-----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, Q7H3dyAQJ3XnO3qt6wMAvYtMykb8Q2s3zFE3Du7PUGKjqITvk3cg0HhhV4dhwjbu JK4YOLljPCz/jloYU1sGQg== 0000950152-96-002701.txt : 19960531 0000950152-96-002701.hdr.sgml : 19960531 ACCESSION NUMBER: 0000950152-96-002701 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960515 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960530 SROS: NONE FILER: 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: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27602 FILM NUMBER: 96574736 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PARKWAY STREET 2: SUITE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 8-K 1 NCS HEALTHCARE, INC. 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: MAY 15, 1996 ------------ (Date of earliest event reported) NCS HEALTHCARE, INC. -------------------- (Exact name of Registrant as specified in its charter) Delaware 0-027602 34-1816187 -------- -------- ---------- (State or other jurisdiction (Commission (I.R.S. employer of incorporation) file number) identification no.) 3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (216) 514-3350 ---------------- 2 Item 2. Acquisition or Disposition of Assets. - ---------------------------------------------- On May 15, 1996, NCS HealthCare, Inc. (the "Company") acquired all of the issued and outstanding capital stock of Uni-Care Health Services, Inc., a New Hampshire corporation, and Uni-Care Health Services of Maine, Inc., a New Hampshire corporation (collectively "Uni-Care"). The acquisition was accomplished pursuant to a Stock Purchase Agreement, dated May 15, 1996, by and among the Company and the three shareholders (the "Shareholders") of Uni-Care (the "Stock Purchase Agreement"). A copy of the Stock Purchase Agreement is filed as an Exhibit hereto. Uni-Care provides pharmacy services to approximately 9,200 residents of long-term care facilities in New Hampshire and Maine. As consideration for the acquisition of Uni-Care, the Company (i) paid the Stockholders an aggregate of $6,000,000 in cash, and (ii) issued an aggregate of 34,483 shares of its Class A Common Stock to its Stockholders. In addition the Company paid $1,170,000 in cash and issued 6,897 shares of its Class A Common Stock as a finder's fee to the Shareholders' broker. The value of the Class A Common Stock issued in connection with this transaction was determined based on the closing price of the Class A Common Stock on May 13, 1996. In connection with the purchase of the capital stock of Uni-Care, certain of the Shareholders each entered into Employment Agreements. Uni-Care Health Services, Inc. entered into an Employment Agreement with Michael F. Fecteau for a period of five years for the position of Director of Business Development. Uni-Care Health Services of Maine, Inc. entered into an Employment Agreement with Richard P. Legere for a period of five years for the position of Site Manager. Uni-Care Health Services, Inc. entered into an Employment Agreement with Leon Parker for a period of five years for the position of Site Manager. Copies of the Employment Agreements are filed as Exhibits hereto. In connection with the purchase of the capital stock of Uni-Care, the Company entered into a Non-Competition Agreement with Francis J. Cassidy, a shareholder of Uni-Care. This Agreement provides that Mr. Cassidy will not, for a period of five years, directly or indirectly compete with the Company. A copy of the Non-Competition Agreement is filed as an Exhibit hereto. The Company utilized its available cash to make the cash payments in connection with this transaction. Other than the Employment Agreements and the Non-Competition Agreement set forth above, there are no material relationships between Uni-Care and the Company or any of their affiliates, directors or officers. 2 3 Item 7. Financial Statements, Pro Forma Financial Information and - ------------------------------------------------------------------ Exhibits. - --------- (a) Financial Statements of Businesses Acquired.* (b) Pro Forma Financial Information.* (c) EXHIBITS.
Sequential Exhibit No. Description Page No. - ----------- ----------- -------- 2.1 Stock Purchase Agreement, dated May 15, 1996, by and among 6 NCS HealthCare, Inc., a Delaware corporation, and the owners of capital stock of Uni-Care Health Services, Inc., a New Hampshire corporation, and Uni-Care Health Services of Maine, Inc., a New Hampshire corporation (without schedules).** 23.1 Consent of R. E. Reed & Company *** 99.1 Employment Agreement, dated as of May 15, 1996, by and between Uni-Care Health Services, Inc. and Michael F. Fecteau. 99.2 Employment Agreement, dated as of May 15, 1996, by and between Uni-Care Health Services of Maine, Inc., and Richard P. Legere.
3 4
99.3 Employment Agreement, dated as of May 15, 1996, by and between Uni- Care Health Services, Inc. and Leon Parker. 99.4 Noncompetition Agreement, dated as of May 15, 1996, by and between NCS HealthCare, Inc. and Francis J. Cassidy. - --------------- * The financial statements of Uni-Care for the periods specified in Rule 3-05(b) of Regulation S-X and the pro forma financial information required pursuant to Article 11 of Regulation S-X currently are not available and will be filed as soon as is practicable, but not later than 60 days after the date that this Report is due. ** The Registrant agrees by this filing to supplementally furnish a copy of the schedules of this Agreement to the Commission upon request. *** To be filed by Amendment.
4 5 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NCS HEALTHCARE, INC. By: /s/ Jeffrey R. Steinhilber --------------------------- Jeffrey R. Steinhilber, Senior Vice President and Chief Financial Officer Date: May 30, 1996 5 EX-2.1 2 EXHIBIT 2.1 1 STOCK PURCHASE AGREEMENT ------------------------ THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into on this 15th day of May, 1996, by and among NCS HEALTHCARE, INC., a Delaware corporation ("NCS"), and each of the undersigned owners of shares of capital stock of UNICARE HEALTH SERVICES, INC., a New Hampshire corporation ("Uni-Care Health Services") d/b/a AmeriCare Health Services, Uni-Care Health Services and Uni-Care I.V. Services, and the undersigned individual owner of shares of capital stock of UNI-CARE HEALTH SERVICES OF MAINE, INC., a New Hampshire corporation ("Uni-C are Health Services of Maine") (each, a "Shareholder," and collectively, the "Shareholders"). (Uni-Care Health Services and Uni-Care Health Services of Maine are sometimes referred to herein collectively as "Uni-Care"). RECITALS: --------- A. The Shareholders own all of the issued and outstanding shares of the capital stock of Uni-Care Health Services and Uni-Care Health Services of Maine, except those shares of capital stock of Uni-Care Health Services of Maine owned by Uni-Care Health Services. B. The Shareholders desire to sell to NCS, and NCS desires to purchase from the Shareholders, all of the issued and outstanding shares of the capital stock of Uni-Care for the consideration and subject to the terms and conditions set forth in this Agreement. C. As a condition to such acquisition, each of the Shareholders is willing to enter into an agreement prohibiting the Shareholders from disclosing confidential information, competing or otherwise interfering with NCS and its businesses. NOW, THEREFORE, in consideration of and in reliance upon the representations, warranties and covenants set forth in this Agreement, NCS and the Shareholders hereby agree as follows: 1. SALE AND PURCHASE OF SHARES. Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined below), the Shareholders shall sell, assign, transfer and deliver to NCS and NCS shall purchase and acquire from the Shareholders, all of the issued and outstanding shares of the capital stock of Uni-Care (each individually, a "Share," and collectively, the "Shares"). 2. PURCHASE PRICE. The aggregate purchase price (the "Purchase Price") shall include 34,483 unregistered Class A shares of common stock of NCS (the "NCS Stock") and an amount equal to $6,000,000.00 MINUS the amount, if any, which the Liabilities (as defined below) exceeds $3,780,000.00 and PLUS OR MINUS any adjustments pursuant to Sections 2.4 and 2.5 herein 2 2.1 CASH PAYMENT. At Closing, the Shareholders will receive the sum of $6,000,000.00 PLUS OR MINUS any adjustments pursuant to this Section 2, payable by NCS by wire transfer, in the amounts set forth on SCHEDULE 2.1. 2.2 SECURITIES. At Closing, the Shareholders will receive the NCS Stock in the amounts set forth on SCHEDULE 2.2. 2.2.1 SECURITIES ACT LEGEND. The Shareholders understand and agree that all certificates for NCS Stock which have been received by Shareholders as part of the Purchase Price and any certificates subsequently issued in substitution therefor, shall bear the following legend unless and until such shares either are registered under the Securities Act of 1933, as amended (the "Act"), pursuant to an effective registration statement or counsel satisfactory to NCS shall have advised in writing that such legend is not required: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the 'Act'), and may not be sold, transferred or otherwise disposed of unless a registration statement under the Act with respect to such shares has become effective or unless the holder hereof establishes to the satisfaction of this Corporation that an exemption from such registration is available." 2.2.2 RULE 144 PROVISIONS. Subject to the other terms and conditions of this Section 2.2, the Shareholders understand and agree that (i) the NCS Stock will be "Restricted Securities" under Rule 144 of the Act, (ii) the NCS Stock must be held indefinitely unless such shares are registered under the Act or an exemption from registration is available, (iii) NCS is under no obligation to provide any such registration or to take such steps as are necessary to permit sale without registration pursuant to Rule 144 under the Act or otherwise, (iv) at such time as the NCS Stock may be disposed of in routine sales without registration in reliance on Rule 144 under the Act, such disposition can be made only in limited amounts in accordance with all of the terms and conditions of Rule 144, (v) if the Rule 144 exemption is not available, compliance with some other exemption from registration will be required, and (vi) the transfer agent and registrar of NCS shall be advised (by appropriate "stop-transfer" instructions) of the foregoing restrictions contained herein and instructed to prohibit transfer of the NCS Stock until advised by NCS to proceed with the proposed transfer. 2.2.3 INCIDENTAL REGISTRATION. If NCS at any time proposes to file on its behalf and/or on behalf of any of its security holders a Registration Statement under the Act for the general registration of securities to be sold for cash with respect to its Class A shares of common stock, it will give written notice to the Shareholders at least 30 days before the initial filing with the Securities Exchange Commission (the "Commission") of such 2 3 Registration Statement, which notice shall set forth the intended method of disposition of the securities proposed to be registered by NCS. The notice shall offer to include in such filing the number of shares of NCS Stock as the Shareholders may request. Each Shareholder, desiring to have NCS Stock registered under this subsection, shall advise NCS within 10 days after the date of receipt of such offer from NCS, setting forth the amount of such NCS Stock for which registration by the Shareholders is requested. Subject to the next sentence, NCS shall thereupon include in such filing the number of shares of NCS Stock for which the registration is so requested. If the managing underwriter shall advise NCS that, in its opinion, the distribution of the NCS Stock requested to be included in the registration by the Shareholders concurrently with the securities being registered by NCS is not advisable or would adversely effect the distribution of such securities by NCS, then the Shareholders shall reduce the amount of NCS Stock each intended to distribute through such offering on a pro rata basis (as between the Shareholders). The Shareholders, requesting registration of NCS stock, shall cooperate with NCS and furnish all information with respect to the Shareholders as NCS may reasonably request in connection with such Registration Statement. All expenses of such registration, other than any underwriting discounts and commissions, shall be borne by NCS. 2.2.4 SURVIVAL. The provisions of this Section 2.2 shall expressly survive the Closing. 2.3 LIABILITIES. 2.3.1 LIABILITIES. For purposes of this Section 2, "Liabilities" means the aggregate amount of all liabilities and obligations of Uni-Care to any person, whether fixed or contingent, as of the Closing. "Liabilities" specifically includes all obligations owed by Uni-Care to Richard Fortier (the "Fortier Payable") and Francis J. Cassidy (the "Cassidy Payable"), and specifically excludes those obligations referenced as items 4, 5, 6 and 7 on SCHEDULE 6.8. 2.3.2 MACHBITZ PAYABLE. For purposes of this Section 2, the "Machbitz Payable" means the aggregate amount of all obligations of Uni-Care owed directly or indirectly to Machbitz Associates, which obligations are more particularly described on SCHEDULE 2.3.2. 2.4 PRE-CLOSING ADJUSTMENT. If, at any time between April 1,1996 and the Closing Date, new licensed nursing home beds are signed by Uni-Care to contracts acceptable to NCS, an additional $1,000.00 per new licensed nursing home bed will be added to the Cash Payment at Closing. The current number of licensed beds under contract with Uni-Care, including nursing homes, health care institutions and correctional facilities, is 9,194, as more particularly set forth on SCHEDULE 2.4. 3 4 2.5 NET WORTH ADJUSTMENT. Subject to the terms hereof, there shall be a dollar-for-dollar post-closing adjustment of the Purchase Price ("Net Worth Adjustment") if the net worth of Uni-Care as of the Closing Date is not equal to $1,050,000.00 (the "Net Worth Requirement"). Any Net Worth Adjustment under this Section 2.5 shall be paid by the Shareholders to NCS upon its demand in accordance with the terms hereof. 2.5.1 NET WORTH DETERMINATION. As soon as practicable after the Closing, NCS, or its representatives, shall audit the records of Uni-Care and prepare a statement of net worth as of the Closing (the "Final Net Worth Statement") setting forth all the assets and liabilities of Uni-Care on a consolidated basis as of the Closing in accordance with the Standard Accounting Practices (as hereinafter defined). No effect will be given in preparing the Final Net Worth Statement to any post-closing commitment, obligation or liability arising under this Agreement or the agreements collateral hereto. Representatives of the Shareholders will be permitted to participate in the process at the Shareholders' expense. As soon alter Closing as is reasonably practicable, and in no event later than one hundred twenty (120) days after the Closing Date, NCS will deliver the Final Net Worth Statement to the Shareholders, which shall set forth the amount of the Net Worth Adjustment (if any) and an analysis of how it was determined. The Shareholders shall be given a copy of the work papers generated by NCS and its accountants in the preparation of the Final Net Worth Statement. Any delay in delivering the Final Net Worth Statement shall extend the periods hereunder for review by the Shareholders for an equal number of days. Following receipt of the Final Net Worth Statement, the Shareholders will be afforded a period of 60 days after delivery of the Final Net Worth Statement to review the Final Net Worth Statement (the "Response Period"). Before the end of the Response Period, the Shareholders will either: (i) accept the Final Net Worth Statement, in which case the amount of the Net Worth Adjustment will be the amount, if any so determined and reflected in the Final Net Worth Statement, or (ii) deliver to NCS written objection, with a detailed written explanation of those items contained in the Final Net Worth Statement which the Shareholders dispute. NCS may waive its rights under this Subsection 2.5.1 by delivering written notice thereof to the Shareholders. 2.5.2 DISPUTE RESOLUTION. Within a period of thirty (30) days from the end of the Response Period, the parties will attempt to resolve in good faith any disputed items in the Final Net Worth Statement. Failing such resolution, the unresolved items will be referred for final binding resolution to a nationally recognized firm of independent certified public accountants mutually acceptable to the Shareholders and NCS (the "Independent Accountant"). Failing mutual agreement by the parties, a list of a representatives, who provide litigation support/arbitration services, from the Boston office of each of the six (6) major nationally-recognized accounting firms shall be prepared, from which conflicted accountants will be deleted and the remainder shall be reduced to a final arbitrator by each party striking a name alternating with the Shareholders going first. Within thirty (30) days of the referral, the Independent Accountant shall determine 4 5 the proper amount of such unresolved and disputed items and the amount (if any) of the Net Worth Adjustment in accordance with the Standard Accounting Practices. 2.5.3 STANDARD ACCOUNTING PRINCIPLES AND PRACTICES. The Final Net Worth Statement will be determined in a manner consistent with generally accepted accounting principles in the manner consistently applied by the accountants historically serving UniCare (hereinafter "Standard Accounting Practices"). 2.5.4 EFFECT OF DETERMINATION. A determination under Subsection 2.5.2 shall have the legal effect of an arbitral award and shall be final, nonappealable and incontestable by the parties, and will not be subject to collateral attack for any reason. The parties expressly acknowledge that NCS shall not be entitled to recover more than once for the same claim, whether an adjustment to Net Worth, a reimbursement of excess Liabilities, or a claim under indemnification. 2.5.5 CLOSING COSTS. NCS acknowledges that the Shareholders and Uni-Care shall be authorized to pay all closing costs, including all legal and accounting fees and expenses incurred up to and including the Closing which obligations can and will be paid by Uni-Care at or promptly following Closing, provided that to the extent that such expenditures result in the failure to meet the Net Worth Requirement or Liabilities requirement set forth herein, the Shareholders shall be proportionately responsible for immediate reimbursement to NCS or Uni-Care in accordance herewith. 2.5.6 PAYMENT OF NET WORTH ADJUSTMENT BY SHAREHOLDERS. In the event a Net Worth Adjustment is required to be paid by the Shareholders such Net Worth Adjustment shall be paid at the option of the respective Shareholders, either in cash or by check or in the requisite amount of NCS Stock on a dollar-for-dollar basis based upon $29.00 per share. Any shortfall shall be paid by the Shareholders in cash or by check. Notwithstanding the foregoing, in the event the Liabilities exceed $3,780,000.00, such excess shall be paid by the Shareholders in cash or by check to NCS upon demand. 3. REAL ESTATE LEASES. Uni-Care is currently doing business at two locations. The New Hampshire location is currently located at 23 Perimeter Road South, Londonderry, New Hampshire 03053 (the "New Hampshire Premises") and the Maine location is currently located at 19 Harbor Road, Wells, Maine 04090 (the "Maine Premises"). At Closing, the landlord and Uni-Care Health Services shall enter into the lease attached hereto as Exhibit "A" for the New Hampshire Premises. 4. EMPLOYMENT AND OTHER AGREEMENTS. At Closing, Uni-Care will enter into an employment agreement with Michael F. Fecteau which agreement shall be in the form of the Employment Agreement which is attached hereto as Exhibit "B" and made part hereof (the "Fecteau Employment Agreement"). At Closing, Uni-Care will also enter into employment 5 6 agreements with Richard P. Legere and Leon Parker and NCS will enter into a non-compete agreement with Francis J. Cassidy. 5. CLOSING. If the conditions to the parties' obligations are satisfied, the consummation of the transactions contemplated by this Agreement (the "Closing") will take place on Wednesday, May 15, 1996, at 12:00 p.m. or on such other date and time as may be agreed upon by the parties (the "Closing Date"), at the offices of Sheehan Phinney Bass + Green, P.A., 1000 Elm Street, Manchester, New Hampshire, or at such other place as the parties may agree. If the Closing does not occur by June 30, 1996, this Agreement may be terminated by NCS or the Shareholders, without prejudice to the rights of any party against any other for any reach or nonperformance of its obligations prior to termination. 6. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS. Subject to the provisions of Section 10 of this Agreement, each of the Shareholders hereby makes the following representations and warranties to NCS: 6.1 ORGANIZATION, ETC. OF UNI-CARE. Each of Uni-Care (i) is a corporation duly incorporated and validly existing under the laws of the State of New Hampshire, (ii) is qualified to do business as a foreign corporation in every state or other jurisdiction where the conduct of its business or the ownership of its assets and properties requires it to be so qualified, and (iii) has full corporate power and authority to own, lease and operate its assets and properties and to carry on its business as and where such assets and properties are now owned and leased and as such business is presently being conducted. 6.2 CAPACITY OF SHAREHOLDERS. Each Shareholder has full power and capacity to execute, deliver and perform this Agreement and each of the agreements and documents to be delivered by that Shareholder in connection herewith. This Agreement and each other agreement and document delivered by each Shareholder in connection herewith have been duly executed and delivered by that Shareholder and constitute the binding obligations of that Shareholder enforceable in accordance with their respective terms. 6.3 MINUTES AND STOCK RECORDS. The stock records of Uni-Care which have previously been made available to NCS for inspection are correct and complete. The corporate minutes of Uni-Care which have previously been made available to NCS for inspection are correct and complete and contain all of the material proceedings of the shareholders and directors of Uni-Care. SCHEDULE 6.3 sets forth a correct and complete list of all incumbent directors and officers of Uni-Care. 6.4 SUBSIDIARIES AND AFFILIATES. Uni-Care does not own, directly or indirectly, any equity or ownership interest in any corporation, business trust, partnership, joint venture, joint stock company, limited liability company or other business organization or association. 6 7 6.5 CAPITAL STOCK OF UNI-CARE; TITLE TO SHARES. The total authorized capital stock of NCS Health Care of New Hampshire consists of 1,000 shares, all of which are voting common shares, without par value. The total authorized capital stock of NCS HealthCare of Maine consents of 1,000 shares, all of which are voting common shares, without par value. All of the Shares are owned of record and beneficially by the respective holders and in the respective amounts set forth on SCHEDULE 6.5, in each case, free and clear of all liens, claims, charges and encumbrances of any kind, and the consummation of the transactions contemplated by this Agreement will vest in NCS good and marketable title to all of the Shares. All of the Shares are duly authorized, validly issued, fully paid and nonassessable, and have been issued in compliance with all applicable state and federal securities laws. There are no options, warrants, stock appreciation, conversion or similar rights or obligations providing for the purchase, redemption, sale or issuance of any shares of the capital stock of Uni-Care, and no claims of an equity ownership nature. 6.6 CONSENTS AND APPROVALS. Except as set forth in SCHEDULE 6.6, no consent, authorization or approval of, or registration, declaration or filing with, any governmental authority or third party is required in connection with the execution, delivery or performance of this Agreement by the Shareholders or by any of them. The execution, delivery and performance of this Agreement by the Shareholders does not violate, conflict with or result in a breach of (i) any judgment, decree, order, statute, rule or regulation applicable to any Shareholder, (ii) any contract, agreement or instrument to which any Shareholder is a party or by which any Shareholder is bound, or (iii) any contract, agreement or instrument to which Uni-Care is a party or by which Uni-Care is bound. 6.7 FINANCIAL STATEMENTS. SCHEDULE 6.7 includes the audited annual financial statements of Uni-Care for each of its fiscal years ended December 31, 1994 and December 31, 1995, and the internally prepared financial statements of Uni-Care for the period ended March 31, 1996 (collectively, the "Financial Statements"). The Financial Statements are accurate and complete and all of the Financial Statements present fairly the financial position and results of operations of Uni-Care for the periods they cover in conformity with generally accepted accounting principles applied on a consistent basis. In addition, the other internally prepared financial statements of Uni-Care which have previously been made available to NCS for inspection accurately reflect all items of income and expense (including accruals) and all of Uni-Care's assets and liabilities in accordance with normal accrual accounting practices and consistent with past practice. 6.8 NO LIABILITIES. Uni-Care has no liabilities or obligations of any kind (whether contingent or otherwise) except (i) as reflected on the balance sheet of Uni-Care as of March 31, 1996 which is included in SCHEDULE 6.7 (the "Balance Sheet"), (ii) future performance obligations under contracts disclosed in writing to NCS before the Closing, (iii) as incurred in the ordinary course of business, consistent with past practice, or (iv) as set forth in Schedule 6.8. Neither Uni-Care nor any Shareholder has breached any 7 8 obligation under any contract to which Uni-Care is a party or by which any of Uni-Care's assets are bound. 6.9 MATERIAL CONTRACTS. 6.9.1 INDEBTEDNESS. SCHEDULE 6.9.1 sets forth a complete and accurate list of all loan agreements, facilities, notes, guaranties, capitalized leases, letters of credit and all other material instruments or obligations to which Uni-Care is a party or by which Uni-Care or any of its assets or properties is bound, relating to indebtedness of Uni-Care, whether fixed or contingent, in respect of borrowed money, and includes, without, limitation, all bank or other institutional debt, other loans or commitments and capitalized leases undertaken by Uni-Care. 6.9.2 MACHBITZ. SCHEDULE 2.3.2 sets forth a complete and accurate description of the Machbitz Payable. 6.9.3 OTHER AGREEMENTS. SCHEDULE 6.9.3 sets forth a complete and accurate list of all other material contracts to which Uni-Care is a party or by which it is bound, including without limitation, all pharmacy, medical supply, IV and other agreements. Except as set forth on SCHEDULE 6.9.3, the Shareholders are not aware of any party's intention to cancel or modify a contract or any reason for cancellation or modification thereof, including the consummation of the Transactions. 6.10 COMPLIANCE WITH LAWS. Uni-Care is not in violation of any law, regulation or order of any federal, state or local governmental authority or court, including, without limitation, any laws, regulations or orders relating to Medicare or Medicaid reimbursement, the corporate practice of medicine, environmental matters, occupational health or safety, or the generation, storage, transportation or disposal of infectious wastes. All health care, tax, and other returns, reports, plans and filings of any nature required to be filed by Uni-Care with any federal, state or local governmental authorities and any third party payors have been properly completed and timely filed. Each return, report, plan and filing contains no untrue or misleading statements and does not omit anything which would cause it to be misleading or inaccurate. 6.11 LICENSES. Except as set forth in SCHEDULE 6.11, Uni-Care has all registrations and licenses required to own and operate its businesses. No proceedings have been instituted with a view toward terminating or limiting the scope of any registrations or licenses of Uni-Care. None of such registrations and licenses is subject to any outstanding order, decree, judgment or stipulation, proceeding or known investigation. 8 9 6.12 INSURANCE. There is in full force and effect policies of insurance of the types and in the amounts customary within the institutional pharmaceutical and medical supply business in each jurisdiction where Uni-Care does business. 6.13 TITLE TO ASSETS. Included in the assets reflected on the Balance Sheet are all material assets which have been used to operate the business of Uni-Care in the ordinary course as such business is presently conducted. Except as set forth in SCHEDULE 6.9.1, UniCare owns all of its assets free and clear of any and all liens, claims, encumbrances and other restrictions or limitations. 6.14 CONDITION. All of the assets reflected on the Balance Sheet are in good operating condition, ordinary wear and tear and di minimis third party damage excepted, neither require nor can reasonably be expected to require any special or extraordinary expenditures to remain in such condition beyond normal maintenance, and are capable of being used for their intended purposes in the ordinary course of business. 6.15 RECEIVABLES. All of the accounts receivable of Uni-Care reflected on the Balance Sheet arose from valid sales in the ordinary course of business and reflect goods actually sold and delivered or services in fact rendered and are reflected on the books of account and Financial Statements in conformity with generally accepted accounting principles applied on a consistent basis, subject to contractual allowances and stated reserves. 6.16 INVENTORIES. The inventories reflected on the Balance Sheet are reasonably sufficient to cover the immediate needs of Uni-Care and time required for restocking alter the Closing and none of the pharmaceuticals, drugs or biologicals included therein have expiration dates occurring earlier than sixty (60) days after the Closing Date. 6.17 EMPLOYEE BENEFITS: EMPLOYEES. Except as set forth on SCHEDULE 6.17, UniCare neither maintains nor is required to contribute to any Employee Benefit Plan (within the Meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")). Each Employee Benefit Plan maintained by Uni-Care has been operated in accordance with its terms and with all laws applicable thereto, including without limitation, ERISA, the Internal Revenue Code of 1986, as amended, and the regulations thereunder. Uni-Care has the right to amend or terminate, without the consent of any other person, any Employee Benefit Plan which it maintains, except as prohibited by law. Uni-Care does not maintain an Employee Benefit Plan under which it would be obligated to pay benefits because of the consummation of the transactions contemplated by this Agreement. Except as set forth in SCHEDULE 6.17, since December 31, 1995, there has not been any increase made or promised in the benefits payable under any Employee Benefit Plan of Uni-Care or in the compensation paid or payable to employees, except raises given in the normal course not exceeding a three percent (3%) increase. Uni-Care is not required to retain any employees of Uni-Care other than 9 10 Michael F. Fecteau and Richard P. Legere. Uni-Care owes no severance, separation or similar payments to any employee, independent contractor or agent except the Fortier Payable and the Cassidy Payable. No essential employee of Uni-Care has given notice to Uni-Care of his or her intention to terminate his or her employment with Uni-Care. UniCare enjoys a stable and harmonious relationship with all of its employees. There are no pending disputes, grievances, charges, complaints or proceedings involving any past or present employees, independent contractors or agents of Uni-Care. 6.18 REAL PROPERTY: ENVIRONMENTAL MATTERS. SCHEDULE 6.18 lists all real property owned, leased or occupied by Uni-Care (collectively, the "Real Estate"). There are no structural defects in the Real Estate. The Real Estate is properly zoned, and its current and intended use complies in all respects with all applicable zoning and other ordinances, laws and legal restrictions regulating development and use of the Real Estate. Uni-Care and Shareholders have not received notice of and have no knowledge of any changes or proposed changes to access to the Real Estate. There are no easements or other use.restrictions relating to the Real Estate which would restrict in any way Uni-Care's use of the Real Estate as currently used. None of the Real Estate is in an "area of special flood hazard," as that term is defined in the National Flood Insurance Act,of 1968. There are presently no special assessments assessed or levied on the Real Estate. There is no condemnation or eminent domain proceeding pending or threatened with respect to any part of the Real Estate. Uni-Care has no liability in respect of any activities associated with the generation, transportation, release, storage, treatment, disposal or identification of infectious or biomedical wastes. There is no underground storage tank ("UST") on or under, nor has any UST been removed from, the Real Estate. 6.19 TAXES. All tax returns, reports and declarations (collectively, "Tax Returns") required by any governmental authority to be filed in connection with the properties, business, income, payroll expenses, net worth and franchises of Uni-Care have been timely filed, and all such Tax Returns are correct and complete. All tax due in connection with the properties, business, income, payroll expenses, net worth and franchises of Uni-Care has been paid. There are no tax claims, audits or proceedings pending in connection with the properties, business, income, payroll expenses, net worth or franchises of Uni-Care and there are no such threatened claims, audits or proceedings. 6.20 NO ACCELERATION OF INCOME. Except as set forth in SCHEDULE 6.20, UniCare has not, in anticipation of this Agreement or the Transactions, taken any other action which might have the effect of accelerating the receipt of income, and all receipts have been taken in the ordinary course of business. 6.21 NO CHANGES. Except as set forth in SCHEDULE 6.21, since December 31, 1995, Uni-Care has been operated only in the ordinary course, consistent with past practice, and there has not been any material adverse change, or any event, fact or circumstance which might reasonably be expected to result in a material adverse change 10 11 in the assets, liabilities, operating performance, business relationships or prospects of its businesses. Except as set forth in SCHEDULE 6.21, since December 31, 1995, Uni-Care has not paid any dividend, distribution or other payment to any Shareholder other than payments of salary and expense reimbursements made in the ordinary course, consistent with past practice. 6.22 CUSTOMERS. Except as set forth in SCHEDULE 6.22, since January 1, 1995, no nursing home or other facility or institution served by Uni-Care has canceled or otherwise terminated or made any threat to cancel or otherwise terminate, its relationship with UniCare. Neither Uni-Care nor any Shareholder has any knowledge that any such customer intends to modify, cancel or otherwise terminate its relationship with Uni-Care or to materially decrease its purchase of products and services from Uni-Care. 6.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Uni-Care nor any officer, employee or agent of Uni-Care, nor any other person acting on its behalf, directly or indirectly, has given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other person which (i) might subject Uni-Care to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had an adverse effect on the assets, properties, business or operations of Uni-Care, or (iii) if not continued in the future, might adversely affect UniCare's assets, operations or its prospects or which might subject Uni-Care to suit or penalty in any private or governmental litigation or proceeding. 6.24 NO CONFLICTS. Except as set forth in SCHEDULE 6.24, no Shareholder, director, officer or executive employee of Uni-Care and no relative of any such person, (i) has any direct or indirect interest in any business enterprise which competes or does business with NCS or Uni-Care, or (ii) is a party to any contract, other than contracts disclosed in writing to NCS prior to the date of this Agreement, to which Uni-Care is also a party or by which any of Uni-Care's assets or properties is bound. 6.25 NO LITIGATION. There is no claim, litigation, investigation or proceeding by any person or governmental authority pending or, to the knowledge of Shareholders, threatened against Uni-Care. There are no pending or, to the knowledge of Shareholders, threatened controversies, grievances or claims by any employees or former employees of Uni-Care with respect to their employment benefits or working conditions. 6.26 BROKERS AND FINDERS. Except for Machbitz Associates, no other broker, finder or other person or entity acting in a similar capacity has participated on behalf of Uni-Care or any Shareholder in bringing about the transactions contemplated by this Agreement, rendered any services with respect thereto or been in any way involved therewith. 11 12 6.27 NO MISREPRESENTATIONS. No representation or warranty made by the Shareholders in this Agreement, the Schedules or Exhibits hereto, or any certificate or document delivered pursuant hereto contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in any such representation or warranty true. 6.28 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. Notwithstanding anything else herein to the contrary, for the purposes of this Agreement, the representations and warranties set forth in this Section 6 above shall be limited as follows: 6.28.1 The Shareholders' representations and warranties bear only upon the circumstances extant prior to the Closing. The Shareholders have not made any warranties or representations concerning, and shall not be responsible for NCS's right or freedom to implement its business strategies and policies after Closing. 6.28.2 Projections, forecasts and business plans submitted to NCS by the Shareholders or Uni-Care or their representatives, do not constitute (or give rise to) any warranties or representations as to the matters addressed therein. They are merely good faith estimates or possible results of operations or future business strategies, many of which may be effected by a wide number of unforeseeable variables, and NCS has made its own independent assessment of the likely future results of operations. 7. REPRESENTATIONS AND WARRANTIES OF NCS. Subject to the provisions of Section 10 of this Agreement, NCS hereby makes the following representations and warranties to the Shareholders: 7.1 ORGANIZATION, ETC. OF NCS. NCS is a corporation duly incorporated and validly existing under the laws of the State of Delaware. 7.2 AUTHORIZATION. The execution and delivery of this Agreement and the consummation of the Transactions have been duly authorized by all necessary action of NCS. 7.3 EXECUTION. This Agreement has been duly executed and delivered by NCS, and constitutes a legal, valid and binding obligation of NCS enforceable against NCS in accordance with its terms and conditions, subject to usual equity principles and except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally. 7.4 CONSENTS AND APPROVALS. No consent, authorization or approval of, or registration, declaration or filing with, any governmental authority or third party is 12 13 required in connection with the execution, delivery or performance of this Agreement by NCS, or of any other agreement, instrument or document to be delivered by or on behalf of NCS in connection herewith. 7.5 NO VIOLATION. Neither the execution or delivery nor performance of this Agreement or any of the other agreements, instruments or documents to be delivered by or on behalf of NCS in connection herewith conflicts with, violates or results in any breach of (i) any judgment, decree, order, statute, rule or regulation applicable to NCS, (ii) any instrument to which NCS is a party or by which NCS is bound, or (iii) any provision of the Articles of Incorporation or By-Laws of NCS. 7.6 NO MISREPRESENTATIONS. No representation or warranty made by NCS in this Agreement, the Schedules or Exhibits hereto, or any certificate or document delivered pursuant hereto contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in any such representation or warranty true. 8. COVENANTS OF SHAREHOLDERS 8.1 FECTEAU COVENANTS. The Fecteau Employment Agreement attached hereto as EXHIBIT B contains covenants by Fecteau against nondisclosure of proprietary and confidential information and covenants against competition, all of which are incorporated herein by reference and made a part hereof. 8.2 LEGERE COVENANTS. Concurrent herewith, Uni-Care Health Services of Maine will enter into an employment agreement with Richard P. Legere for rendering services on behalf of Uni-Care Health Services of Maine, which employment agreement contains covenants against nondisclosure of proprietary and confidential information and covenants against competition, all of which are incorporated herein by reference and made a part hereof. 8.3 CASSIDY COVENANTS. Concurrent herewith, NCS will be entering into a non-compete agreement with Francis J. Cassidy, which non-compete agreement contains covenants against nondisclosure of proprietary and confidential information and covenants against competition, all of which are incorporated herein by reference and made a part hereof. 9. CLOSING CONDITIONS. 9.1 CONDITIONS OF NCS. The obligation of NCS to perform this Agreement is subject to the satisfaction of the following conditions at or before the Closing unless waived in writing by NCS: 13 14 9.1.1 NCS shall have received from the Shareholders certificates representing all of the Shares, in each case duly endorsed or accompanied by appropriate stock powers duly executed in blank or in favor of NCS, with all signatures guaranteed and otherwise in proper form for transfer, together with all other documents necessary or appropriate to validly transfer the Shares to NCS free and clear of all liens or adverse claims. 9.1.2 NCS shall have received letters of resignation, effective as of the Closing, from those directors and officers of AHS whom NCS has requested to resign. 9.1.3 NCS shall have received a mutually acceptable real estate lease for the New Hampshire Premises as set forth and attached hereto as Exhibit "A". 9.1.4 NCS shall have received the Fecteau Employment Agreement, employment agreements with Richard P. Legere and Leon Parker, and a non- compete agreement with Francis J. Cassidy. NCS shall have received general releases from Francis J. Cassidy and Richard M. Fortier. 9.1.5 NCS shall have received all consents and permits necessary for the consummation of the transactions contemplated by this Agreement, and no suit, action or other proceeding shall be pending or threatened before any court or before or by any regulatory or governmental authority in which it is sought to restrain, prohibit, invalidate or set aside in whole or in part the consummation of the transactions contemplated by this Agreement. 9.1.6 The Shareholders shall have performed and complied in all material respects with all obligations, covenants and conditions required by this Agreement to have been performed or complied with by them at or prior to the Closing, and all representations and warranties of the Shareholders contained herein shall continue to be accurate in all material respects at and as of the Closing Date, just as if made as of the Closing Date. 9.1.7 NCS shall have received a certificate from the President of Uni-Care and each Shareholder, dated as of the Closing and duly executed by persons, in the form of closing certificate attached hereto as Exhibit "C" and made a part hereof. 9.2 CONDITIONS OF THE SHAREHOLDERS. The obligations of the Shareholders to perform this Agreement are subject to the satisfaction of the following conditions at or before the Closing unless waived in writing by the Shareholders: 9.2.1 Each of the Shareholders shall have received his pro-rata share of the Cash Payment and NCS Stock. 14 15 9.2.2 NCS shall have performed and complied in all material respects with all obligations, covenants and conditions required by this Agreement to have been performed or complied with by NCS at or prior to the Closing, and all representations and warranties of NCS contained herein shall continue to be accurate in all material respects at and as of the Closing Date, just as if made as of the Closing Date. 9.2.3 Fecteau shall have received a mutually acceptable real estate lease for the New Hampshire Premises as set forth and attached hereto as Exhibit "A". 9.2.4 Fecteau shall have received the Fecteau Employment Agreement. 9.3 INTERDEPENDENCE. The transfers and deliveries described in this Section 9 shall be mutually interdependent and regarded as occurring simultaneously and unless waived by the Shareholders and NCS no such transfer of delivery shall become effective unless and until all the other transfers and deliveries provided for in this Section 9 have also been consummated. 10. INDEMNIFICATION. 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Subject to the provisions of this Section 10, the representations and warranties of the Shareholders in Section 6 and of NCS in Section 7 shall survive the Closing and continue to be binding regardless of any investigation made at any time by any party. 10.2 INDEMNIFICATION BY SHAREHOLDERS. The Shareholders shall indemnify NCS and its directors and officers (the "NCS Indemnified Parties"), and hold them harmless from and against, all claims, damages, losses, deficiencies, costs and expenses (including, but not limited to, reasonable attorneys' fees), which any NCS Indemnified Party may incur, suffer or become liable for as a result of or arising out of or in connection with the inaccuracy or breach of any representations, warranties or covenants of the Shareholders contained in this Agreement, subject in each instance to the following: 10.2.1 LIMITATIONS ON PERIODS DURING WHICH CLAIMS CAN BE MADE. Except with regard to claims for breach of the warranties and representations of Shareholders set forth in Subsection 6.2, Subsection 6.5, Subsection 6.10, the last two sentences of Subsection 6.18, Subsection 6.19 and Subsection 6.25 (claims for which an action may be brought within the applicable statutory period during which the claims would not otherwise be time-barred under applicable law), all other claims must be asserted in writing by NCS and its directors and officers, on or before the second anniversary of the date of this Agreement. 15 16 10.2.2 LIMITATIONS ON DAMAGES. The maximum amount of the indemnification obligation by any Shareholder for all claims hereunder, plus related expenses, shall not exceed in the case of each Shareholder, the pro rata share of the Purchase Price received by such Shareholder set forth in Section 2 of this Agreement. 10.3 INDEMNIFICATION BY NCS. NCS shall indemnify the Shareholders, and hold them harmless from and against, all claims, damages, losses, deficiencies, costs and expenses (including, but not limited to, reasonable attorneys' fees), which they may incur, suffer or become liable for as a result of or arising out of or in connection with the inaccuracy or breach of any representations, warranties or covenants of NCS contained in this Agreement, subject in each instance to the following: 10.3.1 LIMITATIONS ON PERIODS DURING WHICH CLAIMS CAN BE MADE. All claims must be asserted in writing by the Shareholders on or before the second anniversary of this Agreement. 10.4 THIRD PARTY CLAIMS. If any legal proceeding is instituted or any claim asserted by any third party (a "Claim") in respect of which the Shareholders on the one hand, or the NCS Indemnified Parties on the other hand, may be entitled to indemnity hereunder, the party asserting such right to indemnity (the "Indemnitee") will give the party from whom indemnity is sought (the "Indemnitor") prompt written notice thereof. The Indemnitor will have the right, at its option and expense, to participate in the defense of such a Claim, but not to control the defense, negotiation or settlement thereof, which control will at all times rest with the Indemnitee, unless the Claim involves only money damages, not an injunction or other equitable relief, and unless the Indemnitor (a) acknowledges in writing responsibility for investigation and diligent defense of the Claim, and (1)) furnishes satisfactory evidence of the financial ability to indemnify the Indemnitee, in which case the Indemnitor may assume such control through counsel of its choice and at its expense, but the Indemnitee will continue to have the right to be represented, at its own expense, by counsel of its choice in connection with the defense of such a Claim. In any such event in which Indemnitor undertakes the defense pursuant to the preceding sentence, Indemnitor shall advise Indemnitee on a regular basis with respect to the Claim. If the Indemnitor does not assume control of the defense of such a Claim, the entire defense of the Claim by the Indemnitee, any settlement made by the Indemnitee, and any judgment entered in the Claim will be deemed to have been consented to by, and will be binding on, the Indemnitor as fully as though it alone had assumed the defense thereof and a judgment had been entered in the Claim in the amount of such settlement or judgment, except that the right of the Indemnitor to contest the right of the Indemnitee to indemnification under this Agreement with respect to the Claim will not be extinguished. If the Indemnitor does assume control of the defense of such a Claim, it will not, without the prior written consent of the Indemnitee, settle the Claim or consent to 16 17 entry of any judgment relating thereto which does not include as an unconditional term thereof the giving by the claimant to the Indemnitee a release from all liability in respect of the Claim. The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Claim. 11. MISCELLANEOUS PROVISIONS. 11.1 ENTIRE AGREEMENT. This Agreement is the exclusive statement of the agreement among the parties concerning the subject matter hereof. 11.2 SUCCESSORS BOUND. The terms and conditions of this Agreement shall extend to and inure to the benefit of and be binding on the respective heirs, successors and assigns of the parties. 11.3 TITLE AND CAPTIONS. All articles or section titles or captions contained in this Agreement are for convenience of reference only and shall not be used in the interpretation or construction of this Agreement. 11.4 INJUNCTIVE RELIEF. The parties hereby agree that a breach or threatened breach by any of the Shareholders of this Agreement will cause irreparable injury to NCS that is inadequately compensable in damages and, as a result, NCS will not have an adequate remedy at law to redress such injury. Therefore, in the event any of the Shareholders threatens to violate or violates any provision of this Agreement, and the Shareholders agree that in addition to its other remedies, NCS shall be entitled to injunctive relief including, but not limited to, temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any violation or threatened . violation of this Agreement. 11.5 EXPENSES. TAXES AND BROKERAGE FEES. Except as herein specifically provided to the contrary, each of the parties hereto shall bear its own legal and accounting expenses incurred in connection with the negotiation of this Agreement and the consummation of the transaction contemplated herein. 11.6 ASSIGNMENT. This Agreement may not be assigned by any party without the written consent of the other party. 11.7 FURTHER ASSURANCES. Each of the Shareholders agrees that as requested by NCS after the Closing, such Shareholder will do all such further acts as may be required for NCS to effectuate the transactions contemplated by this Agreement. 11.8 NO PUBLIC STATEMENT. The Shareholders agree that they shall not make any public statement or disclosure regarding any amounts paid to them pursuant to this Agreement. 17 18 11.9 NOTICES. All notices or other communications hereunder shall not be binding on any party hereto unless in writing, and delivered to the party at the address for such set forth herein. Notices shall be deemed duly delivered upon hand delivery thereof at the addresses specified below or two (2) days after deposit thereof in the United States mails, postage prepaid, certified or registered mail. Any party may change its address for notice by delivery of written notice thereof in the manner provided above. 11.10 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the benefit of and may be enforced only by the parties hereto and their respective successors, transferees and assignees, and is not for the benefit of, and may not be enforced by, any third-party. 11.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall constitute an original. 11.12 FACSIMILE SIGNATURES. Facsimile signatures shall be treated the same as original execution signatures for purposes of Closing, provided original signatures are to be delivered promptly following Closing. 11.13 GOOD FAITH. In the discharge of their obligations under this Agreement, and the agreements collateral hereto, then the parties shall act in good faith and reasonably towards one another. 11.14 ATTORNEYS' FEES. In the event any legal action or arbitration proceeding is undertaken by a party in respect of the matters addressed in this Agreement and the agreements collateral thereto, the prevailing party shall be awarded his/its legal expenses and costs incurred in the prosecution or defense of any such action or proceeding. The "prevailing party" means the party, if any, determined by the court or the arbitrator to most nearly prevailed, even, if such party did not prevail in all matters, not necessarily the one in whose favor a judgment is rendered. Further, in the event of any default or breach. by any party under this Agreement, such defaulting party shall pay all expenses and attorney's fees incurred by the other party in connection with such default, whether or not any legal action or arbitration is commenced. 18 19 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NCS HealthCare, Inc., /s/ Michael F. Fecteau a Delaware corporation -------------------------------- Michael F. Fecteau Address: 1164 Union Street Manchester, New Hampshire 03104 By: /s/ Kevin B. Shaw ------------------------------------- Its: CEO /s/ Francis J. Cassidy ------------------------------------ --------------------------------- Francis J. Cassidy "NCS" Address: 216 Dover Point Road Dover, Hampshire 03820 /s/ Richard P. Legere --------------------------------- Richard P. Legere Address: R.R. 4, Box 595 84 Drakes Island Road Wells, Maine 04090 "Shareholders" 19 EX-99.1 3 EXHIBIT 99.1 1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between UNI-CARE HEALTH SERVICES, INC., a New Hampshire corporation (the "Company"), and MICHAEL F. FECTEAU, an individual and licensed pharmacist ("Employee"). A. As a principal officer and shareholder of the Company, Employee has obtained valuable knowledge and experience pertaining to the Company's business of proving pharmaceuticals, drugs, biologicals, IV's, medical devices, durable medical equipment and other health or medical supplies and related services to nursing homes, other institutional care facilities and individuals residing in such facilities. B. NCS HealthCare, Inc. ("NCS") is acquiring all of the stock of the Company, including shares held by Employee, pursuant to a Stock Purchase Agreement, dated as of May 15, 1996 (the "Stock Purchase Agreement"), by and among NCS, Employee and the other shareholders of the Company. C. As a condition to such acquisition, the Company and Employee desire to enter into an agreement to provide for the employment of Employee by the Company and for a prohibition on his disclosing confidential information of, competing against or otherwise interfering with the Company. In consideration of and in reliance upon the covenants, obligations and agreements herein contained, the Company and Employee hereby agree as follows: 1. EMPLOYMENT. The Company hereby offers, and Employee hereby accepts, employment as Director of Business Development, with the responsibilities and powers customarily associated with such position under the general direction of the management of NCS. Employee shall also perform such other duties as the management of NCS may from time to time reasonably request. 2. PERFORMANCE. During the term of this Agreement, Employee covenants and agrees to devote his full time, energy and best efforts to the furtherance of the business of the Company. However, notwithstanding anything to the contrary in this Agreement, Employee shall not be obligated to provide distribution services, nor work weekends, nights or holidays. In addition, the Company acknowledges that Employee shall not be obligated to undertake business which will require more than three (3) consecutive overnights. Employee covenants that he will not engage in any activity which interferes with the performance of his duties hereunder and in any case will not provide personal services to any individual, firm or other business entity as an employee, advisor or otherwise without the prior written consent of the management of NCS. 2 3. TERM. The employment term of this Agreement shall commence upon execution of this Agreement by the parties and continue through May 15, 2001. 4. TERMINATION. Notwithstanding anything to the contrary in this Agreement, the employment relationship between Employee and the Company may be terminated only as provided herein. (a) BY THE COMPANY. The Company may terminate Employee's employment (and this Agreement) immediately and without prior notice for "cause" upon the occurrence of one or more of the following: (i) Employee's professional pharmacy license is revoked, suspended or surrendered; (ii) Fraud in the inducement of this Agreement by Employee; (iii) Conviction of or plea by Employee upon any felony charge, major misdemeanor or an offense involving moral turpitude; (iv) Misappropriation, embezzlement, or theft of the Company's assets or property by Employee; or (v) Wilful misconduct, gross negligence, gross neglect of duties, or wilful refusal to carry out the duties and responsibilities set forth herein, repeated absenteeism, drug or excessive alcohol consumption on the part of Employee or breach of any of the provisions or covenants of this Agreement by Employee; provided, that in any such instance under this subparagraph (v), the Company may terminate Employee's employment only if, after having received written notice of said conduct or breach, Employee does not remedy the same to the Company's satisfaction within twenty-one (21) days of receipt of said written notice. If Employee is involuntarily terminated by the Company without "cause", "cause" being defined in this Section 4(a) above, then Employee will be immediately paid his entire base salary for the remaining original term of this Agreement, using the base salary from the year of termination as the base amount for calculation purposes. Such payment shall constitute liquidated damages (it being agreed that no exact measure of damages can be determined) to Employee in lieu of any and all other compensation or remedies owing to Employee on account of any such termination, and Employee shall not be entitled to receive any other compensation or remedy in respect thereof. Employee shall not be required to mitigate the amount of said damages, nor, shall the damages be reduced by other compensation paid to or received by Employee during the applicable period. 2 3 (b) By Employee. If after the first twelve (12) months of this Agreement, Employee voluntarily terminates his employment with the Company, Employee will receive, as severance pay, one-half (1/2) of his base salary for the remaining original term of this Agreement payable over such term, using the base salary from the year of termination as the base amount for calculation purposes; provided, that while Employee shall not be required to mitigate the amount of the said severance pay by seeking employment or otherwise, such severance payments shall nevertheless be offset or reduced by the amount of any W-2 compensation received by the Employee during the remainder of the original term of this Agreement. 5. BASE SALARY. In consideration of the services to be performed by Employee hereunder, Employee shall be paid a base salary of Seventy Thousand Dollars ($70,000.00) for the first twelve (12) months of this Agreement, which shall be subject to annual performance reviews and payable in accordance with the Company's standard payroll practices. 6. BENEFITS. The Company shall provide Employee with substantially the same benefits as are generally provided pharmacists of NCS. Employee shall also be entitled to participate in NCS-sponsored non-qualified or qualified pension, profit-sharing or similar retirement plans upon attaining eligibility for participation in such plan(s). 7. BUSINESS EXPENSES. The Company shall at regular intervals reimburse Employee for all reasonable business expenses incurred and paid by Employee in connection with his employment which are substantiated by adequate written documentation as required by the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, and the guidelines and practices established from time to time by the Company. 8. VACATION AND HOLIDAYS. Employee shall be entitled to six (6) weeks paid vacation per calendar year, which vacation must be approved in advance by the management of NCS. The Company acknowledges that Employee is scheduled for approximately two (2) weeks' vacation in early June 1996 and tentatively scheduled for approximately fifteen (15) additional days during the remainder of the summer. In addition, Employee shall be entitled to such holidays as the Company may approve. 9. NON-DISCLOSURE OF PROPRIETARY AND CONFIDENTIAL INFORMATION. Employee covenants that he shall not, at any time during the duration of this Agreement and at any time thereafter, whether or not in the employ of the Company, disclose, communicate or divulge to, or use for his personal benefit or for the benefit of, directly or indirectly, any person, firm, association, partnership or corporation other than the Company and its representatives, any private, confidential or proprietary information. For purposes of this Agreement, the terms "private," "confidential" and "proprietary" information mean and include any and all information relating to the terms and conditions of this Agreement, the Stock Purchase Agreement or the transactions contemplated thereby, and any and all information belonging to, used by, or which is in the possession of the Company relating to the Company's business, products, services, strategies, 3 4 pricing, customers, representatives, suppliers, distributors, technology, programs, finances, costs, employee compensation, marketing plans, developmental plans, computer software (including all operating system and systems application software), inventions, developments or trade secrets, all to the extent such information is not intended by the Company to be disseminated to the public or to other participants in the Company's trade or business or is otherwise not generally known to competitors of the Company. Employee acknowledges that all of the private, confidential and proprietary information is and shall continue to be the exclusive proprietary property of the Company, whether or not prepared in whole or in part by Employee and whether or not disclosed to or entrusted to the custody of Employee. Employee further covenants that upon termination of his employment with the Company, Employee shall immediately turn over to the Company all originals and copies of correspondence, letters, papers, reports, disks, lists and each and every writing or record in the possession or control of Employee and pertaining to the business of the Company. Employee further agrees that the Company shall be entitled to all legal and equitable remedies for violation of this Section. Notwithstanding the foregoing, with respect to information, the terms "private," "confidential" and "proprietary" shall not include any of the following: (a) Such information that was a part of the public domain prior to the date of this Agreement; (b) Such information that became or becomes part of the public domain not due to some unauthorized act or omission of Employee; or (c) Such information that is obtained from a third party who is lawfully in possession of the same and did not obtain it from the Company. Notwithstanding the foregoing, the Employee may disclose private, confidential or proprietary information as required by law or in the event of subpoena; provided, that Employee gives written notice to the Company prior to any proposed disclosure, if permitted by law. 10. RESTRICTIVE COVENANT; NON-SOLICITATION. (a) Employee acknowledges and agrees that in the course of performing services for the Company he has and will become further acquainted with and has and will further learn about the affairs of the Company, its officers and employees, its services, products, business practices, financial condition, operations, programs, "know-how," procedures, customers, the needs and requirements of its customers, trade secrets and other private, confidential or proprietary information that the Company has or will acquire at its cost and expense, and has and will continue to develop business relationships with the Company's clients, potential clients and its suppliers. Therefore, as an essential ingredient in consideration of this Agreement, Employee hereby agrees that in addition to any other obligations or duties he owes to the Company, that during the term of this Agreement and for such additional period as provided in Section 10(b) below, Employee will not, without the express, written consent of the Company, directly or indirectly, 4 5 whether as an individual, employee, sole proprietor, principal, owner, partner, shareholder (except as a holder of one percent (1%) or less of any class of outstanding securities listed on any national securities exchange or actively traded in an over-the-counter market), officer, director, trustee, administrator, manager, agent, consultant, independent contractor, formal or informal advisor or by or through the lending of any form of assistance; (i) Engage in any business activities competitive with the Business of the Company (hereinafter defined), its successors and assigns; or (ii) Offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iii) Within the states of New Hampshire, Massachusetts, Maine, Vermont, Connecticut, New York Ohio, Pennsylvania, Indiana, Michigan, Illinois, Missouri, Wisconsin, Minnesota and Iowa offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iv) Compete with the Company for the business of any customer or a potential customer of the Company with whom Employee had contact while employed by the Company that involves the same or substantially similar goods or services as those for which Employee was directly or indirectly responsible at the time of termination of Employee's employment with the Company (or its successors or assigns); or (v) Solicit, divert or take away or attempt to solicit, divert or take away any business of the Company with anyone who is a customer of the Company at the time of the termination of Employee's employment with the Company (or its successors or assigns); or (vi) Solicit, take away, hire, employ or attempt to solicit, take away, hire or employ any of the employees of the Company (or its successors or assigns). For purposes of this Agreement, the business of the Company" is defined to include, but is not limited to, (a) the sale of pharmaceuticals, pharmacy and medical devices, supplies and equipment, IVS and related products to nursing homes and/or other long-term care facilities, (b) the offering of laboratory, nutritional counseling and related services, and (c) the offering of home health services, including nursing care. 5 6 (b) Pursuant to the provisions of the Stock Purchase Agreement, the foregoing covenant not to compete shall continue for the ten (10) year period commencing on the date of execution of the Stock Purchase Agreement. (c) For and in consideration of the covenants made by the Employee herein, NCS, for itself and the Company shall pay the sum of $1,300,000.00 to the Employee upon closing of the transactions contemplated in the Stock Purchase Agreement. (d) The parties expressly agree that in the event the foregoing covenant not to compete is held by any court of competent jurisdiction to be unenforceable because it is too extensive in scope or time or territory, it shall be deemed to be and shall be amended without further act by the parties hereto to conform to the scope, period of time and geographical area which would permit it to be enforced. (e) Upon the termination of this Agreement, Employee shall be permitted to provide services as a pharmacist in a retail or hospital setting or other non-competitive facility so long as he does not compete with the Business of the Company. Employee shall also be permitted to be employed by a facility, institution or company for the provision of M.I.S. services provided that neither the said entity, nor an entity for which the entity performs services,is not in the long-term care pharmacy business. Employee may also be engaged by any governmental agency in any capacity. 11. INJUNCTIVE RELIEF. Employee recognizes that a breach or threatened breach by Employee of this Agreement will cause irreparable injury to the Company that is inadequately compensable in damages and, as a result, the Company will not have an adequate remedy at law to redress such injury. Therefore, in the event Employee threatens to violate or violates any provision of this Agreement, Employee agrees that in addition to its other remedies, the Company shall be entitled to injunctive relief including, but not limited to, temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any violation or threatened violation of this Agreement. 12. ENFORCEMENT AND SURVIVAL OF NON-PIRACY AND NON-COMPETE COVENANTS AND-NONDISCLOSURE AND CONFIDENTIALITY PROVISIONS. The provisions of Sections 9,10 and 11 and the other associated provisions of this Agreement shall survive the termination of this Agreement. It is understood and agreed that the restrictions set forth in Sections 9 and 10 herein were bargained for by the Company as a material term under the Stock Purchase Agreement. Notwithstanding anything herein to the contrary, Employee understands and expressly consents and agrees that (a) a change in ownership of the Company could occur or (b) the Company may sell or otherwise transfer substantially all of its operating assets of its business to a third party and, as part of such sale, assign the Company's rights and obligations hereunder to such third party purchaser. In either such event, Employee acknowledges and agrees that the 6 7 provisions regarding non-disclosure, non-piracy and non-competition contained herein shall be enforceable by such new owner(s) through the Company or a third party purchaser/assignee. 13. NEW DEVELOPMENTS. Employee agrees that he will disclose promptly to the Company any and all improvements, inventions, developments, discoveries, innovations, systems, techniques, ideas, processes, programs and other things, whether patentable or unpatentable, that are made or conceived by him alone or with others, in whole or in part, during his employment and which were made or conceived in whole or in part with the Company's resources or during the Company time and related to the Business of the Company (collectively referred to as "New Developments"). Employee further agrees that all New Developments shall be and remain the sole and exclusive property of the Company and that Employee shall, upon the request of the Company, and without further compensation, do lawful things reasonably necessary to ensure the Company's ownership of any New Development, including the execution of any necessary documents assigning and transferring to the Company all of Employee's right, title and interest in and to any New Development, and the execution of all necessary documents required to enable the Company to file and obtain patents to the United States and foreign countries on any New Development. 14. MISCELLANEOUS PARAGRAPHS. (a) OTHER BENEFITTED PERSONS. Employee agrees for purposes of this Agreement, the term "Company" includes NCS and any and all subsidiaries of NCS. (b) EXTENSION OF RESTRICTIVE COVENANTS. If a court of competent jurisdiction finds that Employee has violated any of the restrictions or covenants set forth in Section 10 of this Agreement, then the parties agree that the period of all restrictions and covenants set forth in Section 10 automatically shall be extended by the number of days that the court determines Employee to have been in violation of such restriction or covenant. (c) REASONABLENESS OF TERMS. Both the Company and Employee stipulate and agree that covenants and other terms contained in this Agreement are reasonable in all respects, including time period, geographical area and scope of restricted activities, and that the restrictions contained herein are designed to protect the Company's business and ensure that Employee does not engage in unfair competition with the Company. In the event a court determines that any of the terms or provisions of this Agreement are unreasonable, the court may limit the application of any such provision or term, or modify any such provision or term, and enforce the Agreement as so limited or modified. (d) NOTICES. All notices or other communications hereunder shall not be binding on either party hereto unless in writing, and delivered to the other party hereto at the following address; 7 8 If to the Company: UNI-CARE HEALTH SERVICES, INC. c/o NCS HEALTHCARE, INC. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 Attn; President If to Employee: Michael F. Fecteau 1164 Union Street Manchester, New Hampshire 03104 with a copy to: Sheehan, Phinney, Bass & Green 1000 Elm Street, Hampshire Plaza P.O. Box 3701 Manchester, New Hampshire 03105-3701 Attn; Peter W. Leberman, Esq. Notices shall be deemed duly delivered upon hand delivery thereof at the above addresses or two days after deposit thereof in the United States mails, postage prepaid, certified or registered mail. Either party may change its address for notice by delivery of written notice thereof in the manner provided. (e) WAIVER. Failure of any party hereto to insist upon strict compliance with any of the terms, covenants and conditions hereof shall not be deemed a waiver or relinquishment of any similar right or power hereunder at any subsequent time. (f) BINDING AGREEMENT. This Agreement shall be binding upon and inure to the benefit of the Company, its successors or assigns, and Employee and his heirs, executors, administrators, and legal representatives. Employee shall not have any right to anticipate, alienate or assign any of his rights or obligations under this Agreement, and any effort to do so shall be null and void. (g) APPLICABLE LAW. The parties agree that this Agreement shall be governed by and construed in accordance with the internal laws of the State of New Hampshire, notwithstanding any state's choice of law rules to the contrary. (h) SEVERABILITY. In the event that any provision, term or restriction of this Agreement (or portion thereof) shall be held invalid, illegal or otherwise unenforceable in any respect, such provision, term or restriction (or portion thereof) shall be modified or, if necessary, severed and the balance of this Agreement shall continue in full force and effect. (i) ENTIRE AGREEMENT; AMENDMENT. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS. The parties 8 9 further acknowledge this Agreement together with the Stock Purchase Agreement to be the complete and final understanding between them, superseding any existing employment or similar agreement and all other contracts or proposals oral or written, and any and all other communications between them relating to the subject matter of this Agreement. Except as provided in Sections 10 and 14(h) herein, this Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by the parties. (j) EFFECTIVE DATE. Upon execution by the parties, this Agreement shall be deemed effective as of May 15,1996. INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement. UNI-CARE HEALTH SERVICES, INC., a New Hampshire corporation By: /s/ Kevin B. Shaw ------------------------------ Its: President ------------------------------ "Company" /s/ Michael F. Fecteau ------------------------------ Michael F. Fecteau "Employee" 9 EX-99.2 4 EXHIBIT 99.2 1 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between UNI-CARE HEALTH SERVICES OF MAINE, INC., a New Hampshire corporation (the "Company"), and RICHARD P. LEGERE, an individual and pharmacist licensed in the state of Maine ("Employee"). RECITALS: --------- A. NCS HealthCare, Inc. ("NCS") has acquired all of the stock of the Company held by Employee, pursuant to a Stock Purchase Agreement, dated as of May 15, 1996 (the "Stock Purchase Agreement"), by and among NCS, Employee and others. B. As a condition to such acquisition, the Company and Employee desire to enter into an agreement to provide for the employment of Employee by the Company and for a prohibition on his disclosing confidential information of, competing against or otherwise interfering with the Company. In consideration of and in reliance upon the covenants, obligations and agreements herein contained, the Company and Employee hereby agree as follows: 1. EMPLOYMENT. The Company hereby offers, and Employee hereby accepts, employment as Site Manager with the responsibilities and powers customarily associated with such position under the general direction of the management of NCS. Employee shall also perform such other duties as the management of NCS may from time to time reasonably request. 2. PERFORMANCE. During the term of this Agreement, Employee covenants and agrees to devote his full time, energy and best efforts to the furtherance of the business of the Company. Employee covenants that he will not engage in any activity which interferes with the performance of his duties hereunder and in any case will not provide personal services to any individual, firm or other business entity as an employee, advisor or otherwise without the prior written consent of the management of NCS. 3. TERM. The employment period under this Agreement shall commence upon the date of this Agreement by the parties and continue for five (5) years. 4. TERMINATION. Notwithstanding anything to the contrary in this Agreement, the Company may terminate Employee's employment as follows: (a) At the option of and upon 30 days' advance written notice from the Company if Employee shall become disabled, which, for purposes of this Agreement, shall 2 be deemed to have occurred if Employee suffers from any disability or impairment of health which continues for at least 90 days and which in the good faith opinion of the Company's management renders the Employee unable to perform his duties on an active full-time basis. (b) As of the end of the month in which Employee dies. (c) At the option of and by written notice from the Company for any of the following: wilful misconduct, gross negligence, gross neglect of duties, or wilful refusal to carry out the duties and responsibilities set forth herein, including failure to observe the directives of the management of NCS, repeated absenteeism, drug use or excessive alcohol consumption on the part of Employee, breach by Employee of any of his obligations under this Agreement or his fiduciary duties to the Company, or public conduct which in any manner offends against decency or morality; provided, that in any such instance under this subparagraph (c), the Company may terminate Employee's employment only if, after having received written notice of said conduct or breach, Employee does not remedy the same to the Company's satisfaction within twenty-one (21) days of receipt of said written notice. (d) Immediately and without prior notice upon the occurrence of any of the following: Employee's professional pharmacy license is revoked, suspended or surrendered, conviction of or plea by Employee upon any felony charge, major misdemeanor or offense involving moral turpitude, or misappropriation, embezzlement, or theft of the Company's assets or property by Employee. Termination of this Agreement pursuant to the foregoing provisions shall not prejudice any other remedy to which the Company or Employee may be entitled either at law, in equity or under the terms of this Agreement. 5. BASE SALARY; BONUS. In consideration of the services to be performed by Employee hereunder, Employee shall be paid a base salary of Seventy-seven Thousand Dollars ($77,000.00) per calendar year, payable in accordance with the Company's standard payroll practices. Such salary shall be reviewed annually and be subject to such periodic adjustments as determined from time to time by the management of NCS. In addition, Employee shall be entitled to a cash bonus based upon the earnings of the Company's Maine operations before interest, taxes and amortization ("EBIT-A"), payable annually, as set forth on Exhibit "A" and incorporated herein by reference. Such bonus structure shall be reviewed annually and be subject to such periodic adjustments as determined from time to time by the management of NCS. Additional incentives, including stock options, may be established after 12 months at the sole discretion of the Company as Employee's assigned responsibilities require them. 6. BENEFITS. The Company shall provide Employee with substantially the same benefits as are generally provided other site managers of NCS. Employee shall also be entitled to participate in NCS-sponsored non-qualified or qualified pension, profit-sharing or similar retirement plans upon attaining eligibility for participation in such plan(s). 2 3 7. BUSINESS EXPENSES. The Company shall at regular intervals reimburse Employee for all reasonable business expenses incurred and paid by Employee in connection with his employment which are substantiated by adequate written documentation as required by the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, and the guidelines and practices established from time to time by the Company. 8. VACATION AND HOLIDAYS. Employee shall be entitled to four (4) weeks paid vacation per calendar year, which vacation must be approved in advance by the management of NCS. In addition, Employee shall be entitled to such holidays as the Company may approve. 9. NON-DISCLOSURE OF PROPRIETARY AND CONFIDENTIAL INFORMATION. Employee covenants that he shall not, at any time during the duration of this Agreement and at any time thereafter, whether or not in the employ of the Company, disclose, communicate or divulge to, or use for his personal benefit or for the benefit of, directly or indirectly, any person, firm, association, partnership or corporation other than the Company and its representatives, any private, confidential or proprietary information. For purposes of this Agreement, the terms "private," "confidential" and "proprietary" information mean and include any and all information relating to the terms and conditions of this Agreement, the Stock Purchase Agreement or the transactions contemplated thereby, and any and all information belonging to, used by, or which is in the possession of the Company relating to the Company's business, products, services, strategies, pricing, customers, representatives, suppliers, distributors, technology, programs, finances, costs, employee compensation, marketing plans, developmental plans, computer software (including all operating system and systems application software), inventions, developments or trade secrets, all to the extent such information is not intended by the Company to be disseminated to the public or to other participants in the Company's trade or business or is otherwise not generally known to competitors of the Company. Employee acknowledges that all of the private, confidential and proprietary information is and shall continue to be the exclusive proprietary property of the Company, whether or not prepared in whole or in part by Employee and whether or not disclosed to or entrusted to the custody of Employee. Employee further covenants that upon termination of his employment with the Company, Employee shall immediately turn over to the Company all originals and copies of correspondence, letters, papers, reports, disks, lists and each and every writing or record in the possession or control of Employee and pertaining to the business of the Company. Employee further agrees that the Company shall be entitled to all legal and equitable remedies for violation of this Section. Notwithstanding the foregoing, with respect to information, the terms "private," "confidential" and "proprietary" shall not include any of the following; (a) Such information that was a part of the public domain prior to the date of this Agreement; (b) Such information that became or becomes part of the public domain not due to some unauthorized act or omission of Employee; or 3 4 (c) Such information that is obtained from a third party who is lawfully in possession of the same and did not obtain it from the Company. Notwithstanding the foregoing, the Employee may disclose private, confidential or proprietary information as required by law or in the event of subpoena; provided, that Employee gives written notice to the Company prior to any proposed disclosure, if permitted by law. 10. RESTRICTIVE COVENANT; NON-SOLICITATION. (a) Employee acknowledges and agrees that in the course of performing services for the Company he has and will become further acquainted with and has and will further learn about the affairs of the Company, its officers and employees, its services, products, business practices, financial condition, operations, programs, "know-how," procedures, customers, the needs and requirements of its customers, trade secrets and other private, confidential or proprietary information that the Company has or will acquire at its cost and expense, and has and will continue to develop business relationships with the Company's clients, potential clients and its suppliers. Therefore, as an essential ingredient in consideration of this Agreement, Employee hereby agrees that in addition to any other obligations or duties he owes to the Company, that until the seventh anniversary of the date of this Agreement, Employee will not, without the express, written consent of the Company, directly or indirectly, whether as an individual, employee, sole proprietor, principal, owner, partner, shareholder (except as a holder of one percent (1%) or less of any class of outstanding securities listed on any national securities exchange or actively traded in an over-the-counter market), officer, director, trustee, administrator, manager, agent, consultant, independent contractor, formal or informal advisor or by or through the lending of any form of assistance; (i) Engage in any business activities competitive with the Business of the Company (hereinafter defined), its successors and assigns; or (ii) Offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iii) Within the states of New Hampshire, Massachusetts, Maine, Vermont, Connecticut, New York Ohio, Pennsylvania, Indiana, Michigan, Illinois, Missouri, Wisconsin, Minnesota and Iowa offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iv) Compete with the Company for the business of any customer or a potential customer of the Company with whom Employee had contact while employed by the Company that involves the same or substantially-similar goods 4 5 or services as those for which Employee was directly or indirectly responsible at the time of termination of Employee's employment with the Company (or its successors or assigns); or (v) Solicit, divert or take away or attempt to solicit, divert or take away any business of the Company with anyone who is a customer of the Company at the time of the termination of Employee's employment with the Company (or its successors or assigns); or (vi) Solicit, take away, hire, employ or attempt to solicit, take away, hire or employ any of the employees of the Company (or its successors or assigns). For purposes of this Agreement, the "Business of the Company" is defined to include, but is not limited to, (a) the sale of pharmaceuticals, pharmacy and medical devices, supplies and equipment, IV's and related products to nursing homes and/or other long-term care facilities, (b) the offering of laboratory, nutritional counseling and related services, and (c) the offering of home health services, including nursing care. (b) Nothing herein shall prohibit Employ, after termination of his employment, from providing his personal services as a retail pharmacist so long as he does not compete with the Business of the Company. Further, after termination of his employment, Employee shall also be permitted to provide his personal services to any government agency in any capacity or an insurance company or managed care company provided that neither the said entity, nor an entity for which the entity performs services, is in the long-term care pharmacy business. (c) In the event the Company terminates Employee for any reason prior to the fifth anniversary of this Agreement, the restrictions under this Section 10 shall expire after the second anniversary of the effective date of Employee's termination. 11. INJUNCTIVE RELIEF. Employee recognizes that a breach or threatened breach by Employee of this Agreement will cause irreparable injury to the Company that is inadequately compensable in damages and, as a result, the Company will not have an adequate remedy at law to redress such injury. Therefore, in the event Employee threatens to violate or violates any provision of this Agreement, Employee agrees that in addition to its other remedies, the Company shall be entitled to injunctive relief including, but not limited to, temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any violation or threatened violation of this Agreement. 12. ENFORCEMENT AND SURVIVAL OF NON-PIRACY AND NON-COMPETE COVENANTS AND-NON-DISCLOSURE AND CONFIDENTIALITY PROVISIONS. The provisions of Sections 9, 10 and 11 and the other associated provisions of this Agreement shall survive the termination of this Agreement. It is 5 6 understood and agreed that the restrictions set forth in Sections 9 and 10 herein were bargained for by the Company as a material term under the Stock Purchase Agreement. Notwithstanding anything herein to the contrary, Employee understands and expressly consents and agrees that (a) a change in ownership of the Company could occur or (b) the Company may sell or otherwise transfer substantially all of its operating assets of its business to a third party and, as part of such sale, assign the Company's rights and obligations hereunder to such third party purchaser. In either such event, Employee acknowledges and agrees that the provisions regarding non-disclosure, non-piracy and non-competition contained herein shall be enforceable by such new owner(s) through the Company or a third party purchaser/assignee. 13. NEW DEVELOPMENTS. Employee agrees that he will disclose promptly to the Company any and all improvements, inventions, developments, discoveries, innovations, systems, techniques, ideas, processes, programs and other things, whether patentable or unpatentable, that are made or conceived by him alone or with others, in whole or in part, during his employment and which were made or conceived in whole or in part with the Company's resources or during Company time and related to the Business of the Company (collectively referred to as "New Developments"). Employee further agrees that all New Developments shall be and remain the sole and exclusive property of the Company and that Employee shall, upon the request of the Company, and without further compensation, do lawful things reasonably necessary to ensure the Company's ownership of any New Development, including the execution of any necessary documents assigning and transferring to the Company all of Employee's right, title and interest in and to any New Development, and the execution of all necessary documents required to enable the Company to file and obtain patents to the United Sates and foreign countries on any New Development. 14. MISCELLANEOUS PARAGRAPHS. (a) OTHER BENEFITTED PERSONS. Employee agrees for purposes of this Agreement, the term "Company" includes and inures to the benefit of NCS and its subsidiaries. (b) EXTENSION OF RESTRICTIVE COVENANTS. If a court of competent jurisdiction finds that Employee has violated any of the restrictions or covenants set forth in Section 10 of this Agreement, then the parties agree that the period of all restrictions and covenants set forth in Section 10 automatically shall be extended by the number of days that the court determines Employee to have been in violation of such restriction or covenant. (c) REASONABLENESS OF TERMS; SEVERABILITY. Both the Company and Employee stipulate and agree that covenants and other terms contained in this Agreement are reasonable in all respects, including time period, geographical area and scope of restricted activities, and that the restrictions contained herein are designed to protect the Company's 6 7 business and ensure that Employee does not engage in unfair competition with the Company. In the event that any provision, term or restriction of this Agreement (or portion thereof) shall be held invalid, illegal or otherwise unenforceable in any respect, such provision, term or restriction (or portion thereof) shall be modified or, if necessary, severed and the balance of this Agreement shall continue in full force and effect. (d) NOTICES. All notices or other communications hereunder shall not be binding on either party hereto unless in writing, and delivered to the other party hereto at the following address: If to Company: UNI-CARE HEALTH SERVICES OF MAINE, INC. c/o NCS HEALTHCARE, INC. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 Attn: President If to Employee: Richard p. Legere R.R. 4, Box 595, 84 Drakes Island Road Wells, Maine 04090 Notices shall be deemed duly delivered upon hand delivery thereof at the above addresses or two days after deposit thereof in the United States mails, postage prepaid, certified or registered mail. Either party may change its address for notice by delivery of written notice thereof in the manner provided. (e) WAIVER. Failure of any party hereto to insist upon strict compliance with any of the terms, covenants and conditions hereof shall not be deemed a waiver or relinquishment of any similar right or power hereunder at any subsequent time. (f) BINDING AGREEMENT. This Agreement shall be binding upon and inure to the benefit of the Company, its successors or assigns, and Employee and his heirs, executors, administrators, and legal representatives. Employee shall not have any right to anticipate, alienate or assign any of his rights or obligations under this Agreement, and any effort to do so shall be null and void. (g) ENTIRE AGREEMENT; AMENDMENT. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS. The parties further acknowledge this Agreement together with the Stock Purchase Agreement to be the complete and final understanding between them, superseding any existing employment or similar agreement and all other contracts or proposals, oral or written, and any and all other communications between them relating to the subject matter of this Agreement. 7 8 Except as provided herein, this Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by the parties. (h) EFFECTIVE DATE. Upon execution by the parties, this Agreement shall be deemed effective as of May 15, 1996. INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement. UNI-CARE HEALTH SERVICES OF MAIN, INC. By: /s/ Kevin B. Shaw --------------------------------------- Its: President --------------------------------------- "Company" /s/ Richard P. Legere --------------------------------------- Richard P. Legere "Employee" 8 9 EXHIBIT "A" FISCAL 1997 BONUS PLAN RICHARD LEGERE --------------
EBIT-A %(1) Dollar Amount(2) ------------ ---------------- 10% - < 11% $10,000 11% - < 12% $13,000 12% - < 13% $16,000 13% - < 14% $20,000 14% - < 15% $25,000 15% - > $30,000 (1)EBIT-A = earning before interest, taxes and amortization (2)The maximum bonus is $30,000.
9 EX-99.3 5 EXHIBIT 99.3 1 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between UNI-CARE HEALTH SERVICES, INC., a New Hampshire corporation (the "Company"), and LEON PARKER, an individual and pharmacist licensed in the State of New Hampshire ("Employee") . RECITALS: -------- A. The Company and Employee desire to enter into an agreement to provide for the employment of Employee by the Company and for a prohibition on his disclosing confidential information of, competing against or otherwise interfering with the Company. In consideration of and in reliance upon the covenants, obligations and agreements herein contained, the Company and Employee hereby agree as follows: 1. EMPLOYMENT. The Company hereby offers, and Employee hereby accepts, employment as Site Manager with the responsibilities and powers customarily associated with such position under the general direction of the management of NCS HealthCare Services, Inc. ("NCS"). Employee shall also perform such other duties as the management of NCS may from time to time reasonably request. 2. PERFORMANCE. During the term of this Agreement, Employee covenants and agrees to devote his full time, energy and best efforts to the furtherance of the business of the Company. Employee covenants that he will not engage in any activity which interferes with the performance of his duties hereunder and in any case will not provide personal services to any individual, firm or other business entity as an employee, advisor or otherwise without the prior written consent of the management of NCS. 3. TERM. The employment period under this Agreement shall commence upon the date of this Agreement by the parties and continue for five (5) years. 4. TERMINATION. Notwithstanding anything to the contrary in this Agreement, the Company may terminate Employee's employment as follows: (a) At the option of and upon 30 days' advance written notice from the Company if Employee shall become disabled, which, for purposes of this Agreement, shall be deemed to have occurred if Employee suffers from any disability or impairment of health which continues for at least 90 days and which in the good faith opinion of the Company's management renders the Employee unable to perform his duties on an active full-time basis. 2 (b) As of the end of the month in which Employee dies. (c) At the option of and by written notice from the Company for any of the following: wilful misconduct, gross negligence, gross neglect of duties, or wilful refusal to carry out the duties and responsibilities set forth herein, including failure to observe the direction of the management of NCS, repeated absenteeism, drug use or excessive alcohol consumption on the part of Employee or breach by Employee of any of his obligations under this Agreement or his fiduciary duties to the Company, or public conduct which in any manner offends against decency or morality; provided, that in any such instance under this subparagraph (c), the Company may terminate Employee's employment only if, after having received written notice of said conduct or breach, Employee does not remedy the same to the Company's satisfaction within twenty-one (21) days of receipt of said written notice. (d) Immediately and without prior notice upon the occurrence of any of the following: Employee's professional pharmacy license is revoked, suspended or surrendered, conviction of or plea by Employee upon any felony charge, major misdemeanor or offense involving moral turpitude, or misappropriation, embezzlement, or theft of the Company's assets or property by Employee. Termination of this Agreement pursuant to the foregoing provisions shall not prejudice any other remedy to which the Company or Employee may be entitled either at law, in equity or under the terms of this Agreement. 5. BASE SALARY; BONUS. In consideration of the services to be performed by Employee hereunder, Employee shall be paid a base salary of Ninety Thousand Dollars ($90,000.00) per calendar year, payable in accordance with the Company's standard payroll practices. Such salary shall be reviewed annually and be subject to such periodic increases as determined from time to time by the management of NCS. In addition, Employee shall be entitled to a cash bonus based upon the earnings of the Company's New Hampshire operations before interest, taxes and amortization (EBIT-A), payable annually, as set forth on Exhibit "A" and incorporated herein by reference. Such bonus structure shall be reviewed annually and be subject to such periodic adjustments as determined from time to time by the management of NCS. Additional incentives, including stock options may be established after 12 months at the sole discretion of the Company as Employee's assigned responsibilities require them. 6. BENEFITS. The Company shall provide Employee with substantially the same benefits as are generally provided other site managers of NCS. Employee shall also be entitled to participate in NCS-sponsored non-qualified or qualified pension, profit-sharing or similar retirement plans upon attaining eligibility for participation in such plan(s). 7. BUSINESS EXPENSES. The Company shall at regular intervals reimburse Employee for all reasonable business expenses incurred and paid by Employee in connection with his employment which are substantiated by adequate written documentation as required by the 2 3 Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, and the guidelines and practices established from time to time by the Company. 8. VACATION AND HOLIDAYS. Employee shall be entitled to three (3) weeks paid vacation per calendar year, which vacation must be approved in advance by the management of NCS. In addition, Employee shall be entitled to such holidays as the Company may approve. 9. NON-DISCLOSURE OF PROPRIETARY AND CONFIDENTIAL INFORMATION. Employee covenants that he shall not, at any time during the duration of this Agreement and at any time thereafter, whether or not in the employ of the Company, disclose, communicate or divulge to, or use for his personal benefit or for the benefit of, directly or indirectly, any person, firm, association, partnership or corporation other than the Company and its representatives, any private, confidential or proprietary information. For purposes of this Agreement, the terms "private," "confidential" and "proprietary" information mean and include any and all information relating to the terms and conditions of this Agreement and any and all information belonging to, used by, or which is in the possession of the Company relating to the Company's business, products, services, strategies, pricing, customers, representatives, suppliers, distributors, technology, programs, finances, costs, employee compensation, marketing plans, developmental plans, computer software (including all operating system and systems application software), inventions, developments or trade secrets, all to the extent such information is not intended by the Company to be disseminated to the public or to other participants in the Company's trade or business or is otherwise not generally known to competitors of the Company. Employee acknowledges that all of the private, confidential and proprietary information is and shall continue to be the exclusive proprietary property of the Company, whether or not prepared in whole or in part by Employee and whether or not disclosed to or entrusted to the custody of Employee. Employee further covenants that upon termination of his employment with the Company, Employee shall immediately turn over to the Company all originals and copies of correspondence, letters, papers, reports, disks, lists and each and every writing or record in the possession or control of Employee and pertaining to the business of the Company. Employee further agrees that the Company shall be entitled to all legal and equitable remedies for violation of this Section. Notwithstanding the foregoing, with respect to information, the terms "private," "confidential" and "proprietary" shall not include any of the following: (a) Such information that was a part of the public domain prior to the date of this Agreement; (b) Such information that became or becomes part of the public domain not due to some unauthorized act or omission of Employee; or (c) Such information that is obtained from a third party who is lawfully in possession of the same and did not obtain it from the Company. 3 4 Notwithstanding the foregoing, the Employee may disclose private, confidential or proprietary information as required by law or in the event of subpoena; provided, that Employee gives written notice to the Company prior to any proposed disclosure, if permitted by law. 10. RESTRICTIVE COVENANT; NON-SOLICITATION. (a) Employee acknowledges and agrees that in the course of performing services for the Company he has and will become further acquainted with and has and will further learn about the affairs of the Company, its officers and employees, its services, products, business practices, financial condition, operations, programs, "know-how," procedures, customers, the needs and requirements of its customers, trade secrets and other private, confidential or proprietary information that the Company has or will acquire at its cost and expense, and has and will continue to develop business relationships with the Company's clients, potential clients and its suppliers. Therefore, as an essential ingredient in consideration of this Agreement, Employee hereby agrees that in addition to any other obligations or duties he owes to the Company, that until the seventh anniversary of this Agreement, Employee will not, without the express, written consent of the Company, directly or indirectly, whether as an individual, employee, sole proprietor, principal, owner, partner, shareholder (except as a holder of one percent (1%) or less of any class of outstanding securities listed on any national securities exchange or actively traded in an over-the-counter market), officer, director, trustee, administrator, manager, agent, consultant, independent contractor, formal or informal advisor or by or through the lending of any form of assistance: (i) Engage in any business activities competitive with the Business of the Company (hereinafter defined), its successors and assigns; or (ii) Offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iii) Within the states of New Hampshire, Massachusetts, Maine, Vermont, Connecticut, New York Ohio, Pennsylvania, Indiana, Michigan, Illinois, Missouri, Wisconsin, Minnesota and Iowa offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Employee's employment with the Company (or its successors or assigns); or (iv) Compete with the Company for the business of any customer or a potential customer of the Company with whom Employee had contact while employed by the Company that involves the same or substantially similar goods or services as those for which Employee was directly or indirectly responsible at the time of termination of Employee's employment with the Company (or its successors or assigns); or 4 5 (v) Solicit, divert or take away or attempt to solicit, divert or take away any business of the Company with anyone who is a customer of the Company at the time of the termination of Employee's employment with the Company (or its successors or assigns); or (vi) Solicit, take away, hire, employ or attempt to solicit, take away, hire or employ any of the employees of the Company (or its successors or assigns). For purposes of this Agreement, the "Business of the Company" is defined to include, but is not limited to, (a) the sale of pharmaceuticals, pharmacy and medical devices, supplies and equipment, IV's and related products to nursing homes and/or other long-term care facilities, (b) the offering of laboratory, nutritional counseling and related services, and (c) the offering of home health services, including nursing care. (b) Nothing herein shall prohibit Employee, after termination of his employment, from offering his personal services as a retail, hospital or government pharmacist so long as he does not compete with the Business of the Company. (c) In the event the Company any terminates Employee for any reason prior to the fifth anniversary of this Agreement, the restrictions under of this Section 10 shall expire after the second anniversary of the effective date of Employee's termination. 11. INJUNCTIVE RELIEF. Employee recognizes that a breach or threatened breach by Employee of this Agreement will cause irreparable injury to the Company that is inadequately compensable in damages and, as a result, the Company will not have an adequate remedy at law to redress such injury. Therefore, in the event Employee threatens to violate or violates any provision of this Agreement, Employee agrees that in addition to its other remedies, the Company shall be entitled to injunctive relief including, but not limited to, temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any violation or threatened violation of this Agreement. 12. ENFORCEMENT AND SURVIVAL OF NON-PIRACY AND NON-COMPETE COVENANTS AND-NON-DISCLOSURE AND CONFIDENTIALITY PROVISIONS. The provisions of Sections 9, 10 and 11 and the other associated provisions of this Agreement shall survive the termination of this Agreement. Notwithstanding anything herein to the contrary, Employee understands and expressly consents and agrees that (a) a change in ownership of the Company could occur or (b) the Company may sell or otherwise transfer substantially all of its operating assets of its business to a third party and, as part of such sale, assign the Company's rights and obligations hereunder to such third party purchaser. In either such event, Employee acknowledges and agrees that the provisions regarding non-disclosure, non-piracy and non-competition contained herein shall be enforceable by such new owner(s) through the Company or a third party purchaser/assignee. 5 6 13. NEW DEVELOPMENTS. Employee agrees that he will disclose promptly to the Company any and all improvements, inventions, developments, discoveries, innovations, systems, techniques, ideas, processes, programs and other things, whether patentable or unpatentable, that are made or conceived by him alone or with others, in whole or in part, during his employment and which were made or conceived in whole or in part with the Company's resources or during Company time and related to the Business of the Company (collectively referred to as "New Developments"). Employee further agrees that all New Developments shall be and remain the sole and exclusive property of the Company and that Employee shall, upon the request of the Company, and without further compensation, do lawful things reasonably necessary to ensure the Company's ownership of any New Development, including the execution of any necessary documents assigning and transferring to the Company all of Employee's right, title and interest in and to any New Development, and the execution of all necessary documents required to enable the Company to file and obtain patents to the United Sates and foreign countries on any New Development. 14. MISCELLANEOUS PARAGRAPHS. (a) OTHER BENEFITTED PERSONS. Employee agrees for purposes of this Agreement, the term "Company" includes and inures to the benefit of NCS and its subsidiaries. (b) EXTENSION OF RESTRICTIVE COVENANTS. If a court of competent jurisdiction finds that Employee has violated any of the restrictions or covenants set forth in Section 10 of this Agreement, then the parties agree that the period of all restrictions and covenants set forth in Section 10 automatically shall be extended by the number of days that the court determines Employee to have been in violation of such restriction or covenant. (c) REASONABLENESS OF TERMS; SEVERABILITY. Both the Company and Employee stipulate and agree that covenants and other terms contained in this Agreement are reasonable in all respects, including time period, geographical area and scope of restricted activities, and that the restrictions contained herein are designed to protect the Company's business and ensure that Employee does not engage in unfair competition with the Company. In the event that any provision, term or restriction of this Agreement (or portion thereof) shall be held invalid, illegal or otherwise unenforceable in any respect, such provision, term or restriction (or portion thereof) shall be modified or, if necessary, severed and the balance of this Agreement shall continue in full force and effect. (d) NOTICES. All notices or other communications hereunder shall not be binding on either party hereto unless in writing, and delivered to the other party hereto at the following address: 6 7 If to the Company: UNI-CARE HEALTH SERVICES, INC. c/o NCS HEALTHCARE, INC. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 Attn: President If to Employee: Leon Parker 38 Profile Road Concord, New Hampshire 03331 Notices shall be deemed duly delivered upon hand delivery thereof at the above addresses or two days after deposit thereof in the United States mails, postage prepaid, certified or registered mail. Either party may change its address for notice by delivery of written notice thereof in the manner provided. (e) WAIVER. Failure of any party hereto to insist upon strict compliance with any of the terms, covenants and conditions hereof shall not be deemed a waiver or relinquishment of any similar right or power hereunder at any subsequent time. (f) BINDING AGREEMENT. This Agreement shall be binding upon and inure to the benefit of the Company, its successors or assigns, and Employee and his heirs, executors, administrators, and legal representatives. Employee shall not have any right to anticipate, alienate or assign any of his rights or obligations under this Agreement, and any effort to do so shall be null and void. (g) ENTIRE AGREEMENT; AMENDMENT. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS. The parties further acknowledge this Agreement to be the complete and final understanding between them, superseding any existing employment or similar agreement and all other contracts or proposals, oral or written, and any and all other communications between them relating to the subject matter of this Agreement. Except as provided herein, this Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by the parties. (h) EFFECTIVE DATE. Upon execution by the parties, this Agreement shall be deemed effective as of May 15, 1996. 7 8 INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement. UNI-HEALTH SERVICES, INC., a New Hampshire corporation By: /s/ Kevin B. Shaw -------------------------------- Its: President -------------------------------- "Company" /s/ Leon Parker -------------------------------- Leon Parker "Employee" 8 9 EXHIBIT "A" FISCAL 1997 BONUS PLAN LEON PARKER -----------
EBIT-A %(1) Dollar Amount(2) ------------ ---------------- 10%-<11% $10,000 11%-<12% $13,000 12%-<13% $16,000 13%-<14% $20,000 14%-<15% $25,000 15%- > $30,000 (1)EBIT-A= earnings before interest, taxes and amortization (2)The maximum bonus is $30,000.
9 EX-99.4 6 EXHIBIT 99.4 1 NON-COMPETE AGREEMENT --------------------- THIS NON-COMPETE AGREEMENT ("Agreement") is entered into by and between NCS HEALTHCARE, INC., a Delaware corporation (which for purposes of this Agreement, together with all of its subsidiaries, will be referred to as "NCS"), and FRANCIS J. CASSIDY, an individual and licensed pharmacist ("Cassidy"). RECITALS; -------- A. As a shareholder of Uni-Care Health Services, Inc. and Uni-Care Health Services of Maine, Inc. (collectively, the "Company"), Cassidy has obtained valuable knowledge and experience pertaining to the Company's business of proving pharmaceuticals, drugs, biologicals, IV's, medical devices, durable medical equipment and other health or medical supplies and related services to nursing homes, other institutional care facilities and individuals residing in such facilities. B. NCS is acquiring all of the stock of the Company, including shares held by Cassidy, pursuant to a Stock Purchase Agreement, dated as of May 15, 1996 (the "Stock Purchase Agreement"), by and among NCS, Cassidy and others. C. As a condition to such acquisition, NCS and Cassidy desire to enter into an agreement to provide for a prohibition on his disclosing confidential information of, competing against or otherwise interfering with the Company. In consideration of and in reliance upon the covenants, obligations and agreements herein contained, NCS and Cassidy hereby agree as follows: 1. NON-DISCLOSURE OF PROPRIETARY AND CONFIDENTIAL INFORMATION. Cassidy covenants that he shall not, at any time during the duration of this Agreement and at any time thereafter, disclose, communicate or divulge to, or use for his personal benefit or for the benefit of, directly or indirectly, any person, firm, association, partnership or corporation other than the Company and its representatives, any private, confidential or proprietary information. For purposes of this Agreement, the terms "private," "confidential" and "proprietary" information mean and include any and all information relating to the terms and conditions of this Agreement, the Stock Purchase Agreement or the transactions contemplated thereby, and any and all information belonging to, used by, or which is in the possession of the Company relating to the Company's business, products, services, strategies, pricing, customers, representatives, suppliers, distributors, technology, programs, finances, costs, employee compensation, marketing plans, developmental plans, computer software (including all operating system and systems application software), inventions, developments or trade secrets, all to the extent such information is not intended by the Company to be disseminated to the public or to other participants in the Company's trade 2 or business or is otherwise not generally known to competitors of the Company. Cassidy acknowledges that all of the private, confidential and proprietary information is and shall continue to be the exclusive proprietary property of the Company, whether or not prepared in whole or in part by Cassidy and whether or not disclosed to or entrusted to the custody of Cassidy. Cassidy further covenants that upon termination of his relationship with the Company, Cassidy shall immediately turn over to the Company all originals and copies of correspondence, letters, papers, reports, disks, lists and each and every writing or record in the possession or control of Cassidy and pertaining to the business of the Company. Cassidy further agrees that the Company shall be entitled to all legal and equitable remedies for violation of this Section. Notwithstanding the foregoing, with respect to information, the terms "private," "confidential" and "proprietary" shall not include any of the following: (a) Such information that was a part of the public domain prior to the date of this Agreement; (b) Such information that became or becomes part of the public domain not due to some unauthorized act or omission of Cassidy; or (c) Such information that is obtained from a third party who is lawfully in possession of the same and did not obtain it from the Company. Notwithstanding the foregoing, Cassidy may disclose private, confidential or proprietary information as required by law or in the event of subpoena; provided, that Cassidy gives written notice to NCS prior to any proposed disclosure, if permitted by law. 2. RESTRICTIVE COVENANT; NON-SOLICITATION. (a) Cassidy acknowledges and agrees that in the course of performing services for the Company he has become acquainted with and has learned about the affairs of the Company, its officers and employees, its services, products, business practices, financial condition, operations, programs, "know-how," procedures, customers, the needs and requirements of its customers, trade secrets and other private, confidential or proprietary information that the Company has or will acquire at its cost and expense, and has and will continue to develop business relationships with the Company's clients, potential clients and its suppliers. Therefore, as an essential ingredient in consideration of this Agreement, Cassidy hereby agrees that in addition to any other obligations or duties he owes to the Company, that until the fifth anniversary of this Agreement, Cassidy will not, without the express, written consent of the Company, directly or indirectly, whether as an individual, Employee, sole proprietor, principal, owner, partner, shareholder (except as a holder of one percent (1%) or less of any class of outstanding securities listed on any national securities exchange or actively traded in an over-the-counter market), officer, 2 3 director, trustee, administrator, manager, agent, consultant, independent contractor, formal or informal advisor or by or through the lending of any form of assistance; (i) Engage in any business activities competitive with the Business of the Company (hereinafter defined), its successors and assigns; or (ii) Offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Cassidy's relationship with the Company (or its successors or assigns); or (iii) Within the states of New Hampshire, Massachusetts, Maine, Vermont, Connecticut, New York Ohio, Pennsylvania, Indiana, Michigan, Illinois, Missouri, Wisconsin, Minnesota and Iowa offer or endeavor to offer any goods or services the Company provided or any goods or services substantially similar to those of the Company at the time of termination of Cassidy's relationship with the Company (or its successors or assigns); or (iv) Compete with the Company for the business of any customer or a potential customer of the Company with whom Cassidy had contact during his relationship with the Company that involves the same or substantially similar goods or services as those for which Cassidy was directly or indirectly responsible at the time of termination of Cassidy's relationship with the Company (or its successors or assigns); or (v) Solicit, divert or take away or attempt to solicit, divert or take away any business of the Company with anyone who is a customer of the Company at the time of the termination of Cassidy's relationship with the Company (or its successors or assigns); or (vi) Solicit, take away, hire, employ or attempt to solicit, take away, hire or employ any of the Employees of the Company (or its successors or assigns). For purposes of this Agreement, the "Business of the Company" is defined to include the sale of pharmaceuticals, pharmacy and medical devices, supplies and equipment, IV's and related products to nursing homes and/or other long-term care facilities, which offer skilled, intermediate and/or assisted living care. (b) Notwithstanding the foregoing, nothing herein shall prevent Cassidy from engaging in the sale of pharmaceuticals, pharmacy and medical devices, supplies and equipment, IV's and related products in a retail setting, by mail order, to a group home or in the course of offering of home health services, including nursing care. Company 3 4 acknowledges that Cassidy is significantly involved in the retail pharmacy and medical supply/home health businesses. 3. INJUNCTIVE RELIEF. Cassidy recognizes that a breach or threatened breach by Cassidy of this Agreement will cause irreparable injury to the Company that is inadequately compensable in damages and, as a result, the Company will not have an adequate remedy at law to redress such injury. Therefore, in the event Cassidy threatens to violate or violates any provision of this Agreement, Cassidy agrees that in addition to its other remedies, the Company shall be entitled to injunctive relief including, but not limited to, temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any violation or threatened violation of this Agreement. 4. ENFORCEMENT AND SURVIVAL OF NON-PIRACY AND NON-COMPETE COVENANTS AND-NON-DISCLOSURE AND CONFIDENTIALITY PROVISIONS. The provisions of Sections 1, 2 and 3 and the other associated provisions of this Agreement shall survive the termination of this Agreement. It is understood and agreed that the restrictions set forth in Sections 1 and 2 herein were bargained for by the Company as a material term under the Stock Purchase Agreement. Notwithstanding anything herein to the contrary, Cassidy understands and expressly consents and agrees that (a) a change in ownership of the Company could occur or (b) the Company may sell or otherwise transfer substantially all of its operating assets of its business to a third party and, as part of such sale, assign the Company's rights and obligations hereunder to such third party purchaser. In either such event, Cassidy acknowledges and agrees that the provisions regarding non-disclosure, non-piracy and non-competition contained herein shall be enforceable by such new owner(s) through the Company or a third party purchaser/assignee. 5. MISCELLANEOUS PARAGRAPHS. (a) EXTENSION OF RESTRICTIVE COVENANTS. If a court of competent jurisdiction finds that Cassidy has violated any of the restrictions or covenants set forth in Section 2 of this Agreement, then the parties agree that the period of all restrictions and covenants set forth in Section 2 automatically shall be extended by the number of days that the court determines Cassidy to have been in violation of such restriction or covenant. (b) REASONABLENESS OF TERMS; SEVERABILITY. Both NCS and Cassidy stipulate and agree that covenants and other terms contained in this Agreement are reasonable in all respects, including time period, geographical area and scope of restricted activities, and that the restrictions contained herein are designed to protect the Company's business and ensure that Cassidy does not engage in unfair competition with the Company. In the event that any provision, term or restriction of this Agreement (or portion thereof) shall be held invalid, illegal or otherwise unenforceable in any respect, such provision, term or 4 5 restriction (or portion thereof) shall be modified or, if necessary, severed and the balance of this Agreement shall continue in full force and effect. (c) NOTICES. All notices or other communications hereunder shall not be binding on either party hereto unless in writing, and delivered to the other party hereto at the following address: If to NCS: NCS HEALTHCARE, INC. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 Attn: President If to Cassidy: Francis J. Cassidy 216 Dover Point Road Dover, New Hampshire 03820 Notices shall be deemed duly delivered upon hand delivery thereof at the above addresses or two days after deposit thereof in the United States mails, postage prepaid, certified or registered mail. Either party may change its address for notice by delivery of written notice thereof in the manner provided. (d) WAIVER. Failure of any party hereto to insist upon strict compliance with any of the terms, covenants and conditions hereof shall not be deemed a waiver or relinquishment of any similar right or power hereunder at any subsequent time. (e) BINDING AGREEMENT. This Agreement shall be binding upon and inure to the benefit of NCS, its successors or assigns, and Cassidy and his heirs, executors, administrators, and legal representatives. Cassidy shall not have any right to anticipate, alienate or assign any of his rights or obligations under this Agreement, and any effort to do so shall be null and void. (f) ENTIRE AGREEMENT; AMENDMENT. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS. The parties further acknowledge this Agreement together with the Stock Purchase Agreement to be the complete and final understanding between them, superseding any and all other contracts or proposals, oral or written, and any and all other communications between them relating to the subject matter of this Agreement. Except as provided herein, this Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by the parties. (g) EFFECTIVE DATE. Upon execution by the parties, this Agreement shall be deemed effective as of May 15, 1996. 5 6 INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized representatives have signed this Agreement. NCS HEALTHCARE, INC., a Delaware corporation By: /s/ Kevin B. Shaw ------------------------------- Its: CEO ------------------------------- "NCS" /s/ Francis J. Cassidy ------------------------------- Francis J. Cassidy "Cassidy" 6 -----END PRIVACY-ENHANCED MESSAGE-----