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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 29th day of
December, 1997, by and between Xxxxx X. Xxxxxx ("Executive") and COROMED, Inc.,
a Delaware corporation (the "Company");
WHEREAS, pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of August 19, 1997, as amended as of November 4, 1997 (the
"Merger Agreement"), among Omnicare, Inc., a Delaware corporation ("Omnicare"),
Coromed Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Omnicare ("Merger Sub"), the Company and certain stockholders of
the Company, Merger Sub will be merged with and into the Company with the
Company surviving the merger as a wholly-owned subsidiary of Omnicare;
WHEREAS, the Company previously employed the Executive as Executive
Vice President and Chief Operations Officer;
WHEREAS, the Company is a contract research organization ("CRO")
providing contract research services to third parties of the type identified
below and desires to continue to employ Executive as its Executive Vice
President and Chief Operations Officer for the purpose of engaging in its
business of researching, developing and testing of pharmaceuticals,
therapeutics, medical devices and diagnostics, the development and management of
study designs, systems and procedures, data management, clinical and statistical
analysis, biochemical analyses, chemical synthesis, validation, evaluation,
support services, regulatory submissions and marketing and post-marketing
support in relation to any such products (the "Business"), and Executive desires
to be employed by the Company for such purpose; and
WHEREAS, the Executive shall have access to confidential financial
information, trade secrets and other confidential and proprietary information of
the Company and Omnicare and its subsidiaries.
NOW, THEREFORE, in consideration of these recitals and the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
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SECTION 1: EMPLOYMENT
1.1 DUTIES. The Company shall employ Executive as Executive Vice
President and Chief Operations Officer of the Company upon the terms and
conditions set forth in this Agreement. Executive shall have such duties as are
customary for such office and which may be assigned to Executive from time to
time by the Company. The principal place of the business of the Executive during
the term of the Agreement shall be in the greater Albany, New York area.
1.2 BEST EFFORTS. Executive agrees to devote her best efforts and her
full time and attention to the performance of her duties under this Agreement,
and to perform such duties in a trustworthy and businesslike manner. In
addition, Executive agrees that she shall not, directly or indirectly, engage or
participate in, or become employed by or render advisory or consulting services
or other services in connection with, any business activity other than that of
the Company, whether or not such business activity is pursued for gain, profit
or other advantage, without the prior consent of the Company. In addition to the
performance of her duties for the Company, Executive agrees to perform such
additional services for the Company as the board of directors of the Company
reasonably may request and which are consistent with her position as Executive
Vice President and Chief Operations Officer of the Company.
1.3 DUTY TO ACT IN THE BEST INTEREST OF THE COMPANY. Executive shall
not act in any manner, directly or indirectly, which may damage the business of
the Company or its affiliates or which would adversely affect the goodwill,
reputation or business relations of the Company or its affiliates with their
customers, the public generally or with any of their other employees.
SECTION 2: TERM OF EMPLOYMENT
2.1 TERM. The term of Executive's employment with the Company shall
commence as of the Effective Time, as defined in the Merger Agreement, and shall
continue for a period of five (5) years from the Effective Time (the "Initial
Term"). Commencing not less than one month before the end of the Initial Term or
any additional term, if either party so desires, the Company and the Executive
shall negotiate in good faith to renew this Agreement for a one-year period on
terms and conditions set forth in the Agreement. This Agreement and Executive's
employment also may be terminated as provided for in Sections 2.2, 2.3 or 2.4 of
this Agreement.
2.2 TERMINATION FOR CAUSE. The Company shall have the right to
terminate Executive's employment hereunder for the following causes (a
"Termination for Cause"):
(a) Conviction of Executive for, or entry of a plea of guilty or
nolo contendere by Executive with respect to, any felony or
any crime involving an act of moral turpitude;
(b) Commission by Executive of any act of fraud toward the Company
or any of its affiliates;
(c) Conduct which is materially detrimental to the reputation,
goodwill or business operations of the Company or its
affiliates;
(d) Neglect by Executive of her duties or breach by Executive of
her duties or intentional misconduct by Executive in
discharging such duties, in each case which is material in the
context of her employment relationship with the Company;
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(e) Executive's continued absence from her duties without the
consent of the board of directors of the Company after receipt
of notification from the board referring to this clause, other
than absence due to bona fide illness or disability, as
defined herein;
(f) Executive's failure or refusal to comply with the directions
of the board of directors of the Company or with the policies,
standards and regulations of the Company or its affiliates,
provided that such directions, policies, standards or
regulations do not require Executive (i) to take any action
which is illegal, immoral or unethical or (ii) to fail to take
any action required by applicable law, regulations or
licensing standards, in each case where such failure or
refusal to comply continues after receipt of the notification
from the board of directors referring to this clause; or
(g) Executive's breach of the restrictive covenants set forth in
Section 5 of this Agreement, in such case where such breach
continues after a five (5) day period immediately following
receipt of notification from the board of directors of the
Company referring to this clause.
Upon the effectiveness of any Termination for Cause by the Company, payment of
all compensation to Executive under this Agreement shall cease immediately
(except for any payment of compensation accrued but unpaid through the date of
such Termination for Cause).
2.3 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company shall have
the right to terminate this Agreement and Executive's employment without cause
upon ten (10) days' prior written notice to Executive. If the Company terminates
this Agreement and Executive's employment without cause pursuant to this Section
2.3, Executive shall receive her Base Compensation, as that term is defined in
Section 3.1 of this Agreement, for the remainder of the then current term of
this Agreement. Upon such termination, Executive shall not receive any further
compensation pursuant to Sections 3.2 or 3.3 of this Agreement, except as
required by law. In the event of termination without cause, Executive
acknowledges that the Company shall have no liability to her whatsoever other
than its obligation to pay her Base Compensation for the remainder of the then
current term of this Agreement pursuant to Section 3.1.
2.4 TERMINATION DUE TO DISABILITY OR DEATH. If Executive is unable to
perform her duties under this Agreement by reason of physical or mental
disability, this Agreement shall terminate, and, upon such termination,
Executive shall continue to receive the compensation described in Section 3 of
this Agreement, reduced by any disability payment received under a Company plan
or policy to which Executive may be entitled in lieu of such compensation, for a
period of six (6) months following termination. At the expiration of the six (6)
month period, payment of all compensation to Executive under this Agreement
shall cease immediately (except for any payment of compensation accrued but
unpaid through that date). The term "disability" as used herein shall mean a
condition which prohibits Executive from performing her duties substantially in
the manner she is capable of performing them on the date of this Agreement,
which cannot be removed by reasonable accommodations on the part of the Company,
for ninety (90) days or more during any one (1) year period.
If Executive should die during the term of this Agreement, this
Agreement shall terminate and all payments to Executive under this Agreement
shall cease immediately (except for any such payments accrued but unpaid through
the date of death).
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SECTION 3: COMPENSATION
3.1 BASE COMPENSATION. Subject to Sections 2 and 5.5 of this Agreement,
during the term of this Agreement, the Company shall pay to Executive an initial
annual salary of $142,663 ("Base Compensation"), such annual salary to be
reviewed for increase, if any, by the Company in accordance with Company
policies but not less frequently than intervals of fourteen (14) months from
July 1, 1997. The Base Compensation shall be paid in conformity with the
Company's policy relating to salaried employees and shall be subject to all
required deductions and withholdings.
3.2 REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this
Agreement, the Company shall reimburse Executive for all ordinary and reasonable
business expenses incurred by her in connection with the Business. Reimbursement
of such expenses shall be paid monthly, upon submission by Executive to the
Company of vouchers itemizing such expenses in a form conforming to Company
policy.
3.3 BENEFITS. During the term of this Agreement, Executive shall be
entitled to such insurance, medical, savings and investment plans, sick leave,
holiday, education and continuing education assistance and other benefits as may
be given from time to time to other similarly-situated employees of the Company,
as determined from time to time by the Company. Executive shall be entitled to a
number of vacation days in accordance with Company policy. Executive may request
unpaid leave benefits at any time, which benefits may be granted at the sole
discretion of the board of directors of the Company.
SECTION 4: ALL BUSINESS TO BE THE PROPERTY OF THE COMPANY; ASSIGNMENT
Executive agrees that the Business and all business developed by her
relating to the Business, including, without limitation, software, contracts,
fees, commissions, customer lists and any other incident of any business
developed or sought by the Company or its affiliates, or earned or carried on by
Executive for the Company, are and shall be the exclusive property of the
Company for its sole use.
Executive hereby grants and assigns to the Company (without additional
compensation) her entire right, title and interest under applicable laws in and
to all software products and modifications thereto, inventions, patents, patent
applications, research, information, customer lists, all other technical and
research data, and copyrighted material made, conceived, developed or acquired
by her solely or jointly with others during the period of her employment by the
Company, but only to the extent the foregoing pertains to the Business.
SECTION 5: COVENANTS OF NONDISCLOSURE, NONSOLICITATION AND NONCOMPETITION
5.1 NONDISCLOSURE. During the term of her employment with the Company
and for five (5) years after the termination of her employment with the Company
for any reason, Executive shall not, and Executive shall use her best efforts
(which best efforts shall include, without limitation, notifying the board of
directors of the Company of any suspected breach of this Section 5.1) to ensure
that any persons or entities over which Executive has control do not, directly
or indirectly, use any proprietary and confidential information of the Company
or its affiliates for any purpose not associated with activities of the Company
or its affiliates, or disseminate or disclose any such information to any person
or entity not affiliated or associated with the Company. Such proprietary and
confidential information includes, without limitation, sales methods,
prospecting methods, customer lists, computer technology, programs and data,
whether on-line or off-loaded on disk format, methods of presentation and any
other plans, programs and materials used in managing, marketing or furthering
the business of the Company and its affiliates. Upon termination of Executive's
employment relationship with the Company, Executive shall return to the Company
all documents, records, notebooks, manuals, computer disks and similar
repositories of or containing the proprietary and confidential information of
the Company or its affiliates, including all copies thereof, then in Executive's
possession or control, whether prepared by Executive or
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otherwise. Executive shall undertake all reasonably necessary and appropriate
steps to insure that the confidentiality of proprietary and confidential
information of the Company and its affiliates shall be maintained.
5.2 NONSOLICITATION. For a period of five (5) years after the
termination of Executive's employment with the Company for any reason, Executive
shall not (i) solicit, service or in any way or to any degree handle (other than
as are permitted in Section 5.3) any business similar to that performed by
Executive for the Company or its affiliates, for any person, firm or entity
which is a customer or actively marketed prospect of the Company or such
affiliates for which the Executive has performed services or which becomes a
customer or actively marketed prospect of the Company or such affiliates during
the term of Executive's employment, whether or not a customer or prospect of the
Company shall have been handled, serviced or produced by Executive, (ii) divert
or attempt to divert any such customer or prospect or (iii) announce or
advertise to the general public her former employment by or connections with the
Company or its affiliates. For purposes of this Section 5.2, the term customer
shall not include any entity which has not conducted business with the Company
or any such affiliate during the three-year period immediately preceding the
Executive's termination of employment.
For a period of five (5) years after the termination of Executive's
employment with the Company for any reason, Executive shall not solicit, take
away, hire, employ or endeavor to employ any of the employees of the Company or
any of its affiliates for which the Executive has performed services.
5.3 NONCOMPETITION. Executive acknowledges that the Business was
conducted prior to the date of this Agreement by the Company throughout North
America, South America and Europe (the "Restricted Area") and, therefore, agrees
that, during the term of her employment with the Company and for five (5) years
after the termination of her employment with the Company for any reason, she
shall not, without the prior written consent of the Company, directly or
indirectly, own, develop, manage, operate, join, control or participate in the
ownership, management, operation or control of, or become an employee or
independent contractor of, or consultant to, any business which competes with
the Business as conducted by the Company or any of its subsidiary companies, or
any of its successors in the past, during the term of Executive's employment
hereunder, for the duration of Executive's agreement not to compete pursuant to
this Section 5.3., by selling such products, or providing such services, as the
Company, or any of its subsidiary companies, or any of its successors, sells or
provides. This restriction will apply within the Restricted Area. The foregoing
notwithstanding, nothing herein shall be construed so as to prohibit or restrict
Executive from (i) activities of the type described above where the business is
not a CRO (or is not then contemplated to be a CRO) but is a manufacturer of
pharmaceuticals, therapeutics or diagnostics provided that such manufacturer is
not a customer for which the Business has provided services within the one-year
period preceding the Executive's employment with the manufacturer, or (ii)
owning less than five percent (5%) of the outstanding common stock of any
corporation, the stock of which is publicly traded on a national securities
exchange or in the over-the-counter market, that competes with the Company.
Executive further agrees that, during her employment with the Company, she shall
use her best efforts to preserve the Business and the organization of the
Company, to keep available to the Company the services of its employees, and to
preserve for the Company its and her favorable business relationships with
suppliers, customers and others with whom the Company and Executive have
business relationships.
5.4 APPLICABILITY. The provisions of Sections 5.1, 5.2 and 5.3 of this
Agreement shall apply to all terminations of Executive's employment with the
Company, regardless of the cause or circumstances thereof and whether such
termination was voluntary or involuntary, for cause or without cause, provided
the Company complies in all material respects with Section 2.3. Further,
Executive's covenants of nondisclosure, noncompetition and nonsolicitation,
along with the Company's remedies for the breach or threatened breach of those
covenants, shall remain in effect following the termination of this Agreement
and Executive's employment, regardless of the cause or circumstances thereof and
whether such termination was voluntary or involuntary, for cause or without
cause, provided the Company in all respects complies with Section 2.3.
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5.5 REMEDIES. In view of the services which Executive will perform for
the Company, which are special, unique, extraordinary and intellectual in
character, which place her in a position of confidence and trust with the
customers and employees of the Company and its affiliates, and which provide her
with access to confidential financial information, trade secrets, "know-how" and
other confidential and proprietary information of the Company and its
affiliates, in view of the geographic scope and nature of the business in which
the Company and its affiliates are engaged, and recognizing the value of this
Agreement to her, Executive expressly acknowledges that the restrictive
covenants set forth in this Agreement, including, without limitation, the
geographic scope of such covenants, are necessary in order to protect and
maintain the proprietary interests and other legitimate business interests of
the Company and its affiliates, and that the enforcement of such restrictive
covenants shall not prevent her from earning a livelihood. Executive also
acknowledges that the scope of the operations of the Company and its affiliates
are such that it is reasonable that the restrictions set forth in this Agreement
are not more limited as to geographic area than is set forth herein. Executive
further acknowledges that the remedy at law for any breach or threatened breach
of this Agreement will be inadequate and, accordingly, that the Company, in
addition to all other available remedies (including, without limitation, seeking
such damages as they have sustained by reason of such breach), shall be entitled
to injunctive or any other appropriate form of equitable relief. Notwithstanding
anything in this Agreement to the contrary, in the event Executive breaches any
of the covenants of nondisclosure, nonsolicitation or noncompetition set forth
in Sections 5.1, 5.2 and 5.3 of this Agreement, she shall not receive any
further payments from the Company pursuant to this Agreement. The Company shall
be entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the provisions of
this Section 5 and the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the posting of any bond by
the Company.
SECTION 6: WARRANTS
Upon commencement of and as compensation, in part, for Executive's
employment pursuant to this Agreement, Executive shall be granted warrants to
purchase 60,000 shares of the common stock, par value $1.00 per share, of
Omnicare (the "Omnicare Common Stock"). The warrants shall be substantially in
the form attached hereto as Exhibit A. The Executive shall comply with the terms
of the warrants.
SECTION 7: MISCELLANEOUS PROVISIONS
7.1 ASSIGNMENT AND SUCCESSORS. If the Company sells all or
substantially all of the assets of the Business, the rights and obligations of
the Company under this Agreement may be assigned without Executive's consent. In
all other circumstances, the rights and obligations of the Company under this
Agreement may be assigned with Executive's consent (which shall not be
unreasonably withheld) and shall inure to the benefit of and be binding upon the
successors and assigns of the Company. Executive's obligation to provide
services hereunder may not be assigned to or assumed by any other person or
entity, except as provided above.
7.2 NOTICES. All notices, requests, demands, or other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed, by fax (receipt confirmed), by express mail services or by registered or
certified mail, postage prepaid, to the Company c/o Omnicare, Inc., 2800 Chemed
Center, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, and to Executive at her
address as shown in the Company's records. Notices, requests, demands, and other
communications so delivered shall be deemed given upon receipt.
7.3 SEVERABILITY. If any provision or portion of this Agreement shall
be or become illegal, invalid or unenforceable in whole or in part for any
reason, such provision shall be ineffective only to the extent of such
illegality, invalidity or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement. If any court of
competent jurisdiction should deem any covenant herein to be invalid, illegal or
unenforceable because its scope is considered excessive,
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such covenant shall be modified so that the scope of the covenant is reduced
only to the minimum extent necessary to render the modified covenant valid,
legal and enforceable.
7.4 INTEGRATION, AMENDMENT AND WAIVER. This Agreement constitutes the
entire agreement among the parties hereto, superseding all prior arrangements
and agreements, and may be modified, amended or waived only by a written
instrument signed by the parties hereto.
7.5 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed for all purposes by the laws of the State of Ohio applicable to
contracts executed and wholly-performed within such State.
7.6 INTERPRETATION. The headings contained in this Agreement are for
reference purposes only, and shall not affect in any way the meaning or
interpretation of this Agreement. The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning, and not strictly
for or against any party hereto. In this Agreement, unless the context otherwise
requires, the singular and the plural include one another.
7.7 NON-WAIVER OF RIGHTS AND BREACHES. No failure or delay of any party
herein in the exercise of any right given to such party hereunder shall
constitute a waiver thereof unless the time specified herein for the exercise of
such right has expired, nor shall any single or partial exercise of any right
preclude other or further exercise thereof or of any other right. The waiver by
a party hereto of any default of any other party shall not be deemed to be a
waiver of any subsequent default or other default by such party.
7.8 DISPUTE RESOLUTION.
(a) (i) Any dispute, controversy or claim arising out of
or relating to this Agreement or any term or
provision of this Agreement, including, without
limitation, any claim of breach, termination or
invalidity thereof, (ii) any matter subject to
arbitration under any provision of this Agreement and
(iii) any other matter which the parties agree to
submit to arbitration shall be settled by arbitration
in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, and judgment
on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
Such arbitration proceedings shall be held in the
State of Ohio.
(b) Notwithstanding the foregoing, the Company at all
times shall have the right to bring an action to
enforce the covenants and seek the remedies set forth
in Section 5 of this Agreement (other than an action
for monetary damages which is covered by the dispute
resolution provisions of Section 7.8(a) provided that
any arbitration proceedings for monetary damages
sought in connection with an injunction or other
equitable relief shall be under the supervision of
the court in which such relief is sought) through the
courts as they deem necessary or desirable in order
to protect their confidential or proprietary
information or to prevent the occurrence of any event
which the Company believes will cause them to suffer
immediate and irreparable harm or damage. The parties
agree that any such action may be brought in a state
or federal court located within Cincinnati, Ohio. The
parties waive any and all objections to jurisdiction
or venue. The parties further agree that service of
process may be made by registered mail to the address
referred to in Section 7.2 of this Agreement, and
that such service shall be deemed effective service
of process.
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7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts by the parties hereto, each of which when so executed shall be
deemed an original and all of which taken together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COROMED, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President and CEO
Executive: Xxxxx X. Xxxxxx
By: /s/ Xxxxx X. Xxxxxx
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S.S. No. ###-##-####
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THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED. THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE UNDER THE
SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES) OR (iii) AN OPINION OF
COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE
ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE LAW IS AVAILABLE.
Dated: December 29, 1997
No: ____
WARRANT
To Purchase up to an aggregate of 60,000 shares of Common Stock, $1.00 par value
("Common Stock"), of
OMNICARE, INC.
THIS IS TO CERTIFY THAT, for value received, Xxxxx X. Xxxxxx
(hereinafter referred to as the "Holder"), is entitled to purchase from
Omnicare, Inc., a Delaware Corporation (the "Company"), at any time and from
time to time during the period from the date hereof to and including the
Expiration Date, at the offices of the Warrant Agent (as hereinafter defined),
at the Exercise Price (as hereinafter defined), up to an aggregate of 60,000
shares of Common Stock, subject to adjustment and upon the terms and conditions
as hereinafter provided, and is also entitled to exercise the other appurtenant
rights, powers and privileges hereinafter described.
This Warrant is being issued in connection with that certain Employment
Agreement between Coromed, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company ("Coromed"), and the Holder, dated as of the date
hereof (the "Employment Agreement").
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANT
1.1 METHOD OF EXERCISE. To exercise this Warrant in whole or in part,
the Holder shall deliver to the Company, at the Warrant Agent, (a) this Warrant,
(b) a written notice, in substantially the form of the Subscription Notice
attached hereto as Exhibit A, of such Holder's election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to be
purchased (in lots of not less than 1,000 shares), the denominations of the
share certificate or certificates desired and the name or names in which such
certificates are to be registered and (c) payment of the Exercise Price with
respect to such shares. Such payment may be made, at the option of the Holder,
by cash, certified or bank cashier's check or wire transfer.
In addition to and at the time of payment of the Exercise Price, the
Holder shall pay to the Company the full amount of all federal and state
withholding and other employment taxes applicable to the taxable income of such
Holder resulting from such exercise.
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The Company shall as promptly as practicable and in any event within
five (5) Business Days after receipt of the Subscription Notice, execute and
deliver or cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock to which the Holder is entitled. The share certificate or
certificates so delivered shall be in such denominations as may be specified in
such notice or, if such notice shall not specify denominations, in denominations
of 1,000 shares each, and shall be issued in the name of the Holder or such
other name or names as shall be designated in such notice. Such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
person so designated to be named therein shall be deemed for all purposes to
have become holders of record of such shares, as of the date the aforementioned
notice is received by the Company. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing the rights to
purchase the remaining shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
which shall then be returned to the Holder. The Company shall pay all expenses,
taxes and other charges payable in connection with the preparation, issuance and
delivery of share certificates and new Warrants, except that, if share
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Holder at the time of delivering the
aforementioned notice of exercise or promptly upon receipt of a written request
of the Company for payment.
1.2 SHARES TO BE FULLY PAID AND NONASSESSABLE; RESERVATION AND LISTING.
All shares of Common Stock issued upon the exercise of this Warrant shall be
validly issued, fully paid and nonassessable and the Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall be exercisable hereof. If the Common Stock of
any class is then listed on any national securities exchange (as such term is
used in the Exchange Act (as defined herein)) or quoted on Nasdaq, the Company
shall cause the shares of Common Stock issuable upon exercise of this Warrant to
be duly listed or quoted thereon, as the case may be.
1.3 NO FRACTIONAL SHARES TO BE ISSUED. The Company shall not be
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the Company
shall pay to the Holder in cash, an amount equal to the same fraction of the
current Market Price per share of outstanding Common Stock on the Business Day
immediately prior to the date of such exercise.
1.4 SHARE LEGEND. Each certificate for shares of Common Stock issued
upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY
SIMILAR RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE LAW IS
AVAILABLE.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of
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counsel selected by the holder of such certificate and reasonably acceptable to
counsel to the Company, the securities represented thereby need no longer be
subject to restrictions on resale under the Securities Act or any state
securities laws.
ARTICLE II
WARRANT AGENT; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 WARRANT AGENT. Until such time, if any, as an independent agent
shall be appointed by the Company to perform services with respect to the
Warrant described herein (the "Warrant Agent"), the Company shall perform the
obligations of the Warrant Agent provided herein at its principal office address
or such other address in the United States as the Company shall specify by prior
written notice to the Holder.
2.2 OWNERSHIP OF WARRANT. The Company shall treat the Holder as the
holder and owner hereof for all purposes (and shall not be affected by any
notice to the contrary which shall not be effective).
2.3 NO TRANSFER. The Holder of this Warrant, by its acceptance hereof,
covenants and agrees that such Warrant may not be sold, transferred, pledged or
hypothecated. The Common Stock issuable upon exercise hereof may not be sold,
transferred, pledged, hypothecated or otherwise disposed of unless registered
pursuant to the Securities Act or the Company shall have been supplied with an
opinion of counsel reasonably satisfactory to the Company's counsel that such
transfer is not in violation of the Securities Act and any applicable state
laws.
2.4 DIVISION OR COMBINATION OF WARRANTS. This Warrant may be divided
(in lots exercisable for not less than 1,000 shares of Common Stock) or combined
with other Warrants upon surrender hereof. The Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
2.5 LOSS, THEFT, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company, at Holder's expense, will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of shares of
Common Stock.
ARTICLE III
ADJUSTMENT PROVISIONS
3.1 ADJUSTMENTS GENERALLY. The Exercise Price and the number of shares
of Common Stock (or other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events, as provided in this Article III.
3.2 COMMON STOCK REORGANIZATIONS AND DISTRIBUTIONS. If the Company
shall (i) subdivide its outstanding shares of Common Stock into a greater number
of shares or consolidate its outstanding shares of Common Stock into a smaller
number of shares (any such event being called a "Common Stock Reorganization")
or (ii) pay a dividend in shares of Common Stock or make a distribution in
shares of Common Stock on its outstanding shares of Common Stock, other than
pursuant
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to a Common Stock Reorganization (any such event being herein called a "Common
Stock Distribution"), then (A) the Exercise Price shall be adjusted, effective
immediately after the record date at which the holders of Common Stock are
determined for purposes of such Common Stock Reorganization or Common Stock
Distribution, to a price determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date
before giving effect to such Common Stock Reorganization or Common Stock
Distribution and the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such Common Stock Reorganization
or Common Stock Distribution, and (B) the number of shares of Common Stock
subject to purchase upon exercise of this Warrant shall be adjusted, effective
at such time, to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Common Stock
Reorganization or Common Stock Distribution by a fraction, the numerator of
which shall be the number of shares outstanding after giving effect to such
Common Stock Reorganization or Common Stock Distribution and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
before such Common Stock Reorganization or Common Stock Distribution.
3.3 ADJUSTMENT RULES.
(a) Any adjustments pursuant to this Article III shall be made
successively whenever an event referred to herein shall occur.
(b) No adjustment shall be made pursuant to this Article III in respect
of the issuance from time to time of Common Stock upon the exercise of this
Warrant.
(c) If the Company shall set a record date to determine the holders of
Common Stock for purposes of a Common Stock Reorganization or Common Stock
Distribution and shall legally abandon such action prior to effecting such
action, then no adjustment shall be made pursuant to this Article III in respect
of such action.
3.4 NOTICE OF ADJUSTMENT. As promptly as practicable after any action
is taken which requires an adjustment or readjustment pursuant to this Article
III, the Company shall give notice to the Holder of such event, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such notice, the Company
shall give notice to the Holder of such adjustment and computation promptly
after such adjustment becomes determinable.
ARTICLE IV
FORM S-8 REGISTRATION
4.1 FORM S-8 REGISTRATION. As promptly as reasonably practicable after
the Closing Date, the Company will prepare and file a registration statement on
Form S-8 (or any equivalent successor form under the Securities Act) to register
the Common Stock issuable upon exercise of this Warrant.
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"BUSINESS DAY" means each day in which banking institutions in New York
are not required or authorized by law or executive order to close.
"CLOSING DATE" means the date hereof.
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"COMMON STOCK" shall have the meaning set forth in the first paragraph
of this Warrant.
"COMMON STOCK DISTRIBUTION" shall have the meaning set forth in Section
3.2.
"COMMON STOCK REORGANIZATION" shall have the meaning set forth in
Section 3.2.
"COMPANY" shall have the meaning set forth in the first paragraph of
this Warrant.
"EMPLOYMENT AGREEMENT" shall have the meaning set forth in the second
paragraph of this Warrant.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" shall mean $29.275 for each share of Common Stock to
be issued upon exercise of this Warrant, subject to adjustment pursuant to
Article III.
"EXPIRATION DATE" means the third day following the date on which the
Holder ceases for any reason to be employed by Coromed; provided, however, that
if the Holder's employment with Coromed is terminated by Coromed in a manner
that constitutes "Termination for Cause" (as defined in the Holder's employment
agreement), then "Expiration Date" shall mean the date on which the Holder
ceases for any reason to be employed by Coromed.
"HOLDER" shall have the meaning set forth in the first paragraph of
this Warrant.
"MARKET PRICE" means, with respect to Common Stock, the average of the
daily closing prices for the Common Stock on the ten (10) consecutive trading
days before the day in question. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such date, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange ("NYSE"), or if the
Common Stock is not listed or admitted to trading on the NYSE, on the principal
securities exchange on which the Common Stock is listed or admitted to trading
or Nasdaq or, if not listed or admitted to trading on any securities exchange or
Nasdaq, the closing sale price of the Common Stock, or in case no reported sale
takes place, the average of the closing bid and asked prices, on any interdealer
quotation system or any comparable system, or if the Common Stock is not so
quoted, the parties hereto agree for the purposes of this Warrant that the
current market price shall be as determined in good faith by the Board of
Directors of the Company.
"NASDAQ" means The Nasdaq Stock Market.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANT AGENT" shall have the meaning set forth in Section 2.1.
ARTICLE VI
MISCELLANEOUS
6.1 EXPIRATION. This Warrant shall expire and be of no further force
and effect on the Expiration Date.
6.2 NOTICES. Any notice or other communication to be given hereunder
shall be in writing and shall be delivered by recognized courier, telecopy or
certified mail, return receipt requested, and shall be conclusively deemed to
have been received by a party hereto and to be effective on the day on which
delivered or telecopied to such party at its address set forth below (or at such
other address as such
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party shall specify to the other parties hereto in writing), or, if sent by
certified mail, on the third business day after the day on which mailed,
addressed to such party at such addresses.
In the case of a Holder, such notices and communications shall be
addressed to its address as shown on the books maintained by the Warrant Agent,
unless the Holder shall notify the Company and the Warrant Agent that notices
and communications should be sent to a different address, in which case such
notices and communications shall be sent to the address specified by the Holder,
with a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxx, III, Esq., Facsimile No.:
(000) 000-0000. In the case of the Company, such notices and communications
shall be addressed as follows (until notice of a change is given as provided
herein): Omnicare, Inc., 2800 Chemed Center, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000, Attention: Xxxx X. Xxxxxxxx, Facsimile No.: 000-000-0000, with a
copy to: Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx X. Xxxxxx, Esq., Facsimile No.: 000-000-0000.
6.3 WAIVERS; AMENDMENTS. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the Holder.
6.4 GOVERNING LAW This Warrant shall be construed in accordance with
and governed by the laws of the State of Delaware without regard to choice of
law principles.
6.5 SURVIVAL OF AGREEMENTS. All covenants and agreements made by the
parties herein shall be considered to have been relied upon by each party and
shall survive the issuance and delivery of the Warrant, and shall continue in
full force and effect so long as this Warrant is outstanding.
6.6 COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.
6.7 SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
6.8 SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.9 NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle any Holder
to any rights as a stockholder of the Company and no dividends shall be payable
or accrue in respect of this Warrant or the interest represented hereby or the
shares of Common Stock underlying this Warrant exercisable hereunder unless and
until and only to the extent this Warrant shall be exercised.
6.10 NO REQUIREMENT TO EXERCISE. Nothing contained in this Warrant
shall be construed as requiring the Holder to exercise this Warrant.
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IN WITNESS WHEREOF, Omnicare, Inc. has caused this Warrant to be
executed in its corporate name by one of its officers thereunto duly authorized.
OMNICARE, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and
Secretary
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SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To: OMNICARE, INC.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to purchase thereunder,
____________ shares of Common Stock, as provided for therein, and tenders
herewith payment of the Exercise Price in full in the form of certified or bank
cashier's check or wire transfer.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated:
___________________________________________
NOTE: The above signature should
correspond exactly with the name on
the face of the attached Warrant.
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