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<SEC-DOCUMENT>0000929624-97-000781.txt : 19970623
<SEC-HEADER>0000929624-97-000781.hdr.sgml : 19970623
ACCESSION NUMBER: 0000929624-97-000781
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 20
CONFORMED PERIOD OF REPORT: 19970331
FILED AS OF DATE: 19970619
SROS: NYSE
SROS: PSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MCKESSON CORP
CENTRAL INDEX KEY: 0000927653
STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122]
IRS NUMBER: 943207296
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-13252
FILM NUMBER: 97627102
BUSINESS ADDRESS:
STREET 1: ONE POST ST
STREET 2: MCKESSON PLAZA
CITY: SAN FRANCISCO
STATE: CA
ZIP: 94104
BUSINESS PHONE: 4159838300
FORMER COMPANY:
FORMER CONFORMED NAME: SP VENTURES INC
DATE OF NAME CHANGE: 19940728
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-13252
McKESSON CORPORATION
A Delaware Corporation
I.R.S. Employer Number 94-3207296
McKesson Plaza, One Post Street, San Francisco, CA 94104
Telephone - Area Code (415) 983-8300
Securities registered pursuant to Section 12(b) of the Act:
(Name of Each Exchange
(Title of Each Class) on Which Registered)
Common Stock, $.01 par value New York Stock Exchange
Pacific Exchange, Inc.
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Exchange, Inc.
Securities registered pursuant to Section 12 (g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Aggregate market value of voting stock held by nonaffiliates of the Registrant
at June 2, 1997: $2,628,255,561
Number of shares of common stock outstanding at June 2, 1997: 45,897,016
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders for the fiscal year
ended March 31, 1997 are incorporated by reference into Parts I, II and IV of
this report. Portions of the Registrant's Proxy Statement for its Annual
Meeting of Stockholders to be held on July 30, 1997 are incorporated by
reference into Part III of this report.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page
- ---- ----
PART I
<S> <C> <C>
1. Business............................................................. 1
2. Properties........................................................... 5
3. Legal Proceedings.................................................... 6
4. Submission of Matters to a Vote of Security Holders.................. 8
Executive Officers of the Registrant................................. 9
PART II
5. Market for the Registrant's Common Stock and
Related Stockholder Matters......................................... 11
6. Selected Financial Data.............................................. 11
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 11
8. Financial Statements and Supplementary Data.......................... 11
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.............................. 11
PART III
10. Directors and Executive Officers of the Registrant................... 12
11. Executive Compensation............................................... 12
12. Security Ownership of Certain Beneficial Owners and Management....... 12
13. Certain Relationships and Related Transactions....................... 12
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K...... 13
Signatures............................................................ 15
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Development of Business
The Company's objective is to become the world leader in health care supply
and comprehensive pharmaceutical management across the entire supply chain, from
manufacturer to patient. (As used herein, the term "Company" includes McKesson
Corporation and its consolidated subsidiaries.) Since late 1995, in pursuit of
this goal, the Company completed a number of acquisitions and undertook several
initiatives to further focus the Company on its core health care business:
. In December 1995, the Company acquired McKesson BioServices Corporation, a
business that provides product marketing and support services for the
pharmaceutical industry, for approximately $20 million.
. In April 1996, the Company acquired Automated Healthcare, Inc. ("AHI"), a
business that specializes in automated pharmaceutical dispensing systems
for health care institutions, for approximately $65 million.
. In November 1996, the Company acquired the pharmaceutical distribution
business of FoxMeyer Corporation ("FoxMeyer") out of bankruptcy for
approximately $598 million.
. In December 1996, the Company disposed of its 55% equity interest in Armor
All Products Corporation ("Armor All"), a non-health care business.
. In February 1997, the Company acquired General Medical Inc., a multi-market
distributor of medical-surgical supplies, for approximately $775 million.
. In March 1997, the Company disposed of Millbrook Distribution Services Inc.
("Millbrook") a non-health care business.
. In March 1997, the Company sold its Aqua-Vend vended water business, a unit
of the Water Products segment.
Developments which could be considered significant to individual segments
of the business are described under (c)(1) "Narrative Description of Business"
on pages 2 through 5 of this report.
(b) Financial Information About Industry Segments
Financial information for the three years ended March 31, 1997 appears in
Financial Note 16, "Segments of Business", on page 46 of the 1997 Annual Report
to Stockholders, which note is incorporated herein by reference.
1
<PAGE>
(c) Narrative Description of Business
(1) Description of Segments of Business
The Company conducts its operations through two operating business segments
which generated annual sales in fiscal 1997 of $12.9 billion, approximately 98%
of which were generated by the Health Care Services segment and approximately 2%
of which were generated by McKesson's Water Products (as hereinafter defined)
business.
Health Care Services
PRODUCTS & MARKETS
Through its Health Care Services segment, the Company is the largest
distributor of ethical and proprietary drugs and health and beauty care products
in North America. The Company is the market leader in its core U.S. drug
distribution businesses. U.S. Health Care Services operations also include
Healthcare Delivery Systems, Inc. ("HDS") and McKesson BioServices Corporation,
through which the Company provides marketing and other support services to drug
manufacturers, AHI, a business that specializes in automated pharmaceutical
dispensing systems for hospitals and Zee Medical, Inc., a distributor of first-
aid products and supplies to industrial and commercial customers. International
operations include Medis Health and Pharmaceutical Services Inc., a wholly-owned
subsidiary and the largest pharmaceutical distributor in Canada, and the
Company's 22.7% equity interest in Nadro, S.A. de C.V., the largest
pharmaceutical distributor in Mexico.
The Company's domestic distribution operations include the pharmaceutical
health care products and medical-surgical supplies distribution businesses. The
Company supplies drugs and health and beauty care products to independent and
chain drug stores, hospitals, alternate-site facilities, food stores and mass
merchandisers in all 50 states. Using the names "Economost" and "Econolink" and
a number of related service marks, the Company has promoted electronic order
entry systems and a wide range of computerized merchandising and asset
management services for drug retailers and hospitals. The Company also supplies
computer-based practice management systems to drug retailers. The Company
believes that its financial strength, purchasing leverage, nationwide network of
distribution centers, and advanced logistics and information technologies
provide competitive advantages to its drug distribution operations. For
example, the Company uses Acumax(R), a computerized bar-code scanning system, to
track items in its warehouses. Acumax enables the Company to achieve order
filling and inventory accuracy levels of more than 99%, ensuring that the right
product arrives at the right time and place for both the Company's customers and
their patients.
Health Care Services serves three primary customer segments: retail
independent pharmacies, retail chains and institutional providers (including
hospitals, health care facilities and pharmacy service operators) which
represents approximately 37%, 31% and 32% respectively, of U.S. Health Care
Services revenues. In addition, McKesson's Pharmaceutical and Retail Services
unit focuses on drug manufacturers as a customer segment by providing them
marketing and other support services.
Independent Pharmacies. In addition to distribution services, the Company
provides value added services to independent retail pharmacies through
management information systems, including inventory management, electronic
billing, current pricing and other financial management offerings. In
February 1996, the Company launched the OmniLink/SM/ centralized pharmacy
technology platform and the associated Valu-Rite/CareMax/SM/ network of
independent pharmacies. The combined offering is designed to link independent
pharmacies, creating a "virtual chain" for contracting with pharmaceutical
suppliers and managed care organizations. As of March 31, 1997, OmniLink had
been installed in over 1,800 pharmacies.
2
<PAGE>
OmniLink is designed to offer pharmacies streamlined transaction processing
through connectivity with managed care organizations, while promoting
compliance with managed care formularies and appropriate reimbursement from
managed care plans. The service also improves cash flow for pharmacies and
enhances pharmacy revenues through programs such as 24-hour advanced funding
of third-party reimbursements, prescription refill reminders, patient direct
marketing and distribution of coupons and samples from over-the-counter
products.
The Company currently has two pharmacy programs for independent pharmacies-
Valu-Rite(R), a voluntary cooperative program, and Health Mart(R), a
franchise program. Through Valu-Rite, the Company provides its independent
U.S. retail drug store customers with a common marketing identity, group
advertising, purchasing programs, promotional merchandise and access to a
pharmacy provider network. At March 31, 1997, approximately 5,200 stores were
participating in the Valu-Rite program. Through Health Mart, acquired as part
of the FoxMeyer transaction, the Company provides its community pharmacists
with a franchise program. Currently, Health Mart has approximately 650
franchisees. Together, Valu-Rite and Health Mart pharmacies comprise
approximately 25% of the nation's independent retail pharmacies.
Retail chains. Retail drug chains do business with the Company mainly
through primary sourcing and secondary sourcing. In primary sourcing, a chain
depends on the Company to supply its logistics, warehousing and contract
administration functions, much as the Company performs primary distribution
for all other retail customers. In secondary sourcing, the Company "backs up"
the chains' own warehouses with deliveries on an as-needed basis.
Institutional Business. The Company, through its McKesson Health Systems
unit, provides drug distribution services, and related logistics and
management information systems support, to the institutional market, which
includes hospitals, alternate-sites and integrated health networks. The
acquisition of FoxMeyer strengthened the Company's position in the
institutional marketplace. Also, the General Medical acquisition further
enhanced the Company's competitiveness, particularly in the fast-growing
alternate-site segment. General Medical is the nation's leading supplier of
medical-surgical supplies to the full range of alternative-site health care
facilities, including physicians and clinics, long-term care and home-care
sites, and is the third largest distributor of medical-surgical supplies to
hospitals.
Manufacturers. The Company's Pharmaceutical and Retail Services unit
develops innovative marketing and distribution services to help build and
sustain sales for manufacturers' pharmaceutical products. Through its HDS
unit, this group operates integrated systems for specialized delivery of
biotech and other high-cost pharmaceutical therapies. These systems manage
manufacturer cost and information requirements through financial assistance
programs for patients, reimbursement support and patient advocacy programs,
product hot-lines, pharmacy-based sampling and physician and patient
information programs. These services are also provided to manufacturers on a
stand-alone basis outside of integrated service systems. Through McKesson
BioServices Corporation, this group also provides support services to
commercial, non-profit and governmental organizations engaged in drug
development and biomedical research including biological repository
management, clinical trials support and regulatory process management
services.
The Company also provides a service to drug manufacturers with McKesson
Select Generics/SM/, an enhancement of the Company's Multi-Source Complete(R)
generic drug program which was launched in May 1996. Through the Select
Generics program, retail customers have access to a broad line of
approximately 1,350 generic items, and single suppliers are chosen for each
item, thereby offering to manufacturers the advantage of exclusivity and
compliance.
3
<PAGE>
COMPETITION
In every area of operations, the distribution businesses face strong
competition both in price and service from national, regional and local full-
line, short-line and specialty wholesalers, service merchandisers, and from
manufacturers engaged in direct distribution. The particular areas in which
U.S. Health Care Services provides services are in a rapid state of development,
and therefore there are no clearly defined markets in which U.S. Health Care
Services competes. It nonetheless faces competition from various other service
providers and from pharmaceutical and other health care manufacturers (as well
as other potential customers of U.S. Health Care Services) which may from time
to time decide to develop, for their own internal needs, those services which
are provided by U.S. Health Care Services and other competing service providers.
Price, quality of service, and, in some cases, convenience to the customer are
generally the principal competitive elements in the Health Care Services
segment.
INTELLECTUAL PROPERTY
The principal trademarks and service marks of the Health Care Services
segment are: ECONOMOST(R), ECONOLINK(R), VALU-RITE(R), Valu-Rite/CareMax,
OmniLink, Health Mart(R) and R\\X\\OBOT/TM/. The Company also owns other
registered and unregistered trademarks and service marks and similar rights. All
of the principal marks are registered in the United States and registration has
been obtained or applied for in Canada with respect to such marks. The United
States federal registrations of these trademarks and service marks have ten or
twenty year terms, depending on date of registration; the Canadian registrations
have fifteen year terms. All are subject to unlimited renewals. The Company
believes this business has taken all necessary steps to preserve the
registration and duration of its trademarks and service marks, although no
assurance can be given that it will be able to successfully enforce or protect
its rights thereunder in the event that they are subject to third-party
infringement. The Company does not consider any particular patent, license,
franchise or concession to be material to the business of the Health Care
Services segment.
Water Products
PRODUCTS & MARKETS
McKesson Water Products Company ("Water Products") is a leading provider in
the $3.4 billion bottled water industry in the United States. It is one of the
largest bottled water companies in most of the geographic markets in which it
competes. Water Products is primarily engaged in the processing and sale of
bottled drinking water delivered to more than 530,000 homes and businesses under
its Sparkletts(R), Alhambra(R), and Crystal/TM/ brands in California, Arizona,
Nevada, Oklahoma, Washington, Texas and New Mexico. It also sells packaged water
through retail stores.
COMPETITION
Although this business faces competition from several larger competitors,
the competition is generally widely dispersed between many different entities.
Principal among the large local competitors of the Water Products segment are:
Arrowhead (California and Arizona) and Ozarka/Oasis (Texas) (both owned by
Nestle); Hinckley & Schmitt (Arizona, Las Vegas, and Southern California) and
Sierra Springs (Northern California and Texas) (both owned by Suntory
International Corporation); Crystal Geyser (nationally distributed); Evian
(nationally distributed) (owned by Groupe Donone, S.A.) and private label
brands. This operation faces significant competition in both price and service
in all aspects of its business.
4
<PAGE>
INTELLECTUAL PROPERTY
The principal trademarks and service marks of the Water Products segment
are: SPARKLETTS/R/, ALHAMBRA/R/ and CRYSTAL/TM/. Water Products also owns other
registered and unregistered trademarks and service marks used by the Water
Products segment. All of the principal trademarks and service marks are
registered in the United States, in addition to certain other jurisdictions. The
United States federal registrations of these trademarks have terms of ten or
twenty years, depending on date of registration, and are subject to unlimited
renewals. The Company believes this business has taken all necessary steps to
preserve the registration and duration of its trademarks and service marks,
although no assurance can be given that it will be able to successfully enforce
or protect its rights thereunder in the event that they are subject to third-
party infringement. The Company does not consider any particular patent,
license, franchise or concession to be material to the business of the Water
Products segment.
(2) Other Information About the Business
Customers -- No material part of the business is dependent upon a single or
a very few customers, the loss of any one of which could have a material adverse
effect on the Company or any of its business segments.
Environmental Legislation -- The Company sold its chemical distribution
operations in fiscal 1987. In connection with the disposition of those
operations, the Company retained responsibility for certain environmental
obligations and has entered into agreements with the Environmental Protection
Agency and certain states pursuant to which it is or may be required to conduct
environmental assessments and cleanups at several closed sites. These matters
are described further in Item 3 "Legal Proceedings" on pages 6 to 8 of this
report. Other than any capital expenditures which may be required in connection
with those matters, the Company does not anticipate making substantial capital
expenditures for environmental control facilities or to comply with
environmental laws and regulations in the future. The amount of capital
expenditures expended by the Company for environmental compliance was not
material in fiscal 1997 and is not expected to be material in the next fiscal
year.
Employees -- At March 31, 1997, the Company employed approximately 13,300
persons.
Backlog Orders -- Both of the Company's segments seek to promptly fill or
otherwise satisfy the orders of each such segment's customers. Accordingly,
neither of the Company's segments has a significant backlog of customer orders.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales
Information as to foreign operations is included in Financial Note 16,
"Segments of Business" on page 46 of the 1997 Annual Report to Stockholders,
which note is incorporated herein by reference.
ITEM 2. PROPERTIES
Because of the nature of the Company's principal businesses, plant,
warehousing, office and other facilities are operated in widely dispersed
locations. The warehouses are typically owned or leased on a long-term basis.
The Company considers its operating properties to be in satisfactory condition
and adequate to meet its needs for the next several years. Information as to
material lease commitments is included in Financial Note 11, "Lease Obligations"
on page 41 of the 1997 Annual Report to Stockholders, which note is incorporated
herein by reference. Due to the numerous warehousing, office and other
5
<PAGE>
facilities utilized by the Company in its business operations, the Company does
not believe that any one of its facilities is materially important to the
Company.
ITEM 3. LEGAL PROCEEDINGS
In addition to commitments and obligations in the ordinary course of
business, the Company is subject to various claims, other pending and potential
legal actions for product liability and other damages, investigations relating
to governmental laws and regulations, and other matters arising out of the
normal conduct of the Company's business.
The Company currently is a defendant in seven civil actions filed since
late 1993 by retail pharmacies. The first proceeding, Feitelberg v. Abbott
Laboratories, is pending in the Superior Court for the State of California
(County of San Francisco) and is now referred to as Coordinated Proceeding
Special Title, Pharmaceutical Cases I, II and III. The second proceeding, HJB,
Inc. v. Abbott Laboratories (now known as MDL 997), is pending in the United
States District Court for the Northern District of Illinois. The third
proceeding, K-S Pharmacies, Inc. v. Abbott Laboratories, is pending in the
Circuit Court of Wisconsin for Dane County. A fourth action, Adams v. Abbott
Laboratories, was filed in the U.S. District Court for the Eastern District of
Arkansas. A fifth action, Salk Drug Co. v. Abbott Laboratories, was filed in
the District Court of Minnesota, Fourth Judicial District. A sixth action was
filed in California Superior Court for San Francisco County, Horton v. Abbott
Laboratories, et. al. has been consolidated with Coordinated Proceeding Special
Title, Pharmaceutical Cases I, II and III. A seventh case, Durrett v. Upjohn
Co., filed in the United States District Court for the Northern District of
Alabama, was served on McKesson in 1996. These actions were brought as purported
class actions on behalf of all other similarly-situated retail pharmacies. A
class has been certified in Feitelberg and in MDL 997. There are numerous other
defendants in these actions including pharmaceutical manufacturers, a
pharmaceutical mail order firm, and several other wholesale distributors. These
cases allege, in essence, that the defendants have unlawfully conspired together
and agreed to fix the prices of brand name pharmaceuticals sold to plaintiffs at
artificially high, discriminatory, and non-competitive levels, all in violation
of various state and federal antitrust laws. Some of the plaintiffs specifically
contend that the wholesaler and manufacturer defendants are engaged in a
conspiracy to fix prices charged to plaintiffs and members of the purported
classes (independent and chain retail drug stores) above the price levels
charged to mail order pharmacies, HMOs and other institutional buyers. The
California cases allege, among other things, violation of California antitrust
law. In MDL 997, plaintiffs allege that defendants' actions constitute price
fixing in violation of the Sherman Act. In the K-S Pharmacies, Inc., Salk Drug
and Durrett complaints, plaintiffs allege violation of Wisconsin, Minnesota and
Alabama antitrust laws, respectively. In each of the complaints, except Adams,
plaintiffs seek certification as a class and remedies in the form of injunctive
relief, unquantified monetary damages (trebled as provided by law), and
attorneys fees and costs. In addition, the California cases seek restitution. In
MDL 997, plaintiffs have appealed the court's ruling granting the motion for
summary judgment filed by the Company and other wholesaler defendants. In K-S
Pharmacies, the court dismissed the Company and other wholesaler defendants with
prejudice and plaintiffs have appealed. In Durrett, the court denied the
wholesaler's motion to dismiss. The Company believes it has meritorious defenses
to the allegations made against it and intends to vigorously defend itself in
all of these cases. In addition, the Company has entered into a judgment sharing
agreement with certain pharmaceutical manufacturer defendants, which provides
generally that the Company (together with the other wholesale distributor
defendants) will be held harmless by such pharmaceutical manufacturer defendants
and will be indemnified against the costs of adverse judgments, if any, against
the wholesaler and manufacturers in these or similar actions, in excess of $1
million in the aggregate per wholesale distributor defendant.
In December 1996, a purported stockholder class action entitled Vogel vs.
Armstrong, et. al. was filed in the Court of Chancery of the State of Delaware
against the Company, Armor All Products
6
<PAGE>
Corporation ("Armor All"), then current members of Armor All's Board of
Directors and The Clorox Company ("Clorox"). The complaint alleges that (i) the
Company and Armor All's directors breached their fiduciary duties to Armor All's
public shareholders by entering into an agreement to sell Armor All for an
insufficient price, (ii) the Company and the Armor All directors, contrary to
their fiduciary duties, consummated the sale in order to favor the Company over
the public shareholders of Armor All, and (iii) Clorox, in purchasing the shares
of Armor All, aided and abetted those breaches of fiduciary duty. Plaintiff
seeks rescission, compensatory damages, interest, attorneys fees and costs. The
Company has filed a motion to dismiss the complaint, believes it has meritorious
defenses to the allegations made against it, and intends to vigorously defend
the litigation.
In January 1997, the Company and twelve pharmaceutical manufacturers (the
"Manufacturer Defendants") were named as defendants in the matter of FoxMeyer
Health Corporation vs. McKesson Corporation, et. al. filed in the District Court
in Dallas County, Texas. In its complaint, Plaintiff (the parent corporation of
FoxMeyer Drug Company and FoxMeyer Corporation collectively, "FoxMeyer
Corporation") alleges that, among other things, the Company (i) defrauded
Plaintiff, (ii) competed unfairly and tortiously interfered with FoxMeyer
Corporation's business operations, and (iii) conspired with the Manufacturer
Defendants, all in order to destroy FoxMeyer Corporation's business, restrain
trade and monopolize the marketplace, and allow the Company to purchase that
business at a distressed price. Plaintiff seeks relief against all defendants
in the form of compensatory damages of at least $400 million, punitive damages,
attorneys fees and costs. The Company has answered the complaint, denying the
allegations, and removed the case to federal bankruptcy court in Dallas. A
motion by defendants to transfer the case to bankruptcy court in Delaware and a
motion by Plaintiff to remand the case to Texas State Court are pending. The
Company believes it has meritorious defenses to the allegations made against it
and intends to vigorously defend the litigation.
In July 1995, a purported class action was filed in the Supreme Court of
the State of New York against General Medical Corp., Inc. and several other
defendants by Richard A. Bernstein, Chairman and President of Rabco Health
Services, Inc. and Chairman of General Medical at the time of its leveraged
buyout in 1993. Plaintiff alleges a conspiracy to orchestrate the buyout of
plaintiff's interest in Rabco at an unfairly low price. Plaintiff alleges
common law fraud, breach of fiduciary duty and inducing breach of fiduciary
duty. Plaintiff seeks rescissionary damages of $50 million, compensatory
damages of $25 million, and punitive damages of $25 million. The complaint was
dismissed in September 1996 and an appeal by plaintiff is pending. The Company
believes that it has meritorious defenses to the allegations made against it and
intends to vigorously defend the action.
Primarily as a result of the operation of its former chemical businesses,
which were divested in fiscal 1987, the Company is involved in various matters
pursuant to environmental laws and regulations:
The Company has received claims and demands from governmental agencies
relating to investigative and remedial actions purportedly required to address
environmental conditions alleged to exist at five sites where the Company (or
entities acquired by the Company) formerly conducted operations; and the
Company, by administrative order or otherwise, has agreed to take certain
actions at those sites, including soil and groundwater remediation.
The current estimate (determined by the Company's environmental staff, in
consultation with outside environmental specialists and counsel) of the upper
limit of the Company's range of reasonably possible remediation costs for these
five sites is approximately $22 million, net of $5 million which third parties
have agreed to pay in settlement or which the Company expects, based either on
agreements or nonrefundable contributions which are ongoing, to be contributed
by third parties. The $22 million is expected to be paid out between April 1997
and March 2028 and is included in the Company's recorded environmental reserves
at March 31, 1997.
7
<PAGE>
In addition, the Company has been designated as a potentially responsible
party (PRP) by the U.S. Environmental Protection Agency under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended (the
"Superfund" law), for environmental assessment and cleanup costs as the result
of the Company's alleged disposal of hazardous substances at 22 Superfund sites.
With respect to each of these Superfund sites, numerous other PRPs have
similarly been designated and, while the current state of the law potentially
imposes joint and several liability upon PRPs, as a practical matter costs of
these sites are typically shared with other PRPs. The Company's estimated
liability at those 22 Superfund sites is approximately $2 million, net of $4
million which insurance companies, and $3 million which another PRP, are
expected or have agreed to contribute to the Company's allocated share. The
aggregate settlements and costs paid by the Company in Superfund matters to date
has not been significant. The $2 million is included in the Company's recorded
environmental reserves at March 31, 1997.
The potential costs to the Company related to environmental matters is
uncertain due to such factors as: the unknown magnitude of possible pollution
and cleanup costs; the complexity and evolving nature of governmental laws and
regulations and their interpretations; the timing, varying costs and
effectiveness of alternative cleanup technologies; the determination of the
Company's liability in proportion to other PRPs; and the extent, if any, to
which such costs are recoverable from insurance or other parties.
Management believes, based on current knowledge and the advice of the
Company's counsel, that the outcome of the litigation and governmental
proceedings discussed in the preceding paragraphs will not have a material
adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the three months ended March 31,
1997.
8
<PAGE>
Executive Officers of the Registrant
The following table sets forth information concerning the executive
officers of the Registrant as of June 2, 1997. The number of years of service
with the Company includes service with predecessor and acquired companies,
including McKesson.
There are no family relationships between any of the executive officers or
directors of the Registrant. The executive officers are chosen annually to
serve until the first meeting of the Board of Directors following the next
annual meeting of stockholders and until their successors are elected and have
qualified, or until death, resignation or removal, whichever is sooner.
<TABLE>
<CAPTION>
Name Age Position with Registrant and Business Experience
- --------------------- ----- ----------------------------------------------------------
<S> <C> <C>
Alan Seelenfreund 60 Chairman of the Board since July 1994 and a Director since
November 1994; Chairman and Chief Executive Officer (July
1994-March 1997). Formerly Chairman of the Board and
Chief Executive Officer (November 1989-November 1994) and
a Director (July 1988-November 1994) of McKesson. Service
with the Company - 22 years.
Mark A. Pulido 44 Chief Executive Officer since April 1997 and President and
Chief Operating Officer and a Director since May 1996.
Chief Executive Officer, Sandoz Pharmaceuticals Corporation
(January-April 1996) and Chief Operating Officer (December
1994-December 1995). Other positions in the previous five
years, all with Red Line Healthcare Corporation, a Sandoz
affiliate: Chairman of the Board (December 1994-January
1996), Chairman, President and Chief Executive Officer
(March 1992-November 1994), President and Chief Executive
Officer (January 1992-March 1992). Service with the
Company - 1 year 1 month.
William A. Armstrong 56 Vice President Human Resources and Administration since
September 1994. Formerly Vice President Human Resources
and Administration (April 1993-November 1994) and Vice
President Administration (July 1991-April 1993) of McKesson.
Service with the Company - 25 years.
Michael T. Dalby 51 Vice President Strategic Planning since September 1994.
Principal at McKinsey & Company, Inc., an international
management consulting firm (1988-1994). Service with the
Company - 2 years 9 months.
John H. Hammergren 38 Vice President and President of McKesson Health Systems
since January 1996. President, Medical/Surgical Division,
Kendall Healthcare Products Company (1993-1996) and Vice
President and General Manager (1991-1993). Service with the
Company - 1 year 5 months.
Richard H. Hawkins 47 Vice President and Chief Financial Officer since September
1996; Vice President and Controller (September 1994-
September 1996). Formerly Vice President (April 1993-
November 1994) and Controller (April 1990-November 1994)
of McKesson, Chief Financial Officer (September 1993-
November 1994) of McKesson's Drug Company division and
Vice President Finance (February 1991-April 1993) of
McKesson's Distribution Group. Service with the Company -
13 years.
</TABLE>
9
<PAGE>
<TABLE>
Name Age Position with Registrant and Business Experience
- --------------------- ----- ----------------------------------------------------------
<S> <C> <C>
David L. Mahoney 42 Vice President since September 1994 and President,
Pharmaceutical and Retail Services since August 1996;
President, Pharmaceutical Services Group (February-August
1996). Formerly President of Healthcare Delivery Systems,
Inc., a wholly-owned subsidiary of the Company, (September
1994-December 1995) and Vice President Strategic Planning
(July 1990-September 1994) of McKesson. Service with the
Company - 7 years.
Mark T. Majeske 39 Vice President and President, Customer Operations since
August 1996; Executive Vice President, Field Operations
(November 1995-July 1996) and Executive Vice President, Central
Region, Drug Company division (July 1994-November 1995). Senior
Vice President of Field Operations Hamilton HallMark
Electronics (April-July 1994) and Vice President of Strategic,
Canada and NAFTA Operations from 1992 to April 1994. Service with
the Company - 2 years 11 months.
Ivan D. Meyerson 52 Vice President and General Counsel since July 1994. Formerly Vice
President and General Counsel (January 1987-November 1994) of
McKesson. Service with the Company - 19 years.
Nancy A. Miller 53 Vice President and Corporate Secretary since July 1994.
Formerly Vice President and Corporate Secretary
(December 1989-November 1994) of McKesson. Service with the
Company - 19 years.
Steven B. Nielsen 49 Vice President since March 1997 and Chairman and Chief
Executive Officer of General Medical Inc. (since May 1994) and of GM
Holdings, Inc. and General Medical Corporation (since December 1993),
all wholly-owned subsidiaries of the Company. President of General
Medical Corporation (December 1988-April 1997). Service with the
Company - 3 months.
Charles A. Norris 51 Vice President and President of McKesson Water Products Company, a
wholly-owned subsidiary of the Company, since September 1994.
Formerly Vice President of McKesson (April 1993-November 1994) and
President (May 1990-November 1994) of McKesson Water Products Company,
a wholly-owned subsidiary of McKesson. Service with the Company - 7 years.
Alan M. Pearce 48 Treasurer since May 30, 1997; Assistant Treasurer (September 1994-
May 30, 1997). Formerly Assistant Treasurer (August 1977-September 1994)
of McKesson. Service with the Company - 19 years.
Carmine J. Villani 54 Vice President and Chief Information Officer since January 1997; Vice President,
Information Management of the Drug Company division (November 1994-January 1997).
Formerly Vice President, Technology Integration (1992-1994) of McKesson. Service
with the Company - 5 years.
Heidi E. Yodowitz 43 Controller since October 1996; Staff Vice President, Planning & Analysis (1995 to
1996) and Assistant Controller (September 1994-1995). Formerly Assistant
Controller of McKesson (June 1990-September 1994). Service with the
Company - 7 years.
</TABLE>
10
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
(a) Market Information
The principal market on which the Company's common stock is traded is the
New York Stock Exchange and on the Pacific Stock Exchange. High and low prices
for the common stock by quarter appear in Financial Note 18, "Quarterly
Financial Information (Unaudited)" on page 49 of the 1997 Annual Report to
Stockholders which note is incorporated herein by reference.
(b) Holders
The number of record holders of the Company's common stock as of March 31,
1997 was 14,385.
(c) Dividends
Dividend information is included in Financial Note 18, "Quarterly Financial
Information (Unaudited)" on page 49 of the 1997 Annual Report to Stockholders,
which note is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data is shown on pages 20 and 21 of the 1997 Annual
Report to Stockholders and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of the Company's financial condition
and results of operations appears in the Financial Review on pages 22 to 28 of
the 1997 Annual Report to Stockholders and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements and Supplementary Data appear on pages 29 to 49 of the
1997 Annual Report to Stockholders and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
11
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Company is incorporated by
reference from the Company's 1997 Proxy Statement (the "Proxy Statement").
Certain information relating to Executive Officers of the Company appears at
pages 9 and 10 of this Form 10-K Annual Report. The information with respect to
this item required by Item 405 of Regulation S-K is incorporated herein by
reference from the Company's 1997 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item is incorporated herein by reference
from the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this item is incorporated herein by reference
from the Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain transactions with management is
incorporated by reference from the Company's Proxy Statement.
12
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Exhibits and Financial Statement Schedules
The following consolidated financial statements of the Company and the
Independent Auditors' Report are included in the 1997 Annual Report to
Stockholders and are incorporated by reference in Item 8. Page number
references are to the 1997 Annual Report to Stockholders.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 50
Consolidated Financial Statements
Statements of Consolidated Income for the years ended
March 31, 1997, 1996 and 1995 29
Consolidated Balance Sheets, March 31, 1997, 1996 and 1995 30
Statements of Consolidated Cash Flows for the years ended
March 31, 1997, 1996 and 1995 31
Statements of Consolidated Stockholders' Equity for the
years ended March 31, 1997, 1996 and 1995 32-33
Financial Notes 34-49
10-K
The following are included herein: Page
----
Independent Auditors' Report on Supplementary Financial
Schedule 16
Supplementary Financial Schedule:
II Consolidated Valuation and Qualifying Accounts 17
</TABLE>
Financial statements and schedules not included or incorporated by
reference herein have been omitted because of the absence of conditions under
which they are required or because the required information, where material, is
shown in the financial statements, financial notes or supplementary financial
information.
Exhibits submitted with this Form 10-K as filed with the SEC and those
incorporated by reference to other filings are listed on the Exhibit Index on
pages 18 to 23.
13
<PAGE>
(b) Reports on Form 8-K
The following reports on Form 8-K or amendments to previously filed
reports on Form 8-K were filed during the three months ended March 31,
1997:
1. Form 8-K/A Amendment No. 1
Date of Report: November 22, 1996 Date Filed: January 21, 1997
Item 5. Other Events
---------------------
The Registrant reported that it and twelve pharmaceutical
manufacturers were named as defendants in the matter of FoxMeyer
Health Corporation vs. McKesson Corporation et. al.
Item 7. Financial Statements, Pro Forma Information and Exhibits
-----------------------------------------------------------------
The Registrant filed the financial statements and pro forma financial
information related to its acquisition of the healthcare distribution
business of FoxMeyer Corporation.
2. Form 8-K
Date of Report: December 31, 1996 Date Filed: January 13, 1997
Item 2. Acquisition or Disposition of Assets
---------------------------------------------
The Registrant reported that it had completed the disposition of its
equity interest in Armor All Products Corporation.
3. Form 8-K
Date of Report: January 28, 1997 Date Filed: February 5, 1997
Item 5. Other Events
---------------------
The Registrant announced that it had signed a definitive agreement to
acquire privately held General Medical Inc.
4. Form 8-K
Date of Report: February 11, 1997 Date Filed: February 11, 1997
Item 5. Other Events
---------------------
The Registrant announced that Mark A. Pulido had been named Chief
Executive Officer effective April 1, 1997.
5. Form 8-K
Date of Report: February 21, 1997 Date Filed: February 24, 1997
Item 5. Other Events
---------------------
The Registrant announced that it had (i) executed a definitive
agreement to divest Millbrook Distribution Services Inc., its service
merchandising unit, to R.A.B. Holdings, Inc., a private investment
group, and (ii) completed its acquisition of General Medical Inc.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
McKESSON CORPORATION
Date: May 30, 1997 By: /s/Richard H. Hawkins
--------------------------------
Richard H. Hawkins, Vice
President and Chief Financial
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on May 30, 1997 by the following persons on behalf
of the Registrant and in the capacities indicated:
/s/Alan Seelenfreund /s/Mark A. Pulido
- ---------------------------------------- -----------------------------------
Alan Seelenfreund, Chairman of the Board Mark A. Pulido, President and
Chief Executive Officer and
Director
/s/Richard H. Hawkins /s/Heidi E. Yodowitz
- ---------------------------------------- -----------------------------------
Richard H. Hawkins, Vice President and Heidi E. Yodowitz, Controller
Chief Financial Officer
/s/Mary G.F. Bitterman /s/Tully M. Friedman
- ---------------------------------------- -----------------------------------
Mary G.F. Bitterman, Director Tully M. Friedman, Director
/s/John M. Pietruski
- ---------------------------------------- -----------------------------------
John M. Pietruski, Director Carl E. Reichardt, Director
/s/Jane E. Shaw /s/Robert H. Waterman, Jr.
- ---------------------------------------- -----------------------------------
Jane E. Shaw, Director Robert H. Waterman, Jr., Director
15
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
SUPPLEMENTARY FINANCIAL SCHEDULE
The Stockholders and Board of Directors of McKesson Corporation:
We have audited the consolidated financial statements of McKesson Corporation
and subsidiaries as of March 31, 1997, 1996 and 1995, and for the years then
ended and have issued our report thereon dated May 16, 1997. Such consolidated
financial statements and report are included in the 1997 Annual Report to
Stockholders and are incorporated herein by reference. Our audits also included
the consolidated supplementary financial schedule of McKesson Corporation,
listed in Item 14(a). This consolidated supplementary financial schedule is the
responsibility of the Corporation's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such consolidated
supplementary financial schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
San Francisco, California
May 16, 1997
16
<PAGE>
Schedule II
McKESSON CORPORATION - CONSOLIDATED
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND 1995
(in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- --------------------------------- ----------- ------------------------------ ------------ ------------
Additions
------------------------------
Balance at Charged to Charged to
Beginning Costs and Other Balance at
Description of Period Expenses Accounts Deductions/(1)/ End of Period/(2)/
- --------------------------------- ----------- ---------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
AMOUNTS DEDUCTED FROM
ASSETS TO WHICH THEY APPLY:
Year Ended March 31, 1997
- -------------------------
Allowances for doubtful
accounts receivable $23,743 $23,035/(3)/ - $24,800 $21,978
Other reserves 15,240 18,470 - 10,974 22,736
------ ------ ------ ------ ------
$38,983 $41,505 $ - $35,774 $44,714
====== ====== ====== ====== ======
Year Ended March 31, 1996
- -------------------------
Allowances for doubtful
accounts receivable $38,249 $13,679 $ - $28,185 $23,743
Other reserves 13,098 10,595 - 8,453 15,240
------ ------ ------ ------ ------
$51,347 $24,274 $ - $36,638 $38,983
====== ====== ====== ====== ======
Year Ended March 31, 1995
- -------------------------
Allowances for doubtful
accounts receivable $13,582 $49,005/(4)/ $ - $24,338 $38,249
Other reserves 13,135 1,900 - 1,937 13,098
------ ------ ------ ------ ------
$26,717 $50,905 $ - $26,275 $51,347
====== ====== ====== ====== ======
</TABLE>
- ----------------------------------------
NOTES:
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
(1) Deductions:
Written off $25,107 $28,338 $27,324
Credited to other accounts 10,667 8,300 (1,049)
------ ------ ------
Total $35,774 $36,638 $26,275
====== ====== ======
(2) Amounts shown as deductions from:
Current receivables $43,948 $38,088 49,217
Other assets 766 895 2,130
------ ------ ------
Total $44,714 $38,983 $51,347
====== ====== ======
</TABLE>
(3) Includes charges of $15.1 million for receivable reserves related to
management's reevaluation of the U.S. Health Care business' estimated
exposures for bad debts, disputed amounts, customer allowances and rebates.
See Financial Note 4.
(4) Includes charges of $32.2 million for receivable reserves related to
facility closures and a reassessment of credit risks in the Company's
Health Care Services business. See Financial Note 4.
17
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
- ------ ----------------------------------------------------------------------
<S> <C>
2.1 Restructuring and Distribution Agreement dated as of July 10, 1994, by
and among McKesson Corporation, a Delaware corporation ("Old
McKesson"), McKesson Corporation, a Maryland corporation ("Maryland"),
Clinical Pharmaceuticals, Inc. ("CPI"), PCS Health Systems, Inc.
("PCS") and the Company (Exhibit 2.1 (1)).
2.2 Amendment, dated as of October 10,1994, by and among Old McKesson,
Maryland, CPI, PCS and the Company, which amends the Distribution
Agreement (Exhibit 2.2 (3)).
2.3 Second Amendment, dated as of November 3, 1994, by and among Old
McKesson, Maryland, CPI, PCS and the Company, which amends the
Distribution Agreement (Exhibit 2.5 (5)).
2.4 Agreement and Plan of Merger, dated as of July 10, 1994, by and among
Old McKesson, Eli Lilly and Company ("Parent") and ECO Acquisition
Corporation (the "Purchaser") (Exhibit 2.3 (4)).
2.5 Amendment, dated as of August 8, 1994, by and among Old McKesson,
Parent and Purchaser, which amends the Merger Agreement (Exhibit 2.4
(5)).
2.6 Asset Purchase Agreement dated as of October 3, 1996 by and among
FoxMeyer Corporation, FoxMeyer Drug Company, Health Mart, Inc.,
FoxMeyer Software, Inc., FoxMeyer Funding, Inc., Healthcare
Transportation System, Inc. and Merchandise Coordinator Services
Corporation as Sellers, and the Company, as Purchaser and FoxMeyer
Health Corporation (Exhibit 2.1 (10)).
2.7 First Amendment and Waiver to the Asset Purchase Agreement dated as of
November 7, 1996 by and among FoxMeyer Health Corporation, FoxMeyer
Corporation, FoxMeyer Drug Company, Healthcare Transportation System,
Inc., FoxMeyer Software, Inc., FoxMeyer Funding, Inc., Health Mart,
Inc., Merchandise Coordinator Services Corporation d/b/a FoxMeyer
Trading Company, and the Company (Exhibit 2.2(10)).
2.8 Agreement and Plan of Merger, dated as of January 28, 1997, by and
among General Medical Inc., the Company, Spider Acquisition
Corporation and certain stockholders named therein (Exhibit 2.1 (12)).
3.1 Restated Certificate of Incorporation of the Company, as filed with
the Office of the Delaware Secretary of State on February 7, 1996
(Exhibit 3.1 (8)).
3.2 Restated By-Laws of the Company, as amended through May 30, 1997
(Exhibit 4.2 (14)).
4.1 Rights Agreement dated as of September 14, 1994 between the Company
and First Chicago Trust Company of New York, as Rights Agent (Exhibit
4.1 (4)).
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
- ------ ----------------------------------------------------------------------
<S> <C>
4.2 Amended and Restated Declaration of Trust of McKesson Financing Trust,
dated as of February 20, 1997, among the Company, as Sponsor, The
First National Bank of Chicago, as Institutional Trustee, First
Chicago Delaware, Inc., as Delaware Trustee and William A. Armstrong,
Ivan D. Meyerson and Nancy A. Miller, as Regular Trustees (Exhibit 4.2
(15)).
4.3 McKesson Corporation Preferred Securities Guarantee Agreement, dated
as of February 20, 1997, between the Company, as Guarantor, and The
First National Bank of Chicago, as Preferred Guarantor Trustee
(Exhibit 4.7 (13)).
4.4 Indenture dated as of March 11, 1997, by and between the Company, as
Issuer, and The First National Bank of Chicago, as Trustee.
4.5 Registrant agrees to furnish to the Commission upon request a copy of
each instrument with respect to issues of long-term debt of the
Registrant, the authorized principal amount of which does not exceed
10% of the total assets of the Registrant.
10.1 Tax Sharing Agreement, dated as of July 10, 1994, among the Company,
Old McKesson, Parent and the Purchaser (Exhibit 10.1 (1)).
10.2 HDS Services Agreement, dated as of July 10, 1994, among Parent, PCS
and Healthcare Delivery Systems, Inc. (Exhibit 10.2 (1)).
10.3 McKesson Services Agreement, dated as of July 10, 1994, between PCS
and the Company (Exhibit 10.3 (1)).
10.4 Memorandum of Understanding, dated as of July 10, 1994, between Parent
and the Company (Exhibit 10.4 (1)).
10.5 Non-Competition Agreement, dated as of July 10, 1994, between the
Company, Old McKesson, the Purchaser and Parent (Exhibit 10.5 (1)).
* 10.6 McKesson Corporation 1994 Stock Option and Restricted Stock Plan (as
amended through March 26, 1997).
* 10.7 McKesson Corporation Supplemental PSIP (Exhibit 10.7 (2)).
* 10.8 McKesson Corporation Deferred Compensation Administration Plan amended
as of March 30, 1994 (Exhibit 10.8 (2)).
* 10.9 McKesson Corporation Deferred Compensation Administration Plan II as
amended though September 28, 1994 (Exhibit 10.9 (2)).
* 10.10 McKesson Corporation Directors' Deferred Compensation Plan (Exhibit
10.10 (2)).
* 10.11 McKesson Corporation 1994 Option Gain Deferral Plan (Exhibit 10.12
(3)).
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
- ------ ----------------------------------------------------------------------
<S> <C>
* 10.12 McKesson Corporation 1985 Executives' Elective Deferred Compensation
Plan (Exhibit 10.13 (2)).
* 10.13 McKesson Corporation Management Deferred Compensation Plan (Exhibit
10.14 (2)).
* 10.14 McKesson Corporation 1984 Executive Benefit Retirement Plan as amended
through May 30, 1997.
* 10.15 McKesson Corporation 1988 Executive Survivor Benefits Plan (Exhibit
10.16 (2)).
* 10.16 McKesson Corporation Executive Medical Plan Summary (Exhibit 10.17
(3)).
* 10.17 McKesson Corporation 1988 Management Survivor Benefits Plan (Exhibit
10.18 (2)).
* 10.18 McKesson Corporation Severance Policy for Executive Employees (amended
and restated as of May 31, 1996) (Exhibit 10.2 (9)).
* 10.19 McKesson Corporation 1989 Management Incentive Plan (Amended and
Restated Effective April 26, 1995) (Exhibit B (6)).
* 10.20 McKesson Corporation 1981 Long-Term Incentive Plan (As amended through
January 29, 1997) (Exhibit C (16)).
* 10.21 McKesson Corporation Stock Purchase Plan (As amended and restated
through March 26, 1997) (Exhibit B (16)).
* 10.22 Form of Termination Agreement by and between the Company and certain
designated Executive Officers (Exhibit 10.23 (7)).
* 10.23 Description of McKesson Corporation Retirement Program for Nonemployee
Directors (Exhibit 10.24 (7)).
* 10.24 Separation and Mutual General Release Agreement entered into as of
February 12,1996 by and between the Company and a former Executive
Officer (Exhibit 10.24 (8)).
* 10.25 Form of Employment Agreement effective as of January 31, 1996 by and
between the Company and corporate Vice President who is also President
of the Company's Health Systems unit (Exhibit 10.1 (9)).
* 10.26 Form of Employment Agreement, made effective as of May 20, 1996, by
and between the Company and its President and Chief Operating Officer
(now Chief Executive Officer).
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
------ ----------------------------------------------------------------------
<S> <C>
10.27 Agreement and Plan of Merger, dated as of November 26, 1996, by and
among Armor All Products Corporation, The Clorox Company and Shield
Acquisition Corporation (Exhibit 10.1 (11)).
10.28 First Amendment to the Agreement and Plan of Merger, dated as of
December 1, 1996, by and among Armor All Products Corporation, The
Clorox Company and Shield Acquisition Corporation (Exhibit 10.2 (11)).
10.29 Stockholder Agreement, dated as of November 26, 1996, by and among the
Company, The Clorox Company and Shield Acquisition Corporation
(Exhibit 10.3 (11)).
* 10.30 McKesson Corporation 1997 Non-Employee Directors' Equity Compensation
and Deferral Plan (Exhibit A (16)).
* 10.31 Form of Employment Agreement, dated as of January 27, 1997, by and
between the Company and a corporate Vice President who is also
Chairman and Chief Executive Officer of General Medical Inc., a wholly-
owned subsidiary of the Company.
* 10.32 Form of Consulting Agreement, dated as of March 28, 1997, by and
between the Company and its Chairman and former Chief Executive
Officer.
10.33 Credit Agreement entered into as of March 31, 1995, among the Company,
Medis Health and Pharmaceutical Services Inc., an indirect wholly-
owned subsidiary of the Company, the several financial institutions
from time to time party to the agreement (collectively the "Banks"),
Bank of America National Trust and Savings Association, as Agent for
the Banks, Chemical Bank, as Co-Agent for the Banks and Bank of
America Canada, as Canadian Administrative Agent. (Exhibit 10.25 (7)).
10.34 Custodial Agreement Acknowledgment entered into as of March 31, 1995,
among the Company and Bank of America National Trust and Savings
Association (the "Custodian") in its capacity as Custodian under the
Custodial Agreement and as Agent for the Banks from time to time party
to the Credit Agreement. (Exhibit 10.26 (7)).
10.35 Pledge Agreement entered into as of March 31, 1995 among the Company
(the "Pledgor") and Bank of America National Trust and Savings
Association, as Agent for the Banks from time to time party to the
Credit Agreement. (Exhibit 10.27 (7)).
10.36 Guaranty entered into as of March 31, 1995 among the Company (the
"Guarantor"), in favor of and for the benefit of Bank of America
National Trust and Savings Association, as Agent for and
representative of the Banks party to the Credit Agreement. (Exhibit
10.28 (7)).
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
------ ---------------------------------------------------------------------
<S> <C>
10.37 First Amendment to Credit Agreement dated as of August 31, 1995, among
the Company, Medis Health and Pharmaceutical Services Inc., an
indirect wholly-owned subsidiary of the Company, the several financial
institutions party to the 1995 Credit Agreement (the "Banks"), Bank of
America Canada as Canadian Administrative Agent, Chemical Bank as co-
agent for the Banks, the Bank of America National Trust and Savings
Association as agent for the Banks.
10.38 Second Amendment to Credit Agreement dated as of April 10, 1996, among
the Company, Medis Health and Pharmaceutical Services Inc., an
indirect wholly-owned subsidiary of the Company, the several financial
institutions party to the 1995 Credit Agreement (the "Banks"), Bank of
America Canada as Canadian Administrative Agent, The Chase Manhattan
Bank as co-agent for Banks, and Bank of America National Trust and
Savings Association as agent for the Banks.
10.39 Third Amendment to Credit Agreement dated as of November 4, 1996,
among the Company, Medis Health and Pharmaceutical Services Inc., an
indirect wholly-owned subsidiary of the Company, the several financial
institutions party to the 1995 Credit Agreement (the "Banks"), Bank of
America Canada as Canadian Administrative Agent, The Chase Manhattan
Bank as co-agent for the Banks, and Bank of America National Trust and
Savings Association as agent for the Banks.
10.40 Pledge and Security Agreement entered into as of August 31, 1995,
among Macfor International Finance Company, a wholly-owned subsidiary
of the Company, and Bank of America National Trust and Savings
Association, as agent for the several financial institutions from time
to time party to the 1995 Credit Agreement.
10.41 Custody Agreement dated as of August 14, 1995, between Bank of America
National Trust and Savings Association, as Custodian, and Macfor
International Finance Company, a wholly-owned subsidiary of the
Company.
10.42 Custodial Agreement Acknowledgment entered into as of August 31, 1995,
between Macfor International Finance Company, a wholly-owned
subsidiary of the Company, and Bank of America National Trust and
Savings Association, as custodian and as agent for the several
financial institutions from time to time party to the 1995 Credit
Agreement.
10.43 Credit Agreement entered into as of November 4, 1996, among the
Company, the several financial institutions from time to time party to
the agreement (the "Banks"), The Chase Manhattan Bank as co-agent for
the Banks, and Bank of America National Trust and Savings Association
as agent for the Banks.
10.44 Letter Loan Agreement dated as of February 21, 1997, between the
Company and Bank of America National Trust and Savings Association.
11 Computation of Earnings Per Common Share for the Five Years Ended
March 31, 1997.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
- ------ ----------------------------------------------------------------------
<S> <C>
13 1997 Annual Report to Stockholders. Portions not incorporated by
reference are furnished for informational purposes and are not deemed
to be filed herewith.
21 List of Subsidiaries of the Company.
23 Independent Auditors' Consent.
27 Financial Data Schedule.
99 Registration Rights Agreement, dated as of January 28, 1997, by and
among the Company and certain stockholders named therein (Exhibit 99.2
(12)).
</TABLE>
- ----------------------------------------
Footnotes to Exhibit Index:
* Denotes management contract or compensatory plan, contract or arrangement.
(1) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form 10 filed with the Commission on July 27,
1994, File No. 1-13252.
(2) Incorporated by reference to designated exhibit to Amendment No. 1 to the
Company's Registration Statement on Form 10 filed with the Commission on
August 26, 1994, File No. 1-13252.
(3) Incorporated by reference to designated exhibit to Amendment No. 2 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 11, 1994, File No. 1-13252.
(4) Incorporated by reference to designated exhibit to Amendment No. 3 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 27, 1994, File No. 1-13252.
(5) Incorporated by reference to designated exhibit to Amendment No. 4 to the
Company's Registration Statement on Form 10 filed with the Commission on
November 7, 1994, File No. 1-13252.
(6) Incorporated by reference to designated exhibit to the Company's definitive
Proxy Statement dated June 9, 1995 for the Annual Meeting of Stockholders
held on July 26, 1995.
(7) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1995, File No.
1-13252.
(8) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, as amended by
Amendment No. 1 on Form 10-K/A, filed on February 13, 1997, File No. 1-
13252.
(9) Incorporated by reference to designated exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1996, File No. 1-13252.
(10) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission on November 22, 1996, File No.
1-13252.
(11) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission on December 10, 1996, File No.
1-13252.
(12) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission on February 5, 1997, File No.
1-13252.
(13) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-3 filed with the Commission on May 2,
1997, Registration No. 333-26443.
(14) Incorporated by reference to designated exhibit to Amendment No. 1 to the
Company's Registration Statement on Form S-3 filed with the Commission on
June 9, 1997, Registration No. 333-26103.
(15) Incorporated by reference to designated exhibit to Amendment No. 1 to the
Company's Registration Statement of Form S-3 filed with the Commission on
June 18, 1997, Registration No. 333-26443.
(16) Incorporated by reference to designated exhibit to the Company's definitive
Proxy Statement dated June 18, 1997, for the Annual Meeting of Stockholders
to be held on July 30, 1997.
23
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>2
<DESCRIPTION>INDENTURE DATED AS OF MARCH 11, 1997
<TEXT>
<PAGE>
Exhibit 4.4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
McKESSON CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
Indenture
Dated as of March 11, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act (as defined herein) and Indenture
dated as of March 11, 1997 between McKESSON CORPORATION and THE FIRST NATIONAL
BANK OF CHICAGO, Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
<S> <C>
310(a)(1) and (2)...............................................................................................6.9
310(a)(3) and (4)......................................................................................Inapplicable
310(b).................................................................................6.8 and 6.10(a), (b) and (d)
310(c).................................................................................................Inapplicable
311(a).........................................................................................................6.14
311(b).........................................................................................................6.14
311(c).................................................................................................Inapplicable
312(a)..................................................................................................4.1 and 4.2
312(b)..........................................................................................................4.2
312(c)..........................................................................................................4.2
313(a)..........................................................................................................4.3
313(b)(1)..............................................................................................Inapplicable
313(b)(2).......................................................................................................4.3
313(c)...................................................................................4.3, 5.11, 6.10, 6.11, 8.2
and 12.2
313(d)..........................................................................................................4.3
314(a)..................................................................................................3.5 and 4.2
314(b).................................................................................................Inapplicable
314(c)(1) and (2)..............................................................................................11.5
314(c)(3)..............................................................................................Inapplicable
314(d).................................................................................................Inapplicable
314(e).........................................................................................................11.5
314(f).................................................................................................Inapplicable
315(a), (c) and (d).............................................................................................6.1
315(b).........................................................................................................5.11
315(e).........................................................................................................5.12
316(a)(1)..............................................................................................5.9 and 5.10
316(a)(2)..............................................................................................Not required
316(a) (last sentence)..........................................................................................7.4
316(b)..........................................................................................................5.7
317(a)..........................................................................................................5.2
317(b)...............................................................................................3.4(a) and (b)
318(a).........................................................................................................11.7
</TABLE>
*This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE I DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED....................................................... 1
ARTICLE II SECURITIES
SECTION 2.1 FORMS GENERALLY............................................................. 7
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION...................................................... 7
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES........................................ 8
SECTION 2.4 AUTHENTICATION AND DELIVERY OF
SECURITIES.......................................................... 11
SECTION 2.5 EXECUTION OF SECURITIES..................................................... 13
SECTION 2.6 CERTIFICATE OF AUTHENTICATION............................................... 14
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES;
PAYMENTS OF INTEREST................................................ 14
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE......................................... 15
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND
STOLEN SECURITIES................................................... 21
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION
THEREOF............................................................. 22
SECTION 2.11 TEMPORARY SECURITIES........................................................ 22
ARTICLE III COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST........................................... 23
SECTION 3.2 OFFICES FOR PAYMENTS, ETC................................................... 23
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE
OF TRUSTEE.......................................................... 24
SECTION 3.4 PAYING AGENTS............................................................... 24
SECTION 3.5 COMPLIANCE CERTIFICATES..................................................... 25
SECTION 3.6 CORPORATE EXISTENCE......................................................... 26
SECTION 3.7 MAINTENANCE OF PROPERTIES................................................... 26
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS........................................... 26
SECTION 3.9 LUXEMBOURG PUBLICATIONS..................................................... 26
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE IV SECURITYHOLDER LISTS AND REPORTS BY THE
<S> <C> <C>
ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS
TO NAMES AND ADDRESSES OF
SECURITYHOLDERS..................................................... 27
SECTION 4.2 REPORTS BY THE ISSUER....................................................... 27
SECTION 4.3 REPORTS BY THE TRUSTEE...................................................... 27
ARTICLE V REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF
DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED, ACCELERATION
OF MATURITY; WAIVER OF DEFAULT...................................... 29
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE;
TRUSTEE MAY PROVE DEBT.............................................. 32
SECTION 5.3 APPLICATION OF PROCEEDS..................................................... 34
SECTION 5.4 SUITS FOR ENFORCEMENT....................................................... 35
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT
OF PROCEEDINGS...................................................... 35
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITY HOLDERS.................................... 35
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS
TO INSTITUTE CERTAIN SUITS.......................................... 36
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY
OR OMISSION NOT WAIVER OF DEFAULT................................... 36
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES............................................ 36
SECTION 5.10 WAIVER OF PAST DEFAULTS..................................................... 37
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT
MAY WITHHOLD IN CERTAIN
CIRCUMSTANCES....................................................... 37
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF
UNDERTAKING TO PAY COSTS............................................ 37
ARTICLE VI CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE
TRUSTEE; DURING DEFAULT; PRIOR TO
DEFAULT............................................................. 38
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE............................................... 39
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITION OF SECURITIES OR
APPLICATION OF PROCEEDS THEREOF..................................... 40
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES
OR COUPONS; COLLECTIONS, ETC........................................ 41
SECTION 6.5 MONEYS HELD BY TRUSTEE...................................................... 41
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF
TRUSTEE AND ITS PRIOR CLAIM......................................... 41
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S
CERTIFICATE, ETC.................................................... 41
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL
CONFLICTING INTERESTS FOR THE
TRUSTEE............................................................. 42
SECTION 6.9 QUALIFICATION OF TRUSTEE: CONFLICTING
INTERESTS........................................................... 42
SECTION 6.10 PERSONS ELIGIBLE FOR APPOINTMENT AS
TRUSTEE............................................................. 42
SECTION 6.11 RESIGNATION AND REMOVAL; APPOINTMENT
OF SUCCESSOR TRUSTEE................................................ 42
SECTION 6.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
TRUSTEE............................................................. 44
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS OF TRUSTEE................................... 45
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE ISSUER.................................................. 45
SECTION 6.15 APPOINTMENT OF AUTHENTICATING AGENT......................................... 46
ARTICLE VII CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY
SECURITYHOLDERS............................................................. 47
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND
OF HOLDING OF SECURITIES............................................ 47
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS............................................. 47
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT
OUTSTANDING......................................................... 47
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN......................................... 48
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE VIII SUPPLEMENTAL INDENTURES
<S> <C> <C>
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CON-
SENT OF SECURITYHOLDERS............................................. 48
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT
OF SECURITYHOLDERS.................................................. 50
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE............................................ 51
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE............................................ 51
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF
SUPPLEMENTAL INDENTURES............................................. 52
ARTICLE IX CONSOLIDATION, MERGER, SALE OR
CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON
CERTAIN TERMS....................................................... 52
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED........................................... 52
SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE...................................... 53
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE..................................... 53
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS
DEPOSITED FOR PAYMENT OF
SECURITIES.......................................................... 57
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING
AGENT............................................................... 57
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND
PAYING AGENT UNCLAIMED FOR TWO
YEARS............................................................... 57
SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OF
OBLIGATIONS......................................................... 58
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS OF ISSUER EXEMPT
FROM INDIVIDUAL LIABILITY........................................... 58
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE
BENEFIT OF PARTIES AND HOLDERS OF
SECURITIES AND COUPONS.............................................. 58
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND
BY INDENTURE........................................................ 58
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE
AND HOLDERS OF SECURITIES AND
COUPONS............................................................. 58
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF
COUNSEL; STATEMENTS TO BE
CONTAINED THEREIN................................................... 59
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND
HOLIDAYS............................................................ 60
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE
WITH TRUST INDENTURE ACT............................................ 60
SECTION 11.8 NEW YORK LAW TO GOVERN...................................................... 60
SECTION 11.9 COUNTERPARTS................................................................ 61
SECTION 11.10 EFFECT OF HEADINGS.......................................................... 61
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN
ECU................................................................. 61
SECTION 11.12 JUDGMENT CURRENCY........................................................... 61
ARTICLE XII REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE.................................................... 62
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL
REDEMPTIONS......................................................... 62
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR
REDEMPTION.......................................................... 64
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM
ELIGIBILITY FOR SELECTION FOR
REDEMPTION.......................................................... 65
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS........................................ 65
</TABLE>
v
<PAGE>
THIS INDENTURE, dated as of March 11, 1997, by and between McKESSON
CORPORATION, a Delaware corporation (the "Issuer"), and THE FIRST NATIONAL BANK
OF CHICAGO, a national banking association, as trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities and of the coupons, if any, appertaining thereto as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act"), are referred to in
the Trust Indenture Act, including terms defined therein by reference to the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meaning assigned to such terms in
the Trust Indenture Act and in the Securities Act as in effect from time to
time. All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation
unless a different time shall be specified with respect to such series of
Securities as provided for in Section 2.3. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not
1
<PAGE>
to any particular Article, Section or other subdivision. The terms defined in
this Article have the meanings assigned to them in this Article and include the
plural as well as the singular.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor provision.
"Authenticating Agent" shall have the meaning set forth in Section
6.15.
"Authorized Newspaper" means a newspaper (which, in the case of The
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), in the case of the United Kingdom of Great Britain and Northern
Ireland (the "United Kingdom"), will, if prac ticable, be The Financial Times
(London Edition) and, in the case of the Grand Duchy of Luxembourg
("Luxembourg"), will, if practicable, be the Luxemburger Wort) published in an
official or common language of the county of publication customarily published
at least once a day for at least five days in each calendar week and of general
circulation in The City of New York, the United Kingdom or Luxembourg, as
applicable. If it shall be impractical in the opinion of the Trustee to make
any publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day other than
any day on which banking institutions in the city (or in any of the cities, if
more than one) in which amounts are payable, as specified in the form of such
Security, are authorized or required by any applicable law or regulation to be
closed.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution and delivery of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, as of the date of this Indenture,
located at One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Administration.
"Coupon" means any interest coupon appertaining to an Unregistered
Security.
"Covenant Defeasance" shall have the meaning set forth in Section
10.1(C).
2
<PAGE>
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Registered Global
Securities of that series.
"Dollar" or "$" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the European Monetary System of the European Community.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Value" when used with respect to any Voting Stock means the fair
value as determined in good faith by the Board of Directors of the Issuer.
"Foreign Currency" means a currency issued by the government of a
country other than the United States of America.
"Holder," "Holder of Securities," "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury, or any successor entity.
"Issuer" means (except as otherwise provided in Article IX) McKesson
Corporation, a Delaware corporation, and, subject to Article IX, its successors
and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer.
3
<PAGE>
"Judgment Currency" has the meaning set forth in Section 11.12.
"Non-U.S. Person" means any person that is not a "U.S. person" as such
term is defined in Rule 902 of the Securities Act.
"Officer's Certificate" means a certificate signed by the chairman of
the Board of Directors, the president or any vice president or the treasurer of
the Issuer and delivered to the Trustee. Each such certificate shall comply
with Section 314 of the Trust Indenture Act and include the statements provided
for in Section 11.5.
"144A Global Security" has the meaning set forth in Section 2.8(b)(i).
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of the Issuer or other counsel satisfactory to
the Trustee. Each such opinion shall comply with Section 314 of the Trust
Indenture Act and include the statements provided for in Section 11.5.
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in Section 7.4), when used
with reference to Securities, means, subject to the provisions of Section 7.4,
as of any particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in Section
10.1) in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders of
such Securities (if the Issuer shall act as its own paying agent),
provided, that if such Securities, or portions thereof, are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been
given as herein provided, or provisions satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered pursuant
to the terms of Section 2.9 (except with respect to any such Security as to
which proof satisfactory to the Trustee
4
<PAGE>
is presented that such Security is held by a person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite principal amount
of Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PORTAL Market" means Private Offerings, Resales and Trading through
Automatic Linkages Market.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any," provided, however, that such inclusion of premium, if any, shall under no
circumstances result in the double counting of such premium for the purpose of
any calculation required hereunder.
"QIB" or "Qualified Institutional Buyer" means "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" shall have the meaning set forth in Section 2.7.
"Registered Global Security" means a Security evidencing all or a part
of a series of Registered Securities, issued to the Depositary for such series
in accordance with Section 2.4, and bearing the legend prescribed in Section 2.4
and any other legend required by the Depositary for such series.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Regulation S" means Regulation S under the Securities Act, or any
successor provision.
"Regulation S Global Security" has the meaning set forth in Section
2.8(b).
5
<PAGE>
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"Vice President"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"Restricted Security" has the meaning set forth in Section 2.8(b).
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144K" means Rule 144(k) under the Securities Act.
"Security" or "Securities" (except as otherwise provided in Section
7.4) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having the voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time of
determination directly or indirectly owned by the Issuer, or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.
"Transfer Restriction Termination Date" means the earlier of the first
date on which (i) the Securities of a series (other than such Securities
acquired by the Issuer or any Affiliate thereof since the issue date of such
Securities) may be sold pursuant to Rule 144K (or any successor provision) and
(ii) all such Securities have been exchanged or sold pursuant to an effective
registration statement.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article VI, shall also
include any successor trustee. "Trustee" shall also mean or include each Person
who is then a trustee hereunder and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
6
<PAGE>
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(A).
"Voting Stock" means stock of any class or classes having general
voting power under ordinary circumstances to elect a majority of the board of
directors, managers or trustees of the corporation in question, provided, that,
for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered voting stock
whether or not such event shall have happened.
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE II
SECURITIES
SECTION 2.1 FORMS GENERALLY. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to but not set forth in a Board Resolution, an Officer's
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
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"This is one of the Securities referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By ______________________________
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the within-mentioned
Indenture.
[_________________________________]
as Authenticating Agent
By _______________________________
Authorized Signatory"
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with all other unsecured and
unsubordinated debt of the Issuer. There shall be established in or pursuant to
one or more Board Resolutions (and to the extent established pursuant to but
not set forth in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series, and which may be part of a series of Securities previously issued;
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities
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authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin or currency in which the
Securities of the series are denominated (including, but not limited to,
any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined;
(6) the place or places where the principal of and any interest on
Securities of the series shall be payable, if other than as provided in
Section 3.2;
(7) the right, if any, of the Issuer to redeem Securities, in whole
or in part, at its option and the period or periods within which, the price
or prices at which and any terms and conditions upon which Securities of
the series may be so redeemed, pursuant to any sinking fund or otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the
case of Unregistered Securities, the denominations in which Securities of
the series shall be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities of
the series are denominated, the coin or currency in which payment of the
principal of or interest on the Securities of such series shall be payable;
(12) if the principal of or interest on the Securities of the series
are to be payable, at the election of the Issuer or a Holder thereof, in a
coin or currency other than
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that in which the Securities are denominated, the period or periods within
which, and the terms and conditions upon which, such election may be made;
(13) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, the manner in which such amounts shall be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable
as Registered Global Securities) or Unregistered Securities (with or
without Coupons), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Unregistered Securities or the
payment of interest thereon and, if other than as provided in Section 2.8,
the terms upon which Unregistered Securities of any series may be exchanged
for Registered Securities of such series and vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to
redeem the Securities of the series rather than pay such additional
amounts;
(16) if the Securities of the series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars of any other agents with respect to the
Securities of such series;
(18) any other events of default or covenants with respect to the
Securities of such series;
(19) if the Securities of the series are to be convertible into or
exchangeable for any other security; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any, appertaining
thereto shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and may be issued from time to time,
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consistent with the terms of this Indenture, if so provided by or pursuant to
such Board Resolution, such Officer's Certificate or in any indenture
supplemental hereto.
SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURITIES. The Issuer
may deliver Securities of any series having attached thereto appropriate
Coupons, if any, executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section 2.4,
and the Trustee shall thereupon authenticate and deliver such Securities and
Coupons, if any, to or upon the order of the Issuer (contained in the Issuer
Order referred to below in this Section) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from time
to time by an Issuer Order. The maturity date, original issue date, interest
rate and any other terms of the Securities of such series and Coupons, if any,
appertaining thereto shall be determined by or pursuant to such Issuer Order and
procedures. If provided for in such procedures, such Issuer Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Issuer or its duly authorized agent or agents, which instructions, if oral,
shall be promptly confirmed in writing. In authenticating such Securities and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the case of
subparagraphs (2), (3) and (4) below only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such series)
and (subject to Section 6.1) shall be fully protected in relying upon, the
following enumerated documents unless and until such documents have been
superseded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities and Coupons, if any, are not to be
delivered to the Issuer, provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to an Issuer Order
or pursuant to procedures acceptable to the Trustee as may be specified
from time to time by an Issuer Order, (c) the maturity date or dates,
original issue date or dates, interest rate or rates and any other terms of
Securities of such series shall be determined by an Issuer Order or
pursuant to such procedures and (d) if provided for in such procedures,
such Issuer Order may authorize authentication and delivery pursuant to
oral or electronic instructions from the Issuer or its duly authorized
agent or agents, which instructions, if oral, shall be promptly confirmed
in writing;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Section 2.1 and 2.3 by or pursuant to
which the forms and terms of the Securities and Coupons, if any, were
established;
(3) an Officer's Certificate setting forth the form or forms and
terms of the Securities and Coupons, if any, stating that the form or forms
and terms of the Securities
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and Coupons, if any, have been established pursuant to Sections 2.1 and 2.3
and comply with this Indenture, and covering such other matters as the
Trustee may reasonably request; and
(4) At the option of the Issuer, either one or more Opinions of
Counsel, or a letter addressed to the Trustee permitting it to rely on one
or more Opinions of Counsel, substantially to the effect that:
(a) the form or forms of the Securities and Coupons, if any,
have been duly authorized and established in conformity with the
provisions of this Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities have been duly authorized and established in conformity
with the provisions of this Indenture, and, in the case of an offering
that is not underwritten, certain terms of the Securities have been
established pursuant to a Board Resolution, an Officer's Certificate
or a supplemental indenture in accordance with this Indenture, and
when such other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established, all such
terms will have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture; and
(c) such Securities and Coupons, if any, when executed by the
Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, and subject to any conditions specified in such
Opinion of Counsel, will have been duly issued under this Indenture,
will be entitled to the benefits of this Indenture, and will be valid
and binding obligations of the Issuer, enforceable in accordance with
their respective terms except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency or similar laws affecting
creditors' rights generally, (ii) rights of acceleration, if any, and
(iii) the availability of equitable remedies may be limited by
equitable principles of general applicability and such counsel need
express no opinion with regard to the enforceability of Section 6.6 or
of a judgment denominated in a currency other than Dollars.
In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent transfer and
other similar laws affecting the rights and remedies of creditors and is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely upon
opinions of other counsel (copies of which shall be delivered to the Trustee)
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes he and the Trustee are entitled so to rely. Such
counsel may also state that, insofar as
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such opinion involves factual matters, he has relied, to the extent he deems
proper, upon certificates of officers of the Issuer and its subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee or a trust committee of directors or trustees shall
determine that such action would expose the Trustee to personal liability to
existing Holders or would affect the Trustee's own rights, duties or immunities
under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or delivered or held pursuant to
such Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
SECTION 2.5 EXECUTION OF SECURITIES. The Securities and each Coupon
appertaining thereto, if any, shall be signed on behalf of the Issuer by the
chairman or vice chairman of its Board of Directors or its president, or any
executive (senior or other), a vice president or its treasurer, under its
corporate seal (except in the case of Coupons) which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the
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Trustee or disposed of by the Issuer, such Security or Coupon nevertheless may
be authenticated and delivered or disposed of as though the person who signed
such Security or Coupon had not ceased to be such officer of the Issuer; and any
Security or Coupon may be signed on behalf of the Issuer by such persons as, at
the actual date of the execution of such Security or Coupon, shall be the proper
officers of the Issuer, although at the date of the execution and delivery of
this Indenture any such person was not such an officer.
SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of any
series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series are
not so established, such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
Board Resolution referred to in Section 2.3. The Securities of each series
shall bear interest, if any, from the date, and such interest shall be payable
on the dates, established as contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the
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Issuer to the Holders of Registered Securities not less than 15 days preceding
such subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) for the
Securities of any series shall mean the date specified as such in the terms of
the Registered Securities of such series established as contemplated by
Section 2.3, or, if no such date is so established, if such interest payment
date is the first day of a calendar month, the fifteenth day of the preceding
calendar month or, if such interest payment date is the fifteenth day of a
calendar month, the first day of such calendar month, whether or not such record
date is a Business Day.
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. (a) The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as the Issuer may prescribe, it will
provide for the registration of Registered Securities of such series and the
registration of transfer of Registered Securities of such series. Such register
shall be in written form in the English language or in any other form capable of
being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, at the option of the Holder thereof, except as otherwise
specified pursuant to Section 2.3, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. At the option of
the Holder thereof, if Unregistered Securities of any series, maturity date,
interest rate and
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original issue date are issued in more than one authorized denomination, except
as otherwise specified pursuant to Section 2.3, such Unregistered Securities may
be exchanged for Unregistered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2 or as specified
pursuant to Section 2.3, with, in the case of Unregistered Securities that have
Coupons attached, all unmatured Coupons and all matured Coupons in default
thereto appertaining, and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. Registered Securities of any series may not be
exchanged for Unregistered Securities of such series unless (1) otherwise
specified pursuant to Section 2.3 and (2) the Issuer has delivered to the
Trustee an Opinion of Counsel that (x) the Issuer has received from the IRS a
ruling or (y) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that the inclusion of terms
permitting Registered Securities to be exchanged for Unregistered Securities
would result in no Federal income tax effect adverse to the Issuer or to any
Holder. Whenever any Securities are so surrendered for exchange, the Issuer
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. All Securities and
Coupons, if any, surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly cancelled and disposed of by the Trustee, and the
Trustee shall deliver a certificate of disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed, by the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days preceding the first
mailing of notice of redemption of Securities of such series to be redeemed or
(b) any Securities selected, called or being called for redemption, in whole or
in part, except, in the case of any Security to be redeemed in part, the portion
thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
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If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or if at any time the Depositary for such Registered
Securities shall no longer be eligible under Section 2.4, the Issuer shall
appoint a successor Depositary eligible under Section 2.4 with respect to such
Registered Securities. If a successor Depositary eligible under Section 2.4 for
such Registered Securities is not appointed by the Issuer within 90 days after
the Issuer receives such notice or becomes aware of such ineligibility, the
Issuer's election pursuant to Section 2.3 that such Registered Securities be
represented by one or more Registered Global Securities shall no longer be
effective and the Issuer will execute, and the Trustee, upon receipt of an
Officer's Certificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing such Registered
Securities in exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of any Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized denominations
as requested by such Person, in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Registered Global
Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount
of the surrendered Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and delivered pursuant to
clause (i) above.
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Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in Federal income tax consequences adverse to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
(b)(i) Securities that are distributed to QIBs will be represented by a
global Security (the "144A Global Security"). Securities that are distributed to
Non-U.S. Persons will be represented by a global Security (the "Regulation S
Global Security"). Each of the 144A Global Security and the Regulation S Global
Security shall be referred to herein as a "Global Security." If Global
Securities are issued, transfers of interests in the Securities between the 144A
Global Security and the Regulation S Global Security will be made in accordance
with the standing instructions and procedures of the Depositary and its
participants and the Trustee shall make appropriate endorsements to reflect
increases or decreases in the principal amounts of such Global Securities to
reflect any such transfers.
Except as provided below, beneficial owners of a Security in global
form shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Securities in global
form.
(ii) So long as the Securities are eligible for book-entry
settlement, and to the extent that Securities are held by QIBs or Non-U.S.
Persons, as the case may be, in a Global Security, or unless otherwise required
by law, upon any transfer of a definitive Security to a QIB in accordance with
Rule 144A or to a Non-U.S. Person in accordance with Regulation S, unless
otherwise requested by the transferor, and upon receipt of the definitive
Security or Securities being so transferred, together with a certification from
the transferor that the transfer is being
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made in compliance with Rule 144A or Regulation S, as the case may be (or other
evidence satisfactory to the Trustee), the Trustee shall make an endorsement on
any 144A Global Security or any Regulation S Global Security, as the case may
be, to reflect an increase in the aggregate principal amount of the Securities
represented by such Global Security, and the Trustee shall cancel such
definitive Security or Securities in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount of Securities
represented by such Global Security to be increased accordingly; provided that
no definitive Security, or portion thereof, in respect of which the Issuer or an
Affiliate of the Issuer held any beneficial interest shall be included in such
Global Security until such definitive Security is freely tradable in accordance
with Rule 144K; provided further that the Trustee shall, at the written request
of the Issuer, issue Securities in definitive form upon any transfer of a
beneficial interest in the Global Security to the Issuer or any Affiliate of the
Issuer.
Any Global Security may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary, by the New
York Stock Exchange or by the National Association of Securities Dealers, Inc.
in order for the Securities to be tradeable on the PORTAL Market or as may be
required for the Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange upon which the Securities may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Securities are subject.
(iii) Each Security that bears or is required to bear the legend set
forth in this Section 2.8(b) (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this
Section 2.8(b), unless such restrictions on transfer shall be waived by the
written consent of the Issuer, and the Holder of each Restricted Security, by
such Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.8(b), the term "transfer" encompasses any
sale, pledge, transfer or other disposition of any Restricted Security.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Security shall bear a legend in substantially the following form,
unless otherwise agreed by the Issuer (with written notice thereof to the
Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS
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DEFINED IN RULE 50l(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2)
AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON CORPORATION
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE FOR THE SECURITIES A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE
SECURITIES. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE SECURITIES SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
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Following the Transfer Restriction Termination Date, any Security or
security issued in exchange or substitution therefor (other than Securities
acquired by the Issuer or any Affiliate thereof since the issue date of the
Securities) may upon surrender of such Security for exchange to the registrar in
accordance with the provisions of this Section 2.8, be exchanged for a new
Security or Securities, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.8(b).
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall be mutilated, defaced, destroyed, lost or
stolen, the Issuer in its discretion may execute and, upon the written request
of any officer of the Issuer, the Trustee shall authenticate and deliver, a new
Security of the same series, maturity date, interest rate and original issue
date, bearing a number or other distinguishing symbol not contemporaneously
outstanding, in exchange and substitution for the mutilated or defaced Security,
or in lieu of and in substitution for the Security so destroyed, lost or stolen
with Coupons corresponding to the Coupons appertaining to the Securities so
mutilated, defaced, destroyed, lost or stolen, or in exchange or substitution
for the Security to which such mutilated, defaced, destroyed, lost or stolen
Coupon appertained, with Coupons appertaining thereto corresponding to the
Coupons so mutilated, defaced, destroyed, lost or stolen. In every case the
applicant for a substitute Security or Coupon shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each of
them harmless and, in every case of destruction, loss or theft, evidence to
their satisfaction of the destruction, loss or theft of such Security or Coupon
and of the ownership thereof, and in the case of mutilation or defacement shall
surrender the Security and related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) or its agent connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same or the relevant Coupon (without surrender
thereof except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or indemnity as any of them
may require to save each of them harmless, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security or Coupons and of the ownership
thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and
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shall be entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Securities or Coupons of such series duly authenticated
and delivered hereunder. All Securities and Coupons shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced or destroyed, lost or stolen Securities and Coupons and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if any, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee, shall
be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities and Coupons held by
it and deliver a certificate of disposition to the Issuer. If the Issuer or its
agent shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee or
its agent for cancellation.
SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Registered
Securities of such series may be surrendered in exchange therefor without charge
at each office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.2 and, in the case of Unregistered Securities, at any
agency maintained by the Issuer for such purpose as specified pursuant to
Section 2.3, and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations and, in
the case of Unregistered Securities, having attached thereto any appropriate
Coupons. Until so exchanged, the temporary
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Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise established
pursuant to Section 2.3. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of temporary Unregistered
Securities of any series that may be established pursuant to Section 2.3
(including any provision that Unregistered Securities of such series initially
be issued in the form of a single global Unregistered Security to be delivered
to a depositary or agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered Securities of such series
would be issued in exchange for such temporary global Unregistered Security).
ARTICLE III
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, if any,
each of the Securities of such series (together with any additional amounts
payable pursuant to the terms of such Securities) at the place or places, at the
respective time or times and in the manner provided in such Securities and in
the Coupons, if any, appertaining thereto and in this Indenture. The interest
on Securities with Coupons attached (together with any additional amounts
payable pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary
Unregistered Security provides that interest thereon may be paid while such
Security is in temporary form, the interest on any such temporary Unregistered
Security (together with any additional amounts payable pursuant to the terms of
such Security) shall be paid, as to the installments of interest evidenced by
Coupons attached thereto, if any, only upon presentation and surrender thereof,
and, as to the other installments of interest, if any, only upon presentation of
such Securities for notation thereon of the payment of such interest, in each
case subject to any restrictions that may be established pursuant to Section
2.3. The interest, if any, on Registered Securities (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
payable only to or upon the written order of the Holders thereof and, at the
option of the Issuer, may be paid by wire transfer or by mailing checks for such
interest payable to or upon the written order of such Holders at their last
addresses as they appear on the Securities register of the Issuer.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Registered Securities of each
series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable,
pursuant to Section 2.3 and where the Registered Securities of each series may
be presented for registration of transfer as in this Indenture provided.
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The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Securities of such series are listed) where the Unregistered
Securities, if any, of each series and Coupons, if any, appertaining thereto may
be presented for payment. No payment on any Unregistered Security or Coupon
will be made upon presentation of such Unregistered Security or Coupon at an
agency of the Issuer within the United States nor will any payment be made by
transfer to an account in, or by mail to an address in, the United States unless
pursuant to applicable United States laws and regulations then in effect such
payment can be made without tax consequences adverse to the Issuer.
Notwithstanding the foregoing, payments in Dollars of Unregistered Securities of
any series and Coupons appertaining thereto which are payable in Dollars may be
made at an agency of the Issuer maintained in the Borough of Manhattan, The City
of New York if such payment in Dollars at each agency maintained by the Issuer
outside the United States for payment on such Unregistered Securities is illegal
or effectively precluded by exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City of New
York, an office or agency where notices and demands to or upon the Issuer in
respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
The Issuer will give to the Trustee written notice of the location of
each such office or agency and of any change of location thereof. In case the
Issuer shall fail to maintain any agency required by this Section to be located
in the Borough of Manhattan, The City of New York, or shall fail to give such
notice of the location or for any change in the location of any of the above
agencies, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.3 and where the Registered Securities of that series may be
presented for registration of transfer as in this Indenture provided, and the
Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; provided, that no such designation or rescission
shall in any manner relieve the Issuer of its obligations to maintain the
agencies provided for in this Section. The Issuer shall give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying
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agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other
obligor on the Securities of such series) in trust for the benefit of the
Holders of the Securities of such series, or Coupons appertaining thereto,
if any, or of the Trustee;
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such series
when the same shall be due and payable; and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in the foregoing clause (b).
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 COMPLIANCE CERTIFICATES. The Issuer will furnish to the
Trustee on or before January 31 in each year (beginning with January 31, 1998) a
brief certificate (which need not comply with Section 11.5) from the principal
executive, financial or accounting officer of the Issuer stating that in the
course of the performance by the signer of his or her duties as an officer of
the Issuer he or she would normally have knowledge of any default or non-
compliance by the Issuer in the performance of any covenants or conditions
contained
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in this Indenture, stating whether or not he or she has knowledge of any such
default or non-compliance and, if so, describing each such default or non-
compliance of which the signer has knowledge and the nature thereof.
SECTION 3.6 CORPORATE EXISTENCE. Subject to Article IX, the Issuer
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the rights (charter and statutory),
licenses and franchises of the Issuer and its Subsidiaries; provided, that the
Issuer shall not be required to preserve any such right, license or franchise,
if, in the judgment of the Issuer, the preservation thereof is no longer
desirable in the conduct of the business of the Issuer and its Subsidiaries
taken as a whole and the loss thereof is not disadvantageous in any material
respect to the Securityholders.
SECTION 3.7 MAINTENANCE OF PROPERTIES. The Issuer will cause all
properties used in or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair, and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Issuer may be necessary, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all time except to the extent that the Issuer may be prevented from so doing
by circumstances beyond its control; provided, that nothing in this Section
shall prevent the Issuer from discontinuing the operation or maintenance of any
of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Issuer desirable in the conduct of the
business of the Issuer or any Subsidiary and not disadvantageous in any material
respect to the Securityholders.
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent: (a) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary; and (b) all lawful claims for labor,
materials, and supplies, which, if unpaid, might by law become a lien upon the
property of the Issuer or any Subsidiary; provided, that the Issuer shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings; and provided further that
the Issuer shall not be required to cause to be paid or discharged any such tax,
assessment, charge or claim if the Issuer shall determine that such payment is
not advantageous to the conduct of the business of the Issuer and its
Subsidiaries taken as a whole and that the failure so to pay or discharge is not
disadvantageous in any material respect to the Securityholders.
SECTION 3.9 LUXEMBOURG PUBLICATIONS. In the event of the publication
of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 10.4 or 12.2, the
party making such publication in the Borough of Manhattan, The City of New York
and London shall also, to the extent that notice is required to be given to
Holders of Securities of any series by
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applicable Luxembourg law or stock exchange regulation, as evidenced by an
Officer's Certificate delivered to such party, make a similar publication in
Luxembourg.
ARTICLE IV
SECURITYHOLDER LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. If and so long as the Trustee shall not be the
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act:
(a) semi-annually not more than 5 days after each record date for the
payment of interest on such Registered Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to
Section 2.3 for non-interest bearing Registered Securities in each year;
and
(b) at such other times as the Trustee may reasonably request in
writing, within thirty days after receipt by the Issuer of any such request
as of a date not more than 15 days prior to the time such information is
furnished.
SECTION 4.2 REPORTS BY THE ISSUER. The Issuer covenants to file with
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
and other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act or pursuant to
Section 314 of the Trust Indenture Act.
SECTION 4.3 REPORTS BY THE TRUSTEE.
(a) On or before the first July 15 which occurs not less than 60 days
after the earliest date of issuance of any Securities and on or before July
15 in each year thereafter, so long as any Securities are Outstanding
hereunder, the Trustee shall transmit by mail as provided below to the
Securityholders of each series of outstanding Securities, as hereinafter in
this Section provided, a brief report dated as of the preceding May 15 with
respect to:
(i) its eligibility under Section 6.10 and its qualification
under Section 6.9, or in lieu thereof, if to the best of its knowledge
it has continued to be eligible and qualified under such Sections, a
written statement to such effect;
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(ii) the character and amount of any advances (and if the
Trustee elects to so state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities of such
series, on any property or funds held or collected by it as Trustee,
except that the Trustee shall not be required (but may elect) to
report such advances if such advances so remaining unpaid aggregate
not more than 0.5% of the principal of the Securities of such series
outstanding on the date of such report;
(iii) the amount, interest rate and maturity date of all other
indebtedness owing by the Issuer (or any other obligor on the
Securities of such series) to the Trustee in its individual capacity
on the date of such report, with a brief description of any property
held as collateral security therefor, except any indebtedness based
upon a creditor relationship;
(iv) the property and funds, if any, physically in the
possession of the Trustee (as such) in respect of the Securities of
such series on the date of such report;
(v) any additional issue of Securities of such series which the
Trustee has not previously reported; and
(vi) any action taken by the Trustee in the performance of its
duties under this Indenture which the Trustee has not previously
reported and which in the Trustee's opinion materially affects the
Securities of such series, except action in respect of a default,
notice of which has been or is to be withheld by it in accordance with
the provisions of Section 5.11.
(b) The Trustee shall transmit to the Securityholders of each series,
as provided in subsection (c) of this Section, a brief report with respect
to the character and amount of any advances (and if the Trustee elects so
to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) in respect of the Securities of such series since the
date of the last report transmitted pursuant to the provisions of
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of
which it claims or may claim a lien or charge prior to that of the
Securities of such series on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this
subsection (b), except that the Trustee shall not be required (but may
elect) to report such advances if such advances remaining unpaid at any
time aggregate 10% or less of the principal amount of Securities of such
series outstanding at such time, such report to be transmitted within 90
days after such time.
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(c) Reports pursuant to this Section shall be transmitted by mail to
all Holders of Securities of such series, as the names and addresses of
such Holders appear upon the Securities register as of a date not more than
15 days prior to the mailing thereof.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of such
series are listed and also with the Commission. The Issuer agrees to
notify the Trustee when and as Securities of any series become listed on
any national securities exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED, ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. "Event of Default" with respect to Securities of any
series, wherever used herein, means each one of the following events which shall
have occurred and be continuing (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on any
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or
otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities
of such series; or
(d) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the
Securities of such series or contained in this Indenture (other than a
covenant or agreement included in this Indenture solely for the benefit of
a series of Securities other than such series) for a period of 60 days
after the date on which written notice specifying such failure, stating
that such notice is a "Notice of Default" hereunder and demanding that the
Issuer remedy the same, shall have been given by registered or certified
mail, return receipt requested, to the Issuer by the Trustee, or to the
Issuer and the Trustee by the holders of at least 25% in aggregate
principal amount of the Outstanding Securities of the series to which such
covenant or agreement relates; or
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(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer for any
substantial part of its or their property or ordering the winding up or
liquidation of its or their affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of its or their
property, or make any general assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental indenture
or Board Resolution under which such series of Securities is issued or in
the form of Security for such series.
If an Event of Default described in clause (a), (b), (c), (d) or (g)
(if the Event of Default under clause (d) or (g), as the case may be, is with
respect to less than all series of Securities then Outstanding) occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(each such series voting as a separate class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of any such affected series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable.
If an Event of Default described in clause (d) or (g) above with
respect to all series of Securities then Outstanding, or an Event of Default
described in clause (e) or (f) above occurs and is continuing, then, and in each
and every such case, unless the Principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all of the Securities then Outstanding
hereunder (treated as one class) by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of any series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series)
of all of the Securities then Outstanding, and the interest accrued thereon, if
any, to be due and payable immediately, and upon such declaration, the same
shall become immediately due and payable.
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The foregoing provisions are subject to the condition that if, at
any time after the principal (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of the Securities of any series (or of all the Securities, as the case
may be) shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided,
(A) the Issuer shall pay or shall deposit with the Trustee a sum
sufficient to pay
(i) all matured installments of interest upon all the Securities
of each such series (or all the Securities, as the case may be); and
(ii) the principal of any and all Securities of each such series
(or of all the Securities, as the case may be) which shall have become
due otherwise than by acceleration; and
(iii) interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of each such series (or at the
respective rates of interest or Yields to Maturity of all the
Securities, as the case may be) to the date of such payment or
deposit; and
(iv) all amounts payable to the Trustee pursuant to Section 6.6;
and
(B) all Events of Default under the Indenture, other than the non-
payment of the principal of Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as
provided herein,
then and in every such case the Holders of a majority in aggregate principal
amount of all the Securities of each such series, each such series voting as a
separate class (or of all the Securities, as the case may be, voting as a single
class), then Outstanding, by written notice to the Issuer and to the Trustee,
may waive all defaults with respect to each such series (or with respect to all
the Securities, as the case may be) and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any,
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thereon and all other amounts owing thereunder, shall constitute payment in full
of such Original Issue Discount Securities.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
DEBT. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal and interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and such
other amount due the Trustee under Section 6.6 in respect of Securities of such
series.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
Holders, whether or not the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated, all the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
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(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for amounts payable to the Trustee under Section 6.6)
and of the Securityholders allowed in any judicial proceedings relative to
the Issuer or other obligor upon the Securities, or to the creditors or
property of the Issuer or such other obligor; and
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any series in any election of a
receiver, assignee, trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings,
custodian or other person performing similar functions in respect of any
such proceedings; and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other
similar official performing similar functions in respect of any such
proceedings is hereby authorized by each of the Securityholders to make
payments to the Trustee, and, in the event that the Trustee shall consent
to the making of payments directly to the Securityholders, to pay to the
Trustee its costs and expenses of collection and all other amounts due to
it pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding, except as aforesaid in clause (b).
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall awarded
to the Trustee for ratable distribution to the Holders of the Securities or
Coupons appertaining to such Securities in respect of which such action was
taken, after payment of all sums due to the Trustee under Section 6.6 in respect
of such Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to
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such Securities in respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities or Coupons appertaining to such
Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series
of Securities in respect of which monies have been collected, including all
amounts due to the Trustee and each predecessor Trustee pursuant to Section
6.6 in respect to such series of Securities;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments on such
interest, with interest (to the extent that such interest has been
collected by the Trustee and is permitted by applicable law) upon the
overdue installments of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for principal and interest,
with interest upon the overdue principal, and (to the extent that such
interest has been collected by the Trustee and is permitted by applicable
law) upon the overdue installations of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series; and in
case such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment of
such principal and interest or Yield to Maturity, without preference or
priority of principal over interest or Yield to Maturity, or of interest or
Yield to Maturity over principal, or of any installment of interest over
any other installment of interest or of any Security of such series over
any other Security of such series, ratably to the aggregate of such
principal and accrued and unpaid interest or Yield to Maturity; and
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FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITY HOLDERS. No Holder of
any Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture or such Security, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder or thereunder, unless (a) such Holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to Securities of such series and of the continuance thereof, as
hereinbefore provided, and (b) the Holders of not less than 25% in aggregate
principal amount of the Securities of such affected series then Outstanding
(treated as a single class) shall have made written request upon the Trustee to
institute such action or proceedings in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and (c) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or proceeding,
and (d) no direction inconsistent with such written request shall have been
given to the Trustee pursuant to Section 5.9; it being understood and intended,
and being expressly covenanted by the taker and Holder of every Security or
Coupon with every other taker and Holder and the Trustee, that no one or more
Holders of Securities of any series or Coupons appertaining to such Securities
shall have any right in any manner whatever by virtue or by availing of any
provision of this Indenture or any Security to affect, disturb or prejudice the
rights of any other such taker or Holder of Securities or Coupons appertaining
to such Securities, or to obtain or seek to obtain priority over or preference
to any other such taker or Holder or to enforce any right under this Indenture
or any Security, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Securities of the appli-
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cable series and Coupons appertaining to such Securities. For the protection
and enforcement of the provisions of this Section, each and every Securityholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon or the
applicable redemption dates provided for in such Security, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 5.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Indenture, any
Security or law to the Trustee or to the Holders of Securities or Coupons may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or, subject to Section 5.6, by the Holders of Securities or Coupons.
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with each such series voting as a separate class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; provided, that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided, further,
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if (a) the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken; or (b) if the Trustee by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Trustee shall determine in good faith that the action or proceedings so
directed would involve the Trustee in personal liability; or (c) if the Trustee
in good faith shall so determine that the actions or forbearances specified in
or pursuant to such direction would be unduly prejudicial to the interests of
Holders of the Securities of all affected series not joining in the giving of
said
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direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. Prior to the declaration of
acceleration of the maturity of any Securities as provided in Section 5.1, the
Holders of a majority in aggregate principal amount of the Securities of such
series (each series voting as a separate class) at the time Outstanding with
respect to which an Event of Default shall have occurred and be continuing
(voting as a single class) may on behalf of the Holders of all such Securities
waive any past default or Event of Default described in Section 5.1 and its
consequences, except a default in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Security affected. In the case of any such waiver, the Issuer, the Trustee and
the Holders of all such Securities shall be restored to their former positions
and rights hereunder, respectively, and such default shall cease to exist and be
deemed to have been cured and not to have occurred for purposes of this
Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES. The Trustee shall, within ninety days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London (and, if required by Section 3.9, at least once in an Authorized
Newspaper in Luxembourg) and (ii) to all Holders of Securities of such series in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, unless in each case such defaults shall have been cured before the mailing
or publication of such notice (the term "default" for the purpose of this
Section being hereby defined to mean any event or condition which is, or with
notice or lapse of time or both would become, an Event of Default); provided,
that, except in the case of default in the payment of the principal of or
interest on any of the Securities of such series, or in the payment of any
sinking fund installment on such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders of such series.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS. All parties to this Indenture agree, and each Holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered or omitted by it as
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Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series
holding in the aggregate more than 10% in aggregate principal amount of the
Securities of such series, or, in the case of any suit relating to or arising
under clause (d) or (g) of Section 5.1 (if the suit relates to Securities of
more than one but less than all series), 10% in aggregate principal amount of
Securities then Outstanding and affected thereby, or in the case of any suit
relating to or arising under clause (d) or (g) (if the suit under clause (d) or
(g) relates to all the Securities then Outstanding), (e) or (f) of Section 5.1,
10% in aggregate principal amount of all Securities then Outstanding, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. Prior to the occurrence of an Event of Default with
respect to the Securities of a particular series and after the curing or waiving
of all Events of Default which may have occurred with respect to such series,
the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to such series of
Securities. In case an Event of Default with respect to the Securities of a
series has occurred and has not been cured or waived, the Trustee shall exercise
with respect to such series of Securities such of the rights and powers vested
in it by this Indenture with respect to such series of Securities, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no
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implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders pursuant to Section 5.9 relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and subject
to Section 315 of the Trust Indenture Act.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and
subject to the Trust Indenture Act, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless
other evidence in respect thereof is specifically prescribed herein or in
the terms established in respect of any
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series); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing so
to do by the Holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then Outstanding; provided,
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency
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of this Indenture or of the Securities or Coupons. The Trustee shall not be
accountable for the use or application by the Issuer of any of the Securities or
of the proceeds thereof.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS;
COLLECTIONS, ETC. The Trustee or any agent of the Issuer or of the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor trustee upon its request for all reasonable
expense, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and each predecessor trustee and to pay or reimburse the Trustee and
each predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities or Coupons, and the Securities are hereby subordinated
to such senior claim.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE, ETC.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless
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other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CONFLICTING INTERESTS
FOR THE TRUSTEE. The following indentures are hereby specifically described for
the purposes of Section 310(b)(1) of the Trust Indenture Act: this Indenture
with respect to the Securities of any other series.
SECTION 6.9 QUALIFICATION OF TRUSTEE: CONFLICTING INTERESTS. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act.
SECTION 6.10 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The
Trustee for each series of Securities hereunder shall at all times be a
corporation or banking association organized and doing business under the laws
of the United States of America, any State thereof or the District of Columbia,
having a combined capital and surplus of at least $50,000,000, and which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, state or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.11.
The provisions of this Section 6.10 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act.
SECTION 6.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and (i) if any Unregistered
Securities of a series affected are then Outstanding, by giving notice of such
resignation to the Holders thereof, by publication at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York, and at
least once in an Authorized Newspaper in London (and, if required by Section
3.9, at least once in an Authorized Newspaper in Luxembourg), (ii) if any
Unregistered Securities of a series affected are then Outstanding, by mailing
notice of such resignation to the Holders thereof who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act at such addresses as were so furnished to the Trustee and (iii) by mailing
notice of such resignation to the Holders of then Outstanding Registered
Securities of each series
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affected at their addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act with respect to any series
of Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.10 and Section 310(a) of the Trust
Indenture Act and shall fail to resign after written request therefor
by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act, any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time outstanding may at any time remove
the Trustee with respect to Securities of such series and appoint a
successor trustee with respect to the Securities of
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such series by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Issuer the evidence provided for in Section
7.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.11 shall become
effective upon acceptance of appointment by the successor trustee as
provided in Section 6.12.
SECTION 6.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 6.11 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to be vested in the predecessor trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.12 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act and eligible under the provisions of Section 6.10.
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Upon acceptance of appointment by any successor trustee as provided in
this Section 6.12, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once in an Authorized
Newspaper in London (and, if required by Section 3.9, at least once in an
Authorized Newspaper in Luxembourg), (b) if any Unregistered Securities of a
series affected are then Outstanding, to the Holders thereof who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act, by mailing such notice to such Holders at such addresses as
were so furnished to the Trustee (and the Trustee shall make such information
available to the Issuer for such purpose) and (c) to the Holders of Registered
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.11. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided, that such
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
and eligible under the provisions of Section 6.10, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor trustee or to authenticate Securities of any series in the
name of any predecessor trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated.
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SECTION 6.15 APPOINTMENT OF AUTHENTICATING AGENT. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent for such series and a Certificate of
Authentication executed on behalf of the Trustee by such Authenticating Agent.
Such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $45,000,000 (determined as provided in Section
6.10 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent. Any Authenticating Agent may at any
time, and if it shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.15 with respect to
one or more series of Securities, the Trustee shall upon receipt of an Issuer
Order appoint a successor Authenticating Agent and the Issuer shall provide
notice of such appointment to all Holders of Securities of such series in the
manner and to the extent provided in Section 11.4. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Issuer agrees
to pay to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
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ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holding or Securities shall
be proved by the Security register or by a certificate of the registrar thereof.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any request,
demand, authorization, direction, notice, consent, waiver or other action by
Securityholders under this
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Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities with respect to which such determination is being made or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Securities
with respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such action only Securities which the Trustee knows are so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that
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the specific terms of such action may be determined in accordance with or
pursuant to an Issuer Order), and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto for one or more
of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article IX;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons,
and to make the occurrence, or the occurrence and continuance, of a default
in any such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided, that in
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided, that no such action shall adversely
affect the interests of the Holders of the Securities or Coupons;
(e) to establish the forms or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.1
and 2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one trustee, pursuant to the requirements
of Section 6.12.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such
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supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article VII) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force and effect at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such series or of the
Coupons appertaining to such Securities; provided, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption thereof, or make
the principal thereof (including any amount in respect of original issue
discount), or interest thereon payable in any coin or currency other than that
provided in the Securities and Coupons or in accordance with the terms thereof,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.1 or the amount thereof provable in bankruptcy pursuant to
Section 5.2, or alter the provisions of Section 11.11 or 11.12 or impair or
affect the right of any Securityholder to institute suit for the payment thereof
when due or, if the Securities provide therefor, any right of repayment at the
option of the Securityholder, in each case without the consent of the Holder of
each Security so affected, or (b) reduce the aforesaid percentage of Securities
of any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action
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and may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order) certified by the secretary or an
assistant secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of the Holders of the Securities as aforesaid and other documents, if
any, required by Section 7.1, the Trustee shall join with the Issuer in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act, by mailing a notice thereof by first-class mail to such Holders
at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and at
least once in an Authorized Newspaper in London (and, if required by Section
3.9, at least once in an Authorized Newspaper in Luxembourg), and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
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SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Issuer shall not consolidate with or merge into any other Person or transfer or
lease its properties and assets substantially as an entirety to any Person, and
the Issuer shall not permit any other Person to consolidate with or merge into
the Issuer, unless:
(a) either the Issuer shall be the continuing corporation, or the
successor corporation (if other than the Issuer) formed by such
consolidation or into which the Issuer is merged or to which the properties
and assets of the Issuer substantially as an entity are transferred or
leased shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Issuer under the Securities and this Indenture; and
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Issuer or a Subsidiary
as a result of such transaction as having been incurred by the Issuer or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing.
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED. The successor
corporation formed by such consolidation or into which the Issuer is merged or
to which such transfer or lease is made shall succeed to and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture with
the same effect as if such successor corporation had been named as the Issuer
herein, and thereafter (except in the case of a lease to another Person) the
predecessor corporation shall be relieved of all obligations and covenants under
the Indenture and the Securities and, in the event of such conveyance or
transfer, any such predecessor corporation may be dissolved and liquidated.
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SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption, complies with the provisions of this
Article IX.
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE.
(A) If at any time (i) the Issuer shall have paid or caused to be paid
the principal of and interest on all the Securities of any series Outstanding
hereunder and all unmatured Coupons appertaining thereto (other than Securities
of such series and Coupons appertaining thereto which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (ii) the Issuer shall
have delivered to the Trustee for cancellation all Securities of any series
theretofore authenticated and all unmatured Coupons appertaining thereto (other
than any Securities of such series and Coupons appertaining thereto which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.9) or (iii) in the case of any series of Securities
where the exact amount (including the currency of payment) of principal of and
interest due on which can be determined at the time of making the deposit
referred to in clause (b) below, (a) all the Securities of such series and all
unmatured Coupons appertaining thereto not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and (b) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust the entire amount in (i)
cash (other than moneys repaid by the Trustee or any paying agent to the Issuer
in accordance with Section 10.4), (ii) in the case of any series of Securities
the payments on which may only be made in Dollars, direct obligations of the
United States of America, backed by its full faith and credit ("U.S. Government
Obligations"), maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash sufficient to pay at such
maturity or upon such redemption, as the case may be, or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (a) the principal and interest on all
Securities of such series and Coupons appertaining thereto on each date that
such principal or interest is due and payable and (b) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series; (x) the
principal and interest on all Securities of such series and Coupons appertaining
thereto on each date that such principal or interest is due and payable and (y)
any mandatory sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of the Indenture and the Securities of
such series; and if, in any such case, the Issuer shall
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also pay or cause to be paid all other sums payable hereunder by the Issuer,
then this Indenture shall cease to be of further effect (except as to (i) rights
of registration of transfer and exchange of Securities of such Series and of
Coupons appertaining thereto and the Issuer's right of optional redemption, if
any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, including those under Section 6.6, (vi) the rights of the Holders of
securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them, and (vii) the obligations of the Issuer under Section 3.2) and
the Trustee, on demand of the Issuer accompanied by an Officer's Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on the Securities and
Coupons held by them shall not be delayed longer than required by then-
applicable mandatory rules or policies of any securities exchange upon which the
Securities are listed. The Issuer agrees to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Securities of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (a) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series and
Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, (vi) the rights of the Holders of Securities of such series and
Coupons appertaining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any
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of them and (vii) the obligations of the Issuer under Section 3.2) and the
Trustee, at the expense of the Issuer, shall at the Issuer's request, execute
proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series and Coupons
appertaining thereto (i) cash in an amount, or (ii) in the case of any
series of Securities the payments on which may only be made in Dollars,
U.S. Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or (iii)
a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal
and interest on all Securities of such series and Coupons appertaining
thereto on each date that such principal or interest is due and payable and
(b) any mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and the
Securities of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Issuer
is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Issuer has received from, or there has been
published by, the IRS a ruling or (y) since the date hereof, there has been
a change in the applicable Federal income tax law, in either case to the
effect that, and such opinion shall confirm that, the Holders of the
Securities of such series and Coupons appertaining thereto will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to United States Federal income tax on the same amount and in the
same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision have
been complied with.
(C) The Issuer shall be released from its obligations under Sections
3.6 and 9.1 and unless otherwise provided for in the Board Resolution, Officer's
Certificate or Indenture supplemental hereto establishing such series of
Securities, from all covenants and other obligations referred to in Section
2.3(18) or 2.3(19) with respect to such series of Securities, and any Coupons
appertaining thereto, outstanding on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose,
such covenant defeasance means that, with respect to the Outstanding Securities
of any series, the Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation
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set forth in such Section, whether directly or indirectly by reason of any
reference elsewhere herein to such Section or by reason of any reference in such
Section to any other provision herein or in any other document and such omission
to comply shall not constitute an Event of Default under Section 5.1, but the
remainder of this Indenture and such Securities and Coupons shall be unaffected
thereby. The following shall be the conditions to application of this
subsection C of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities of such series and
coupons appertaining thereto, (i) cash in an amount, or (ii) in the case of
any series of Securities the payments on which may only be made in Dollars,
U.S. Government Obligations maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or (iii)
a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal
and interest on all Securities of such series and Coupons appertaining
thereof and (B) any mandatory sinking fund payments on the day on which
such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;
(b) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit;
(c) Such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 6.9 and for purposes of the
Trust Indenture Act with respect to any securities of the Issuer;
(d) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it is
bound;
(e) Such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the Exchange
Act to be delisted;
(f) The Issuer shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel to the effect that the Holders of the
Securities of such series and Coupons appertaining thereto will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such covenant defeasance and will be subject to
United States Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred; and
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(g) The Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the covenant defeasance contemplated by
this provision have been complied with.
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.4, all moneys deposited with the Trustee
(for other trustee) pursuant to Section 10.1 shall be held in trust and applied
by it to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR TWO YEARS. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any Security
of any series of Coupons attached thereto and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series and of any Coupons appertaining thereto shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Issuer for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any paying agent
with respect to such moneys shall thereupon cease; provided, that the Trustee or
such paying agent, before being required to make any such repayment with respect
to moneys deposited with it for any payment (a) in respect of Registered
Securities of any series, shall at the expense of the Issuer, mail by first-
class mail to Holders of such Securities at their addresses as they shall appear
on the Security register, and (b) in respect of Unregistered Securities of any
series, shall at the expense of the Issuer cause to the published once, in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and once
in an Authorized Newspaper in London (and if required by Section 3.9, once in an
Authorized Newspaper in Luxembourg), notice, that such moneys remain and that,
after a date specified therein, which shall not be less than thirty days from
the date of such mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer.
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SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OF OBLIGATIONS. The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities and the Coupons, if any,
appertaining thereto by the Holders thereof and as part of the consideration for
the issue of the Securities and the Coupons appertaining thereto.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
AND HOLDERS OF SECURITIES AND COUPONS. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties thereto and their successors and the Holders of the Securities or
Coupons, if any, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities or Coupons, if any.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND HOLDERS OF
SECURITIES AND COUPONS. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons, if any, to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Issuer is filed by the Issuer with the Trustee) to McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, Attention:
Secretary. Any notice, direction, request or demand by the Issuer or any Holder
of Securities or Coupons, if any, to or upon the Trustee shall be deemed to have
been sufficiently
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given or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Services Division.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class mail, postage prepaid,
to each Holder entitled thereto, at his last address as it appears in the
Security register. In any case where notice to such Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to the given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer of officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion of or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with duties imposed by, or with another provision
(an "incorporated provision") included in this Indenture by operation of
Sections 310 to 318, inclusive, of the Trust Indenture Act, such imposed duties
or incorporated provision shall control.
SECTION 11.8 NEW YORK LAW TO GOVERN. THIS INDENTURE AND EACH
SECURITY AND COUPON SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE
OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
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SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN ECU. Unless
otherwise specified in an Officer's Certificate delivered pursuant to Section
2.3 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders
of a specified percentage in aggregate principal amount of Securities of all
series or all series affected by a particular action at the time Outstanding
and, at such time, there are Outstanding Securities of any series which are
denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate. For
purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar
buying rate in The New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, in the case of
ECUs, Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Communities (or any successor thereto) as published
in the Official Journal of the European Communities (such publication or any
successor publication, the "Journal"). If such Market Ex change Rate is not
available for any reason with respect to such currency, the Trustee shall use,
in its sole discretion and without liability on its part, such quotation of the
Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange
as published in the Journal, as of the most recent available date, or quotations
or, in the case of ECUs, rates of exchange from one or more major banks in The
City of New York or in the country of issue of the currency in question, which
for purposes of the ECU shall be Brussels, Belgium, or such other quotations or,
in the case of ECU, rates of exchange as the Trustee shall deem appropriate. The
provisions of this paragraph shall apply in determining the equivalent principal
amount in respect of Securities of a series denominated in a currency other than
Dollars in connection with any action taken by Holders of Securities pursuant to
the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 JUDGMENT CURRENCY. The Issuer agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the
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<PAGE>
rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the day on which final unappealable judgment is entered, unless such
day is not a New York Banking Day, then, to the extent permitted by applicable
law, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
ARTICLE XII
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least 30 days and not more than 60 prior to the date fixed
for redemption, to such Holders at such addresses as were so furnished to the
Trustee (and, in the case of any such notice given by the Issuer, the Trustee
shall make such information available to the Issuer for such purpose). Notice
of redemption to all other Holders of Unregistered Securities shall be published
in an Authorized Newspaper in the Borough of Manhattan, The City of New York and
in an Authorized Newspaper in London (and, if required by Section 3.9, in an
Authorized Newspaper in
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Luxembourg), in each case, once in each of three successive calendar weeks, the
first publication to be not less than 30 nor more than 60 days prior to the
date fixed for redemption. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by mail, or any defect
in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of such Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemp tion, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities and, in the case of Securities with Coupons attached thereto, of
all Coupons appertaining thereto maturing after the date fixed for redemption,
that such redemption is pursuant to the mandatory or optional sinking fund, or
both, if such be the case, that interest accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. In case any Security of a series is to be redeemed in part only the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and holder in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Issuer
will deliver to the Trustee at least 70 days prior to the date fixed for
redemption, or such shorter period as shall be acceptable to the Trustee, an
Officer's Certificate stating the aggregate principal amount of Securities to be
redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deemed appropriate and fair, in
its sole discretion, Securities of such series to be redeemed in whole or in
part. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Issuer in writing of the Securities of
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such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities of any series
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided, that
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holder of such Registered Securities registered
as such on the relevant record date, subject to the terms and provisions of
Section 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
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SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment," and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officer's
Certificate (which need not contain the statements required by Section 11.5) (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of Securities of such
series and the basis for such credit, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer's Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash
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<PAGE>
payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officer's Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that the
Issuer will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or a
lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or ECU)
if the Issuer shall so request with respect to the Securities of any particular
series, such cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any
Foreign Currency or ECU) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Issuer) inform the Issuer of the serial numbers of the Securities of such series
(or portions thereof) so selected. Securities shall be excluded from
eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officer's Certificate delivered to the
Trustee at least 60 days prior to the sinking fund payment date as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) an entity specifically identified in such Officer's
Certificate as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer. The Trustee, in the name and
at the expense of the Issuer (or the Issuer, if it shall so request the Trustee
in writing) shall cause notice of redemption of the Securities of such series to
be given in substantially the manner provided in Section 12.2 (and with the
effect provided in Section 12.3) for the redemption of Securities of such series
in part at the option of the Issuer. The amount of any sinking fund payments
not so applied or allocated to the redemption of Securities of such series shall
be added to the next cash sinking fund payment for such series and, together
with such payment, shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys held on the stated maturity date of
the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of, and
interest on, the Securities of such series at maturity.
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On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default be deemed to have been collected
under Article Five and held for the payment of all such Securities. In case
such Event of Default shall have been waived as provided in Section 5.10 or the
default cured on or before the sixtieth day preceding the sinking fund payment
date in any year, such moneys shall thereafter be applied on the next succeeding
sinking fund payment date in accordance with this Section to the redemption of
such Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested as of the date first written above.
McKESSON CORPORATION
By: /s/ Richard H. Hawkins
---------------------------------
Name: Richard H. Hawkins
Title: Vice President and
Chief Financial Officer
Attest:
By: /s/ Lorraine Peetz
------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Richard D. Manella
-----------------------------
Name: Richard D. Manella
Title: Vice President
Attest:
By: /s/ Janice Ott Rotunno
---------------------------
Assistant Vice President
Assistant Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>3
<DESCRIPTION>MCKESSON CORP 1994 STOCK OPTION PLAN
<TEXT>
<PAGE>
EXHIBIT 10.6
MCKESSON CORPORATION
1994 STOCK OPTION AND RESTRICTED STOCK PLAN
-------------------------------------------
(As amended through March 26, 1997)
1. Establishment, Purpose and Definitions.
--------------------------------------
(a) There is hereby adopted the McKesson Corporation 1994 Stock Option
and Restricted Stock Plan (the "Plan"). The Plan shall be the successor to the
McKesson Corporation 1988 Restricted Stock Plan and the McKesson Corporation
1978 Stock Option Plan (collectively, the "Predecessor Plans") with respect to
those awards under the Predecessor Plans which will be equitably adjusted to
become awards under the Plan ("Adjusted Awards"), all in connection with the
restructuring of McKesson Corporation, a Delaware corporation ("Old McKesson"),
that will result in the sale of Old McKesson's PCS business to Eli Lilly and
Company (the "Transaction"). In connection with the Transaction, SP Ventures,
Inc. shall be renamed McKesson Corporation (both of such entities being referred
to herein as the "Company", in each case as the context so requires) and the
Plan shall be renamed the McKesson Corporation 1994 Stock Option and Restricted
Stock Plan.
(b) The purpose of this Plan is to provide a means whereby key
executives of the Company and its affiliates and members of the Board of
Directors of the Company (the "Board") who are not employed as regular salaried
officers or employees of the Company or any affiliate of the Company
("Nonemployee Directors") may be given an opportunity to purchase shares of the
common stock ($0.01 par value) of the Company (the "Stock") pursuant to options
which may or may not qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code, as amended (the "Code"), and by providing
participants (other than Nonemployee Directors) with grants of restricted shares
of Stock ("Restricted Stock") in accordance with the terms and conditions set
forth herein.
2. Stock Subject to the Plan.
-------------------------
(a) The aggregate number of shares of Stock available for the grant of
awards hereunder shall equal the sum of (a) the number of shares of Stock
issuable in connection with Adjusted Awards, plus (b) 4,150,000 (all such shares
shall be subject to equitable adjustment as provided herein). With respect to
the shares of Stock referred to in clause (b) above (the "Future Award Shares")
no more than 350,000 shares may be awarded as Restricted Stock (subject to
equitable adjustment as provided herein). All Future Award Shares granted to
Nonemployee Directors shall be granted pursuant to the formula provisions set
forth in Section 5(e) herein. The maximum number of Future Award Shares that may
be granted to any individual during any plan year in the form of Restricted
Stock shall not exceed 20,000 and the maximum number of Future Award Shares that
may be granted to any individual in the form of options during any plan year
shall not exceed
<PAGE>
2
300,000; in each case, such maximum number shall be subject to equitable
adjustment as provided herein. All awards of Future Award Shares shall be
contingent on the approval of the Plan by the stockholders of the Company at its
first annual meeting of stockholders next following consummation of the
Transaction.
As the Committee (as hereinafter defined) may determine from time to
time, the Stock may consist either in whole or in part of shares of authorized
but unissued Stock, or shares of authorized and issued Stock reacquired by the
Company and held in its treasury. If an option covered by Future Award Shares is
surrendered for cash or for any other reason (except surrender for shares of
Stock) ceases to be exercisable in whole or in part, the shares which were
subject to such option but as to which the option had not been exercised shall
continue to be available for grants of stock options under the Plan. If any
shares of Stock underlying Restricted Stock grants which are covered by Future
Award Shares shall be reacquired by the Company pursuant to the termination
provisions described herein or in the instruments evidencing the making of such
Restricted Stock grants, such shares shall again be available for grant of
Restricted Stock awards under the Plan (to the extent permitted under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Prior to the granting of awards, the Company shall be under no obligation to
reserve or retain in its treasury any particular number of shares of Stock at
any time, and no particular shares of Stock, whether issued or held as treasury
Stock, shall be identified as being available for future awards under the Plan.
(b) In the case of options which are intended to qualify as "incentive
stock options" under Section 422 of the Code, the aggregate fair market value
(determined as of the time the option is granted) of the Stock with respect to
which incentive stock options are exercisable for the first time by any eligible
key executive during any calendar year (under this Plan and any other plans of
the Company) shall not exceed $100,000.
(c) In the event that the Committee shall determine that any dividend
or other distribution (whether in the form of cash, stock, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to preserve (but not increase) the rights of
participants under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (i)
the number and kind of shares which may thereafter be issued in connection with
Future Award Shares (with respect to both Restricted Stock and option awards),
(ii) the number and kind of shares issued in respect of outstanding Adjusted
Awards, (iii) the number and kind of shares issued in respect of outstanding
awards of Future Award Shares, and (iv) the exercise price relating to any
options.
<PAGE>
3
3. Eligibility.
-----------
Persons who shall be eligible to have granted to them awards provided
for by the Plan shall be (i) such key executives of the Company and its
affiliates as the Committee, in its sole discretion, shall designate from time
to time and (ii) Nonemployee Directors.
4. Administration of the Plan.
--------------------------
(a) The Plan shall be administered by a committee (the "Committee")
consisting of not less than two directors of the Company to be appointed by the
Board, each of whom is an "outside director" within the meaning of Section
162(m) of the Code and a "non-employee director" within the meaning of Rule 16b-
3 under the Exchange Act.
(b) The Committee may from time to time determine which key executives
of the Company and its affiliates shall be granted awards under the Plan, the
terms thereof, and the number of shares covered by an option or the number of
shares of Restricted Stock to be granted.
(c) The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan, to construe and
interpret the Plan, the rules and regulations, and the instruments evidencing
awards granted under the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan. All decisions,
determinations, and interpretations of the Committee shall be final and binding
on all participants and other interested parties.
5. Stock Options and Stock Appreciation Rights.
-------------------------------------------
(a) The Option Price.
----------------
The exercise price of each option shall not be less than the fair
market value of the Stock covered by such option on the date the option is
granted, except that the option price associated with Adjusted Awards shall be
such price as results from the equitable adjustment of such awards. Such fair
market value shall, if the Stock is not listed or admitted to trading on a stock
exchange, be the mean between the lowest reported bid price and highest reported
asked price of the Stock on the date the option is granted in the over-the-
counter market, as reported by any publication of general circulation selected
by the Company which regularly reports the market price of the Stock in such
market, or, if the Stock is then listed or admitted to trading on any stock
exchange, the composite closing price on such day as reported in the Wall Street
Journal; provided, however, that if the Committee determines that as a result of
-------- -------
the Transaction fair market value may be more accurately determined based on the
average closing price of the Stock over a three-
<PAGE>
4
consecutive-day period immediately prior to the grant, then such average will
constitute fair market value. Such price shall be subject to adjustment as
provided in paragraph 2(c) hereof.
(b) Terms and Conditions of Options.
-------------------------------
(i) Each option granted pursuant to the Plan shall be evidenced by
a written grant agreement (the "Agreement") executed by the Company and the
person to whom such option is granted which shall provide such terms and
conditions as the Committee may determine, in its sole discretion.
(ii) Unless otherwise provided in the Agreement, the term of each
option shall be for no more than ten years and three months; provided however
that the term of each option intended to qualify as an "incentive stock option"
shall be for no more than ten years.
(iii) The Agreement may contain such other terms, provisions, and
conditions as may be determined by the Committee (not inconsistent with this
Plan) including, without limitation, provisions relating to stock appreciation
rights ("SARs") with respect to options granted hereunder. Unless otherwise
provided in the Agreement, the Committee may, in its sole discretion, extend the
post-termination exercise period with respect to an option (but not beyond the
original term of such option). If an option, or any part thereof, is intended
to qualify as an "incentive stock option", the Agreement shall contain those
terms and conditions necessary to so qualify said option or such part thereof.
(iv) The Committee shall have the authority to accelerate the
exercisability of any outstanding option (except for options granted to
Nonemployee Directors) at such time and under such circumstances as it, in its
sole discretion, deems appropriate.
(v) Adjusted Awards shall remain subject to the same terms and
conditions to which they were subject prior to any equitable adjustment made in
respect of the Transaction.
(c) Stock Appreciation Rights.
-------------------------
The Committee may, under such terms and conditions as it deems
appropriate, authorize the surrender by an optionee who is not a Nonemployee
Director of all or part of an unexercised option and authorize a payment in
consideration thereof of an amount equal to the difference obtained by
subtracting the option price of the shares then subject to exercise under such
option from the fair market value of the Stock represented by such shares on the
date of surrender, provided that the Committee determines that such
<PAGE>
5
settlement is consistent with the purpose of the Plan. Such payment may be made
in shares of Stock valued at their fair market value on the date of surrender of
such option or in cash, or partly in shares and partly in cash. Acceptance of
such surrender and the manner of payment shall be in the discretion of the
Committee. If an option is surrendered for cash, the shares covered by the
surrendered option will thereafter be available for grant under the Plan to the
extent permitted under Rule 16b-3 of the Exchange Act.
(d) Use of Proceeds.
---------------
Proceeds realized from the sale of Stock pursuant to options granted
under the Plan shall constitute general funds of the Company.
(e) Granting of Options to Nonemployee Directors.
--------------------------------------------
Each Nonemployee Director (i) commencing his or her term on the Board
at the Company's first annual meeting of stockholders following consummation of
the Transaction or (ii) who is elected to the Board for the first time by the
stockholders of the Company at any special or annual meeting of stockholders
(other than those Nonemployee Directors who were nonemployee directors of Old
McKesson), will automatically receive, on such date, an option to purchase 5,000
shares of Stock (subject to adjustment as provided in Paragraph 2(c) above),
which option shall be immediately exercisable in full but shall expire to the
extent of 1,000 shares per year on each anniversary of the grant date unless and
until such Nonemployee Director retires from the Board, in which case the option
period shall end three years after the retirement date or until the option term
expires, whichever shall first occur, and the option shall be exercisable to the
extent of the entire unexercised portion of the option (or any lesser amount)
remaining at the date of retirement. On the date of each subsequent annual
meeting of stockholders (and, in the case of those Nonemployee Directors who
were previously nonemployee directors of Old McKesson, on the date of the
Company's first annual meeting of stockholders following consummation of the
Transaction and on the date of each subsequent annual meeting of stockholders)
each continuing Nonemployee Director will automatically receive, on such date,
an option to purchase 1,500 shares of Stock (subject to adjustment as provided
in Paragraph 2(c) above), which option shall be immediately exercisable in full.
Nonemployee Directors shall not dispose of shares of Stock received upon
exercise of any such option prior to six months from the date of grant of such
option.
Subject to the aforementioned expiration provisions, the term of each
option shall be five years. All such options shall be designated as stock
options which do not qualify under Section 422 of the Code. Subject to the
foregoing, all provisions of this Plan not inconsistent with the foregoing shall
apply to options granted to Nonemployee Directors, except that with respect to
an option granted to a Nonemployee Director, (a) any requirement for employment
with the Company or a subsidiary shall be deemed to be a
<PAGE>
6
requirement for service as a director, (b) any requirement of continuous
employment shall be deemed to be a requirement of continuous service as a
director, and (c) any reference to termination of employment shall be deemed to
mean termination of service as a director.
6. Restricted Stock Awards.
-----------------------
(a) Terms and Conditions.
--------------------
Each Restricted Stock grant made pursuant to the Plan shall be
evidenced by an Agreement executed by the Company and the person to whom such
Restricted Stock is granted (the "Grantee"). Each Restricted Stock grant made
under the Plan shall, unless otherwise provided in the Agreement, contain the
following terms, conditions and restrictions and such additional terms,
conditions and restrictions as may be determined by the Committee. Adjusted
Awards shall maintain the same terms and conditions to which they were subject
prior to any equitable adjustment made in respect of the Transaction.
(b) Restrictions.
------------
Until the restrictions imposed on any Restricted Stock grant shall
lapse, shares of Stock granted to a participant pursuant to a Restricted Stock
grant:
(i) shall not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of, and
(ii) shall, if the Grantee's continuous employment with the
Company shall terminate for any reason, unless otherwise provided in the
Agreement, be returned to the Company forthwith, and all the rights of the
Grantee to such shares shall immediately terminate; provided that if the
Committee, in its sole discretion, shall within ninety (90) days of such
termination of employment, notify the participant in writing of its decision not
to terminate the Grantee's rights in such shares, then the Grantee shall
continue to be the owner of such shares subject to such continuing restrictions
as the Committee may prescribe in such notice. If the Grantee's interests in the
shares granted pursuant to a Restricted Stock grant shall be terminated, such
Grantee shall forthwith deliver or cause to be delivered to the Secretary of the
Company the certificate(s), if any, previously delivered to the Grantee for such
shares, accompanied by such endorsement(s) and/or instrument(s) of transfer as
may be required by the Secretary of the Company.
(c) Lapse of Restrictions.
---------------------
Except as otherwise provided in the Plan or the Agreement, the
restrictions imposed on any Restricted Stock grant shall commence with the date
of the grant and continue during a period set by the Committee. Notwithstanding
the foregoing, the
<PAGE>
7
Committee may accelerate the lapsing of restrictions on a Restricted Stock grant
under such terms and conditions as it may deem appropriate.
(d) Restrictive Legend; Certificates May be Held in Custody.
-------------------------------------------------------
Each certificate evidencing shares granted pursuant to a Restricted
Stock grant may bear an appropriate legend referring to the terms, conditions
and restrictions described in the Plan and in the instrument evidencing the
Restricted Stock grant. Any attempt to dispose of such shares in contravention
of such terms, conditions and restrictions shall be invalid. The Committee may
enact rules which provide that the certificates evidencing such shares may be
held in custody by a bank or other institution, or that the Company may itself
hold such shares in custody, until restriction thereon shall have lapsed.
(e) Restrictions upon Making of Restricted Stock Grants.
---------------------------------------------------
The registration or qualification under any federal or state law of any
shares to be granted pursuant to Restricted Stock grants or the resale or other
disposition of any such shares by or on behalf of the Grantees receiving such
shares may be necessary or desirable as a condition of or in connection with
such Restricted Stock grants, and, in any such event, if the Committee in its
sole discretion so determines, delivery of the certificates for such shares
shall not be made until such registration or qualification shall have been
completed.
(f) Special Provisions Regarding Awards.
-----------------------------------
Notwithstanding anything to the contrary contained herein, unless
otherwise provided in the Agreement governing a Restricted Stock grant,
Restricted Stock awards granted pursuant to this Section 6 to Executive Officers
(as such term is defined in Rule 3b-7 promulgated under the Exchange Act) shall
be based on the attainment by the Company (or a subsidiary or division of the
Company if applicable) of performance goals pre-established by the Committee,
during a performance period pre-established by the Committee, based on one or
more of the following criteria: (i) the attainment of a specified percentage
return on total capital employed by the Company (or a subsidiary or division of
the Company); (ii) the attainment of a specified percentage return on total
stockholder equity of the Company; (iii) the attainment of a specified
percentage increase in earnings per share of Stock from continuing operations;
(iv) the attainment of a specified percentage increase in net income of the
Company; (v) the attainment of a specified percentage increase in profit before
taxation of the Company (or a subsidiary or division of the Company); and (vi)
the attainment of a specified percentage increase in revenues of the Company (or
a subsidiary or division of the Company). In addition, such performance goals
may be based upon the attainment of specified levels of Company performance
under one or more of the measures described above relative to the performance of
other corporations.
<PAGE>
8
Each such performance criteria shall be evaluated in accordance with
generally accepted accounting principles. Such shares of Restricted Stock shall
be released from restrictions only after the attainment of such performance
measures have been certified by the Committee.
7. Change in Control.
-----------------
Upon a Change in Control (as hereinafter defined), then notwithstanding
anything herein to the contrary, all options granted under the Plan that are
outstanding at the time of such Change in Control shall become immediately
exercisable in full and all restrictions with respect to shares of Restricted
Stock shall lapse and such shares shall become fully vested and exercisable.
A "Change in Control" of the Company shall be deemed to have occurred
if any of the events set forth in any one of the following paragraphs shall
occur:
(i) any "person" (as such term is used in sections 13(d) and 14(d)
of the Exchange Act), excluding the Company or any of its affiliates, a trustee
or any fiduciary holding securities under an employee benefit plan of the
Company or any of its affiliates, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation owned, directly or
indirectly, by stockholders of the Company in substantially the same proportions
as their ownership of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities; or
(ii) during any period of not more than two consecutive years,
individuals who at the beginning of such period constitute the Board and any new
director (other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in clause (i),
(iii) or (iv) of this paragraph) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least two-
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities
<PAGE>
9
of the Company or such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
Notwithstanding the foregoing, no Change in Control shall be deemed to
have occurred if there is consummated any transaction or series of integrated
transactions immediately following which the holders of the Stock immediately
prior to such transaction or series of transactions continue to have the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately prior to such transaction or series of
transactions.
8. Amendment and Termination of the Plan.
-------------------------------------
The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that an amendment which requires
-------- -------
stockholder approval in order for the Plan to continue to comply with Section
162(m) of the Code or any other law, regulation or stock exchange requirement
shall not be effective unless approved by the requisite vote of stockholders. No
suspension, termination, modification or amendment of the Plan may adversely
affect any award previously granted without the written consent of the Grantee.
9. Assignability.
-------------
Each option award granted pursuant to this Plan shall, during the
participant's lifetime, be exercisable only by him. No award nor any right
thereunder shall be transferable by the participant by operation of law or
otherwise other than by will, the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined in the Code or the Employee
Retirement Income Security Act of 1974, as amended.
10. Payment Upon Exercise.
---------------------
Payment of the purchase price upon exercise of any option granted
under this Plan shall be made in cash; provided that the Committee, in its sole
discretion, may permit an option holder to pay the option price, in whole or in
part, by tendering to the Company shares of Stock owned by the option holder,
and having a fair market value equal to the option price. The fair market value
of such Stock shall be determined by the Committee as it deems appropriate, or
as may be required in order to comply with any applicable law
<PAGE>
10
or regulation.
11. Effective Date and Duration of the Plan.
---------------------------------------
The Plan shall become effective upon its adoption by the Board and
the approval thereof by Old McKesson as the sole stockholder of the Company;
provided, however, that the effectiveness of the Plan shall be contingent upon
the occurrence of the Transaction and all awards of Future Award Shares shall be
contingent on the approval of the Plan by the stockholders of the Company at its
first annual meeting of stockholders. Unless sooner terminated, the Plan shall
remain in effect until terminated by action of the Board, provided, however,
that the duration of the Plan shall in no event exceed ten years from the date
of the adoption of the Plan by the Board. Termination of the Plan shall not
affect any awards previously granted pursuant thereto, which shall remain in
effect until their restrictions shall have lapsed (with respect to Restricted
Stock grants) or until exercised (with respect to option grants) all in
accordance with their terms.
12. Agreement by Participant Regarding Withholding Taxes.
----------------------------------------------------
If the Committee shall so require, as a condition of exercise of an
option or SAR or upon the lapsing of restrictions imposed on Restricted Stock
(each a "Tax Event"), each participant shall agree that no later than the date
of the Tax Event, the participant will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld upon the Tax Event.
Alternatively, the Committee may provide, in its sole discretion, that a
participant may elect, to the extent permitted or required by law, to have the
Company deduct federal, state and local taxes of any kind required by law to be
withheld upon the Tax Event from any payment of any kind due to the participant,
including withholding of Shares.
13. Rights as a Shareholder.
-----------------------
A participant granted an award hereunder or a transferee of an
award shall have no rights as a stockholder with respect to any shares covered
by the award until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distribution of
other rights for which the record date is prior to the date such stock
certificate is issued, except as otherwise provided in the Plan.
14. No Rights to Employment.
-----------------------
Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any participant the right to continue in
the employ of, or in an independent contractor relationship with, the Company or
any subsidiary or to be
<PAGE>
11
entitled to any remuneration or benefits not set forth in the Plan or such
Agreement or to interfere with or limit in any way the right of the Company or
any such subsidiary to terminate such participant's employment. Awards granted
under the Plan shall not be affected by any change in duties or position of a
participant as long as such participant continues to be employed by, or in a
consultant relationship with, the Company or any subsidiary.
15. Interpretation.
--------------
The Plan is designed and intended to comply with Rule 16b-3
promulgated under the Exchange Act and Section 162(m) of the Code and all
provisions hereof shall be construed in a manner to so comply.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>4
<DESCRIPTION>MCKESSON CORP 1984 EXECUTIVE BENEFIT RETIREMENT
<TEXT>
<PAGE>
EXHIBIT 10.14
MCKESSON CORPORATION
1984 EXECUTIVE BENEFIT RETIREMENT PLAN
--------------------------------------
AS AMENDED THROUGH MAY 30, 1997
A. PURPOSE
-------
This Plan is established to enable the Company to attract and retain key
executive personnel by assisting them and their survivors in maintaining their
standards of living on the Executive's retirement or earlier death.
B. ERISA PLAN
----------
This Plan is an unfunded deferred compensation program for a select group
of highly compensated management employees of the Company. The Plan, therefore,
is generally covered by Title I of ERISA, but is exempt from Parts 2, 3, and 4
of Title I of ERISA.
C. PARTICIPATION
-------------
1. SELECTION BY THE BOARD. The Board may select, at its discretion and
----------------------
from time to time as it decides, the Key Executives who participate in this
Plan. Participation in the Plan shall be limited to those Executives of the
Company who are selected by the Board. Selection of a Key Executive to
participate in the Plan may be evidenced by the terms of his contract of
employment with the Company.
2. ADDITION AND REMOVAL OF PARTICIPANTS. The Board may, at its discretion
------------------------------------
and at any time, designate additional Executives to participate in the Plan and
remove Executives from participation in the Plan. If an Executive is removed
from participation prior to reaching age 65, he shall be entitled to receive
benefits, if any, as specified in Section D or F.
3. NOTIFICATION OF PARTICIPANTS. The Administrator shall annually notify
----------------------------
each Executive that he is a participant in the Plan and shall notify each
Executive of the estimated amount of benefits which he will receive under the
Plan on Approved Retirement.
4. RELATION TO OTHER PLANS, ETC. If an Executive participates in this
----------------------------
Plan, he shall not participate in or receive benefits under any other Company-
paid plan, program or agreement that provides Company Executives, or the
individual Executive, with retirement benefits that supplement or are in
addition to the benefits under the Retirement Plan, Profit Sharing Investment
Plan or Supplemental Profit-Sharing Investment Plan, unless otherwise
specifically approved by the Board. For example, any Executive who participates
in this Plan shall not receive any retirement benefits under the McKesson
Executive Benefit Plan or under any Supplemental Retirement Agreement or
Deferred Compensation Agreement that provides
<PAGE>
retirement benefits in addition to benefits provided under the Retirement Plan
or Profit-Sharing Investment Plan. This paragraph shall not limit an Executive's
participation in or benefits under any plan or program under which the Executive
voluntarily defers for later payment compensation otherwise currently payable to
him (such as, but not limited to, the Deferred Compensation Administration
Plan).
D. BENEFITS ON APPROVED RETIREMENT
-------------------------------
1. AMOUNT OF BENEFITS.
------------------
a. IN GENERAL. Except as otherwise provided herein, each Executive who
----------
participates in the Plan and terminates employment by reason of an Approved
Retirement shall be entitled to receive monthly payments equal to (1) reduced by
(2), as follows:
(1) The percentage of Average Final Compensation specified for the
Executive, which shall be as provided herein and no higher than sixty percent
(60%)
reduced by
(2) the Executive's Basic Retirement Benefits.
The percentage stated in clause (1) may be specified by the Board or may be
specified in the Executive's written employment contract with the Company.
Unless otherwise determined by the Board, the percentage of Average Final
Compensation specified in clause (1) shall be 20% plus 0.148% for each completed
month (1.77% per completed year) of the Executive's full-time continuous
employment with the Company, but in no event shall be higher than 60%.
b. SPECIAL RULE. The benefit of an Executive under this Section D. who
------------
is a participant in the Plan as of August 28, 1996, shall not be less than his
benefit calculated pursuant to Section F.1.a. of the Plan, without regard to any
reduction required by Section D.3. of the Plan.
c. EFFECT OF PLAN TERMINATION. If the Plan is terminated with respect to
--------------------------
any or all Executives, each affected Executive who later terminates employment
by reason of an Approved Retirement shall be entitled to receive upon such
Approved Retirement monthly payments equal to (1) the applicable percentage of
Average Final Compensation under Section D.1.a. multiplied by his Pro Rata
Percentage, reduced by (2) his Basic Retirement Benefits. For purposes of this
section, his Pro Rata Percentage and Average Final Compensation shall be
calculated by treating the date of Plan termination as the date that his
employment with the Company terminates.
d. REMOVAL FROM PARTICIPATION. If an Executive is removed from Plan
--------------------------
participation, and later terminates employment by reason of an Approved
Retirement, he shall be treated as if the Plan were terminated with respect to
him as of the date of his removal, and his benefits shall be determined under
Section D.1.b. above except that his Basic Retirement benefits reduction will be
determined as of the date of his Approved Retirement.
<PAGE>
e. CHANGE IN PERCENTAGE.
--------------------
(1) If the percentage of Average Final Compensation specified in
Section D.l.a. is reduced, the percentage applied to determine the Executive's
benefit shall be determined by averaging over his period of participation in the
Plan (and in the Executive Benefit Plan) the percentages that have been so
specified. For example, if an Executive's percentage is reduced from 60% to 50%,
and one-half of his Plan participation is at 60% and one-half at 50%, the
percentage used to determine his benefits will be 55%. (See Appendix C.)
In addition, the benefit payable under this Plan after a
reduction in such percentage shall not be less than the benefit that would have
been paid if the Plan had been terminated with respect to the Executive on the
date of such reduction.
(2) If the percentage of Average Final Compensation specified in
Section D.l.a. is increased, such increased percentage shall apply for
determining Plan benefits without averaging it with prior percentages, and all
prior Plan participation shall be treated as having been participation under
that increased percentage.
f. REDUCTION FOR BASIC RETIREMENT BENEFITS. The reduction for the
---------------------------------------
Executive's Basic Retirement Benefits shall be applied, unless otherwise
provided herein, by calculating all benefits as if they were payable in the form
of a straight life annuity beginning at the date of Approved Retirement, without
survivor benefits. There is no requirement, however, that the benefits payable
under this Plan and any other plan be paid in the same form or at the same time.
2. TIME OF PAYMENT. The benefits provided on Approved Retirement shall
---------------
commence on the first day of the month following the date of the Executive's
Approved Retirement.
3. EARLY RETIREMENT BENEFIT. If an Executive's Approved Retirement occurs
------------------------
before attaining age 62, he shall receive a reduced benefit commencing on the
first day of the month following his Approved Retirement. This benefit shall be
reduced beginning at age 62 at the same rate per year as that specified for
Retirement before Social Security Normal Retirement age under the Retirement
Plan. On Approved Retirement before age 62, the reduction for Basic Retirement
Benefits shall be applied by calculating all benefits as if they were payable in
the form of a straight life annuity at the date of Approved Retirement before
age 62, without survivor benefits, to determine the net benefit payable under
this Plan. See Appendix A for an example of this calculation.
4. NO ELECTION OF DELAYED RETIREMENT BENEFIT. An Executive may not elect
-----------------------------------------
to delay the beginning of his retirement benefits under the Plan after the time
for commencement specified in Section D.2. or D.3., as applicable.
<PAGE>
E. DEATH BENEFITS
--------------
1. DEATH AFTER APPROVED RETIREMENT. If an Executive dies after Approved
-------------------------------
Retirement, benefits shall be paid after his death only in accordance with the
Method of Payment determined under Section H. For example, if the Executive
received a straight life annuity or a lump sum, no benefits shall be paid under
this Plan after his death.
2. DEATH WHILE EMPLOYED.
--------------------
a. BENEFITS PAYABLE TO BENEFICIARY. If an Executive dies while he is
-------------------------------
employed by the Company, his beneficiary shall receive the monthly benefit that
would have been paid to such beneficiary if the Executive had terminated
employment by reason of an Approved Retirement on the last day of the month
before his death, had elected to receive his benefits in the actuarially reduced
form of a joint and 100% survivor annuity with his beneficiary as the contingent
annuitant, had begun to receive such benefits on the day prior to his death, and
died immediately thereafter. Such payment shall be calculated by first
determining the amount payable to the Executive under this Plan without
reduction for Basic Retirement Benefits (applying any early Retirement Benefit
reduction and applying the actuarial reduction for joint and 100% survivor
annuity) and only thereafter making a reduction for Basic Retirement Benefits.
The reduction for Basic Retirement Benefits in connection with the Retirement
Plan in this case shall be in the amount payable, if any, under the Retirement
Plan as a spouse allowance; if any spouse allowance is payable under the
Retirement Plan on account of the Executive, this reduction shall be made even
if the Executive's beneficiary under this Plan is not his surviving spouse. See
Appendix B for an example of this calculation.
b. AVERAGE FINAL COMPENSATION. For purposes of the calculations under
--------------------------
this Section E.2., the Executive's Average Final Compensation shall be based on
the compensation he actually earned during his employment with the Company.
c. NO DESIGNATED BENEFICIARY. If an Executive dies before Approved
-------------------------
Retirement without having designated a beneficiary, and was married on the date
of his death, his surviving spouse shall be his beneficiary, unless otherwise
provided by applicable community property or other laws or court order. If he
dies before Approved Retirement, has no surviving spouse and has not designated
a beneficiary, the present value of the benefits that would be paid to a
surviving spouse of the same age as the Executive under a joint and 100%
survivor annuity form (and under the method of calculation provided in Section
E.2.a. and b.) shall be paid to the Executive's estate in two equal amounts in
the 14 months following death. The present value of benefits shall be determined
under factors established and uniformly applied by the Administrator.
3. DESIGNATION OF BENEFICIARY. An executive may designate any natural
--------------------------
person as his beneficiary, but may not designate more than one person, or any
person that is not a natural person, without the approval of the Administrator.
Designation shall be made in writing and shall become effective only when filed
with the Administrator. Such filing must occur before the Executive's death.
An Executive may change his beneficiary, from time to time, by filing
<PAGE>
a new written designation with the Administrator. If the Executive is married,
any Beneficiary designation which does not designate the Executive's spouse to
receive at least one-half of the benefit payable on the Executive's death shall
only become effective when approved in writing by the Executive's spouse.
F. TERMINATION BEFORE APPROVED RETIREMENT
--------------------------------------
1. BASIC RULE
----------
a. TERMINATION BENEFITS. Subject to other applicable provisions in this
--------------------
Plan, an Executive who terminates employment with the Company other than on
Approved Retirement or death shall be entitled to receive, beginning at age 65,
monthly payments equal to his Termination Benefits. An Executive's Termination
Benefits are equal to 1) the applicable percentage of Average Final Compensation
under Section D.1.a., multiplied by his Pro Rata Percentage and reduced by 2)
his Basic Retirement Benefits at the later of age 65 or the date of actual
termination.
b. PLAN TERMINATION OR REMOVAL FROM PARTICIPATION. An Executive who
----------------------------------------------
terminates employment with the Company other than on Approved Retirement or
death and who has been removed from Plan participation ("removal") , or with
respect to whom the Plan has terminated prior to his termination of employment
("termination") shall be entitled to receive, beginning at age 65, monthly
payments determined under this Section F but treating his date of "removal" or
"termination", whichever is applicable, as his date of termination of employment
for purposes of calculating his Pro Rata Percentage and Average Final
Compensation.
c. REDUCTION FOR SUBSEQUENT EMPLOYER BENEFITS. Any amount payable under
------------------------------------------
Section F.1.a. or b. shall be reduced by any retirement benefit payable to the
Executive or his beneficiary on account of service rendered to another employer
after his termination of employment with the Company.
2. LIMITATIONS. No benefits shall be paid under this Section F to:
-----------
a. TERMINATION FOR CAUSE. An Executive who is terminated for cause. If
---------------------
the Executive has a written employment agreement, "cause" shall be determined in
accordance with that agreement. Otherwise, "cause" shall be determined by the
Administrator.
b. VIOLATION OF EMPLOYMENT AGREEMENT. An Executive who terminates his
---------------------------------
employment in violation of his written employment agreement (if any).
Termination is in violation of an employment agreement if termination occurs
before the end of the term of that contract and is not allowed by the agreement
(e.g., for "good reason").
c. NO VESTED INTEREST. An Executive who has no vested interest in
------------------
benefits under the Retirement Plan at the time of his termination of employment
with the Company; provided, however, that this Section F.2.c. shall not apply to
any Executive who is a participant in this Plan on September 29, 1993. An
Executive who would have such a vested interest 1) if his employment was not
terminated by the Company in violation of his employment agreement
<PAGE>
or 2) if his employment was not terminated for "good reason" under such
agreement, shall be treated as having such a vested interest.
3. PRO RATA PERCENTAGE. An Executive's Pro Rata Percentage is the higher
-------------------
of the following two percentages (but not greater than 100%). The first
percentage is determined by dividing the number of the Executive's whole months
of employment with the Company by the number of whole months from the date that
the Executive was first hired by the Company to the date that he will reach age
65 and multiplying by 100. The second percentage is determined by multiplying
4.44% by the number of his whole and partial years of completed employment with
the Company.
4. RULES OF APPLICATION.
--------------------
a. PERIODS OF EMPLOYMENT. For purposes of determining employment with
---------------------
the Company, periods that would be disregarded under the Retirement Plan on
account of breaks in service shall be disregarded under this Section.
b. BASIC RETIREMENT BENEFITS. For purposes of this Section, an
-------------------------
Executive's Basic Retirement Benefits shall be determined at the time that he
terminates employment with the Company, calculating all benefits as if they were
payable in the form of a straight life annuity beginning at the later of age 65
or the date of actual termination of employment, without survivor benefits.
c. METHOD OF PAYMENT. Benefits under this section shall be paid in the
-----------------
form provided in Section H.
d. DATE BENEFITS BEGIN. Benefits payable under this Section shall begin
-------------------
on the first day of the month following the date the Executive reaches age 65.
e. DEATH BENEFITS. For purposes of this Section:
--------------
(1) If an Executive dies after his benefits have begun, benefits
payable thereafter, if any, shall be paid in accordance with the method of
payment determined under Section H.
(2) If an Executive who has terminated employment and is entitled to
receive benefits under this Section F dies before his benefits begin, his
beneficiary shall receive the monthly benefit payable under an actuarially
reduced form of joint and 100% survivor annuity with his beneficiary as the
contingent annuitant, payable beginning on the first day of the month after the
Executive would have reached age 65. The principles of the second and third
sentences of Section E.2.a. and the principles of Section E.2.b. and of this
Section shall apply for calculating these survivor benefits.
(3) The principles of Section E.2.c. and of this Section shall apply
if there is no surviving spouse and no designation of beneficiary. The rules of
Section E.3. concerning designation of beneficiary shall apply.
<PAGE>
f. CHANGE IN PERCENTAGE. The principles of Section D.1.d. shall apply to
--------------------
benefits calculated under this Section F.
g. EXAMPLE. An Executive whose specified percentage of Average Final
-------
Compensation under Section D.1.a. is 60% who was hired at age 50, whose
employment is terminated at age 60, and who otherwise qualifies for a benefit
under this Section, will have a vested benefit beginning at age 65 of 2/3's of
60% or 40% of actual Average Final Compensation, less his Basic Retirement
Benefits.
5. OTHER AGREEMENT. If an Executive's written Employment Agreement with
---------------
the Company provides higher benefits on termination of employment before
Approved Retirement than provided under this Section F, such higher benefits
shall be paid.
6. FORFEITURE OF BENEFITS. Except as provided in this Section, and as
----------------------
provided elsewhere in this Plan with respect to Approved Retirement or death of
an Executive, an Executive or his beneficiaries shall not be entitled to any
benefits under this Plan, all obligations of the Company to the Executive and
his beneficiaries shall cease, and the Company shall have no further liability
to the Executive or any other person under this Plan.
G. SPECIAL FORFEITURE AND REPAYMENT RULES
--------------------------------------
Any other provisions of this Plan to the contrary notwithstanding, if the
Compensation Committee of the Board determines that an Executive has engaged in
any of the actions described in 3. below, the consequences set forth in 1. and
2. below shall result.
1. FORFEITURE OF BENEFITS. To the extent that the benefit that otherwise
----------------------
would be payable under this Plan exceeds the benefit, if any, that would have
been payable if the Executive's retirement had occurred on November 1, 1993,
such excess portion shall be forfeited and shall not be payable at any time
under this Plan.
2. REPAYMENT. If the Executive received a payment under this Plan at any
---------
time within six months prior to the date the Company discovered that the
Executive engaged in any action described in 3. below, the Executive, upon
written notice from the Company, shall repay to the Company in cash the excess
portion of any such payment, such excess portion to be calculated in the manner
described in 1. above.
3. The consequences described in 1. and 2. above shall apply if the
Executive, either before or after termination of employment with the Company:
a. Accepts a position as a consultant to or an employee of a business
enterprise that is in direct competition with any line of business engaged in by
the Company at the time of the termination of the Executive's employment;
b. Discloses to others, or takes or uses for his own purpose or the
purpose of others, any trade secrets, confidential information, knowledge, data
or know-how belonging to the Company and obtained by the Executive during the
term of his employment, whether or
<PAGE>
not they are the Executive's work product. Examples of such confidential
information or trade secrets include (but are not limited to) customer lists,
supplier lists, pricing and cost data, computer programs, delivery routes,
advertising plans, wage and salary data, financial information, research and
development plans, processes, equipment, product information and all other types
and categories of information as to which the Executive knows or has reason to
know that the Company intends or expects secrecy to be maintained;
c. Fails to promptly return all documents and other tangible items
belonging to the Company in the Executive's possession or control, including all
complete or partial copies, recordings, abstracts, notes or reproductions of any
kind made from or about such documents or information contained therein, upon
termination of employment, whether pursuant to an Approved Retirement or
otherwise;
d. Fails to provide the Company with at least thirty (30) days' written
notice prior to directly or indirectly engaging in, becoming employed by, or
rendering services, advice or assistance to any business in competition with the
Company. As used herein, "business in competition" means any person,
organization or enterprise which is engaged in or is about to become engaged in
any line of business engaged in by the Company at the time of the termination of
the Executive's employment with the Company;
e. Fails to inform any new employer, before accepting employment, of the
terms of this section and of the Executive's continuing obligation to maintain
the confidentiality of the trade secrets and other confidential information
belonging to the Company and obtained by the Executive during the term of his
employment with the Company;
f. Induces or attempts to induce, directly or indirectly, any of the
Company's customers, employees, representatives or consultants to terminate,
discontinue or cease working with or for the Company, or to breach any contract
with the Company, in order to work with or for, or enter into a contract with,
the Executive or any third party; or
g. Engages in conduct which is not in good faith and which disrupts,
damages, impairs or interferes with the business, reputation or employees of the
Company.
The Compensation Committee of the Board shall determine in its sole
discretion whether the Executive has engaged in any of the acts set forth in (a)
through (g) above, and its determination shall be conclusive and binding on all
interested persons.
Any provision of this section which is determined by a court of competent
jurisdiction to be invalid or unenforceable shall be construed or limited in a
manner that is valid and enforceable and that comes closest to the business
objectives intended by such invalid or unenforceable provision, without
invalidating or rendering unenforceable the remaining provisions of this
section.
<PAGE>
H. METHOD OF PAYMENT
-----------------
1. NORMAL FORM. The Normal Form of Benefit under this Plan shall be a
-----------
straight life annuity of monthly payments over the lifetime of the Executive,
with payments ceasing on the first day of the month in which the Executive dies.
2. JOINT AND SURVIVOR ANNUITY. If the Executive is married at the time
--------------------------
benefits become payable, then, unless he has elected otherwise (as described
below), his benefits shall be paid in the actuarially reduced form of a joint
and 50% survivor annuity payable to him and his spouse. With the approval of
the Administrator, the Executive may elect, in writing, not to receive this form
of benefit, but any such election which provides a benefit for a beneficiary
other than his spouse must be approved in writing by his spouse to be effective.
Such election shall become effective when filed with the Administrator and must
be filed before the Executive's termination of employment with the Company.
3. LUMP SUM DISTRIBUTION. An Executive whose employment terminates by
---------------------
reason of an Approved Retirement on or after June 1, 1997, may elect to have the
actuarial equivalent value of his benefits paid in the form of a lump sum
distribution in cash, where actuarial equivalence is determined using (i) the
interest rate prescribed by the Pension Benefit Guaranty Corporation for
purposes of determining the present value of a lump sum distribution on plan
termination for the month in which the Executive makes the lump sum distribution
election and (ii) the mortality table in use under the Retirement Plan on the
date the Executive makes the lump sum distribution election. An election of a
lump sum form of distribution must be made at least twelve months prior to the
Executive's Approved Retirement (except that an election made prior to January
1, 1997 shall be effective as to any Approved Retirement occurring during
calendar year 1997) and shall be void and of no effect if either of the
following occurs: (a) the Executive's employment with the Company does not
terminate within 24 months after the date on which the Executive made the
election of a lump sum form of distribution; or (b) the Executive makes a new
election under this Section H.3. at least twelve months after the date of the
Executive's previous election under this Section H.3.
An Executive who is married at the time benefits become payable under this
Section H.3. may not receive a lump sum form of distribution unless the
Executive's spouse approves of the election in writing.
An Executive may elect a lump sum form of distribution less than twelve
months prior to his Approved Retirement, but in such event the amount of the
lump sum distribution shall be reduced by ten percent.
4. ADDITIONAL FORMS OF BENEFITS. With the approval of the Administrator,
----------------------------
the Executive may elect to receive his benefits in one of the actuarially
equivalent benefit forms permitted under the Retirement Plan or such other form
as may be approved by the Administrator. If the Executive is married, any such
election must be approved in writing by
<PAGE>
his spouse to be effective, if it would provide the spouse with a benefit less
than that provided under Section H.2.
I. SOURCE OF PAYMENT
-----------------
The benefits paid under this Plan shall be paid from the general funds of
the Company, and the Executive and his beneficiaries shall be no more than
unsecured general creditors of the Company with no special or prior right to any
assets of the Company for payment of any obligations hereunder. Nothing
contained in this Plan shall be deemed to create a trust of any kind for the
benefit of the Executive or any beneficiary, or create any fiduciary
relationship between the Company and the Executive or any beneficiary with
respect to any assets of the Company.
J. WITHHOLDING
-----------
The Executive and any beneficiary shall make appropriate arrangements with
the Company for the satisfaction of any federal, state or local income tax
withholding requirements and social security or other employee tax requirements
applicable to the payment of benefits under this Plan. If no other arrangements
are made, the Company may provide, at its discretion, for such withholding and
tax payments as may be required.
K. ADMINISTRATION OF THE PLAN
--------------------------
1. IN GENERAL. The Plan shall be administered by the Vice President,
----------
Human Resources of the Company under the direction of the Compensation Committee
of the Board. If the Vice President, Human Resources, is an Executive
participating in the Plan, then any discretionary action taken as Administrator
which directly affects him as Executive shall be specifically approved by the
Compensation Committee. The Compensation Committee shall have the ultimate
responsibility to interpret the Plan and shall adopt such rules and regulations
for carrying out the Plan as it may deem necessary or appropriate. Decisions of
the Compensation Committee shall be final and binding on all parties who have an
interest in the Plan.
2. ELECTIONS AND NOTICES. All elections and notices made by an Executive
---------------------
under this Plan shall be in writing and filed with the Administrator.
3. ACTION BY BOARD OF DIRECTORS. The Board may act under this Plan in
----------------------------
accordance with its normal procedures and practices, including but not limited
to delegation of its authority to act under the Plan.
4. PLAN YEAR. The Plan Year is the calendar year.
---------
<PAGE>
L. AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
The Board may at any time amend, alter, modify or terminate the Plan. This
Plan shall be treated as a plan covered by Section 301 of the Retirement Equity
Act for purposes of amendment and termination.
The Compensation Committee of the Board may amend this Plan to make
technical and correcting changes and to make other changes that do not
materially increase the cost of the Plan to the Company or materially change its
design.
M. NO ASSIGNMENT
-------------
The benefits provided under this Plan may not be alienated, assigned,
transferred, pledged or hypothecated by any person, at any time, or to any
person whatsoever. These benefits shall be exempt from the claims of creditors
or other claimants and from all orders, decrees, levies, garnishment or
executions to the fullest extent allowed by law.
N. DEFINITIONS
-----------
For purposes of the Plan, the following terms shall have the meanings
indicated:
1. "Administrator" shall mean the person specified in Section K.
2. "Approved Retirement" shall mean (i) any termination of employment with
the Company after attainment of age 62; (ii) any involuntary termination of
employment after both attainment of age 55 and completion of 15 years of service
(as determined under the Retirement Plan); or (iii) any other termination of
employment before (i) or (ii) above with the approval of the Board.
Notwithstanding the foregoing, "Approved Retirement" shall not include
any termination for cause, which shall be determined as provided in Section
F.2.a. hereof.
3. "Average Final Compensation" shall mean: one-fifth of the sum of the
base salary and annual bonuses under the Management Incentive Plan ("MIP") and
the Performance Award Plan for Key Executives ("PAPKE") or any successor or
replacement plans (including base salary and annual bonuses voluntarily deferred
under a cash or deferred plan or any other tax qualified or non-qualified salary
deferral plan such as the Deferred Compensation Administration Plan) earned by
an Executive for the 5 consecutive years of full-time continuous employment with
the Company which (a) fall within the 15-year period ending on the first day of
the month following his termination of service with the Company and (b) produce
the highest such sum. If the Executive has had less than five years of full
time continuous employment, Average Final Compensation shall be base salary and
annual bonuses, including amounts voluntarily deferred under the plans described
in the previous sentence, for the entire period of such employment with the
Company, divided by the number of whole and partial years of service.
<PAGE>
4. "Basic Retirement Benefits" shall mean the monthly annuity benefit
payable under the Retirement Plan and a hypothetical monthly annuity benefit
payable to the Executive under the Profit-Sharing Investment Plan as follows:
a. Benefits from the Executive's interest in the Retirement Plan shall
be calculated on a straight life annuity basis payable (i) to the Executive in
the event of normal retirement, retirement after age 65, early retirement, or
termination allowance as defined in the Retirement Plan, or (ii) as a spouse
allowance in the event of the Executive's death before Approved Retirement
(Section E.2.) or before benefits begin (Section F.4.e.).
b. The hypothetical annuity benefit payable under the Profit-Sharing
Investment Plan shall be calculated by first determining the value of each share
credited to the Executive's Retirement Share Plan account under that Plan as of
the date it was credited and applying an annual rate of twelve percent to such
value from the date such share was credited to such account to the date the
Executive's benefit under this Plan is to commence. The aggregate value of all
of the shares credited to the Executive's Retirement Share Plan account so
determined shall then be converted to a straight life annuity using the factors
for determining actuarial equivalence set forth in Section H.3.
5. "Board" shall mean the Board of Directors of McKesson Corporation, a
Delaware corporation.
6. "Company" shall mean McKesson Corporation, a Delaware Corporation, and
any member of its controlled group as defined by Section 414(b) and 414(c) of
the Internal Revenue Code of 1986, as amended.
7. "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
8. "Executive" shall mean an employee of the Company selected to
participate in this Plan.
9. "Normal Form of Benefit" is that form described in Section G.l.
10. The "Pro Rata Percentage" is defined in Section F.3.
11. "Retirement Plan" shall mean the McKesson Corporation Retirement Plan.
12. "Profit-Sharing Investment Plan" shall mean the McKesson Corporation
Profit-Sharing Investment Plan.
13. "Termination Benefits" is defined in Section F.l.a.
<PAGE>
O. MISCELLANEOUS
-------------
1. FIDUCIARY INSURANCE. The Company may purchase insurance for its
-------------------
directors, officers, employees and agents to cover potential liability arising
from their acts and omissions concerning this Plan.
2. APPLICABLE LAW; SEVERABILITY. The Plan hereby created shall be construed,
----------------------------
administered, and governed in all respects in accordance with ERISA and the laws
of the State of California to the extent the latter are not preempted by ERISA.
If any provision of this instrument shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.
3. EFFECTIVE DATE. This Third Amendment and Restatement is effective as
--------------
of October 27, 1993.
4. NO RIGHT TO CONTINUED EMPLOYMENT. Each executive selected to participate
--------------------------------
in the Plan is deemed by the Company to be a bona fide executive or in a high
policy making position for purposes of the Age Discrimination in Employment Act
and state laws of similar effect. Accordingly, the terms of the Plan shall not
confer any legal rights upon any Executive to continued employment or employment
past age 65, nor shall the Plan interfere with the rights of the Company to
discharge any Executive or to treat him without regard to the effect which that
treatment might have upon him as a participant in the Plan.
Executed as of August 28, 1996, in the City and County of San Francisco,
State of California.
McKESSON CORPORATION
By __________________________________
William A. Armstrong
Vice President, Human Resources
and Administration
<PAGE>
MCKESSON CORPORATION
1984 EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX A
----------
SAMPLE CALCULATION
EARLY RETIREMENT
----------------
Executive retires at age 59, 3 years early
Final Average Compensation: $250,000
Percentage of Average Final Compensation
specified under the Plan: 60%
Income Objective
(60% x $250,000) $150,000
LESS: Early Retirement Reduction
(0.003 per month x 36 months = 10.8%) (16,200)
Adjusted Objective $133,800
LESS: Single Life Value of Retirement
Plan Benefit and Annuitized Value of
Retirement Share Plan (38,000)
--------
Annual Single Life EBRP Benefit $ 95,800
NOTE: Retirement Plan benefits are governed by the terms of that
Plan, and incorporate the appropriate reduction for early
retirement. As intended, the 1984 EBRP provides a retirement
income that, when added to income from the Retirement Plan,
provides the executive with retirement income equal to the
adjusted objective.
<PAGE>
MCKESSON CORPORATION
1984 EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX B
----------
SAMPLE CALCULATION
SURVIVOR BENEFIT
----------------
Death age 57
Final Average Compensation: $175,000
Percentage of Average Final Compensation
specified under the Plan: 60%
Income Objective
(60% x $175,000) $105,000
LESS: Early Retirement Reduction
(0.003 per month x 60 months = 18%) (18,900)
--------
Subtotal $ 86,100
Application of 100% J&S Factor 80%
--------
Adjusted Objective $ 68,880
LESS: Retirement Plan Spouse Allowance
and Annuitized Value of Retirement
Share Plan (25,000)
--------
Annual EBRP Survivor Benefit $ 43,880
NOTE: As intended, the 1984 EBRP Survivor Benefit provides a
supplement to the Retirement Plan so that the total of
these two sources of Company provided benefits equals
the survivor's adjusted income objective. This method
would apply even if the Retirement Plan Spouse
Allowance were paid to a minor child, and the 1984
EBRP benefit were paid to the spouse.
<PAGE>
MCKESSON CORPORATION
1984 EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX C
----------
EFFECTS OF AMENDING PLAN TO ELIMINATE REDUCTION
FOR PROFIT-SHARING INVESTMENT PLAN BENEFITS AND TO
REDUCE THE MAXIMUM AVERAGE COMPENSATION
PERCENTAGE TO 60%
1. AMENDMENT NOT TREATED AS REDUCTION OR INCREASE OF PERCENT OF AVERAGE FINAL
COMPENSATION
The amendment to the Plan as of December 2, 1987 to eliminate the reduction
for benefits from the Profit-Sharing Investment Plan and to reduce the maximum
Average Final Compensation percentage to 60% from 65% is not treated as a
reduction or increase of the percentage of Average Final Compensation under
Section D.1.d. of the Plan. This is the case because the change in the
percentage is coupled with the reduction in the offset and is intended to
provide a better overall benefit to Plan participants.
2. MAINTENANCE OF EXISTING BENEFITS
The amendment to the Plan of December 2, 1987 shall not operate to reduce
the benefit accrued as of that date by any person who is a Plan participant.
Therefore, any Executive who participated in the Plan on December 2, 1987 and
who otherwise is or becomes entitled to benefits under the Plan shall receive
the higher of: 1) the benefits which he had earned and to which he is entitled
under the Plan calculated on December 2, 1987 immediately before the Plan was
amended and taking into account the value of his vested benefit as of that date
under the Profit-Sharing Investment Plan, and 2) the benefits to which he is
entitled under the Plan as amended.
FOR EXAMPLE: Assume that Appendix A shows the benefits to which an Executive
- -----------
who participates in the Plan on December 2, 1987 is entitled immediately after
the Plan's amendment (an Annual Single Life EBRP benefit of $95,800). Under the
Plan on December 2, 1987, before amendment his benefits would be calculated as
follows:
Executive retires at age 62, 3 years early
Final Average Compensation: $ 250,000
Percentage of Average Final Compensation
specified under the Plan: 65%
Income Objective
(65% x $250,000) $ 162,500
<PAGE>
LESS: Early Retirement Reduction
(0.003 per month x 36 months = 10.8%) (17,550)
---------
Adjusted Objective $ 144,950
LESS: Single Life Value of Retirement
Plan Benefit and Annuitized Value of
Retirement Share Plan (38,000)
---------
Single Life Annuity from Company
contributed funds in PSIP (45,000)
---------
Annual Single Life EBRP Benefit $ 61,950
For this individual, the EBRP benefit from the Plan immediately after the Plan
amendment is higher than the benefit provided before amendment. Since he is
entitled to the higher of the two, his benefit under the Plan would be $95,800.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>5
<DESCRIPTION>FORM OF EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.26
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, made effective as of May 20, 1996 by and between
McKESSON CORPORATION (the "Company"), a Delaware corporation with its principal
office at One Post Street, San Francisco, California, and
______________("Executive").
R E C I T A L S
- - - - - - - -
A. The Company, in its business, develops and uses certain trade
secrets, customer lists and other confidential information and data
("Confidential Information"). Such Confidential Information will necessarily be
communicated to or acquired by Executive by virtue of his employment with the
Company, and the Company has spent time, effort and money to develop such
Confidential Information and to promote and increase its goodwill; and
B. The Company desires to retain the services of, and employ,
Executive on its own behalf and on behalf of its affiliated companies for the
period provided in this Agreement and, in so doing, to protect its Confidential
Information and goodwill, and Executive is willing to accept employment by the
Company on a full-time basis for such period, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Employment. Subject to the terms and conditions of this
----------
Employment Agreement, the Company agrees to employ Executive, and Executive
agrees to accept employment from, and remain in the employ of, the Company for
the period stated in Paragraph 3 hereof.
2. Position and Responsibilities. During the period of his
-----------------------------
employment hereunder, Executive agrees to serve the Company, and the Company
shall employ Executive, as President and Chief Operating Officer, or in such
other senior corporate executive capacity or capacities as may be specified from
time to time by the Chief Executive Officer of the Company.
3. Term and Duties.
---------------
(a) Term of Employment. The period of Executive's employment under
------------------
this Agreement shall be deemed to have commenced on the date of this Agreement
and shall continue until May 20, 1999.
(b) Duties. During the period of his employment hereunder and
------
except for illness, reasonable vacation periods, and reasonable leaves of
absence, Executive shall devote his best efforts and all his business time,
attention, skill and efforts to the business and affairs of the Company and its
affiliated companies, as such business and affairs now exist and as they may be
hereafter changed or added to, under and pursuant to the general direction of
the Board of Directors of the Company; provided, however, that, with the
-------- -------
approval of the Chief Executive Officer of the Company (or if Executive becomes
Chief Executive Officer, then with approval of the Board of Directors),
Executive may serve, or continue to serve, on the boards of directors of, hold
any other offices or positions in, companies or organizations which, in such
officer's judgment, will not present any conflict of interest with the Company
or any of its subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement. The Company shall
retain full direction and control of the means and methods by which Executive
performs the services for which he is employed hereunder. The services which
are to be employed by Executive hereunder are to be rendered in the State
<PAGE>
of California, or in such other place or places in the United States or
elsewhere as may be determined from time to time by the Board of Directors of
the Company, but are to be rendered primarily at the Company's principal place
of business in San Francisco, California. Unless and until otherwise agreed
between the Company and the Executive, the Executive shall be at liberty to
maintain his residence in the San Francisco Bay Area, State of California, and
whenever absent therefrom on account of the performance of services under this
Agreement, shall be reimbursed for all expenses reasonably incurred by him in
the performance of his duties.
4. Compensation and Reimbursement of Expenses;
------------------------------------------
Other Benefits;
--------------
(a) Compensation. During the period of employment under this
------------
Agreement, Executive shall be paid a salary, in biweekly installments, at the
rate of Five Hundred Thousand Dollars ($500,000.00)per year, or such higher
salary as may be from time to time approved by the Board of Directors (or any
duly authorized Committee thereof) of the Company (any such higher salary so
approved to be thereafter the minimum salary payable to Executive during the
remainder of the term hereof), plus such additional incentive compensation, if
any, as may be voted to him yearly by the Board of Directors (or any duly
authorized committee thereof). Executive shall also receive an automobile
allowance from Company of One Thousand Dollars ($1000) per month during the term
of this Agreement.
(b) Reimbursement of Expenses. The Company shall pay or reimburse
-------------------------
Executive, in accordance with its normal policies and practices, for all
reasonable travel and other expenses incurred by Executive in performing his
obligations under this Agreement. The Company further agrees to furnish
Executive with such assistance and accommodations as shall be suitable to the
character of Executive's position with the Company and adequate for the
performance of his duties hereunder.
(c) Other Benefits. During the period of employment under this
--------------
Agreement, Executive shall be entitled to receive all other benefits of
employment generally available to other members of the Company's management and
those benefits for which key executives are or shall become eligible, when and
as he becomes eligible therefor, including without limitation, group health and
life insurance benefits, short and long-term disability plans and participation
in the Company's Profit-Sharing Investment Plan, Retirement Plan, Executive
Medical Plan, Management Incentive Plan (commencing with the fiscal year
beginning April 1, 1996), Long Term Incentive Plan, Executive Benefit Retirement
Plan, Executive Survivor Benefits Plan, and Restricted Stock and Stock Option
Plan, and the Company agrees that none of such benefits shall be altered in any
manner in such a way as to reduce any then existing entitlement of Executive
thereunder.
(d) EBRP and ESBP Designations. Subject to the terms of the
--------------------------
respective Plans, Executive is hereby designated as a participant in the
Executive Benefit Retirement Plan (as amended and restated), with an Income
Objective on Approved Retirement of that percentage of Average Final
Compensation determined under Section D.1 of such Plan (unless and until the
Board of Directors of the Company at any time, or from time to time, designates
a different percentage of Average Final Compensation as an Income Objective),
and Executive is designated as a participant in the Executive Survivor Benefits
Plan.
5. Initial Incentive Grants. Executive shall receive the following
------------------------
initial incentive awards specified in subparagraphs (a) through (c) below:
(a) Stock Options. Subject to the terms and conditions of Company's
-------------
1994 Stock Option and Restricted Stock Plan (the "Plan"), Executive shall
receive an initial grant of 200,000 stock options, which options shall vest in
installments of twenty-five percent (25%) per year commencing on the first
anniversary of the date of grant.
<PAGE>
(b) Restricted Stock. Subject to the terms and conditions of the
----------------
Plan, Executive shall receive an initial grant of 20,000 shares of Company's
restricted stock. The restrictions with respect to ten thousand (10,000) shares
of said stock shall lapse on the fourth (4th) anniversary of the date of grant;
the restrictions on the balance of the shares shall lapse on the fifth
anniversary of the date of grant.
(c) LTIP Cash Award. Executive is hereby designated as a
---------------
participant in Company's Long Term Incentive Plan. Subject to the terms of the
Plan, Executive's annual target award is thirty percent (30%) of salary.
Executive shall be eligible for a full award for the incentive period ending
March 31, 1997. Executive acknowledges that payment of any and all awards under
the Plan are subject to achievement by the Company of the financial targets
specified pursuant thereto.
6. Housing Assistance.
------------------
Company shall reimburse Executive, in accordance with its existing
policies, for the following reasonable expenses incurred in connection with
purchase of suitable housing in the San Francisco Bay Area: real estate
brokerage fees, pest control inspections, furniture storage fees, title
insurance and escrow fees and moving costs (including temporary living expenses,
if any, while in transit). In addition, Company shall reimburse Executive in an
amount up to one-half month's salary for non-receipted, miscellaneous moving
expenses. Company shall further reimburse Executive for any reasonable amounts
he must repay his previous employer for moving expenses paid to, or on behalf
of, Executive by such employer in connection with Executive's relocation for his
prior position.
7. Benefits Payable Upon Disability or Death.
-----------------------------------------
(a) If Executive shall be prevented during the term of this
Agreement from properly performing services hereunder by reason of illness or
other physical or mental incapacity, the Company shall continue to pay Executive
his then current salary hereunder during the period of his disability; provided,
however, that if Executive is disabled for a continuous period exceeding twelve
(12) calendar months, then the Company's obligations hereunder shall cease and
terminate.
(b) In the event of the death of Executive during the term of this
Agreement, Executive's salary payable hereunder shall continue to be paid to
Executive's surviving spouse, or if there is no spouse surviving, then to
Executive's designee or representative (as the case may be) through the six-
month period following the end of the calendar month in which death occurs.
Thereafter, all of Company's obligations hereunder shall cease and terminate.
(c) The provisions of this Paragraph 7 shall not affect any rights
of Executive's heirs, administrators, executors, legatees, beneficiaries or
assigns under the Company's Profit-Sharing Investment Plan, Retirement Plan,
Executive Benefit Retirement Plan, Long Term Incentive Plan, Executive Survivor
Benefits Plan, any Stock Purchase, Restricted Stock and Stock Option Plan, or
any other employee benefit plan of the Company, and any such rights shall be
governed by the terms of the respective plans.
8. Obligations of Executive
------------------------
During and After Employment.
---------------------------
(a) Executive agrees that during the term of his employment under
this Agreement, he will engage in no other business activities, directly or
indirectly, which are or may be competitive with or which might place him in a
competing position to that of the Company, or any affiliated company, without
the prior written consent of the Chief Executive Officer of the Company (or if
Executive becomes Chief Executive Officer, then without the prior written
consent of the Board of Directors).
<PAGE>
(b) Executive acknowledges and agrees that (i) during the course of
his employment Executive will have produced and/or have access to Confidential
Information, records, notebooks, data, formulae, specifications, trade secrets,
customer lists and secret inventions and processes of Company and its affiliated
companies, and (ii) the unauthorized use or sale of any of such confidential or
proprietary information at any time would constitute unfair competition with
Company. Executive promises and agrees not to engage in any unfair competition
with Company either during or after the term of this Agreement. Therefore,
during and subsequent to his employment by Company, or by an affiliated company,
Executive agrees to hold in confidence and not, directly or indirectly,
disclose, use, copy or make lists of any such information, except to the extent
expressly authorized by Company in writing. All records, files, drawings,
documents, equipment, and the like, or copies thereof, relating to Company's
business, or the business of an affiliated company, which Executive shall
prepare, or use, or come into contact with, shall be and remain the sole
property of Company, or of an affiliated company, and shall not be removed
(except to allow Executive to perform his responsibilities hereunder while
traveling for business purposes or otherwise working away from his office) from
the Company's or the affiliated company's premises without its prior written
consent, and shall be promptly returned to Company upon termination of
employment with Company and its affiliated companies. This paragraph 8(b) shall
survive the termination or expiration of this Agreement.
9. Termination.
-----------
(a) For Cause. Notwithstanding anything herein to the contrary, the
---------
Company may, without liability, terminate Executive's employment hereunder for
cause at any time upon written notice from the Board of Directors (or any duly
authorized Committee thereof) specifying such cause, and thereafter the
Company's obligations hereunder shall cease and terminate; provided, however,
-------- -------
that such written notice shall not be delivered until after the Board of
Directors (or any duly authorized Committee thereof) shall have given Executive
written notice specifying the conduct alleged to have constituted such cause and
Executive has failed to cure such conduct, if curable, within fifteen (15) days
following receipt of such notice. As used herein, the term "cause" shall mean
(i) Executive's misconduct, habitual neglect, dishonesty or other knowing and
material violation of Company's policies and procedures in effect from time to
time, or (ii) actions (or failures to act) by Executive in bad faith and to the
detriment of Company or any affiliated company, or (iii) a material breach by
Executive of one or more terms of this Agreement.
(b) Other than for Cause: Performance, Reorganization.
-------------------------------------------------
Notwithstanding anything herein to the contrary, Company may also terminate
Executive's employment (without regard to any general or specific policies of
Company relating to the employment or termination of its employees) should (i)
Executive fail to perform his duties hereunder in a manner satisfactory to the
Chief Executive Officer of Company (or if Executive becomes Chief Executive
Officer, then satisfactory to the Board of Directors), provided that Executive
shall first be given written notice of such unsatisfactory performance and a
period of ninety (90) days to improve such performance to a level deemed
acceptable to the Chairman and Chief Executive Officer (or to the Board of
Directors if Executive becomes Chief Executive Officer) or, (ii) Executive's
position be eliminated as a result of a reorganization or restructuring of
Company or its affiliated companies.
(c) Obligations of Company on Termination of Employment. If Company
---------------------------------------- ----------
terminates Executive's employment pursuant to subparagraph 9(a) above, then all
of Company's obligations hereunder shall immediately cease and terminate.
Executive shall thereupon have no further right or entitlement to additional
salary, incentive compensation payments or awards, or any perquisites from
Company whatsoever, and Executive's rights, if any, under Company's employee and
executive benefit plans shall be determined solely in accordance with the
express terms of the respective plans;
(i) If Company terminates Executive's employment pursuant to
subparagraph 9(b) above, then, notwithstanding anything herein (or in any of
Company's benefit,
<PAGE>
incentive or severance plans) to the contrary and in complete satisfaction and
discharge of all of its obligations to Executive hereunder, Company shall (i)
continue Executive's then base salary, without increase, for the remainder of
the term of this Agreement, provided, however that Company's obligation to make
-------- -------
such salary payments shall be reduced by any compensation received by Executive
from a subsequent employer during such term, (ii) consider Executive for a bonus
under the terms of Company's Management Incentive Plan for the fiscal year in
which termination occurs (but not for any subsequent year) provided that any
such bonus, if earned, shall be prorated to reflect the portion of the year for
which Executive was actively employed, (iii) continue Executive's automobile
allowance and Executive Medical Plan benefits until the earlier of the
expiration date of this Agreement or the effective date of Executive's coverage
under a subsequent employer's plan or policy, (iv) continue the accrual and
vesting of Executive's rights, benefits and existing awards for the remainder of
the term of this Agreement for purposes of the Executive Benefit Retirement
Plan, Executive Survivor Benefit Plan, and the Stock Option and Restricted Stock
Plan, provided, however, that (unless the Board of Directors, or any duly
-------- -------
authorized Committee, in its sole discretion, determines otherwise) Executive
shall in no event receive or be entitled either to additional grants or awards
subsequent to the date of termination, or "Approved Retirement" status, under
the foregoing plans, (v) continue Executive's participation in the Company's
Long Term Incentive Plan for the remainder of the term of this Agreement
(prorating performance periods as of the expiration date of the Agreement),
provided, that Executive shall not participate in any way whatsoever in any
- -------- ----
performance period commencing subsequent to the date of termination, and (vi)
terminate Executive's participation in Company's tax-qualified pension and
profit-sharing plans, pursuant to the terms of the respective plans, as of the
date of Executive's termination of employment.
(ii) Company and Executive agree that if Executive resigns or
otherwise voluntarily leaves his employment with Company prior to the expiration
of this Agreement (other than for Good Reason as defined in the Termination
Agreement between the parties of even date herewith), Company shall be under no
further obligation to make any additional payments or provide any benefits
hereunder. Notwithstanding anything to the contrary contained in the
immediately preceding sentence however, Company agrees that Executive may, in
his sole discretion, elect to resign from Company's employment at any time
between the period commencing January 1, 1998 and ending on the expiration date
of this Agreement (i.e., May 20, 1999). In such event, executive's resignation
---
shall, solely for purposes of delineating Company's obligations to Executive
hereunder, be deemed to be a termination pursuant to Paragraph 9(b) above.
Executive shall thereupon be entitled to receive from Company the greater of (i)
those benefits to which he would otherwise be entitled pursuant to the Company's
then existing Severance Policy for Executive Employees (in the absence of this
Employment Agreement and assuming said Policy would then be applicable to
Executive), or (ii) the compensation and benefits provided in Paragraph 9 (c)
(i), for the remaining term of this Agreement; provided, however, that Executive
-------- -------
shall receive incentive awards (calculated pursuant to the respective terms of
the Company's Management Incentive Plan and Long Term Incentive Plan) for each
of Company's fiscal years ending within the term of this Agreement (i.e., March
---
31, 1998 and March 31, 1999), and such incentive awards shall not be pro-rated
in any manner.
10. General Provisions.
------------------
(a) Executive's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, nor shall Executive's rights be
subject to encumbrance or subject to the claims of Company's creditors. Nothing
in this Agreement shall prevent the consolidation of Company with, or its merger
into, any other corporation, or the sale by Company of all or substantially all
of its properties or assets; and this Agreement shall inure to the benefit of,
be binding upon and be enforceable by, any successor surviving or resulting
corporation, or other entity to which such assets shall be transferred. This
Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.
(b) This Agreement (together with the Termination Agreement between
the parties of even date herewith) and the rights of Executive with respect to
the benefits of
<PAGE>
employment referred to in Paragraph 4(c) constitute the entire agreement between
the parties hereto in respect of the employment of Executive by Company. This
Agreement supersedes and replaces all prior oral and written agreements,
understandings, commitments, and practices between the parties, including but
not limited to Company's letter to Executive dated March 28, 1996.
(c) Any dispute, controversy or claim arising under or in connection
with this Agreement, or the breach hereof, shall be settled exclusively by
arbitration in accordance with the Rules of the American Arbitration Association
then in effect. Judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction. Any arbitration held pursuant
to this paragraph in connection with any termination of Executive's employment
shall take place in San Francisco, California at the earliest possible date. If
any proceeding is necessary to enforce or interpret the terms of this Agreement,
or to recover damages for breach thereof, the prevailing party shall be entitled
to reasonable attorneys fees and necessary costs and disbursements, not to
exceed in the aggregate one percent (1%) of the net worth of the other party, in
addition to any other relief to which he or it may be entitled.
(d) The provisions of this Agreement shall be regarded as divisible,
and if any of said provisions or any part thereof are declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
(e) This Agreement may not be amended or modified except by a
written instrument executed by Company and Executive.
(f) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the date first above written.
McKESSON CORPORATION
A Delaware Corporation
By_______________________
Vice President
ATTEST:
________________________ _________________________
Secretary Executive
By the Authority of the
Compensation Committee
of the Board of Directors
of McKesson Corporation
on April 24, 1996.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>6
<DESCRIPTION>FORM OF EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.31
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, dated as of January 27, 1997, is made by and between
McKesson Corporation, a Delaware corporation (the "Company"), with its principal
office at One Post Street, San Francisco, California, and ______________
("Executive").
RECITALS
A. Pursuant to that certain Agreement and Plan of Merger, dated as of
January 28, 1997 (the "Merger Agreement"), by and among the Company, a wholly-
owned subsidiary of the Company ("Sub"), and General Medical Inc. ("GMI"), the
Company is to acquire GMI through the merger of Sub with and into GMI (the
"Merger").
B. The Company (including its subsidiaries and affiliates), in its
business, develops and uses certain trade secrets, customer lists and other
confidential information and data (as hereinafter defined, "Confidential
Information"). Such Confidential Information will necessarily be communicated to
or acquired by Executive by virtue of his employment with the Company, and the
Company has spent time, effort and money to develop or acquire such Confidential
Information and to promote and increase its goodwill.
C. The Company desires to assure the services and employment of Executive
on its own behalf and on behalf of its affiliated companies for the period
provided in this Agreement, and in so doing, to protect its Confidential
Information and goodwill, and Executive is willing to be employed by the Company
on a full-time basis for such period, upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT.
-----------
The Company agrees to employ Executive, and Executive agrees to be employed
by the Company, for the period stated in Paragraph 3 hereof and upon the
other terms and conditions herein provided.
2. POSITION AND RESPONSIBILITIES.
-----------------------------
During the period of his employment hereunder, Executive agrees to serve
the Company as a Vice President of the Company and Chairman, President and
Chief Executive Officer of GMI or in such other capacity or capacities,
generally consistent with Executive's level of experience and
<PAGE>
expertise, as may be specified from time to time by the President of the
Company.
3. TERM AND DUTIES.
----------------
a. TERM OF EMPLOYMENT. The term of Executive's employment under this
-------------------
Agreement shall be a period of two (2) years commencing at the
Effective Time of the Merger (as defined in the Merger Agreement).
This Agreement shall be null and void in the event the Merger is not
consummated.
b. DUTIES. During the period of his employment hereunder and except for
-------
illness, reasonable vacation periods, and leaves of absence (in each
case, consistent with Company policy as it exists from time to time),
Executive shall devote his best efforts and all his business time,
attention, skill and efforts to the business and affairs of the
Company and its affiliated companies, as such business and affairs now
exist and as they may be hereafter changed or added to, under and
pursuant to the general direction of the President of the Company. The
Company shall retain full direction and control of the means and
methods by which Executive performs the services for which he is
employed hereunder. Executive agrees to comply with all rules,
regulations and instruments established or issued by the Company.
Executive further agrees that during the term of this Agreement,
Executive shall not, directly or indirectly, engage in any business or
activity which would detract from Executive's ability to apply his
best efforts to the performance of his duties hereunder. Executive
agrees that he shall not usurp any corporate opportunities of the
Company.
4. COMPENSATION AND REIMBURSEMENT OF EXPENSES: OTHER BENEFITS.
-----------------------------------------------------------
a. COMPENSATION. During the period of employment under this Agreement,
-------------
Executive shall be paid a base salary at the rate of Four Hundred
Thousand Dollars ($400,000) per year, or such higher salary as may
from time to time be approved by the Board of Directors or any duly
authorized committee thereof (any such higher salary so approved to be
thereafter the minimum salary payable to Executive during the
remainder of the term hereof), and such additional incentive
compensation, if any, as may be voted to him by the Board of
Directors. Executive's salary shall be paid in bi-weekly installments.
Executive will be eligible to participate in the Company's Management
Incentive Plan (the "MIP"). This plan provides for potential incentive
awards to participants based on the Company's financial performance
against plan, and on individual performance. Executive's individual
target award under
<PAGE>
the MIP shall be fifty percent (50%) of base salary. Executive will be
eligible for a full MIP award for the Company's fiscal year beginning
April 1, 1997.
b. REIMBURSEMENT OF EXPENSES. The Company shall pay or reimburse
-------------------------
Executive for all reasonable travel and other expenses incurred by
Executive in performing his obligations under this Agreement. The
Company further agrees to furnish Executive with such assistance and
accommodations as shall be, in the judgment of the Company, suitable
to the character of Executive's position with the Company and adequate
for the performance of his duties hereunder.
c. OTHER BENEFITS. During the period of employment under this Agreement,
--------------
Executive shall be entitled to receive all other benefits of
employment generally available to other members of the Company's
management and those benefits for which key executives are or shall
become eligible pursuant to the Company's Executive Benefit Plan when
and as he becomes eligible therefor, including, without limitation,
participation in the Company's Executive Medical Plan, Life Insurance
Plan, the MIP and the 1994 Stock Option and Restricted Stock Plan (the
"Stock Plan"), in accordance with the terms of those plans.
d. INITIAL INCENTIVE GRANT. Subject to the terms and conditions of the
-----------------------
Stock Plan, Executive shall receive an initial grant of six thousand
(6,000) shares of Company Restricted Stock (as defined in the Stock
Plan), the restrictions on which shall lapse on the second anniversary
of the date of grant.
5. BENEFITS PAYABLE UPON DISABILITY OR DEATH.
-----------------------------------------
a. If Executive shall be prevented during the term of this Agreement from
properly performing services hereunder by reason of illness or other
physical or mental incapacity, the Company shall continue to pay
Executive his then current salary hereunder during the period of his
disability; provided, however, that if Executive is disabled for a
-------- -------
continuous period exceeding six (6) calendar months, then the
Company's obligations hereunder shall cease and terminate at the end
of the sixth calendar month following the month in which the
disability first occurred.
b. In the event of the death of Executive during the term of this
Agreement, Executive's salary payable hereunder shall continue to be
paid to Executive's surviving spouse, or if there is no spouse
surviving, then to Executive's designee or representative (as the case
may
<PAGE>
be) through the six-month period following the end of the calendar
month in which death occurs.
c. The provisions of this Paragraph 5 shall not affect the entitlement of
Executive's heirs, executors, administrators, legatees, beneficiaries
or assigns under the MIP or the Stock Plan, or any other employee
benefit plan of the Company.
6. OBLIGATIONS OF EXECUTIVE DURING AND AFTER EMPLOYMENT.
----------------------------------------------------
a. No Competition. Executive acknowledges and agrees that he has and will
---------------
have knowledge and access to Confidential Information (as defined in
Paragraph 6b hereof) and responsibilities relating to all aspects of
the business operations of the Company in all of the territories and
geographical areas covered by the Company's business operations.
Executive further acknowledges and agrees that this knowledge
qualifies Executive as a potentially formidable competitor throughout
the territories and geographical areas covered by the Company's
business operations.
Executive agrees that during the term of his employment under this
Agreement, and for a period of one (1) year following Executive's
Termination of Employment with the Company for any reason or for a
period ending one (1) year after the date of entry by a court of
competent jurisdiction of a final judgment enforcing the no
competition provision of this Agreement, whichever is later, he will
not, within the territories and the geographical areas covered by the
Company's business operations, own, participate, engage or have any
interest in, directly or indirectly, any person, firm, partnership,
joint venture, corporation, or business (whether as an owner,
employee, officer, director, agent, creditor, security holder or other
investor, or consultant or in any other capacity which calls for the
rendering of personal services, advice, acts of management, operation
or control) which is competitive with the Company's or any affiliated
company's medical and surgical supplies and wholesale pharmaceutical
distribution businesses (including, without limitation, competitive
with any products or services sold, investigated, developed or
otherwise pursued by the Company or any affiliated company in such
businesses at the time of Executive's Termination of Employment with
the Company). For purposes of this Paragraph 6, "Executive's
Termination of Employment with the Company" shall mean the latest of
(i) the date on which the Company terminates Executive's employment
for cause under Paragraph 7a hereof, (ii) the date on which Executive
resigns or otherwise voluntarily leaves his employment with the
Company, and (iii) the date on
<PAGE>
which any salary continuation payments to Executive under Paragraph 7c
hereof cease.
b. UNAUTHORIZED USE OF CONFIDENTIAL INFORMATION. Executive acknowledges
---------------------------------------------
and agrees that (i) during the course of his employment with the
Company, Executive has or will have produced and/or has had or will
have access to Confidential Information, as hereinafter defined, and
(ii) the unauthorized use or disclosure of any such Confidential
Information at any time would constitute unfair competition with the
Company. Executive promises and agrees not to engage in any unfair
competition with the Company either during or after the term of this
Agreement. Therefore, during and subsequent to his employment with the
Company, or by an affiliated company, Executive agrees to hold in
confidence the Company's Confidential Information and not, directly or
indirectly, disclose, publish, or otherwise make available to the
public or to any individual, firm or corporation, or use, copy or make
lists of any of the Company's Confidential Information, other than on
behalf of the Company, except to the extent expressly authorized by
the Company in writing. Executive further agrees that all Confidential
Information, together with all records, files, drawings, document,
equipment, and the like, or copies thereof, relating to the Company's
business, or the business of an affiliated company, which Executive
shall prepare, or use, or come into contact with, shall be and remain
the sole property of the Company, or of an affiliated company, and
shall not be removed (except to allow Executive to perform his
responsibilities hereunder while traveling for business purposes or
otherwise working away from his office) from the Company's or the
affiliated company's premises without its prior written consent, and
shall be promptly returned to the Company upon termination of
employment with the Company and its affiliated companies. This
Paragraph 6b shall survive the termination or expiration of this
Agreement.
c. CONFIDENTIAL INFORMATION DEFINED. For purposes of this Agreement,
---------------------------------
"Confidential Information" means all information (whether or not
reduced to written, electronic, magnetic or other tangible form)
acquired in any way by Executive during the course of his employment
the Company concerning the products, projects, activities, business or
affairs of the Company or its customers, including, without
limitation, (i) all information concerning trade secrets of the
Company, including computer programs, system documentation, special
hardware, product hardware, related software development, manuals,
formulae, processes, methods, machines, compositions, ideas,
improvements or inventions of the Company and
<PAGE>
its affiliated companies, (ii) all sales and financial information
concerning the Company, (iii) all customer and supplier lists, (iv)
all information concerning products or projects under development or
marketing plans for any of those products or projects, and (v) all
information in any way concerning the products, projects, activities,
business or affairs of customers of the Company which was furnished to
him by the Company or any of its agents or customers or otherwise
discovered by him during his employment; provided, however, that
-------- -------
Confidential Information does not include information which (A)
becomes available to the public other than as a result of disclosure
by Executive in violation of this Agreement, (B) was available to him
on a non-confidential basis outside of his employment with the
Company, or (C) becomes available to him on a non-confidential basis
from a source other than the Company or any of its agents, creditors,
suppliers, lessors, lessees or customers.
d. WORK MADE FOR HIRE. Executive recognizes and understands that his
------------------
duties at GMI have included and at the Company may continue to include
the preparation of materials, including computer software and other
written or graphic materials, and that any such materials conceived or
written by him were done and shall continue to be done as "work made
for hire" as defined and used in the Copyright Act of 1976, 17 USC 1
et seq. In the event of publication of such materials, Employee
understands that since the work is a "work made for hire, " the
Company will solely retain and own all rights in all materials,
including the right to copyright.
e. DISCLOSURE OF DISCOVERIES. IDEAS AND INVENTIONS. Executive warrants
------------------------------------------------
and represents that he has listed and described on the attached
Exhibit A every discovery, idea and invention (1) in which he has any
right, title or interest, and (2) which was made or conceived wholly
or in part prior to the commencement of his employment with the
Company and not assigned to the Company. (Employee understands and
acknowledges that it is in his interest to establish that a discovery,
idea, or invention was made prior to the commencement of his
employment with the Company.) Employee covenants and agrees to notify
the Company in writing before he makes any disclosure or performs or
causes to be performed any work for or on behalf of the Company which
appears to present a conflict with the rights claimed in Exhibit A or
with any other rights, duties or obligations outside the scope of this
Agreement. In the event that Executive fails to provide the Company
with such notice, the Company shall be released from any claim by
Executive or by anyone in
<PAGE>
privity with him against the Company with respect to the use of any
such discovery, idea or invention in any work or the product of any
work which he performs or causes to be performed on behalf of the
Company.
f. DISCLOSURE OF OTHER DISCOVERIES. IDEAS AND INVENTIONS/ASSIGNMENT OF
-------------------------------------------------------------------
PATENTS. Executive shall disclose promptly to the Company, its
-------
successors or assigns any and all works, inventions, discoveries and
improvements authored, conceived or made by Executive during the
period of employment and related to the business or activities of the
Company, solely or jointly with others, which is related to the lines
of business, work or investigations of the Company at the time of such
discovery, idea or invention or which results from, or is suggested
by, any work which Executive may do for or on behalf of the Company,
and hereby assigns and agrees to assign all his interest therein to
the Company or its nominee. Whenever requested to do so by the
Company, Executive shall execute any and all applications, assignments
or other instruments which the Company shall deem necessary to apply
for and obtain Letters Patent or Copyrights of the United States or
any foreign country or to otherwise protect the interest therein and
shall assist the Company in every proper way (entirely at the
Company's expense, including reimbursement to him for all expense and
loss of income) to obtain such patents and copyrights and to enforce
them. Such obligations shall continue beyond the termination of
employment with respect to works, inventions, discoveries and
improvements authored, conceived or made by Executive during the
period of employment, and shall be binding upon Employee's assigns,
executors, administrators and other legal representatives. All such
works, inventions, discoveries and improvements shall remain the sole
and exclusive property of the Company, whether patentable or not.
g. Nonsolicitation. Executive recognizes and acknowledges that it is
----------------
essential for the proper protection of the business of the Company
that Executive be restrained for a reasonable period following the
termination of Executive's employment with the Company from: (1)
soliciting or inducing any employee of the Company to leave the employ
of the Company; (2) hiring or attempting to hire any employee of the
Company; and (3) soliciting the trade of or trading with the customers
of the Company for any competitive business purpose. Accordingly,
Executive agrees that during the term of his employment under this
Agreement, and for a period of two (2) years following Executive's
Termination of Employment with the Company for any reason, Executive
shall not, directly or indirectly, (i) hire, solicit,
<PAGE>
aid in or encourage the hiring and/or solicitation of, contract with
for employment consulting, or any other purpose which is competitive
to the Company's business operation, aid in or encourage such
contracting, or induce or encourage to leave the employment of the
Company, any employee of the Company; (ii) hire, solicit, aid in or
encourage the hiring and/or solicitation of, contract with for
employment, consulting or any other purpose which is competitive to
the Company's business operations, aid in or encourage such
contracting or induce or encourage to hire or cause to be hired, any
individual who has left the employment of the Company within one (1)
year prior to Executive's Termination of Employment with the Company;
or (iii) solicit, aid in or encourage the solicitation of, contract
with, aid in or encourage the contracting with, service, or contact
any person or entity which is, or was, within three (3) years prior to
Executive's Termination of Employment with the Company, a customer or
client of the Company for the purpose of offering or selling a product
or service competitive with any of such businesses.
h. Remedy for Breach. Executive acknowledges and agrees that the Company
-----------------
would be irreparably harmed if he violated any of the covenants in
this Agreement or if any of these covenants were not specifically
enforced. Executive further agrees that in the event of a breach or
threatened breach of any of the covenants contained in this Agreement,
including, without limitation, Paragraph 6 hereof, the Company shall
have the right, if it so chooses, to obtain relief in any court of
competent jurisdiction to enjoin Executive from breaching or further
breaching such provisions of this Agreement, to obtain specific
performance of this Agreement, to obtain monetary compensation for
damages sustained as a result of breaches of this Agreement, and to
recover the attorneys' fees and costs and expenses incurred by the
Company as a result of Executive's breach or threatened breach of this
Agreement.
i. COMPANY DEFINED. For purposes of clarity, the term "Company" as used
---------------
in this Paragraph 6 shall specifically be deemed to include GMI and
its subsidiaries.
7. TERMINATION.
-----------
a. For Cause. Notwithstanding anything herein to the contrary, the
---------
Company may, without liability, terminate Executive's employment
hereunder for cause at any time immediately upon written notice from
the President of the Company or his designee specifying such cause. As
<PAGE>
used herein, the term "cause" shall mean (i) Executive's willful
misconduct, dishonesty, or other knowing and material violation of the
Company's policies and procedures in effect from time to time,
following a written warning to cease or otherwise remedy such
violation, (ii) actions (or failures to act) by Executive in bad faith
and to the detriment of the Company, (iii) any breach or threatened
breach of Paragraph 6 hereof, or (iv) a material breach by Executive
of one or more terms of this Agreement, other than Paragraph 6 hereof,
which breach Executive has not cured within thirty (30) days of his
receipt of written notice from the Company of such breach; provided,
--------
however, that the term "cause" shall not mean Executive's refusal to
--------
relocate beyond a distance of thirty (30) miles at the request of the
Company.
b. OTHER THAN FOR CAUSE; PERFORMANCE; REORGANIZATION. Notwithstanding
--------------------------------------------------
anything herein to the contrary, the Company may also terminate
Executive's employment (without regard to any general or specific
policies of the Company relating to the employment or termination of
its employees) should (i) Executive fail to perform his duties
hereunder in a manner satisfactory to the President of the Company,
provided that Executive shall first be given written notice of such
unsatisfactory performance and a period of thirty (30) days to improve
such performance to a level deemed acceptable to the President of the
Company or, (ii) Executive's position be eliminated as a result of a
reorganization or restructuring of the Company or its affiliated
companies.
c. OBLIGATIONS OF COMPANY ON TERMINATION OF EMPLOYMENT. If the Company
---------------------------------------------------
terminates Executive's employment pursuant to Paragraph 7a hereof,
then all of the Company's obligations hereunder shall immediately
cease and terminate. Executive shall thereupon have no further right
or entitlement to additional salary, incentive compensation payments
or awards, or any perquisites from the Company whatsoever, and
Executive's rights, if any, under the Company's employee and
management benefit plans shall be determined solely in accordance with
the express terms of the respective plans.
If the Company terminates Executive's employment pursuant to Paragraph
7b hereof, then, notwithstanding anything herein (or in any of the
Company's benefit or incentive plans) to the contrary and in complete
satisfaction and discharge of all of its obligations to Executive
hereunder, the Company shall (i) continue Executive's then base
salary, without increase, for the longest of (x) three (3) months, (y)
such period set forth in Company policy and (z) the remainder of the
<PAGE>
term of this Agreement; provided, however, that the Company's
-------- -------
obligation to make such salary payments shall be reduced by any
compensation received by Executive from a subsequent employer during
such term, and (ii) consider Executive for a bonus under the terms of
the MIP for the fiscal year in which termination occurs (but not for
any subsequent year); provided, further, that any such bonus, if
-------- --------
earned, shall be pro-rated to reflect the portion of the year for
which Executive was actively employed.
The Company and Executive agree that if Executive resigns or otherwise
voluntarily leaves his employment with the Company prior to expiration
of this Agreement, the Company shall be under no further obligation to
make any additional payments or provide any benefits hereunder.
Executive acknowledges and agrees that all of his obligations under
Paragraph 6 hereof shall continue in full force and effect subsequent
to any of the above-described terminations of his employment with the
Company.
8. GENERAL PROVISIONS.
-------------------
a. Executive's rights and obligations under this Agreement shall not be
transferable by him by assignment or otherwise, nor shall Executive's
rights be subject to encumbrance or subject to the claims of the
Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its properties or assets; and this Agreement shall inure to the
benefit of, be binding upon and be enforceable by, any successor,
surviving or resulting corporation, or other entity to which such
assets shall be transferred. This Agreement shall not be terminated by
the voluntary or involuntary dissolution of the Company.
b. This Agreement and the rights of Executive with respect to the
benefits of employment referred to in Paragraph 4c hereof constitute
the entire agreement between the parties hereto in respect of the
employment of Executive by the Company. This Agreement supersedes and
replaces all prior oral and written agreements, understandings,
commitments, and practices between Executive and either GMI or the
Company; provided, however, that nothing herein shall relieve
--------- --------
Executive from his obligation to repay any borrowings from the Company
pursuant to the terms and conditions of such borrowings.
<PAGE>
c. The provisions of this Agreement and parts thereof shall be regarded
as divisible, and if any of said provisions or any part thereof are
declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remainder of such
provisions or parts thereof and the application thereof shall not be
affected thereby.
d. This Agreement may not be amended or modified except by a written
instrument executed by the Company and Executive.
e. This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the
Commonwealth of Virginia. The parties agree that any dispute related
to or involving this Agreement will be litigated in a state or federal
court of competent jurisdiction in the Commonwealth of Virginia.
f. If this Agreement is executed after the commencement of Executive's
employment with the Company, Executive acknowledges and agrees that
this Agreement is supported by new, additional consideration, the
receipt and adequacy of which are hereby acknowledged by Executive.
g. In the event that any of the provisions of this Agreement are
determined by a court of competent jurisdiction to be contrary to any
applicable statute, law, rule or regulations, or to be or any reason
unenforceable as written, Executive expressly agrees that such court
may modify this Agreement or any of its terms so as to permit the
enforcement thereof as thus modified. In the event that any of the
provisions of this Agreement should ever be deemed to exceed the time,
geographic area, or activity limitations permitted by applicable law,
the parties agree that such provisions should be and are reformed to
the maximum time, geographic area and activity limitations permitted
by applicable law, and the parties expressly authorize a court having
jurisdiction to reform the provisions to the maximum time, geographic
area and activity limitations permitted by applicable law.
McKESSON CORPORATION
______________________
By:
Title:
______________________
ATTEST
_____________________
Name:
<PAGE>
EXHIBIT A
The following is the entire list of discoveries, ideas and inventions (1)
in which I claim any right, title and interest and (2) which were conceived
wholly or in part prior to the commencement of my employment with the Company
and not assigned to the Company.
(List every discovery, idea and invention by TITLE ONLY and by the dates of
documents describing them. DO NOT DISCLOSE THE SUBJECT MATTER IN DETAIL. If
not applicable, write "NONE.")
TITLE DOCUMENT AND DATE THEREOF
DESCRIBING THE DISCOVERY, IDEA
OR INVENTION
_________________________________
Signed
Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>7
<DESCRIPTION>FORM OF CONSULTING AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.32
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT, dated as of March 28, 1997, is by and
between McKESSON CORPORATION, a Delaware Corporation, with its principal office
at One Post Street, San Francisco, California (the "Company") and
( ).
R E C I T A L S
- - - - - - - -
A. currently holds the positions of Chairman
and Chief Executive Officer of Company;
B. Company and now desire to alter their relationship
to allow to (i) relinquish the position of Chief Executive
Officer, (ii) retire as an executive officer and employee of Company, but (iii)
continue to serve Company in the capacity of non-executive Chairman.
C. The Company recognizes the value of services and
has determined that it is in its best interests that, upon his retirement,
be available to provide such consulting and advisory services to Company
as may be requested by Company from time to time, and is willing
to make such services available to Company, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Engagement. Subject to the terms and conditions of this
----------
Agreement, the Company agrees to retain and agrees to
serve the Company for the period stated in Paragraph 2 hereof.
2. Term and Duties. (a) The period of engagement
---------------
pursuant to this Agreement shall commence on July 1, 1997 and continue until
July 31, 1998, (the "Term") provided, however, that prior to April 1, 1998 the
--------- -------
parties may agree to extend the Term by mutual agreement.
(b) During the Term, agrees to continue to serve (i) as a
member of the Board of Directors of Company, and (ii) at the pleasure of the
Board of Directors, as Chairman of the Board of Directors of Company, and shall
render to Company such consulting
<PAGE>
and advisory services and perform such special assignments in connection with
the business of Company as may be requested from time to time by the Board of
Directors or the Chief Executive Officer of Company (the "Services"). Company
and agree that the performance of the Services by is
intended to require approximately twenty-five percent (25%) of
normal business hours (assuming full-time employment) and agrees
and undertakes to devote such amount of time to the performance of the Services.
3. Compensation and Reimbursements of Expenses
-------------------------------------------
(a) Compensation. During the Term, shall be paid an
------------
annual retainer of Two Hundred Fifty Thousand Dollars ($ 250,000.00) in equal
quarterly installments in advance. shall also be considered for an
additional payment following the conclusion of Company's fiscal year ending
March 30, 1998, which payment will be calculated on the same basis as if
had continued to participate in Company's Management Incentive Plan with a
target bonus of sixty percent (60%) of his annual retainer.
(b) Reimbursement of Expenses. The Company shall pay or reimburse
--------------------------
, in accordance with its normal policies and practices, for all
reasonable and documented travel and other expenses incurred by in
performing the services contemplated by this Agreement. Company further agrees
to furnish with such assistance and accommodations as shall be
suitable to the character of position with the Company and adequate
for the performance of his duties hereunder including, but not limited to,
office space, secretarial support, suitable transportation and membership in
various luncheon clubs.
(c) Other Benefits. Nothing contained in this Agreement shall affect
--------------
the benefits available now or in the future to as a retired
employee or as a director of the Company; provided, however, that so long as
-------- -------
is receiving payments pursuant to Paragraph 3(a) above, he shall
not receive a retainer or fees for service as a non-employee director of the
Company.
4. Payments Upon Disability or Death.
---------------------------------
(a) If shall be prevented during the term of this
Agreement from properly performing services hereunder by reason of illness or
other physical or mental incapacity (as determined by the Company in the
exercise of its reasonable judgment), the Company shall continue to pay
during the period of his disability; provided, however, that if is
-------- -------
disabled for a continuous period exceeding three (3) calendar months, then all
of the Company's obligations hereunder shall cease and terminate.
<PAGE>
(b) In the event of the death of during the term of this
Agreement, all of Company's obligations hereunder shall cease and terminate.
5. Conflict of Interest. Nothing contained in this Agreement shall
--------------------
be deemed to preclude from engaging in other professional endeavors
or employment not inconsistent with the terms of this Agreement.
hereby represents that he is not, nor during the Term will he become, bound by
any agreements, commitments or obligations, nor involved with any professional
endeavors, which restrict or may restrict his ability to perform the Services.
shall adhere to the conflict of interest policy promulgated by
Company and shall direct to Company any business opportunities in the fields
in which Company or its direct or indirect subsidiaries ("Affiliates") operate.
6. Independent Contractor. It is expressly understood and agreed
----------------------
that, in rendering the Services, is an independent contractor and
is not an employee or agent of Company and shall have sole discretion to
determine the time, manner and other details of rendering the Services. Company
shall not have the right to control the manner and detail of the performance of
the Services and, subject to such regulations as Company may from time to time
promulgate, shall exercise independent judgment as to such
performance. shall be responsible for all federal, state and
local taxes of every kind in connection with payments hereunder, provided that
Company may withhold such amounts if and as required by any applicable taxing
authority.
7. Non-Competition and Non-Solicitation. covenants
------------------------------------
and agrees that during the Term and for a period of two years following the
termination of this Agreement, he will not directly or indirectly without the
prior written approval of Company:
(a) consult with, advise or otherwise participate, render services to
or engage in any business similar to, or which competes with, the business now
or then being conducted by Company or any of its Affiliates, or have any
interest (other than an interest of 1% or less of the stock of a publicly traded
corporation) or involvement in any such business, whether as an agent, employee,
advisor, creditor, proprietor, partner, stockholder, officer, director or
otherwise;
(b) solicit from any present or past customer, client or vendor of
Company or any of its Affiliates any business similar to that now or then being
conducted by Company or any of its Affiliates;
(c) request or advise any present or future customer, client or
vendor of Company or any of its Affiliates to withdraw, curtail or cancel its
business dealings with Company or any of its Affiliates; or
<PAGE>
(d) solicit, suggest or encourage any present or future employee of
Company or any of its Affiliates to leave such employ for any reason whatsoever.
Should any portion of this Section 7 be deemed unenforceable because
of its scope, duration or territory, and only in such event, then the parties
consent and agree to such limitation on scope, duration or territory as may be
finally adjudicated as enforceable in such jurisdiction by a court of competent
jurisdiction after exhaustion of all appeals, to give this Section 7 its maximum
permissible scope, duration and territory. It is hereby agreed that each breach
of this Section 7 is a distinct and material breach of this Agreement and that
solely a monetary remedy will be inadequate, impractical and extremely difficult
to prove, and that each such breach will cause Company irreparable harm. It is
further agreed that, in addition to any and all remedies available at law or
equity (including monetary damages and Company's right to cease payments under
this Agreement), Company shall be entitled to temporary and permanent injunctive
relief to enforce the provisions of this Section 7 without the necessity of
proving actual damages. Company may pursue any of the remedies described in
this Section 7 concurrently or consecutively in any order as to any such breach
or violation, and the pursuit of one of such remedies at any time will not be
deemed an election of remedies or waiver of the right to pursue any of the other
of such remedies.
8. Notices. All notices given or made pursuant hereto shall be in
-------
writing and shall be deemed to have been given or made if in writing and
delivered personally or sent by registered or certified mail (postage prepaid,
return receipt requested), Federal Express or equivalent courier service (by
next day service), or facsimile transmission to the parties at the following
addresses:
To at his home address shown in the records of
Company.
To Company at: McKesson Corporation
1 Post Street
San Francisco, CA 94104
Attention: General Counsel
Telecopier No. (415) 983-8826
or to such other address as shall be furnished by either party by like notice to
the other. Such notice or communication shall be deemed to have been given or
made (i) if personally delivered, on the date so delivered, (ii) if sent by
registered or certified mail, on the third business day after mailing, (iii) if
sent by Federal Express or equivalent courier service, on the next business day
following delivery to the courier service within its business hours provided for
next day delivery, or (iv) if sent by facsimile transmission, on the date of
confirmation.
<PAGE>
9. General Provisions.
------------------
(a) This Agreement shall be binding upon the parties hereto, their
heirs, personal representatives, successors, transferees and assigns; provided
that may not assign any of his rights, duties, or obligations
hereunder.
(b) This Agreement contains the entire agreement between the parties
in respect of the consulting engagement of by Company. This
Agreement supersedes and replaces all prior oral and written agreements,
understandings, commitments, and practices between the parties.
(c) This Agreement may not be amended or modified except by a
written instrument executed by and Company.
(d) This Agreement shall be governed by, and interpreted and enforced
in accordance with, the substantive laws of the State of California.
(e) No waiver of any of the provisions of this Agreement shall
constitute a continuing waiver of such provision or a waiver of any other
provision hereof. No waiver shall be binding unless executed in writing by the
party making the waiver.
In witness whereof, the parties have executed this Consulting
Agreement as of the date first above written.
McKesson Corporation
A Delaware Corporation
by _____________________
Attest: Vice President
____________________________
Secretary _________________________
By the Authority of
the Board of Directors
of McKesson Corporation
on ____________, 1997.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>8
<DESCRIPTION>FIRST AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.37
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
---------
August 31, 1995, is entered into by and among McKesson Corporation, a Delaware
corporation (the "Company"), Medis Health and Pharmaceutical Services Inc., an
-------
Ontario corporation and indirect wholly-owned subsidiary of the Company
("Medis"), the several financial institutions party to the Credit Agreement (the
-----
"Banks"), Bank of America Canada, as administrative agent with respect to the
-----
Tranche B Canadian Loans and the Bankers' Acceptance Facility (the "Canadian
--------
Administrative Agent"), Chemical Bank, as co-agent for the Banks (the "Co-
- -------------------- ---
Agent"), and Bank of America National Trust and Savings Association, as agent
- -----
for the Banks (the "Agent").
-----
RECITALS
--------
A. The Company, Medis, Banks, Canadian Administrative Agent, Co-Agent and
Agent are parties to a Credit Agreement dated as of March 31, 1995 (the "Credit
------
Agreement") pursuant to which the Banks have extended certain credit facilities
- ---------
to the Company and Medis.
B. The obligations of Medis under the Loan Documents are guaranteed by the
Company pursuant to a Guaranty dated as of March 31, 1995 by the Company in
favor of the Agent and the Banks (the "Guaranty").
--------
C. The obligations of the Company under the Credit Agreement, the Guaranty
and the other Loan Documents are secured by that certain Pledge and Security
Agreement dated as of March 31, 1995 among the Company and the Agent (the
"Company Pledge Agreement").
- -------------------------
D. The Company has requested that the Agent terminate the Company Pledge
Agreement and that certain Custodial Agreement Acknowledgement dated as of March
31, 1995 among the Company, Bank of America National Trust and Savings
Association, as Custodian (the "Company Custodial Agreement Acknowledgment"),
------------------------------------------
and the Agent and that the Banks agree to certain amendments of the Credit
Agreement.
E. The Banks are willing to amend the Credit Agreement and authorize the
Agent to terminate the Company Pledge Agreement and the Company Custodial
Agreement Acknowledgment, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
-------------
herein shall have the meanings, if any, assigned to them in the Credit
Agreement, as applicable.
2. Amendments to Credit Agreement.
------------------------------
1
<PAGE>
(a) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Approved Custodian" by amending and restating such defined term in
its entirety as follows:
"'Approved Custodian' means BofA, in its capacity as the initial
------------------
custodian under the Custodial Agreement and its successors and assigns, any
Bank (or any Affiliate of a Bank), The Bank of New York, as successor-by-
assignment to BofA (provided that BofA shall have assigned to The Bank of
New York BofA's rights as Custodian under the Custodial Agreement and the
Custodial Agreement Acknowledgement, and The Bank of New York shall have
assumed the obligations of BofA as Custodian under such documents pursuant
to an assignment and assumption agreement in form and substance
satisfactory to the Agent and the Majority Banks) and any other Persons
that may be approved in writing as additional or successor custodians by
the Company, the Agent and Majority Banks."
(b) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Collateral" by amending and restating such defined term in its
entirety as follows:
"'Collateral' means all property and interests in property and
----------
proceeds thereof now owned or hereafter acquired by Macfor that becomes
subject to a Lien in favor of the Banks, or the Agent on behalf of the
Banks, whether under this Agreement, the Pledge Agreement or any other
Collateral Document; which Collateral shall not include any deposit in a
Tranche B Canadian Bank."
(c) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Collateral Documents" by amending and restating such defined term
in its entirety as follows:
"'Collateral Documents' means, collectively, (a) the Pledge Agreement,
--------------------
the Custodial Agreement (other than provisions that do not relate to
Collateral or any other Collateral Document), the Custodial Agreement
Acknowledgement, and all other security agreements and other similar
agreements between the Company or Macfor and the Banks or the Agent for its
benefit and the benefit of the Banks now or hereafter delivered to the
Banks or the Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents
now or hereafter filed in accordance with the Uniform Commercial Code or
comparable law) against the Company or Macfor as debtor in favor of the
Banks or the Agent for its benefit and the benefit of the Banks as secured
party, and (b) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
(d) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Custodial Agreement" by amending and restating such defined term
in its entirety as follows:
2
<PAGE>
"'Custodial Agreement' means the Custody Agreement dated as of August
-------------------
14, 1995 between Macfor and BofA in its capacity as Custodian and any other
custodial agreement with an Approved Custodian, substantially in the form
of such Custody Agreement or in such other form as may be approved by
Majority Banks, which may be in effect from time to time."
(e) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Custodial Agreement Acknowledgement" by amending and restating
such defined term in its entirety as follows:
"'Custodial Agreement Acknowledgement' means a Custodial Agreement
-----------------------------------
Acknowledgement substantially in the form of Exhibit J and any other
custodial agreement acknowledgement among Macfor, the Agent and the
Custodian substantially in the form of Exhibit J or in such other form as
may be approved by the Majority Banks, which may be in effect from time to
time."
(f) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Custodian" by amending and restating such defined term in its
entirety as follows:
"'Custodian' means BofA, in its capacity as the initial Custodian
---------
under the Custodial Agreement and Custodial Agreement Acknowledgement, and
any other Approved Custodian under the Custodial Agreement and Custodial
Agreement Acknowledgement (including any successor Custodial Agreement and
Custodial Agreement Acknowledgement) appointed in accordance with the terms
hereof and the Pledge Agreement. The parties hereto acknowledge that there
may be more than one Custodian from time to time."
(g) Section 1.01 of the Credit Agreement shall be amended by adding
the following new defined term in the appropriate alphabetical order:
"'Macfor' means Macfor International Finance Company, a Delaware
------
corporation and a Wholly-Owned Subsidiary of the Company."
(h) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Majority Banks" by amending and restating such defined term in its
entirety as follows:
"'Majority Banks' means at any time (i) Banks then holding more than
--------------
50% of the then aggregate unpaid principal amount of the Loans, or (ii) if
no such principal amount is then outstanding, Banks then having more than
50% of the Commitments. For purposes of clarification of clause (ii) of
this definition only, the Tranche B Banks shall include only the Tranche B
Domestic Banks."
(i) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Projected Market Value" by amending
3
<PAGE>
and restating such defined term in its entirety as follows:
"'Projected Market Value' means the Market Value of the Collateral
----------------------
that the Company intends to pledge or cause Macfor to pledge under the
Pledge Agreement to secure the Commitments and the Loans (if any) for the
succeeding calendar quarter as set forth in a Notice of Election of
Projected Market Value."
(j) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Qualifying Collateral" by amending and restating such term in its
entirety as follows:
"'Qualifying Collateral' means Collateral as to which a first priority
---------------------
Lien, subject to no other Liens (except the Lien in favor of the Custodian
that secures the obligations of the Company or Macfor to the Custodian
under the Custodial Agreement that is equal and ratable with the Lien of
the Agent and the Lien in favor of the Custodian that secures the
obligations of the Company or Macfor to the Custodian other than under the
Custodial Agreement that is junior to the Lien of the Agent), exists in
favor of the Agent for the benefit of the Agents and the Banks pursuant to
the Collateral Documents, and of a type as to which the Company has
furnished or caused to be furnished an opinion of counsel (which counsel
shall be satisfactory to the Agent) addressed to the Agent and the Banks,
in the form of Exhibit D-3 or otherwise satisfactory to the Agent and
Majority Banks and opining that a perfected Lien exists or will exist in
favor of the Agent for the benefit of the Banks, and consisting of (a) cash
held in a segregated deposit account with the Agent or with the Custodian
contemplated under the Custodial Agreement and the Custodial Agreement
Acknowledgement, (b) securities issued by the United States Government or
(c) securities directly and unconditionally guaranteed by the United States
Government; provided, however, that if the Company proposes to pledge
-------- -------
Collateral of the type described in clause (b) or (c) above, such
Collateral shall not constitute Qualifying Collateral unless and until the
Company has furnished or caused to be furnished to the Agent, with
sufficient copies for each Bank, a certificate of the Company signed by a
Responsible Officer to the effect that such Collateral constitutes
Collateral of such type and such other evidence, certificates or opinions
as the Agent may, at the request of any Bank, reasonably request; and
provided, further, that if any Bank shall have notified the Agent that
-------- -------
under any Capital Adequacy Regulation then in effect with respect to such
Bank, assets secured by such Collateral do not have a risk category with a
risk weight of 20%, such Collateral shall not be Qualifying Collateral as
to that Bank, and the provisions of subsection 3.03(c) shall apply to such
Bank.
(k) Subsection 5.12 of the Credit Agreement shall be amended in its
entirety as follows:
"(a) The provisions of each of the Collateral
4
<PAGE>
Documents are effective to create in favor of the Agent for its benefit and
the benefit of the Banks, a legal, valid and enforceable first priority
security interest in all right, title and interest of the Company (in the
case of Collateral pledged pursuant to Collateral Documents to which the
Company is a party) or Macfor (in the case of Collateral pledged pursuant
to Collateral Documents to which Macfor is a party) in the Collateral
described therein to the extent that Collateral is pledged thereunder from
time to time subject only to the equal and ratable Lien of the Custodian
and the junior Lien of the Custodian under the Custodial Agreement; and
financing statements have been filed in the offices in accordance with the
Pledge Agreement.
(b) All representations and warranties of the Company and Macfor
contained in the Collateral Documents are true and correct."
(l) The following shall be added as a new Section 5.13 of the Credit
Agreement:
"5.13. Ownership of Macfor. Macfor is a Wholly-Owned Subsidiary of
-------------------
the Company."
(m) Subsection 8.01(d) of the Credit Agreement shall be amended and
restated in its entirety as follows:
"(d) Other Defaults. Either Borrower or Macfor (to the extent that
--------------
Macfor is a party thereto) fails to perform or observe any other term or
covenant contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 20 days after the earlier
of (i) in the case of any provision in Article V or VI, the date upon which
a Responsible Officer knew of such failure or (ii) the date upon which
written notice thereof is given to the Company by the Agent or any Bank;
or"
(n) The following shall be added at the end of Section 10.01 of the
Credit Agreement: "For purposes of clarification, for the purpose of any waiver,
amendment or consent covering the matters referred to in subsections (a) through
(f) of this Section 10.01 and given or entered into at any time that no
principal amount of Loans is then outstanding, the Tranche B Banks shall include
only the Tranche B Domestic Banks. "
(o) Exhibit I to the Credit Agreement shall be amended and restated
in its entirety in the form of Exhibit A attached hereto.
(p) Exhibit J to the Credit Agreement shall be amended and restated
in its entirety in the form of Exhibit B attached hereto.
3. Representations and Warranties. The Company hereby represents and
------------------------------
warrants to the Agent and the Banks as follows:
(a) No Event of Default has occurred and is
5
<PAGE>
continuing.
(b) The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Credit Agreement, as amended by this
Amendment, constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its respective terms, without defense,
counterclaim or offset.
(c) All representations and warranties of the Company contained in
the Credit Agreement and of Macfor in the Collateral Documents to which it is a
party are true and correct.
(d) The Company is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Agent and
the Banks or any other Person.
4. Effective Date. This Amendment will become effective as of August 31,
--------------
1995 (the "Effective Date"), provided that each of the following conditions
-------------- --------
precedent is satisfied on or before September 6, 1995:
(a) The Agent has received from the Company and each of the Banks a
duly executed original (or, if elected by the Agent, an executed facsimile copy)
of this Amendment.
(b) A Pledge Agreement, Custodial Agreement, and Custodial Agreement
Acknowledgement executed by Macfor and each other party thereto, and a UCC
Financing Statement covering the Collateral pledged thereunder executed by
Macfor in proper form for filing with the Secretary of State of the State of
California.
(c) A certificate of the Secretary or Assistant Secretary of Macfor,
certifying the names and true signatures of
6
<PAGE>
the officers of Macfor authorized to execute, deliver and perform, all Loan
Documents to be delivered by it hereunder.
(d) The articles or certificate of incorporation and the bylaws of
Macfor as in effect on the Effective Date, certified by the Secretary or
Assistant Secretary of Macfor as of the Effective Date.
(e) an opinion of Ivan D. Meyerson, Vice President and General
Counsel of the Company, addressed to the Agent and the Banks, substantially in
the form of Exhibit C.
5. Termination of Company Pledge Agreement. The Company, the Agent and
---------------------------------------
the Banks hereby agree that as of the Effective Date, subject to the
satisfaction of the conditions precedent set forth in Section 4 hereof, the
Company Pledge Agreement and the Company Custodial Agreement Acknowledgement
shall be terminated and of no further force and effect and the liens granted
thereunder shall be released. Subject to the occurrence of the Effective Date
and the satisfaction of the conditions precedent set forth in Section 4 hereof,
the Banks authorize the Agent to deliver to the Company, and the Agent agrees to
so deliver, a UCC-3 Termination Statement terminating the UCC Financing
Statement given by the Company in connection with such Pledge Agreement.
6. Post-Closing Deliveries. The Company shall furnish to the Agent below
-----------------------
the following on or before the dates indicated below:
(a) On or before September 8, 1995, (i) copies of the resolutions
of the board of directors of Macfor authorizing the transactions contemplated
under the Collateral Documents to which Macfor is a party, certified as of a
recent date by the Secretary or an Assistant Secretary of Macfor; (ii) a good
standing and tax good standing certificate for Macfor from the Secretary of
State of the State of Delaware, dated as of a recent date.
(b) On or before September 30, 1995, certified copies of Requests for
Information or Copies, dated a date reasonably near such date, listing all
effective financing statements in the State of California which name the Macfor
as debtor, together with copies of such financing statements.
7. Reservation of Rights. The Company acknowledges and agrees that the
---------------------
execution and delivery by the Agent and the Banks of this Amendment shall not be
deemed to create a course of dealing or otherwise obligate the Agent or the
Banks to forbear or execute similar amendments under the same or similar
circumstances in the future.
8. Guarantor Acknowledgement and Consent. The Company, in its capacity
-------------------------------------
as Guarantor under the Guaranty, acknowledges and consents to the execution,
delivery and performance hereof by the parties hereto and reaffirms and agrees
that the Guaranty is in full force and effect, without defense, offset or
counterclaim.
7
<PAGE>
9. Miscellaneous.
-------------
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to such Credit Agreement shall henceforth refer to
the Credit Agreement, as amended by this Amendment. This Amendment shall be
deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the Agent of a
facsimile transmitted document purportedly bearing the signature of a party
hereto shall bind such party with the same force and effect as the delivery of a
hard copy original. Any failure by the Agent to receive the hard copy executed
original of such document shall not diminish the binding effect of receipt of
the facsimile transmitted executed original of such document of the party whose
hard copy page was not received by the Agent.
(e) This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent, upon
demand, for all reasonable costs and expenses (including allocated costs of in-
house counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment and the documents related
hereto.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
MCKESSON CORPORATION
By: __________________________
Title: _______________________
MEDIS HEALTH AND
PHARMACEUTICAL SERVICES INC.
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Agent
By: _________________________
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Bank
By: _________________________
Title: Vice President
BANK OF AMERICA CANADA, as a
Bank
By: _________________________
Title: ______________________
CHEMICAL BANK
By: _________________________
Title: ______________________
9
<PAGE>
CHEMICAL BANK OF CANADA
By: _________________________
Title: ______________________
THE CHASE MANHATTAN BANK N.A.
By: ______________________
Title: ___________________
THE CHASE MANHATTAN BANK OF
CANADA
By: ______________________
Title: ___________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: _________________________
Title: ______________________
MORGAN BANK OF CANADA
By: ________________________
Title: _____________________
FIRST INTERSTATE BANK OF
CALIFORNIA
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
10
<PAGE>
ABN AMRO BANK N.V.
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
ABN AMRO BANK CANADA
MONTREAL BRANCH
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
THE FIRST NATIONAL BANK OF
CHICAGO
By: _________________________
Title: ______________________
TORONTO DOMINION (TEXAS), INC.
By: _________________________
Title: ______________________
THE TORONTO-DOMINION BANK
By: _________________________
Title: ______________________
11
<PAGE>
Acknowledged as of this 31st day of August, 1995
BANK OF AMERICA CANADA,
as Canadian Administrative Agent
By: _______________________________
Title: ____________________________
12
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.38
<SEQUENCE>9
<DESCRIPTION>SECOND AMENDMENT TO CREDIT AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.38
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
---------
April 10, 1996, is entered into by and among McKesson Corporation, a Delaware
corporation (the "Company"), Medis Health and Pharmaceutical Services Inc., an
-------
Ontario corporation and indirect wholly-owned subsidiary of the Company
("Medis"), the several financial institutions party to the Credit Agreement (the
-----
"Banks"), Bank of America Canada, as administrative agent with respect to the
-----
Tranche B Canadian Loans and the Bankers' Acceptance Facility (the "Canadian
--------
Administrative Agent"), The Chase Manhattan Bank, N.A., as co-agent for the
- --------------------
Banks (the "Co-Agent"), and Bank of America National Trust and Savings
--------
Association, as agent for the Banks (the "Agent").
-----
RECITALS
--------
A. The Company, Medis, Banks, Canadian Administrative Agent, Chemical
Bank, as co-agent, and Agent are parties to a Credit Agreement dated as of March
31, 1995, as amended by a First Amendment to Credit Agreement dated as of August
31, 1995 (as so amended, the "Credit Agreement") pursuant to which the Banks
----------------
have extended certain credit facilities to the Company and Medis.
B. The obligations of Medis under the Loan Documents are guaranteed by the
Company pursuant to a Guaranty dated as of March 31, 1995 by the Company in
favor of the Agent and the Banks (the "Guaranty").
--------
C. The obligations of the Company under the Credit Agreement, the Guaranty
and the other Loan Documents are secured by that certain Pledge and Security
Agreement dated as of August 31, 1995 among MacFor International Finance
Company, a Delaware corporation and a Wholly-Owned Subsidiary of the Company
("MacFor"), and the Agent (the "Pledge Agreement").
- -------- ----------------
D. The Company has requested that the Banks agree to certain amendments of
the Credit Agreement.
E. The Banks are willing to amend the Credit Agreement, subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
-------------
herein shall have the meanings, if any, assigned to them in the Credit
Agreement, as applicable.
1
<PAGE>
2. Amendments to Credit Agreement.
------------------------------
(a) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Approved Custodian" by amending and restating such defined term in
its entirety as follows:
"'Approved Custodian' means BofA, in its capacity as the initial
------------------
custodian under the Custodial Agreement and its successors and assigns, any
Bank (or any Affiliate of a Bank), The Bank of New York, as successor-by-
assignment to BofA, and any other Persons that may be approved in writing
as additional or successor custodians by the Company, the Agent and
Majority Banks."
(b) Section 1.01 of the Credit Agreement shall be amended at the
defined term "Revolving Termination Date" by replacing the date "March 31, 2000"
with the date "July 31, 2001".
(c) Schedule 2.01 to the Credit Agreement shall be amended and
restated in its entirety in the form of Schedule 2.01 attached hereto.
3. Representations and Warranties. The Company hereby represents and
------------------------------
warrants to the Agent and the Banks as follows:
(a) No Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Credit Agreement, as amended by this
Amendment, constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its respective terms, without defense,
counterclaim or offset.
(c) All representations and warranties of the Company contained in
the Credit Agreement and of Macfor in the Collateral Documents to which it is a
party are true and correct.
(d) The Company is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Agent and
the Banks or any other Person.
4. Effective Date. This Amendment will become effective as of April 10,
--------------
1996 (the "Effective Date"), provided that each of the following conditions
-------------- --------
precedent is satisfied:
(a) The Agent has received from the Company and each of the Banks a
duly executed original (or, if elected by the
2
<PAGE>
Agent, an executed facsimile copy) of this Amendment, together with a duly
executed MacFor Acknowledgment and Consent in the form attached hereto (the
"Consent").
-------
(b) The Agent has received from the Company and MacFor a copy of a
resolution passed by the board of directors of such corporation, certified by
the Secretary or an Assistant Secretary of such corporation as being in full
force and effect on the date hereof, authorizing the execution, delivery and
performance of this Amendment or the Consent, as applicable.
5. Reservation of Rights. The Company acknowledges and agrees that the
---------------------
execution and delivery by the Agent and the Banks of this Amendment shall not be
deemed to create a course of dealing or otherwise obligate the Agent or the
Banks to forbear or execute similar amendments under the same or similar
circumstances in the future.
6. Guarantor Acknowledgement and Consent. The Company, in its capacity
-------------------------------------
as Guarantor under the Guaranty, acknowledges and consents to the execution,
delivery and performance hereof by the parties hereto and reaffirms and agrees
that the Guaranty is in full force and effect, without defense, offset or
counterclaim.
7. Miscellaneous.
-------------
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to such Credit Agreement shall henceforth refer to
the Credit Agreement, as amended by this Amendment. This Amendment shall be
deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the Agent of a
facsimile transmitted document purportedly bearing the signature of a party
hereto shall bind such party with the same force and effect as the delivery of a
hard copy original. Any failure by the Agent to receive the hard copy executed
original of such document shall
3
<PAGE>
not diminish the binding effect of receipt of the facsimile transmitted executed
original of such document of the party whose hard copy page was not received by
the Agent.
(e) This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent, upon
demand, for all reasonable costs and expenses (including allocated costs of in-
house counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment and the documents related
hereto.
(h) From and after the Effective Date, neither of Chemical Bank or
Chemical Bank of Canada shall be a Bank under the Credit Agreement and neither
shall have any further Commitment thereunder and Chemical Bank shall no longer
be co-agent under the Credit Agreement; provided, that the provisions of Article
--------
III and Sections 10.04 and 10.05 of the Credit Agreement shall continue to inure
to the benefit of Chemical Bank and Chemical Bank of Canada to the extent
relating to the time prior to the Effective Date.
(i) From and after the Effective Date, The Chase Manhattan Bank, N.A.
shall be Co-Agent under the Credit Agreement. Except as set forth in the second
sentence of Section 9.09 of the Credit Agreement, the Co-Agent shall not have
any duties or other obligations in its capacity as Co-Agent under the Credit
Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
MCKESSON CORPORATION
By: __________________________
Title: _______________________
MEDIS HEALTH AND
PHARMACEUTICAL SERVICES INC.
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Agent
By: _________________________
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Bank
By: _________________________
Title: Vice President
BANK OF AMERICA CANADA, as a
Bank
By: _________________________
Title: ______________________
5
<PAGE>
THE CHASE MANHATTAN BANK N.A.,
as a Bank and as Co-Agent
By: ______________________
Title: ___________________
THE CHASE MANHATTAN BANK OF CANADA
By: ______________________
Title: ___________________
CHEMICAL BANK
By: _________________________
Title: ______________________
CHEMICAL BANK OF CANADA
By: _________________________
Title: ______________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: _________________________
Title: ______________________