EXHIBIT 10.23
McKESSON CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED THROUGH JULY 31, 2002)
1. PURPOSE
The McKesson Corporation 2000 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") and which does not so qualify for
eligible employees of other entities which are designated to participate in the
Plan by the Company.
2. STOCK RESERVED FOR THE PLAN
The Company will reserve 11,100,000 (which number has been adjusted to
reflect the 2:1 stock split effected by the former HBO & Company 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 further 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
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
(a) Eligible Employees. Except as set forth in subsections (b) and
(c) 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. In addition, the Board may designate as a subsidiary any other entity
controlled directly or indirectly by the Company which does not qualify as a
subsidiary corporation as defined in Section 424(f) of the Code and the
employees of that Subsidiary shall be eligible to participate in the Plan
although the Plan will not qualify as an employee stock purchase plan within the
meaning of Section 423 of the Code as to those employees. 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 participate in the Plan:
(i) any Employee whose customary employment is less than
20 hours 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); and
(iii) effective for the first Purchase Period commencing
after September 30, 1999 and for any subsequent Purchase Period, any
Employee who as of the first day of any such Purchase Period has not
completed a period of employment of at least 30 days.
5. OFFERING DATES
The Plan will be implemented by a continuous series of 24-month
offerings beginning on the first trading day on or after May 1 and November 1 of
each calendar year and terminating on the last trading day of the month which is
24 months later (the "Offering Periods") and six-month periods commencing on
each May 1 and November 1 and ending on the following October 31 and April 30,
during which contributions may be made toward the purchase of Stock under the
Plan (the "Accumulation Periods"). For purposes of calculating the purchase
price under Section 9, the applicable Offering Period shall be determined as
follows:
(i) Once a Participant is enrolled in the Plan for an
Offering Period, such Offering Period shall continue to apply to the
Participant until the earliest of (A) the end of such Offering Period,
(B) the date the Participant elects to discontinue contributions to the
Plan and receive a distribution of his Cash Account, or (C)
re-enrollment in a subsequent Offering Period under paragraph (ii)
below.
(ii) In the event that the Fair Market Value of the Stock
on the last trading day before the commencement of the Offering Period
in which the Participant is enrolled is higher than on the last trading
day before the commencement of any subsequent Offering Period, the
first Offering Period shall be canceled and the Participant shall
automatically be re-enrolled for such subsequent Offering Period.
6. ELECTION TO PARTICIPATE
(a) Initial Election. Each Employee who is eligible to participate
in the 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 15 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). An
Employee's "Compensation" is his "compensation" as that term is defined in the
McKesson Corporation Profit-Sharing Investment Plan. 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
change the amount of payroll deductions elected for a Purchase Period by
providing notice in accordance with procedures established by the Committee.
(c) Discontinuance of Contributions. At any time during a Purchase
Period, (but not later than five business days prior to the Purchase Date), 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
(a) In General. 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) $12,500 by (ii) the Fair Market Value of one share of Stock on the
Offering Date for such Purchase Period.
(b) Insufficient Shares of Stock. If at any time the number of
shares of 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
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
(a) In General. The purchase price of each share of Stock
purchased at the close of an Accumulation Period will be the lower of (i) 85
percent of the Fair Market Value of the such share on the last trading day of
such Accumulation Period, or (ii) 85 percent of the Fair Market Value of such
share on the first day of the applicable Offering Period (as determined under
Section 5).
(b) Fair Market Value. The Fair Market Value of the Stock, as of
any 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
Subject 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 and fractional shares of Stock
determined by dividing the amount in such Cash Account on such date by the
purchase price determined under Section 9.
11. STOCK ACCOUNTS
(a) Establishment of Accounts. As soon as reasonably practicable
after each Purchase Date, the Company will deliver to a custodian selected by
the Committee (the "Custodian"), in electronic form, 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 whole and fractional shares of Stock purchased by the
Participant under the Plan.
(b) Withdrawals from Stock Accounts. A Participant may at any time
withdraw any whole shares of Stock credited to his Stock Account as to which the
holding period requirements of Code Section 423(a)(1) have been satisfied. As
soon as practicable after such request by a Participant, the Custodian will
cause such whole shares to be transferred in electronic form to a broker
designated by the Participant or will 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 a stockholder 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
(a) Termination Other Than Due to Death, Disability or Retirement.
If a 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 will 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 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 will 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
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 will 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
will mean the attainment by a Participant of age plus whole years of service
with the Company or any Parent or Subsidiary totaling 65 or more.
13. BENEFICIARY
In the event of the Participant's death, his beneficiary shall be his
surviving spouse, or if there is none, his surviving children in equal shares,
or if there are none, his estate.
14. COMPLIANCE WITH SECURITIES LAW
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
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
(a) In General. In the event of a subdivision or consolidation of
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 1.425-1(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 purchase rights of HBO & Company employees under the Plan remained
in effect and were assumed by the Company, with appropriate changes to reflect
the issuance of shares of Stock.
17. FOREIGN EMPLOYEES
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 will
include any provisions that are inconsistent with the 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
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) any change in the
designation of corporations whose employees may be eligible to participate in
the Plan, other than a corporation who is a Parent or a Subsidiary, 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
The Plan and all rights of Employees hereunder will terminate:
(a) 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
(b) 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
This Amendment and Restatement will become effective as of May 1, 2000.
For Offering Periods prior to May 1, 2000 the terms of the Plan as in effect
from time to time are applicable.
21. GOVERNMENT AND OTHER REGULATIONS
(a) In General. The Plan, and the grant and exercise of the rights
to purchase shares of 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 will, no later than
the 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 will be conditional on the making of
such payments or arrangements and the Company will, 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
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.