Exhibit 99.25
McKESSON HBOC, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
As Amended and Restated Effective January 12, 1999
WHEREAS, the Board of Directors of HBO & Company, a Delaware
corporation ("HBOC"), adopted the 1998 Employee Discount Stock Purchase Plan on
November 11, 1997, subject to the approval of the stockholders of HBOC, which
approval was obtained on May 12, 1998; and
WHEREAS, McKesson HBOC, Inc., a Delaware corporation ("McKesson"),
HBOC, and McKesson Merger Sub, Inc., a Delaware corporation ("Merger Sub"), have
entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as
of October 17, 1998, whereby Merger Sub will be merged with and into HBOC, and
HBOC will thereby become a direct, wholly-owned subsidiary of McKesson (the
"Merger"); and
WHEREAS, pursuant to the Merger Agreement, upon consummation of the
Merger, the name of the combined entity will be changed to McKesson HBOC, Inc.
(the "Company"); and
WHEREAS, the Boards of Directors of each of McKesson and HBOC have
adopted resolutions providing that, subject to and effective upon consummation
of the Merger, the 1998 Employee Discount Stock Purchase Plan shall be renamed
the McKesson HBOC, Inc. 1998 Employee Stock Purchase Plan; and
WHEREAS, the Boards of Directors of each of McKesson and HBOC have
adopted resolutions providing that, subject to and effective upon consummation
of the Merger, the McKesson HBOC, Inc. 1998 Employee Stock Purchase Plan shall
be amended and restated in the form below (the "Amendment and Restatement"):
1. PURPOSE
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The McKesson HBOC, Inc. 1998 Employee Stock Purchase Plan (the "Plan")
is intended to encourage the employees of the Company and certain of its
subsidiaries to acquire a proprietary interest, or to increase their existing
proprietary interest, in the Company. The Board of Directors of the Company
(the "Board") believes that employee ownership of the Company's stock will serve
as an incentive, encouraging employees to continue their employment and to
perform diligently their duties as employees. The Plan is intended to qualify
as an "employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. STOCK RESERVED FOR THE PLAN
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The Company will reserve 1,110,000 (which number has been adjusted
to reflect the 2:1 stock split effected by HBO on May 27, 1998, and the Exchange
Ratio as defined in the Merger Agreement) shares of the Company's common stock,
$.01 par value per share ("Stock"), for purchase by employees under the Plan.
The number of shares of Stock reserved for the Plan may be adjusted as provided
in Section 16. The shares of
Stock reserved for the Plan may be shares now or hereafter authorized but
unissued, shares that have been reacquired by the Company, or shares of treasury
stock.
3. ADMINISTRATION
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The Plan will be administered by the Compensation Committee of the
Board (the "Committee"), consisting of members of the Board designated by the
Board. The Board from time to time may remove members from, or add members to,
the Committee. Vacancies on the Committee will be filled by the Board. Subject
to the express provisions of the Plan, the Committee will have authority to
interpret the Plan, to prescribe rules and regulations for administering the
Plan, and to make all other determinations necessary or advisable in
administering the Plan. The determinations of the Committee will be final and
binding upon all persons, unless otherwise determined by the Board. A majority
of the members of the Committee will constitute a quorum, and the Committee may
act by vote of a majority of its members at a meeting at which a quorum is
present, or without a meeting by a written consent signed by all members of the
Committee. To the extent consistent with applicable law, the Committee may
delegate its duties hereunder to a sub-committee, whose members need not be
members of the Board.
4. ELIGIBILITY
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a. Eligible Employees. Except as set forth in subsections (b) and (c)
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below, all employees of the Company, and all employees of any parent
corporation, as defined in Code Section 424(e) (a "Parent") or any subsidiary
corporation as defined in Code Section 424(f) (a "Subsidiary") of the Company
that is designated by the Board as a participating Parent or Subsidiary, will be
eligible to participate in the Plan. Such employees are referred to herein as
"Employees." No person who is not an Employee will be eligible to participate
in the Plan.
b. Excluded Employees. The following Employees will not be eligible to
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participate in the Plan:
i. any Employee whose customary employment is 20 hours or less per
week or for not more than 5 months in any calendar year; and
ii. any Employee who, immediately after a right to purchase Stock is
granted hereunder, would own shares of Stock, or of the stock of a Subsidiary,
possessing 5 percent or more of the total combined voting power or value of
all classes of such stock. In determining whether an Employee owns 5 percent
of such shares, (A) the attribution of ownership rules of Code Section 424(d)
will apply, and (B) an Employee will be deemed to own the shares of stock
underlying any outstanding option which he has been granted (whether under the
Plan or any other plan or arrangement).
c. Participation by Certain Employees Subject to Stockholder Approval.
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Participation in the Plan by Employees who, immediately prior to the Merger,
were not employed by HBOC or by any subsidiary (as defined in Code Section
424(f)) designated by the Board of Directors of HBOC as eligible to participate
(the "Contingent Participants"), shall be subject to approval of this Amendment
and Restatement by the stockholders of the Company within twelve months from the
date this Amendment and Restatement was adopted by the Boards of Directors of
each of McKesson and HBOC (the "Stockholder Approval Date"). In the event such
stockholder approval is not obtained by the Stockholder Approval Date, the
balance of the Cash Accounts (as defined in Section 6 below)
of Contingent Participants shall be returned to them as soon as reasonably
practicable and their participation in the Plan shall thereupon be automatically
terminated.
5. OFFERING DATES
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a. In General. The Plan will be implemented by a continuous series of
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offerings beginning on the first trading day on or after March 1/st/ of each
calendar year (the "Offering Date") and terminating on the last trading day of
the following February (the "Purchase Date"). A trading day shall be a day on
which the New York Stock Exchange (or any other exchange or quotation system on
which the Stock may from time to time be listed) shall be open. The period for
which each such offering is effective is referred to herein as a "Purchase
Period." The first Purchase Period will commence on March 1, 1998, and will
terminate on the last trading day on or before February 28, 1999.
b. Application to Contingent Participants. Subject to Section 4(c)
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above, Contingent Participants may elect to participate in the Plan beginning
with the offering commencing on the first trading day on or after March 1, 1999.
6. ELECTION TO PARTICIPATE
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a. Initial Election. Each Employee who is eligible to participate in the
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Plan may become a participant (a "Participant") by making an election, prior to
any Offering Date and in accordance with procedures established by the
Committee, authorizing specified regular payroll deductions over the next
succeeding Purchase Period (an "Election Form"). Each election will be
expressed as a percentage of the Employee's Compensation (as defined below),
which may not exceed 10 percent of the Employee's Compensation for any payroll
period or be less than 1 percent of the Employee's Compensation for any payroll
period (or such other maximum and minimum percentages as the Committee may
determine). A Participant's "Compensation" is his total cash compensation from
the Company and its affiliates. Payroll deductions for a Participant will be
made regularly and in equal amounts during the Purchase Period by the Company,
and will be credited to a bookkeeping account established by the Company in the
name of the Participant (the "Cash Account"). No interest will be paid on or
credited to Cash Accounts.
b. Changes in Rate of Payroll Deductions. A Participant may discontinue
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making payroll deductions in accordance with Section 6(c), but may not otherwise
increase or decrease the amount of payroll deductions elected for a Purchase
Period.
c. Discontinuance of Contributions. At any time during a Purchase
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Period, a Participant may discontinue participation in the Plan for the current
Purchase Period by providing notice in accordance with procedures established by
the Committee. Upon such discontinuance, at the Participant's election, the
balance of his Cash Account will be (i) returned to the Participant as soon as
practicable, or (ii) held in the Cash Account until the end of the Purchase
Period and applied to purchase Stock in accordance with Section 10. A
Participant who discontinues payroll deductions may recommence his participation
in the Plan as of the Offering Date for any other succeeding Purchase Period,
provided he otherwise is eligible to participate and timely files a new Election
Form with the Committee.
7. PURCHASE PERIOD LIMITATION ON RIGHTS TO PURCHASE STOCK
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a. In General. Except as provided in Section 7(b) below with respect to
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the first Purchase Period under the Plan, and subject to the annual limitations
in Section 8 below, the maximum number of shares of Stock each Participant will
have the right to purchase under the Plan during a Purchase Period is determined
by dividing (i) $25,000 by (ii) the Fair Market Value of one share of Stock on
the Offering Date for such Purchase Period.
b. First Purchase Period. For purposes of the first Purchase Period
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hereunder, the maximum number of shares of Stock each Participant will have the
right to purchase under the Plan will be determined by dividing (i) $25,000 by
(ii) the closing price of the common stock, par value $.05 per share, of HBOC as
quoted on the Nasdaq National Market on February 27, 1998 divided by the
Exchange Ratio (as defined in the Merger Agreement).
c. Insufficient Shares of Stock. If at any time the number of shares of
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the Stock available for purchase under the Plan is insufficient to grant to each
Participant the right to purchase the full number of shares to which he
otherwise would be entitled, then each Participant will have the right to
purchase that number of available shares of Stock that is equal to the total
number of available shares of Stock multiplied by a fraction, the numerator of
which is the amount of Compensation credited to the Participant's Cash Account
for the Purchase Period, and the denominator of which is the total amount of
Compensation credited to the Cash Accounts of all Participants for the Purchase
Period.
8. ANNUAL LIMITATION ON RIGHTS TO PURCHASE STOCK
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No right to purchase shares of Stock under the Plan will be granted to
an Employee if such right, when combined with all other rights and options
granted under all of the Code Section 423 employee stock purchase plans of the
Company or any Parent or Subsidiary would permit the Employee to purchase shares
of Stock with a Fair Market Value (determined at the time the right or option is
granted) in excess of $25,000 for each calendar year in which the right or
option is outstanding at any time, determined in accordance with Code Section
423(b)(8).
9. PURCHASE PRICE
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a. In General. Except as provided in Section 9(b) with respect to the
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purchase of Stock under the first offering of the Plan, the purchase price of
each share of Stock will be the lesser of (i) 85 percent of the Fair Market
Value of the Stock on the Offering Date, or (ii) 85 percent of the Fair Market
Value of the Stock on the Purchase Date.
b. Effect of Merger. The purchase price for each share of Stock
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purchased under the first Purchase Period of the Plan will be the lesser of (i)
85 percent of the closing price of the common stock, par value $.05 per share,
of HBOC as quoted on the Nasdaq National Market on February 27, 1998 divided by
the Exchange Ratio (as defined in the Merger Agreement), or (ii) 85 percent of
the Fair Market Value of the Stock on the Purchase Date.
c. Fair Market Value. The Fair Market Value of the Stock, as of any
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date, will be equal to the closing price of the Stock on the New York Stock
Exchange ("NYSE"), for such date as reported in The Wall Street Journal. If no
transaction is reported for a particular date, Fair Market Value will be the
closing price on the closest preceding date
for which any transaction is reported. If the Stock is not traded on the NYSE,
Fair Market Value will be determined using the method established by the
Committee.
10. PURCHASE OF STOCK
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a. Funds in Cash Account Used to Purchase Whole Shares of Stock. Subject
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to the share limitations set forth in Sections 7 and 8 above, as of each
Purchase Date, the Committee will purchase from the Company using the funds in
each Cash Account on such date, on behalf of each Participant having funds in
his Cash Account, the number of whole shares of Stock determined by dividing the
amount in such Cash Account on such date by the purchase price determined under
Section 9.
b. No Fractional Shares. No fractional shares will be issued under the
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Plan. To the extent that, following the purchase of shares of Stock on any
Purchase Date, there remains in any Cash Account payroll deduction amounts
insufficient to purchase at least one full share of Stock, such amounts shall be
retained in the Participant's Cash Account and applied to the next subsequent
Purchase Period, subject to withdrawal by the Participant as provided in Section
6(c) hereof.
c. Return of Excess Contributions. Any additional amounts remaining in a
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Participant's Cash Account following the purchase of shares of Stock on any
Purchase Date that are equal to or in excess of the amount required under
Section 10(a) to purchase at least one full share of Stock shall be returned to
the Participant as soon as reasonably practicable following the Purchase Date.
11. STOCK ACCOUNTS
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a. Establishment of Accounts. As soon as reasonably practicable after
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each Purchase Date, the Company will deliver to a custodian selected by the
Committee (the "Custodian") a certificate or certificates representing the total
number of shares purchased by all Participants in the Purchase Period. The
Custodian will maintain a separate "Stock Account" for each Participant, which
will be credited with the number of shares of Stock purchased by the Participant
under the Plan.
b. Withdrawals from Stock Accounts. A Participant may at any time
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withdraw any shares of Stock credited to his Stock Account. As soon as
practicable after such request by a Participant, the Custodian shall cause a
certificate representing such Shares to be delivered to the Participant.
c. Rights as Shareholders. A Participant will have all of the rights of
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a shareholder of the Company with respect to all of the shares of Stock credited
to his Stock Account, including the right to vote and receive dividends on such
Shares.
12. TERMINATION OF EMPLOYMENT
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a. Termination Other Than Due to Death, Disability or Retirement. If a
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Participant terminates employment with the Company or any Parent or Subsidiary
during a Purchase Period for any reason other than death, disability, or
retirement, then the Participant's participation in the Plan will immediately
terminate and the balance of the Participant's Cash Account will be returned to
the Participant. For purposes of the Plan, a Participant who is on an approved
leave of absence shall not be considered to have
terminated employment until the 91st day of such leave of absence or such longer
period as the Participant's right to re-employment is guaranteed by law or
contract.
b. Termination Due to Death. If a Participant terminates employment with
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the Company or any Parent or Subsidiary during a Purchase Period due to death,
then, at the election of the Participant's beneficiary, the balance of the
Participant's Cash Account shall be (i) delivered to the beneficiary or (ii)
held in the Cash Account until the end of the Purchase Period and applied to
purchase Stock in accordance with Section 10.
c. Termination Due to Disability or Retirement. If a Participant
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terminates employment with the Company or any Parent or Subsidiary due to
retirement or disability no more than 3 months before the Purchase Date for a
Purchase Period, then, at the Participant's election, the balance of the
Participant's Cash Account shall be (i) returned to the Participant, or (ii)
held in the Cash Account until the end of the Purchase Period and applied to
purchase Stock in accordance with Section 10. If a Participant terminates
employment due to retirement or disability more than 3 months before the
Purchase Date for a Purchase Period, then the Participant's participation in the
Plan will immediately terminate and the balance of the Participant's Cash
Account will be returned to the Participant.
d. Definition of Retirement. For purposes of the Plan, Retirement shall
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mean the attainment by a Participant of age plus whole years of service with the
Company or any Parent or Subsidiary totalling 65.
13. DESIGNATION OF BENEFICIARY
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In accordance with procedures established by the Committee, a
Participant may designate one or more beneficiaries to receive benefits in the
event of the Participant's death. If a Participant fails to properly designate
a beneficiary, the Participant's estate will be considered the Participant's
beneficiary for purposes of the Plan.
14. COMPLIANCE WITH SECURITIES LAWS
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All shares of Stock issued under the Plan will be subject to such
restrictions as the Committee may deem advisable under any applicable federal or
state securities laws, and the Committee may cause a legend or legends making
reference to such restrictions to be placed on the certificates representing
such shares.
15. RIGHTS NOT TRANSFERABLE
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Neither payroll deductions credited to a Participant's account nor any
rights under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way by the Participant (other than by will or the laws of
descent and distribution or as provided in Section 13 hereof). Rights under the
Plan are exercisable during the lifetime of the Participant only by the
Participant.
16. ADJUSTMENT IN CASE OF CHANGES AFFECTING THE COMPANY'S STOCK
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a. In General. In the event of a subdivision or consolidation of
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outstanding shares of Stock, the payment of a stock dividend thereon, stock
split, reverse stock split, or in the event of any "corporate transaction" as
defined in Treasury Regulations
Section l.425-1(a)(1)(ii) (now relating to Code Section 424), the number of
shares reserved or authorized to be reserved under the Plan, the number and
price of such shares subject to purchase pursuant to rights outstanding
hereunder, the maximum number of shares each Participant may purchase during
each Purchase Period (pursuant to Section 7) or during each calendar year
(pursuant to Section 8), and the number of shares credited to Participants'
Stock Accounts, will be adjusted in such manner as may be deemed necessary or
equitable by the Board to give proper effect to such event, subject to the
limitations of Code Section 424.
b. Effect of Merger. Following consummation of the Merger, outstanding
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purchase rights of HBOC employees under the Plan will remain in effect and will
be assumed by the Company, with appropriate changes to reflect the issuance of
shares of Stock.
17. FOREIGN EMPLOYEES
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To the extent permitted under Section 423 of the Code, the Committee
may provide for such special terms for Participants who are foreign nationals,
or who are employed by the Company or a Parent or Subsidiary outside of the
United States of America, as the Committee may consider necessary or appropriate
to accommodate differences in local law, tax policy or custom. Moreover, the
Committee may approve such supplements to or amendments, restatements, or
alternative versions of, this Plan as it may consider necessary or appropriate
for such purposes without thereby affecting the terms of this Plan as in effect
for any other purpose; provided, however, that no such supplements, amendments,
restatements or alternative versions shall include any provisions that are
inconsistent with terms of this Plan, as then in effect, unless this Plan could
have been amended to eliminate such inconsistency without further approval by
the shareholders of the Company, or which would cause the Plan to fail to meet
the requirements of Section 423 of the Code.
18. AMENDMENT OF THE PLAN
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The Board may amend the Plan in any respect; provided, however, that,
any amendment (i) increasing the number of shares of Stock reserved under the
Plan (other than as provided in Section 16), or (ii) changing the designated
class of employees eligible to participate in the Plan as provided in Section 4,
must be approved, within 12 months of the adoption of such an amendment, by the
holders of a majority of the voting power of the outstanding shares of Stock.
19. TERMINATION OF THE PLAN
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The Plan and all rights of Employees hereunder will terminate:
(i) as of the Purchase Date on which Participants purchase a number
of shares of Stock that substantially exhausts the number of shares available
for issuance under the Plan, to such an extent that the Committee determines
that no subsequent offerings are practicable; or
(ii) at any time upon action of the Board; provided, however, that
if the Plan is terminated during any Purchase Period, any amounts in a
Participant's Cash Account will be returned to the Participant.
20. EFFECTIVE DATE
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The Amendment and Restatement will become effective as of January 12,
1999; provided, however, that if the amendments to Section 4(a) of the Amendment
and Restatement is not approved by the holders of a majority of the voting power
of the outstanding shares of Stock within 12 months from the date the Amendment
and Restatement is adopted by the Board, participation in the Plan by all
Contingent Participants will be automatically terminated, and all amounts in
such Contingent Participants' Cash Accounts shall be returned to them as soon as
reasonably practicable thereafter. Participation in the Plan by Employees who,
immediately prior to the Merger, were employed by HBOC, or by any subsidiary (as
defined in Code Section 424(f)) designated by the Board of Directors of HBOC as
eligible to participate shall continue in full force and effect and shall not be
affected by any such failure to obtain stockholder approval.
21. GOVERNMENT AND OTHER REGULATIONS
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a. In General. The Plan, and the grant and exercise of the rights to
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purchase shares of the Stock hereunder, and the Company's obligation to sell and
deliver shares of Stock, will be subject to all applicable federal, state and
foreign laws, rules and regulations, and to such approvals by any regulatory or
government agency as may, in the opinion of counsel for the Company, be
required.
b. Withholding Obligations. Each Participant shall, no later than the
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date as of which the value of any purchase right granted under the Plan first
becomes includible in the gross income of the Participant for federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the Company,
regarding payment of any federal, state, or local taxes of any kind required by
law to be withheld with respect to such purchase right. The obligations of the
Company under the Plan shall be conditional on the making of such payments or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant.
22. INDEMNIFICATION OF COMMITTEE
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In addition to such other rights of indemnification as they have as
directors or as members of the Committee, the members of the Committee will be
indemnified by the Company against reasonable expenses (including, without
limitation, attorneys' fees) actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved to the extent required by and in the
manner provided by the Bylaws of the Company relating to indemnification of
directors) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it will be
adjudged in such action, suit or proceeding that such Committee member did not
act in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Company.