AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1998
REGISTRATION NOS. 333-50985, 333-50985-01, 333-50985-02 AND 333-50985-03
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MCKESSON CORPORATION DELAWARE 94-3207296
MCKESSON FINANCING TRUST II DELAWARE 94-6723899
MCKESSON FINANCING TRUST III DELAWARE 94-6723900
MCKESSON FINANCING TRUST IV DELAWARE 94-6723902
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
MCKESSON PLAZA
ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
NANCY A. MILLER
VICE PRESIDENT AND CORPORATE SECRETARY
MCKESSON CORPORATION
MCKESSON PLAZA, ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
IVAN D. MEYERSON GREGG A. NOEL
VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER
MCKESSON CORPORATION & FLOM LLP
MCKESSON PLAZA, ONE POST STREET 300 SOUTH GRAND AVENUE, SUITE 3400
SAN FRANCISCO, CALIFORNIA 94104 LOS ANGELES, CALIFORNIA 90071
(415) 983-8300 (213) 687-5000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
(Continued on next page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 89(a), MAY DETERMINE.
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(Continued from previous page)
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER UNIT(3) OFFERING PRICE FEE(6)
- -------------------------------------------------------------------------------------------------------
Senior debt securities, senior
subordinated debt securities,
subordinated debt securities and
junior subordinated debt
securities (collectively, "Debt
Securities") of McKesson
Corporation....................
Warrants of McKesson Corporation
to purchase Debt Securities....
Warrants of McKesson Corporation
to purchase Series Preferred
Stock or Depositary Shares.....
Warrants of McKesson Corporation
to purchase Common Stock.......
Series Preferred Stock of
McKesson Corporation...........
Depositary Shares of McKesson
Corporation....................
Common Stock of McKesson
Corporation....................
Rights to Purchase Series A Pre-
ferred Stock of McKesson Corpo-
ration(4)......................
Stock Purchase Contracts of Mc-
Kesson Corporation.............
Stock Purchase Units of McKesson
Corporation....................
Prepaid Stock Purchase Contracts
of McKesson Corporation........
Preferred Securities of McKesson
Financing Trust II.............
Preferred Securities of McKesson
Financing Trust III............
Preferred Securities of McKesson
Financing Trust IV.............
Guarantees of Preferred
Securities of McKesson Financing
Trust II, McKesson Financing
Trust III and McKesson Financing
Trust IV by McKesson
Corporation(5).................
$750,000,000 100% $750,000,000 $221,250.00
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
(1) Such indeterminate number or amount of Debt Securities, Warrants, Series
Preferred Stock, Depositary Shares, Common Stock, Stock Purchase Contracts
and Stock Purchase Units of McKesson Corporation and Preferred Securities
of McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV as may from time to time be issued at indeterminate
prices. Debt Securities may be issued and sold to McKesson Financing Trust
II, McKesson Financing Trust III and McKesson Financing Trust IV, in which
event such Debt Securities may later be distributed to the holders of
Preferred Securities.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign
currencies as shall result in an aggregate initial offering price for all
securities of $750,000,000. In addition, this Registration Statement
includes such presently indeterminate number of Offered Securities (as
defined herein) as may be issuable from time to time upon conversion or
exchange of the Offered Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and exclusive of accrued interest and dividends,
if any.
(4) Associated with the Common Stock of McKesson Corporation are rights to
purchase Series A Junior Participating Preferred Stock of McKesson
Corporation (the "Series A Preferred Stock") that will not be exercisable
or evidenced separately from the Common Stock prior to the occurrence of
certain events. No separate consideration will be received by the Company
for the initial issuance of the rights to purchase the Junior Preferred
Stock.
(5) McKesson is also registering under this registration statement all other
obligations that it may have with respect to Preferred Securities issued
by McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV. No separate consideration will be received for any
Guarantee or any other such obligations.
(6) Previously paid.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 30, 1998
PROSPECTUS
$750,000,000
MCKESSON CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
-----------
MCKESSON FINANCING TRUST II
MCKESSON FINANCING TRUST III
MCKESSON FINANCING TRUST IV
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
MCKESSON CORPORATION
-----------
McKesson Corporation ("McKesson" or the "Company") may offer and sell from
time to time (i) its unsecured senior debt securities ("Senior Debt
Securities"), unsecured senior subordinated debt securities ("Senior
Subordinated Debt Securities"), unsecured subordinated debt securities
("Subordinated Debt Securities") or unsecured junior subordinated debt
securities ("Junior Subordinated Debt Securities" and together with the Senior
Debt Securities, Senior Subordinated Debt Securities and the Subordinated Debt
Securities, the "Debt Securities"), consisting of debentures, notes or other
evidences of indebtedness, (ii) shares of its Series Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), which may be represented by depositary
shares as described herein, (iii) shares of its common stock, par value $0.01
per share (the "Common Stock") and any associated rights to purchase Series A
Preferred Stock (as defined herein), (iv) warrants to purchase any of the
foregoing Debt Securities, Preferred Stock and Common Stock (the "Warrants"),
(v) stock purchase contracts ("Stock Purchase Contracts") to purchase Common
Stock or (vi) stock purchase units ("Stock Purchase Units"), each representing
ownership of a Stock Purchase Contract and any of (x) the Debt Securities, (y)
debt obligations of third parties, including U.S. Treasury Securities or
(z) Preferred Securities (as defined herein) of a McKesson Trust (as defined
herein), securing the holder's obligation to purchase Common Stock under the
Stock Purchase Contract. Such securities may be offered in one or more separate
classes or series, in amounts, at prices and on terms to be determined by
market conditions and other factors at the time of sale and to be set forth in
a supplement or supplements to this Prospectus (a "Prospectus Supplement").
Such securities may be sold for U.S. dollars, foreign denominated currency or
currency units; amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units--in each case as the Company specifically designates.
McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV (each, a "McKesson Trust"), each a statutory business trust
formed under the laws of the State of Delaware, may offer and sell, from time
to time, preferred securities, which may be convertible into other securities
of the Company, representing undivided beneficial interests in the assets of
the respective McKesson Trust ("Preferred
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DESCRIPTION
OF CERTAIN RISKS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
OFFERED SECURITIES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is June , 1998.
(Continued from previous page)
Securities"). The payment of periodic cash distributions ("Distributions")
with respect to Preferred Securities of each of the McKesson Trusts out of
monies held by the Institutional Trustee (as defined herein) of each of the
McKesson Trusts and payments on liquidation of each McKesson Trust and on
redemption of Preferred Securities of such McKesson Trust, will be guaranteed
by the Company as and to the extent described herein (each, a "Preferred
Securities Guarantee"). See "Description of the Preferred Securities
Guarantees." The Company's obligation under each Preferred Securities
Guarantee is an unsecured obligation of the Company. The terms of the
subordination, if any, of a Preferred Securities Guarantee will be set forth
in the applicable Prospectus Supplement. Debt Securities may be issued and
sold from time to time in one or more series by the Company to a McKesson
Trust, or a trustee of such McKesson Trust, in connection with the investment
of the proceeds from the offering of Preferred Securities and Common
Securities (as defined herein) of such McKesson Trust. The Debt Securities
purchased by a McKesson Trust may be subsequently distributed pro rata to
holders of Preferred Securities and Common Securities in connection with the
dissolution of such McKesson Trust upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement.
Specific terms of the particular Senior Debt Securities, Senior Subordinated
Debt Securities, Subordinated Debt Securities, Junior Subordinated Debt
Securities, Preferred Stock, Common Stock, rights to purchase Series A
Preferred Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units,
Preferred Securities and the related Preferred Securities Guarantee, in
respect of which this Prospectus is being delivered (the "Offered Securities")
will be set forth in an accompanying Prospectus Supplement or Supplements,
together with the terms of the offering of the Offered Securities, the initial
price thereof and the net proceeds from the sale thereof. The Prospectus
Supplement will set forth with regard to the particular Offered Securities,
certain terms thereof, including, where applicable, (i) in the case of Senior
Debt Securities, Senior Subordinated Debt Securities, Subordinated Debt
Securities and Junior Subordinated Debt Securities, the ranking as senior,
senior subordinated, subordinated or junior subordinated Debt Securities, the
specific designation, aggregate principal amount, purchase price, maturity,
interest rate (which may be fixed or variable), if any, the terms of any
subordination to the other debt of the Company, the time and method of
calculating interest payments, if any, the right of the Company, if any, to
defer payments of interest on the Senior Subordinated Debt Securities,
Subordinated Debt Securities or Junior Subordinated Debt Securities and the
maximum length of such deferred period, time of payment of interest, if any,
listing, if any, on a securities exchange, authorized denomination, any
exchangeability, conversion, redemption, prepayment or sinking fund
provisions, the currency or currencies or currency unit or units in which
principal, premium, if any, or interest, if any, is payable, public offering
price and any other specific terms of the Debt Securities; (ii) in the case of
Preferred Stock, the specific designation, number of shares, purchase price
and the rights, preferences and privileges thereof and any qualifications or
restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other
specific terms of the Preferred Stock), listing, if any, on a securities
exchange and whether the Company has elected to offer the Preferred Stock in
the form of depositary shares; (iii) in the case of Common Stock, the number
of shares offered, the initial offering price, market price and dividend
information; (iv) in the case of Warrants, the specific designation, the
number, purchase price and terms thereof, any listing of the Warrants or the
underlying securities on a securities exchange or any other terms in
connection with the offering, sale and exercise of the Warrants, as well as
the terms on which and the securities for which such Warrants may be
exercised; (v) in the case of Stock Purchase Contracts, the designation and
number of shares of Common Stock issuable thereunder, the purchase price of
the Common Stock, the date or dates on which the Common Stock is required to
be purchased by the holders of the Stock Purchase Contracts, any periodic
payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice versa, and the terms of the offering and sale
thereof; (vi) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Debt Securities or debt obligations of third
parties or Preferred Securities of a McKesson Trust securing the holders'
obligation to purchase the Common Stock under the Stock Purchase Contracts,
the ability of a holder of such Stock Purchase Units to settle early the
underlying Stock Purchase Contract by delivering cash in exchange for the
underlying collateral and, if applicable, whether the Company will issue to
such holder a Prepaid Stock Purchase Contract as a result of such early
settlement and the specific terms of the Prepaid Stock Purchase Contract and
the terms of the offering and sale of such Stock
(continued on next page)
2
(continued from previous page)
Purchase Units; and (vii) in the case of Preferred Securities of a McKesson
Trust, the specific designation, number of securities, liquidation amount per
security, initial public offering price, and any listing on a securities
exchange, distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall
accrue, voting rights, if any, terms for any conversion or exchange into other
securities, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Debt Securities of
the Company.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
offering price to the public of the Offered Securities will be limited to
$750,000,000. Any Prospectus Supplement relating to any Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to the Offered Securities.
----------------
The Company and/or each McKesson Trust may sell the Offered Securities
directly, through agents designated from time to time or through underwriters
or dealers. See "Plan of Distribution." If any agents of the Company and/or
any McKesson Trust or any underwriters or dealers are involved in the sale of
the Offered Securities, the names of such agents, underwriters or dealers and
any applicable commissions and discounts will be set forth in the related
Prospectus Supplement. The managing underwriter or underwriters with respect
to each series sold to or through underwriters will be named in the
accompanying Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549, or at the public reference facilities of
the regional offices in Chicago and New York. The addresses of these regional
offices are as follows: 500 West Madison Street, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material also can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington D.C. 20549, at prescribed
rates. The Commission also maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants (including McKesson) that file electronically with the Commission
(at http://www.sec.gov). The Common Stock is listed on each of the New York
Stock Exchange, Inc. (the "NYSE") and the Pacific Exchange, Inc. (the "PE").
Reports, proxy statements, and other information concerning the Company may
also be inspected at the offices of the NYSE at 20 Broad Street, New York, New
York 10005 and at the offices of the PE at 301 Pine Street, San Francisco,
California 94104.
The Company and the McKesson Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement. In addition, certain documents filed by the
Company with the Commission have been incorporated in this Prospectus by
reference. See "Incorporation of Certain Documents by Reference." Statements
contained herein concerning the provisions of any document do not purport to
be complete and, in each instance, are qualified in all respects by reference
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. For further information with
respect to the Company, the McKesson Trusts and the securities offered hereby,
reference is made to the Registration Statement, any applicable Prospectus
Supplement and the documents incorporated herein and therein by reference.
No separate financial statements of any of the McKesson Trusts have been
included or incorporated by reference herein. The Company and the McKesson
Trusts do not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities
of each McKesson Trust will be owned, directly or indirectly, by the Company,
a reporting company under the Exchange Act, (ii) each of the McKesson Trusts
is a special purpose entity, has no operating history, has no independent
operations and is not engaged in, and does not propose to engage in, any
activity other than issuing Trust Securities (as defined herein) representing
undivided beneficial interests in the assets of such McKesson Trust and
investing the proceeds thereof in Debt Securities issued by the Company and
(iii) McKesson's obligations described herein and in any accompanying
Prospectus Supplement under the Declaration (as defined herein) of a McKesson
Trust, the Preferred Securities Guarantee with respect to the Preferred
Securities issued by such McKesson Trust, the Debt Securities purchased by
such McKesson Trust and the Indenture (as defined herein), taken together,
constitute a full and unconditional guarantee of payments due on the Preferred
Securities of such McKesson Trust. See "The McKesson Trusts," "Description of
the Preferred Securities," "Description of the Preferred Securities
Guarantees" and "Description of the Debt Securities." The McKesson Trusts are
statutory business trusts formed under the laws of the State of Delaware. The
Company, as of the date of this Prospectus, owns all of the beneficial
interests in each McKesson Trust. Each holder of Preferred Securities of a
McKesson Trust will be furnished annually with unaudited financial statements
of such McKesson Trust as soon as available after the end of the McKesson
Trust's fiscal year.
4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously filed by the Company with the Commission pursuant to the
Exchange Act:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1998,
filed on June 18, 1998.
2. Current Reports on Form 8-K dated November 22, 1996 (as amended by
Amendment No. 1 on Form 8-K/A, filed on January 21, 1997, as further
amended by Amendment No. 2 on Form 8-K/A filed on April 28, 1997).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such documents shall be directed to
Nancy A. Miller, Vice President and Corporate Secretary, McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, (telephone
(415) 983-8300).
----------------
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY MCKESSON TRUST OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY OR ANY MCKESSON TRUST SINCE
THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information.............. 4
Incorporation of Certain Documents
by Reference...................... 5
The Company........................ 6
Risk Factors....................... 7
The McKesson Trusts................ 8
Use of Proceeds.................... 10
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Stock
Dividends......................... 10
Description of Debt Securities..... 10
PAGE
----
Description of Capital Stock....... 18
Description of Depositary Shares... 22
Description of Warrants............ 26
Description of Preferred
Securities........................ 28
Description of Preferred Securities
Guarantee......................... 29
Description of Stock Purchase
Contracts and Stock Purchase
Units............................. 32
Plan of Distribution............... 32
Legal Matters...................... 34
Experts............................ 34
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
5
THE COMPANY
McKesson is the leading health care supply management company in North
America. The Company also develops and manages innovative marketing programs
for pharmaceutical manufacturers and, through McKesson Water Products Company
("Water Products"), processes and markets pure drinking water.
The Company's objective is to become the world leader in health care supply
across the entire supply chain, from manufacturer to patient. The Company
conducts its operations through two operating business segments: the Health
Care Services segment and Water Products segment.
The principal executive offices of the Company are located at McKesson
Plaza, One Post Street, San Francisco, California 94104, and the telephone
number is (415) 983-8300.
6
RISK FACTORS
RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS
An element of the Company's growth strategy is to pursue strategic
acquisitions that either expand or complement its business, and McKesson
routinely reviews such potential acquisition opportunities. Acquisitions
involve a number of special risks, including the diversion of management's
attention to the assimilation of the operations from other business concerns,
difficulties in the integration of operations and systems, delays or
difficulties in opening and operating larger distribution centers in an
integrated distribution network, the assimilation and retention of the
personnel of the acquired companies, challenges in retaining the customers of
the combined businesses and potential adverse short-term effects on operating
results. In addition, the Company may require additional debt or equity
financing for future acquisitions, which may not be available on terms
favorable to the Company, if at all. The inability of the Company to
successfully finance, complete and integrate strategic acquisitions in a
timely manner could have an adverse impact on the Company's results of
operations and its ability to effect a portion of its growth strategy.
CHANGING UNITED STATES HEALTH CARE ENVIRONMENT
In recent years, the health care industry has undergone significant change
driven by various efforts to reduce costs, including potential national health
care reform, trends toward managed care, cuts in Medicare, consolidation of
pharmaceutical and medical/surgical supply distributors and the development of
large, sophisticated purchasing groups. This industry is expected to continue
to undergo significant changes for the foreseeable future. Changes in
governmental support of health care services, the method by which such
services are delivered or the prices for such services, or other legislation
or regulations governing such services or mandated benefits, or changes in
pharmaceutical manufacturers' pricing or distribution policies, may have a
material adverse effect on the Company's results of operations.
COMPUTER TECHNOLOGIES
McKesson relies heavily on computer technologies to operate its business. As
a result, McKesson continuously seeks to upgrade and improve its computer
systems in order to provide better service to its customers and to support the
Company's growth. McKesson has conducted an assessment of its computer systems
and has begun to make the changes necessary to make its computer systems Year
2000 compliant. McKesson believes that with modifications to or replacements
of its existing computer-based systems, it will be Year 2000 compliant by
March 31, 1999, although the Company cannot provide any assurance in this
regard. McKesson's systems rely in part on the computer-based systems of its
trading partners. As part of the Company's assessment, an overview of certain
of its trading partners' Year 2000 compliance strategies is being performed,
and the Company plans to conduct extensive systems testing with such trading
partners during calendar 1999. Nevertheless, if any trading partner or other
entity upon which they rely failed to become Year 2000 compliant, McKesson
could be adversely affected. The Company incurred approximately $7 million in
fiscal 1998 and expects to incur between $10 and $15 million in each of the
next two fiscal years in costs associated with modifications to the Company's
existing systems to make them Year 2000 compliant and related testing,
including planned testing with trading partners. Such costs are being expensed
as incurred. Year 2000 project costs are difficult to estimate accurately, and
the projected costs could change due to unanticipated technological
difficulties, project vendor delays, and project vendor cost overruns. The
inability of the Company to successfully complete its Year 2000 compliance
project or to maintain computer systems that meet the Company's and its
customers' needs could have an adverse effect on the Company.
7
THE MCKESSON TRUSTS
Each of McKesson Financing Trust II, McKesson Financing Trust III and
McKesson Financing Trust IV is a statutory business trust formed in April 1998
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to
(i) separate declarations of trust executed by the Company, as sponsor and the
MFT Trustees (as defined herein) of such McKesson Trust and (ii) the filing of
a certificate of trust with the Secretary of State of the State of Delaware.
Such declaration will be amended and restated in its entirety (as so amended
and restated, the "Declaration") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Each
Declaration is qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). Upon issuance of any Preferred Securities by a
McKesson Trust, the holders thereof will own all of the issued and outstanding
Preferred Securities of such McKesson Trust. The Company will acquire
securities representing common undivided beneficial interests in the assets of
each McKesson Trust (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") in an amount equal to at least 3% of the
total capital of such McKesson Trust and will own, directly or indirectly, all
of the issued and outstanding Common Securities of each McKesson Trust. The
Preferred Securities and the Common Securities of a McKesson Trust will rank
pari passu with each other and will have equivalent terms; provided that (i)
if a Declaration Event of Default under the Declaration of a McKesson Trust as
defined therein occurs and is continuing, the holders of Preferred Securities
of such McKesson Trust will have a priority over holders of the Common
Securities of such McKesson Trust with respect to payments in respect of
distributions and payments upon liquidation, redemption and maturity and (ii)
holders of Common Securities of such McKesson Trust have the exclusive right
(subject to the terms of the Declaration) to appoint, remove or replace the
MFT Trustees and to increase or decrease the number of MFT Trustees, subject
to the right of holders of Preferred Securities, if so provided in the
Prospectus Supplement, to appoint one additional Regular Trustee (as defined
herein) of such McKesson Trust (a "Special Regular Trustee") in certain
limited circumstances. Each McKesson Trust exists for the purpose of (a)
issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the gross proceeds from the sale of the Trust
Securities in Debt Securities of the Company and (d) engaging in such other
activities as are necessary, convenient or incidental thereto. The rights of
the holders of the Trust Securities, including economic rights, rights to
information and voting rights, are set forth in the applicable Declaration,
the Business Trust Act and the Trust Indenture Act.
The number of trustees (the "MFT Trustees") of each McKesson Trust will
initially be five. Three of such MFT Trustees (the "Regular Trustees") are
persons who are employees or officers of or who are affiliated with the
Company. The fourth trustee will be an entity that maintains its principal
place of business in the State of Delaware (the "Delaware Trustee"). The fifth
Trustee will be a financial institution that is unaffiliated with McKesson and
will serve as institutional trustee (the "Institutional Trustee") under the
Declaration and will act as indenture trustee under the Declaration for the
purposes of compliance with the provisions of the Trust Indenture Act.
The Institutional Trustee will, for the applicable McKesson Trust, hold
title to the Debt Securities for the benefit of the holders of the Trust
Securities and the Institutional Trustee will have the power to exercise all
rights, powers and privileges under the Indenture as the holder of the Debt
Securities. In addition, the Institutional Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Debt Securities of a
McKesson Trust for the benefit of the holders of the Trust Securities of that
Trust. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Preferred Securities
Guarantee Trustee (as defined herein) will hold the Preferred Securities
Guarantee for the benefit of the holders of the Preferred Securities. The
Company, as the direct or indirect holder of all of the Common Securities,
will have the right to appoint, remove or replace any of the MFT Trustees
(other than a Special Regular Trustee) and to increase or decrease the number
of MFT Trustees. The Company will pay fees and expenses related to each
McKesson Trust and the offering of the Trust Securities.
8
The business address of each McKesson Trust is c/o McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, telephone
number (415) 983-8300.
The foregoing description summarizes the material terms of the Declaration
and is qualified in its entirely by reference to the form of Declaration which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
9
USE OF PROCEEDS
Each McKesson Trust will use all proceeds received from the sale of its
Trust Securities to purchase Debt Securities of the Company. Unless otherwise
set forth in a Prospectus Supplement with respect to the proceeds from the
sale of the particular Offered Securities to which such Prospectus Supplement
relates, the net proceeds from the sale of the Offered Securities are expected
to be used by the Company for general corporate purposes, including repayment
or redemption of outstanding debt or preferred stock, the possible acquisition
of related businesses or assets thereof, and working capital needs. The
Company routinely reviews opportunities to acquire related businesses or
assets thereof.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated:
FISCAL YEAR ENDED MARCH 31,
-------------------------------
1998 1997 1996 1995(3) 1994
----- ----- ----- ------- -----
Ratio of Earnings to Fixed Charges(1)...... 2.91x 1.53x 4.71x -- 3.42x
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends(2).......... 2.91x 1.53x 4.71x -- 2.81x
- --------
(1) The ratio of earnings to fixed charges was computed by dividing fixed
charges (interest expense, the portion of rental expense under operating
leases deemed by the Company to be representative of the interest factor
and dividends on preferred securities of a subsidiary grantor trust) into
earnings available for fixed charges (income from continuing operations
plus taxes on income and fixed charges).
(2) The ratio of earnings to combined fixed charges and preferred stock
dividends was computed by dividing fixed charges and preferred stock
dividends into earnings available for fixed charges.
(3) The ratios of earnings to fixed charges and earnings to combined fixed
charges and preferred stock dividends were less than 1.0x, (0.01x) in
fiscal 1995. The deficiency in the ratio of earnings to fixed charges was
$53.5 million, and the deficiency in the ratio of earnings to fixed
charges and preferred stock dividends was $58.5 million.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the applicable Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will consist of either Senior Debt Securities, Senior Subordinated Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt
Securities under an Indenture, (the "Indenture") between the Company and a
trustee (including any successor trustee and each person which is a trustee
under the Indenture including, with respect to the Debt Securities of any
series, the trustee with respect to the Debt Securities of such series, the
"Trustee"). The Indenture will be in the form that has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part,
subject to such amendments or supplements as are adopted from time to time.
The Indenture will be subject to and governed by certain provisions of the
Trust Indenture Act. Prospective purchasers of the Debt Securities are
referred to the Indenture and the Trust Indenture Act for a statement of such
provisions. Capitalized terms used in this section which are not otherwise
defined in this Prospectus shall have the meanings set forth in the Indenture.
The following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by express reference to, all the provisions of the
Indenture, including the definitions therein of certain terms.
10
The Debt Securities will be direct, unsecured obligations of the Company.
The Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and provides that Debt Securities may be issued
thereunder from time to time in one or more series. Under the Indenture, the
Company will have the ability to issue Debt Securities with terms different
from those of Debt Securities previously issued.
The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities, Subordinated Debt Securities or
Junior Subordinated Debt Securities will set forth the aggregate amount of
outstanding indebtedness, as of the most recent practicable date, that by the
terms of such Debt Securities would be senior to such Debt Securities and any
limitation on the issuance of additional senior indebtedness.
Debt Securities may be issued as discount securities, which may be sold at a
discount below their principal amount. These Debt Securities as well as other
Debt Securities that are not issued at a discount below their principal
amount, may, for United States federal income tax purposes, be deemed to have
been issued with "original issue discount" ("OID") because of, among other
things, certain interest payment characteristics. Special United States
federal income tax considerations applicable to Debt Securities issued with
original issue discount, including discount securities, will be described in
more detail in any applicable Prospectus Supplement. In addition, special
United States federal income tax considerations or other restrictions or terms
applicable to any Debt Securities which are issuable in bearer form, offered
exclusively to United States Aliens, denominated in a currency other than
United States dollars or having certain other characteristics will be set
forth in the Prospectus Supplement relating thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities
offered thereby (the "Offered Debt Securities"): (i) the title of the Offered
Debt Securities; (ii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iii) whether the Offered Debt Securities are to be
issuable as registered securities or bearer securities or both and whether the
Offered Debt Securities may be represented initially by a Debt Security in
temporary or permanent global form, and if so, the initial Depositary (as
defined herein) with respect to such temporary or permanent global Debt
Security and whether, and the circumstances under which, beneficial owners of
interests in any such temporary or permanent global Debt Security may exchange
such interests for Debt Securities of such series and of like tenor of any
authorized form and denomination; (iv) the price or prices at which the
Offered Debt Securities will be issued; (v) the date or dates on which the
principal of the Offered Debt Securities is payable or the method of
determination thereof; (vi) the place or places where and the manner in which
the principal of and premium, if any, and interest, if any, on such Offered
Debt Securities will be payable and the place or places where such Offered
Debt Securities may be presented for transfer and, if applicable, conversion
or exchange; (vii) the rate or rates at which the Offered Debt Securities will
bear interest, or the method of calculating such rate or rates, if any, and
the date or dates from which such interest, if any, will accrue; (viii) the
stated maturities of installments of interest, if any, on which any interest
on the Offered Debt Securities will be payable, and the record date for any
interest payable on any Offered Debt Securities which are registered
securities; (ix) the terms, if any, on which the Offered Debt securities of
any series will be subordinated to other debt of the Company; (x) the right or
obligation, if any, of the Company to redeem or purchase Offered Debt
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of a holder thereof, the conditions, if any, giving rise to
such right or obligation, and the period or periods within which, and the
price or prices at which and the terms and conditions upon which Offered Debt
Securities of the series shall be redeemed or purchased, in whole or part, and
any provisions for the remarketing of such Offered Debt Securities; (xi)
whether such Offered Debt Securities are convertible or exchangeable into
other debt or equity securities, and, if so, the terms and conditions upon
which such conversion or exchange will be effected, including the initial
conversion or exchange price or rate and any adjustments thereto, the
conversion or exchange period and other conversion or exchange provisions;
(xii) the currency or currencies, including composite currencies or currency
units, of payment of principal of and interest, if any, on the Offered Debt
Securities, if other than U.S. dollars, and, if other than U.S. dollars,
whether the Offered Debt Securities may be satisfied and discharged other than
as provided in the Indenture and whether the Company or the holders of any
such Offered Debt Securities may elect to receive payments in respect of such
Offered Debt Securities in a currency or currency units other than that in
which
11
such Offered Debt Securities are stated to be payable; (xiii) any terms
applicable to such Offered Debt Securities issued at an issue price below
their stated principal amount, including the issue price thereof and the rate
or rates at which such original issue discount will accrue; (xiv) if the
amount of payments of principal of and interest, if any, on the Offered Debt
Securities is to be determined by reference to an index or formula, or based
on a coin or currency or currency unit other than that in which the Offered
Debt Securities are stated to be payable, the manner in which such amounts are
to be determined and the calculation agent, if any, with respect thereto;
(xv) if other than the principal amount thereof, the portion of the principal
amount of the Offered Debt Securities which will be payable upon declaration
or acceleration of the maturity thereof pursuant to an Event of Default (as
defined in the Indenture); (xvi) any deletions from, modifications of or
additions to the Events of Default or covenants of the Company with respect to
such Offered Debt Securities, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein; (xvii) any special United States Federal income tax considerations
applicable to the Offered Debt Securities; and (xviii) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indenture.
The applicable Prospectus Supplement will also describe the following terms of
any series of Senior Subordinated, Subordinated or Junior Subordinated Debt
Securities offered hereby in respect of which this Prospectus is being
delivered: (a) the rights, if any, to defer payments of interest on the Senior
Subordinated, Subordinated or Junior Subordinated Debt Securities of such
series by extending the interest payment period, and the duration of such
extensions, and (b) the subordination terms of the Senior Subordinated,
Subordinated or Junior Subordinated Debt Securities of such series. The
foregoing is not intended to be an exclusive list of the terms that may be
applicable to any Offered Debt Securities and shall not limit in any respect
the ability of the Company to issue Debt Securities with terms different from
or in addition to those described above or elsewhere in this Prospectus
provided that such terms are not inconsistent with the Indenture. Any such
Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt Securities.
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Depositary") or with a nominee
for a Depositary identified in the Prospectus Supplement relating to such
series and registered in the name of the Depositary or a nominee thereof. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole for Debt Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security 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 of
such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of
12
such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in Registered Global
Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Registered Global Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Debt Securities represented by such Registered Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the
procedures of the Depositary for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the Indenture. The Company understands that under existing industry practices,
if the Company requests any action of holders or if an owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
for such Registered Global Security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owners of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payments of principal and
premium, if any, and interest, if any, in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with the securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such participants.
If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one or
more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euroclear System and Cedel Bank, societe anonyme,
or with a nominee for such depositary identified in the Prospectus Supplement
relating to such series. The specific terms and procedures, including the
specific terms of the depositary arrangement and any
13
specific procedures for the issuance of Debt Securities in definitive form in
exchange for a Bearer Global Security, with respect to any portion of a series
of Debt Securities to be represented by a Bearer Global Security will be
described in the Prospectus Supplement relating to such series.
SENIOR DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior Debt
Securities issued under the Indenture will rank pari passu with all other
unsecured and unsubordinated debt of the Company.
SENIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior
Subordinated Debt Securities issued under the Indenture will be junior in
right of payment to the extent and in the manner set forth in the resolutions
of the Board of Directors of the Company ("Board Resolutions") or certificate
executed by an authorized officer of the Company ("Officer's Certificate")
establishing such series of Senior Subordinated Debt Securities to all
unsubordinated debt of the Company, including Senior Debt Securities.
SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Subordinated
Debt Securities issued under the Indenture will be subordinate and junior in
right of payment to the extent and in the manner set forth in the Board
Resolutions or the Officer's Certificate establishing such series of
Subordinated Debt Securities to all Senior Debt and Senior Subordinated Debt
of the Company.
JUNIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Junior
Subordinated Debt Securities issued under the Indenture will be subordinate
and junior in right of payment, to the extent and in the manner set forth in
the Board Resolutions or the Officer's Certificate establishing such series of
Junior Subordinated Debt Securities to all Senior Debt Securities, Senior
Subordinated Debt Securities, Subordinated Debt Securities and may be
subordinate and junior in right of payment to all other debt of the Company.
CONVERSION OR EXCHANGE RIGHTS
The terms and conditions, if any, on which Offered Debt Securities are
convertible at the election of the holder of such Offered Debt Securities or
may be exchanged at the election of the Company into Common Stock, Preferred
Stock or any other security of the Company will be set forth in the Prospectus
Supplement relating thereto. Such terms will include the conversion price, the
conversion or exchange period, provisions as to whether conversion will be at
the option of the holder or exchangeable at the option of the Company, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversion or exchange in the event of the redemption of
such Offered Debt Securities; and such terms may include provisions under
which the number of shares of Common Stock to be received by the holders of
the Offered Debt Securities would be calculated according to the market price
of the Common Stock as of a time stated in the Prospectus Supplement.
SUCCESSOR CORPORATION
The Indenture provides that the Company shall not consolidate or merge with
or into, or transfer or lease its assets substantially as an entirety to any
person unless the Company shall be the continuing corporation, or the
successor corporation or person to which such assets are transferred or leased
shall be a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume the
Company's obligations on the Debt Securities and under the Indenture, and
immediately after giving effect to such transaction no Event of Default shall
have occurred and be continuing, and certain other conditions are met. Upon
assumption of the Company's obligations by a person to whom such assets are
transferred or leased,
14
subject to certain exceptions, the Company shall be discharged from all
obligations under the Debt Securities and the Indenture.
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transaction or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety.
EVENTS OF DEFAULT
An Event of Default is defined under the Indenture with respect to Debt
Securities of each series as being: (a) default in payment of all or any part
of the principal of, or premium, if any, on any Debt Securities of such series
when due, either at maturity, upon any redemption, by declaration or
otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due by the terms of the Debt Securities of such series; (d)
default for 60 days after written notice as provided in the Indenture in the
observance or performance of any other covenant or agreement in the Debt
Securities of such series or in the Indenture, other than a covenant included
in the Indenture solely for the benefit of a series of Debt Securities other
than such series; or (e) certain events of bankruptcy, insolvency or
reorganization.
The Indenture provides that (a) if an Event of Default due to the default in
payment of principal, premium, if any, or interest on any series of Debt
Securities, or due to the default in the performance or breach of any other
covenant or agreement of the Company applicable to the Debt Securities of such
series but not applicable to all outstanding Debt Securities, shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities of such series may declare the
principal of all Debt Securities of such series and interest accrued thereon
to be due and payable immediately and (b) if an Event of Default due to a
default in the performance of any other of the covenants or agreements in the
Indenture applicable to all Debt Securities then outstanding or due to certain
events of bankruptcy, insolvency and reorganization of the Company shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities then outstanding (treated as
one class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal, premium, if any, or interest on
such Debt Securities) by the holders of a majority in principal amount of the
Debt Securities of such series (or of all series, as the case may be) then
outstanding.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee to act with the required standard of care, to be
indemnified by the holders of Debt Securities requesting the Trustee to
exercise any right or power under the Indenture before proceeding to exercise
any such right or power at the request of such holders.
The Indenture provides that no holder of Debt Securities of any series may
institute any action against the Company under the Indenture (except actions
for payment of overdue principal, premium, if any, or interest) unless such
holder previously shall have given to the Trustee written notice of default
and continuance thereof and unless the holders of not less than 25% in
principal amount of the Debt Securities of such series then outstanding shall
have requested such Trustee to institute such action and shall have offered
the Trustee reasonable indemnity, such Trustee shall not have instituted such
action within 60 days of such request and such Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the Debt Securities of such series then outstanding.
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any
default that exists.
15
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or decrease its obligations under the Indenture as
set forth below.
Under terms satisfactory to the applicable Trustee, the Company may
discharge certain obligations to holders of any series of Debt Securities
which have not already been delivered to the Trustee for cancellation and
which have either become due and payable or are by their terms due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the Trustee cash or U.S. Government Obligations (as defined in
the Indenture), as trust funds in an amount certified to be sufficient to pay
when due, whether at maturity, upon redemption or otherwise, the principal of,
premium, if any, and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders of
any series of Debt Securities at any time ("defeasance"), but may not thereby
avoid its duty to register the transfer or exchange of such series of Debt
Securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of Debt Securities or to maintain an office or agency in respect of
such series of Debt Securities. Under terms satisfactory to the Trustee, the
Company may instead be released with respect to any outstanding series of Debt
Securities from the obligations imposed by any covenants imposed by a series
of Debt Securities, certain provisions of the Indenture and omit to comply
with such covenants without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or
U.S. Government Obligations, as trust funds in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal, premium, if
any, and interest on all outstanding Debt Securities of such series and (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States Federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities. In the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after June 30, 1998, since such a result would not
occur under then current tax law.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in the Indenture, (e) establish the forms or terms
of Debt Securities of any series and (f) evidence the acceptance of
appointment by a successor trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series then outstanding
and affected (voting as one class), to add any provisions to, or change in any
manner, eliminate or waive any of the provisions of, the Indenture or modify
in any manner the rights of the holders of the Debt Securities of each series
so affected; provided that the Company and the Trustee may not, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
extend the final maturity of any Debt Security, or reduce the principal amount
thereof or premium thereon, if any, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption
thereof or change the currency in which the principal thereof (other than as
otherwise may be provided with respect to such series), premium, if any, or
interest thereon is payable or reduce the amount of the principal of any Debt
Security issued with original issue discount that is payable upon acceleration
or provable in bankruptcy or alter certain provisions of the Indenture
relating to the Debt Securities not denominated in U.S. dollars or impair the
right to institute suit for the enforcement of any payment on any Debt
Security when due or (b) reduce the aforesaid percentage in principal amount
of Debt Securities of any series, the consent of the holders of which is
required for any such modification.
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CONCERNING THE TRUSTEE
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. If there are
different Trustees for different series of Debt Securities, each Trustee shall
be a Trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee thereunder, and except as otherwise indicate
herein or a Prospectus Supplement, any action described herein taken by a
Trustee may be taken by such Trustee only with respect to the one or more
series of Debt Securities for which it is the Trustee under the Indenture. Any
Trustee under the Indenture may resign or be removed with respect to one or
more series of Debt Securities. All payments of principal of, premium, if any,
and interest on and all registration, transfer, exchange, authentication and
delivery (including authentication and delivery on original issuance of the
Debt Securities) of, the Debt Securities will be effected by the Trustee at an
office designated by the Trustee in New York, New York.
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict or resign.
In case of any conflicting interest relating to any Trustee's duties with
respect to the Debt Securities, such Trustee shall either eliminate such
conflicting interest or, except as otherwise provided in the Trust Indenture
Act, resign.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee with respect to such series of Debt Securities, provided that such
direction would not conflict with any rule of law or with the Indenture, would
not be unduly prejudicial to the rights of another holder of the Debt
Securities, and would not involve any Trustee in personal liability. The
Indenture provides that in case an Event of Default shall occur and be known
to any Trustee (and not be cured), such Trustee will be required to use the
degree of care of a prudent person in the conduct of his or her own affairs in
the exercise of its power. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of the Debt Securities, unless
they shall have offered to the Trustee security and indemnity satisfactory to
it.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indenture will provide that no past, present or future director,
officer, employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Debt Securities or the Indenture or for any claim based on, in respect or,
or by reason of such obligations or their creation, by reason of such person's
or entity's status as such director, officer, stockholder or incorporator.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
17
DESCRIPTION OF CAPITAL STOCK
The following descriptions of the Company's capital stock and of certain
provisions of Delaware law do not purport to be complete and are subject to
and qualified in their entirety by reference to the Company's Restated
Certificate of Incorporation (the "Certificate") and Restated By-Laws (the
"By-Laws") and Delaware law, and, with respect to certain rights of holders of
shares of Common Stock, the Rights Agreement (as defined herein). Copies of
such documents have been filed with the Commission and are filed as exhibits
to the Registration Statement of which this Prospectus is a part.
As of the date hereof, the capital stock of the Company consists of
200,000,000 authorized shares of Common Stock and 100,000,000 authorized
shares of Preferred Stock.
COMMON STOCK
As of June 1, 1998, there were 94,929,952 shares of Common Stock issued and
outstanding.
The holders of outstanding shares of Common Stock are entitled to receive
dividends out of assets legally available therefor at such times and in such
amounts as the Company's Board of Directors (the "Board") may from time to
time determine. The shares of Common Stock are neither redeemable nor
convertible, and the holders thereof have no preemptive or subscription rights
to purchase any securities of the Company. Upon liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to receive
the assets of the Company which are legally available for distribution, after
payment of all debts, other liabilities and any liquidation preferences of
outstanding Preferred Stock. Each outstanding share of Common Stock is
entitled to one vote on all matters submitted to a vote of stockholders. There
is no cumulative voting.
In February 1997, McKesson Financing Trust issued an aggregate of 4,123,720
5% Trust Convertible Preferred Securities (each, a "Trust Security"). Each
Trust Security is convertible into Common Stock at any time prior to the close
of business on the business day prior to June 1, 2027 (or prior to the date of
redemption of the Trust Security), at the option of the holder, at the rate of
1.3418 shares of Common Stock for each Trust Security (equivalent to a
conversion price of $37.26 per share of Common Stock), subject to adjustment
in certain circumstances.
PREFERRED STOCK
As of the date hereof, there were no shares of Preferred Stock issued and
outstanding. The Board is authorized to issue the Preferred Stock in classes
or series and to fix the designations, preferences, qualifications,
limitations, or restrictions of any class or series with respect to the rate
and nature of dividends, the price and terms and conditions on which shares
may be redeemed, the amount payable in the event of voluntary or involuntary
liquidation, the terms and conditions for conversion or exchange into any
other class or series of the stock, voting rights and other terms. Of the
Preferred Stock, 10,000,000 shares have been designated Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock") and reserved
for issuance pursuant to the Company's Rights Agreement.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND BY-LAWS
The Certificate and By-Laws of the Company contain certain provisions that
may be deemed to have an anti-takeover effect and may delay, deter or prevent
a tender offer or takeover attempt that a stockholder might consider in its
best interest, including those attempts that might result in a premium over
the market price for the shares held by stockholders.
Pursuant to the Certificate, the Board is divided into three classes serving
staggered three-year terms. Directors can be removed from office only for
cause and only by the affirmative vote of the holders of at least a majority
of the voting power of the then outstanding shares of any class or series of
capital stock of the Company entitled to vote generally in the election of
directors. Vacancies and newly created directorships on the Board may be
filled only by a majority of the remaining directors or by the plurality vote
of the stockholders.
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The Certificate also provides that any action required or permitted to be
taken by the holders of Common Stock may be effected only at an annual or
special meeting of such holders, and that stockholders may act in lieu of such
meetings only by unanimous written consent. The By-Laws provide that special
meetings of holders of Common Stock may be called only by the Chairman or the
President of the Company or the Board. Holders of Common Stock are not
permitted to call a special meeting or to require that the Board call a
special meeting of stockholders.
The By-Laws establish an advance notice procedure for the nomination, other
than by or at the direction of the Board, of candidates for election as
directors as well as for other stockholder proposals to be considered at
annual meetings of stockholders. In general, notice of intent to nominate a
director or raise business at such meetings must be received by the Company
not less than 60 nor more than 90 days prior to the date of the annual meeting
and must contain certain specified information concerning the person to be
nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal.
The Certificate also provides that certain provisions of the By-Laws may
only be amended by the affirmative vote of the holders of 75% of the shares of
the Company outstanding and entitled to vote. The Certificate also provides
that, in addition to any affirmative vote required by law, the affirmative
vote of holders of 80% of the voting stock of the Company and two-thirds of
the voting stock other than voting stock held by an interested stockholder
shall be necessary to approve certain business combinations proposed by an
interested stockholder.
The foregoing summary is qualified in its entirety by the provisions of the
Certificate and By-Laws, copies of which have been filed with the Commission.
RIGHTS PLAN
Pursuant to the Company's Rights Agreement, the Board declared a dividend
distribution of one right (a "Right") for each outstanding share of Common
Stock to stockholders of record of the Company at November 1, 1994 (the
"Record Date"). As a result of the two-for-one stock split effective January
2, 1998, each share of the Common Stock has attached to it one-half of a
Right. Each Right entitles the registered holder to purchase from the Company
a unit consisting of one one-hundredth of a share of Series A Preferred Stock
at a purchase price of $100 per unit. The Rights expire on October 21, 2004,
unless redeemed earlier by the Board. The terms of the Rights are set forth in
a Rights Agreement between the Company and a Rights Agent (the "Rights
Agreement"), a copy of which is filed with the Commission. The following
summary outlines certain provisions of the Rights Agreement and is qualified
by reference to the full text of the form of the Rights Agreement.
The Rights are attached to all Common Stock certificates representing shares
outstanding at the Record Date and shares issued between the Record Date and
the Distribution Date (as defined herein), and no separate rights certificates
(the "Rights Certificates") have been distributed. The Rights will separate
from the Common Stock, separate Rights Certificates will be issued and a
distribution date (the "Distribution Date") will occur upon the earlier to
occur of (i) ten business days following the date of a public announcement
that there is an Acquiring Person (as defined herein) (such date, the "Stock
Acquisition Date"), (ii) ten business days (or such later date as the Board
may determine) following commencement of a tender or exchange offer that would
result in the offeror beneficially owning 15% or more of the Common Stock or
(iii) ten business days after the Board determines that the ownership of 10%
or more of the Company's outstanding Common Stock by a person is (A) intended
to cause the Company to repurchase the Common Stock beneficially owned by such
person or (B) is causing, or is reasonably likely to cause, a material adverse
impact on the Company.
The term "Acquiring Person" means any person who, together with affiliates
and associates, acquires beneficial ownership of shares of Common Stock
representing 15% or more of the Common Stock, but shall not include the
Company, any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company, or any person or entity
organized, appointed or established by the Company for or pursuant to the
terms of such plan.
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In the event that a person becomes an Acquiring Person (except pursuant to
an offer for all outstanding shares of Common Stock which the independent
directors determine to be fair to and otherwise in the best interests of the
Company and its stockholders), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a calculated value
equal to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of such event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person and certain related persons and
transferees will be null and void. However, Rights are not exercisable
following the occurrence of such event until such time as the Rights are no
longer redeemable as set forth below.
At any time prior to the tenth day following the Stock Acquisition Date, the
Company may redeem the Rights, in whole, but not in part, at a price of $.01
per Right.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including without limitation, the right to
vote or to receive dividends.
In general, the Rights Agreement may be amended by the Board (i) prior to
the Distribution Date in any manner, and (ii) on or after the Distribution
Date in certain respects including (a) to shorten or lengthen at any time
period and (b) in a manner not adverse to the interests of Rights holders.
However, amendments extending the redemption period must be made while the
Rights are still redeemable.
The Rights have certain anti-takeover effects and will cause substantial
dilution to a person or group that attempts to acquire the Company on terms
not approved by the Board. The Rights should not interfere with any merger or
other business combination approved by the Board, since the Board may redeem
the Rights as provided above.
SECTION 203 OF DELAWARE GENERAL CORPORATION LAW
The Company is subject to the "business combination" statute of the Delaware
General Corporation Law (Section 203). In general, such statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with any "interested stockholder" for a period of three years after the date
of the transaction in which the person became an "interested stockholder,"
unless (i) such transaction is approved by the board of directors prior to the
date the interested stockholder obtains such status, (ii) upon consummation of
such transaction, the "interested stockholder" beneficially owned at least 85%
of the voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned by (a) persons who are directors and also
officers and (b) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or (iii) the "business
combination" is approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at least 66 2/3%
of the outstanding voting stock which is not owned by the "interested
stockholder." A "business combination" includes mergers, asset sales and other
transactions resulting in financial benefit to the "interested stockholder."
An "interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) beneficially 15% or more of
a corporation's voting stock. The statute could prohibit or delay mergers or
other takeover or change in control attempts with respect to the Company and,
accordingly, may discourage attempts to acquire the Company.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
The Company's authorized but unissued shares of Common Stock and Preferred
Stock may be issued without additional stockholder approval and may be
utilized for a variety of corporate purposes, including future offerings to
raise additional capital or to facilitate corporate acquisitions.
The issuance of Preferred Stock could have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for
20
distribution to the holders of Common Stock or could adversely affect the
rights and powers, including voting rights, of the holders of the Common
Stock. In certain circumstances, such issuance could have the effect of
decreasing the market price of the Common Stock.
One of the effects of the existence of unissued and unreserved Common Stock
or Preferred Stock may be to enable the Board to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a merger, tender
offer, proxy contest or otherwise, and thereby protect the continuity of
management. Such additional shares also could be used to dilute the stock
ownership of persons seeking to obtain control of the Company.
The Company plans to issue additional shares of Common Stock (i) in
connection with its employee benefit plans and (ii) upon conversion of the
Trust Securities. The Company does not currently have any plans to issue
shares of Preferred Stock, although, 10,000,000 shares of Series A Preferred
Stock have been designated pursuant to the Company's Rights Agreement.
LIMITATION OF DIRECTORS LIABILITY
The Certificate contains a provision that limits the liability of the
Company's directors for monetary damages for breach of fiduciary duty as a
director to the fullest extent permitted by the Delaware General Corporation
Law. Such limitation does not, however, affect the liability of a director (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases and (iv)
for any transaction from which the director derives an improper personal
benefit. The effect of this provision is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
the fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek non-monetary relief such as
an injunction or rescission in the event of a breach of a director's duty of
care. In addition, the directors and officers of the Company have
indemnification protection.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The following description sets forth certain general terms and provisions of
the Depositary Shares to which any Prospectus Supplement may relate. The
particular terms of the Depositary Shares to which any Prospectus Supplement
may relate and the extent, if any, to which such general provisions may apply
to the Depositary Shares so offered will be described in the applicable
Prospectus Supplement.
The Company may, at its option, elect to offer fractional shares of the
Preferred Stock of a series, rather than full shares of the Preferred Stock of
such series. In the event such option is exercised, the Company will issue
receipts for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") among
the Company, a depositary to be named in the applicable Prospectus Supplement
(the "Preferred Stock Depositary"), and the holders from time to time of
depositary receipts issued thereunder. Subject to the terms of the Deposit
Agreement, each holder of a Depositary Share will be entitled, in proportion
to the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, subscription and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Preferred Stock.
The following summary of certain provisions of the Depositary Shares and
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by express reference to, all the provisions of the
Deposit Agreement, including the definitions therein of certain terms. The
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
Immediately following the issuance of shares of a series of Preferred Stock
by the Company, the Company will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to the
purchasers thereof. Depositary Receipts will only be issued evidencing whole
Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related series of Preferred
Stock to the record holders of Depositary Shares relating to such series of
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or
that it is not feasible to make such distributions, in which case the
Preferred Stock Depositary may, with the approval of the Company, adopt such
22
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and
upon such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes or other governmental charges.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the
Prospectus Supplement relating thereto, each record holder of Depositary
Shares will have the right or obligation to convert or exchange such
Depositary Shares pursuant to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Preferred Stock Depositary resulting from any
redemption, in whole or in part, of such series of the Preferred Stock held by
the Preferred Stock Depositary. The redemption price per Depositary Share will
be equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Preferred Stock. If the Company redeems
shares of a series of Preferred Stock held by the Preferred Stock Depositary,
the Preferred Stock Depositary will redeem as of the same redemption date the
number of Depositary Shares representing the shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as
determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years
from the date such funds are so deposited.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be the
same date as the record date for the related series of Preferred Stock) will
be entitled to instruct the Preferred Stock Depositary as to the exercise of
the voting rights pertaining to the number of shares of the series of
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will endeavor, insofar as practicable, to vote or cause to be
voted the number of shares of the Preferred Stock represented by such
Depositary Shares in accordance with such instructions, provided the Preferred
Stock Depositary receives such instructions sufficiently in advance of such
meeting to enable it to so vote or cause to be voted the shares of Preferred
Stock, and the Company will agree to take all reasonable action that may be
deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares
representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred
Stock,
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or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or
any election on the part of the Company to call for the redemption of any
Preferred Stock, the Preferred Stock Depositary shall in each such instance
fix a record date (which shall be the same as the record date for the
Preferred Stock) for the determination of the holders of Depositary Receipts
(x) who shall be entitled to receive such dividend, distribution, rights,
preferences or privileges or the net proceeds of the sale thereof or (y) who
shall be entitled to give instructions for the exercise of voting rights at
any such meeting or to receive notice of such meeting or of such redemption or
conversion, subject to the provisions of the Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Preferred
Stock Depositary. However, any amendment which imposes or increases any fees,
taxes or other charges payable by the holders of Depositary Receipts (other
than taxes and other governmental charges, fees and other expenses payable by
such holders as stated under "Charges of Preferred Stock Depositary"), or
which otherwise prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding Depositary
Receipts until the expiration of 30 days after notice of such amendment has
been mailed to the record holders of outstanding Depositary Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time
45 days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its
appointment. If any Depositary Receipts remain outstanding after the date of
termination, the Preferred Stock Depositary thereafter will discontinue the
transfer of Depositary Receipts, will suspend the distribution of dividends to
the holders thereof, and will not give any further notices (other than notice
of such termination) or perform any further acts under the Deposit Agreement
except as provided below and except that the Preferred Stock Depositary will
continue (i) to collect dividends on the Preferred Stock and any other
distributions with respect thereto and (ii) to deliver the Preferred Stock
together with such dividends and distributions and the net proceeds of any
sales of rights, preferences, privileges or other property, without liability
for interest thereon, in exchange for Depositary Receipts surrendered. At any
time after the expiration of two years from the date of termination, the
Preferred Stock Depositary may sell the Preferred Stock then held by it at
public or private sales, at such place or places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property then held by it, without liability
for interest thereon, for the pro rata benefit of the holders of Depositary
Receipts which have not been surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary including
charges in connection with the initial deposit of the Preferred Stock, the
initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which
Preferred Stock is entitled to vote, withdrawals of the Preferred Stock by the
holders of Depositary Receipts or redemption or conversion of the Preferred
Stock, except for taxes (including transfer taxes, if any) and other
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts or
persons depositing Preferred Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by holders
of Depositary Receipts at its corporate office and its New York office, all
reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
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Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to
performing its duties thereunder without negligence or bad faith. The
obligations of the Company under the Deposit Agreement are limited to
performing its duties thereunder in good faith. Neither the Company nor the
Preferred Stock Depositary is obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on documents
believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been
appointed or accepted such appointment within 45 days after the Preferred
Stock Depositary has delivered a notice of election to resign to the Company,
the Preferred Stock Depositary may terminate the Deposit Agreement. See
"Amendment and Termination of Deposit Agreement" above.
25
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants for the purchase of (i) Debt Securities
("Debt Warrants") or (ii) Preferred Stock or Common Stock ("Stock Warrants").
The Warrants will be issued under Warrant Agreements (as defined herein) to
be entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement" or "Stock Warrant Agreement," as the case
may be, or collectively the "Warrant Agreements"), including the forms of
certificates representing the Warrants ("Debt Warrant Certificates" or "Stock
Warrant Certificates," as the case may be, or collectively, the "Warrant
Certificates") reflecting the provisions to be included in such agreements
that will be entered into with respect to the particular offerings of each
type of warrant are filed as exhibits to the Registration Statement of which
this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular
terms of the Warrants to which any Prospectus Supplement may relate and the
extent, if any, to which such general provisions may apply to the Warrants so
offered will be described in the applicable Prospectus Supplement. The
following summary of certain provisions of the Warrants, Warrant Agreements
and Warrant Certificates does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all the provisions
of the Warrant Agreements and Warrant Certificates, including the definitions
therein of certain terms.
DEBT WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the
Debt Securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants; (ii)
the designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants
and any related Offered Securities will be separately transferable; (iv) the
principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant and the price at which such principal amount of Debt Securities may be
purchased upon such exercise; (v) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire;
(vi) a discussion of the material United States federal income tax
considerations applicable to the ownership or exercise of Debt Warrants; (vii)
whether the Debt Warrants represented by the Debt Warrant Certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered; (viii) call provisions of such Debt Warrants, if
any; and (ix) any other terms of the Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise and will not be entitled
to any payments of principal and premium, if any, and interest, if any, on the
Debt Securities purchasable upon such exercise.
Exercise of Debt Warrants. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth
in, the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Unless otherwise specified in the applicable Prospectus Supplement,
Debt Warrants may be exercised at any time up to 5:00 p.m.,
26
New York City time, on the expiration date set forth in the applicable
Prospectus Supplement. After 5:00 p.m., New York City time, on the expiration
date, unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
forward the Debt Securities purchasable upon such exercise. If less than all
of the Debt Warrants represented by such Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants.
STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Stock Warrants in respect of which this Prospectus is being
delivered, the Stock Warrant Agreement relating to such Stock Warrants and the
Stock Warrant Certificates representing such Stock Warrants, including the
following: (i) the type and number of shares of Preferred Stock or Common
Stock purchasable upon exercise of such Stock Warrants and the procedures and
conditions relating to the exercise of such Stock Warrants; (ii) the date, if
any, on and after which such Stock Warrants and related Offered Securities
will be separately tradeable; (iii) the offering price of such Stock Warrants,
if any; (iv) the initial price at which such shares may be purchased upon
exercise of Stock Warrants and any provision with respect to the adjustment
thereof; (v) the date on which the right to exercise such Stock Warrants shall
commence and the date on which such right shall expire; (vi) a discussion of
the material United States federal income tax considerations applicable to the
ownership or exercise of Stock Warrants; (vii) call provisions of such Stock
Warrants, if any; (viii) any other terms of the Stock Warrants (ix) anti-
dilution provisions of the Stock Warrants, if any and; (x) information
relating to any Preferred Stock purchasable upon exercise of such Stock
Warrants.
Stock Warrant Certificates will be exchangeable for new Stock Warrant
Certificates of different denominations and Stock Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Stock
Warrants, holders of Stock Warrants will not have any of the rights of holders
of shares of capital stock purchasable upon such exercise, and will not be
entitled to any dividend payments on such capital stock purchasable upon
such exercise.
Exercise of Stock Warrants. Each Stock Warrant will entitle the holder to
purchase for cash such number of shares of Preferred Stock or Common Stock, as
the case may be, at such exercise price as shall in each case be set forth in,
or be determinable as set forth in, the applicable Prospectus Supplement
relating to the Stock Warrants offered thereby. Unless otherwise specified in
the applicable Prospectus Supplement, Stock Warrants may be exercised at any
time up to 5:00 p.m., New York City time, on the expiration date set forth in
the applicable Prospectus Supplement. After 5:00 p.m., New York City time, on
the expiration date, unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating thereto. Upon receipt of payment and the Stock Warrant
Certificates properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, forward a
certificate representing the number of shares of capital stock purchasable
upon such exercise. If less than all of the Stock Warrants represented by such
Stock Warrant Certificate are exercised, a new Stock Warrant Certificate will
be issued for the remaining amount of Stock Warrants.
27
DESCRIPTION OF PREFERRED SECURITIES
Each McKesson Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each McKesson Trust authorizes the
Regular Trustees of such McKesson Trust to issue on behalf of such McKesson
Trust one series of Preferred Securities. Each Declaration will be qualified
as an indenture under the Trust Indenture Act. The Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation
rights and such other preferred, deferred or other special rights or such
restrictions as shall be set forth in the related Declaration or made part of
such Declaration by the Trust Indenture Act or the Business Trust Act.
Reference is made to any Prospectus Supplement relating to the Preferred
Securities of a McKesson Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such McKesson Trust, (iii) the annual distribution rate
(or method of calculation thereof) for Preferred Securities issued by such
McKesson Trust, the date or dates upon which such distributions shall be
payable and the record date or dates for the payment of such distributions,
(iv) whether distributions on Preferred Securities issued by such McKesson
Trust shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on Preferred Securities
issued by such McKesson Trust shall be cumulative, (v) the amount or amounts
which shall be paid out of the assets of such McKesson Trust to the holders of
Preferred Securities of such McKesson Trust upon voluntary or involuntary
dissolution, winding up or termination of such McKesson Trust, (vi) the
obligation or right, if any, of such McKesson Trust to purchase or redeem
Preferred Securities issued by such McKesson Trust and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Preferred Securities issued by such McKesson Trust shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation or
right, (vii) the voting rights, if any, of Preferred Securities issued by such
McKesson Trust in addition to those required by law, including the number of
votes per Preferred Security and any requirement for the approval by the
holders of Preferred Securities, or of Preferred Securities issued by one or
more McKesson Trusts, or of both, as a condition to specified actions or
amendments to the Declaration of such McKesson Trust, (viii) the terms and
conditions, if any, upon which Preferred Securities issued by such McKesson
Trust may be converted by the holder thereof or exchanged at the election of
the Company into Common Stock, Preferred Stock or any other securities of the
Company, including the conversion price per share and the circumstances, if
any, under which such conversion right will expire, (ix) the terms and
conditions, if any, upon which the Debt Securities may be distributed to
holders of the Preferred Securities, (x) if applicable, any securities
exchange upon which the Preferred Securities shall be listed, and (xi) any
other relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities issued by such McKesson Trust consistent with the
Declaration of such McKesson Trust or with applicable law. All Preferred
Securities offered hereby will be guaranteed by the Company as and to the
extent set forth below under "Description of the Preferred Securities
Guarantee." Certain United States federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each McKesson Trust
will issue one series of Common Securities. The Declaration of each McKesson
Trust authorizes the Regular Trustees of such trust to issue on behalf of such
McKesson Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a
McKesson Trust will be substantially identical to the terms of the Preferred
Securities issued by such McKesson Trust and the Common Securities will rank
pari passu, and payments will be made thereon on a pro rata basis with the
Preferred Securities except that if a Declaration Event of Default occurs and
is continuing, the rights of the holders of such Common Securities to payments
in respect of distributions and payments upon liquidation, redemption and
maturity will be subordinated to the rights of the holders of such Preferred
Securities. Except in certain limited circumstances, the Common Securities
issued by a McKesson Trust will also carry the right to vote and to appoint,
remove or replace any of the MFT Trustees (other than a Special Regular
Trustee) of that McKesson Trust. All of the Common Securities of a McKesson
Trust will be directly or indirectly owned by the Company.
28
DESCRIPTION OF PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee which will be executed and delivered by the Company for
the benefit of the holders from time to time of the Preferred Securities of
each McKesson Trust. The summary does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to the respective Preferred Securities Guarantee, a form of which
has been attached as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each Preferred Securities Guarantee incorporates by
reference the terms of the Trust Indenture Act. The trustee of each Preferred
Securities Guarantee (the "Preferred Securities Guarantee Trustee") will hold
the Preferred Securities Guarantee for the benefit of the holders of the
Preferred Securities of that McKesson Trust.
GENERAL
Pursuant to and to the extent set forth in each Preferred Securities
Guarantee, the Company will agree, to the extent set forth therein, to pay in
full to the holders of the Preferred Securities of the applicable McKesson
Trust (except to the extent paid by that McKesson Trust), as and when due,
regardless of any defense, right of set off or counterclaim which the McKesson
Trust may have or assert, the following payments (the "Preferred Securities
Guarantee Payments"), without duplication: (i) all accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent the McKesson Trust has funds available therefor, (ii) the redemption
price, if any, plus accrued and unpaid distributions with respect to any such
Preferred Securities called for redemption by the McKesson Trust, to the
extent the McKesson Trust has funds available therefor, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
McKesson Trust (other than in connection with the distribution of the Debt
Securities held by the McKesson Trust to its holders of Preferred Securities
or the redemption of all the Preferred Securities of the McKesson Trust), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Preferred Securities to the date of payment to the
extent that McKesson Trust has funds available therefor and (b) the amount of
assets of the McKesson Trust remaining available for distribution to holders
of its Preferred Securities then outstanding upon the liquidation of the
McKesson Trust. If the Company were to default on its obligation to pay
amounts payable on the Debt Securities held by a McKesson Trust, that McKesson
Trust would lack available funds for the payment of distributions or amounts
payable on redemption of its Preferred Securities or otherwise, and in such
event holders of those Preferred Securities would not be able to rely upon the
Preferred Securities Guarantee for payment of such amounts. Instead, a holder
of such Preferred Securities would be required to rely on the enforcement (i)
by the Institutional Trustee of its rights, as registered holder of the Debt
Securities, against the Company pursuant to the terms of the Debt Securities
or (ii) by such holder of Preferred Securities of its rights against the
Company to enforce payments on Debt Securities. Each Declaration provides that
each holder of Preferred Securities, by acceptance thereof, agrees to the
provisions of the applicable Preferred Securities Guarantee, including the
subordination provisions thereof.
The Preferred Securities Guarantee will not apply to any payment of
distributions or redemption price, if any, or to payments upon the
dissolution, winding-up or termination of the related McKesson Trust, except
to the extent that McKesson Trust shall have funds available therefor. If the
Company does not make interest payments on the Debt Securities held by a
McKesson Trust, that McKesson Trust will not pay distributions on its
Preferred Securities and will not have funds available therefor. A Preferred
Securities Guarantee, when taken together with the Company's obligations under
the related Debt Securities and Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and liabilities of that McKesson
Trust (other than with respect to the Trust Securities) will provide a full
and unconditional guarantee by the Company of payments due on the Preferred
Securities of that McKesson Trust. The terms of the subordination, if any, of
a Preferred Securities Guarantee will be set forth in the applicable
Prospectus Supplement.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of each McKesson Trust with respect to its Common
Securities (the "Common Securities Preferred Securities Guarantee") to the
same extent as the related Preferred Securities Guarantee, except that upon
the occurrence and during the continuation of a Declaration Event of Default
with respect to the Debt Securities held by the
29
McKesson Trust, the holders of its Preferred Securities shall have priority
over the holders of the Common Securities with respect to the Preferred
Securities Guarantee Payments.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any of the related Preferred Securities remain outstanding, if (i) the
Company has exercised its option to defer interest payments on the related
Debt Securities by extending the interest payment period and such extension
period, or any extension thereof, shall be continuing, (ii) the Company shall
be in default with respect to its payment or other obligations under the
Preferred Securities Guarantee or (iii) there shall have occurred and be
continuing a Declaration Event of Default or any event that, with the giving
of notice or lapse of time or both, would constitute a Declaration Event of
Default, then the Company shall not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior
in interest to the related Debt Securities or make any guarantee payment with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior in
interest to the related Debt Securities (other than (i) as a result of a
reclassification of the Company capital stock or the exchange or conversion of
one class or series of the Company capital stock for another class or series
of the Company capital stock, (ii) the purchase of fractional interests in
shares of the Company capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being
converted into or exchanged for capital stock of the Company, (iii) dividends
or distributions in Common Stock, (iv) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the
Preferred Securities Guarantee, (vi) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans
for its directors, officers or employees and (vii) obligations under any
dividend reinvestment and stock purchase plans).
As part of each Preferred Securities Guarantee, the Company will agree that
it will honor all obligations relating to the conversion of the Preferred
Securities into, as the case may be, Common Stock, Preferred Stock or other
securities of the Company.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which
case no vote will be required), a Preferred Securities Guarantee may be
amended only with the prior approval of the holders of at least a majority in
liquidation amount of all the related Preferred Securities then outstanding.
All guarantees and agreements contained in each Preferred Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding. Except in connection with any permitted
merger or consolidation of the Company with or into another entity or any
permitted sale, transfer or lease of the Company's assets to another entity
the Company may not assign its rights or delegate its obligations under any
Preferred Securities Guarantee without the prior approval of the holders of at
least a majority of the aggregate stated liquidation amount of the related
Preferred Securities then outstanding.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
Each Preferred Securities Guarantee will terminate as to each holder of
Preferred Securities with respect to a McKesson Trust upon (i) full payment of
the redemption price, if any, and accrued and unpaid distributions with
respect to all related Preferred Securities, (ii) distribution of the Debt
Securities held by the McKesson Trust to the holders of its Preferred
Securities, (iii) full payment of the amounts payable under its Declaration
upon liquidation of the McKesson Trust, or (iv) the distribution of the
underlying securities to the holder thereof upon any conversion or exchange of
such holder's Preferred Securities into the designated security, and will
terminate
30
completely upon full payment of the amounts payable in accordance with the
applicable Declaration. Each Preferred Securities Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of related Preferred Securities must restore payment of any sum paid
under such Preferred Securities or the Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
(a) the failure of the Company to perform any of its payment or other
obligations thereunder or (b) if applicable, the failure by the Company to
deliver the designated securities upon an appropriate election by the holder
or holders of related Preferred Securities to convert or exchange the
Preferred Securities into such designated security.
The holders of a majority in liquidation amount of Preferred Securities then
outstanding relating to the Preferred Securities Guarantee have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Preferred Securities Guarantee Trustee under the related
Preferred Securities. If the Preferred Securities Guarantee Trustee fails to
enforce the Preferred Securities Guarantee, any holder of the related
Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Preferred Securities Guarantee Trustee's rights under
the Preferred Securities Guarantee, without first instituting a legal
proceeding against the McKesson Trust, the Preferred Securities Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a Preferred Securities Guarantee Payment, the
related holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Preferred Securities Guarantee for
such payment. The Company waives any right or remedy to require that any
action be brought first against each McKesson Trust or any other person or
entity before proceeding directly against the Company.
STATUS OF THE PREFERRED SECURITIES GUARANTEE; SUBORDINATION
The Preferred Securities Guarantee will constitute an unsecured obligation
of the Company and will rank in right of payment to all other liabilities of
the Company in the manner set forth in the applicable Prospectus Supplement.
The terms of the Preferred Securities provide that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions, if
any, and other terms of the Preferred Securities Guarantee relating thereto.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity). The Preferred Securities Guarantee does not place
a limitation on the amount of additional indebtedness that may be incurred by
the Company.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
Each Preferred Securities Guarantee Trustee, prior to the occurrence of a
default with respect to the related Preferred Securities Guarantee, undertakes
to perform only such duties as are specifically set forth in the Preferred
Securities Guarantee and, after default with respect to that Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
person would exercise in the conduct of his or her own affairs. Subject to
such provision, a Preferred Securities Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Preferred
Securities Guarantee at the request of any holder of related Preferred
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
31
GOVERNING LAW
Each Preferred Securities Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to
the holders, a specified number of shares of Common Stock at a future date or
dates. The price per share of Common Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts. The Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Senior Subordinated Debt Securities, Subordinated Debt Securities
or Junior Subordinated Debt Securities, (y) debt obligations of third parties,
including U.S. Treasury securities or (z) Preferred Securities of a McKesson
Trust securing the holder's obligations to purchase the Common Stock under the
Stock Purchase Contracts. The Stock Purchase Contracts may require the Company
to make periodic payments to the holders of the Stock Purchase Units or vice
versa, and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner and in certain circumstances the Company may
deliver newly issued prepaid stock purchase contracts ("Prepaid Securities")
upon release to a holder of any collateral securing such holder's obligations
under the original Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements,
if applicable, relating to such Stock Purchase Contracts or Stock Purchase
Units and, if applicable, the Prepaid Securities and the document pursuant to
which such Prepaid Securities will be issued.
GOVERNING LAW
Each Stock Purchase Contract will be governed by, and construed in
accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company and/or McKesson Trust may sell the Offered Securities directly
or through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company and/or a McKesson Trust from time to time. Any such agent, who
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Offered Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable
by the Company and/or a McKesson Trust to such agent set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment, The Company and/or a McKesson Trust may also sell
Offered Securities to an agent as principal. Agents may be entitled to, under
agreements which may be entered into with the Company and/or a McKesson Trust,
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If any underwriters are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, the Company and/or a McKesson
Trust will enter into an underwriting agreement with such
32
underwriters and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Offered Securities in respect of
which this Prospectus is delivered to the public. Underwriters may offer and
sell the Offered Securities at a fixed price or prices, which may be changed,
or from time to time at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
underwriters may be entitled, under the relevant underwriting agreement, to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company and/or a McKesson Trust will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("Remarketing firms"), acting as principals
for their own accounts or as agents for the Company and/or a McKesson Trust.
Any Remarketing firm will be identified and the terms of its agreement, if
any, with the Company and/or a McKesson Trust and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Offered Securities remarketing thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company and/or a McKesson Trust to indemnification by the Company
and/or a McKesson Trust against certain liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with
or perform services for the Company and/or a McKesson Trust in the ordinary
course of business.
If so indicated in the Prospectus Supplement, the Company and/or a McKesson
Trust will authorize agents and underwriters or dealers to solicit offers by
certain purchasers to purchase Offered Securities from the Company and/or a
McKesson Trust at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject to
only those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation
of such offers.
33
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Offered Securities of McKesson will be passed upon for
McKesson by Ivan D. Meyerson, Vice President and General Counsel of McKesson,
and by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements of the Company and the related
financial statement schedule incorporated in this Registration Statement by
reference from the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998 and the consolidated financial statements of FoxMeyer for
the year ended March 31, 1996 incorporated in this Registration Statement by
reference from McKesson's Current Report on Form 8-K/A filed with the
Commission on April 28, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports incorporated herein by
reference, (which report dated May 18, 1998 on McKesson's consolidated
financial statements expresses an unqualified opinion and which report on
FoxMeyer's consolidated financial statements dated June 28, 1996 (March 18,
1997 as to paragraph seven of Note Q), expresses an unqualified opinion and
includes an explanatory paragraph relating to the sale of the principal assets
of FoxMeyer and its Chapter 7 bankruptcy filing). Such consolidated financial
statements and financial statement schedule have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts
in auditing and accounting.
34
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
SEC registration fee............................................. $ 221,250
Printing and engraving........................................... 200,000
Legal fees and expenses.......................................... 150,000
Fees of accountants.............................................. 100,000
Fees of trustee.................................................. 50,000
Blue Sky fees and expenses....................................... 10,000
Rating agency fees............................................... 250,000
Miscellaneous.................................................... 268,750
----------
Total.......................................................... $1,250,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Restated By-Laws of the Company (the "Bylaws"), in
accordance with the provisions of Section 145 of the General Corporation Law
of Delaware (the "Delaware Corporation Law"), provides that the Company shall
indemnify any person in connection with any threatened, pending or completed
legal proceeding (other than a legal proceeding by or in the right of the
Company) by reason of the fact that he is or was a director of officer of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership or other
enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such legal proceeding if he acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any a criminal action or proceeding, if he had
no reasonable cause to believe that his conduct was unlawful. If the legal
proceeding is by or in the right of the Company, the director or officer may
be indemnified by the Company against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement
of such legal proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, except that he may not be indemnified in respect of any claim, issue
or matter as to which he shall have been adjudged to be liable to the Company
unless a court determines otherwise.
Article VIII of the Company's By-Laws allows the Company to maintain
director and officer liability insurance on behalf of any person who is or was
a director or officer of the Company or such person who serves or served as
director, officer, employee or agent of another corporation, partnership or
other enterprise at the request of the Company.
Article VI of the Company's Restated Certificate of Incorporation, in
accordance with Section 102(b)(7) of the Delaware Corporation Law, provides
that no director of the Company shall be personally liable to the Company or
its stockholders for monetary damages for any breach of his fiduciary duty as
a director; provided, however, that such clause shall not apply to any
liability of a director (1) for any breach of his duty of loyalty to the
Company or its stockholders, (2) for acts or omissions that are not in good
faith or involve intentional misconduct or a knowing violation of the law, (3)
under Section 174 of the Delaware Corporation Law, or (4) for any transaction
from which the director derived an improper personal benefit.
Each Declaration of Trust (a "Declaration") of a McKesson Trust provides
that no Trustee, affiliate of any Trustee or any officers, directors,
stockholders, members, partners, employees, representatives or agents of any
Trustee or any employee or agent of such McKesson Trust or its affiliates
(each, an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to any employee or agent of such McKesson Trust
II-1
or its affiliates, or any officers, directors, shareholders, employees,
representatives or agents of the Company or its affiliates or to any holders
of Trust Securities of such McKesson Trust for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such McKesson Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by the Declaration of such
McKesson Trust or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or, in the case of the Institutional Trustee of
such McKesson Trust, negligence) or willful misconduct with respect to such
acts or omissions. Each Declaration also provides that, to the fullest extent
permitted by applicable law, the Company shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of such McKesson Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by such Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of
any loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence (or, in the case of the Institutional Trustee of such
McKesson Trust, negligence) or willful misconduct with respect to such acts or
omissions. Each Declaration further provides that to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or the final
disposition of such claim, demand, action, suit or proceeding shall, from time
to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified pursuant to such Declaration.
ITEM 16. LIST OF EXHIBITS.
EXHIBIT
-------
1.1** Form of Underwriting Agreement (Debt).
1.2** Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company (Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May 30, 1997
(Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and between the
Company and First Chicago Trust Company of New York as Rights Agent
(Exhibit 4.1( 3)).
4.1** Form of Indenture.
4.2** Certificate of Trust of McKesson Financing Trust II.
4.3** Certificate of Trust of McKesson Financing Trust III.
4.4** Certificate of Trust of McKesson Financing Trust IV.
4.5** Declaration of Trust of McKesson Financing Trust II.
4.6** Declaration of Trust of McKesson Financing Trust III.
4.7** Declaration of Trust of McKesson Financing Trust IV.
4.8** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust II.
4.9** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust III.
4.10** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust IV.
4.11** Form of Warrant (Stock).
II-2
EXHIBIT
-------
4.12** Form of Warrant (Debt).
4.13** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust II.
4.14** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust III.
4.15** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust IV.
4.16* Form of Purchase Contract Agreement.
4.17* Form of Pledge Agreement.
4.18** Form of Deposit Agreement.
5.1** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the Debt Securities, Common Stock, Preferred Stock, Warrants,
Preferred Securities, Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered hereby.
12.1** Computation of Ratio of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends of McKesson
Corporation.
23.1** Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
23.2** Independent Auditors' Consent.
24*** Power of Attorney.
- --------
(1) 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-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission June 24, 1997, File No. 1-
13252.
(3) 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.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
** Filed herewith.
*** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
II-3
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered thereby,
and for the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions referred
to in Item 15 of this registration statement, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such.
(d)(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430(A) and contained
in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering hereof.
(e) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, State of California,
on the 30th day of June, 1998.
McKESSON CORPORATION
/s/ Richard H. Hawkins
By: ___________________________
Name: Richard H. Hawkins
Title: Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* President and Chief June 30, 1998
____________________________________ Executive
Mark A. Pulido Officer and Director
(principal executive
officer)
* Vice President and June 30, 1998
____________________________________ Chief Financial Officer
Richard H. Hawkins (principal financial
officer)
* Controller June 30, 1998
____________________________________ (principal accounting
Heidi E. Yodowitz officer)
* Director June 30, 1998
____________________________________
Mary G. F. Bitterman
* Director June 30, 1998
____________________________________
Tully M. Friedman
* Director June 30, 1998
____________________________________
John M. Pietruski
* Director June 30, 1998
____________________________________
David S. Pottruck
* Director June 30, 1998
____________________________________
Carl E. Reichardt
* Director; June 30, 1998
____________________________________ Chairman of the Board
Alan Seelenfreund
II-5
SIGNATURE TITLE DATE
--------- ----- ----
* Director June 30, 1998
____________________________________
Jane E. Shaw
* Director June 30, 1998
____________________________________
Robert H. Waterman, Jr.
*By: /s/ Nancy A. Miller
___________________________________
Nancy A. Miller
Attorney-in-fact
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, McKesson
Financing Trust II, McKesson Financing Trust III and McKesson Financing Trust
IV, each certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, State of California,
on June 30, 1998.
McKESSON FINANCING TRUST II
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST III
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST IV
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
II-7
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
1.1** Form of Underwriting Agreement (Debt).
1.2** Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase
Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company
(Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May
30, 1997 (Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and
between the Company and First Chicago Trust Company of
New York as Rights Agent (Exhibit 4.1(3)).
4.1** Form of Indenture.
4.2** Certificate of Trust of McKesson Financing Trust II.
4.3** Certificate of Trust of McKesson Financing Trust III.
4.4** Certificate of Trust of McKesson Financing Trust IV.
4.5** Declaration of Trust of McKesson Financing Trust II.
4.6** Declaration of Trust of McKesson Financing Trust III.
4.7** Declaration of Trust of McKesson Financing Trust IV.
4.8** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust II.
4.9** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust III.
4.10** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust IV.
4.11** Form of Warrant (Stock).
4.12** Form of Warrant (Debt).
4.13** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust II.
4.14** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust III.
4.15** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust IV.
4.16* Form of Purchase Contract Agreement.
4.17* Form of Pledge Agreement.
4.18** Form of Deposit Agreement.
5.1** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as
to the legality of the Debt Securities, Common Stock,
Preferred Stock, Warrants, Preferred Securities,
Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered
hereby.
12.1** Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends of McKesson Corporation.
23.1** Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
23.2** Independent Auditors' Consent.
24*** Power of Attorney.
- --------
(1) 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-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission June 24, 1997, File No. 1-
13252.
(3) 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.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
** Filed herewith.
*** Previously filed.