follows: On December 27, 2002, the stockholder-plaintiffs filed a complaint (the "Complaint") in the Chancery Court against Omnicare and the Purchaser seeking an order (i) temporarily, preliminarily and permanently enjoining Omnicare and the Purchaser from distributing $13,500,000 of the amount otherwise payable to stockholders of the Company in the Offer and (ii) requiring that Omnicare and the Purchaser deposit this sum in escrow until the Chancery Court determines the rights of the stockholder-plaintiffs and their counsel to an allowance of fees and expenses in connection with Plaintiffs' action against the Company and its directors entitled "In re NCS HealthCare Shareholders Litigation" (C.A. No. 19786). In the Complaint, the stockholder-plaintiffs argue, among other things, that (i) their litigation against the Company resulted in a benefit of approximately $102,000,000 to the Company's stockholders, for which the stockholder-plaintiffs and their counsel are entitled to an allowance for reasonable attorneys' fees and expenses, (ii) it would be impossible, as a practical matter, for the stockholder-plaintiffs' counsel to collect such fees and expenses from the Company's stockholders, unless an amount is set aside as requested, and (iii) the stockholder-plaintiffs have no adequate remedy at law. The full text of the Complaint is filed as Exhibit (a)(1)(OOO) hereto and is incorporated herein by reference. On the same day, the stockholder-plaintiffs filed a Motion for Temporary Restraining Order (the "Motion") with the Chancery Court seeking an order (i) temporarily restraining Omnicare and the Purchaser from distributing $13,500,000 of the amount otherwise payable to stockholders of the Company in the Offer pending a determination by the Chancery Court with respect to an application of the stockholder-plaintiffs and their counsel for an allowance of attorneys' fees and reimbursement of expenses in connection with their action against the Company and its directors and (ii) requiring Omnicare and the Purchaser to deposit this amount in an interest bearing account to be drawn upon only pursuant to an order of the Chancery Court. In support of the Motion, the stockholder-plaintiffs filed Plaintiffs' Memorandum of Law in Support of Motion for Temporary Restraining Order and an Affidavit of Joseph A. Rosenthal in Support of Application for a Temporary Restraining Order, setting forth the grounds for the Motion. The full text of the Motion, together with (i) Plaintiffs' Memorandum of Law in Support of Motion for Temporary Restraining Order and (ii) the Affidavit of Joseph A. Rosenthal in Support of Application for a Temporary Restraining Order is filed as Exhibit (a)(1)(PPP) hereto and is incorporated herein by reference. Item 12. Exhibits. Item 12 is hereby amended and supplemented with the following information: Exhibit (a)(1)(OOO) Complaint filed by the stockholder-plaintiffs in the Court of Chancery of the State of Delaware on December 27, 2002. Exhibit (a)(1)(PPP) Motion for Temporary Restraining Order, together with (i) Plaintiffs' Memorandum of Law in Support of Motion for Temporary Restraining Order and (ii) the Affidavit of Joseph A. Rosenthal in Support of Application for a Temporary Restraining Order, filed by the stockholder- plaintiffs in the Court of Chancery of the State of Delaware on December 27, 2002. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 30, 2002 OMNICARE, INC. By: /s/ DAVID W. FROESEL, JR. ------------------------------- Name: David W. Froesel, Jr. Title: Senior Vice President and Chief Financial Officer NCS ACQUISITION CORP. By: /s/ DAVID W. FROESEL, JR. ------------------------------- Name: David W. Froesel, Jr. Title: Vice President and Chief Financial Officer EXHIBIT INDEX (a)(1)(A) Offer to Purchase dated August 8, 2002.* (a)(1)(B) Letter of Transmittal.* (a)(1)(C) Notice of Guaranteed Delivery.* (a)(1)(D) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (a)(1)(E) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (a)(1)(G) Summary Advertisement, published August 8, 2002.* (a)(1)(H) Press Release issued by Omnicare, Inc. on August 8, 2002.* (a)(1)(I) Complaint filed in the Chancery Court, New Castle County, Delaware on August 1, 2002.* (a)(1)(J) Press Release issued by Omnicare, Inc. on August 8, 2002.* (a)(1)(K) First Amended Complaint filed in the Chancery Court, New Castle County, Delaware on August 12, 2002.* (a)(1)(L) Press Release issued by Omnicare, Inc. on August 20, 2002.* (a)(1)(M) First Amended Complaint filed in the United States District Court for the Northern District of Ohio on August 21, 2002.* (a)(1)(N) Press Release issued by Omnicare, Inc. on August 26, 2002.* (a)(1)(O) Press Release issued by Omnicare, Inc. on September 6, 2002.* (a)(1)(P) Selected material from a presentation of Omnicare, Inc. at the Bear Stearns 15th Annual Healthcare Conference on September 17, 2002 at The Waldorf Astoria, New York, New York.* (a)(1)(Q) Press Release issued by Omnicare, Inc. on September 20, 2002.* (a)(1)(R) Motion for Summary Judgment as to Count I of the First Amended Complaint filed in the Chancery Court, New Castle County, Delaware on September 30, 2002.* (a)(1)(S) Motion to Dismiss the First Amended Complaint filed in the United States District Court for the Northern District of Ohio on September 13, 2002.* (a)(1)(T) Opposition to Omnicare's Motion to Dismiss and Motion for Preliminary Injunction filed in the United States District Court for the Northern District of Ohio on September 30, 2002.* (a)(1)(U) Press Release issued by Omnicare, Inc. on October 4, 2002.* (a)(1)(V) Defendant's Motion to Dismiss the Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 3, 2002.* (a)(1)(W) Omnicare's Reply Memorandum of Law in Further Support of the Motion to Dismiss the First Amended Complaint filed in the United States District Court for the Northern District of Ohio on October 15, 2002.* (a)(1)(X) Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 16, 2002.*
(a)(1)(Y) Plaintiff's Memorandum of Law in Opposition to the NCS Defendants' Motion to Dismiss Omnicare's Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 17, 2002.* (a)(1)(Z) Omnicare's Memorandum of Law in Opposition to Plaintiff's Motion for Preliminary Injunction filed in the United States District Court for the Northern District of Ohio on October 17, 2002.* (a)(1)(AA) The NCS Defendants' Memorandum of Law in Opposition to Omnicare's and the Class Plaintiffs' Motion for Summary Judgment filed in the Chancery Court, New Castle County, Delaware on October 17, 2002.* (a)(1)(BB) Defendant Jon H. Outcalt's Brief in Opposition to Omnicare's Motion for Summary Judgment on Count I of the First Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 17, 2002.* (a)(1)(CC) Defendant Kevin B. Shaw's Memorandum of Law in Opposition to Omnicare's Motion for Summary Judgment on Count I of the Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 17, 2002.* (a)(1)(DD) Brief of Defendants Genesis Health Ventures, Inc. and Geneva Sub, Inc. in Opposition to Omnicare's and the Class Plaintiffs' Motions for Summary Judgment on Count I of their Complaints filed in the Chancery Court, New Castle County, Delaware on October 17, 2002.* (a)(1)(EE) Press Release issued by Omnicare, Inc. on October 22, 2002.* (a)(1)(FF) Reply Memorandum of Law in Further Support of Omnicare's Motion for Summary Judgment as to Count I of the Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 22, 2002.* (a)(1)(GG) The NCS Defendants' Reply Memorandum of Law in Support of Their Motion to Dismiss Omnicare's Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 22, 2002.* (a)(1)(HH) Reply Brief of Defendants Genesis Health Ventures, Inc. and Geneva Sub, Inc. in Support of Their Motion to Dismiss the Second Amended Complaint filed in the Chancery Court, New Castle County, Delaware on October 22, 2002.* (a)(1)(II) Omnicare, Inc. v. NCS HealthCare, Inc., et al., C.A. No. 19800 (Del. Ch. October 25, 2002).* (a)(1)(JJ) Press Release issued by Omnicare, Inc. on October 28, 2002.* (a)(1)(KK) Omnicare, Inc. v. NCS HealthCare, Inc., et al., C.A. No. 19800 (Del. Ch. October 29, 2002).* (a)(1)(LL) Press Release issued by Omnicare, Inc. on October 30, 2002.* (a)(1)(MM) Excerpts from the Transcript of Omnicare's Third Quarter 2002 Conference Call, dated October 31, 2002.* (a)(1)(NN) Press Release issued by Omnicare, Inc. on November 5, 2002.* (a)(1)(OO) Selected material from a presentation of Omnicare, Inc. at the CIBC World Markets 13th Annual Health Care Conference on November 5, 2002 at The Plaza Hotel, New York, New York.* (a)(1)(PP) Press Release issued by Omnicare, Inc. on November 19, 2002.* (a)(1)(QQ) Brief filed by Omnicare, Inc. in the Supreme Court of the State of Delaware on November 14, 2002.* (a)(1)(RR) In Re NCS HealthCare, Inc., Shareholders Litigation, Consolidated C.A. No. 19786 (Del. Ch. November 22, 2002).*
(a)(1)(SS) Press Release issued by Omnicare, Inc. on November 25, 2002.* (a)(1)(TT) Answering Brief filed by Appellees NCS HealthCare, Inc., Boake A. Sells and Richard L. Osborne in the Supreme Court of the State of Delaware on November 22, 2002.* (a)(1)(UU) Answering Brief filed by Appellees Jon H. Outcalt and Kevin B. Shaw in the Supreme Court of the State of Delaware on November 22, 2002.* (a)(1)(VV) Answering Brief filed by Appellees Genesis Health Ventures, Inc. and Geneva Sub, Inc. in the Supreme Court of the State of Delaware on November 22, 2002.* (a)(1)(WW) Press Release issued by Omnicare, Inc. on December 4, 2002.* (a)(1)(XX) Order of the Supreme Court of the State of Delaware, issued on December 3, 2002.* (a)(1)(YY) Order of the Supreme Court of the State of Delaware, issued on December 4, 2002.* (a)(1)(ZZ) Press Release issued by Omnicare, Inc. on December 5, 2002.* (a)(1)(AAA) Order of the Supreme Court of the State of Delaware, issued on December 10, 2002.* (a)(1)(BBB) Press Release issued by Omnicare, Inc. on December 11, 2002.* (a)(1)(CCC) Omnicare, Inc. v. NCS HealthCare, Inc., et al., C.A. No. 19786 (Del. Ch. December 11, 2002).* (a)(1)(DDD) Press Release issued by Omnicare, Inc. on December 12, 2002.* (a)(1)(EEE) Rules and Procedures for Submission of Proposals for NCS HealthCare, Inc., dated December 13, 2002.* (a)(1)(FFF) Press Release issued by Omnicare, Inc. on December 16, 2002.* (a)(1)(GGG) Press Release issued by Omnicare, Inc. on December 18, 2002.* (a)(1)(HHH) Supplement to the Offer to Purchase dated December 23, 2002.* (a)(1)(III) Revised Letter of Transmittal.* (a)(1)(JJJ) Revised Notice of Guaranteed Delivery.* (a)(1)(KKK) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (a)(1)(LLL) Revised Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (a)(1)(MMM) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (a)(1)(NNN) Press Release issued by Omnicare, Inc. on December 23, 2002.* (a)(1)(OOO) Complaint filed by the stockholder-plaintiffs in the Court of Chancery of the State of Delaware on December 27, 2002. (a)(1)(PPP) Motion for Temporary Restraining Order, together with (i) Plaintiffs' Memorandum of Law in Support of Motion for Temporary Restraining Order and (ii) the Affidavit of Joseph A. Rosenthal in Support of Application for a Temporary Restraining Order, filed by the stockholder-plaintiffs in the Court of Chancery of the State of Delaware on December 27, 2002. (a)(5)(A) Form of Agreement and Plan of Merger proposed by Omnicare, Inc.* (a)(5)(B) Agreement and Plan of Merger executed by Omnicare, Inc.* (a)(5)(C) Agreement and Plan of Merger executed and delivered by Omnicare, Inc. on December 12, 2002.* (a)(5)(D) Termination and Settlement Agreement, dated December 15, 2002, between Omnicare, Inc., Genesis Health Ventures, Inc. and Geneva Sub, Inc.*
(b)(1) Three-year, $495.0 million Credit Agreement, dated as of March 20, 2001, among Omnicare, Inc., as the Borrower, the Guarantors named therein and the lenders named therein, as the Lenders, Lehman Commercial Paper Inc., as a Syndication Agent, Sun Trust Bank, as a Documentation Agent, Deutsche Banc Alex. Brown, as a Documentation Agent, and Bank One, NA, with its main office in Chicago, Illinois, as the Administrative Agent. (Incorporated by reference to Exhibit 99.3 of Omnicare's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2001). (c) None. (d)(1) Confidentiality Agreement, dated August 29, 2001, between Omnicare, Inc. and NCS HealthCare, Inc.* (d)(2) Agreement and Plan of Merger, dated December 17, 2002, between Omnicare, Inc., NCS Acquisition Corp. and NCS HealthCare, Inc.* (e) None. (f) None. (g) None. (h) None.
- --------- * Previously filed. EX-99 3 exa1-ooo.txt EXHIBIT (A)(1)(OOO) Exhibit (a)(1)(OOO) IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY DOLPHIN LIMITED PARTNERSHIP I, L.P., : RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, : JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : Civil Action DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, : No. 20101-NC ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MEHAN IRA, ROBERT M. MILES and : GUILLERMO MARTI, : Plaintiffs, : : v. : : NCS ACQUISITION CORP. and OMNICARE, INC., : : Defendants. :
COMPLAINT SUMMARY OF THE ACTION 1. Plaintiffs are shareholders of NCS, which is being acquired by defendants Omnicare, Inc. ("Omnicare") and its wholly owned subsidiary, NCS Acquisition Corp. ("NCS Acquisition"), pursuant to a tender offer and merger at $5.50 per share (the "Acquisition"). The Acquisition is the culmination of a five month process in which Omnicare's acquisition proposal was (and is) by far the highest offer. It is available to NCS shareholders as a direct result of the successful litigation efforts of plaintiffs in an action in this Court entitled "In re NCS Healthcare, Inc. Shareholders Litigation," Consolidated C.A. No. 19786 (the "Shareholders Action"). Those litigation efforts achieved success when the Delaware Supreme Court, by Order entered December 10, 2002, directed entry in the Shareholders Action of a preliminary injunction barring consummation of a proposed merger between NCS and Genesis Health Ventures, Inc. ("Genesis") that would have paid the stockholders of NCS approximately $1.60 per share in Genesis common stock. As a result of the successful prosecution of the Shareholders Action, the Genesis Merger Agreement and two related voting agreements that would have guaranteed approval of the Genesis merger were enjoined. Thereafter, a bidding contest between Genesis and Omnicare ensued, culminating in the Acquisition pursuant to which NCS will be acquired at $5.50 per share. That increase of approximately $3.90 (340%) per share constitutes a direct monetary benefit of about $102 million in the aggregate for the stockholders of NCS. By this action, plaintiffs seek to escrow a portion of that benefit for the payment of the fees and expenses of their counsel in the event this Court concludes that the stockholders of NCS should pay the compensation to which plaintiffs' counsel are entitled for their services in the litigation. THE PARTIES 2. Plaintiffs Dolphin Limited Partnership I, L.P., Ramesh Mehan, Renee Mehan, Renee Mehan IRA, Saroj Mehan, Maneesh Mehan, 2 Rahul Mehan, Joel Mehan, Lajia Mehan, Darshan Mehan IRA, Darshan Mehan (Rollover IRA), Arsh N. Mehan, Arsh N. Mehan (Roth IRA), Ashok K. Mehan, Ashok K. Mehan IRA, Robert M. Miles and Guillermo Marti are plaintiffs in the Shareholders Action and own shares of the Class A common stock of NCS. 3. Omnicare is a Delaware corporation headquartered in Covington, Kentucky. NCS Acquisition, a Delaware corporation, is a wholly owned subsidiary of Omnicare formed to facilitate the acquisition of NCS. THE BACKGROUND TO THE SHAREHOLDERS ACTION 4. On July 29, 2002, NCS announced that it had agreed, pursuant to an Agreement and Plan of Merger by and among Genesis and one of its subsidiaries and NCS, dated as of July 28, 2002 (the "Genesis Merger Agreement"), to be acquired by Genesis in a stock-for-stock deal with a value then and now of approximately $1.60 per NCS share. However, prior to agreeing to the Genesis deal, NCS and its Directors were aware that Omnicare was interested in acquiring NCS and had in fact, on July 26, 2002, made an all-cash offer to acquire NCS at $3.00 per share. Omnicare had also offered to consider a stock-for-stock merger, if desired by NCS. 5. The NCS Board of Directors - Jon H. Outcalt ("Outcalt"), Kevin B. Shaw ("Shaw"), Boake A. Sells ("Sells"), 3 and Richard L. Osborne ("Osborne") (collectively, the "Director Defendants") -- did not explore Omnicare's proposal. Rather, the Director Defendants entered into the Genesis Merger Agreement. The Director Defendants also approved a series of provisions and agreements which collectively ensured approval of the Genesis Merger, including: o Two of the Director Defendants, Outcalt and Shaw, entered into voting agreements granting Genesis an irrevocable proxy to vote their NCS shares in favor of the Genesis Merger Agreement and against any other proposal (the "Voting Agreements"). Because Outcalt and Shaw collectively own 230,968 shares of NCS Class A common stock (one vote per share) and 4,617,219 shares of NCS Class B common stock (10 votes per share), or an aggregate of about 65% of the outstanding voting power of NCS, implementation of the Voting Agreements would have guaranteed approval of the Genesis Merger. o The Genesis Merger Agreement expressly required the NCS Board of Directors to convene and hold a stockholders' meeting even if the Director Defendants withdrew their approving recommendation and prohibited the NCS Board from terminating the Agreement prior to the stockholder vote to approve the merger (the "Force the Vote Provision"). 6. On August 1, 2002, Omnicare announced that it would be commencing an all-cash, fully financed tender offer for all shares of NCS common stock at a price of $3.50 per share. The Tender Offer was commenced on August 8, 2002 and conditioned on invalidation of the lock-up provisions contained in the Genesis Merger Agreement and Voting Agreements. 7. In September 2002 (during the midst of expedited proceedings), the Director Defendants obtained from Genesis a 4 limited waiver of the "no-shop" provisions in the Genesis Merger Agreement and announced that NCS planned to hold discussions with Omnicare concerning its offer to acquire NCS. However, the Director Defendants stated that because of the Voting Agreements and the Force the Vote Provision "[i]t was unlikely that a business combination with Omnicare may be consummated." 8. Following a meeting between representatives of Omnicare and NCS, Omnicare provided NCS with a signed merger agreement confirming its willingness to acquire NCS at $3.50 per share. On October 22, 2002, NCS announced that the Board of Directors had withdrawn its recommendation that NCS stockholders vote in favor of the Genesis Merger and, instead, unanimously recommended that NCS stockholders vote against the transaction. That announcement cautioned that "NCS does not have the right" to terminate the Genesis Merger Agreement and was still required to submit the transaction for stockholder approval. NCS further represented that "[b]y virtue of [V]oting [A]greements entered into in connection with the Genesis transaction, NCS believes that Genesis has sufficient power to approve the Genesis [M]erger." 9. That same day, Genesis issued a press release stating that Genesis was "'respectful of the continuing fiduciary duty of the NCS board,'" but that the decision of the NCS Board to change its recommendation "'does not affect the Genesis/NCS merger agreement, which remains binding upon NCS, nor does it affect the 5 related [V]oting [A]greements which remain binding upon the holders of a majority of the voting power of NCS.'" (Quotation omitted.) As a result, "Genesis reiterated its confidence that the merger will be completed on a timely basis." 10. In accordance with the Force the Vote Provision of the Genesis Merger Agreement, the Director Defendants then duly scheduled a stockholders' meeting to approve the Genesis Merger. THE PROCEEDINGS IN THE SHAREHOLDERS ACTION 11. On and after July 30, 2002, plaintiffs filed class actions in the Court of Chancery seeking equitable and declaratory relief against the attempt by NCS' Board of Directors to sell NCS to Genesis without having explored or investigated the proposal by Omnicare to acquire NCS at a considerably higher price. On August 30, 2002, the actions were consolidated as Consol. C.A. No. 19786. On September 12, 2002, the Court granted plaintiffs' motion to expedite discovery. On September 20, 2002, plaintiffs filed a Consolidated Amended Complaint amplifying their existing claims and asserting additional ones. 12. During the course of the Shareholders Action and the related lawsuit brought by Omnicare (the "Omnicare Action"), the parties engaged in extensive discovery and motion practice, all on an expedited basis. On October 2, 2002, plaintiffs moved for summary judgment on Count I of the Consolidated Amended Complaint 6 seeking a declaration that the Voting Agreements among Genesis and Director Defendants Outcalt and Shaw that gave Genesis an irrevocable proxy to vote Outcalt's and Shaw's shares of NCS common stock in favor of the Genesis Merger violated the transfer restrictions contained in the NCS amended and restated certificate of incorporation. This Court denied plaintiffs' motion, and granted summary judgment, sua sponte, in favor of defendants with respect to this claim. See Omnicare, Inc. v. NCS Healthcare, Inc., 2002 WL 31445163 (Del. Ch.). 13. The Court of Chancery also granted summary judgment against Omnicare on a similar count of its Second Amended Complaint. Id. Earlier, this Court had dismissed for lack of standing the breach of fiduciary duty counts of Omnicare's complaint challenging the Genesis Merger Agreement and the Voting Agreements. See Omnicare, Inc. v. NCS Healthcare, Inc., 2002 WL 31445168 (Del. Ch.). 14. On Sunday, November 3, 2002, plaintiffs filed a motion for a preliminary injunction seeking to enjoin the acquisition of NCS by Genesis on the grounds that the Director Defendants had breached their fiduciary duties in approving the Genesis Merger Agreement and the Voting Agreements. After extensive briefing, that motion was argued on November 14, 2002. On November 22, 2002, the Court of Chancery issued an Opinion and Order (the "November 22 Order") denying plaintiffs' motion for a preliminary 7 injunction. 15. On November 25, 2002, plaintiffs filed applications in both the Court of Chancery and the Delaware Supreme Court seeking certification of an interlocutory appeal of the November 22 Order. Plaintiffs contemporaneously moved in the Supreme Court for an expedited appeal. Following briefing and oral argument, this Court denied certification on November 26, 2002 and the Supreme Court initially denied certification as well; however, in a sua sponte Order issued on December 4, 2002, the Supreme Court vacated its earlier Order and granted certification and an expedited appeal of the November 22 Order. The Delaware Supreme Court further directed that (a) the appeal be fully briefed by December 9 at 4:00 p.m.; (b) the appeal be consolidated with the pending appeals by Omnicare from the dismissal of its claims; (c) the appeals be argued on December 10; and (d) the appeals be heard en banc. 16. All parties then complied with the extraordinarily accelerated schedule established by the Delaware Supreme Court and the appeals were duly argued on December 10, 2002, with the argument of the appeal in the Shareholders Action proceeding first (in accordance with the Supreme Court's directive) followed by the argument of the appeal from the decisions in the Omnicare Action. Later that day, the Delaware Supreme Court issued an Order (the "December 10 Order") reversing this Court's denial of 8 a preliminary injunction. This Supreme Court held that the NCS Board had acted unreasonably in approving "deal protection measures" that "irrevocably locked up the [Genesis] merger" and "precluded the directors from exercising their continuing fiduciary obligation to negotiate a sale of the company in the interest of the shareholders." December 10 Order, at 7. 17. The Delaware Supreme Court remanded the matter to the Court of Chancery with a direction to enter a preliminary injunction "precluding implementation of the NCS/Genesis merger." Id. at 8. 18. On December 11, 2002 the Court of Chancery entered an order preliminarily enjoining the Genesis Merger. THE ACQUISITION 19. A bidding contest between Genesis and Omnicare for NCS ensued promptly following the entry of the preliminary injunction. As a result of that process, Omnicare submitted the highest bid at $5.50 per share. That increased offer is more than 340% higher than the $1.60 per share price NCS stockholders would have received in the Genesis merger or $102 million in the aggregate. 20. Pursuant to an Agreement and Plan of Merger by and among Omnicare, NCS Acquisition and NCS, dated December 17, 2002, Omnicare and NCS Acquisition will be acquiring all of the 9 outstanding shares of NCS common stock at $5.50 per share pursuant to the Tender Offer scheduled to expire at 12:00 midnight (EST) on January 7, 2003 and a merger to acquire any shares that remain outstanding thereafter. Omnicare has represented in its offering materials that it will be purchasing 26,233,391 NCS shares through the Acquisition. Omnicare has further represented that it will pay the tendering shareholders promptly after the expiration of the Tender Offer. IRREPARABLE INJURY 21. The successful prosecution of the Shareholders Action and the efforts of the plaintiffs' counsel have conferred an approximate $102,000,000 direct benefit upon all of the shareholders of NCS, the "common fund" in which all NCS shareholders will participate. Under Delaware law, plaintiffs are entitled to an allowance of reasonable attorneys' fees and expenses to be paid from the common fund. 22. Nonetheless, it will be impossible as a practicable matter for plaintiffs' attorneys to collect such fees and expenses from the widely scattered NCS shareholders, unless monies are set aside as requested herein. 23. Plaintiffs have no adequate remedy at law and will be irreparably damaged unless immediate and permanent equitable relief is granted. 10 WHEREFORE, plaintiffs pray for judgment and relief as follows: A. Temporarily, preliminarily and permanently enjoining defendants from distributing $13,500,000, otherwise payable to acquire NCS common stock in the Acquisition, and ordering defendants to deposit such sum in escrow, until the Court can adjudicate the rights of plaintiffs and their counsel to an allowance of fees and expenses in the Shareholders Action. B. Granting such other and further relief as may be just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ Joseph A. Rosenthal ------------------------- 919 North Market Street, Suite 1401 P.O. Box 1070 Wilmington, DE 19899-1070 Telephone: (302) 656-4433 CHIMICLES & TIKELLIS, LLP. One Rodney Square Wilmington, DE 19801 (302) 656-2500 Attorneys for Plaintiffs OF COUNSEL: LOWEY DANNENBERG BEMPORAD & SELINGER, P.C. The Gateway, 11th Floor One North Lexington Avenue White Plains, NY 10601-1714 (914) 997-0500 BEATIE AND OSBORN LLP 521 Fifth Avenue, 34th Floor New York, NY 10175 (212) 888-9000 Co-Lead Counsel for Plaintiffs 11 CAULEY GELLER BOWMAN & COATES, LLP One Boca Place 2255 Glades Road, Suite 421A Boca Raton, FL 33431 (561) 750-3000 SCHIFFRIN & BARROWAY, LLP Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706 WOLF HALDENSTEIN ADLER FREEMAN & HERZ 270 Madison Avenue New York, NY 10016 (212) 545-4600 12 EX-99 4 exa1-ppp.txt EXHIBIT (A)(1)(PPP) Exhibit (a)(1)(PPP) IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY DOLPHIN LIMITED PARTNERSHIP I, L.P., : RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, : JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : Civil Action DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, : No. 20101 ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MEHAN IRA, ROBERT M. MILES, and : GUILLERMO MARTI, : : Plaintiffs, : : v. : : NCS ACQUISITION CORP. and OMNICARE, INC., : : Defendants. : NOTICE OF MOTION TO: Donald J. Wolfe, Jr., Esquire Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19801 PLEASE TAKE NOTICE that plaintiffs will present the attached motion for temporary restraining order to the Court at the earliest convenience of the Court and counsel. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ Joseph A. Rosenthal -------------------------------- Suite 1401, 919 N. Market Street P.O. Box 1070 Wilmington, DE 19899 (302) 656-4433 CHIMICLES & TIKELLIS LLP One Rodney Square Wilmington, DE 19899 (302) 656-2500 Attorneys for Plaintiffs OF COUNSEL: LOWEY DANNENBERG BEMPORAD & SELINGER, P.C. The Gateway One N. Lexington Avenue White Plains, NY 10601 BEATIE and OSBORN 34th FLOOR 521 Fifth Avenue New York, NY 10175 CAULEY GELLER BOWMAN & COATES, LLP One Boca Place 2255 Glades Road, Suite 421A Boca Raton, FL 33431 (561) 750-3000 SCHIFFRIN & BARROWAY, LLP Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706 WOLF HALDENSTEIN ADLER FREEMAN & HERZ 270 Madison Avenue New York, NY 10016 (212) 545-4600 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY DOLPHIN LIMITED PARTNERSHIP I, L.P., : RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, : JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : Civil Action DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, : No. 20101 ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MEHAN IRA, ROBERT M. MILES, and : GUILLERMO MARTI, : : Plaintiffs, : : v. : : NCS ACQUISITION CORP. and OMNICARE, INC., : : Defendants. : MOTION FOR TEMPORARY RESTRAINING ORDER Plaintiffs hereby move the Court for an Order (1) temporarily restraining defendants NCS Acquisition Corp. ("NCS Acquisition") and Omnicare, Inc. ("Omnicare") and their agents and affiliates from paying out or distributing $13.5 million (the "escrow fund") of the monies they would otherwise pay or distribute to the shareholders of NCS Healthcare, Inc. ("NCS") to acquire all outstanding NCS stock pursuant to an Agreement and Plan of Merger by and among Omnicare, NCS Acquisition and NCS dated December 17, 2002 ("Merger Agreement"), pending this Court's determination of the application of plaintiffs and their counsel for an allowance of attorneys' fees and reimbursement of expenses in the related litigation, In Re NCS Healthcare, Inc. Shareholders Litigation, Cons. C.A. No. 19786 (the "Shareholders Action"), and (2) requiring NCS Acquisition and Omnicare to deposit the escrow fund in an interest bearing account to be drawn upon only pursuant to further Order of this Court. The grounds for this motion, which are more fully set forth in the Affidavit of Joseph A. Rosenthal and plaintiffs' supporting memorandum of law filed herewith are that (a) plaintiffs' prosecution of C.A. No. 19786 benefitted NCS shareholders thereby entitling plaintiffs and their counsel to an allowance of attorneys' fees and expenses, (b) the monies to be paid out and distributed to NCS shareholders in payment for NCS shares pursuant to the Merger Agreement constitutes a common fund from which any attorneys' fees and expenses would be paid, and (3) immediate relief is necessary to preserve the escrow fund for payment of any allowance of attorneys' fees and expenses the Court may grant. WHEREFORE, plaintiffs respectfully request the Court to enter an Order in the form attached hereto as Exhibit A. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ Joseph A. Rosenthal ----------------------------------- Suite 1401, 919 N. Market Street P.O. Box 1070 Wilmington, DE 19899 (302) 656-4433 CHIMICLES & TIKELLIS LLP One Rodney Square Wilmington, DE 19899 (302) 656-2500 Attorneys for Plaintiffs OF COUNSEL: LOWEY DANNENBERG BEMPORAD & SELINGER, P.C. The Gateway One N. Lexington Avenue White Plains, NY 10601 BEATIE and OSBORN 34th FLOOR 521 Fifth Avenue New York, NY 10175 CAULEY GELLER BOWMAN & COATES, LLP One Boca Place 2255 Glades Road, Suite 421A Boca Raton, FL 33431 (561) 750-3000 SCHIFFRIN & BARROWAY, LLP Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706 WOLF HALDENSTEIN ADLER FREEMAN & HERZ 270 Madison Avenue New York, NY 10016 (212) 545-4600 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTRY DOLPHIN LIMITED PARTNERSHIP I, L.P., : RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, : JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : Civil Action DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, : No. 20101 ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MESHAN IRA, ROBERT M. MILES and : GUILLERMO MARTI, : : Plaintiffs, : : v. : : NCS ACQUISITION CORP. and OMNICARE, INC., : Defendants.
O R D E R Plaintiffs having moved the Court for a Temporary Restraining Order, for the reasons stated on the record on , 200 , IT IS this day of , 200 , ORDERED as follows: 1. Defendants NCS Acquisition Corp. ("NCS Acquisition") and Omnicare, Inc. ("Omnicare") and their directors, officers, agents, servants, employees, attorneys, parents and subsidiaries are hereby temporarily restrained and enjoined from paying to the shareholders of NCS Healthcare, Inc. ("NCS") the sum of $ (the "escrow fund") in connection with the closing of defendants' pending tender offer for the stock of NCS and related merger, pursuant to the Agreement and Plan of Merger by and among Omnicare, NCS Acquisition Corp. and NCS dated December 17, 2002. 2. The escrow fund shall be withheld by proration among all NCS shares NCS Acquisition and Omnicare acquire in the tender offer and merger, i.e., the same amount shall be withheld from payment for each NCS share acquired pursuant to the tender offer and merger. 3. NCS Acquisition and Omnicare shall deposit the escrow fund in an interest bearing escrow account pending further Order of this Court. 4. This Temporary Restraining Order shall be effective only upon the posting of a bond without surety by plaintiffs in the sum of $ for such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. ----------------------------------- Vice Chancellor 2 CERTIFICATE OF SERVICE I, Joseph A. Rosenthal, Esquire, do hereby certify that on this 27th day of December, 2002, I caused copies of the foregoing document to be served via hand delivery upon: Donald J. Wolfe, Jr., Esquire Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19801 /s/ Joseph A. Rosenthal ------------------------------- Joseph A. Rosenthal cc: Edward B. Welch, Esquire David C. McBride, Esquire Elizabeth Ann Brown, Esquire Jon E. Abramczyk, Esquire IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY DOLPHIN LIMITED PARTNERSHIP I, L.P., : RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, : JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : Civil Action DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, : No. 20101 ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MEHAN IRA, ROBERT M. MILES and : GUILLERMO MARTI, : : Plaintiffs, : : v. : : NCS ACQUISITION CORP. and OMNICARE, INC., : : Defendants. : AFFIDAVIT OF JOSEPH A. ROSENTHAL IN SUPPORT OF APPLICATION FOR A TEMPORARY RESTRAINING ORDER STATE OF DELAWARE ) ) ss.: COUNTY OF NEW CASTLE ) Joseph A. Rosenthal, being sworn, deposes and says: 1. I am a member of Rosenthal, Monhait, Gross & Goddess, P.A., one of plaintiffs' counsel in this action and in related litigation in this Court entitled "In re NCS Healthcare, Inc. Shareholders Litigation," Consolidated C.A. No. 19786 (the "Shareholders Action"). I submit this affidavit in support of plaintiffs' application for a temporary restraining order restraining defendants from paying or distributing the sum of $13,500,000 to the shareholders of NCS Healthcare, Inc. ("NCS") in connection with the acquisition of NCS by defendant Omnicare, Inc. ("Omnicare") pursuant to the Agreement and Plan of Merger by and among Omnicare, NCS Acquisition Corp. and NCS dated December 17, 2002, so that a fund is available to pay the fees and expenses of plaintiffs' attorneys whose services in the Shareholders Action benefitted NCS' shareholders. 2. The Shareholders Action resulted in an injunction barring the proposed acquisition by Genesis Health Ventures, Inc. ("Genesis") of all of the outstanding common stock of NCS through a merger agreement and related Voting Agreements with the controlling stockholders of NCS, Jon H. Outcalt and Kevin Shaw. Each of those agreements was dated as of July 28, 2002 (collectively, the "Genesis Merger Agreements") and provided that the stockholders of NCS would receive 0.1 share of Genesis common stock worth about $1.60 per NCS share. As a direct result of the entry by the Delaware Supreme Court of an Order on December 10, 2002 on an appeal from the November 22, 2002 decision of this Court in the Shareholders Action, the Genesis Merger Agreements were enjoined, a bidding contest for NCS ensued and NCS entered into the Agreement and Plan of Merger with Omnicare and its wholly owned subsidiary, NCS Acquisition Corp. (collectively, "Omnicare") for NCS to be acquired at a price of $5.50 cash per share (the "Acquisition") -- approximately $102 million (340%) more than the $1.60 per NCS share consideration in the Genesis Merger Agreements. The Acquisition is being accomplished through a tender offer scheduled to expire at 12:00 midnight (EST) on January 7, 2002 (the "Tender Offer"), to be followed by a merger to acquire any NCS shares that remain outstanding. 3. This affidavit, together with the accompanying memorandum of law, is submitted in support of plaintiffs' application for a temporary restraining order in this action. 4. Plaintiffs and their counsel do not complain of the Acquisition, but only seek a temporary restraining order requiring defendants to withhold $13,500,000 from the monies which defendants would otherwise pay out or distribute to NCS stockholders, until the right of plaintiffs and their counsel to an award of attorneys' fees and reimbursement of expenses can be determined by this Court. Omnicare has represented in its offering materials for the Tender Offer that it will be purchasing 26,233,391 NCS shares in the Acquisition. Accordingly, the amount sought to be withheld is less than $.52 per share, about 13% of the $102 million benefit achieved for the NCS stockholders through the successful prosecution of the Shareholders Action (the "common fund"). Plaintiffs will be filing a motion for determination of attorneys' fees and expenses shortly. 5. Plaintiffs' counsel have communicated with counsel for NCS, its directors and Omnicare seeking payment for the fees and expenses of plaintiffs' counsel in an effort to avoid the necessity for this action and the restraining order plaintiffs seek. Those communications have not obviated the need for this application. 6. Plaintiffs and their counsel will suffer imminent and irreparable injury if this application is denied. Despite the direct and substantial benefits conferred upon the shareholders of NCS in the Shareholders Action, if this application is denied and the Court determines that the common fund is the sole source of payment of an award to plaintiffs' counsel, counsel would be put in the untenable position of having to attempt to collect those fees and expenses from thousands of geographically dispersed shareholders. Such an approach might well deny counsel any fee at all and would be highly inequitable, in view of the total success achieved in the Shareholders Action and the creation of a fund exceeding $102 million for the benefit of the NCS stockholders. 7. Moreover, no harm will be incurred by defendants if this application is granted. Omnicare will be able to complete its Acquisition and acquire NCS. Defendants will simply be required to withhold a small portion of the aggregate payment until counsels' entitlement to fees and expenses has been determined by this Court. 8. In addition, the NCS shareholders will not suffer any detriment as any money withheld which this Court determines should not be awarded to plaintiffs' counsel can be distributed promptly to the shareholders. Thus, the imminent and irreparable harm to counsel clearly outweighs the slight inconvenience which may be incurred by defendants or the NCS shareholders. 9. The urgency surrounding this application and requiring the immediate relief requested herein is an outgrowth of the timing of the Acquisition. Omnicare has publicly represented that the holders of most of the outstanding shares of NCS have tendered to Omnicare. That Tender Offer is scheduled to close on January 7, 2003, with payment to be made promptly thereafter. Omnicare has further represented that it hopes to complete the Acquisition through a short-form or other merger as soon as practicable after the expiration of the Tender Offer. 10. Without the relief sought herein, defendants can (and probably will) distribute the Tender Offer proceeds to NCS shareholders shortly after January 7, 2003, potentially leaving plaintiffs' counsel with no alternative practical means of being paid compensation or reimbursed expenses. Defendants may, on behalf of themselves and as successor in interest to NCS, deny any liability or obligation to pay fees or reimburse expenses to plaintiffs' counsel. Therefore, the common fund created through the efforts of plaintiffs' counsel may be the only source from which plaintiffs' counsel can obtain payment of fees and expenses. 11. For the foregoing reasons, I respectfully request that the temporary restraining order be granted in all respects. /s/ Joseph A. Rosenthal -------------------------------------- Joseph A. Rosenthal SWORN TO AND SUBSCRIBED BEFORE ME this 27th day of December, 2002. /s/ Mary C. McMonigal - ---------------------------------- Notary Public MARY C. McMONIGAL NOTARY PUBLIC STATE OF DELAWARE My Commission Expires May 11, 2005 CERTIFICATE OF SERVICE I, Joseph A. Rosenthal, Esquire, do hereby certify that on this 27th day of December, 2002, I caused copies of the foregoing document to be served via hand delivery upon: Donald J. Wolfe, Jr., Esquire Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19801 /s/ Joseph A. Rosenthal ---------------------------------- Joseph A. Rosenthal cc: Edward B. Welch, Esquire David C. McBride, Esquire Elizabeth Ann Brown, Esquire Jon E. Abramczyk, Esquire IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - -----------------------------------------------X DOLPHIN LIMITED PARTNERSHIP I, L.P., RAMESH MEHAN, RENEE MEHAN, RENEE MEHAN IRA, : SAROJ MEHAN, MANEESCH MEHAN, RAHUL MEHAN, Civil Action JOEL MEHAN, LAJIA MEHAN, DARSHAN MEHAN IRA, : No. 20101 DARSHAN MEHAN (ROLLOVER IRA), ARSH N. MEHAN, ARSH N. MEHAN (ROTH IRA), ASHOK K. MEHAN, : ASHOK K. MESHAN IRA, ROBERT M. MILES and GUILLERMO MARTI, : Plaintiffs, : v. : NCS ACQUISITION CORP. and OMNICARE, INC., : Defendants. : - -----------------------------------------------X
PLAINTIFFS' MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR TEMPORARY RESTRAINING ORDER ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. Suite 1401, 919 N. Market Street P.O. Box 1070 Wilmington, DE 19899 (302) 656-4433 CHIMICLES & TIKELLIS LLP One Rodney Square Wilmington, DE 19899 (302) 656-2500 Attorneys for Plaintiffs OF COUNSEL: LOWEY DANNENBERG BEMPORAD & SELINGER, P.C. The Gateway One N. Lexington Avenue White Plains, NY 10601 BEATIE AND OSBORN 34th FLOOR 521 Fifth Avenue New York, NY 10175 Plaintiffs' Co-Lead Counsel DATED: DECEMBER 27, 2002 TABLE OF CONTENTS TABLE OF AUTHORITIES.....................................................ii PRELIMINARY STATEMENT.................................................... 1 STATEMENT OF FACTS....................................................... 2 ARGUMENT................................................................. 3 A. Plaintiffs' Counsel Will Suffer Imminent And Irreparable injury If A Reasonable Portion Of The Tender Offer/Merger Proceeds Is Not Escrowed............... 3 B. Shareholders' Counsel Can Demonstrate A Reasonable Probability of Success On The Merits Of The Fee Application....... 5 CONCLUSION............................................................... 7
TABLE OF AUTHORITIES Allied Artists Pictures Corp. v. Baron, 413 A.2d 867 (Del. 1980).............................................................5 In Re Anderson-Clayton Shareholder Litigation, Del. Ch., Cons. C.A. No. 8387, Allen, C. (Sept. 19, 1988).............2, 5, 6 Barton v. Drummond Co., 636 F.2d 978 (5th Cir. 1981)................6 Chrysler Corp. v. Dann, 223 A.2d 384 (Del. 1966).................1, 5 Cottle v. Carr, 1988 WL 10415 (Del.Ch.).............................2 In re First Interstate Bancorp. Consol. Shareholders Litigation, 756 A.2d 353 (Del. Ch. 1999), aff'd, 755 A.2d 388 (Del. 2000)...................................5 Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir. 1970)..............2, 4, 6 Koppel v. Wien, 743 F.2d 129 (2d Cir. 1984).........................4 Krinsky v. Helfand, 156 A.2d 90 (Del. 1959).........................6 McDonnell Douglas Corp. v. Palley, 310 A.2d 635 (Del. 1973).............................................................5 Mentor Graphics Corporation v. Quickturn Design Systems, Inc., 789 A.2d 1216 (Del. Ch. 2001)...............................4 Perrine v. Pennroad Corp., 51 A.2d 327 (Del. Ch. 1947)..............4 Ramey v. Cincinnati Enquirer, Inc., 508 F.2d 1188 (6th Cir. 1974), cert. denied, 422 U.S. 1048 (1975).........................6 Smith v. Van Gorkom, 1985 WL 22040 (Del. Ch.).......................6 Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 (Del. 1980).......................................................1, 5, 6 Weinberger v. UOP, Inc., 517 A.2d 653 (Del. Ch. 1986).........1, 4, 5 Zlotnick v. Metex, Inc., C.A. No. 9781, Hartnett, V.C. (Del. Ch. Mar. 2, 1989).....................................................4
PRELIMINARY STATEMENT Plaintiffs submit this memorandum of law in support of their application to temporarily restrain Omnicare, Inc., and its wholly owned subsidiary, NCS Acquisition Corp. (collectively, "Omnicare") from disbursing $13.5 million of the funds otherwise payable to the shareholders of NCS Healthcare, Inc. ("NCS") pursuant to a December 17, 2002 merger agreement between Omnicare and NCS. Plaintiffs ask that the restraining order remain in place and effect until such time as the Court determines plaintiffs' counsels' right to, and amount of, an award of attorneys' fees and reimbursement of expenses for their services in the related action styled "In re NCS Healthcare, Inc. Shareholders Litigation," Consolidated C.A. No. 19786 (the "Shareholders Action"). The efforts of plaintiffs' counsel resulted in an Order from the Delaware Supreme Court directing that this Court enjoin implementation of a merger agreement between NCS and Genesis Health Ventures, Inc. ("Genesis") that NCS entered into even though Omnicare, a competing bidder, had expressed a willingness to offer a superior price. A bidding contest ensued after the Supreme Court's decision resulting in the current NCS-Omnicare merger agreement in which NCS shareholders will receive more than three times the price for their stock than they would have received under the NCS-Genesis merger. The aggregate benefit exceeds $102 million. Under well-established Delaware law, when a party is successful in creating a "common fund" for the benefit of other stockholders, attorneys' fees may be paid from the common fund. Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 (Del. 1980); Chrysler Corp. v. Dann, 223 A.2d 384, 386 (Del. 1966); Weinberger v. UOP, Inc., 517 A.2d 653, 654 (Del. Ch. 1986). If the Court determines that the transaction proceeds are the only source of payment, unless a portion of the merger proceeds, or "common fund," is withheld from distribution, plaintiffs' counsels' 1 collection of any fees and expenses for their services in achieving the benefit will be a practical impossibility, and plaintiffs' counsel will be irreparably harmed. The only practical alternative, as sought here, is the escrowing of a fund prior to distribution. See Kahan v. Rosenstiel 424 F.2d 161, 168 n.8 (3d Cir. 1970). The amount which plaintiffs request to be withheld is relatively small compared to the total cash benefit conferred upon NCS's shareholders. The $13.5 million requested to be withheld represents approximately 13% of the additional $102 million in consideration that NCS stockholders will receive. Plaintiffs' counsel have attempted to resolve this issue without resorting to litigation. However, in the absence of a commitment by Omnicare to pay the fees and expenses awarded to plaintiffs' counsel (see In Re Anderson-Clayton Shareholder Litigation, Del. Ch. Cons. C.A. No. 8387, Allen, C. (Sept. 19, 1988)("Anderson-Clayton")), plaintiffs are left with no practical alternative to the instant motion. STATEMENT OF FACTS The relevant facts are set forth in the Affidavit of Joseph A. Rosenthal, sworn to December 27, 2002 submitted herewith (the "Moving Affidavit"), and the Complaint in this action. Plaintiffs will also file more detailed papers in support of their fee application in the Shareholders Action. As detailed in the Complaint and Moving Affadavit, the diligent efforts of plaintiffs' counsel caused the Genesis merger agreement and related voting agreements to be enjoined, and enabled competitive bidding for NCS to ensue between Genesis and Omnicare. The Shareholders Action, by blocking the Genesis merger, opened up the "playing field" and permitted the emergence of a competitive bidding process in which Genesis offered $3.50 per 2 share in Genesis stock to counter Omnicare's pending bid, and Omnicare promptly upped its bid to $5.50 cash per share. As a result, the stockholders of NCS will receive approximately $3.90 per share (340%) more than they would have received under the Genesis merger as a result of the successful prosecution of the Shareholders Action. The tender offer for NCS shares is scheduled to close on January 7, 2003, thus requiring that this application be made on an expedited basis. ARGUMENT The standards applicable to this motion for a temporary restraining order ("TRO") are clear: the moving party must show a threat of imminent irreparable injury and claims that are colorable, litigable, or that raise questions deserving serious attention. Cottle v. Carr, 1988 WL 10415 at *2 (Del. Ch.) (on a TRO, the Court's focus "is not importantly upon an assessment of the probability of ultimate success, but is primarily upon the injury to plaintiff that is threatened and the possible injury to defendant if the remedy is improvidently granted"). Each of these elements is satisfied by the instant application. A. Plaintiffs' Counsel Will Suffer Imminent And Irreparable Injury If A Reasonable Portion Of The Tender Offer/Merger Proceeds Is Not Escrowed The rights of plaintiffs' counsel to reasonable attorneys' fees and reimbursement of expenses may be completely frustrated if the tender offer/merger consideration is paid to NCS' shareholders without first withholding a reasonable amount for plaintiffs' attorneys' fees. Plaintiffs' counsel may have no other source of compensation for their successful efforts because it is a practical impossibility to assess the many thousands of geographically dispersed shareholders individually after payment has been made. See Weinberger v. UOP, Inc., 517 A.2d 653 (Del. Ch. 1986). In this case, no harm will befall Omnicare if it is required to withhold temporarily a small 3 portion of the more than $460 million in cash earmarked for distribution to NCS' shareholders and creditors. The NCS shareholders also will not be harmed because the portion to be withheld is small, and, to the extent ultimately allowed for fees and expenses by this Court, will simply represent just compensation reasonably owed by the NCS stockholders to counsel. Under these circumstances, it is clear that the requested TRO should be granted. Indeed, in Kahan v. Rosenstiel, supra, the Court stated that filing an application for a TRO in circumstances such as these is the appropriate way to proceed: Plaintiff also argued that he had an attorney's lien on the fund [created by the tender offer] which the defendants could not defeat by giving the money directly to the shareholders....It should be noted that if plaintiff believed he was entitled to a lien on the amount that [the bidder] paid to the shareholders for their stock, he could have sought an injunction to enjoin the payment and to assert his claim against it in court. 424 F.2d at 168 n.8 (emphasis added). Likewise, in Weinberger v. UOP, Inc., supra, 517 A.2d at 658, then Vice Chancellor Berger recognized the appropriateness of the procedure sought here--partial withholding of the fund until appropriate attorneys' fees are determined and satisfied. See also Perrine v. Pennroad Corp., 51 A.2d 327, 343 (Del. Ch. 1947) (court retains jurisdiction over settlement fund to extent of amount awarded as attorney fee); Koppel v. Wien, 743 F.2d 129, 134-35 (2d Cir. 1984). And in Zlotnick v. Metex, Inc., Del. Ch., C.A. No. 9781, Hartnett, V.C. (Mar. 2, 1989) (Order), the Court granted a restraining order on a payout to shareholders to secure counsel fees.(1) See also Mentor Graphics Corporation v. Quickturn Design Systems, Inc., - ---------- (1) The Court's Order permitted the Metex defendants to assume responsibility for the counsel fee in lieu of withholding payment to the Class. In In Re Macmillan Inc. Shareholders Litig., C.A. No. 9909, In Re Dunkin' Donuts Shareholders Litig., C.A. No. 10825, and In Re Wilson Foods Corporation Shareholders Litig., C.A. No. 10106, counsel made an application like the instant one, the defendants agreed to be responsible for such counsel fees as the Court might award, and the need for ruling on the TRO application was thus obviated. Here plaintiffs' counsel have sought but not yet received such a commitment. 4 789 A.2d 1216, 1233 (Del. Ch. 2001). B. Shareholders' Counsel Can Demonstrate A Reasonable Probability of Success On The Merits Of The Fee Application Shareholders' counsel who obtain a recovery for the benefit of others are entitled to reasonable attorneys' fees and reimbursement of expenses from the beneficiaries of the actions under the "common fund" doctrine, The Delaware Supreme Court held in Chrysler Corp. v. Dann, 223 A.2d 384 (Del. 1966): . . . when the litigation results in benefit to all members of a class, the successful litigant is entitled to an allowance for counsel fees to be paid from the fund or property which his efforts have created, the amount to be fixed in the sound discretion of the Chancellor. Id. at 386 (emphasis supplied). Allied Artists Pictures Corp. v. Baron, 413 A.2d 867 (Del. 1980); Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 (Del. 1980); McDonnell Douglas Corp. v. Palley, 310 A.2d 635 (Del. 1973); Anderson-Clayton, supra, mem. op. at 3. See also Weinberger v. UOP, Inc., supra, 517 A.2d 652; In re FirstInterstate Bancorp. Consol. Shareholders Litigation, 756 A.2d 353 (Del. Ch. 1999), aff'd, 755 A.2d 388 (Del. 2000). Here, the efforts of plaintiffs' counsel have conferred a benefit of more than $102 million upon the shareholders. Courts have readily approved the award of fees in analogous situations where plaintiffs' claims were mooted by defendants' correction of underpriced tender offers or abandonment of risky acquisition plans. See Sugarland Industries, Inc. v. Thomas, 420 A.2d 142, 148-149 (Del. 1980) (fee awarded where plaintiffs challenged an acquisition offer as inadequate, contributed to the creation of a syndicate which made a higher offer, obtained an injunction preventing the company from accepting the inadequate offer and requiring it to conduct an auction, all of which resulted in the acceptance of the highest offer); Anderson-Clayton, supra; Ramey v. Cincinnati Enquirer, Inc. 508 F.2d 1188, 1194-1196 (6th Cir. 1974), 5 cert. denied, 422 U.S. 1048 (1975) (derivative suits caused defendant to terminate a risky repurchase plan and allowed outside companies to make more favorable bids); Barton v. Drummond Co., 636 F.2d 978 (5th Cir. 1981) (plaintiff may be entitled to fees where the challenged merger was abandoned subsequent to his lawsuit); Kahan v. Rosenstiel, supra, 424 F.2d 161 (plaintiff may be entitled to fees where the acquiring company improved the terms of its offer after institution of the suit). The fees to be requested by plaintiffs' counsel are reasonable when compared to the huge, direct benefit created for NCS shareholders. A fee and expense application of $13.5 million would constitute approximately 13% of the benefit created for the stockholders. The courts of this State have awarded fees in excess of this percentage of recovery in shareholder litigation. See, e.g., Sugarland Industries, Inc., supra, ($15 million value of benefit and 20% fee of $3 million); Krinsky v. Helfand, 156 A.2d 90, 95 (Del 1959) (20% fee); Smith v. Van Gorkom, 1985 WL 22040 (Del. Ch.) (23.4% of the fund awarded). 6 CONCLUSION Plaintiffs' counsels' clear entitlement to substantial compensation would be empty indeed if the common fund was disbursed to thousands of stockholders, and it became impossible, as a practical matter, to enforce whatever award this Court might ultimately make. Accordingly, plaintiffs' counsel request that this Court temporarily restrain Omnicare from distributing $13.5 million in cash to NCS' shareholders and direct Omnicare to deposit that sum in an interest-bearing escrow account subject to the jurisdiction of this Court until plaintiffs' counsels application for attorneys' fees and reimbursement of expenses in C.A. No. 19786 has been determined. ROSENTHAL, MONHAIT, GROSS Of Counsel: & GODDESS, P.A. LOWEY DANNENBERG BEMPORAD By: /s/ Joseph A. Rosenthal & SELINGER, P.C. ----------------------------- The Gateway, 11th Floor Suite 1401, 919 N. Market Street On North Lexington Avenue Wilmington, Delaware 19801 White Plains, New York, 10601-1714 Tel: (302) 656-4433 (914) 997-0500 BEATIE AND OSBORN LLP CHIMICLES & TIKELIS LLP 521 Fifth Avenue, 34th Floor One Rodney Square New York, New York 10175 Wilmington, Delaware 19801 Tel: (212) 888-9000 (302) 656-2500 Plaintiffs' Co-lead Counsel Attorneys for Plaintiffs CAULEY GELLER BOWMAN & COATES, LLP One Boca Place 2255 Glades Road, Suite 421A Boca Raton, FL 33431 (561) 750-3000 7 SCHIFFRIN & BARROWAY, LLP Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 (610) 667-7706 WOLF HALDENSTEIN ADLER FREEMAN & HERZ 270 Madison Avenue New York, NY 10016 (212) 545-4600 8 TABLE OF UNREPORTED CASES EXHIBIT In Re Anderson-Clayton Shareholder Litigation, Del. Ch., Cons. C.A. No. 8387, Allen, C. (Sept. 19, 1988) ....................................A Cottle v. Carr, 1988 WL 10415 ................................................B Smith v. Van Gorkom, 1985 WL 22040 (Del. Ch.) ...............................C Zlotnick v. Metex, Inc., Del. Ch., C.A. No. 9781, Harnett, V.C. (Mar. 2, 1989) ..........................................................D -----END PRIVACY-ENHANCED MESSAGE-----