<PAGE>
As filed with the Securities and Exchange Commission on February 9, 1995.
Registration No. 33-86536
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
McKESSON CORPORATION (formerly, "SP Ventures, Inc.")
(Exact name of registrant as specified in its charter)
Delaware 94-3207296
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Post Street
San Francisco, California 94104
(Address of Principal Executive Offices) (Zip Code)
SP Ventures, Inc. 1994 Stock Option and Restricted Stock Plan
McKesson Corporation 1973 Stock Purchase Plan
McKesson Corporation Profit-Sharing Investment Plan
(Full Title of Plans)
Nancy A. Miller Ivan D. Meyerson
Vice President and Vice President and
Corporate Secretary General Counsel
One Post Street One Post Street
San Francisco, CA 94104 San Francisco, CA 94104
(Name and address of agents for service)
(415) 983-8300
(Telephone number, including area code, of agents for service)
This Post-Effective Amendment to the Registration Statement shall be
effective upon filing in accordance with Rule 462 under the Securities Act of
1933.
<PAGE>
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-8 and has duly caused this Post-Effective
Amendment No. 1 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 8th day of February, 1995.
McKESSON CORPORATION
By: /s/ Nancy A. Miller
____________________________
Nancy A. Miller
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities indicated on the 8th day of February, 1995.
Signature Title
- --------- -----
*
- -----------------------------
Alan J. Seelenfreund Chairman of the Board and Chief
Executive Officer
(Principal Executive Officer)
*
- -----------------------------
David E. McDowell President, Chief Operating
Officer and Director
*
- -----------------------------
Kevin B. Ferrell Vice President, Chief Financial
Officer (Principal Financial
Officer)
*
- -----------------------------
Richard H. Hawkins Vice President and Controller
(Principal Accounting Officer)
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*
- -----------------------------
Tully M. Friedman Director
*
- -----------------------------
James R. Harvey Director
*
- -----------------------------
George M. Keller Director
*
- -----------------------------
Leslie L. Luttgens Director
*
- -----------------------------
John M. Pietruski Director
*
- -----------------------------
Jane E. Shaw Director
*
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Robert H. Waterman, Jr. Director
/s/ Nancy A. Miller
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*By: Nancy A. Miller
(Attorney-in-Fact)
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EXHIBIT INDEX
Exhibit Description
No.
4.1* SP Ventures, Inc. 1994 Stock Option and Restricted
Stock Plan
4.2* McKesson Corporation 1973 Stock Purchase Plan, as
amended through July 31, 1987
4.3 McKesson Corporation Profit-Sharing Investment Plan,
as amended through November 18, 1994
5.1* Opinion of Pillsbury Madison & Sutro, as to the
legality of the securities being registered
5.2* Undertaking by the Company as to the submission of
the McKesson Corporation Profit-Sharing Investment
Plan to the Internal Revenue Service
23.1* Independent Auditors' Consent
23.2* Consent of Pillsbury Madison & Sutro (included in
Exhibit 5.1 to this Registration Statement)
24* Powers of Attorney pursuant to which certain
officers and directors of the registrant signed this
Registration Statement
* Previously filed.
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EXHIBIT 4.3
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McKESSON CORPORATION
PROFIT-SHARING INVESTMENT PLAN
RESTATED
AS OF APRIL 1, 1990
[WORKING COPY INCORPORATING FIRST AMENDMENT]
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TABLE OF CONTENTS
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Section 1 INTRODUCTION .................................................. 1
1.1 Purposes of the Plan .......................................... 1
1.2 Tax Status of Plan ............................................ 1
(a) In General............................................... 1
(b) ESOP portions............................................ 1
(c) 401(k) portions.......................................... 2
(d) PAYSOP portion........................................... 2
1.3 Effective Date of Restatement.................................. 2
Section 2 PARTICIPATION ................................................. 3
2.1 Commencement .................................................. 3
(a) April 1, 1990............................................ 3
(b) General Rule............................................. 3
2.2 Duties of Employees Upon participation ........................ 3
2.3 Cessation ..................................................... 3
(a) Distribution of Account ................................. 3
(b) Delayed Distribution .................................... 3
2.4 Participants Who Are Not Eligible
Employees ..................................................... 3
2.5 Reemployment, Etc ............................................. 4
(a) Reemployment............................................. 4
(b) Reeligible............................................... 4
Section 3 EMPLOYEE CONTRIBUTIONS ........................................ 5
3.1 Pre-Tax Deferral Elections .................................... 5
(a) In General............................................... 5
(b) Quarterly Contribution .................................. 5
3.2 After-Tax Contribution Elections .............................. 5
3.3 Basic Contribution Amounts .................................... 5
3.4 Supplemental Contribution Amounts ............................. 5
3.5 Rules for Elections ........................................... 6
(a) Elections Continue ...................................... 6
(b) Changes.................................................. 6
(c) Redesignation as After-Tax
Contributions ........................................... 6
(d) Timing................................................... 6
3.6 $7,000 Limit for Pre-Tax Deferrals ............................ 6
3.7 Ordering of Contributions ..................................... 6
3.8 Investment Funds .............................................. 7
(a) General.................................................. 7
(b) Administrative Changes .................................. 7
(c) Quarterly Contributions ................................. 7
3.9 Limits on Deferrals and Contributions ......................... 7
3.10 Timing ........................................................ 7
Section 4 MATCHING EMPLOYER CONTRIBUTIONS ............................... 8
4.1 Eligibility ................................................... 8
(a) General ................................................. 8
(b) Elected Valuation Date .................................. 8
(c) Eligible Contributions .................................. 8
4.2 Amount of Contribution ........................................ 8
4.3 Form of Contribution .......................................... 9
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(a) Cash or Stock .......................................... 9
(b) Stock Contribution ..................................... 9
(c) Cash Contributions .................................... 10
4.4 Matching Contribution Made With Company
Stock Acquired With Exempt Loans ............................ 10
(a) In Lieu of or in Addition to Other Provisions ......... 10
(b) Exempt Loans for Acquisition of Company Stock,
etc ................................................... 10
(c) Release and Allocation of Financed
Company Stock ......................................... 10
4.5 Dividends on Suspense Account Shares ........................ 11
(a) Cash Dividends......................................... 11
(b) Non-Cash Dividends .................................... 11
(c) Other Distributions ................................... 11
4.6 Dividends on Allocated Shares ............................... 12
(a) Cash Dividends......................................... 12
(b) Non-Cash Dividends .................................... 12
4.7 Gain or Loss on Certain Company Stock ....................... 12
4.8 Discretionary Special Match ................................. 13
4.9 Limits on Matching Contributions ............................ 13
Section 5 ADDITIONAL ESOP MATCH ....................................... 14
5.1 Exempt Loans ................................................ 14
5.2 Release and Allocation of Financed Company
Stock ....................................................... 14
(a) Release................................................ 14
(b) Allocation............................................. 14
5.3 Cash Dividends .............................................. 16
(a) Loan Payment........................................... 16
(b) Distribution of Cash Dividends ........................ 17
5.4 Non-Cash Dividends and Distributions on
Suspense Account Shares ..................................... 17
5.5 Non-Cash Dividends and Distributions on
Suspense Account Shares ..................................... 17
5.6 Limitation on Allocations ................................... 17
Section 6 NON-MATCHING EMPLOYER CONTRIBUTIONS ......................... 18
6.1 Amount of Contributions ..................................... 18
6.2 Form of Contribution ........................................ 18
6.3 Exempt Loans ................................................ 18
(a) Purpose ............................................... 18
(b) Terms ................................................. 18
(c) Pledge of Company Stock ............................... 18
(d) Allocations ........................................... 18
(e) Repayment Source ...................................... 18
6.4 Loan Suspense Account ....................................... 19
6.5 Allocations ................................................. 19
6.6 Dividends on Suspense Account ............................... 19
(a) Cash Dividends ........................................ 19
(b) Non-Cash Dividends and Other
Distributions ......................................... 19
6.7 Dividends on Allocated Shares ............................... 20
(a) Cash Dividends ........................................ 20
(b) Non-Cash Dividends and Other
Distributions ......................................... 20
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6.8 Special Election ............................................ 20
6.9 Limits ...................................................... 20
Section 7 VESTING ..................................................... 21
7.1 Vesting of Participant's Accounts ........................... 21
7.2 Vesting on Retirement, Etc .................................. 21
7.3 Vesting on Completion of Service--Matching
Employer Contributions ...................................... 21
(a) General Rule .......................................... 21
(b) Grandfather ........................................... 21
7.4 Vesting on Completion of Service--Non-
Matching Employer Contributions ............................. 22
(a) Pre-1989 Credits ...................................... 22
(b) Grandfather--3-Year Rule .............................. 22
(c) General--5-Year Rule .................................. 22
7.5 Forfeitures ................................................. 22
(a) Date of Forfeiture .................................... 22
(b) Rehires ............................................... 22
(c) Order of Forfeiture ................................... 23
7.6 Allocation of Forfeitures ................................... 23
Section 8 WITHDRAWALS DURING EMPLOYMENT ............................... 24
8.1 Hardship Withdrawals--Basic and
Supplemental Contributions .................................. 24
(a) General ............................................... 24
(b) Financial Need Limit .................................. 24
(c) Account Limit ......................................... 24
(d) "Hardship" ............................................ 24
(e) Representations ....................................... 25
8.2 Voluntary Contributions ..................................... 25
8.3 Regular Contributions ....................................... 25
8.4 Non-Permitted Withdrawals ................................... 25
8.5 Applications ................................................ 26
8.6 Ordering .................................................... 26
Section 9 DISTRIBUTION OF ACCOUNT BALANCE ............................. 27
9.1 Amount ...................................................... 27
(a) In General ............................................ 27
(b) Additional ESOP Match ................................. 27
9.2 Distribution on Retirement or Disability .................... 27
(a) General ............................................... 27
(b) Elected Valuation Date ................................ 27
(c) Annuity ............................................... 28
(d) Other Benefit Forms ................................... 28
(e) Distribution Date ..................................... 29
9.3 Distribution on Death ....................................... 29
(a) Beneficiary Designation ............................... 29
(b) Lump Sum .............................................. 29
(c) Annuity ............................................... 30
(d) Annuity Eligible ...................................... 30
(e) Death After Distribution Begins ....................... 30
9.4 Distribution on Termination of Employment
for Reasons Other Than Retirement,
Disability or Death ......................................... 31
(a) General ............................................... 31
(b) Lump Sum .............................................. 31
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(c) Annuity ............................................... 31
(d) Investments on Deferral ............................... 31
9.5 Annuity Contracts ........................................... 32
(a) OJSA .................................................. 32
(b) OPSA .................................................. 32
(c) Elections ............................................. 32
(d) Spousal Consent ....................................... 33
(e) Notice ................................................ 33
9.6 Valuation Date .............................................. 33
(a) General Rule .......................................... 33
(b) Distribution on Retirement or
Disability ............................................ 33
(c) Distribution on Death ................................. 34
(d) Distributions or Termination of
Employment for Other Reasons .......................... 34
(e) Application Valuation Date ............................ 34
(f) Certain Cases When No Application
for Benefits Is Needed ................................ 34
(g) Valuation Date of Preferred Stock ..................... 34
(h) Effective Date ........................................ 35
9.7 Missing Distributees ........................................ 35
9.8 Right to Receive Company Stock .............................. 35
(a) General ............................................... 35
(b) Section 16(b) ......................................... 35
9.9 60 Day Rule Re Payment of Benefits .......................... 36
9.10 Payment to Participant Employee at Age
70 1/2 ...................................................... 36
9.11 Section 401(a)(9) Requirements .............................. 36
9.12 Distribution of Company Stock to Certain
Participants ................................................ 36
Section 10 ACCOUNTING, INVESTMENT AND VALUATION ........................ 37
10.1 Participant Accounts ........................................ 37
10.2 Investment Funds ............................................ 37
10.3 Valuation ................................................... 38
(a) General ............................................... 38
(b) Diversified Fund ...................................... 38
(c) Fixed Income Fund ..................................... 38
(d) Company Stock Fund .................................... 39
10.4 Statement to Participants ................................... 39
Section 11 VOTING AND TENDER OFFER RIGHTS IN COMPANY
STOCK ....................................................... 40
11.1 Named Fiduciary Status ...................................... 40
11.2 Confidentiality ............................................. 40
11.3 Directed Voting and Consents ................................ 40
11.4 Tender or Exchange Offers ................................... 41
Section 12 ADMINISTRATION .............................................. 43
12.1 Responsibilities of Company and Committee ................... 43
12.2 Responsibilities of Compensation
Committee ................................................... 43
12.3 Designation of Employers .................................... 43
12.4 Records and Reports ......................................... 44
12.5 Delegation of Responsibilities .............................. 44
12.6 Claims ...................................................... 44
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12.7 Fiduciary Duty ............................................. 45
12.8 Limitation on Liability .................................... 45
12.9 Payment of Committee Expenses .............................. 45
12.10 Indemnification and Insurance .............................. 45
12.11 Committee Members .......................................... 46
12.12 Expenses for Administration ................................ 46
Section 13 INDIVIDUAL ROLLOVERS ....................................... 47
13.1 Rollover From Qualified Plan ............................... 47
13.2 Rollover From IRA .......................................... 47
13.3 No Rollovers of Transfers By Key
Employees .................................................. 48
13.4 Mistaken Rollover .......................................... 48
13.5 Miscellaneous Rules ........................................ 48
(a) Election ............................................. 48
(b) Investments........................................... 49
(c) Vesting .............................................. 49
(d) Limitations on Benefits .............................. 49
(e) Distributions ........................................ 49
Section 14 FUTURE OF THE PLAN ......................................... 50
14.1 Amendments ................................................. 50
14.2 Tax Qualification .......................................... 50
14.3 Termination ................................................ 51
14.4 Merger ..................................................... 51
14.5 Transfer to Another Plan ................................... 51
Section 15 MISCELLANEOUS .............................................. 53
15.1 Non-Alienation of Benefits ................................. 53
(a) General .............................................. 53
(b) ODRO ................................................. 53
15.2 Construction ............................................... 53
15.3 Time for Making Contributions .............................. 53
15.4 Designations and Elections under Certain....................
Plans of Affiliated Companies .............................. 53
15.5 Return of Contributions .................................... 54
15.6 All Elections in Writing ................................... 54
15.7 Conditions of Employment Not Affected by
Plan ....................................................... 54
Section 16 DEFINITIONS ................................................ 56
16.1 Account .................................................... 56
16.2 Administrator .............................................. 56
16.3 Affiliated Company ......................................... 56
16.4 After-Tax Contributions .................................... 56
16.5 Application Valuation Date ................................. 56
16.6 Average Deferral Percentage ................................ 56
16.7 Average Contribution Percentage ............................ 56
16.8 Beneficiary ................................................ 57
16.9 Board of Directors ......................................... 57
16.10 Break in Service ........................................... 57
16.11 Code ....................................................... 57
16.12 Committee .................................................. 57
16.13 Company .................................................... 57
16.14 Company Stock .............................................. 57
16.15 Compensation ............................................... 58
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16.16 Compensation Committee ..................................... 58
16.17 Disabled ................................................... 58
16.18 Effective Date ............................................. 58
16.19 Elected Valuation Date ..................................... 58
16.20 Eligible Contributions ..................................... 58
16.21 Eligible Employee .......................................... 58
16.22 Employee ................................................... 59
16.23 Employer ................................................... 59
16.24 Entry Date ................................................. 59
16.25 ERISA ...................................................... 59
16.26 Excess Contributions ....................................... 59
16.27 Excess Aggregate Contributions ............................. 59
16.28 Exempt Loan ................................................ 59
16.29 Financed Company Stock ..................................... 60
16.30 Highly Compensated Employee ................................ 60
16.31 Hour of Service ............................................ 61
16.32 Independent Appraiser ...................................... 62
16.33 Participant ................................................ 62
16.34 Plan ....................................................... 62
16.35 Plan Year .................................................. 62
16.36 Pre-Tax Deferrals .......................................... 62
16.37 Quarter Date ............................................... 63
16.38 Rollover Contributions ..................................... 63
16.39 Service .................................................... 63
16.40 Spousal Consent ............................................ 64
16.41 Trust ...................................................... 64
16.42 Trustee .................................................... 64
16.43 Valuation Date ............................................. 64
16.44 Year of Service ............................................ 64
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EXHIBIT 4.3
McKESSON CORPORATION
PROFIT-SHARING INVESTMENT PLAN
RESTATED
AS OF APRIL 1, 1990
[WORKING COPY INCORPORATING FIRST AMENDMENT]
Section 1
---------
INTRODUCTION
------------
1.1 Purposes of the Plan. The purposes of this Plan are (a) to encourage
--------------------
employees to contribute to their retirement savings; (b) to provide
employees a proprietary interest in McKesson Corporation through stock
ownership; (c) to promote greater interest of employees in the growth and
development of McKesson Corporation; and (d) to promote the best interest
of the stockholders of McKesson Corporation through the retention of the
services of its employees.
1.2 Tax Status of Plan.
------------------
(a) In General. The Company intends that this Plan be a qualified plan
----------
under Section 401(a) of the Code. Portions of the Plan also are
intended to qualify as (a) a stock bonus plan which qualifies as an
employee stock ownership plan under Section 4975(e)(7) of the Code;
and (b) a profit sharing plan which is a qualified cash or deferred
arrangement within the meaning of Section 401(k) of the Code. Also,
the Plan contains a "frozen" tax credit employee stock ownership
plan to which no contributions have been made since December 31,
1986.
(b) ESOP portions. The portions of the Plan that constitute an employee
-------------
stock ownership plan under Section 4975(e)(7) of the Code are
Section 4 of the Plan providing for Matching Employer
Contributions, Section 5 of the Plan providing for an Additional
ESOP Match, Section 6 of the Plan providing for Non-Matching
Employer Contributions, that part of Section 3 of the Plan
providing for Quarterly Contributions, and all other sections of the
Plan necessary to meet the requirements of Section 4975(e)(7) of the
Code. The portions of the Plan that constitute an employee stock
ownership plan shall be treated as such for all purposes including
but not limited to Sections 404(a)(9), 404(k), and 415(c) of the
Code.
(c) 401(k) portions. The portions of the Plan that constitute a
---------------
qualified cash or deferred arrangement under Section 401(k) of the
Code are Section 3 of
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the Plan providing for Salary Reduction, and all other sections of
the Plan necessary to meet the requirements of Section 401(k) of the
Code.
(d) PAYSOP portion. The portion of the Plan that constitutes a frozen
--------------
tax credit employee stock ownership plan is Appendix C of the Plan.
1.3 Effective Date of Restatement. This Restatement of the Plan is effective
-----------------------------
as of April 1, 1990, except as otherwise provided in the Plan, and
incorporates all amendments made to the Plan since it was last amended and
restated as of June 6, 1989.
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Section 2
---------
PARTICIPATION
-------------
2.1 Commencement.
------------
(a) April 1, 1990. Each Eligible Employee who was a Participant in the
-------------
Plan on March 31, 1990 shall participate in the Plan on the
Effective Date.
(b) General Rule. Each Eligible Employee not covered by subparagraph
------------
(a) above shall become a Participant as of the Entry Date coinciding
with or next following his completion of one Year of Service.
2.2 Duties of Employees Upon participation. Upon becoming a Participant, each
--------------------------------------
Eligible Employee shall designate a Beneficiary as provided in Section
9.3. Also, if the Eligible Employee elects to have Basic or Supplemental
Contributions made on his behalf to the Plan, he shall complete and file
such election at the time and in the manner specified by the Company.
2.3 Cessation.
---------
(a) Distribution of Account. A person ceases to be a Participant when
-----------------------
the vested balance credited to his Account (if any) is distributed
to him. A person with no vested balance credited to his Account
shall be deemed to have received that balance on the day he ceases
to be employed by any Affiliated Company.
(b) Delayed Distribution. A person who terminates employment with all
--------------------
Affiliated Companies, who is entitled to receive the vested balance
credited to his Account and who elects to have it distributed at age
65 (see Section 9.4.(b)) shall cease to be a Participant for
purposes of contributions, allocations and hardship withdrawals and
shall remain a Participant solely for purposes of investment and
distribution. However, if a Participant has elected an Elected
Valuation Date under Section 9.2 which is the last day of the Plan
Year in which his termination of employment occurs, then he shall be
treated as a Participant for all purposes through that Date.
2.4 Participants Who Are Not Eligible Employees. A Participant who ceases to
-------------------------------------------
be an Eligible Employee, but who remains an Employee, shall cease to be a
Participant for purposes of contributions and allocations. Amounts which
have been credited to his Account shall continue to vest in accordance
with the rules of the Plan, and he shall continue to be a Participant for
purposes of investment, distribution and hardship withdrawals. No
contributions or allocations shall be made to the Account of a Partici-
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pant covered by this Paragraph based on Compensation paid while he is not
an Eligible Employee.
2.5 Reemployment, Etc.
-----------------
(a) Reemployment. A former Employee who at any time has completed at
------------
least one Year of Service shall be eligible to participate
immediately upon again becoming an Eligible Employee. However, an
Eligible Employee who is rehired after five or more consecutive
Breaks in Service and who has no remaining Account balance under the
Plan shall resume participation immediately only upon providing
reasonable evidence to the Company of his previous completion of one
Year of Service.
(b) Reeligible. A Participant described in Paragraph 2.4 shall become a
----------
Participant immediately upon again becoming an Eligible Employee.
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Section 3
---------
EMPLOYEE CONTRIBUTIONS
----------------------
This Section of the Plan contains the cash and deferred portion of the
Plan under Section 401(k) of the Code. In addition, the portion of this Section
that provides for Quarterly Contributions is an employee stock ownership plan
under Section 4975(e)(7) of the Code.
3.1 Pre-Tax Deferral Elections.
--------------------------
(a) In General. A Participant may elect to defer a percentage of his
----------
Compensation and direct his Employer to contribute an equal amount
to the Plan as a Pre-Tax Deferral by completing and filing an
election to defer at the time and in the manner prescribed by the
Company. Pre-Tax Deferrals may be made as Basic or Supplemental
Contributions.
(b) Quarterly Contribution. A Participant shall be deemed to have made
----------------------
an election to defer an amount of his Compensation equal to the
amount of dividends on the Company Stock allocated to his Account
which are paid to him in cash in any Plan Year. He also shall be
deemed to have directed his Employer to contribute such amounts to
the Plan on his behalf as Quarterly Contributions. However, the
Participant may timely file an election, at the time and in the
manner prescribed by the Company, not to make this deferral and
contribution.
3.2 After-Tax Contribution Elections. A Participant may elect, at the time
--------------------------------
and in the manner prescribed by the Company, to contribute a percentage of
his Compensation as After-Tax Contributions to the Plan through payroll
withholding. After-Tax Contributions may be made as Basic or Supplemental
Contributions. In no event shall any After-Tax Contributions be made
under the Plan by any Highly Compensated Employee after March 31, 1989.
3.3 Basic Contribution Amounts. A Participant may elect that total Basic
--------------------------
Contributions of between two percent ("2%") and six percent ("6%") (in
whole numbers) of his Compensation be made to the Plan on his behalf as
Pre-Tax Deferrals in accordance with Paragraph 3.1 or as After-Tax
Contributions in accordance with Paragraph 3.1 or through a combination of
both methods.
3.4 Supplemental Contribution Amounts. A Participant who elects Basic
---------------------------------
Contributions of six percent (6%) of his Compensation may elect total
Supplemental Contributions of between one percent (1%) and ten percent
(10%) of his Compensation. Supplemental Contributions may be made as Pre-
Tax Deferrals in accordance with Paragraph 3.1 or as
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After-Tax Contributions in accordance with Paragraph 3.2 or through a
combination of both methods.
3.5 Rules for Elections.
-------------------
(a) Elections Continue. The elections made under this Section 3 (or
------------------
the equivalent elections made under the Plan before this Restatement
is effective) shall be effective until such elections are changed or
terminated in accordance with this Section.
(b) Changes. A Participant may make his initial Pre-Tax Deferral or
-------
After-Tax Contribution election, change such election, cease such
election or, following cessation, renew such election effective as
of the first day of any month. To take any such action, the
Participant must complete and file an election at the time and in
the manner prescribed by the Company.
(c) Redesignation as After-Tax Contributions. If the portion of a
----------------------------------------
Participant's Pre-Tax Deferrals that is designated as Pre-Tax
Deferral exceeds the $7,000 limit described in Paragraph 3.6 or the
limits provided in Appendix A for any Plan Year, the excess amount
shall automatically be redesignated as an After-Tax Contribution.
(d) Timing. All Basic Contributions and Supplemental Contributions
------
shall be equal to the elected percentage applied, on a
nondiscriminatory basis, to the Participant's Compensation at the
time and in the manner determined by the Company.
3.6 $7,000 Limit for Pre-Tax Deferrals. Salary deferral contributions for any
----------------------------------
Participant shall not exceed $7,000 (increased as provided by the
Secretary of the Treasury) in the aggregate in any calendar year. The
Company may (but need not) establish procedures for the distribution to a
Participant of amounts contributed to the Plan that exceed this limit, on
account of administrative error or mistake of fact, along with income
allocable to excess deferrals.
3.7 Ordering of Contributions. If the aggregate Basic, Quarterly and
-------------------------
Supplemental Contributions exceed the maximum contributions that can be
made for a Participant for a Plan Year, the contributions made on his
behalf shall be reduced in the following order so that the aggregate
contributions do not exceed the maximum: first, Supplemental; second,
Quarterly; third, Basic.
3.8 Investment Funds.
----------------
(a) General. Basic and Supplemental Contributions made on behalf of
-------
each Participant, together with the
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Regular and Voluntary Contributions (if any) made by the Participant
prior to September 1, 1983, shall be invested in the Fixed Income
Fund and/or the Diversified Fund of the Trust in accordance with the
election of the Participant. A Participant may elect one of the
following modes of investment for such contributions.
(i) One hundred percent (100%) in the Fixed Income Fund;
(ii) One hundred percent (100%) in the Diversified Fund;
(iii) Fifty percent (50%) in the Fixed Income Fund and fifty
percent (50%) in the Diversified Fund;
(iv) Seventy-five percent (75%) in the Fixed Income Fund and
twenty-five percent (25%) in the Diversified Fund; or
(v) Seventy-five percent (75%) in the Diversified Fund and
twenty-five percent (25%) in the Fixed Income Fund.
Elections may be changed as of any February 1, May 1, August 1 or November 1.
All elections shall be made at the time and in the manner prescribed by the
Company.
(b) Administrative Changes. The times and percentages for investment of
----------------------
Basic and Supplemental Contributions provided in Paragraph 3.8.(a)
may be changed at any time by action of the Company, at its sole
discretion.
(c) Quarterly Contributions. Quarterly Contributions made on behalf of
-----------------------
each Participant shall be invested in Company Stock that is common
stock.
3.9 Limits on Deferrals and Contributions. Pre-Tax Deferrals and After-Tax
-------------------------------------
Contributions shall be subject to the limitations provided in Appendices A
and B.
3.10 Timing. A Participant's Basic and Supplemental Contributions shall be
------
paid to the Trust and allocated to the Participant's Account as soon as
practicable (and in no event later than 90 days) after the payroll period
to which such contributions relate.
-7-
<PAGE>
Section 4
---------
MATCHING EMPLOYER CONTRIBUTIONS
-------------------------------
This Section of the Plan is an employee stock ownership plan under Section
4975(e)(7) of the Code. Financed Company Stock was purchased under this Section
in 1988.
4.1 Eligibility.
-----------
(a) General. Every Participant who elects that a Basic Contribution be
-------
made to this Plan on his behalf for the Plan Year shall be eligible
to have a Matching Employer Contribution allocated to his Account
for that Plan Year if he is an Eligible Employee on the last day of
such year. No other Participants shall be entitled to receive any
Matching Employer Contribution for the plan year.
(b) Elected Valuation Date. An Eligible Employee who elects an Elected
----------------------
Valuation Date pursuant to Section 9.2 which is the last day of the
Plan Year during which his termination of employment occurs shall be
deemed to be an Eligible Employee on such last day for purposes of
Paragraph 3.8.(a).
(c) Eligible Contributions. Quarterly Contributions shall be deemed to
----------------------
be Basic Contributions for purposes of eligibility for a Matching
Employer Contribution. The total of Quarterly and Basic
Contributions taken into account under this Section for a Plan Year
shall not exceed 6% of Compensation and shall be reduced by the
Participant's withdrawals during the Plan Year ("Eligible
Contributions").
4.2 Amount of Contribution. The amount of the Matching Employer Contribution
----------------------
to be allocated to a Participant's Account for the Plan Year shall be a
percentage of such Participant's Eligible Contributions. Such percentage
shall be determined as follows:
<TABLE>
<CAPTION>
If the Consolidated
Pre-Tax Return on Equity The Applicable
For the Year is: Percentage is:
------------------------- --------------
<S> <C>
Less than 17% 0%
17 - 17.99% 5%
18 - 18.99% 10%
19 - 19.99% 15%
20 - 20.99% 20%
21 - 21.99% 25%
22 - 22.99% 30%
23 - 23.99% 35%
24 - 24.99% 40%
25 - 25.99% 45%
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C>
26 - 26.99% 50%
27 - 27.99% 55%
28 - 28.99% 60%
29 - 29.99% 65%
30 - 30.99% 70%
31 - 31.99% 75%
32 - 32.99% 80%
33 - 33.99% 85%
34 - 34.99% 90%
35 - 35.99% 95%
36% and above 100%
</TABLE>
For purposes of this Paragraph 4.2, "Consolidated Pre-Tax Return on Equity" for
any Plan Year shall be the percentage that (a) the total of the consolidated net
income of the Company and its subsidiaries as shown by the Company's annual
report, plus provisions for taxes on income and contributions to this Plan,
adjusted as provided in the next sentence, all for the fiscal year ending as of
the last day of such Plan Year is of (b) the net stockholder equity as shown on
the consolidated balance sheet of the Company and its subsidiaries of the last
day of the immediately preceding fiscal year as shown by such annual report and
adjusted as provided in the next sentence. In determining consolidated net
income and net stockholder equity, the Board of Directors may make any
adjustments it deems appropriate, in its sole discretion.
4.3 Form of Contribution.
--------------------
(a) Cash or Stock. The Matching Employer Contribution shall be made by
-------------
the Employers for the benefit of the Eligible Employees and shall be
in the form of cash or Company Stock that is common stock, at the
Company's election.
(b) Stock Contribution. If the Matching Employer Contribution is made
------------------
in Company Stock, the number of shares to be contributed shall be
determined by dividing the total amount of the contribution
determined under Paragraph 4.2 above by the closing price of such
Company Stock as accurately reported in The Wall Street Journal on
-----------------------
the last day of the Plan Year (or the last business day of the Plan
Year on which such Company Stock was traded if there were no trades
on the last day of the Plan Year). If such contribution is made
after the last day of the Plan Year, the number of shares so
determined shall be adjusted by the Company to reflect any dividends
or stock splits which occur after the end of the Plan Year.
(c) Cash Contributions. If the Matching Employer Contribution is made
------------------
in cash, such amount shall be invested by the Trustee, as soon as
practicable, in the purchase of Company Stock that is common stock
either from the Company or on the open market. If
-9-
<PAGE>
stock is purchased from the Company, the price paid shall be the
closing price of such Company Stock reported in The Wall Street
---------------
Journal on the day before the purchase, unless a different price is
-------
required under ERISA. If such contribution is made after the last
day of the Plan Year, then it shall be increased to approximately
reflect any cash or other dividends paid on Company Stock that is
common stock which is paid after the end of the Plan Year and before
the contribution is made.
4.4 Matching Contribution Made With Company Stock Acquired With Exempt Loans.
------------------------------------------------------------------------
(a) In Lieu of or in Addition to Other Provisions. At its sole
---------------------------------------------
discretion, the Company may apply the provisions of this Paragraph
4.4 in lieu of or in addition to Paragraphs 4.2 and 4.3 of this
Section.
(b) Exempt Loans for Acquisition of Company Stock, etc. The Company may
---------------------------------------------------
direct the Trustee to enter into Exempt Loans from time to time for
the purpose of financing the acquisition of Company Stock for the
Trust or to repay prior Exempt Loans. Such Exempt Loans shall be on
the same terms and conditions (including, without limitation, terms
relating to security, release of shares, and source of repayment) as
provided in Section 6.3 of the Plan and Company Stock acquired with
such Exempt Loans shall be held in a Loan Suspense Account in the
same manner as provided in Section 6.4 of the Plan.
(c) Release and Allocation of Financed Company Stock.
------------------------------------------------
(i) As principal and interest is paid on an Exempt Loan described
in this Paragraph 4.4, Financed Company Stock held in the Loan
Suspense Account under this Paragraph 4.4 shall be released as
provided in applicable Treasury Regulations.
(ii) Financed Company Stock released for any Plan Year shall be
allocated to the Matching Employer Contribution Sub-Account of
each Participant who is entitled to receive a Matching
Employer Contribution under Paragraph 4.1 of this Section 4
for the Plan Year. The amount of the released Financed
Company Stock that is allocated to this Sub-Account of each
such Participant shall be equal to a fraction of the released
Financed Company Stock for the Plan Year. This fraction shall
be determined by dividing the total amount of such
Participant's Eligible Contributions for the Plan Year by the
total amount of Eligible Contributions made by all
-10-
<PAGE>
Participants who are eligible to receive a Matching Employer
Contribution for that Plan Year.
4.5 Dividends on Suspense Account Shares. All shares of Company Stock not
------------------------------------
allocated under the terms of this Section 4 shall be treated as held in
the Loan Suspense Account for purposes of this Paragraph.
(a) Cash Dividends. Cash dividends paid on Financed Company Stock held
--------------
in the Loan Suspense Account under this Section 4 shall be applied
to repay Exempt Loans entered into by the Trust under this Section.
(b) Non-Cash Dividends.
------------------
(i) Dividends of Company Stock shall be added to the Loan Suspense
Account and released and allocated as the applicable Exempt
Loan is repaid, pursuant to the terms of this Plan. Dividends
of stock of another Affiliated Company shall be disposed of,
the proceeds reinvested in Company Stock, and this Company
Stock shall be added to the Loan Suspense Account, and
released and allocated as the applicable Exempt Loan is
repaid, pursuant to the terms of this Plan.
(ii) Non-cash dividends, which are not described in (b)(i) above
shall be sold or otherwise disposed of, the proceeds applied
to repay Exempt Loans entered into by the Trust under this
Paragraph, and Company Stock shall then be released and
allocated pursuant to the terms of this Plan.
(c) Other Distributions. Distributions on Financed Company Stock held
-------------------
in the Loan Suspense Account under this Section 4 which are not
dividends shall be disposed of, the proceeds reinvested in Company
Stock which shall be added to the Loan Suspense Account and released
and allocated as the applicable Exempt Loan is repaid, pursuant to
the terms of this Plan. All distributions with respect to which the
Trust would not recognize gain or loss under the Code (if the Trust
were not exempt from taxation under the Code) shall not be treated
as dividends and shall be governed by this subparagraph.
4.6 Dividends on Allocated Shares.
-----------------------------
(a) Cash Dividends. Cash dividends paid on Company Stock allocated to
--------------
Participants' Matching Employer Contribution Sub-Accounts shall be
paid currently (or within ninety (90) days following the close of
-11-
<PAGE>
the Plan Year in which dividends are received by the Trust) in cash
to Participants to the extent that the Company determines that a
federal income tax deduction for such dividend payments is allowable
to the Company. If such a deduction is not allowable, such
dividends shall be added to the Participants' Matching Employer
Contribution Sub-Accounts. Also, such cash dividends shall not be
paid currently to Participants who have elected Not to receive Non-
Matching Employer Contributions, but shall be added to their
Matching Employer Contribution Sub-Accounts.
(b) Non-Cash Dividends. Dividends of Company Stock paid on Company
------------------
Stock allocated to Matching Employer Sub-Accounts shall be added to
the Appropriate Accounts under this Plan. Other non-cash dividends
and distributions paid on such Company Stock shall be sold or
otherwise disposed of and the proceeds invested in Company Stock and
added to the appropriate Accounts under this Plan.
4.7 Gain or Loss on Certain Company Stock. From time to time the Plan may
-------------------------------------
borrow cash from the Company, to the extent permitted under ERISA, in
order to make cash distributions to Participants at a time when Company
Stock cannot be sold because of, e.g., restrictions under the securities
----
laws. In such case, the Plan temporarily will hold unallocated Company
Stock which will be sold, or transferred to the Company, to repay such
loans. Any gain for a Plan Year on the disposition of such assets shall
be applied in the following order of Priority:
(a) First, it shall reduce Matching Employer Contributions and be
allocated in lieu of such contributions, other than Contributions
made to repay an Exempt Loan pursuant to Paragraph 4.4;
(b) Second, it shall be used to restore benefits (e.g., under Section
7.5) to the extent that current forfeitures are insufficient.
(c) Third, it shall be used in lieu of Employer Contributions to repay
an Exempt Loan under Paragraph 4.4;
(d) Fourth, it shall be used in lieu of Employer Contributions to repay
an Exempt Loan under Section 5.
(e) Fifth, it shall be used in lieu of Employer Contributions to repay
an Exempt Loan under Section 6.
(f) Sixth, it shall be an additional allocation to the Account of each
Participant who is entitled to
-12-
<PAGE>
receive an Employer Matching Contribution for the Plan Year, made in
proportion to each such Participant's Compensation.
Any loss attributable to such assets shall be assumed by the Company.
4.8 Discretionary Special Match. At its sole discretion, the Board of
---------------------------
Directors may provide a Matching Employer Contribution for any Plan Year
for designated Participants who (a) are employed by a business unit
specified by the Board of Directors which is sold or shut down, or (b) are
laid off pursuant to a reduction-in-force. The amount of such Matching
Employer Contribution (if any) shall be determined by the Board of
Directors at its sole discretion. Such Matching Employer Contribution
shall be allocated in proportion to each eligible Participant's Eligible
Contribution. Such Matching Employer Contribution may be made pursuant to
Paragraph 4.3 or 4.4 of this Section 4. Any such contribution made
pursuant to Paragraph 4.4 shall reduce the total amount of Financed
Company Stock allocated to other Participants under Paragraph 4(c)(ii) for
the Plan Year. No such contribution shall be made if it would jeopardize
the tax-qualified status of the Plan.
4.9 Limits on Matching Contributions. See Appendices A and B which establish
--------------------------------
limits on contributions.
-13-
<PAGE>
Section 5
---------
ADDITIONAL ESOP MATCH
---------------------
This Section of the Plan is an employee stock ownership plan under section
4975(e)(7) of the Code. Financed Company Stock was purchased under this section
in 1989.
5.1 Exempt Loans. The Company may direct the Trustee to enter into Exempt
------------
Loans from time to time for the purpose of financing the acquisition of
Company Stock for the Trust under this Section 5 or to repay such prior
Exempt Loans. Such Exempt Loans shall be on the same terms and conditions
(including, without limitation, terms relating to security, release of
shares and source of repayment) as provided in Section 6.3 of the Plan and
Company Stock acquired with such Exempt Loans shall be held in a Loan
Suspense Account in the same manner as provided in Section 6.4 of the
Plan.
5.2 Release and Allocation of Financed Company Stock.
------------------------------------------------
(a) Release. As principal and interest are paid on an Exempt Loan
-------
described in this Paragraph 5.2, Financed Company Stock held in the
Loan Suspense Account under this Section 5 shall be released as
provided in applicable Treasury regulations.
(b) Allocation. The amount of Company Stock released for any Plan Year
----------
under subparagraph (a) above that is allocated to any Participant's
Additional ESOP Match Sub-Account shall be the sum of the amount in
(i) and (ii) below.
(i) In accordance with section 404(k)(2)(B) of the Code, to the
extent that cash dividends on Company Stock previously
allocated to a Participant's Additional ESOP Match Sub-Account
are used to pay principal or interest on an Exempt Loan, the
amount under this clause (i) is the fair market value of
Company Stock equal to the cash dividends so used. Fair
market value for purposes of this clause (i) shall be
determined as of the actual date of allocation of such Company
Stock. This clause (i) applies with respect to a Participant
whether or not he has elected to have Basic Contributions made
to the Plan on his behalf for the Plan Year and whether or not
he is an Eligible Employee on the last day of the Plan Year.
(ii) The amount under this clause (ii) is a per capita allocation.
The total amount allocated to Participants under this clause
(ii) shall be equal to the amount of Company Stock
-14-
<PAGE>
released for the Plan Year under subparagraph (a) reduced as
described in clause (iii). This amount shall be allocated
among the Additional ESOP Match Sub-Accounts of Participants
who are entitled to receive an allocation under this clause
(ii) for a Plan Year as follows:
(A) Each eligible Full-Time Participant shall receive an
equal allocation;
(B) Each eligible part-Time Participant shall receive an
equal allocation in an amount which is one-half of the
amount allocated to each Full-Time Participant;
(C) No Participant shall receive an allocation unless the
Participant is an Eligible Employee on the last day of
the Plan Year; a Participant who elects, during the Plan
Year, an Elected Valuation Date pursuant to Section 9.2
which is the last day of the Plan Year during which his
termination of employment occurs shall be deemed to be
an Eligible Employee on such last day for purpose of
this subparagraph (C);
(D) Except as provided in (F) below, no Participant shall
receive an allocation unless the sum of his Basic and
Supplemental Contributions for the Plan Year equals at
least 2% of his Compensation for the Plan Year.
Quarterly Contributions shall not count towards this
requirement. In addition, any similar elective employee
contributions for the Plan Year to any other qualified
plan maintained by an Employer designated to participate
in this Section 5 shall be counted towards this
requirement;
(E) For purposes of the requirement in (D) above, only the
following payments Compensation shall be counted:
(I) Solely for the Plan Year ending March 31, 1990,
only Compensation paid on or after January 1,
1990.
(II) Compensation paid while the Participants is
eligible to participate in the Plan and with
respect to which the Participant is eligible to
make the elective
-15-
<PAGE>
contributions counted towards the requirement in
(D) above;
(F) For purposes of (D) above, a Participant shall be
treated as meeting the 2% of Compensation minimum if he
cannot otherwise make such contributions because of the
$7,000 limit provided in Section 3.6 or the limitations
of Appendix A or Appendix B;
(G) For purposes of this clause (ii), "Full-Time
Participant" is defined as a Participant who is
scheduled to work the normally scheduled hours for a
full-time position at the Participant's work location as
determined on the last day of the Plan Year;
(H) For purposes of this clause (ii), "Part-Time
Participant" is defined as a Participant who is not a
Full-Time Participant.
(iii) For purposes of the calculations in clause (ii), the total
amount of Company Stock released for the Plan Year shall be
reduced by the total amount of Company Stock allocated to all
Participants' Accounts under clause (i) for that Plan Year.
(iv) If allocation is made under clause (i) and not under clause
(ii), and the "fair market value" requirement of clause (i) is
not met by the use of released shares, then in lieu of
allocation under clause (i), the released stock for the Plan
Year shall be allocated to Additional ESOP Matching Sub-
Accounts in proportion to the cash dividends on Company Stock
allocated to such sub-Accounts which are used to pay an Exempt
Loan.
5.3 Cash Dividends.
--------------
(a) Loan Repayment. Cash dividends paid on all Company Stock
--------------
acquired with one or more Exempt Loans under this Section 5
shall first be used to pay principal and interest due on the
Exempt Loan used to acquire such stock, or on a substitute
loan. This rule shall apply both to dividends paid on stock
allocated to Participants' Accounts and to dividends paid on
stock held in a Loan Suspense Account. All shares of Company
Stock not allocated under the terms of this Section 5 shall
be treated
-16-
<PAGE>
as held in the Loan Suspense Account for purposes of this
Paragraph 5.3.
(b) Distribution of Cash Dividends. After any Exempt Loan
------------------------------
referred to in this Paragraph 5.3 is repaid and all Company
stock acquired under this Section 5 has been released and
allocated, cash dividends on Company Stock acquired under this
Section 5 shall be paid in cash to Participants currently (or
within ninety (90) days following the clause of the Plan Year
in which such dividends are received by the Trust to the
extent that a federal income tax deduction for such dividend
payments is allowable to the Company. If such a deduction is
not allowable, such dividends shall be added to the
Participants' Additional ESOP Match Sub-Account.
5.4 Non-Cash Dividends and Distributions on Suspense Account Shares. Non-Cash
---------------------------------------------------------------
Dividends and other distributions paid on Company Stock held in a Loan
Suspense Account under this Section 5 shall be treated in the same way as
provided under Section 4.5.(b) and 4.5.(c) as applicable.
5.5 Non-Cash Dividends and Distributions on Allocated Shares.
--------------------------------------------------------
(a) Dividends of Company Stock paid on Company Stock acquired with an
Exempt Loan under this Section 5 shall be added to the appropriate
Participant Accounts.
(b) Dividends of stock of an Affiliated Company, and other non-cash
distributions that are not dividends of Company Stock, shall be sold
or otherwise disposed of and the proceeds shall be invested in
Company Stock and allocated to the appropriate Participant Accounts
under this Plan.
5.6 Limitation on Allocations. See Appendices A and B which establish limits
-------------------------
on contributions.
-17-
<PAGE>
Section 6
---------
NON-MATCHING EMPLOYER CONTRIBUTIONS
-----------------------------------
This section of the Plan is an employee stock ownership plan under Section
4975(e)(7) of the Code. Financed Company Stock was purchased under this Section
in 1985 and 1986.
6.1 Amount of Contributions. For each Plan Year, the Company may contribute
-----------------------
to the Trust Non-Matching Employer contributions in such amounts, if any,
as may be determined by the Company's Board of Directors.
6.2 Form of Contribution. Contributions may be made in cash or in shares of
--------------------
Company Stock; provided, that Non-Matching Employer Contributions shall be
paid in cash to the extent that they are required to pay any currently
maturing obligations of the Trust under an Exempt Loan. Cash
contributions not used to pay an Exempt Loan shall be used to purchase
Company Stock.
6.3 Exempt Loans.
------------
(a) Purpose. The Company may direct the Trustee to enter into Exempt
-------
Loans from time to time for the purpose of financing the acquisition
of Company Stock for the Trust or to repay prior Exempt Loans.
(b) Terms. Exempt Loans shall be made for a specific term, shall bear a
-----
reasonable rate of interest and shall not be payable on demand
except in the event of default.
(c) Pledge of Company Stock. An Exempt Loan entered into directly with
-----------------------
the Company, or with another lender, may be secured by a pledge of
the Financed Company Stock acquired with the proceeds of an Exempt
Loan in accordance with the provisions of the Code and Regulations
thereunder. Any pledge of Financed Company Stock must provide for
the release of the encumbered shares at the time and in the manner
provided by Treasury regulations as the Exempt Loan is repaid.
(d) Allocations. Financed Company Stock released from pledge shall be
-----------
allocated to Participants' Company Stock Accounts as provided in
Paragraph 6.5 below.
(e) Repayment Source. The Trustee shall repay the interest and
----------------
principal on an Exempt Loan from Non-Matching Employer
Contributions, earnings on Non-Matching Employer Contributions and
dividends (and any other earnings) on the Financed Company Stock
held in the Loan Suspense Account described in Paragraph 6.4 of this
Section 6. See also Section 4.6 and Paragraph 6.6 below on
repayment.
-18-
<PAGE>
6.4 Loan Suspense Account. A Loan Suspense Account shall be established when
---------------------
the Trustee enters into an Exempt Loan, and all Financed Company Stock
acquired with such Exempt Loan shall be initially allocated to the Loan
Suspense Account. As the principal and interest of the Exempt Loan is
repaid, Financed Company Stock held in the Loan Suspense Account shall be
released as provided in Paragraph 6.3 above and allocated to Participant's
Company Stock Accounts as provided in Paragraph 6.5 below.
6.5 Allocations. Company Stock purchased under Paragraph 6.2 or released from
-----------
the Loan Suspense Account for each Plan Year shall be allocated to the
Non-Matching Employer Contribution Account of each Participant who is an
Eligible Employee on the December 31 ending within the Plan Year. Such
allocation shall be in the ratio that the Compensation of each Participant
bears to the Compensation of all such Participants. For this purpose,
Compensation shall be determined for the calendar year, and not for the
Plan Year. A Participant who elects, during the Plan Year, an Elected
Valuation Date pursuant to Section 9, which is the last day of the Plan
Year during which his termination occurs shall be deemed to be an Eligible
Employee on the December 31 ending within that Plan Year. In making the
allocation required by this Paragraph 6.5 if the individual is not a
Participant and an Eligible Employee for the entire calendar year, his
Compensation used for allocation under this Paragraph 6.5 shall be his
Compensation for the calendar year multiplied by a fraction. Such
fraction shall be his Compensation paid while a Participant and an
Eligible Employee divided by his total Compensation paid in the calendar
year.
6.6 Dividends on Suspense Account. All shares of Company Stock not allocated
-----------------------------
under the terms of Section 6 shall be treated as held in the Loan
Suspense Account for purposes of this Paragraph.
(a) Cash Dividends. Cash Dividends paid on Financed Company Stock held
--------------
in a loan Suspense Account under this Section 6 shall be Applied to
repay Exempt Loans entered into by the Trust under this Section.
(b) Non-Cash Dividends and Other Distributions. Non-Cash Dividends and
------------------------------------------
other distributions paid on Company Stock held in a loan Suspense
Account under this Section 6 shall be treated in the same way as
provided under Section 4.5(b) and 4.5(c).
6.7 Dividends on Allocated Shares.
-----------------------------
(a) Cash Dividends. Cash Dividends paid on Company Stock allocated to
--------------
the Non-Matching Employer Contribution Sub-Accounts shall be treated
in the same way as provided in the first sentence of Section
4.6.(a).
-19-
<PAGE>
(b) Non-Cash Dividends and Other Distributions. Non-Cash dividends and
------------------------------------------
other distributions paid on Company Stock allocated to the Non-
Matching Employer Contribution Sub-Accounts shall be treated in the
same way as provided in Section 4.6.(b).
6.8 Special Election. A Participant who elected, in May 1985, not to receive
----------------
Non-Matching Employee Contributions shall not be treated as a Participant
for purposes of Paragraph 6.5 and no allocations shall be made to his
Account under that Paragraph. However, such Participant may elect, at the
time and in the manner prescribed by the Committee, to receive Non-
Matching Employer Contributions. An election to receive Non-Matching
Employer Contributions, may not be revoked. If a Participant has not
elected to receive Non-Matching Contributions under this Paragraph, he
shall not receive any compensation or remuneration in exchange therefor or
in lieu thereof: Therefore, an election under this Paragraph is not an
election to defer or not to defer compensation and is not subject to
Sections 401(k), 402(g) or related sections of the Code.
6.9 Limits. See Appendix B that establishes limits on allocations.
------
-20-
<PAGE>
Section 7
---------
VESTING
-------
7.1 Vesting of Participant's Accounts. The balance credited to a
---------------------------------
Participant's Account shall be fully vested and nonforfeitable, except for
amounts credited to the Participant's Matching Employer Contribution Sub-
Account, Additional ESOP Match Sub-Account and Non-Matching Employer
Contribution Sub-Account, which shall vest as provided further in this
Section.
7.2 Vesting on Retirement, Etc. The amount credited to a Participant's
--------------------------
Matching and Non-Matching Employer Contribution Sub-Accounts and to his
Additional ESOP Match Sub-Account shall be fully vested and nonforfeitable
upon the occurrence of the earliest of the following events:
(a) retirement from current employment with an Affiliated Company under
the terms of the McKesson Corporation Retirement Plan;
(b) attainment of age 65 while an Employee; (c) becoming Disabled while
an Employee; (d) death while an Employee;
(c) termination of employment with all Affiliated Companies on account
of a reduction in work force initiated by an Employer affecting a
substantial number of Employees, including a closing or sale of an
operating unit; or
(d) Effective only for transfers before April 1, 1990, required transfer
from status as an Eligible Employee to the employment of a
corporation or other business entity which is affiliated with or
subsidiary to the Company and which is not an Employer under the
Plan.
7.3 Vesting on Completion of Service--Matching Employer Contributions.
-----------------------------------------------------------------
(a) General Rule. The amounts credited to a Participant's Matching
------------
Employer Contribution Sub-Account and Additional ESOP Match Sub-
Account shall be fully vested and nonforfeitable upon his completion
of three Years of Service.
(b) Grandfather. If a Participant was employed by an Affiliated Company
-----------
on or before March 31, 1989, has not had five one-year Breaks in
Service which include that date, is not vested under Paragraph 7.2
or Paragraph 7.3.(a), and terminates employment on or after April l,
1989, that portion of his Matching Employer Contribution Sub-Account
attributable to the Plan Year immediately preceding such termination
-21-
<PAGE>
shall be forfeited. The portion of such Sub-Account not forfeited
pursuant to the preceding sentence shall be fully vested and
nonforfeitable.
7.4 Vesting on Completion of Service--Non-Matching Employer Contributions.
---------------------------------------------------------------------
(a) Pre-1989 Credits. The amount credited to each Participant's Non-
----------------
Matching Employer Contribution Sub-Account that is attributable to
contributions made as of or before December 31, 1988 shall be fully
vested and nonforfeitable.
(b) Grandfather--3-Year Rule. The amount credited to the Non-Matching
------------------------
Employer Contribution Sub-Account of each Participant who had three
or more Years of Service on March 31, 1989, who had not incurred
five consecutive one-year Breaks in Service on that date, and who
was an Employee on April 1, 1989 shall be fully vested and
nonforfeitable.
(c) General--5-Year Rule. The Non-Matching Employer Contribution Sub-
--------------------
Account of each other Participant shall be fully vested and
nonforfeitable after completion of five Years of Service.
7.5 Forfeitures.
-----------
(a) Date of Forfeiture. The portion of a Participant's Account that is
------------------
not fully vested and nonforfeitable as of the date of his
termination of employment with all Affiliated Companies shall be
forfeited on the earliest of the following: (i) the date when a
complete distribution of all vested amounts credited to his Account
is made (if there are no such amounts, such a distribution is deemed
to occur on the date the Participant terminates employment with all
Affiliated Companies), or (ii) the date when he has 5 consecutive
one-year Breaks in Service.
(b) Rehires. If such Participant is rehired by an Affiliated Company,
-------
the forfeited amount shall be restored to his Account if the
Participant has had fewer than 5 one-year Breaks in Service.
Notwithstanding the foregoing sentence, no such restoration shall be
required after one or more successive Breaks in Service before April
1, 1985 if such restoration would not have been required under the
provisions of the Plan as in effect before that date. Amounts
restored under this subparagraph (b) shall come first from
forfeitures for the Plan Year, second from amounts (if any)
available under Section 4.7, and third from additional Employer
contributions.
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<PAGE>
(c) Order of Forfeiture. If any portion of a Participant's Account is
-------------------
forfeited, such Participant shall forfeit Financed Company Stock
allocated to such Participant's Matching Employer Contribution Sub-
Account, Non-Matching Employer Contribution Sub-Account and
Additional ESOP Match Sub-Account only after having fully forfeited
all assets other than Financed Company Stock allocated to such
Participant's Sub-Accounts. If a Participant for whom the Trustee
maintains any Sub-Account that is credited with Financed Company
Stock forfeits Financed Company Stock, such Participant shall
forfeit equal percentages of each different class of Financed
Company Stock credited to his Accounts.
7.6 Allocation of Forfeitures. The value as of the last day of the Plan Year
-------------------------
of any portion of a Participant's Matching Employer Contribution Sub-
Account, Additional ESOP Match Sub-Account, or Non-Matching Employer
Contribution Sub-Account which is forfeited during such Plan Year shall be
reallocated to the Sub-Accounts of the remaining Participants first to
restore prior forfeitures under Section 7.5 and second in the manner
provided for the allocation of Matching Employer Contributions under
Section 4, Additional ESOP Match under Section 5, and Non-Matching
Employer Contributions under Section 6, respectively.
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<PAGE>
Section 8
---------
WITHDRAWALS DURING EMPLOYMENT
-----------------------------
8.1 Hardship Withdrawals--Basic and Supplemental Contributions.
----------------------------------------------------------
(a) General. Withdrawals from a Participant's Basic Contribution Salary
-------
Deferral Sub-Account, Supplemental Contribution Salary Deferral Sub-
Account, Basic Contribution After-Tax Sub-Account, Supplemental
Contribution After-Tax Sub-Account and Rollover Contribution Sub-
Account shall be permitted on financial hardship and only during
employment by an Affiliated Company. Such withdrawals shall occur
only after the Participant furnishes to the Company, at the time and
in the manner prescribed by it, proof of his financial hardship that
creates an immediate and heavy financial need, as determined by the
Company under rules uniformly applied to all Participants similarly
situated.
(b) Financial Need Limit. The amount withdrawn, net after reduction for
--------------------
any income taxes withheld, shall not exceed the amount required to
meet the Participant's immediate and heavy financial need created by
such hardship. Withdrawal is allowed only if such need cannot be
met from other resources reasonably available to the Participant.
(c) Account Limit. In no event shall any withdrawal under this
-------------
Paragraph exceed an amount equal to: (i) the amount credited to a
Participant's Basic Contribution Salary Deferral Sub-Account and
Supplemental Contribution Salary Deferral Sub-Account as of December
31, 1988, plus (ii) the Participant's Basic and Supplemental Salary
Deferral Contributions credited to such Accounts after such date,
plus (iii) the Participant's After-Tax Basic and Supplemental
Contributions to the Plan, plus (iv) the full amount credited to the
Rollover Contribution Sub-Account.
(d) "Hardship." For purposes of this Paragraph, "hardship" shall
--------
include the need to pay the following items, to the extent provided
in applicable Treasury Regulations: medical expenses; purchase of a
principal residence of the Employee; payment of post-secondary
tuition; payment to prevent eviction or foreclosure; and such other
items listed by the Internal Revenue Service in documents provided
under applicable Treasury Regulations. Hardship shall also mean an
immediate and heavy need of the Participant to draw on financial
resources as determined by the Committee under rules uniformly
applied to all Participants
-24-
<PAGE>
similarly situated. The Company shall make available to all
Participants who apply for hardship withdrawals a list of
circumstances determined by the Committee to be "hardship."
(e) Representations. A hardship withdrawal shall not be made unless:
---------------
(i) The Employee represents to the Company, in the manner
specified by it, that the withdrawal does not exceed his
immediate and heavy need;
(ii) The Employee represents to the Company, in the manner
specified by it, that the Employee's immediate and heavy
financial need cannot be relieved:
(A) Through reimbursement or compensation by insurance or
otherwise;
(B) By reasonable liquidation of the Employee's assets, to
the extent such liquidation would not itself cause an
immediate and heavy financial need;
(C) By cessation of Basic or Supplemental Contributions; or
(D) By other distributions or nontaxable (at the time of the
loan) loans from plans maintained by any Affiliated
Company or by borrowing from commercial sources on
reasonable commercial terms.
8.2 Voluntary Contributions. A Participant may, as of any Quarter Date during
-----------------------
his employment withdraw in cash all or part of the remaining Voluntary
Contributions credited to his Voluntary Contribution Sub-Account as of
such Date. A Participant may not withdraw earnings attributable to
Voluntary Contributions.
8.3 Regular Contributions. A Participant may, as of any Quarter Date during
---------------------
his employment, withdraw in cash all or part of the remaining Regular
Contributions credited to his Regular Contribution Sub-Account as of such
Date, provided that all of his Voluntary Contributions have been withdrawn
pursuant to Paragraph 8.2 above. A Participant may not withdraw earnings
attributable to Regular Contributions.
8.4 Non-Permitted Withdrawals. No withdrawals under this Section shall be
-------------------------
permitted during employment with an Affiliated Company from the
Participant's Matching Employer Contribution Sub-Account, Non-Matching
Employer Contribution Sub-Account, Additional ESOP Match Sub-
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<PAGE>
Account, Quarterly Contribution Sub-Account, or PAYSOP Contribution Sub-
Account.
8.5 Applications. Each Participant who desires to make a withdrawal under
------------
this Section shall complete and file an application for withdrawal at the
time and in the manner prescribed by the Company.
8.6 Ordering. Any withdrawals made by a Participant pursuant to this Section
--------
shall be first charged against the portion of his Sub-Account in which
investments in the Diversified Fund have been credited.
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<PAGE>
Section 9
---------
DISTRIBUTION OF ACCOUNT BALANCE
-------------------------------
9.1 Amount.
------
(a) In General. Upon a Participant's termination of employment with all
----------
Affiliated Companies, he shall be entitled to receive the vested
amount credited to his Account in accordance with the provisions of
this Section.
(b) Additional ESOP Match. If a Participant has a vested amount
---------------------
credited to his Additional ESOP Match Sub-Account and that Sub-
Account is invested in Company Stock that is convertible Preferred
stock, the value of such vested amount on the appropriate Valuation
Date shall be the greater of the value determined after conversion
of such preferred stock or the fair market value of such preferred
stock as determined by an Independent Appraiser.
9.2 Distribution on Retirement or Disability.
----------------------------------------
(a) General. If a Participant's employment with all Affiliated
-------
Companies is terminated for a reason other than death (i) on or
after attaining age 55 and completing ten Years of Service, (ii) due
to retirement under the terms of the McKesson Corporation Retirement
Plan, (iii) on or after attaining age 65, or (iv) due to Disability
then the distribution rules of this Paragraph 9.2 shall apply.
(b) Elected Valuation Date. A Participant described in Paragraph (a)
----------------------
shall elect, at the time and in the manner specified by the Company,
an Elected Valuation Date which shall be either (i) the last day of
the Plan Year during which his termination occurs, or (ii) the end
of the month in which the Company receives his written application
for benefits.
If a Participant described in Paragraph (a) does not elect under
this Paragraph (b), he shall be treated as not having elected an
Elected Valuation Date for all purposes under this Plan (including
but not limited to Sections 4, 5, and 6 relating to contributions
and allocations).
This Paragraph 9.2 shall apply to events described in Paragraph
9.2.(a) that occur after June 30, 1990. Prior to that date, the
rules of this Plan as it was in effect prior to this Restatement
shall apply.
-27-
<PAGE>
(c) Annuity. Unless otherwise elected by the Participant in accordance
-------
with this Section, the vested amount credited to his Account as
determined under Paragraph 9.6 below shall be applied in the manner
prescribed by the Company to the purchase of a nontransferable
Qualified Joint and Survivor Annuity Contract described in Paragraph
9.5 below. Payments under such Contract shall begin as soon as
practicable after the Participant's Elected Valuation Date or at a
later date elected by the Participant, but in no event later than
the end of the calendar year following his attainment of age 70 1/2.
(d) Other Benefit Forms. In lieu of a Qualified Joint and Survivor
-------------------
Annuity Contract a Participant covered by this Paragraph may elect,
with Spousal Consent and in the manner provided in Paragraph 9.5 and
in accordance with the rules established by the Company, to have the
vested amount credited to his Account as determined under Paragraph
9.6 below distributed in one of the ways described in clause (i)
through (iii) as follows:
(i) Paid as a lump sum to the Participant in cash.
(ii) Paid in whole or in part to the Participant in cash in
quarterly, semi-annual or annual installments of an
approximately fixed or a variable value over a period not to
exceed the Participant's expected remaining lifetime or the
joint expected remaining lifetime of the Participant and his
Spouse, if applicable (both determined as of the time
distributions begin), in accordance with governing Treasury
regulations. Installment payments elected under this
Paragraph may be accelerated, but not otherwise changed at the
election of the Participant; any such elections shall be at
the time and in the manner specified by the Company and may be
made no more than once in any Plan Year.
If a Participant elects installment distributions under this
clause (ii), or if the Participant has elected to defer the
payment of a lump sum distribution under subparagraph (f)
below, any Company Stock credited to the Participant's Account
shall be converted to cash and the entire amount credited to
his Account shall be invested in the Diversified Fund or Fixed
Income Fund. The Participant shall elect this investment and
may change such investment, at the time and in the manner
specified by the Company.
-28-
<PAGE>
(iii) Used to purchase a single life annuity contact providing for
level payments at least annually to the Participant for his
lifetime. At the Participant's election, this annuity
contract may be a cash refund annuity providing for payment on
the death of the Participant to his Beneficiary of the
difference, if any, between the vested amount credited to his
Account, and the total annuity payments made to him during his
life. Any final payments to a Beneficiary under a cash refund
contract shall be made either in a lump sum or in
installments, as specified by the Participant, but shall in
all events be distributed to the Beneficiary within five years
of the Participant's death.
(e) Distribution Date. Distributions under this Paragraph shall begin
-----------------
as soon as practicable (but no earlier than his Elected Valuation
Date) unless the Participant elects to defer the commencement of
benefits. In no event may the commencement of payment of benefits
be deferred beyond the end of the calendar year in which the
Participant attains age 70 1/2.
9.3 Distribution on Death.
---------------------
(a) Beneficiary Designation. Each Participant shall designate, at the
-----------------------
time and manner specified by the Company, one or more persons as a
Beneficiary to receive the vested amounts credited to his Account on
the Valuation Date determined under Paragraph 9.6, below.
If a Participant is married at death, his surviving spouse shall be
his Beneficiary unless the Participant has designated another person
or persons, and such spouse has given Spousal Consent, as defined in
Paragraph 9.5.(d). If a Participant is not married at death and has
not designated a Beneficiary, his Beneficiary shall be his estate.
(b) Lump Sum. If a Participant dies before distribution of his vested
--------
Account balance has begun and is not described in Paragraph 9.3.(d)
below, the vested balance in his Account as of the Valuation Date
(including the Elected Valuation Date, if applicable) determined
under Paragraph 9.6, below, shall be distributed in a lump sum
payment to his Beneficiary as soon as practicable following the date
of his death. Such distribution shall in no event be made later
than five years after the Participant's death.
(c) Annuity. If a Participant dies before distribution of his vested
-------
Account balance has begun, has a
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<PAGE>
surviving spouse, and is described in Paragraph 9.3.(d) below, the
vested balance in his Account as of the Valuation Date determined
under Paragraph 9.5.(d) below shall be used to purchase a Qualified
Preretirement Survivor Annuity Contract, as defined in Paragraph
9.5.(b).
A Participant described in Paragraph 9.3.(d) below may elect, in
accordance with Paragraph 9.5, that the Qualified Preretirement
Survivor Annuity Contract not be purchased and that a lump sum be
paid at the time described in Paragraph 9.3.(b) above. The
Participant's surviving spouse may elect, at the time and in the
manner specified by the Company, to receive a lump sum cash payment
in lieu of a Qualified Preretirement Survivor Annuity Contract.
(d) Annuity Eligible. A Participant is described in this Paragraph if
----------------
he is married on the date of his death and is entitled to receive a
distribution under Paragraph 9.2 above, or has elected to receive a
distribution in the form of a Qualified Joint and Survivor Annuity
Contract at the time and in the manner specified by the Company.
(e) Death After Distribution Begins. If a Participant dies after
-------------------------------
distribution of his vested Account balance has begun, the following
rules apply:
(i) If distribution is in the form of an annuity, then payments
(if any) due under that annuity shall be paid after his death.
(ii) If distribution was in the form of a lump sum, then there will
be no additional amount to distribute.
(iii) If distribution is in the form of installments, then his
Beneficiary shall receive the remaining vested amount credited
to his Account determined under Paragraph 9.6 below. The
Beneficiary may elect, at the time and in the manner specified
by the Company, to have this amount distributed in a lump sum
or in installments. If the Beneficiary is the Participant's
surviving spouse, payments may be made over no more than the
spouse's remaining life expectancy (calculated at the time the
Participant dies). If the Beneficiary is not the surviving
spouse, payments must be completed within 5 years of the
Participant's death.
9.4 Distribution on Termination of Employment for Reasons Other Than
----------------------------------------------------------------
Retirement, Disability or Death.
-------------------------------
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<PAGE>
(a) General. If Paragraphs 9.2 and 9.3 of this Section are not
-------
applicable then, the vested amount credited to a Participant's
Account, and determined under Paragraph 9.6 below, shall be
distributed in accordance with this Paragraph 9.4 after his
termination of employment with all Affiliated Companies.
(b) Lump Sum. Distribution shall occur in a lump sum and shall be made
--------
as soon as practicable after termination if the vested amount
credited to Participant's Account is $3,500 or less. If such amount
is greater than $3,500, distribution shall be made in a lump sum as
soon as practicable after termination if the Participant consents in
writing to such distribution. In all other cases, except as
provided in Paragraph 9.4.(c), the vested amount credited to a
Participant's Account shall be distributed to the Participant in a
lump sum, as soon as practicable following the Participant's
attainment of age 65.
(c) Annuity. A Participant with a vested amount credited to his Account
-------
of more than $3,500 who has not consented to an immediate lump sum
distribution may elect to have his vested Account balance used to
purchase a Qualified Joint and Survivor Annuity Contract which
satisfies the requirements of Paragraph 9.5. Such election shall be
made no less than 90 days and no more than 120 days before the date
a deferred distribution would otherwise be made under Paragraph
9.4.(b) above. Any such contract shall provide for payments to the
Participant beginning as soon as practicable following his
attainment of age 65.
(d) Investments on Deferral. If a Participant covered by this Paragraph
-----------------------
9.4 does not receive a distribution until age 65, all vested amounts
credited to his Account (including Company Stock, except for Company
Stock that is preferred stock) shall be invested in the Diversified
Fund or Fixed Income Fund, at his election. Such investment
elections may be changed at the same time and to the same extent as
investment elections of Employees.
9.5 Annuity Contracts.
-----------------
(a) OJSA. A "Qualified Joint and Survivor Annuity Contract" is a
----
contract providing for an annuity for the life of the Participant,
with (if the Participant is married on the date annuity payments
begin) a survivor annuity for the life of the Participant's spouse
that is 50% of the annuity that is payable during the joint lives of
the Participant and his spouse. A Participant may elect a higher
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<PAGE>
survivor percentage, up to 100%. The benefits payable under the
Qualified Joint and Survivor Annuity Contract shall be the amount
payable under whatever contract is purchased with the vested amount
credited to the Participant's Account, determined as of the
applicable Valuation Date or Elected Valuation Date.
(b) OPSA. A "Qualified Preretirement Survivor Annuity Contract" is a
----
contract providing for the payment of an annuity for the life of a
Participant's surviving spouse. The benefits payable under the
Qualified preretirement Survivor Annuity Contract shall be the
amount payable under whatever contract is purchased with the vested
amount credited to the Participant's Account as of the Valuation
Date immediately following his death. Benefits under such Contract
shall begin at the time elected by the surviving spouse but in no
event after the date the Participant would have attained age 65 or,
if the Participant dies after age 65, as soon as practicable
following the Participant's death.
(c) Elections. A Participant who is entitled to receive a Qualified
---------
Joint and Survivor Annuity Contract under Paragraph 9.2 or has
elected to receive such Contract under Paragraph 9.4 may waive
receipt of such Contract in writing within the 90-day period ending
on the day payments under such Contract are scheduled to begin. (No
waiver is allowed if such contract has already been purchased under
the Plan and cannot be returned without penalty.) A Participant
described in the preceding sentence who has not begun to receive
benefits under the Plan may waive the purchase of a Qualified
Preretirement Survivor Annuity Contract in writing at any time
before his death. No waiver by a married Participant under this
subparagraph (c) shall take effect without Spousal Consent. A
waiver under this subparagraph (c) may be revoked at any time before
the distribution commencement date (or death, if earlier) without
Spousal Consent.
(d) Spousal Consent. "Spousal Consent" is the written consent of the
---------------
spouse of a Participant that acknowledges the effect of the
Participant's waiver, designation, election or other action and is
signed by the spouse and is witnessed by a notary public or
representative of the Plan. Spousal Consent shall not be required
if the Participant establishes to the satisfaction of the Committee
that consent cannot be obtained because the Participant has no
spouse, because the spouse cannot be located or because of other
circumstances specified under section 417(a)(2) of the Code.
Spousal Consent shall be valid only with respect to the spouse who
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<PAGE>
signs the Spousal Consent and only as to the particular choice made
by the Participant in the action requiring Spousal Consent.
(e) Notice. The Committee shall provide a Participant who is entitled
------
to elect, or has elected, to receive a Qualified Joint and Survivor
Annuity Contract with written notice explaining the terms and
conditions of the Qualified Joint and Survivor Annuity Contract and
the Qualified Preretirement Annuity Contract, the Participant's
right to waive such Contracts and the effect of such waiver, the
rights of the Participant's spouse with respect to such Contracts
and the Participant's right to revoke previous waivers of such
contracts. With respect to the Qualified Joint and Survivor Annuity
Contract, such notice shall be provided no less than 30 and no more
than 90 days before payment of benefits to the Participant are to
begin. With respect to the Qualified Preretirement Survivor Annuity
Contract, such notice shall be provided as soon as practicable after
the Participant becomes entitled to elect or elects to receive a
Qualified Joint and Survivor Annuity Contract.
9.6 Valuation Date.
--------------
(a) General Rule. The Valuation Date used to determine the vested
------------
amount credited to a Participant's Account, for purposes of
determining the account distributed or withdrawn and for other
appropriate purposes, shall be determined under this Paragraph 9.6.
(b) Distribution on Retirement or Disability. For determining the
----------------------------------------
amount to be distributed under Section 9.2 the Participant's Account
balance shall be determined on his Elected Valuation Date, or if
later, his Application Valuation Date.
(c) Distribution on Death. For determining the amount to be distributed
---------------------
under Section 9.3 the Participant's vested Account balance shall be
determined on the Valuation Date (including the Elected Valuation
Date, if applicable) immediately following his death, or if later,
the Beneficiary's Application Valuation Date.
(d) Distributions or Termination of Employment for Other Reasons. For
------------------------------------------------------------
determining the amount to be distributed under Section 9.4 the
Participant's vested Account balance shall be determined on the
Valuation Date immediately following his termination of employment
with all Affiliated Companies, or if later, his Application
Valuation Date. If a Participant covered by Section 9.4 elects to
defer
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<PAGE>
payment of his benefits until age 65, then his vested Account
balance shall be determined on the Valuation Date immediately
following the month in which he reaches age 65 or, if later, his
Application Valuation Date.
(e) Application Valuation Date. A Participant's or Beneficiary's
--------------------------
Application Valuation Date shall be the last day of the calendar
month in which his written application is received by the Company's
benefits administration department, under the rules of this
Paragraph. Applications received after the fifth day of a calendar
month and on or before the fifth day of the following calendar month
will be treated as having been received on the last day of the month
occurring within this period. Applications must be made in the form
and manner designated by the Company. The Company may change, at
its discretion, the rules of this Paragraph including but not
limited to the day that will be treated as the Application Valuation
Date and when an application will be treated as received.
(f) Certain Cases When No Application for Benefits Is Needed. If the
--------------------------------------------------------
Company's benefits administration department determines that a
Participant has terminated his employment with all Affiliated
Companies and has not received an application for benefits, the
Company may choose to distribute the vested amount credited to the
Participant's Account, treating the date of such determination as
the date of receipt of an Application for benefits. In any such
case, however, the Participant must consent, in writing, to a
distribution of benefits that occurs prior to reaching age 65.
(g) Valuation Date of Preferred Stock. To the extent that Company stock
---------------------------------
that is not common stock must be valued in connection with a
distribution, the Company may in its discretion, which shall be
exercised in a uniform and nondiscriminatory manner, choose to use
the Valuation Date immediately following termination of employment
or immediately prior to distribution of benefits, whichever is
deemed most appropriate for Plan administration.
(h) Effective Date. This Paragraph 9.6 shall apply to retirements,
--------------
disabilities, deaths, terminations and applications that occur after
June 30, 1990. Prior to that date, the rules of this Plan as it was
in effect prior to this Restatement shall apply.
9.7 Missing Distributees. If the person(s) to whom a distribution has become
--------------------
payable has not, within seven years after it becomes payable (or such
other period as applicable law may provide), accepted such distribution,
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<PAGE>
corresponded in writing concerning such distribution, or otherwise
indicated an interest as evidenced by a memorandum or other record on file
with the Company, then, such distribution shall be forfeited and such
forfeiture shall be treated in the manner set forth in Section 8. Any
amounts so forfeited shall be reinstated if a valid claim therefor is
proven by the Participant or his Beneficiary; no such claim shall be
allowed more than 6 years after such forfeiture.
9.8 Right to Receive Company Stock.
------------------------------
(a) General. Notwithstanding anything to the contrary in this Section,
-------
a Participant or Beneficiary shall have the right to receive
distributions of the portion of his vested Account which represents
his Matching Employer Contributions Sub-Account, his Quarterly
Contributions Sub-Account, his Non-Matching Employer Contributions
Sub-Account, his Additional ESOP Match Sub-Account, and his PAYSOP
Sub-Account in shares of Company Stock which are common stock, and
not preferred stock. However, to the extent that a Participant
elects to receive any portion of these Sub-Accounts in a form of
payment that is an annuity or installment, he shall be deemed to
have elected not to receive this distribution in the form of Company
Stock.
(b) Section 16(b). No distributions of Company Stock shall be made
-------------
under this Plan to any Participant sooner than six months after he
has effected any sale of Company Stock while he was subject to the
provisions of Section 16(b) of the Securities Exchange Act of 1934,
as amended.
9.9 60 Day Rule Re Payment of Benefits. Actual payment of benefits to a
----------------------------------
Participant shall commence, unless the Participant elects otherwise in
accordance with this Plan, no more than sixty (60) days after the end of
the Plan Year in which the Participant attains age 65 or terminates
service with all Affiliated Companies, whichever is later.
9.10 Payment to Participant Employee at Age 70 1/2. Distribution of a
---------------------------------------------
Participant's Account shall in no event begin later than the end of the
calendar year in which he obtains age 70 1/2. If a Participant is an
Employee when his distribution begins under this Paragraph, distribution
shall be paid in annual installments of a variable value over a period
equal to the Participant's remaining expected lifetime determined when
distribution begins. When such Participant terminates employment with all
Affiliated Companies, distribution to him (or his Beneficiaries, as
applicable) shall be determined under Section 9.2 or 9.3 and other
applicable provisions of this Plan.
-35-
<PAGE>
9.11 Section 401(a)(9) Requirements. Notwithstanding any other Plan provision,
------------------------------
all distributions under this Plan shall be made at a time and in an amount
that meets the requirements of any final regulations issued under Section
401(a)(9) of the Code, including regulation 1.401(a)(9)-2. For example,
the amount that must be distributed shall be determined so that death and
other non-retirement benefits are incidental to providing deferred
compensation to Participants, as set out in final regulations.
9.12 Distribution of Company Stock to Certain Participants. A Participant who
-----------------------------------------------------
has attained age 55 and has completed ten years of participation in the
Plan may elect in writing, within 90 days after the end of the Plan Year
to which the election applies, to receive a distribution of up to 25% (up
to 50% in the final Year such election is available) of the vested portion
of his Account that is invested in Company Stock and that is attributable
to Company Stock acquired after December 31, 1986. Such a distribution
shall be made within 90 days of the end of the period during which such
election may be made. Such distribution shall be made only in common
stock. A Participant may make one such election in each Plan Year of the
six-Plan-Year period beginning with the Plan Year in which he becomes
eligible to make such elections.
-36-
<PAGE>
Section 10
----------
ACCOUNTING, INVESTMENT AND VALUATION
------------------------------------
10.1 Participant Accounts. The Company shall establish and maintain an account
--------------------
for each Participant. This Account shall be divided into the following
Sub-Accounts, which shall be credited with the appropriate amounts and
earnings and losses attributable thereto:
(a) Basic Contribution Salary Deferral Sub-Account.
(b) Basic Contribution After-Tax Sub-Account.
(c) Supplemental Contribution Salary Deferral Sub-Account.
(d) Supplemental Contribution After-Tax Sub-Account.
(e) Quarterly Contribution Sub-Account.
(f) Matching Employer Contribution Sub-Account.
(g) Additional ESOP Match Sub-Account.
(h) Non-Matching Employer Contribution Sub-Account.
(i) PAYSOP Contribution Sub-Account (to reflect amounts referred to in
Appendix C).
(j) Regular Contribution Sub-Account (to reflect a Participant's
"Regular Contributions" to the Plan attributable to periods prior to
September 1, 1983 plus any balances transferred to his Account from
a Predecessor Plan pursuant to Section VI.1.(b)(i) of the Plan as
restated November 6, 1974).
(k) Voluntary Contribution Sub-Account(s) (to reflect a Participant's
Voluntary Contributions to the Plan attributable to periods prior to
September 1, 1983 plus any balance transferred to his Account from a
predecessor plan pursuant to Section VI.1.(b)(ii) of the Plan as
restated November 6, 1974).
(l) Rollover Contribution Sub-Account (to reflect amounts referred to in
Section 13).
10.2 Investment Funds. All contributions to the Plan, and the assets rolled
----------------
over under Section 13, shall be paid to the Trust to be invested and held
for the exclusive benefit of the Participants and Beneficiaries of the
Plan.
For investment purposes the Trust will be divided into four separate
funds:
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<PAGE>
(a) A Fixed Income Fund, which shall be invested in the general assets
-----------------
of one or more major financial institutions which shall pay
principal and certain rates of interest;
(b) A Diversified Fund, which shall be invested in assets other than the
----------------
equity securities of the Company or any Affiliated Company;
(c) A Company Stock Fund which shall hold all Company Stock under the
------------------
Plan; and
(d) A Short-Term Investment Fund ("STIF") which shall be invested in
--------------------------
commercial paper, U.S. Treasury bills, bank acceptances,
certificates of deposit, and other money market instruments. At
least annually all net earnings on assets held in the STIF for the
Plan Year shall be allocated to the accounts of all Participants in
proportion to the balances credited to their Accounts and reinvested
in the Fixed Income Fund and the Diversified Fund.
All Basic Contributions, Supplemental Contributions, Regular
Contributions, Voluntary Contributions and Rollover Contributions and the
income attributable thereto shall be invested in the Fixed Income Fund or
the Diversified Fund except as provided in the next sentence. Cash
awaiting distribution or investment shall be held in the STIF. All other
assets held under this Plan shall be invested in Company Stock.
10.3 Valuation.
---------
(a) General. As of each Valuation Date, the Trustee shall determine the
-------
total fair market value of all assets held under the Plan, and
shall, at least annually, determine the fair market value of amounts
credited to each Participant's Account.
(b) Diversified Fund. The interest of each Participant in the
----------------
Diversified Fund shall be the total of the contributions made by or
on behalf of the Participant which have been invested in that Fund,
adjusted for gains and losses, realized and unrealized, and reduced
by any withdrawals and distributions therefrom.
(c) Fixed Income Fund. The interest of each Participant in the Fixed
-----------------
Income Fund shall be the total of the contributions made by or on
behalf of the Participant which have been invested in that Fund plus
any interest credited thereon from time to time less any withdrawals
and distributions therefrom.
(d) Company Stock Fund. The interest of each Participant in the Company
------------------
Stock Fund shall be the
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total number of whole and fractional shares of Company Stock that
have been contributed to the Plan or released from a Loan Suspense
Account, and allocated to such Participant's Account, less
distributions therefrom. Shares of Company Stock that have been
released from a Loan Suspense Account and allocated to a
Participant's Account shall be separately accounted for under the
Plan.
10.4 Statement to Participants. As soon as practicable after the last day of
-------------------------
each Plan Year the Company shall provide each Participant with a statement
setting forth:
(a) the value of his Account as of the last day of the preceding Plan
Year;
(b) the amount of the Basic, Supplemental and Quarterly Contributions
made by or on behalf of the Participant during the Plan Year;
(c) the amount of the Matching Employer Contributions for the
Participant for the Plan Year;
(d) the amount of the Non-Matching Employer Contribution allocated to
the Participant's Account for the Plan Year; and
(e) the amount of the Additional ESOP Match allocated to the
Participant's Account for the Plan Year.
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<PAGE>
Section 11
----------
VOTING AND TENDER OFFER RIGHTS IN COMPANY STOCK
-----------------------------------------------
11.1 Named Fiduciary Status. For purposes of this Section, each Participant
----------------------
(or, if deceased, his Beneficiary) shall be a named fiduciary (within the
meaning of ERISA including but not limited to Sections 402(a) and
403(a)(1) thereof) with respect to all shares of Company Stock as to which
such Participant has the right of direction with respect to voting,
tender, and any other rights appurtenant to such stock. Such named
fiduciary status shall apply with respect to shares of Company Stock
allocated to the Participant's Account as well as shares of unallocated
Company Stock, including Financed Company Stock, with respect to which the
Participant has the right of direction through the proportional voting,
tender, and other similar arrangements of this Section.
11.2 Confidentiality. In implementing this Section, each appropriate fiduciary
---------------
shall take all steps necessary or appropriate to ensure that each
Participant's (or Beneficiary's) instructions shall be kept in strictest
confidence and shall not be divulged or released to any person, except as
provided in the next sentence, including officers, directors or employees
of the Company or any affiliate thereof. To the extent necessary for the
operation of the Plan, however, such instructions may be provided to the
Trustee and to a recordkeeper, auditor or other person providing services
to the Plan if such person (a) is not the Company or an affiliate thereof,
and (b) agrees not to divulge such directions to any other person,
including officers, directors or employees of the Company or an affiliate
thereof.
11.3 Directed Voting and Consents.
----------------------------
(a) Notwithstanding anything contained in this Plan to the contrary,
whenever any proxies or consents are solicited from the holders of
Company Stock, the Trustee shall exercise such voting or other
rights solely as directed in written instructions timely received
from Participants (or if deceased, their Beneficiaries under this
Plan) and in accordance with this Section of the Plan.
(b) Each Participant (or if deceased, his Beneficiary) shall have the
right, with respect to shares of Company Stock allocated to his
Account, to instruct the Trustee in writing as to the manner in
which to vote such shares at any stockholders' meeting of the
Company, or the manner in which the Trustee shall give or withheld
consent with respect to such shares.
-40-
<PAGE>
The Trustee shall pool the results of instructions received from all
Participants to whose Accounts fractional shares have been allocated
and shall vote or otherwise act accordingly with respect to such
shares.
If no instructions are received with respect to shares of Company
Stock allocated to a Participant's PAYSOP Sub-Account, such shares
shall not be voted nor shall any other actions under this Paragraph
11.3 be taken with respect to such shares.
Any other shares of Company Stock as to which the Trustee receives
no instructions, together with shares of unallocated Company Stock,
including Financed Company Stock, shall be voted by the Trustee, or
the Trustee shall give or withhold consent with respect to such
shares, in the same proportion as shares as to which instructions
are received.
(c) The Company shall use its best efforts to timely distribute or cause
to be distributed to each Participant (or Beneficiary) such
information as will be distributed to stockholders of the Company in
connection with any stockholders' meeting or any solicitation of
voting or consents, together with a request for confidential
instructions to the Trustee or its designee on how shares of Company
Stock shall be voted on each such matter or how consents shall be
given or withheld.
11.4 Tender or Exchange Offers.
-------------------------
(a) Notwithstanding anything contained in this Plan to the contrary,
whenever any tender or exchange offer is made for shares of Company
Stock, the Trustee shall tender or exchange such shares of Company
Stock (or refrain from such tender or exchange) solely as directed
in written instructions timely received from Participants (or if
deceased, their Beneficiaries under this Plan) and in accordance
with this Section of the Plan.
(b) Each Participant (or, if deceased, his Beneficiary) shall have the
right, with respect to shares of Company Stock allocated to his
Account, to instruct the Trustee in writing as to the manner in
which to respond to a tender or exchange offer with respect to such
shares.
If, and to the extent that the Trustee shall not have timely
received instructions from any Participant (or Beneficiary) with a
right to instruct, such person shall be deemed to have timely
-41-
<PAGE>
instructed the Trustee not to tender or exchange the relevant shares
---
of Company Stock.
The Trustee shall pool the results of instructions received from all
Participants to whose Accounts fractional shares have been allocated
and shall respond to the tender or exchange offer accordingly with
respect to such shares.
The Trustee shall tender or exchange shares of unallocated Company
Stock, including Financed Company Stock, in the same proportion as
shares as to which instructions are furnished to the Trustee. For
purposes of the preceding sentence, shares with respect to which no
timely instructions are furnished shall be treated as shares with
respect to which instructions not to tender have been timely
---
furnished.
(c) The Company shall use its best efforts to timely distribute or cause
to be distributed to each Participant (or Beneficiary) such
information as will be distributed to stockholders of the Company in
connection with any tender or exchange offer, together with a
request for confidential instructions to the Trustee or its designee
to respond to such tender or exchange offer.
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<PAGE>
Section 12
----------
ADMINISTRATION
--------------
12.1 Responsibilities of Company and Committee. The Company shall have the
-----------------------------------------
responsibility for the general administration of the Plan and the
responsibility for carrying out the provisions hereof and shall be the
"administrator" of the Plan within the meaning of ERISA.
The Company is responsible for compliance with the ERISA reporting and
disclosure requirements.
The Committee shall have the exclusive right to interpret the terms and
provisions of the Plan and to determine any and all questions arising
thereunder or in connection with the administration thereof, including
without limitation, the right to remedy possible ambiguities,
inconsistencies, or omissions; and in doing so, it will endeavor to act in
such a way, by general rule or particular decision, so as not to
discriminate in favor of any class of Employees or Participants.
The Committee also shall review claims for benefits pursuant to Paragraph
12.6 below.
All interpretations, determinations, and decisions of the Committee in
respect of any matter or question hereunder shall be final, conclusive and
binding upon all persons and shall be given the maximum possible deference
allowed by law. This Paragraph shall apply to all persons having or
claiming to have any interest in or under the Plan, including, but not by
way of limitation, all Participants, Employees, and Beneficiaries.
12.2 Responsibilities of Compensation Committee. The Compensation Committee
------------------------------------------
shall have the responsibility for the selection of Trustees and investment
advisors and managers, and for the overall investment Policy of the Plan.
The Compensation Committee may select an investment manager or managers
who meet the requirements of ERISA Section 3(38) to manage the Plan assets
and to direct the Trustee in investing the Plan assets.
12.3 Designation of Employers. The Company has the power to designate who
------------------------
shall be an Employer under this Plan and may designate an entity to be an
Employer for some but not all purposes of this Plan (e.g., an Employer for
participation in the Non-Matching Employer Contribution portion and/or the
Additional ESOP Match portion but not the Salary Deferral or Matching
Employer Contribution portion of the Plan).
The Company shall review all proposed mergers of other defined
contribution Plans into this Plan and shall have the power to make all
decisions concerning such mergers,
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<PAGE>
including, but not limited to, the approval of any merger and the
transferring of assets of such other Plans to the Trustee of this Plan.
12.4 Records and Reports. The Company shall keep records showing the fiscal
-------------------
transactions of the Plan and shall keep in convenient form such data as
may be necessary for valuation of the assets and liabilities of the Plan.
The Company shall prepare and submit to the Compensation Committee, not
less than annually, a report showing in reasonable detail the assets and
liabilities of the Plan and giving a full account of the operation of the
Plan for the past year. The Compensation Committee shall review such
reports and make such comments or recommendations or changes as it deems
appropriate.
12.5 Delegation of Responsibilities. In exercising its rights, powers and
------------------------------
responsibilities, the Company and the Committee shall each be entitled to
employ such counsel, agents, clerical, medical and actuarial services as
it may require. The Company and the Committee, from time to time, each
may delegate or allocate to one or more of its members or to any other
persons or organizations any of its rights, powers, and duties with
respect to the operation and administration of the Plan. Any such
allocation shall be reviewed from time to time by the Company or
Committee, as appropriate, and shall be terminable upon such notice as the
Company or the Committee, in its sole discretion, deems reasonable and
prudent under the circumstances.
12.6 Claims. All Claims for benefits by a Participant or Beneficiary (the
------
"claimant") shall be in writing and shall be filed with the Vice President
of Personnel of the Company within 120 days after the claimant has
knowledge of or should have knowledge of facts giving rise to such claim.
The written claim shall be in sufficient detail as to apprise the Vice
President of the asserted basis therefor. The Vice President shall review
such claim and shall affirm or deny it in writing. In the case of any
denial of a claim, the written denial shall set forth the specific reasons
for denial, and shall describe the procedure by which the claimant may
request a prompt, full and fair review by the Committee of the decision
denying the claim. After such a review, the Committee shall make and
communicate to the claimant, in writing, its final interpretation,
determination and/or decision. The Committee may establish administrative
guidelines further delineating the claims procedure. All reviews of
benefit claims shall meet the time and other requirements established by
ERISA and the claims procedures shall be described in the summary Plan
description for the Plan to the extent required by ERISA.
12.7 Fiduciary Duty. Each person to whom any fiduciary responsibility with
--------------
respect to the Plan is allocated shall
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<PAGE>
discharge such responsibility with respect to the Plan solely in the
interest of the Participants and Beneficiaries, and
(a) for the exclusive purpose of providing benefits to Participants or
their Beneficiaries and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims;
(c) to the extent appropriate, by diversifying the investments of the
Diversified Fund and the Fixed Income Fund so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so; and
(d) in accordance with the Plan to the extent such provisions are
consistent with ERISA.
12.8 Limitation on Liability. No fiduciary under the Plan shall be responsible
-----------------------
for the acts or omissions of another fiduciary with respect to the Plan
unless he participates knowingly in such act or omission or knowingly
undertakes to conceal such act or omission (knowing, in each case, that
such act or omission is a breach of fiduciary responsibility), has actual
knowledge of a breach of fiduciary responsibility and fails to take
reasonable action to remedy said breach, or, through his failure to
perform his own specific fiduciary responsibilities under section
404(o)(1) of ERISA which give rise to his status as a fiduciary, he has
enabled such other fiduciary to commit a breach of the latter's fiduciary
responsibilities.
12.9 Payment of Committee Expenses. The members of the Committee shall serve
-----------------------------
without compensation by the Plan, but shall be entitled to reimbursement
by the Employers for all expenses incurred in the administration of the
Plan.
12.10 Indemnification and Insurance. The Employers shall (a) indemnify and hold
-----------------------------
harmless from and against all liabilities and claims (including reasonable
attorneys' fees and expenses in defense thereof) arising out of or in any
way connected with any act or failure to act concerning the Plan by, any
member of the Board of Directors, the Compensation Committee, the
Committee, or any employee of the Company to whom fiduciary or
administrative responsibilities have been delegated or allocated under the
Plan ("Indemnified Persons"), except to the extent that such act or
failure to act is judicially determined (in a final judgment by a court of
-45-
<PAGE>
competent jurisdiction) to constitute fraud or bad faith; and/or (b)
purchase and maintain adequate insurance to cover any such liability or
claim for any Indemnified Persons. Notwithstanding the foregoing, no
indemnification rights shall be deemed to be granted to any Indemnified
Persons by this Paragraph 12.9 which are consistent with Section 145 of
the General Corporation Law of the State of Delaware.
12.11 Committee Members. Each member of the Committee shall be appointed by and
-----------------
shall serve at the will of the Company, and may resign by delivering a
written resignation as a member of the Committee to the Chief Executive
Officer of the Company.
12.12 Expenses for Administration. For any Plan Year, any or all Employers may
---------------------------
pay or the Plan may pay any costs paid or incurred during the Plan Year
for administering the Plan and Trust.
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<PAGE>
Section 13
----------
INDIVIDUAL ROLLOVERS
--------------------
13.1 Rollover From Qualified Plan. A Participant who is currently an Employee
----------------------------
may, within 60 days after the date of receipt of a "qualified total
distribution" within the meaning of Section 402(a)(5) of the Code,
contribute all or any part of the amount received to the Plan to the
extent that a tax excludible rollover is allowed by such section.
A rollover contribution may be made to the Plan only if the following
conditions are met:
(a) the contribution is paid entirely in the form of cash,
(b) no portion of such distribution is attributable to a required
distribution under Section 401(a)(9) of the Code; and
(c) the Participant establishes to the satisfaction of the Company that
such contribution is attributable to a qualified total distribution
from a Plan which, at the time of the distribution, met the
requirements of Section 401 of the Code and which meets the
requirements of this Section.
No "plan-to-plan" or "trust-to-trust" transfer, on an individual basis, is
allowed under this Section 13.
13.2 Rollover From IRA. A Participant who is currently an Employee may, within
-----------------
60 days after the date of receipt of a distribution from an individual
retirement account which meets the requirements of Section 408 and related
Sections of the Code, contribute the entire amount of the amount received
to the Plan; provided, however, such amount may be contributed to the Plan
only if it meets the following conditions:
(a) it represents the entire amount in such individual retirement
account;
(b) no part of the distribution is attributable to any source other than
a rollover contribution of a "qualified total distribution" (within
the meaning of Section 402(a)(5) of the Code), from an employee's
trust described in Section 401(a) of the Code which is exempt from
tax under Section 401(a) of such Code;
(c) the contribution is paid entirely in the form of cash;
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<PAGE>
(d) no part of the distribution is attributed to (i) an inherited
individual retirement account or (ii) required distributions under
Section 408(a)(6) or (b)(3) of the Code;
(e) no part of the contribution has been rolled over to any individual
retirement account during the one year period ending on the date the
individual received the distributions;
(f) the Participant establishes to the satisfaction of the Company that
the conditions set forth in this Section have been met and that the
contribution is attributable to an individual retirement account
which, at the time of the distribution, met the requirements of
Section 408 and related Sections of the Code and which meets the
requirements of this Section.
13.3 No Rollovers of Transfers By Key Employees. No rollovers or transfers
------------------------------------------
from qualified plans or from individual retirement accounts shall be made
if any part of the amount which otherwise would be rolled over is
attributable to contributions made on behalf of the Participant while he
was a key employee in a top-heavy plan. For purposes of this section, the
terms "key employee" and "top-heavy plan" have the same meanings as when
used in Code Section 416.
13.4 Mistaken Rollover. If it is determined that a Participant's rollover
-----------------
contribution did not qualify under the Code for a tax free rollover, then
as soon as reasonably possible the balance in the Participant's Rollover
Account shall be:
(a) segregated from all other Plan assets,
(b) treated as a non-qualified trust established by and for the benefit
of the Participant, and
(c) distributed to the Participant.
Such a mistaken rollover contribution shall be deemed never to have been a
part of the Plan and shall not adversely affect the tax qualification of
the Plan under the Code.
13.5 Miscellaneous Rules.
-------------------
(a) Election. Rollover elections shall be made at the time and in the
--------
manner designated by the Company.
(b) Investments. Amounts credited to a Participant's Rollover Account
-----------
shall be invested in the same manner as if they were the
Participant's Basic and Supplemental Contributions.
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<PAGE>
(c) Vesting. Amounts credited to a Participant's Rollover Account
-------
shall be fully vested and nonforfeitable.
(d) Limitations on Benefits. Amounts credited to a Participant's
-----------------------
Rollover Account shall not be treated as Annual Additions under
Appendix B.
(e) Distributions. Amounts credited to a Participant's Rollover Account
-------------
shall be distributed at the same time, form and manner as if they
were Basic and Supplemental Contributions.
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<PAGE>
Section 14
----------
FUTURE OF THE PLAN
------------------
14.1 Amendments.
----------
(a) The Company intends to continue this Plan indefinitely, but the
Company reserves the right to amend, suspend or terminate the Plan,
in whole or in part, at any time by resolution of its Board of
Directors.
(b) The chief executive officer of the Company, may at any time, adopt
any amendments to the Plan as may be necessary to comply with ERISA,
the Code or any other applicable law, or that do not add materially
to the Company's costs under the Plan.
(c) No amendment, suspension or termination shall be made so as to
permit any part of the Trust to be used for any purpose other than
the exclusive benefit of Participants or their Beneficiaries nor to
affect adversely any right any Participant or his Beneficiary may
then have with respect to contributions previously made, except as
may be necessary to obtain or retain qualification of the Plan and
the Trust under the Code or otherwise comply with legal
requirements.
(d) An amendment of the Plan which permanently discontinues an
Employer's obligation to make further contributions will be treated
as a withdrawal by that Employer from the Plan.
(e) In the event that any amendment changing the vesting schedule under
the Plan is adopted, any Participant having not less than 3 Years of
Service shall be permitted to elect, within a reasonable period
after the adoption of such amendment to have his vested benefits
computed under the Plan without regard to such amendment.
14.2 Tax Qualification. The Plan is designed to qualify under Section 401(a)
-----------------
of the Code and portions of the Plan are intended to qualify as a tax
credit employee stock ownership plan whereby the Company can qualify for
an employee stock ownership plan credit under Section 41 of the Code,
stock bonus Plan which qualifies as an employee stock ownership Plan under
Section 4975(e)(7) of the Code, and a profit sharing plan which is a
qualified cash or deferred arrangement within the meaning of Section
401(k) of the Code. If it is ever finally determined that this Plan as
adopted by any Employer no longer satisfies the requirements of Sections
41, 401(a), 401(k) or 4975(e)(7) of the Code, such Employer and its
Employees shall cease
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<PAGE>
to participate in this Plan as of the date of such determination.
14.3 Termination.
-----------
(a) The Plan may be terminated in whole or in part at any time by the
Board of Directors. If the Plan shall be terminated or partially
terminated or if contributions of any Employer shall be completely
discontinued, the amounts credited to the Accounts of all affected
Employees shall thereupon become nonforfeitable notwithstanding any
other provision of the Plan.
(b) If an Exempt Loan is outstanding on termination of all of the Plan
or termination of Section 4, 5, or 6 of the Plan, (i) payment
shall be made on the affected Exempt Loan to the extent of the
following assets held in the Trust at the time of termination:
contributions (other than contributions of Company Stock) made to
allow the Plan to pay the affected Exempt Loan, earnings on such
contributions, and earnings attributable to assets in the applicable
Loan Suspense Account; (ii) to the extent available under the
applicable loan agreement, the remaining balance (if any) of the
affected Exempt Loan shall be canceled and Company Stock remaining
in a Loan Suspense Account and purchased with such Exempt Loan,
having a fair market value not exceeding the remaining balance of
such Exempt Loan, shall be transferred to the lender; and (iii) any
additional assets (if any) in the affected Loan Suspense Account
shall be allocated as earnings on the assets of such Loan Suspense
Account to the Accounts of the affected Participants.
14.4 Merger. Upon any merger or consolidation of the Plan with, or transfer of
------
assets or liabilities of the Plan to, any other plan qualified under
Section 401 of the Code, each Participant shall be entitled to receive
from the transferee plan a benefit immediately after the merger,
consolidation or transfer (if such transferee Plan were then terminated)
which is equal to or greater than the benefit such Participant would have
been entitled to receive under the Plan immediately before the merger,
consolidation or transfer had the Plan been terminated immediately prior
to such merger, consolidation or transfer.
14.5 Transfer to Another Plan. At the Company's sole discretion, in the event:
------------------------
(a) Any plant, property or business operation of an Employer is sold or
otherwise disposed of and is continued in operation in similar form
by the transferee-employer;
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<PAGE>
(b) Participants who were employed by an Employer in connection with
such plant, property or business operation on the date of such sale
or other disposition are hired by the transferee ("transferred
employees"); and
(c) The transferee-employer provides a defined contribution qualified
plan covering all such transferred employees, which meets all of the
requirements of the Code with respect to transfers of assets and
liabilities (including, but not limited to providing benefits in the
form of employer stock), then:
(i) Neither this Plan nor any transferred employee's participation
will be considered to have been terminated, but transferred
employees will be considered to be continued by the
transferee-employer's qualified Plan.
(ii) The Trustee of this Plan will be directed to pay over to the
trustee of the transferee-employer's qualified plan assets, in
cash or in kind, equal in value to the full value of each
transferred Participant's Account calculated as of a date
mutually agreed upon by the Company and the transferee-
employer. Such transfer of assets and liabilities shall only
be made upon certification by the sponsor of the transferee
Plan that the plan will meet all the requirements of section
411(d)(6) of the Code and other applicable provisions.
Thereafter, to the maximum extent allowed by law, the rights
and privileges and benefits of such transferred employees
shall be determined solely by the terms and conditions of the
Plan of the transferee-employer, and no Employer nor the
Trustee of this Plan will have any further duties or
obligations to any such transferred employee.
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Section 15
----------
MISCELLANEOUS
-------------
15.1 Non-Alienation of Benefits.
--------------------------
(a) General. No person entitled to any benefits under the Plan shall
-------
have the right to alienate, hypothecate or encumber his interest in
such benefits, and such benefits shall not in any way be subject to
claim of his creditors or liable to attachment, execution or other
process of law.
(b) ODRO. Notwithstanding subparagraph (a), the Company shall
----
distribute benefits payable to a Participant under the Plan in
accordance with any qualified domestic relations order which the
Company determines satisfies the requirements of Section 414(p) of
the Code. To the maximum extent allowed by ERISA and the Code,
distribution may be made at any time to any person designated in a
qualified domestic relations order, in accordance with that order,
beginning as soon as practicable after the Company determines that
the order satisfies the requirements of section 414(q) of the Code,
notwithstanding the fact that the distribution, if made to a
Participant at the time specified in the order, would not be
permitted under the terms of the Plan.
15.2 Construction. This Plan shall be governed by the laws of the State of
------------
California to the extent not preempted by ERISA.
15.3 Time for Making Contributions. Contributions of Company Stock or cash
-----------------------------
shall be made on or before the due date (including extensions of time) for
filing the Company's federal income tax return for the taxable year for
which the Contribution is made.
15.4 Designations and Elections under Certain Plans of Affiliated Companies.
----------------------------------------------------------------------
If an Account balance is maintained for a Participant under this Plan and
also under the PCS, Inc. Profit-Sharing Investment Plan or the Armor-All
Profit-Sharing Investment Plan, the Participant's Beneficiary designation,
investment election and election of a time and manner of distribution
under this Plan shall be identical to such designation and election under
such other plans. If this Paragraph is not complied with, then the
designations and elections under this Plan shall govern for the other two
Plans. Notwithstanding the prior sentences, a Participant's election
under this Plan to receive or not to receive Company Stock shall not
affect any similar election available under any other Plan.
15.5 Return of Contributions.
-----------------------
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<PAGE>
(a) If the Internal Revenue Service, on timely application made after
the establishment of the Plan or any amendment which increases the
costs of the Plan, determines that the Plan is not qualified under
section 401(a) of the Code, or refuses, in writing, to issue a
determination as to whether the Plan is so qualified, the Company's
contributions made on or after the date to which that determination
or refusal is applicable shall be returned to the Company. The
return shall be made within one year after the denial of
qualification.
(b) All contributions (except after tax contributions) to this Plan are
made on the condition that they are deductible by each Employer
under section 404 of the Code. If all or part of the deductions
under section 404 of the Code for contributions to the Plan are
disallowed by the Internal Revenue Service, the portion of the
contributions to which that disallowance applies shall be returned
to the applicable Employer but reduced by any investment loss
attributable to those contributions. The return shall be made
within one year after the disallowance of deduction.
(c) The applicable Employer may recover the amount of its contributions
to the Plan made on account of a mistake in fact, reduced by any
investment loss attributable to those contributions, if recovery is
made within one year after the date of those contributions.
(d) In the event that Pre-Tax Deferrals are returned to an Employer in
accordance with this Paragraph, the elections to defer Compensation
which were made by Participants shall be void retroactively to the
beginning of the period for which those contributions were made.
The Pre-Tax Deferrals so returned to the Employer shall be
distributed by the Employer in cash to those for whom such
contributions were made, adjusted to reflect any investment losses
attributable to those contributions.
15.6 All Elections in Writing. All elections made under this Plan shall be in
------------------------
writing and shall be made at the time and in the manner specified by the
Company.
15.7 Conditions of Employment Not Affected by Plan. The establishment of the
---------------------------------------------
Plan shall not confer any legal rights upon any Employee or other person
for a continuation of employment, nor shall it interfere with the rights
of any Affiliated Company to discharge any Employee and to treat him
without regard to the effect which that treatment might have upon him as a
Member of the Plan.
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<PAGE>
Section 16
----------
DEFINITIONS
-----------
The following terms when used in this Plan shall have the meaning
designated in this Section, unless a different meaning is plainly required by
the context or a different meaning is specifically provided. Wherever
appropriate, words used in the singular include the plural, the plural includes
the singular, and the masculine includes the feminine.
16.1 Account: The individual account established to record the interest of the
-------
Participant in the Trust.
16.2 Administrator: The Plan Administrator specified in Section 12.
-------------
16.3 Affiliated Company: The Company and each corporation and trade or
------------------
business which is a member of a controlled group of corporations or an
affiliated service group or under common control (within the meaning of
section 414(b), (c) or (m) of the Code) with the Company, but only for the
period during which such other entity is so affiliated with any Company
and any other entity required to be aggregated with the Company pursuant
to regulations issued under section 414(o) of the Code.
16.4 After-Tax Contributions: Contributions made by a Participant on an after-
-----------------------
tax basis as elected by the Participant in accordance with Section 3.
16.5 Application Valuation Date: See Section 9.6.
--------------------------
16.6 Average Deferral Percentage: With respect to a specified group of
---------------------------
Eligible Employees, the average of the ratios, calculated separately for
each Eligible Employee in that group, of (a) the amount of Pre-Tax
Deferrals for a Plan Year to (b) the Eligible Employee's Compensation for
that Plan Year while a Participant. Effective April 1, 1990, to the
extent required in final Treasury regulations, the ratio described above
shall be calculated based on an Eligible Employee's Compensation for the
entire applicable Plan Year.
16.7 Average Contribution Percentage: With respect to a specified group of
-------------------------------
Eligible Employees, the average of the ratios, calculated separately for
each Eligible Employee in that group of (a) the sum of Matching Employer
Contributions and After-Tax Contributions for a Plan Year to (b) the
Eligible Employee's Compensation for that Plan Year. To the extent
allowed by Treasury Regulations, the Company may elect to take into
account salary deferral contributions in computing this percentage. To
the extent required by final Treasury Regulations, the Average
Contribution Percentage shall be calculated and tested separately for
Matching Employer Contributions that are
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made through the allocation of Company Stock acquired with Exempt Loans;
provided, however, that in no event is such separate testing required
before April 1, 1989.
16.8 Beneficiary: The person, trust or estate, designated by the Participant
-----------
to receive any benefits under the Plan that are payable upon his death.
16.9 Board of Directors: The Board of Directors of the Company or any
------------------
committee of the Board to which the Board delegates responsibilities under
this Plan.
16.10 Break in Service:
----------------
(a) For vesting: a 12-month period during which an Employee or former
Employee is not credited with Service provided, however, that if an
Employee is credited with Service for a maternity/paternity absence
under Paragraph 34(d) the 12-month period of absence following such
credited Service shall not be a Break in service.
(b) For eligibility to participate: a computation period in which the
Employee is credited with 500 or fewer Hours of Service. The
computation period is the 12-month period beginning with the
anniversary of the date the Employee first completes an Hour of
Service.
16.11 Code: The Internal Revenue Code of 1986, as amended from time to time.
----
16.12 Committee: The Employee Benefits Committee of the Company.
---------
16.13 Company: McKesson Corporation, a Delaware Corporation.
-------
16.14 Company Stock: Shares of the voting common stock and shares of preferred
-------------
stock issued by the Company which shares constitute "employer securities"
under Sections 409(1) and 4975(e)(8) of the Code.
Shares of preferred stock shall be Company Stock only if such shares
are non-callable and convertible at any time into shares of Company
common stock. Conversion shall be at a reasonable conversion price
determined as of the date that such preferred stock is acquired by
the Plan. If the preferred stock is not readily tradable on an
established securities market at the time it is acquired by the
Plan, an Independent Appraiser shall determine whether the
conversion price is reasonable at that time. Shares of preferred
stock shall be treated as non-callable if, after a call, there is a
reasonable opportunity for Conversion at a reasonable conversion
price which is determined at the time and in the manner
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provided for in the prior two sentences. If the preferred stock is
not readily tradable on an established securities market at the time
of its acquisition by the Plan, an Independent Appraiser shall
determine whether the opportunity for conversion is reasonable.
16.15 Compensation. All compensation within the meaning of section 1.415-
------------
2(d)(11)(ii) of the Treasury Regulations paid to an Employee during the
Plan Year for services provided to an Employer, reduced by reimbursements
and other expense allowances, fringe benefits (cash and noncash),
including, but not limited to, amounts realized from the exercise of stock
options, moving expenses, welfare benefits, and any compensation
previously deferred. Compensation shall also include any amounts that
would have been paid during the Plan Year to an Employee but for an
election to make Pre-Tax Deferrals or deferrals to the PCS, Inc., the
Armor-All Products Corporation Profit Sharing Investment plans or to a
plan described in section 125 of the Code. In any Plan Year, compensation
shall not exceed $200,000, adjusted annually in accordance with sections
401(a)(17) and 415(d) of the Code.
16.16 Compensation Committee: The Compensation Committee of the Board of
----------------------
Directors.
16.17 Disabled: A person is disabled when he is receiving Social Security
--------
benefits.
16.18 Effective Date: April l, 1990.
--------------
16.19 Elected Valuation Date: The date specified in Section 9.2.
----------------------
16.20 Eligible Contributions: Pre-Tax Deferrals and After-Tax Contributions
----------------------
that qualify for Matching Employer Contributions under Section 4.1.(c).
16.21 Eligible Employee: Each Employee is an "Eligible Employee" unless:
-----------------
(a) He is not employed by an Employer;
(b) He is an employee of Zee Medical Inc., and his business unit is not
designated by the company as participating in the Plan;
(c) He is a temporary or seasonal employee; or
(d) He is a member of a collective bargaining unit, unless the agreement
between the Employer and that unit provides for participation in
this Plan.
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<PAGE>
16.22 Employee: Any person employed by and receiving Compensation from an
--------
Affiliated Company. The term "Employee" shall also include a person who
is a citizen of the United States and is employed by a foreign subsidiary
(within the meaning of Section 3121(1)(8) of the Code) of an Affiliated
Company to which an agreement entered into by such Affiliated Company
under Section 3121(1) of the Code applies and for whom contributions under
a funded Plan of deferred compensation are not provided by any other
person with respect to the remuneration paid him by such foreign
subsidiary.
16.23 Employer: The Company or any of the corporations or other business
--------
entities subsidiary to or affiliated with the Company whose Employees are
authorized by the Company to participate in all or part of the Plan.
16.24 Entry Date: The first day of any month.
----------
16.25 ERISA: The Employee Retirement Income Security Act of 1974, as amended
-----
from time to time.
16.26 Excess Contributions: For any Plan Year, the total amount (if any) of
--------------------
salary deferral contributions, which are "excess contributions," within
the meaning of Section 401(k)(8)(B) of the Code, made on behalf of Highly
Compensated Employees which exceeds the amount of such deferred
contributions that could be made for such Plan Year without violating the
requirements of Appendix A.
16.27 Excess Aggregate Contributions: For any Plan Year, those Matching
------------------------------
Employer Contributions and After-Tax Contributions (if any), which are
"excess aggregate contributions," within the meaning of Section
401(m)(6)(B) of the Code, made on behalf of Highly Compensated Employees
which exceeds the amount of such Contributions that could be made for such
Plan year without violating the requirements of Appendix A.
16.28 Exempt Loan: A loan to the Trust by a disqualified person, as defined in
-----------
Section 4975(e) of the Code, or a loan to the Plan which is guaranteed by
a disqualified person, which loan is used to acquire Financed Company
Stock. A loan includes a loan of cash, a purchase-money transaction, and
an assumption of the obligations of the Plan. A guaranty shall include an
unsecured guaranty and the use of a disqualified person's assets as
collateral for a loan, even if such use of assets is not a guaranty under
applicable state law.
16.29 Financed Company Stock: Company Stock which has been acquired by the
----------------------
Trust with the proceeds of an Exempt Loan.
16.30 Highly Compensated Employee shall mean any Employee who performs services
---------------------------
for an Employer or Affiliated Company during the Determination Year and
who:
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(a) During the Look-Back Year (1) was a 5-percent owner (within the
meaning of section 414(q)(3) of the Code) (a "5% Owner"), (2)
--------
received Compensation in excess of $75,000 (as adjusted pursuant to
sections 414(q)(1) and 415(d) of the Code), (3) received
Compensation in excess of $50,000 (as adjusted pursuant to sections
414(q)(1) and 415(d) of the Code) and was a member of the top-paid
group (within the meaning of section 414(q)(4) of the Code) for that
Year, or (4) was an officer of an Employer or Affiliated Company and
received Compensation for such Year that is greater than 50% of the
dollar limitation in effect under section 415(b)(1)(A) and (d) of
the Code or (if no officer has Compensation in excess of that
threshold for that Year) the highest paid officer for that Year;
(b) (1) Would be described in clause (2), (3) or (4) of Paragraph
16.30.(a) above if the term "Determination Year" were substituted
for the term "Look-Back Year" and (2) is one of the 100 Employees
who received the most Compensation for the Determination Year; or
(c) Is a 5% Owner at any time during the Determination Year.
(d) Subject to the satisfaction of such conditions as may be prescribed
under section 414(q)(12)(B)(ii) of the Code, the Company may elect
for any Plan Year (1) to apply Paragraph (a)(2) above by
substituting "$50,000" for "$75,000" and (2) not to apply Paragraph
(a)(3) above.
(e) If an Employee is, at any time during a Determination or Look-Back
Year, a spouse lineal ascendant or descendant, or spouse of a lineal
ascendant or descendant (a "Family Member") of either (1) a 5% Owner
-------------
who is an active or former Employee or (2) a Highly Compensated
Employee who is one of the ten most highly compensated employees
ranked on the basis of Compensation paid for that Year (a "Family
------
Employee"), then for that Year the Family Member and the Family
--------
Employee shall be aggregated and treated as one Employee receiving
Compensation and contributions under the Plan equal to the sum of
such Compensation and contributions received by the Family Member
and the Family Employee.
(f) The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees and the number of Employees
treated as officers, shall be made in accordance with section 414(q)
of the Code.
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<PAGE>
(g) For purposes of applying this Paragraph 16.30, (1) "Determination
-------------
Year" shall mean the Plan Year for which the determination is being
----
made; (2) "Look-Back Year" shall mean the Plan Year preceding the
--------------
Determination Year; and (3) "Compensation" shall mean Compensation
------------
(as defined in Section 16.15).
16.31 Hour of Service: An hour described in subparagraph (a) or (b). For each
---------------
Employee for whom no records of actual hours worked are maintained, Hours
of Service shall be credited on the basis of 10 Hours of Service for each
day for which the Employee would have been credited with at least one Hour
of Service under the provisions of this Paragraph.
(a) "Hour of Service" shall mean each hour (i) for which an Employee is
directly or indirectly paid or entitled to payment by an Affiliated
Company for the performance of duties; (ii) for which an Employee is
directly or indirectly paid or entitled to payment by an Affiliated
Company for periods during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty or leave of absence up to one year
(or longer if required by law) and (iii) for which back pay
(irrespective of mitigation or damages) has been awarded or agreed
to by an Affiliated Company. Except as otherwise provided in
subparagraph (b), no Hours of Service shall be credited for periods
during which no duties are performed if payment by an Affiliated
Company is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation,
unemployment compensation or disability insurance laws, or is made
as reimbursement to an Employee for medical or medically related
expenses. In no event will more than 501 Hours of Service be
credited under this subparagraph (a) on account of any single
continuous period during which an Employee performs no duties.
Hours of Service shall be credited in accordance with 29 C.F.R. (S)
2530.200b-2(b) and (c).
(b) Solely for purposes of determining whether a Break in Service has
occurred, in the case of an Employee who is absent from active
employment with an Affiliated Company for any period,
(i) by reason of her pregnancy or the birth of her child,
(ii) by reason of the placement of a child with the Employee in
connection with his adoption of such child, or
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<PAGE>
(iii) for purposes of caring for any such child for a period
beginning immediately following such birth or placement,
"Hour of Service" shall mean each hour which is not credited as an Hour of
Service under Paragraph (a) (because the Employee is not paid or entitled
to payment therefor) but which would otherwise normally have been so
credited. In any case in which the Company is unable to determine the
number of hours which would otherwise normally have been credited to an
Employee, the Employee shall be credited with 10 Hours of Service for each
day or part thereof during which the absence occurs. Notwithstanding the
foregoing, (A) no more than 501 Hours of Service shall be credited to any
individual on account of any single pregnancy, birth or placement, and (B)
the hours described in this Paragraph shall be treated as Hours of Service
(X) only for the Plan Year in which the absence from active employment
begins, if the Employee would thereby be prevented from incurring a Break
in Service in such Plan Year, or (Y) in any other case, in the next
following Plan Year.
(c) For the Plan Year beginning April 1, 1989, each Employee who would
have been credited on March 31, 1990 with less than one Year of
Service shall be credited with 10 Hours of Service for each day in
which he had one Hour of Service in the Plan Year beginning before
April 1, 1990.
16.32 Independent Appraiser: An independent appraiser as provided in Section
---------------------
401(a)(28) of the Code.
16.33 Participant: Any Employee who satisfies the requirements set forth in
-----------
Section 2.
16.34 Plan: The McKesson Corporation Profit-Sharing Investment Plan, as amended
----
from time to time.
16.35 Plan Year: The fiscal year beginning on April l and ending on the
---------
succeeding March 31.
16.36 Pre-Tax Deferrals: Contributions elected by the Participant on a salary
-----------------
deferral basis under Section 3.1.
16.37 Quarter Date: December 31, March 31, June 30, and September 30 of each
------------
year.
16.38 Rollover Contributions: Contributions made under Section 13.
----------------------
16.39 Service: For vesting: the period of an Employee's employment with all
-------
Affiliated Companies. An Employee's Service shall mean the period
commencing with the first day of such employment and ending on the day he
severs from Service. An Employee severs from Service on the
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<PAGE>
earlier of (a) the date he resigns, retires, is discharged or dies, or (b)
on the first anniversary of his absence from work for any other reason.
Notwithstanding the foregoing, an Employee's period of Service shall also
include certain periods of severance:
(a) If an Employee severs from Service by resignation, discharge or
retirement and thereafter returns to the employ of an Affiliated
Company within one year, the period of severance shall be considered
as part of the Employee's Service.
(b) Service shall include such other periods of employment by an
Employee with a corporation which later becomes an Affiliated
Company, or with a corporation whose assets, or substantially all of
whose assets are acquired by an Affiliated Company, solely to the
extent required to be treated as Service by law or as the Company
may designate as Service in its sole discretion effected on a
nondiscriminatory basis, for purposes of this Plan.
(c) An Employee's Service shall also continue during his absence caused
by sickness, accident, layoff where rehire is anticipated, required
military service or any other absence authorized by the Company on a
uniform and nondiscriminatory basis. If, after such absence, the
individual fails to return to work as an Employee within the time
prescribed on a uniform and nondiscriminatory basis by his employer
for such absences, or within the period during which his
reemployment rights are protected by law, his Service shall be
deemed broken as of that date he should have returned to work, as
determined by his employer.
(d) If an Employee terminates employment because of the pregnancy of the
Employee, the birth of a child of the Employee, the Placement of a
child with the Employee in connection with adoption of the child by
the Employee, or for the purpose of caring for such child by the
Employee for a period immediately following birth or placement, the
one-year period following such termination shall be deemed Service
of the Employee. The Employee must furnish the Company with such
timely information as the Company may reasonably require to
establish that the absence is for a reason described in this
subparagraph (d).
16.40 Spousal Consent: See Section 9.5.
---------------
16.41 Trust: The fund which is a part of this Plan and which is held by the
-----
Trustee pursuant to a trust agreement entered into between the Company and
the Trustee.
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<PAGE>
16.42 Trustee: The Chase Manhattan Bank (National Association), or any
-------
successor thereto which the Board of Directors appoints as a Trustee of
the Trust and which agrees to act as Trustee by signing a trust agreement.
16.43 Valuation Date: The last day of each calendar month; provided, however,
--------------
that for purposes of any Company Stock that is preferred stock, the
Valuation Date shall be the last day of the Plan Year and the last day of
any other month designated by the Company, at its sole discretion. The
Company may designate different Valuation Dates for different assets or
classes of assets.
16.44 Year of Service.
---------------
(a) For vesting: a period of 365 aggregate days of Service (including
holidays, weekends and other non-working days). For purposes of
Section 2 (relating to participation) prior to April 1, 1990 and
Section 7 (relating to vesting), a Year of Service is computed
beginning on the Employee's employment commencement date. However,
if he has not completed a Year of Service on the first anniversary
of his employment commencement date, he shall complete a Year of
Service on the date he completes 365 aggregate days of Service.
(b) For participation: the Employee has a Year of Service when he is
credited with at least 1,000 Hours of Service in the 12-month period
beginning on the date he first completes an Hour of Service or in
any 12-month period beginning on the anniversary of such date. In
the case of an Employee who is reemployed after he or she has
incurred a Break in Service and had not previously completed a Year
of Service, this computation shall be made beginning when he first
completes an Hour of Service after such Break.
(c) If an Employee has at any time completed at least one Year of
Service, he shall always be given credit for his completed Years of
Service for purposes of participation and vesting. However, an
Employee who has five or more consecutive Breaks in Service and who
has no remaining Account balance under the Plan shall be given such
credit only upon providing reasonable evidence to the Company of his
previous completion of such service.
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APPENDIX A
----------
LIMITS ON DEFERRALS AND CONTRIBUTIONS
-------------------------------------
1 Limits on Deferrals.
-------------------
1.1 Rule. For every Plan Year, the Average Deferral Percentage for Highly
----
Compensated Employees who are Participants or who are eligible to become
Participants shall not exceed the Average Deferral Percentage for all
other Employees who are Participants or eligible to become Participants
multiplied by 1.25. If the Average Deferral Percentage for Highly
Compensated Employees exceeds the Average Deferral Percentage for all
other Employees who are Participants or eligible to become Participants by
no more than two percentage points, the 1.25 multiplier in the preceding
sentence shall be replaced by 2.0.
1.2 Excess Contributions.
--------------------
(a) Determination of Excess Contributions. The amount of Excess
-------------------------------------
Contributions for a Highly Compensated Employee shall be determined
in the following manner:
(i) The deferrals of the Highly Compensated Employee with the
highest deferral rate shall be reduced to the extent necessary
to satisfy the Average Deferral Percentage test or cause such
rate to equal the deferral rate of the Highly Compensated
Employee with the next highest deferral rate. This process
shall be repeated until the Average Deferral Percentage test
is satisfied.
(ii) The amount of Excess Contributions for a Highly Compensated
Employee shall be equal to his or her deferrals (calculated
using the Participant's original deferral rate), minus his or
her deferrals calculated using the Participant's deferral rate
as reduced under Paragraph 1.2(a)(i) above.
(iii) The amount of Excess Contributions, as determined according
to the method described in this Paragraph 1.2, shall be
reduced by any excess deferrals previously distributed to a
Participant for the Plan Year under Section 3.6.
(b) Family Aggregation. In the case of a Highly Compensated Employee
------------------
whose deferral rate is determined under the family aggregation rules
of Paragraph 1.3 of this Appendix A, the deferral rate shall be
reduced in accordance with the "levelling" method described in
subparagraph (1)(a) above.
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<PAGE>
Excess Contributions for the family unit shall be allocated among
the Family Members in proportion to the deferrals of each Family
Member that have been combined.
(c) Determination of Allocable Income. The income allocable to any
---------------------------------
Excess Contributions for the Plan Year shall be determined in
accordance with the regulation proposed under section
401(k)(8)(A)(i) of the Code, and the income allocable to those
Excess Contributions for the period between the end of the Plan Year
and the date of distribution shall be determined in accordance with
the safe harbor method as set forth in such regulation, provided,
however, that upon the issuance of a final regulation under section
401(k)(8)(A)(i), allocable income under this subparagraph (3) shall
be determined in accordance with such final regulation.
(d) Incorporation By Reference. The foregoing provisions of this
--------------------------
Appendix A are intended to satisfy the requirements of section
401(k)(3) of the Code and, to the extent not otherwise stated above,
the provisions of section 401(k)(3) of the Code and proposed
regulations thereunder are incorporated herein by reference.
1.3 Avoiding Excess Contributions. To the extent practicable, the Company
-----------------------------
shall reduce the amount of deferrals elected by Highly Compensated
Employees to avoid having an Excess Contribution for the Plan Year. Such
reduction shall occur before amounts are contributed to the Plan. Highly
Compensated Employees with the highest percentage deferral elections shall
have their elections reduced first to the extent necessary to avoid an
Excess Contribution.
1.4 Dealing with Excess Contributions. To the extent Excess Contributions are
---------------------------------
made to the Plan, the Excess Contributions plus any income allocable
thereto (determined in accordance with Treasury Regulations) shall be
distributed to Highly Compensated Employees in accordance with Section
401(k) of the Code. Such distributions shall occur no later than the end
of the Plan Year following the Plan Year in which the Excess Contribution
occurred. Such distributions shall be first made to the Highly
Compensated Employees with the highest deferral percentage elections. The
amount of distributions shall be limited to the amount necessary to
eliminate the Excess Contributions plus allocable income.
2 Limits on Contributions.
-----------------------
2.1 Basic Rule. For every Plan Year, the Average Contribution Percentage for
----------
Highly Compensated Employees who are Participants or who are eligible to
become Participants shall not exceed the Average Contribution Percentage
for
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<PAGE>
all other Employees who are Participants or eligible to become
Participants multiplied by 1.25. If the Average Contribution Percentage
for Highly Compensated Employees exceeds the Average Contribution
Percentage for all other Employees who are Participants or eligible to
become Participants by no more than two percentage points, the 1.25
multiplier in the preceding sentence shall be replaced by 2.0. However,
to the extent required in final Treasury Regulations there shall not be
"multiple use" of the 2.0 multiplier under Paragraph 1.1 and this
Paragraph 2.1.
2.2 Determining Excess Aggregate Contributions. The amount of Excess
------------------------------------------
Aggregate Contributions for a Highly Compensated Employee, the income
allocable thereto and the application of the family aggregation rules
shall be determined in the manner provided in Paragraph 1.2 of this
Appendix A with respect to Excess Contributions.
2.3 Avoiding Excess Contributions. To the extent practicable, the Company
-----------------------------
shall reduce the amounts of After-Tax Contributions and/or Matching
Employer Contributions to avoid having an Excess Aggregate Contribution
for the Plan Year. Such reduction shall occur before amounts are
contributed to or allocated under the Plan. Highly Compensated Employees
with the highest percentage contributions shall have their contributions
reduced first to the extent necessary to avoid an Excess Aggregate
Contribution.
2.4 Dealing with Excess Aggregate Contributions. If Excess Aggregate
-------------------------------------------
Contributions are made to the Plan, they shall be deemed to be
attributable first to After-Tax Contributions, and then, if necessary to
Matching Contributions. Excess Aggregate Contributions attributable to
After-Tax Contributions plus any income allocable thereto (determined in
accordance with Treasury Regulations) shall be distributed to Highly
Compensated Employees in accordance with Section 401(m) of the Code. Such
distributions shall occur no later than the end of the Plan Year following
the Plan Year in which the Excess Aggregate Contributions occurred. The
amount of distribution shall be limited to the amount necessary to
eliminate the Excess Aggregate Contribution. Excess Aggregate
Contributions attributable to Matching Employer Contributions, if any,
shall be reallocated from Highly Compensated Employees and allocated to
other Participants to the extent necessary to eliminate the Excess
Aggregate Contribution.
3 Additional Limits. In addition to the other limits on Plan contributions
-----------------
provided in this Appendix, and notwithstanding any provision of the Plan
to the contrary, the Company may, for any Plan Year, impose additional
limits on the percentage of Compensation that may be contributed to the
Plan on behalf of Participants who are Highly-Compensated Employees in
order to ensure that the requirements of Code sections 401(k) and 401(m)
are
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satisfied. Such limits shall be determined on an objective and
nondiscriminatory basis and shall be announced to the affected
Participants before they apply.
4 Special Rules. In applying the limits of this Appendix, the following
-------------
special rules shall apply:
4.1 If any Affiliated Company maintains any other plan which is aggregated by
the Company with this Plan for purposes of applying section 401(a)(4) or
410(b) of the Code, then all such plans shall be treated as one plan for
the purpose of applying the limits of this Appendix A.
4.2 If a Highly Compensated Employee is a Participant in any other plan
maintained by any Affiliated Company, then the separate deferral rates and
contribution rates (if any) determined for the Employee under all such
plans for purposes of sections 401(k) and 401(m) of the Code shall be
aggregated with the separate deferral and contribution rates determined
for the Employee for purposes of applying this Appendix A.
4.3 If a Highly Compensated Employee is subject to the family aggregation
rules of Section 16.30.(e), the deferral rate and the contribution rate of
the family unit for purposes of sections 401(k) and 401(m) of the Code
shall be the greater of (1) the combined deferral rate and the combined
contribution rate (respectively) of all Family Members (as defined in
Section 16.30.(e)) who are Highly Compensated Employees without regard to
family aggregation, or (2) the combined deferral rate and the combined
contribution rate (respectively) of all eligible Family Members.
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APPENDIX B
----------
LIMITATION ON BENEFITS
----------------------
1 Allocation Limitations. Notwithstanding anything to the contrary
----------------------
contained in this Plan, and except as provided in Paragraph 7 of this
Appendix, the Annual Additions to a Participant's Account for any Plan
Year shall not exceed the lesser of $30,000 or 25% of the Participant's
Total Compensation for the year. The dollar limit shall adjust
automatically to the maximum amount permitted pursuant to Section 415(d)
of the Code.
2 Definitions.
-----------
For purposes of this Appendix, the term:
2.1 "Total Compensation" means all amounts accrued by a Participant during a
Plan Year, which amounts are treated as compensation under Treasury
Regulation Section 1.415-2(d)(1), and which amounts are not excluded from
compensation under Treasury Regulation Section 1.415-2(d)(2).
2.2 "Annual Additions" means the sum of Employer contributions and forfeitures
allocated to the Participant's accounts in all qualified defined
contribution Plans maintained by the Employer and the Participant's after-
tax contributions to all such qualified Plans.
2.3 "Employer" means a corporation which is a member of a controlled group of
corporations, a trade or business which is under common control, or a
service organization which is a member of an affiliated service group with
an Employer adopting this Plan, as defined in Sections 414(b), (c) and (m)
of the Code, as modified by Section 415(h).
2.4 "Annual Benefit" means the Participant's annual benefit payable in the
form of a straight life annuity under all qualified defined benefit plans
maintained by an Employer, excluding any benefits attributable to the
Participant's contributions or rollover contributions, if any, to the
plans.
2.5 "Projected Annual Benefit" means the Annual Benefit a Participant would
receive, provided the Participant continued his employment and continued
receiving his current Total Compensation in each subsequent Plan Year
until the later of: (i) the Participant's normal retirement age as
determined under the terms of the Plan; or (ii) the Participant's current
age, and if all relevant factors used to determine benefits under the Plan
for the current Plan Year remained constant for all future Plan Years.
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<PAGE>
3 Combination Limits.
------------------
3.1 If a Participant of this Plan is or has been a Participant in a defined
benefit plan maintained by an Employer, then in addition to the limitation
contained in Paragraph 1, the sum of the defined benefit Plan fraction and
the defined contribution Plan fraction for any Plan Year shall not exceed
one (1.0).
3.2 For purposes of this Paragraph 3:
(a) The defined benefit plan fraction for any Plan Year is a fraction,
the numerator being the projected Annual Benefit of the Participant
under all defined benefit plans maintained by the Employer
(determined as of the close of the Plan Year) and the denominator
being the lesser of:
(i) the product of 1.25 multiplied by $90,000 (as adjusted in
accordance with regulations issued by the Secretary of the
Treasury specifying the maximum dollar limit permitted
pursuant to Section 415(d)(1)(A) of the Code), or
(ii) the product of 1.4 multiplied by an amount which is 100% of
the Participant's average Total Compensation for the three
consecutive calendar years while he was Participant in the
Plan in which his Total Compensation was the highest.
(b) The defined contribution plan fraction for any Plan Year is a
fraction, the numerator being the sum of the Annual Additions to the
accounts of the Participant in all defined contribution plans
maintained by the Employer as of the end of the Plan Year under
consideration, and the denominator being the sum of the lesser of
the following amounts determined for such Plan Year and for each
prior year of service with the Employer:
(i) the product of 1.25 multiplied by $30,000 (as adjusted in
accordance with regulations issued by the Secretary of the
Treasury specifying the maximum dollar limit permitted
pursuant to Section 415(a)(1)(B) of the Code), or
(ii) the product of 1.4 multiplied by an amount equal to 25% of the
Participant's Total Compensation.
(c) At the election of the Company, in applying subparagraph 3(b)(ii)
with respect to any year ending after December 31, 1982, the amount
taken into account in determining the denominator of the defined
contribution plan fraction with respect to
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each Participant for all years ending before January 1, 1983 shall
be an amount equal to the product of (i) and (ii) below:
(i) the amount determined as the denominator of the defined
contribution plan fraction in accordance with subparagraph
3(b)(ii) for the year ending in 1982, multiplied by
(ii) a fraction in which the numerator is the lesser of (1) $51,875
or (2) 1.4 multiplied by 25% of the Participant's Total
Compensation for the year ending in 1981 and the denominator
is the lesser of (1) $41,500 or (2) 25% of the Participant's
Total Compensation for the year ending in 1981.
4 For purposes of the limitations contained in Paragraphs 1 and 3 of this
Appendix, all defined contribution plans (whether or not terminated) of
the Employer shall be treated as one defined contribution plan.
Similarly, all defined benefit plans (whether or not terminated) of the
Employer shall be treated as one defined benefit plan for these purposes.
5 If for any Plan Year, the Annual Additions to a Participant's Account
would exceed the limitations described in Paragraphs 1 and 3 of this
Appendix, the following reductions shall apply to the extent required to
meet such limitations:
5.1 The Participant's benefits under the McKesson Corporation Retirement Plan
shall be reduced.
5.2 Thereafter, the Participant's election to have Supplemental Contributions
made on his behalf to the Plan shall be reduced.
5.3 Thereafter, the Participant's election to have Basic Contributions made on
his behalf to the Plan shall be reduced.
5.4 Thereafter, Quarterly Contributions made on the Participant's behalf shall
be reduced.
5.5 Thereafter, Employer contributions allocated to the Participant's Account
under Sections 4, 5 and 6 shall be reduced, in that order.
5.6 Thereafter, forfeitures otherwise allocated to the Participant's Account
shall be reduced.
6 Limitation Year. The Plan Year shall be the Plan's limitation year.
---------------
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<PAGE>
7 Special Rules for Employee Stock Ownership Plan Contributions.
-------------------------------------------------------------
Notwithstanding the foregoing provisions of this Appendix, in the case of
the Annual Additions to the Participant's Account which are made under
portions of this Plan which are employee stock ownership plans as defined
under Section 4975(e)(7) of the Code (or for years beginning before April
1, 1987, a tax credit employee stock ownership plan as defined under
Section 409 of the Code) the following rules shall apply:
7.1 For years beginning before July 12, 1989, the dollar amounts described in
Paragraphs 1 and 3.2.(b)(i) for a Plan Year with respect to a Participant
shall be equal to the sum of:
(a) the amount described in Paragraphs 1 and 3(b)(ii)(A) determined
without regard to this Paragraph 7 and
(b) the lesser of:
(i) the amount determined under subparagraph (i), or
(ii) the amount of Company Stock contributed, or purchased with
cash contributed, to such portion of the Plan;
provided that no more than one-third of the contributions for such Plan
Year are allocated to Highly Compensated Employees.
7.2 Annual additions under this Appendix with regard to Financed Company Stock
that is released and allocated to any Participant's Account shall be
calculated solely with respect to Company Contributions used to repay the
principal amount of an Exempt Loan and not with respect to the fair market
value of the Financed Company Stock allocated to the Participant's Account
or with respect to any earnings, including dividends on Company Stock,
that are used to repay an Exempt Loan.
7.3 Company Contributions used to repay the principal amount of an Exempt Loan
shall be total Company Contributions used to repay such Loan reduced by
such Contributions attributable to interest deductible under Section
404(a)(9)(B) of the Code and charged (or treated as if it were charged)
against the Participant's Account.
7.4 No amount shall be counted as an Annual Addition to the extent that it is
attributable to the forfeiture of Company Stock acquired with the proceeds
of an Exempt Loan.
7.5 Subparagraphs (c) and (d) shall apply only if no more than one-third of
the employer contributions to the employee stock ownership portion of the
Plan for the year that are
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<PAGE>
deductible under section 404(a)(9) of the Code are allocated to Highly
Compensated Employees.
8 Limit on Contributions. Notwithstanding any other provision of the Plan,
----------------------
in no event shall any contribution be made by an Employer which would
result in the imposition of an excise tax on such contribution under
Section 4972 of the Code.
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<PAGE>
APPENDIX C
----------
PAYSOP
------
This Appendix to the Plan is a frozen tax credit employee stock ownership
Plan under Section 41 of the Code.
1 No Current Contribution. No contributions have been made or allocated
-----------------------
with respect to this tax credit employee stock ownership portion of the
Plan for Plan Years beginning after December 31, 1986.
2 Dividends
---------
2.1 Cash dividends. Cash dividends paid on Company Stock allocated to a
--------------
Participant's PAYSOP Sub-Account shall be paid currently (or within ninety
(90) days following the close of the Plan Year in which dividends are
received by the Trust) in cash to Participants, provided that the
Participant has not elected not to receive Non-Matching Employer
Contributions. Dividends shall be paid to Participants only to the extent
that a federal income tax deduction for such dividend payments is
allowable to the Company. If such a deduction is not allowable, such
dividends shall be added to the Participants' PAYSOP Sub-Accounts.
2.2 Non-Cash Dividends and Other Distributions. Non-cash dividends and other
------------------------------------------
distributions paid on Company stock allocated to PAYSOP Sub-Accounts shall
be treated in the same way as provided in Section 4.6.(b).
2.3 All amounts transferred to the Plan because of the requirements of section
48(n)(1) or 41(c)(1)(B) of the Code shall remain in the Plan as required
by section 409(g) of the Code.
2.4 With respect to the right to demand employer securities, see Section 9.7.
2.5 With respect to the right to receive a distribution, see Sections 9.2,
9.3, and 9.4. Notwithstanding anything to the contrary in this Plan,
unless the Participant elects otherwise, distributions of amounts credited
to a Participant's PAYSOP Sub-Account shall commence no later than one
year after the Participant separates from service with all Affiliated
Companies on attaining age 65, disability or death, or no later than five
years after the Participant otherwise separates from service with all
Affiliated Companies.
3 PAYSOP Limitations.
------------------
3.1 All amounts credited to a Participant's PAYSOP Sub-Account shall be
invested solely in Company Stock.
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<PAGE>
3.2 All Participants shall be fully vested in amounts credited to their PAYSOP
Sub-Accounts.
3.3 All amounts held in PAYSOP Sub-Accounts shall not be distributed prior to
the time allowed in Section 409(d) of the Code. Additionally, pursuant to
Section 409(g) of the Code, amounts contributed to the Plan and held in
PAYSOP Sub-Accounts shall remain in the Plan even though part or all of
the employee plan credit is recaptured or redetermined.
3.4 With respect to voting rights, see Section 11.
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<PAGE>
APPENDIX D
----------
TOP HEAVY RULES
---------------
1 General Rule. Notwithstanding anything in this Plan to the contrary, the
------------
provisions of this Appendix will apply in the event that the Plan is
determined to be a "top-heavy plan" under Section 416 of the Code.
2 Definitions. For purposes of this Appendix:
-----------
2.1 A "top-heavy plan" is (i) a plan in which, as of the last day of the
preceding Plan Year (or the last day of the Plan Year in the case of the
first Plan Year) the present value of the aggregate of Accounts of key
employees under the plan exceeds sixty percent (60%) of the aggregate of
the accounts of all employees under the plan; and (ii) each plan which is
required to be included in an aggregation group under Section 416(g)(2) of
the Code, if such group is a top-heavy group. The determination of
whether a plan is top-heavy shall be made in accordance with Section
416(g) of the Code and regulations promulgated by the Secretary of the
Treasury thereunder;
2.2 A "key employee" is a person described in Section 416(i) of the Code;
2.3 A "non-key employee" is any employee who is not a key employee;
2.4 "Company" includes all employers aggregated under Sections 414(b), (c) and
(m) of the Code;
2.5 The "determination date" with respect to a Plan Year is (i) in the case of
the first Plan Year, the last day of such Plan Year, or (ii) the last day
of the preceding Plan Year. When more than one plan is aggregated, the
determination of whether the plans are top-heavy shall be made at a time
consistent with regulations issued by the Secretary of the Treasury.
2.6 The present value of the Account of any Participant as of a determination
date is the sum of: (i) his Account balance as of the most recent
Valuation Date occurring within a twelve (12) month period ending on the
determination date; and (ii) the amount of any contributions actually made
after the Valuation Date but before the determination date. In the first
Plan Year the present value of a Participant's Account shall also include
any contributions made after the determination date that are allocated as
of a date in the first Plan Year.
3 Aggregation Groups. In determining whether the Plan is top-heavy, the
------------------
following plans shall be aggregated: (a) all plans of the Company in
which a key employee participates, and (b) each other plan of the Company
which
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<PAGE>
enables any plan described in (a) to meet the requirements of Section
401(a)(4) or 410 of the Code. The Company may, in its discretion,
aggregate with the plans described in (a) and (b) of this Paragraph 3 any
other plans of the Company, provided the resulting group of plans
satisfies Sections 401(a)(4) and 410 of the Code.
4 Compensation Limitation. The amount of compensation taken into account
-----------------------
under the Plan for each Participant in any Plan Year in which the Plan is
top-heavy shall not exceed $200,000 or such other amount as shall be
established by the Secretary of the Treasury pursuant to Section 416(d)(2)
of the Code.
5 Adjustments to Limitations on Contributions and Benefits.
--------------------------------------------------------
5.1 Except as provided in Paragraph 5.2, in the event the Plan becomes a top-
heavy Plan:
(a) Section 415(e)(2)(C) of the Code shall be applied by substituting
"1.0" for "1.25" and
(b) Section 415(e)(6)(B)(i) of the Code shall be applied by substituting
"$41,500" for "$51,875."
(c) All non-key employees who are employed on the last day of the Plan
Year shall be allocated for each Plan Year in which this Plan is a
top-heavy plan a contribution of not less than 3 percent of Total
Compensation (as defined in Paragraph 2(a) of Appendix C),
regardless of whether such non-key employees have completed a Year
of Service in such Plan Year. Commencing with the Plan Year
beginning April 1, 1985, Basic and Supplemental Contributions made
pursuant to Section 3 shall be taken into account for purposes of
satisfying any requirement that non-key employees must receive the
minimum contribution specified in this Paragraph 5(a).
5.2 Paragraph 5.1 shall not apply if:
(i) Section 416(c)(2)(A) of the Code is applied by substituting "4
percent" for "3 percent," and
(ii) The Plan would not be a top-heavy Plan if "90 percent" were
substituted for "60 percent" each place it appears in Sections
416(g)(1)(A) and (2)(B) of the Code.
6 Vesting. For any Plan Year in which the Plan is a top-heavy plan, each
-------
Participant who is credited with 3 or more Years of Service shall have a
nonforfeitable right to 100 percent of all of his or her Account and no
portion of such Accounts may become forfeitable if the Plan later ceases
to be top-heavy. Each Participant who is credited
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<PAGE>
with fewer than 3 Years of Service, shall have his vested percentage
determined under Section 7.
7 Effective Date. This Appendix shall be effective as of April 1, 1984.
--------------
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<PAGE>
APPENDIX E
----------
SALE OF DAIRY DIVISION
----------------------
1 Each Participant who ceased to be an Employee as a result of the sale of
the Company's Dairy Division was fully vested in that portion of his
Account as of the date of his termination which represented the Employer
Contribution on his behalf for the immediately preceding Plan Year
(adjusted for any earnings or losses in his Accounts attributable to such
Contribution) and was entitled to such portion of the Employer
Contribution for the Plan Year in which he terminated as the Board shall
determine on a uniform and nondiscriminatory basis.
2 Notwithstanding any other provision of the Plan, the vested amounts in the
Account of each such Participant shall, at the option of such Participant,
be retained in the Plan to be distributed at the end of any month selected
by the Participant, but not later than the end of the month in which the
Participant attains age 65 or terminates employment with the transferee-
employer, whichever occurs first. Except as the Company may otherwise
provide, the vested amounts shall be distributed in a lump sum. At the
request of a Participant, his Regular and Voluntary Contributions may be
distributed in a month different from the month in which his other vested
amounts are distributed. However, if that distribution is made on account
of termination of employment with the transferee-employer, distribution
shall be made in the same manner as if the transferee-employer were an
Employer under this Plan and the McKesson Corporation Retirement Plan.
3 Notwithstanding any other provision of the Plan, any such Participant who
leaves his vested amounts in the Plan in accordance with Paragraph 2
above may not make any Regular or Voluntary Contributions to the prior
Plan or to the Plan after November 30, 1982, and may only make one change
in investment mode after such date (and only if such change is made within
90 days after such date).
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<PAGE>
AMENDMENT NO. 2
TO THE
McKESSON CORPORATION
PROFIT-SHARING INVESTMENT PLAN
(As Amended and Restated April 1, 1990)
The McKesson Corporation Profit-Sharing Investment Plan, as amended and
restated effective April 1, 1990 (the "Plan"), is amended further as follows:
(a) Effective as of the Effective Time (as defined herein), the first
sentence of Section I,2(b) is amended in its entirety to read as follows:
The portions of the Plan that constitute an employee stock ownership plan
under section 4975(e)(7) of the Code are Section IV of the Plan providing
for Matching Employer Contributions, Section IV-A of the Plan providing
for an Additional ESOP Match, Section V of the Plan providing for Non-
Matching Employer Contributions, that part of Section III of the Plan
providing for Quarterly Contributions, and all other sections of the Plan
necessary to meet the requirements of section 4975(e)(7) of the Code;
provided, however, that the portion of the Plan consisting of PCS
Transaction Proceeds that are allocated to the Accounts of Participants
shall not constitute part of the employee stock ownership plan.
(b) Effective as of the Effective Time, a new Section I,4 is added to the
Plan to read as follows:
4. Plan Sponsorship. Effective as of the Effective Time, Old McKesson
----------------
assigns sponsorship of the Plan to the Company, and the Company
assumes all obligations of Old McKesson relating thereto.
(c) Effective as of April 1, 1993, a new sentence is added to the end of
Section II,1(a) as follows:
Each Eligible Employee who was a Participant in the Plan or in the PCS
Plan on March 31, 1993 shall participate in the Plan on April 1, 1993.
-1-
<PAGE>
(d) Effective as of April 1, 1993, Section III,2 is amended in its
entirety to read as follows:
2. After-Tax Contribution Elections. A Participant who is a Nonhighly
--------------------------------
Compensated Employee may elect, at the time and in the manner
prescribed by the Company, to contribute a percentage of his
Compensation as After-Tax Contributions to the Plan through payroll
withholding. After-Tax Contributions may be made as Basic or
Supplemental Contributions.
(e) Effective as of April 1, 1988, Section III,6 is amended in its
entirety to read as follows:
3.6 Excess Deferrals. The aggregate Pre-Tax Deferrals of any Participant
----------------
for any calendar year, together with his or her elective deferrals
under any other plan or arrangement to which section 402(g) of the
Code applies and that is maintained by an Affiliated Company, shall
not exceed $7,000 (or such larger amount as may be adopted by the
Commissioner of Internal Revenue to reflect a cost-of-living
adjustment). In the event that the aggregate Pre-Tax Deferrals of
any Participant for any calendar year, together with any other
elective deferrals (within the meaning of section 402(g)(3) of the
Code) under all plans, contracts or arrangements of the Affiliated
Companies and any other employers, exceed $7,000 (or such larger
amount as may be adopted by the Commissioner of Internal Revenue to
reflect a cost-of-living adjustment), then the Participant may
designate all or a portion of such "Excess Deferrals" as
attributable to this Plan and may request a refund of such portion
by notifying the Company in writing on or before the March 1 next
following the close of such calendar year. If timely notice is
received by the Company, then such portion of the Excess Deferrals,
and any income or loss allocable to such portion, shall be refunded
to the Participant not later than the April 15 next following the
close of such calendar year. If, in the case of Excess Deferrals
arising solely from plans, contracts or arrangements of the
Affiliated Companies, the Participant fails properly to request a
distribution of all such Excess Deferrals, then the Company shall be
deemed to have notice of such Excess Deferrals and shall
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<PAGE>
designate one or more plans maintained by the Affiliated Companies
from which the refund of Excess Deferrals and allocable income or
loss shall be made no later than April 15 next following the close
of such calendar year.
(f) Effective as of July 1, 1994, Section III,8(a) is amended in its
entirety to read as follows and Section III,8 is renumbered accordingly:
(a) Investment of Contributions. Basic and Supplemental Contributions
---------------------------
made on behalf of each Participant shall be invested in the Fixed
Income Fund, the Equity Income Fund and/or the S&P 500 Index Fund of
the Trust in accordance with the election of the Participant.
Investments shall be made among the Funds in ten percent (10%)
increments, as elected by the Participant. A Participant may elect
to change investment instructions with respect to future
contributions as of any January 1, April 1, July 1 or October 1.
All elections shall be made at the time and in the manner prescribed
by the Company.
(b) Transfers Among Investment Funds. A Participant may elect to
--------------------------------
reapportion the value of his or her Account attributable to Basic
and Supplemental Contributions made on behalf of each Participant,
together with the Regular and Voluntary Contributions (if any) made
by the Participant prior to September 1, 1983, by properly
completing and filing the prescribed form with the Company.
Investments shall be made among the Fixed Income Fund, the Equity
Income Fund and the S&P 500 Index Fund and shall be in increments of
ten percent (10%). Such elections may be changed as of January 1,
April 1, July 1 or October 1.
(g) Effective as of April 1, 1992, Section IV,2 is amended in its entirety
to read as follows:
2. Amount of Contribution. The amount of the Matching Employer
----------------------
Contribution to be allocated to a Participant's Account for the Plan
Year shall be a percentage of such Participant's eligible
Contributions. Such percentage shall be determined by the Board of
Directors in its sole discretion as soon as reasonably practicable
after the close of the Plan Year. In no event shall the amount of
such Contribution be less than the amount that is
-3-
<PAGE>
necessary to service any ESOP debt, after taking into consideration
other amounts available for debt service under the Plan.
(h) Effective as of the Effective Time, a new Section VI,4A is added to
the Plan to read as follows:
4A. Vesting on Completion of Service--PCS Transaction Proceeds Sub-
--------------------------------------------------------------
Account. The amount credited to a Participant's PCS Transaction
-------
Proceeds Sub-Account which is attributable to the Participant's
Matching Employer Contributions and Additional ESOP Match shall vest
in accordance with the vesting rules set forth in Section VI,3. The
amount credited to a Participant's PCS Transaction Proceeds Sub-
Account which is attributable to the Participant's Non-Matching
Employer Contributions shall vest in accordance with the vesting
rules set forth in Section VI,4.
(i) Effective as of July 1, 1994, Section VI,6 is amended by replacing the
phrase "Diversified Fund" with the phrase "Equity Income Fund and/or S&P 500
Index Fund."
(j) Effective as of July 1, 1994, Section VIII,2(d)(ii) is amended by
replacing the phrase "or Diversified Fund" with the phrase "Equity Income Fund
or S&P 500 Index Fund."
(k) Effective as of July 1, 1994, Section VIII,4(d) is amended by
replacing the phrase "Diversified Fund" with the phrase "Equity Income Fund, S&P
500 Index Fund."
(l) Effective as of the Effective Time, the first sentence of Section
VIII,8(a) is amended in its entirety to read as follows:
Notwithstanding anything to the contrary in this Article, a Participant or
Beneficiary shall have the right to receive distributions of the portion
of his vested Account that represents his Matching Employer Contributions
Sub-Account, his Quarterly Contributions Sub-Account, his Non-Matching
Employer Contributions Sub-Account, his Additional ESOP Match Sub-Account,
his PAYSOP Sub-Account and his PCS Transaction Proceeds Sub-Account in
shares of Company Stock that are common stock, and not preferred stock.
-4-
<PAGE>
(m) Effective as of the Effective Time, the first sentence of Section
VIII,12 is amended in its entirety to read as follows:
A Participant who has attained age 55 and has completed 10 years of
participation in the Plan may elect in writing, within 90 days after the
end of the Plan Year to which the election applies, to receive a
distribution of up to 25% (up to 50% in the final year such election is
available) of the vested portion of his Account that is invested in
Company Stock or the Company Investment Fund and that is attributable to
Company Stock acquired after December 31, 1986.
(n) Effective as of April 1, 1993, a new Section VIII,13 is added to the
Plan to read as follows:
13. Direct Rollovers.
----------------
(a) The Direct Rollover Option. Notwithstanding any provision of
--------------------------
the Plan to the contrary that would otherwise limit a
Distributee's election under this Section, a Distributee may
elect, at the time and in the manner prescribed by the Plan
administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
(b) Definition of Eligible Rollover Distribution. An Eligible
--------------------------------------------
Rollover Distribution is any distribution of all or any
portion of the balance to the credit of the Distributee,
except that an Eligible Rollover Distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary,
or for a specified period of 10 years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
-5-
<PAGE>
unrealized appreciation with respect to employer securities).
(c) Definition of Eligible Retirement Plan. An Eligible
--------------------------------------
Retirement Plan is an individual retirement account described
in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity
plan described in section 403(a) of the Code, or a qualified
trust described in section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(d) Definition of Distributee. A Distributee includes a
-------------------------
Participant or former Participant. In addition, the
Participant's or former Participant's surviving spouse and the
Participant's or former Participant's spouse or former spouse
who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or
former spouse.
(e) Definition of Direct Rollover. A Direct Rollover is a payment
-----------------------------
by the Plan to the Eligible Retirement Plan specified by the
Distributee.
(o) Effective as of the Effective Time, a new Section IX,1(m) is added to
the Plan to read as follows:
(m) PCS Transaction Proceeds Sub-Account (to reflect the portion of a
Participant's Account that is attributable to PCS Transaction
Proceeds).
(p) Effective as of July 1, 1994, the second sentence of Section IX,2 is
amended to read as follows:
For investment purposes, the Trust will be divided into the following
separate funds:
-6-
<PAGE>
(q) Effective as of July 1, 1994, Section IX,2(b) is deleted and new
Sections IX,2(d) and (e) are added to the Plan as follows:
(d) An Equity Income Fund, which shall be invested in assets other than
------------------
the equity securities of the Company or any Affiliated Company; and
(e) An S&P 500 Index Fund, which shall be invested in assets other than
------------------
the equity securities of the Company or any Affiliated Company.
(r) Effective as of the Effective Time, a new Section IX,2(f) is added to
the Plan to read as follows:
(f) A Company Investment Fund which shall be invested as directed by the
-----------------------
Committee in Company Stock or assets other than the equity
securities of the Company or any Affiliated Company, or any
combination thereof.
(s) Effective as of July 1, 1994, the last paragraph of Section IX,2 is
amended by replacing the phrase "Diversified Fund" with the phrase "Equity
Income Fund or the S&P 500 Index Fund."
(t) Effective as of the Effective Time, the last paragraph of Section IX,2
is amended in its entirety to read as follows:
All Basic Contributions, Supplemental Contributions, Regular
Contributions, Voluntary Contributions and Rollover Contributions and the
income attributable thereto shall be invested in the Fixed Income Fund,
the Equity Income Fund or the S&P 500 Index Fund except as provided in the
next sentence. Cash awaiting distribution or investment shall be held in
the STIF. Notwithstanding the foregoing, all PCS Transaction Proceeds
attributable to shares of Company Stock previously allocated to
Participants' Accounts and the income attributable thereto shall be
invested in the Company Investment Fund, and all PCS Transaction Proceeds
attributable to shares of Company Stock held in the Loan Suspense Account
and the income attributable thereto shall be invested in the Company
Investment Fund to the extent not invested in Company Stock at the
direction of the
-7-
<PAGE>
Company. All other assets held under this Plan shall be invested in
Company Stock.
(u) Effective as of July 1, 1994, Section IX,3(b) is deleted and Sections
IX,3(d) and (e) are added to the Plan to read as follows:
(d) Equity Income Fund. The interest of each Participant in the Equity
------------------
Income Fund shall be the total of the contributions made by or on
behalf of the Participant that have been invested in the Fund,
adjusted for gains and losses, realized and unrealized, and reduced
by any withdrawals and distributions therefrom.
(e) S&P 500 Index Fund. The interest of each Participant in the S&P 500
------------------
Index Fund shall be the total of the contributions made by or on
behalf of the Participant that have been invested in the Fund,
adjusted for gains and losses, realized and unrealized, and reduced
by any withdrawals and distributions therefrom.
(v) Effective as of the Effective Time, a new Section IX,3(f) is added to
the Plan to read as follows:
(e) Company Investment Fund. The interest of each Participant in the
-----------------------
Company Investment Fund shall be the total of the PCS Transaction
Proceeds attributable to the Old McKesson shares previously
allocated to the Account of the Participant that have been invested
in the Fund, adjusted for gains and losses, realized and unrealized,
and reduced by any withdrawals and distributions therefrom.
(w) Effective as of April 1, 1993, Section XI,1 of the Plan is amended in
its entirety to read as follows:
1. Responsibilities of Company and Committee. The Company is the "plan
-----------------------------------------
sponsor" and "plan administrator," as such terms are used in ERISA
and the Code. The Company shall be the named fiduciary which has
the discretionary authority to control and manage the operation and
administration of the Plan.
The Company is responsible for compliance with the ERISA reporting
and disclosure requirements.
-8-
<PAGE>
The Committee in its sole discretion shall have the exclusive right
to interpret the terms and provisions of the Plan and to determine
any and all questions arising thereunder or in connection with the
administration thereof including, without limitation, the right to
remedy possible ambiguities, inconsistencies, or omissions; and in
doing so, it will endeavor to act in such a way, by general rule or
particular decision, so as not to discriminate in favor of any class
of Employees or Participants.
The Committee also shall have sole discretion to determine
eligibility for benefits pursuant to Section XI,6 below.
All interpretations, determinations, and decisions of the Committee
in respect of any matter or question hereunder shall be final,
conclusive and binding upon all persons and shall be given the
maximum possible deference allowed by law. This Section shall apply
to all persons having or claiming to have any interest in or under
the Plan, including, but not by way of limitation, all Participants,
Employees, and Beneficiaries.
(x) Effective as of April 1, 1993, Section XI,5 of the Plan is amended in
its entirety to read as follows:
5. Delegation of Responsibilities. In exercising its rights, powers
------------------------------
and responsibilities, the Company, the Committee and the
Compensation Committee shall each be entitled to employ such
counsel, agents, clerical, medical and actuarial services as it may
require. The Company, the Committee and the Compensation Committee,
from time to time, each may delegate or allocate to one or more of
its members or to any other persons or organizations any of its
rights, powers, and duties with respect to the operation and
administration of the Plan. Any such delegation or allocation shall
be reviewed from time to time by the Company, the Committee or the
Compensation Committee, as appropriate, and shall be terminable upon
such notice as the Company, the Committee or the Compensation
Committee, in its sole discretion, deems reasonable and prudent
under the circumstances.
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<PAGE>
(y) Effective as of July 1, 1994, Section XI,7 is amended by replacing the
phrase "Diversified Fund" with the phrase "Equity Income Fund, the S&P 500 Index
Fund."
(z) Effective as of April 1, 1993, Section XI,12 of the Plan is amended in
its entirety to read as follows:
12. Expenses for Administration. For any Plan Year, any or all Employers
---------------------------
may pay or the Plan may pay any costs paid or incurred during the
Plan Year for administering the Plan and Trust. The Company shall
have complete and unfettered discretion to determine whether an
expense of the Plan shall be paid by the Employers or out of the
Trust, and the Company's discretion and authority to direct the
payment of expenses out of the Trust shall not be limited in any way
by any prior decision or practice regarding payment of the expenses
of the Plan.
(aa) Effective as of April 1, 1993, Section XII,1 is amended by replacing
the phrase "'qualified total distribution'" with the phrase "'eligible rollover
distribution'" and by replacing the phrase "section 402(a)(5)" with the phrase
"section 402(c)(4)."
(ab) Effective as of April 1, 1993, Section XII,2 is amended by replacing
the phrase "section 402(a)(5)" with the phrase "section 402."
(ac) Effective as of April 1, 1993, Section XIV,4 is amended by deleting
the phrase "the PCS, Inc. Profit-Sharing Plan or" therefrom.
(ad) Effective as of April 1, 1993, Section XV,6 is amended by replacing
the phrase "Pre-Tax Deferrals" with the phrase "Pre-Tax Deferrals and Quarterly
Contributions."
(ae) Effective as of April 1, 1993, Section XV,7 is amended by replacing
the phrase "Matching Employer Contributions" with
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<PAGE>
the phrase "Matching Employer Contributions, Additional ESOP Matching
Contributions."
(af) Effective as of the Effective Time, Section XV,13 is amended in its
entirety to read as follows:
13. Company: McKesson Corporation, a Delaware corporation formerly named
-------
SP Ventures, Inc.
(ag) Effective as of April 1, 1994, the last sentence of Section XV,15 is
amended in its entirety to read as follows:
In any Plan Year, Compensation shall not exceed the dollar limitation under
section 401(a)(17) of the Code, adjusted annually by the Secretary of the
Treasury.
(ah) Effective as of April 1, 1993, Sections XV,21 and XV,22 of the Plan
are amended to read as follows:
21. Eligible Employee: Each Employee is an "Eligible Employee" unless:
-----------------
(a) He is not employed by an Employer;
(b) He is a leased employee within the meaning of section 414(n) of
the Code;
(c) He is an employee of Zee Medical Inc., and his business unit is
not designated by the company as participating in the Plan;
(d) He is a temporary or seasonal employee; or
(e) He is a member of a collective bargaining unit, unless the
agreement between the Employer and that unit provides for
participation in this Plan.
22. Employee: Any person employed by and receiving Compensation from an
--------
Affiliated Company. The term "Employee" shall also include (a) a
leased employee within the meaning of section 414(n) of the Code and
(b) a person who is a citizen of the United States and is employed by
a foreign subsidiary (within the meaning of section 3121(1)(8) of the
Code) of an Affiliated Company to which an agreement entered into by
such Affiliated Company under section 3121(1) of the Code applies and
for whom contributions under a funded Plan of deferred compensation
are not provided by any other person with respect to the
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<PAGE>
remuneration paid him by such foreign subsidiary.
(ai) Effective as of April 1, 1993, Section XV,27 is amended by replacing
the phrase "Matching Employer Contributions" with the phrase "Matching Employer
Contributions, Additional ESOP Matching Contributions."
(aj) Effective as of April 1, 1993, new Sections XV,45 and XV,46 are added
to read as follows:
45. Nonhighly Compensated Employee: An Employee who is not a Highly
------------------------------
Compensated Employee.
46. PCS Plan: The PCS, Inc. Profit-Sharing Investment Plan.
--------
(ak) Effective as of the Effective Time, new Sections XV,47 through XV,54
are added to the Plan to read as follows:
47. Effective Time: The effective date of the PCS Transaction, as
--------------
defined in the Merger Agreement.
48. Eli Lilly: Eli Lilly and Company, an Indiana corporation.
---------
49. Merger Agreement: The Agreement and Plan of Merger, dated as of July
----------------
10, 1994, by and among Old McKesson, Eli Lilly and ECO Acquisition
Corporation.
50. Old McKesson: McKesson Corporation, a Delaware corporation and the
------------
prior sponsor of the Plan, which was acquired by Eli Lilly pursuant
to the Merger Agreement.
51. PCS: PCS Health Systems, Inc. and Clinical Pharmaceuticals, Inc,
---
formerly wholly-owned subsidiaries of Old McKesson.
52. PCS Participant: An active employee of PCS or a PCS employee on
---------------
short term disability who participates in the Plan immediately prior
to the Effective Time.
53. PCS Transaction: The acquisition of PCS by Eli Lilly pursuant to the
---------------
Merger Agreement and the Reorganization and Distribution Agreement,
dated as of July 10, 1994, by and among Old McKesson, McKesson
Corporation, a Maryland corporation, PCS and the Company.
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<PAGE>
54. PCS Transaction Proceeds: The cash proceeds received by the Plan as a
------------------------
result of the PCS Transaction.
(al) Effective as of April 1, 1993, Section (a)(ii)(3)of Appendix A is
amended in its entirety to read as follows:
(c) Determination of Allocable Income. Income (and loss) allocable to any
---------------------------------
Excess Contributions for the Plan Year shall be determined in
accordance with the provisions for allocating income (and loss) to a
Participant's Accounts under Section IX,3 of the Plan.
(am) Effective as of April 1, 1993, Section (a)(iv) of Appendix A is
amended by deleting the phrase "(determined in accordance with Treasury
Regulations)" therefrom.
(an) Effective as of April 1, 1993, Section (b)(iv) of Appendix A is
amended by replacing the phrase "Treasury Regulations" with the phrase "Section
IX,3 of the Plan."
(ao) Effective as of April 1, 1994, Section 4 of Appendix D is amended in
its entirety to read as follows:
4. Compensation Limitation.
-----------------------
The amount of compensation taken into account under the Plan for each
Participant in any Plan Year in which the Plan is top-heavy shall not
exceed the dollar limitation under section 401(a)(17) of the Code, as
adjusted annually by the Secretary of the Treasury.
(ap) Effective as of the Effective Time, a new Appendix F is added to the
Plan as follows:
APPENDIX F
----------
SALE OF PCS
-----------
1. PCS Participant Vesting. Notwithstanding any provision of the Plan to
-----------------------
the contrary, the amount credited to the Account of a PCS Participant
shall be fully vested and nonforfeitable as of the Effective Time.
2. Dividend Replacement Allocation. The allocation under Section
-------------------------------
5.2(b)(i) of the Plan made to the Account of each PCS Participant
shall be made as
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<PAGE>
of the last day of the month in which the Effective Time occurs. Such
allocation shall be in an amount calculated pursuant to Section
5.2(b)(i) with respect to cash dividends on Company Stock previously
allocated to a PCS Participant's Additional ESOP Match Sub-Account and
used to pay principal or interest on an Exempt Loan in the Plan Year
in which the Effective Time occurs and prior to such Effective Time.
3. Payment for Shares. Notwithstanding any provision of the Plan to the
------------------
contrary, all shares of Company Stock held in the Account of a PCS
Participant as of the last day of the month in which the Effective
Time occurs shall be transferred to the Loan Suspense Account in
exchange for an amount of cash per share equal to the closing price
per share of Company Stock on the last trading day of the month in
which the Effective Time occurs.
4. Transfer of PCS Accounts to Parent DC Plan. The amount in the Account
------------------------------------------
of each PCS Participant, determined after the payment for shares
described in Section 2 above, shall be transferred as soon as
practicable thereafter, in accordance with 414(l) of the Code and the
regulations promulgated thereunder, to the Parent DC Plan (as defined
in the Merger Agreement).
(aq) Effective as of the Effective Time, a new Appendix G is added to the
Plan as follows:
APPENDIX G
----------
SPECIAL 1994 ALLOCATION
-----------------------
1. Payment of Exempt Loans. As soon as reasonably practicable following
-----------------------
the Effective Time, the Trustee shall apply a portion of the PCS
Transaction Proceeds attributable to the shares of Company Stock held
in the Loan Suspense Account, as determined by the Committee and
communicated in writing to the Trustee, to repay all or any portion of
any of the Exempt Loans referred to in Sections IV-A,1 and 6.3 of the
Plan in an amount sufficient to result in a $5,000 per capita
allocation pursuant to Section 2 below.
2. Allocation. Notwithstanding anything to the contrary in the Plan but
----------
subject to the provisions of Appendix A of the Plan, Financed Company
Stock and the PCS Transaction Proceeds released as a result of this
repayment shall be
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<PAGE>
allocated on a per capita basis to the Account of each Participant who
(a) is an Eligible Employee as of the Effective Time and (b) had
elected that a Basic Contribution be made to the Plan on his or her
behalf for the Plan Year commencing April 1, 1994.
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<PAGE>
To record the adoption of this Amendment No. 2 to the Plan, the Chief
Executive Officer of the Company, as authorized pursuant to Section XIII,1(b) of
the Plan, has executed this document on this ______ day of November, 1994.
MCKESSON CORPORATION
By _______________________________
Alan Seelenfreund
Chairman and Chief Executive Officer
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<PAGE>
AMENDMENT TO
------------
THE MCKESSON CORPORATION
------------------------
PROFIT-SHARING INVESTMENT PLAN
------------------------------
The McKesson Corporation Profit-Sharing Investment Plan (the "Plan"), shall
be, and hereby is, amended as described below.
Section VIII, paragraphs 4(b) and (c), are amended to read as follows:
(b) Lump Sum. Distribution shall occur in a lump sum and shall be
--------
made as soon as practicable after termination if the vested amount credited
to Participant's Account is $3,500 or less. If such amount is greater than
$3,500, distribution shall be made in a lump sum as soon as practicable
after termination if the Participant consents in writing to such
distribution. A Participant who declines to consent in writing to such
distribution at termination may, after termination but prior to the
Participant's attainment of age 65, elect in writing to receive a lump sum
distribution. If a Participant who makes such a post-termination
distribution election meets the criteria set forth in Section VII(d) for a
hardship withdrawal, distribution of the Participant's entire Account shall
be made as soon as practicable after the Participant's election. In all
other cases, except as provided in paragraph (c), the vested amount
credited to a Participant's Account shall be distributed to the Participant
in a lump sum as soon as practicable following the Participant's attainment
of age 65.
(c) Annuity. A Participant with a vested amount credited to his
-------
Account of more than $3,500 who has not consented to a lump sum
distribution may elect to have his vested Account balance used to purchase
a Qualified Joint and Survivor Annuity Contract which satisfies the
requirements of paragraph 5. Such election shall be made no less than 90
days and no more than 120 days before the date a deferred distribution
would otherwise be made under paragraph (b) above. Any such contract shall
provide for payments to the Participant beginning as soon as practicable
following attainment of age 65.
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<PAGE>
In accordance with Section XIII, paragraph 1(b) of the Plan, the Chief
Executive Officer of McKesson Corporation hereby adopts the above amendments to
the Plan.
October 22, 1992.
----------------
Date
/s/ Alan Seelenfreund
-----------------------
Alan Seelenfreund
Chief Executive Officer
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