<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1998
REGISTRATION NOS. 333- , 333- , 333- AND 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
<TABLE>
<S> <C> <C>
MCKESSON CORPORATION DELAWARE 94-3207296
MCKESSON FINANCING TRUST II DELAWARE TO BE APPLIED FOR
MCKESSON FINANCING TRUST III DELAWARE TO BE APPLIED FOR
MCKESSON FINANCING TRUST IV DELAWARE TO BE APPLIED FOR
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
MCKESSON PLAZA
ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
NANCY A. MILLER
VICE PRESIDENT AND CORPORATE SECRETARY
MCKESSON CORPORATION
MCKESSON PLAZA, ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
<TABLE>
<S> <C>
IVAN D. MEYERSON GREGG A. NOEL
VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER
MCKESSON CORPORATION & FLOM LLP
MCKESSON PLAZA, ONE POST STREET 300 SOUTH GRAND AVENUE, SUITE 3400
SAN FRANCISCO, CALIFORNIA 94104 LOS ANGELES, CALIFORNIA 90071
(415) 983-8300 (213) 687-5000
</TABLE>
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
(Continued on next page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 89(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER UNIT(3) OFFERING PRICE FEE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior debt securities, senior
subordinated debt securities,
subordinated debt securities and
junior subordinated debt
securities (collectively, "Debt
Securities") of McKesson
Corporation....................
Warrants of McKesson Corporation
to purchase Debt Securities....
Warrants of McKesson Corporation
to purchase Series Preferred
Stock or Depositary Shares.....
Warrants of McKesson Corporation
to purchase Common Stock.......
Series Preferred Stock of
McKesson Corporation...........
Depositary Shares of McKesson
Corporation....................
Common Stock of McKesson
Corporation....................
Rights to Purchase Junior Pre-
ferred Stock of McKesson Corpo-
ration(4)......................
Stock Purchase Contracts of Mc-
Kesson Corporation.............
Stock Purchase Units of McKesson
Corporation....................
Prepaid Stock Purchase Contracts
of McKesson Corporation........
Preferred Securities of McKesson
Financing Trust II.............
Preferred Securities of McKesson
Financing Trust III............
Preferred Securities of McKesson
Financing Trust IV.............
Guarantees of Preferred
Securities of McKesson Financing
Trust II, McKesson Financing
Trust III and McKesson Financing
Trust IV by McKesson
Corporation(5).................
$750,000,000 100% $750,000,000 $221,250.00
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Such indeterminate number or amount of Debt Securities, Warrants, Series
Preferred Stock, Depositary Shares, Common Stock, Stock Purchase Contracts
and Stock Purchase Units of McKesson Corporation and Preferred Securities
of McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV as may from time to time be issued at indeterminate
prices. Debt Securities may be issued and sold to McKesson Financing Trust
II, McKesson Financing Trust III and McKesson Financing Trust IV, in which
event such Debt Securities may later be distributed to the holders of
Preferred Securities.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign
currencies as shall result in an aggregate initial offering price for all
securities of $750,000,000. In addition, this Registration Statement
includes such presently indeterminate number of Offered Securities (as
defined herein) as may be issuable from time to time upon conversion or
exchange of the Offered Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and exclusive of accrued interest and dividends,
if any.
(4) Associated with the Common Stock of McKesson Corporation are rights to
purchase Series A Junior Participating Preferred Stock of McKesson
Corporation (the "Junior Preferred Stock") that will not be exercisable or
evidenced separately from the Common Stock prior to the occurrence of
certain events. No separate consideration will be received by the Company
for the initial issuance of the rights to purchase the Junior Preferred
Stock.
(5) McKesson is also registering under this registration statement all other
obligations that it may have with respect to Preferred Securities issued
by McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV. No separate consideration will be received for any
Guarantee or any other such obligations.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 24, 1998
PROSPECTUS
$750,000,000
MCKESSON CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
-----------
MCKESSON FINANCING TRUST II
MCKESSON FINANCING TRUST III
MCKESSON FINANCING TRUST IV
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
MCKESSON CORPORATION
-----------
McKesson Corporation ("McKesson" or the "Company") may offer and sell from
time to time (i) its unsecured senior debt securities ("Senior Debt
Securities"), unsecured senior subordinated debt securities ("Senior
Subordinated Debt Securities"), unsecured subordinated debt securities
("Subordinated Debt Securities") or unsecured junior subordinated debt
securities ("Junior Subordinated Debt Securities" and together with the Senior
Debt Securities, Senior Subordinated Debt Securities and the Subordinated Debt
Securities, the "Debt Securities"), consisting of debentures, notes or other
evidences of indebtedness, (ii) shares of its Series Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), which may be represented by depositary
shares as described herein, (iii) shares of its common stock, par value $0.01
per share (the "Common Stock"), (iv) warrants to purchase any of the foregoing
Debt Securities, Preferred Stock and Common Stock (the "Warrants"), (v) stock
purchase contracts ("Stock Purchase Contracts") to purchase Common Stock or
(vi) stock purchase units ("Stock Purchase Units"), each representing ownership
of a Stock Purchase Contract and any of (x) the Debt Securities, (y) debt
obligations of third parties, including U.S. Treasury Securities or
(z) Preferred Securities (as defined below) of a McKesson Trust (as defined
below), securing the holder's obligation to purchase Common Stock under the
Stock Purchase Contract. Such securities may be offered in one or more separate
classes or series, in amounts, at prices and on terms to be determined by
market conditions and other factors at the time of sale and to be set forth in
a supplement or supplements to this Prospectus (a "Prospectus Supplement").
Such securities may be sold for U.S. dollars, foreign denominated currency or
currency units; amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units--in each case as the Company specifically designates.
McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV (each, a "McKesson Trust"), each a statutory business trust
formed under the laws of the State of Delaware, may offer and sell, from time
to time, preferred securities, which may be convertible into other securities
of the Company, representing undivided beneficial interests in the assets of
the respective McKesson Trust ("Preferred Securities"). The payment of periodic
cash distributions ("Distributions") with respect to Preferred Securities of
each of the McKesson Trusts out of monies held by the Institutional Trustee (as
defined herein) of each of the McKesson Trusts and payments on liquidation of
each McKesson Trust and on redemption of Preferred Securities of such McKesson
Trust, will be guaranteed by the Company as and to the extent described herein
(each, a "Preferred Securities Guarantee"). See "Description of the Preferred
Securities Guarantees." The Company's obligation under each Preferred
Securities Guarantee is an unsecured obligation of the Company. The terms of
the subordination, if any, of a Preferred Securities Guarantee will be set
forth in the applicable Prospectus Supplement. Debt Securities may be issued
and sold from time to time in one or more series by the Company to a McKesson
Trust, or a trustee of such McKesson Trust, in connection with the investment
of the proceeds from the offering of Preferred Securities and Common Securities
(as defined herein) of such McKesson Trust. The Debt Securities purchased by a
McKesson Trust may be subsequently distributed pro rata to holders of Preferred
Securities and Common Securities in connection with the dissolution of such
McKesson Trust upon the occurrence of certain events as may be described in an
accompanying Prospectus Supplement.
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DESCRIPTION
OF CERTAIN RISKS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
OFFERED SECURITIES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is April , 1998.
<PAGE>
(Continued from previous page)
Specific terms of the particular Senior Debt Securities, Senior Subordinated
Debt Securities, Subordinated Debt Securities, Junior Subordinated Debt
Securities, Preferred Stock, Common Stock, rights to purchase Junior Preferred
Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units, Preferred
Securities and the related Preferred Securities Guarantee, in respect of which
this Prospectus is being delivered (the "Offered Securities") will be set
forth in an accompanying Prospectus Supplement or Supplements, together with
the terms of the offering of the Offered Securities, the initial price thereof
and the net proceeds from the sale thereof. The Prospectus Supplement will set
forth with regard to the particular Offered Securities, certain terms thereof,
including, where applicable, (i) in the case of Senior Debt Securities, Senior
Subordinated Debt Securities, Subordinated Debt Securities and Junior
Subordinated Debt Securities, the ranking as senior, senior subordinated,
subordinated or junior subordinated Debt Securities, the specific designation,
aggregate principal amount, purchase price, maturity, interest rate (which may
be fixed or variable), if any, the terms of any subordination to the other
debt of the Company, the time and method of calculating interest payments, if
any, the right of the Company, if any, to defer payments of interest on the
Senior Subordinated Debt Securities, Subordinated Debt Securities or Junior
Subordinated Debt Securities and the maximum length of such deferred period,
time of payment of interest, if any, listing, if any, on a securities
exchange, authorized denomination, any exchangeability, conversion,
redemption, prepayment or sinking fund provisions, the currency or currencies
or currency unit or units in which principal, premium, if any, or interest, if
any, is payable, public offering price and any other specific terms of the
Debt Securities; (ii) in the case of Preferred Stock, the specific
designation, number of shares, purchase price and the rights, preferences and
privileges thereof and any qualifications or restrictions thereon (including
dividends, liquidation value, voting rights, terms for the redemption,
conversion or exchange thereof and any other specific terms of the Preferred
Stock), listing, if any, on a securities exchange and whether the Company has
elected to offer the Preferred Stock in the form of depositary shares; (iii)
in the case of Common Stock, the number of shares offered, the initial
offering price, market price and dividend information; (iv) in the case of
Warrants, the specific designation, the number, purchase price and terms
thereof, any listing of the Warrants or the underlying securities on a
securities exchange or any other terms in connection with the offering, sale
and exercise of the Warrants, as well as the terms on which and the securities
for which such Warrants may be exercised; (v) in the case of Stock Purchase
Contracts, the designation and number of shares of Common Stock issuable
thereunder, the purchase price of the Common Stock, the date or dates on which
the Common Stock is required to be purchased by the holders of the Stock
Purchase Contracts, any periodic payments required to be made by the Company
to the holders of the Stock Purchase Contracts or vice versa, and the terms of
the offering and sale thereof; (vi) in the case of Stock Purchase Units, the
specific terms of the Stock Purchase Contracts and any Debt Securities or debt
obligations of third parties or Preferred Securities of a McKesson Trust
securing the holders' obligation to purchase the Common Stock under the Stock
Purchase Contracts, the ability of a holder of such Stock Purchase Units to
settle early the underlying Stock Purchase Contract by delivering cash in
exchange for the underlying collateral and, if applicable, whether the Company
will issue to such holder a Prepaid Stock Purchase Contract as a result of
such early settlement and the specific terms of the Prepaid Stock Purchase
Contract and the terms of the offering and sale of such Stock Purchase Units;
and (vii) in the case of Preferred Securities of a McKesson Trust, the
specific designation, number of securities, liquidation amount per security,
initial public offering price, and any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall
accrue, voting rights, if any, terms for any conversion or exchange into other
securities, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Subordinated Debt
Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
offering price to the public of the Offered Securities will be limited to
$750,000,000. Any Prospectus Supplement relating to any Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to the Offered Securities.
(continued on next page)
2
<PAGE>
(continued from previous page)
----------------
The Company and/or each McKesson Trust may sell the Offered Securities
directly, through agents designated from time to time or through underwriters
or dealers. See "Plan of Distribution" below. If any agents of the Company
and/or any McKesson Trust or any underwriters or dealers are involved in the
sale of the Offered Securities, the names of such agents, underwriters or
dealers and any applicable commissions and discounts will be set forth in the
related Prospectus Supplement. The managing underwriter or underwriters with
respect to each series sold to or through underwriters will be named in the
accompanying Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the Commission's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549, or at the public reference facilities of the
regional offices in Chicago and New York. The addresses of these regional
offices are as follows: 500 West Madison Street, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material also can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington D.C. 20549, upon payment of
the fees prescribed by the rules and regulations of the Commission. Reports,
proxy statements, and other information concerning the Company may also be
inspected at the offices of the New York Stock Exchange, Inc. at 20 Broad
Street, New York, New York 10005 and at the offices of the Pacific Exchange at
301 Pine Street, San Francisco, California 94104 and 233 South Beaudry Avenue,
Los Angeles, California 90012. The Company's Common Stock is listed on both
exchanges. Such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov.
The Company and the McKesson Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference." Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, are qualified in
all respects by reference to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is subject to and qualified in its entirety by such reference. For
further information with respect to the Company, the McKesson Trusts and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and the documents incorporated herein by
reference.
No separate financial statements of any of the McKesson Trusts have been
included or incorporated by reference herein. The Company and the McKesson
Trusts do not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities
of each McKesson Trust will be owned, directly or indirectly, by the Company,
a reporting company under the 1934 Act, (ii) each of the McKesson Trusts is a
special purpose entity, has no operating history, has no independent
operations and is not engaged in, and does not propose to engage in, any
activity other than issuing Trust Securities (as defined herein) representing
undivided beneficial interests in the assets of such McKesson Trust and
investing the proceeds thereof in Debt Securities issued by the Company and
(iii) McKesson's obligations described herein and in any accompanying
Prospectus Supplement under the Declaration (as defined herein) of a McKesson
Trust, the Preferred Securities Guarantee with respect to the Preferred
Securities issued by such McKesson Trust, the Debt Securities purchased by
such McKesson Trust and the Indenture (as defined herein), taken together,
constitute a full and unconditional guarantee of payments due on the Preferred
Securities of such McKesson Trust. See "The McKesson Trusts," "Description of
the Preferred Securities," "Description of the Preferred Securities
Guarantees" and "Description of the Debt Securities." The McKesson Trusts are
statutory business trusts formed under the laws of the State of Delaware. The
Company, as of the date of this Prospectus, owns all of the beneficial
interests in each McKesson Trust. Each holder of Preferred Securities of a
McKesson Trust will be furnished annually with unaudited financial statements
of such McKesson Trust as soon as available after the end of the McKesson
Trust's fiscal year.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously filed by the Company with the Commission pursuant to the
1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1997,
filed on June 19, 1997.
2. Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997,
filed on August 13, 1997, September 30, 1997, filed on November 7, 1997 and
December 31, 1997, filed on February 11, 1998.
3. Current Reports on Form 8-K dated November 22, 1996 (as amended by
Amendment No. 1 on Form 8-K/A, filed on January 21, 1997, as further
amended by Amendment No. 2 on Form 8-K/A filed on April 28, 1997), April 7,
1997, June 13, 1997, June 24, 1997, September 5, 1997, September 24, 1997,
October 31, 1997, February 24, 1998 and March 19, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such documents shall be directed to
Nancy A. Miller, Vice President and Corporate Secretary, McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, (telephone
(415) 983-8300).
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY MCKESSON TRUST OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY OR ANY MCKESSON TRUST SINCE
THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.............. 4
Incorporation of Certain Documents
by Reference...................... 5
The Company........................ 6
Risk Factors....................... 7
The McKesson Trusts................ 8
Use of Proceeds.................... 10
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Stock
Dividends......................... 10
Description of Debt Securities..... 10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Capital Stock....... 18
Description of Depositary Shares... 22
Description of Warrants............ 25
Description of Preferred
Securities........................ 27
Description of Preferred Securities
Guarantee......................... 28
Description of Stock Purchase
Contracts and Stock Purchase
Units............................. 31
Plan of Distribution............... 32
Legal Matters...................... 33
Experts............................ 33
</TABLE>
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
5
<PAGE>
THE COMPANY
McKesson is the leading health care supply management company in North
America. The Company also develops and manages innovative marketing programs
for pharmaceutical manufacturers and, through McKesson Water Products Company
("Water Products"), processes and markets pure drinking water.
The Company's objective is to become the world leader in health care supply
and comprehensive pharmaceutical management across the entire supply chain,
from manufacturer to patient. The Company conducts its operations through two
operating business segments: the Health Care Services segment and Water
Products segment.
The principal executive offices of the Company are located at McKesson
Plaza, One Post Street, San Francisco, California 94104, and the telephone
number is (415) 983-8300.
6
<PAGE>
RISK FACTORS
RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS
An element of the Company's growth strategy is to pursue strategic
acquisitions that either expand or complement its business, and McKesson
routinely reviews such potential acquisition opportunities. Acquisitions
involve a number of special risks, including the diversion of management's
attention to the assimilation of the operations from other business concerns,
difficulties in the integration of operations and systems, delays or
difficulties in opening and operating larger distribution centers in an
integrated distribution network, the assimilation and retention of the
personnel of the acquired companies, challenges in retaining the customers of
the combined businesses and potential adverse short-term effects on operating
results. In addition, the Company may require additional debt or equity
financing for future acquisitions, which may not be available on terms
favorable to the Company, if at all. The inability of the Company to
successfully finance, complete and integrate strategic acquisitions in a
timely manner could have an adverse impact on the Company's results of
operations and its ability to effect a portion of its growth strategy.
CHANGING UNITED STATES HEALTH CARE ENVIRONMENT
In recent years, the health care industry has undergone significant change
driven by various efforts to reduce costs, including potential national health
care reform, trends toward managed care, cuts in Medicare, consolidation of
pharmaceutical and medical/surgical supply distributors and the development of
large, sophisticated purchasing groups. This industry is expected to continue
to undergo significant changes for the foreseeable future. Changes in
governmental support of health care services, the method by which such
services are delivered or the prices for such services, or other legislation
or regulations governing such services or mandated benefits, or changes in
pharmaceutical manufacturers' pricing or distribution policies, may have a
material adverse effect on the Company's results of operations.
COMPUTER TECHNOLOGIES
McKesson relies heavily on computer technologies to operate its business.
McKesson has conducted an assessment of its computer systems and has begun to
make the changes necessary to make its computer systems Year 2000 compliant.
McKesson believes that with modifications to or replacements of its existing
computer-based systems, it will be Year 2000 compliant by March 31, 1999,
although the Company cannot provide any assurance in this regard. McKesson's
systems rely in part on the computer-based systems of its trading partners. As
part of the Company's assessment, an overview of certain of its trading
partners' Year 2000 compliance strategies is being performed and the Company
plans to conduct extensive systems testing with such trading partners during
calendar 1999. Nevertheless, if any trading partner or other entity upon which
they rely failed to become Year 2000 compliant, McKesson could be adversely
affected. The Company incurred approximately $7 million in fiscal 1998 and
expects to incur between $10 and $15 million in each of the next two fiscal
years in costs associated with modifications to the Company's existing systems
to make them Year 2000 compliant and related testing, including planned
testing with trading partners. Such costs are being expensed as incurred. Year
2000 project costs are difficult to estimate accurately and the projected cost
could change due to unanticipated technological difficulties, project vendor
delays and project vendor cost overruns.
7
<PAGE>
THE MCKESSON TRUSTS
Each of McKesson Financing Trust II, McKesson Financing Trust III and
McKesson Financing Trust IV is a statutory business trust formed in April 1998
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to
(i) separate declarations ( each a "Declaration") of trust executed by the
Company, as sponsor and the Trustees (as defined below) of such McKesson Trust
and (ii) the filing of a certificate of trust with the Secretary of State of
the State of Delaware. Each Declaration will be substantially in the form
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. Each Declaration is qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Upon issuance of any Preferred
Securities by a McKesson Trust, the holders thereof will own all of the issued
and outstanding Preferred Securities of such McKesson Trust. The Company will
acquire securities representing common undivided beneficial interests in the
assets of each McKesson Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities") in an amount equal to at least
3% of the total capital of such McKesson Trust and will own, directly or
indirectly, all of the issued and outstanding Common Securities of each
McKesson Trust. The Preferred Securities and the Common Securities of a
McKesson Trust will rank pari passu with each other and will have equivalent
terms; provided that (i) if a Declaration Event of Default (as defined below)
under the Declaration of a McKesson Trust occurs and is continuing, the
holders of Preferred Securities of such McKesson Trust will have a priority
over holders of the Common Securities of such McKesson Trust with respect to
payments in respect of distributions and payments upon liquidation, redemption
and maturity and (ii) holders of Common Securities of such McKesson Trust have
the exclusive right (subject to the terms of the Declaration) to appoint,
remove or replace the Trustees and to increase or decrease the number of
Trustees, subject to the right of holders of Preferred Securities to appoint
one additional Regular Trustee (as defined below) of such McKesson Trust (a
"Special Regular Trustee") in certain limited circumstances set forth in the
Prospectus Supplement. Each McKesson Trust exists for the purpose of (a)
issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the gross proceeds from the sale of the Trust
Securities in Debt Securities of the Company and (d) engaging in such other
activities as are necessary, convenient or incidental thereto. The rights of
the holders of the Trust Securities, including economic rights, rights to
information and voting rights, are set forth in the applicable Declaration,
the Business Trust Act and the Trust Indenture Act.
The number of trustees (the "MFT Trustees") of each McKesson Trust shall
initially be five. Three of such MFT Trustees (the "Regular Trustees") are
persons who are employees or officers of or who are affiliated with the
Company. The fourth trustee will be an entity that maintains its principal
place of business in the State of Delaware (the "Delaware Trustee"). The fifth
Trustee will be a financial institution that is unaffiliated with McKesson and
will serve as institutional trustee (the "Institutional Trustee") under the
Declaration and will act as indenture trustee under the Declaration for the
purposes of compliance with the provisions of the Trust Indenture Act.
The Institutional Trustee will, for the applicable McKesson Trust, hold
title to the Debt Securities for the benefit of the holders of the Trust
Securities and the Institutional Trustee will have the power to exercise all
rights, powers and privileges under the Indenture as the holder of the Debt
Securities. In addition, the Institutional Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Debt Securities of a
McKesson Trust for the benefit of the holders of the Trust Securities of that
Trust. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Preferred Securities
Guarantee Trustee (as defined below) will hold the Preferred Securities
Guarantee for the benefit of the holders of the Preferred Securities. The
Company, as the direct or indirect holder of all of the Common Securities,
will have the right to appoint, remove or replace any of the Trustees and to
increase or decrease the number of Trustees. The Company will pay all fees and
expenses related to each McKesson Trust and the offering of the Trust
Securities.
The Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities, except that upon the
occurrence and continuance of an event of default under the
8
<PAGE>
Declaration resulting from an Event of Default under the Indenture, the rights
of the holders of the Common Securities to payment in respect of distributions
and payments upon liquidation, redemption or otherwise will be subordinated to
the rights of holders of the Preferred Securities. See "Description of the
Preferred Securities."
The books and records of each McKesson Trust will be maintained at the
principal office of such McKesson Trust and will be open for inspection by a
holder of Preferred Securities of such McKesson Trust or its representative
for any purpose reasonably related to its interest in such McKesson Trust
during normal business hours. Each holder of Preferred Securities will be
furnished annually with unaudited financial statements of the applicable
McKesson Trust as soon as available after the end of such McKesson Trust's
fiscal year. The business address of each McKesson Trust is c/o McKesson
Corporation, McKesson Plaza, One Post Street, San Francisco, California 94104,
telephone number (415) 983-8300.
The foregoing description summarizes the material terms of the Declaration
and is qualified in its entirely by reference to the form of Declaration which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
9
<PAGE>
USE OF PROCEEDS
Each McKesson Trust will use all proceeds received from the sale of its
Trust Securities to purchase Debt Securities of the Company. Unless otherwise
set forth in a Prospectus Supplement with respect to the proceeds from the
sale of the particular Offered Securities to which such Prospectus Supplement
relates, the net proceeds from the sale of the Offered Securities are expected
to be used by the Company for general corporate purposes, including repayment
or redemption of outstanding debt or preferred stock, the possible acquisition
of related businesses or assets thereof, and working capital needs. The
Company routinely reviews opportunities to acquire related businesses or
assets thereof.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
DECEMBER 31, FISCAL YEAR ENDED MARCH 31,
------------- -------------------------------
1997 1996(3) 1997 1996 1995(3) 1994 1993
----- ------- ----- ----- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(1)................... 3.00x -- 1.53x 4.71x -- 3.42x 2.97x
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends(2)........... 3.00x -- 1.53x 4.71x -- 2.81x 2.50x
</TABLE>
- --------
(1) The ratio of earnings to fixed charges was computed by dividing fixed
charges (interest expense including the interest portion of capital and
operating leases and dividends on preferred securities of a subsidiary
grantor trust) into earnings available for fixed charges (income from
continuing operations plus income taxes and fixed charges).
(2) The ratio of earnings to combined fixed charges and preferred stock
dividends was computed by dividing fixed charges and preferred stock
dividends into earnings available for fixed charges.
(3) The ratios of earnings to fixed charges and ratios of earnings to combined
fixed charges and preferred stock dividends were less than 1.0x, 0.43x and
(0.01x), in the nine months ended December 31, 1996 and fiscal 1995,
respectively. The deficiencies in the ratios of earnings to fixed charges
amounted to $23.2 million and $53.5 million, and the deficiencies in the
ratios of earnings to fixed charges and preferred stock dividends amounted
to $23.2 million and $58.5 million, in the respective periods.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the applicable Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will consist of either Senior Debt Securities, Senior Subordinated Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt
Securities under an Indenture, (the "Indenture") between the Company and a
trustee (including any successor trustee and each person which is a trustee
under the Indenture including, with respect to the Debt Securities of any
series, the trustee with respect to the Debt Securities of such series, the
"Trustee"). The Indenture will be in the form that has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part,
subject to such amendments or supplements as are adopted from time to time.
The Indenture will be subject to and governed by certain provisions of the
Trust Indenture Act. Prospective purchasers of the Debt Securities are
10
<PAGE>
referred to the Indenture and the Trust Indenture Act for a statement of such
provisions. Capitalized terms used in this section which are not otherwise
defined in this Prospectus shall have the meanings set forth in the Indenture.
The following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by express reference to, all the provisions of the
Indenture, including the definitions therein of certain terms.
The Debt Securities will be direct, unsecured obligations of the Company.
The Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and provides that Debt Securities may be issued
thereunder from time to time in one or more series. Under the Indenture, the
Company will have the ability to issue Debt Securities with terms different
from those of Debt Securities previously issued, without the consent of the
holders of previously issued series of Debt Securities, in an aggregate
principal amount determined from time to time by the Company.
The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities, Subordinated Debt Securities or
Junior Subordinated Debt Securities will set forth the aggregate amount of
outstanding indebtedness, as of the most recent practicable date, that by the
terms of such Debt Securities would be senior to such Debt Securities and any
limitation on the issuance of additional senior indebtedness.
Debt Securities may be issued as discount securities, which may be sold at a
discount below their principal amount. These Debt Securities as well as other
Debt Securities that are not issued at a discount below their principal
amount, may, for United States federal income tax purposes, be deemed to have
been issued with "original issue discount" ("OID") because of, among other
things, certain interest payment characteristics. Special United States
federal income tax considerations applicable to Debt Securities issued with
original issue discount, including discount securities, will be described in
more detail in any applicable Prospectus Supplement. In addition, special
United States federal income tax considerations or other restrictions or terms
applicable to any Debt Securities which are issuable in bearer form, offered
exclusively to United States Aliens, denominated in a currency other than
United States dollars or having certain other characteristics will be set
forth in the Prospectus Supplement relating thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities
offered thereby (the "Offered Debt Securities"): (i) the title of the Offered
Debt Securities; (ii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iii) whether the Offered Debt Securities are to be
issuable as registered securities or bearer securities or both and whether the
Offered Debt Securities may be represented initially by a Debt Security in
temporary or permanent global form, and if so, the initial Depositary (as
defined herein) with respect to such temporary or permanent global Debt
Security and whether, and the circumstances under which, beneficial owners of
interests in any such temporary or permanent global Debt Security may exchange
such interests for Debt Securities of such series and of like tenor of any
authorized form and denomination; (iv) the price or prices at which the
Offered Debt Securities will be issued; (v) the date or dates on which the
principal of the Offered Debt Securities is payable or the method of
determination thereof; (vi) the place or places where and the manner in which
the principal of and premium, if any, and interest, if any, on such Offered
Debt Securities will be payable and the place or places where such Offered
Debt Securities may be presented for transfer and, if applicable, conversion
or exchange; (vii) the rate or rates at which the Offered Debt Securities will
bear interest, or the method of calculating such rate or rates, if any, and
the date or dates from which such interest, if any, will accrue; (viii) the
stated maturities of installments of interest (the "Interest Payment Dates"),
if any, on which any interest on the Offered Debt Securities will be payable,
and the Regular Record Date for any interest payable on any Offered Debt
Securities which are registered securities; (ix) the terms, if any, on which
the Offered Debt securities of any series will be subordinated to other debt
of the Company; (x) the right or obligation, if any, of the Company to redeem
or purchase Offered Debt Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a holder thereof, the conditions,
if any, giving rise to such right or obligation, and the period or periods
within which, and the price or prices at which and the terms and conditions
upon which Offered Debt Securities of the series shall be redeemed or
purchased, in whole or part, and any provisions for the remarketing of such
11
<PAGE>
Offered Debt Securities; (xi) whether such Offered Debt Securities are
convertible or exchangeable into other debt or equity securities, and, if so,
the terms and conditions upon which such conversion or exchange will be
effected, including the initial conversion or exchange price or rate and any
adjustments thereto, the conversion or exchange period and other conversion or
exchange provisions; (xii) the currency or currencies, including composite
currencies or currency units, of payment of principal of and interest, if any,
on the Offered Debt Securities, if other than U.S. dollars, and, if other than
U.S. dollars, whether the Offered Debt Securities may be satisfied and
discharged other than as provided in the Indenture and whether the Company or
the holders of any such Offered Debt Securities may elect to receive payments
in respect of such Offered Debt Securities in a currency or currency units
other than that in which such Offered Debt Securities are stated to be
payable; (xiii) any terms applicable to such Offered Debt Securities issued at
an issue price below their stated principal amount, including the issue price
thereof and the rate or rates at which such original issue discount will
accrue; (xiv) if the amount of payments of principal of and interest, if any,
on the Offered Debt Securities is to be determined by reference to an index or
formula, or based on a coin or currency or currency unit other than that in
which the Offered Debt Securities are stated to be payable, the manner in
which such amounts are to be determined and the calculation agent, if any,
with respect thereto; (xv) if other than the principal amount thereof, the
portion of the principal amount of the Offered Debt Securities which will be
payable upon declaration or acceleration of the maturity thereof pursuant to
an Event of Default; (xvi) any deletions from, modifications of or additions
to the Events of Default or covenants of the Company with respect to such
Offered Debt Securities, whether or not such Events of Default or covenants
are consistent with the Events of Default or covenants set forth herein;
(xvii) any special United States Federal income tax considerations applicable
to the Offered Debt Securities; and (xviii) any other terms of the Offered
Debt Securities not inconsistent with the provisions of the Indenture. The
applicable Prospectus Supplement will also describe the following terms of any
series of Senior Subordinated, Subordinated or Junior Subordinated Debt
Securities offered hereby in respect of which this Prospectus is being
delivered: (a) the rights, if any, to defer payments of interest on the Senior
Subordinated, Subordinated or Junior Subordinated Debt Securities of such
series by extending the interest payment period, and the duration of such
extensions, and (b) the subordination terms of the Senior Subordinated,
Subordinated or Junior Subordinated Debt Securities of such series. The
foregoing is not intended to be an exclusive list of the terms that may be
applicable to any Offered Debt Securities and shall not limit in any respect
the ability of the Company to issue Debt Securities with terms different from
or in addition to those described above or elsewhere in this Prospectus
provided that such terms are not inconsistent with the Indenture. Any such
Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt Securities.
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Depositary") or with a nominee
for a Depositary identified in the Prospectus Supplement relating to such
series and registered in the name of the Depositary or a nominee thereof. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole for Debt Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of
such Depositary or by such Depositary or any such nominee to a successor of
such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold
12
<PAGE>
interests through participants. Upon the issuance of a Registered Global
Security, the Depositary for such Registered Global Security will credit, on
its book-entry registration and transfer system, the participants' accounts
with the respective principal amounts of the Debt Securities represented by
such Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Registered Global Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Debt Securities represented by such Registered Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the
procedures of the Depositary for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the Indenture. The Company understands that under existing industry practices,
if the Company requests any action of holders or if an owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
for such Registered Global Security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owners of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payments of principal and
premium, if any, and interest, if any, in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with the securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such participants.
If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the 1934 Act, and a successor
Depositary registered as a clearing agency under the 1934 Act is not appointed
by the Company within 90 days, the Company will issue such Debt Securities in
definitive form in exchange for such Registered Global Security. In addition,
the Company may at any time and in its sole discretion determine not to have
any of the Debt Securities of a series represented by one or more Registered
Global Securities and, in such event, will issue Debt Securities of such
series in a definitive form in exchange for all of the Registered Global
Security
13
<PAGE>
or Securities representing such Debt Securities. Any Debt Securities issued in
definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one or
more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euroclear System and Cedel Bank, societe anonyme,
or with a nominee for such depositary identified in the Prospectus Supplement
relating to such series. The specific terms and procedures, including the
specific terms of the depositary arrangement and any specific procedures for
the issuance of Debt Securities in definitive form in exchange for a Bearer
Global Security, with respect to any portion of a series of Debt Securities to
be represented by a Bearer Global Security will be described in the Prospectus
Supplement relating to such series.
SENIOR DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior Debt
Securities issued under the Indenture will rank pari passu with all other
unsecured and unsubordinated debt of the Company.
SENIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior
Subordinated Debt Securities issued under the Indenture will be junior in
right of payment to the extent and in the manner set forth in the resolutions
of the Board of Directors of the Company ("Board Resolutions") or certificate
executed by an authorized officer of the Company ("Officer's Certificate")
establishing such series of Senior Subordinated Debt Securities to all
unsubordinated debt of the Company, including Senior Debt Securities.
SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Subordinated
Debt Securities issued under the Indenture will be subordinate and junior in
right of payment to the extent and in the manner set forth in the Board
Resolutions or the Officer's Certificate establishing such series of
Subordinated Debt Securities to all Senior Debt and Senior Subordinated Debt
of the Company.
JUNIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Junior
Subordinated Debt Securities issued under the Indenture will be subordinate
and junior in right of payment, to the extent and in the manner set forth in
the Board Resolutions or the Officer's Certificate establishing such series of
Junior Subordinated Debt Securities to all Senior Debt Securities, Senior
Subordinated Debt Securities, Subordinated Debt Securities and may be
subordinate and junior in right of payment to all other debt of the Company.
CONVERSION OR EXCHANGE RIGHTS
The terms and conditions, if any, on which Offered Debt Securities are
convertible at the election of the holder of such Offered Debt Securities or
may be exchanged at the election of the Company into Common Stock, Preferred
Stock or any other security of the Company will be set forth in the Prospectus
Supplement relating thereto. Such terms will include the conversion price, the
conversion or exchange period, provisions as to whether conversion will be at
the option of the holder or exchangeable at the option of the Company, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversion or exchange in the event of the redemption of
such Offered Debt Securities; and such terms may include provisions under
which the number of shares of Common Stock to be received by the holders of
the Offered Debt Securities would be calculated according to the market price
of the Common Stock as of a time stated in the Prospectus Supplement.
SUCCESSOR CORPORATION
The Indenture provides that the Company shall not consolidate or merge with
or into, or transfer or lease its assets substantially as an entirety to any
person unless the Company shall be the continuing corporation, or the
14
<PAGE>
successor corporation or person to which such assets are transferred or leased
shall be a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume the
Company's obligations on the Debt Securities and under the Indenture, and
immediately after giving effect to such transaction no Event of Default (as
defined in the Indenture) shall have occurred and be continuing, and certain
other conditions are met. Upon assumption of the Company's obligations by a
person to whom such assets are transferred or leased, subject to certain
exceptions, the Company shall be discharged from all obligations under the
Debt Securities and the Indenture.
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transaction or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety.
EVENTS OF DEFAULT
An Event of Default is defined under the Indenture with respect to Debt
Securities of each series as being: (a) default in payment of all or any part
of the principal of, or premium, if any, on any Debt Securities of such series
when due, either at maturity, upon any redemption, by declaration or
otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due by the terms of the Debt Securities of such series; (d)
default for 60 days after written notice as provided in the Indenture in the
observance or performance of any other covenant or agreement in the Debt
Securities of such series or in the Indenture, other than a covenant included
in the Indenture solely for the benefit of a series of Debt Securities other
than such series; or (e) certain events of bankruptcy, insolvency or
reorganization.
The Indenture provides that (a) if an Event of Default due to the default in
payment of principal, premium, if any, or interest on any series of Debt
Securities, or due to the default in the performance or breach of any other
covenant or agreement of the Company applicable to the Debt Securities of such
series but not applicable to all outstanding Debt Securities, shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities of such series may declare the
principal of all Debt Securities of such series and interest accrued thereon
to be due and payable immediately and (b) if an Event of Default due to a
default in the performance of any other of the covenants or agreements in the
Indenture applicable to all Debt Securities then outstanding or due to certain
events of bankruptcy, insolvency and reorganization of the Company shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities then outstanding (treated as
one class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal, premium, if any, or interest on
such Debt Securities) by the holders of a majority in principal amount of the
Debt Securities of such series (or of all series, as the case may be) then
outstanding.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee to act with the required standard of care, to be
indemnified by the holders of Debt Securities requesting the Trustee to
exercise any right or power under the Indenture before proceeding to exercise
any such right or power at the request of such holders.
The Indenture provides that no holder of Debt Securities of any series may
institute any action against the Company under the Indenture (except actions
for payment of overdue principal, premium, if any, or interest) unless such
holder previously shall have given to the Trustee written notice of default
and continuance thereof and unless the holders of not less than 25% in
principal amount of the Debt Securities of such series then outstanding shall
have requested such Trustee to institute such action and shall have offered
the Trustee reasonable indemnity, such Trustee shall not have instituted such
action within 60 days of such request and such Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the Debt Securities of such series then outstanding.
15
<PAGE>
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any
default that exists.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or decrease its obligations under the Indenture as
set forth below.
Under terms satisfactory to the applicable Trustee, the Company may
discharge certain obligations to holders of any series of Debt Securities
which have not already been delivered to the Trustee for cancellation and
which have either become due and payable or are by their terms due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the Trustee cash or U.S. Government Obligations (as defined in
the Indenture), as trust funds in an amount certified to be sufficient to pay
when due, whether at maturity, upon redemption or otherwise, the principal of,
premium, if any, and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders of
any series of Debt Securities at any time ("defeasance"), but may not thereby
avoid its duty to register the transfer or exchange of such series of Debt
Securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of Debt Securities or to maintain an office or agency in respect of
such series of Debt Securities. Under terms satisfactory to the Trustee, the
Company may instead be released with respect to any outstanding series of Debt
Securities from the obligations imposed by any covenants imposed by a series
of Debt Securities, certain provisions of the Indenture and omit to comply
with such covenants without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or
U.S. Government Obligations, as trust funds in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal, premium, if
any, and interest on all outstanding Debt Securities of such series and (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States Federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities. In the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States Federal
income tax law occurring after the date of the Indenture, since such a result
would not occur under current tax law.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in the Indenture, (e) establish the forms or terms
of Debt Securities of any series and (f) evidence the acceptance of
appointment by a successor trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series then outstanding
and affected (voting as one class), to add any provisions to, or change in any
manner, eliminate or waive any of the provisions of, the Indenture or modify
in any manner the rights of the holders of the Debt Securities of each series
so affected; provided that the Company and the Trustee may not, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
extend the final maturity of any Debt Security, or reduce the principal amount
thereof or premium thereon, if any, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption
thereof or change the currency in which the principal thereof, premium, if
any, or interest thereon is payable or reduce the amount of the principal of
any Debt Security issued with original issue discount that is payable upon
acceleration or provable in bankruptcy or alter certain provisions of the
Indenture relating to the Debt Securities not denominated in U.S. dollars or
impair the right to institute suit for the enforcement of any payment on any
Debt Security when due or (b) reduce the aforesaid
16
<PAGE>
percentage in principal amount of Debt Securities of any series, the consent
of the holders of which is required for any such modification.
CONCERNING THE TRUSTEE
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. If there are
different Trustees for different series of Debt Securities, each Trustee shall
be a Trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee thereunder, and except as otherwise indicate
herein or a Prospectus Supplement, any action described herein taken by a
Trustee may be taken by such Trustee only with respect to the one or more
series of Debt Securities for which it is the Trustee under the Indenture. Any
Trustee under the Indenture may resign or be removed with respect to one or
more series of Debt Securities. All payments of principal of, premium, if any,
and interest on and all registration, transfer, exchange, authentication and
delivery (including authentication and delivery on original issuance of the
Debt Securities) of, the Debt Securities will be effected by the Trustee at an
office designated by the Trustee in New York, New York.
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict or resign.
In case of any conflicting interest relating to any Trustee's duties with
respect to the Debt Securities, such Trustee shall either eliminate such
conflicting interest or, except as otherwise provided in the Trust Indenture
Act, resign.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee with respect to such series of Debt Securities, provided that such
direction would not conflict with any rule of law or with the Indenture, would
not be unduly prejudicial to the rights of another holder of the Debt
Securities, and would not involve any Trustee in personal liability. The
Indenture provides that in case an Event of Default shall occur and be known
to any Trustee (and not be cured), such Trustee will be required to use the
degree of care of a prudent man in the conduct of his own affairs in the
exercise of its power. Subject to such provisions, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request of any of the holders of the Debt Securities, unless they shall
have offered to the Trustee security and indemnity satisfactory to it.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indenture will provide that no past, present or future director,
officer, employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Debt Securities or the Indenture or for any claim based on, in respect or,
or by reason of such obligations or their creation, by reason of such person's
or entity's status as such director, officer, stockholder or incorporator.
GOVERNING LAW
The Debt Securities will be governed by, and construed in accordance with,
the laws of the State of New York.
17
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following descriptions of the Company's capital stock and of certain
provisions of Delaware law do not purport to be complete and are subject to
and qualified in their entirety by reference to the Company's Restated
Certificate of Incorporation (the "Certificate") and Restated By-Laws (the
"By-Laws") and Delaware law, and, with respect to certain rights of holders of
shares of Common Stock, the Rights Agreement (as hereinafter defined). Copies
of such documents have been filed with the Commission and are filed as
exhibits to the Registration Statement of which this Prospectus is a part.
As of the date hereof, the capital stock of the Company consists of
200,000,000 authorized shares of Common Stock and 100,000,000 authorized
shares of Preferred Stock.
COMMON STOCK
As of April 20, 1998, there were 93,371,499 shares of Common Stock issued
and outstanding.
The holders of outstanding shares of Common Stock are entitled to receive
dividends out of assets legally available therefor at such times and in such
amounts as the Company's Board of Directors (the "Board") may from time to
time determine. The shares of Common Stock are neither redeemable nor
convertible, and the holders thereof have no preemptive or subscription rights
to purchase any securities of the Company. Upon liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to receive
the assets of the Company which are legally available for distribution, after
payment of all debts, other liabilities and any liquidation preferences of
outstanding Preferred Stock. Each outstanding share of Common Stock is
entitled to one vote on all matters submitted to a vote of stockholders. There
is no cumulative voting.
In February 1997, McKesson Financing Trust issued an aggregate of 4,123,720
5% Trust Securities (each, a "Trust Security"). Each Trust Security is
convertible into Common Stock at any time prior to the close of business on
the business day prior to June 1, 2027 (or prior to the date of redemption of
the Trust Security), at the option of the holder, at the rate of 1.3418 shares
of Common Stock for each Trust Security (equivalent to a conversion price of
$37.26 per share of Common Stock), subject to adjustment in certain
circumstances.
PREFERRED STOCK
As of the date hereof, there were no shares of Preferred Stock issued and
outstanding. The Board is authorized to issue the Preferred Stock in classes
or series and to fix the designations, preferences, qualifications,
limitations, or restrictions of any class or series with respect to the rate
and nature of dividends, the price and terms and conditions on which shares
may be redeemed, the amount payable in the event of voluntary or involuntary
liquidation, the terms and conditions for conversion or exchange into any
other class or series of the stock, voting rights and other terms.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND BY-LAWS
The Certificate and By-Laws of the Company contain certain provisions that
may be deemed to have an anti-takeover effect and may delay, deter or prevent
a tender offer or takeover attempt that a stockholder might consider in its
best interest, including those attempts that might result in a premium over
the market price for the shares held by stockholders.
Pursuant to the Certificate, the Board is divided into three classes serving
staggered three-year terms. Directors can be removed from office only for
cause and only by the affirmative vote of the holders of at least a majority
of the voting power of the then outstanding shares of any class or series of
capital stock of the Company entitled to vote generally in the election of
directors. Vacancies and newly created directorships on the Board may be
filled only by a majority of the remaining directors or by the plurality vote
of the stockholders.
18
<PAGE>
The Certificate also provides that any action required or permitted to be
taken by the holders of Common Stock may be effected only at an annual or
special meeting of such holders, and that stockholders may act in lieu of such
meetings only by unanimous written consent. The By-Laws provide that special
meetings of holders of Common Stock may be called only by the Chairman or the
President of the Company or the Board. Holders of Common Stock are not
permitted to call a special meeting or to require that the Board call a
special meeting of stockholders.
The By-Laws establish an advance notice procedure for the nomination, other
than by or at the direction of the Board, of candidates for election as
directors as well as for other stockholder proposals to be considered at
annual meetings of stockholders. In general, notice of intent to nominate a
director or raise business at such meetings must be received by the Company
not less than 60 nor more than 90 days prior to the date of the annual meeting
and must contain certain specified information concerning the person to be
nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal.
The Certificate also provides that certain provisions of the By-Laws may
only be amended by the affirmative vote of the holders of 75% of the shares of
the Company outstanding and entitled to vote. The Certificate also provides
that, in addition to any affirmative vote required by law, the affirmative
vote of holders of 80% of the voting stock of the Company and two-thirds of
the voting stock other than voting stock held by an interested stockholder
shall be necessary to approve certain business combinations proposed by an
interested stockholder.
The foregoing summary is qualified in its entirety by the provisions of the
Certificate and By-Laws, copies of which have been filed with the Commission.
RIGHTS PLAN
Pursuant to the Company's Rights Agreement, the Board declared a dividend
distribution of one right (a "Right") for each outstanding share of Common
Stock to stockholders of record of the Company at November 1, 1994 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share of Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock") at a purchase
price of $100 per unit. The terms of the Rights are set forth in a Rights
Agreement between the Company and a Rights Agent (the "Rights Agreement"), a
copy of which is filed with the Commission. The following summary outlines
certain provisions of the Rights Agreement and is qualified by reference to
the full text of the form of the Rights Agreement.
The Rights are attached to all Common Stock certificates representing shares
outstanding at the Record Date and shares issued between the Record Date and
the Distribution Date (as hereinafter defined), and no separate rights
certificates (the "Rights Certificates") have been distributed. The Rights
will separate from the Common Stock, separate Rights Certificates will be
issued and a distribution date (the "Distribution Date") will occur upon the
earlier to occur of (i) ten business days following the date of a public
announcement that there is an Acquiring Person (as defined below) (such date,
the "Stock Acquisition Date"), (ii) ten business days following commencement
of a tender or exchange offer that would result in the offeror beneficially
owning 15% or more of the Common Stock or (iii) ten business days after the
Board determines that the ownership of 10% or more of the Company's
outstanding Common Stock by a person is (A) intended to cause the Company to
repurchase the Common Stock beneficially owned by such person or (B) is
causing, or is reasonably likely to cause, a material adverse impact on the
Company.
The term "Acquiring Person" means any person who, together with affiliates
and associates, acquires beneficial ownership of shares of Common Stock
representing 15% or more of the Common Stock, but shall not include the
Company, any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company, or any person or entity
organized, appointed or established by the Company for or pursuant to the
terms of such plan.
19
<PAGE>
In the event that a person becomes an Acquiring Person (except pursuant to
an offer for all outstanding shares of Common Stock which the independent
directors determine to be fair to and otherwise in the best interests of the
Company and its stockholders), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a calculated value
equal to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of such event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person and certain related persons and
transferees will be null and void. However, Rights are not exercisable
following the occurrence of such event until such time as the Rights are no
longer redeemable as set forth below.
The Rights expire on October 21, 2004, unless redeemed earlier by the Board.
At any time prior to the tenth day following the Stock Acquisition Date, the
Company may redeem the Rights, in whole, but not in part, at a price of $.01
per Right.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including without limitation, the right to
vote or to receive dividends.
In general, the Rights Agreement may be amended by the Board (i) prior to
the Distribution Date in any manner, and (ii) on or after the Distribution
Date in certain respects including (a) to shorten or lengthen at any time
period and (b) in a manner not adverse to the interests of Rights holders.
However, amendments extending the redemption period must be made while the
Rights are still redeemable.
The Rights have certain anti-takeover effects and will cause substantial
dilution to a person or group that attempts to acquire the Company on terms
not approved by the Board. The Rights should not interfere with any merger or
other business combination approved by the Board, since the Board may redeem
the Rights as provided above.
SECTION 203 OF DELAWARE GENERAL CORPORATION LAW
The Company is subject to the "business combination" statute of the Delaware
General Corporation Law (Section 203). In general, such statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with any "interested stockholder" for a period of three years after the date
of the transaction in which the person became an "interested stockholder,"
unless (i) such transaction is approved by the board of directors prior to the
date the interested stockholder obtains such status, (ii) upon consummation of
such transaction, the "interested stockholder" beneficially owned at least 85%
of the voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned by (a) persons who are directors and also
officers and (b) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or (iii) the "business
combination" is approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at least 66 2/3%
of the outstanding voting stock which is not owned by the "interested
stockholder." A "business combination" includes mergers, asset sales and other
transactions resulting in financial benefit to the "interested stockholder."
An "interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) beneficially 15% or more of
a corporation's voting stock. The statute could prohibit or delay mergers or
other takeover or change in control attempts with respect to the Company and,
accordingly, may discourage attempts to acquire the Company.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
The Company's authorized but unissued shares of Common Stock and Preferred
Stock may be issued without additional stockholder approval and may be
utilized for a variety of corporate purposes, including future offerings to
raise additional capital or to facilitate corporate acquisitions.
20
<PAGE>
The issuance of Preferred Stock could have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for distribution to
the holders of Common Stock or could adversely affect the rights and powers,
including voting rights, of the holders of the Common Stock. In certain
circumstances, such issuance could have the effect of decreasing the market
price of the Common Stock.
One of the effects of the existence of unissued and unreserved Common Stock
or Preferred Stock may be to enable the Board to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a merger, tender
offer, proxy contest or otherwise, and thereby protect the continuity of
management. Such additional shares also could be used to dilute the stock
ownership of persons seeking to obtain control of the Company.
The Company plans to issue additional shares of Common Stock (i) in
connection with its employee benefit plans and (ii) upon conversion of the
Trust Securities. The Company does not currently have any plans to issue
shares of Preferred Stock, although, 10,000,000 shares of Series A Preferred
Stock have been designated pursuant to the Company's Rights Agreement.
LIMITATION OF DIRECTORS LIABILITY
The Certificate contains a provision that limits the liability of the
Company's directors for monetary damages for breach of fiduciary duty as a
director to the fullest extent permitted by the Delaware General Corporation
Law. Such limitation does not, however, affect the liability of a director (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases and (iv)
for any transaction from which the director derives an improper personal
benefit. The effect of this provision is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
the fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek non-monetary relief such as
an injunction or rescission in the event of a breach of a director's duty of
care. In addition, the directors and officers of the Company have
indemnification protection.
21
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The following description sets forth certain general terms and provisions of
the Depositary Shares to which any Prospectus Supplement may relate. The
particular terms of the Depositary Shares to which any Prospectus Supplement
may relate and the extent, if any, to which such general provisions may apply
to the Depositary Shares so offered will be described in the applicable
Prospectus Supplement.
The Company may, at its option, elect to offer fractional shares of the
Preferred Stock of a series, rather than full shares of the Preferred Stock of
such series. In the event such option is exercised, the Company will issue
receipts for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") among
the Company, a depositary to be named in the applicable Prospectus Supplement
(the "Preferred Stock Depositary"), and the holders from time to time of
depositary receipts issued thereunder. Subject to the terms of the Deposit
Agreement, each holder of a Depositary Share will be entitled, in proportion
to the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, subscription and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Preferred Stock. The forms of Deposit Agreement and
Depositary Receipt are filed as exhibits to the Registration Statement of
which this Prospectus forms a part.
The following summary of certain provisions of the Depositary Shares and
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by express reference to, all the provisions of the
Deposit Agreement, including the definitions therein of certain terms.
Immediately following the issuance of shares of a series of Preferred Stock
by the Company, the Company will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to the
purchasers thereof. Depositary Receipts will only be issued evidencing whole
Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related series of Preferred
Stock to the record holders of Depositary Shares relating to such series of
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or
that it is not feasible to make such distributions, in which case the
Preferred Stock Depositary may, with the approval of the Company, adopt such
22
<PAGE>
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and
upon such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes or other governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Preferred Stock Depositary resulting from any
redemption, in whole or in part, of such series of the Preferred Stock held by
the Preferred Stock Depositary. The redemption price per Depositary Share will
be equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Preferred Stock. If the Company redeems
shares of a series of Preferred Stock held by the Preferred Stock Depositary,
the Preferred Stock Depositary will redeem as of the same redemption date the
number of Depositary Shares representing the shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or substantially
equivalent method determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years
from the date such funds are so deposited.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be the
same date as the record date for the related series of Preferred Stock) will
be entitled to instruct the Preferred Stock Depositary as to the exercise of
the voting rights pertaining to the number of shares of the series of
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will endeavor, insofar as practicable, to vote or cause to be
voted the number of shares of the Preferred Stock represented by such
Depositary Shares in accordance with such instructions, provided the Preferred
Stock Depositary receives such instructions sufficiently in advance of such
meeting to enable it to so vote or cause to be voted the shares of Preferred
Stock, and the Company will agree to take all reasonable action that may be
deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares
representing such Preferred Stock.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary and upon payment of the taxes, charges and fees
provided for in the Deposit Agreement and subject to the terms thereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office, to or upon his or her order; of the number of whole shares of the
related series of Preferred Stock and any money or other property, if any,
represented by such Depositary Shares. Holders of Depositary Shares will be
entitled to receive whole shares of the related series of Preferred Stock, but
holders of such whole shares of Preferred Stock will not thereafter be
entitled to deposit such shares of Preferred Stock with the Preferred Stock
Depositary or to
23
<PAGE>
receive Depositary Shares therefor. If the Depositary Receipts delivered by a
holder evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of the related
series of Preferred Stock to be withdrawn, the Preferred Stock Depositary will
deliver to such holder or upon his or her order at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Preferred Stock Depositary.
However, any amendment that materially and adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the Depositary Shares
then outstanding. Every holder of a Depositary Receipt at the time such
amendment becomes effective will be deemed, by continuing to hold such
Depositary Receipt, to be bound by the Deposit Agreement as so amended.
Notwithstanding the foregoing, in no event may any amendment impair the right
of any holder of any Depositary Shares, upon surrender of the Depositary
Receipts evidencing such Depositary Shares and subject to any conditions
specified in the Deposit Agreement, to receive shares of the related series of
Preferred Stock and any money or other property represented thereby, except in
order to comply with mandatory provisions of applicable law. The Deposit
Agreement may be terminated by the Company at any time upon not less than 60
days prior written notice to the Preferred Stock Depositary, in which case, on
a date that is not later than 30 days after the date of such notice, the
Preferred Stock Depositary shall deliver or make available for delivery to
holders of Depositary Shares, upon surrender of the Depositary Receipts
evidencing such Depositary Shares, such number of whole or fractional shares
of the related series of Preferred Stock as are represented by such Depositary
Shares. The Deposit Agreement shall automatically terminate after all
outstanding Depositary Shares have been redeemed or there has been a final
distribution in respect of the related series of Preferred Stock in connection
with any liquidation, dissolution or winding up of the Company and such
distribution has been distributed to the holders of Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and the governmental
charges arising solely from the existence of the depositary arrangements. the
Company will pay the charges of the Preferred Stock Depositary including
charges in connection with the initial deposit of the related series of
Preferred Stock and the initial issuance of the Depositary Shares and all
withdrawals of shares of the related series of Preferred Stock, except that
holders of Depositary Shares will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company written notice of its election to do so, and the Company may at any
time remove the Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary, which
successor Preferred Stock Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to the holders of Depositary
Shares all reports and communications from the Company that are delivered to
the Preferred Stock Depositary and which the Company is required to furnish to
the holders of the Preferred Stock.
24
<PAGE>
The Preferred Stock Depositary's corporate trust office will be identified
in the applicable Prospectus Supplement. Unless otherwise set forth in the
applicable Prospectus Supplement, the Preferred Stock Depositary will act as
transfer agent and registrar for Depositary Receipts and if shares of a series
of Preferred Stock are redeemable, the Preferred Stock Depositary will act as
redemption agent for the corresponding Depositary Receipts.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue, together with other Securities or separately,
warrants for the purchase of (i) Debt Securities ("Debt Warrants"), (ii)
Preferred Stock (the "Preferred Stock Warrants") or (iii) Common Stock
("Common Stock Warrants"). The Preferred Stock Warrants and the Common Stock
Warrants are collectively referred to as the "Stock Warrants" and the Stock
Warrants and the Debt Warrants are collectively referred to as the
"Warrants").
The Warrants will be issued under Warrant Agreements (as defined below) to
be entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement" or "Stock Warrant Agreement," as the case
may be, or collectively the "Warrant Agreements"), including the forms of
certificates representing the Warrants ("Debt Warrant Certificates" or "Stock
Warrant Certificates," as the case may be, or collectively, the "Warrant
Certificates") reflecting the provisions to be included in such agreements
that will be entered into with respect to the particular offerings of each
type of warrant are filed as exhibits to the Registration Statement of which
this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular
terms of the Warrants to which any Prospectus Supplement may relate and the
extent, if any, to which such general provisions may apply to the Warrants so
offered will be described in the applicable Prospectus Supplement. The
following summary of certain provisions of the Warrants, Warrant Agreements
and Warrant Certificates does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all the provisions
of the Warrant Agreements and Warrant Certificates, including the definitions
therein of certain terms.
DEBT WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the
Debt Securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants; (ii)
the designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants
and the related Debt Securities will be separately transferable; (iv) the
principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant and the price at which such principal amount of Debt Securities may be
purchased upon such exercise; (v) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire;
(vi) a discussion of the material United States Federal income tax
considerations applicable to the ownership or exercise of Debt Warrants; (vii)
whether the Debt Warrants represented by the Debt Warrant Certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered; (viii) call provisions of such Debt Warrants, if
any; and (ix) any other terms of the Debt Warrants.
25
<PAGE>
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise and will not be entitled
to any payments of principal and premium, if any, and interest, if any, on the
Debt Securities purchasable upon such exercise.
Exercise of Debt Warrants. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth
in, the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Unless otherwise specified in the applicable Prospectus Supplement,
Debt Warrants may be exercised at any time up to 5:00 p.m., New York City
time, on the expiration date set forth in the applicable Prospectus
Supplement. After 5:00 p.m., New York City time, on the expiration date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
forward the Debt Securities purchasable upon such exercise. If less than all
of the Debt Warrants represented by such Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants.
STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Stock Warrants in respect of which this Prospectus is being
delivered, the Stock Warrant Agreement relating to such Stock Warrants and the
Stock Warrant Certificates representing such Stock Warrants, including the
following: (i) the type and number of shares of Preferred Stock or Common
Stock purchasable upon exercise of such Stock Warrants and the procedures and
conditions relating to the exercise of such Stock Warrants; (ii) the date, if
any, on and after which such Stock Warrants and the related shares of
Preferred Stock or Common Stock will be separately tradeable; (iii) the
offering price of such Stock Warrants, if any; (iv) the initial price at which
such shares may be purchased upon exercise of Stock Warrants and any provision
with respect to the adjustment thereof; (v) the date on which the right to
exercise such Stock Warrants shall commence and the date on which such right
shall expire; (vi) a discussion of the material United States Federal income
tax considerations applicable to the ownership or exercise of Stock Warrants;
(vii) call provisions of such Stock Warrants, if any; (viii) any other terms
of the Stock Warrants and; (ix) in the case of Preferred Stock Warrants,
information relating to the Preferred Stock purchasable upon exercise of such
Preferred Stock Warrants.
Stock Warrant Certificates will be exchangeable for new Stock Warrant
Certificates of different denominations and Stock Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Stock
Warrants, holders of Stock Warrants will not have any of the rights of holders
of shares of capital stock purchasable upon such exercise, and will not be
entitled to any dividend payments on such capital stock purchasable upon
such exercise.
Exercise of Stock Warrants. Each Stock Warrant will entitle the holder to
purchase for cash such number of shares of Preferred Stock or Common Stock, as
the case may be, at such exercise price as shall in each case be set forth in,
or be determinable as set forth in, the applicable Prospectus Supplement
relating to the Stock Warrants offered thereby. Unless otherwise specified in
the applicable Prospectus Supplement, Stock Warrants may be exercised at any
time up to 5:00 p.m., New York City time, on the expiration date set forth in
the applicable Prospectus Supplement. After 5:00 p.m., New York City time, on
the expiration date, unexercised Stock Warrants will become void.
26
<PAGE>
Stock Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating thereto. Upon receipt of payment and the Stock Warrant
Certificates properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, forward a
certificate representing the number of shares of capital stock purchasable
upon such exercise. If less than all of the Stock Warrants represented by such
Stock Warrant Certificate are exercised, a new Stock Warrant Certificate will
be issued for the remaining amount of Stock Warrants.
DESCRIPTION OF PREFERRED SECURITIES
Each McKesson Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each McKesson Trust authorizes the
Regular Trustees of such McKesson Trust to issue on behalf of such McKesson
Trust one series of Preferred Securities. Each Declaration will be qualified
as an indenture under the Trust Indenture Act. The Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation
rights and such other preferred, deferred or other special rights or such
restrictions as shall be set forth in the related Declaration or made part of
such Declaration by the Trust Indenture Act or the Business Trust Act.
Reference is made to any Prospectus Supplement relating to the Preferred
Securities of a McKesson Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such McKesson Trust, (iii) the annual distribution rate
(or method of calculation thereof) for Preferred Securities issued by such
McKesson Trust, the date or dates upon which such distributions shall be
payable and the record date or dates for the payment of such distributions,
(iv) whether distributions on Preferred Securities issued by such McKesson
Trust shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on Preferred Securities
issued by such McKesson Trust shall be cumulative, (v) the amount or amounts
which shall be paid out of the assets of such McKesson Trust to the holders of
Preferred Securities of such McKesson Trust upon voluntary or involuntary
dissolution, winding up or termination of such McKesson Trust, (vi) the
obligation or right, if any, of such McKesson Trust to purchase or redeem
Preferred Securities issued by such McKesson Trust and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Preferred Securities issued by such McKesson Trust shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation or
right, (vii) the voting rights, if any, of Preferred Securities issued by such
McKesson Trust in addition to those required by law, including the number of
votes per Preferred Security and any requirement for the approval by the
holders of Preferred Securities, or of Preferred Securities issued by one or
more McKesson Trusts, or of both, as a condition to specified actions or
amendments to the Declaration of such McKesson Trust, (viii) the terms and
conditions, if any, upon which Preferred Securities issued by such McKesson
Trust may be converted by the holder thereof or exchanged at the election of
the Company into Common Stock, Preferred Stock or any other securities of the
Company, including the conversion price per share and the circumstances, if
any, under which such conversion right will expire, (ix) the terms and
conditions, if any, upon which the Debt Securities may be distributed to
holders of Trust Preferred Securities, (x) if applicable, any securities
exchange upon which the Preferred Securities shall be listed, and (xi) any
other relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities issued by such McKesson Trust consistent with the
Declaration of such McKesson Trust or with applicable law. All Preferred
Securities offered hereby will be guaranteed by the Company as and to the
extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each McKesson Trust
will issue one series of Common Securities. The Declaration of each McKesson
Trust authorizes the Regular Trustees of such trust to issue on behalf of such
McKesson Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a
McKesson Trust will be substantially identical to the terms of the Preferred
27
<PAGE>
Securities issued by such McKesson Trust and the Common Securities will rank
pari passu, and payments will be made thereon on a pro rata basis with the
Preferred Securities except that if a Declaration Event of Default occurs and
is continuing, the rights of the holders of such Common Securities to payments
in respect of distributions and payments upon liquidation, redemption and
maturity will be subordinated to the rights of the holders of such Preferred
Securities. Except in certain limited circumstances, the Common Securities
issued by a McKesson Trust will also carry the right to vote and to appoint,
remove or replace any of the Trustees of that McKesson Trust. All of the
Common Securities of a McKesson Trust will be directly or indirectly owned by
the Company.
DESCRIPTION OF PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee which will be executed and delivered by the Company for
the benefit of the holders from time to time of the Preferred Securities of
each McKesson Trust. The summary does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to the respective Preferred Securities Guarantee, a form of which
has been attached as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each Preferred Securities Guarantee incorporates by
reference the terms of the Trust Indenture Act. The trustee of each Preferred
Securities Guarantee (the "Preferred Securities Guarantee Trustee") will hold
the Preferred Securities Guarantee for the benefit of the holders of the
Preferred Securities that McKesson Trust.
GENERAL
Pursuant to and to the extent set forth in each Preferred Securities
Guarantee, the Company will agree, to the extent set forth therein, to pay in
full to the holders of the Preferred Securities of the applicable McKesson
Trust (except to the extent paid by that McKesson Trust), as and when due,
regardless of any defense, right of set off or counterclaim which the McKesson
Trust may have or assert, the following payments (the "Preferred Securities
Guarantee Payments"), without duplication: (i) all accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent the McKesson Trust has funds available therefor, (ii) the redemption
price, if any, plus accrued and unpaid distributions with respect to any such
Preferred Securities called for redemption by the McKesson Trust, to the
extent the McKesson Trust has funds available therefor, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
McKesson Trust (other than in connection with the distribution of the Debt
Securities held by the McKesson Trust to its holders of Preferred Securities
or the redemption of all the Preferred Securities of the McKesson Trust), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Preferred Securities to the date of payment to the
extent that McKesson Trust has funds available therefor and (b) the amount of
assets of the McKesson Trust remaining available for distribution to holders
of its Preferred Securities then outstanding upon the liquidation of the
McKesson Trust. The holders of a majority in liquidation amount of the
Preferred Securities of a McKesson Trust have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Preferred Securities Guarantee Trustee or to direct the exercise of any trust
or power conferred upon the Preferred Securities Guarantee Trustee under the
Preferred Securities Guarantee. If a Preferred Securities Guarantee Trustee
fails to enforce the related Preferred Securities Guarantee, any holder of
Preferred Securities of that McKesson Trust may directly institute a legal
proceeding against the Company to enforce the Preferred Securities Guarantee
Trustee's rights under that Preferred Securities Guarantee without first
instituting a legal proceeding against the McKesson Trust, the Preferred
Securities Guarantee Trustee or any other person or entity. If the Company
were to default on its obligation to pay amounts payable on the Debt
Securities held by a McKesson Trust, that McKesson Trust would lack available
funds for the payment of distributions or amounts payable on redemption of its
Preferred Securities or otherwise, and in such event holders of those
Preferred Securities would not be able to rely upon the Preferred Securities
Guarantee for payment of such amounts. Instead, a holder of such Preferred
Securities would be required to rely on the enforcement (i) by the
Institutional Trustee of its rights, as registered holder of the Debt
Securities, against the Company pursuant to the terms of the Debt Securities
or (ii) by such holder of Preferred Securities of its rights against the
Company
28
<PAGE>
to enforce payments on Debt Securities. Each Declaration provides that each
holder of Preferred Securities, by acceptance thereof, agrees to the
provisions of the applicable Preferred Securities Guarantee, including the
subordination provisions thereof.
The Preferred Securities Guarantee will not apply to any payment of
distributions or redemption price, if any, or to payments upon the
dissolution, winding-up or termination of the related McKesson Trust, except
to the extent that McKesson Trust shall have funds available therefor. If the
Company does not make interest payments on the Debt Securities of held by a
McKesson Trust, that McKesson Trust will not pay distributions on its
Preferred Securities and will not have funds available therefor. A Preferred
Securities Guarantee, when taken together with the Company's obligations under
the related Debt Securities and Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and liabilities of that McKesson
Trust (other than with respect to the Trust Securities) will provide a full
and unconditional guarantee by the Company of payments due on the Preferred
Securities of that McKesson Trust. The terms of the subordination, if any, of
a Preferred Securities Guarantee will be set forth in the applicable
Prospectus Supplement.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of each McKesson Trust with respect to its Common
Securities (the "Common Securities Preferred Securities Guarantee") to the
same extent as the related Preferred Securities Guarantee, except that upon
the occurrence and during the continuation of a Declaration Event of Default
with respect to the Junior Subordinated Debt Securities held by the McKesson
Trust, the holders of its Preferred Securities shall have priority over the
holders of the Common Securities with respect to the Preferred Securities
Guarantee Payments.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any of the related Preferred Securities remain outstanding, if (i) the
Company has exercised its option to defer interest payments on the related
Debt Securities by extending the interest payment period and such extension
period, or any extension thereof, shall be continuing, (ii) the Company shall
be in default with respect to its payment or other obligations under the
Preferred Securities Guarantee or (iii) there shall have occurred and be
continuing a Declaration Event of Default or any event that, with the giving
of notice or lapse of time or both, would constitute a Declaration Event of
Default, then the Company shall not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior
in interest to the related Debt Securities or make any guarantee payment with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior in
interest to the related Debt Securities (other than (i) as a result of a
reclassification of the Company capital stock or the exchange or conversion of
one class or series of the Company capital stock for another class or series
of the Company capital stock, (ii) the purchase of fractional interests in
shares of the Company capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being
converted into or exchanged for capital stock of the Company, (iii) dividends
or distributions in Common Stock, (iv) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the
Preferred Securities Guarantee, (vi) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans
for its directors, officers or employees and (vii) obligations under any
dividend reinvestment and stock purchase plans).
As part of each Preferred Securities Guarantee, the Company will agree that
it will honor all obligations relating to the conversion of the Preferred
Securities into, as the case may be, Common Stock, Preferred Stock or other
securities of the Company.
29
<PAGE>
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which
case no vote will be required), a Preferred Securities Guarantee may be
amended only with the prior approval of the holders of at least a majority in
liquidation amount of all the related Preferred Securities then outstanding.
All guarantees and agreements contained in each Preferred Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding. Except in connection with any permitted
merger or consolidation of the Company with or into another entity or any
permitted sale, transfer or lease of the Company's assets to another entity
the Company may not assign its rights or delegate its obligations under any
Preferred Securities Guarantee without the prior approval of the holders of at
least a majority of the aggregate stated liquidation amount of the related
Preferred Securities then outstanding.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
Each Preferred Securities Guarantee will terminate as to each holder of
Preferred Securities with respect to a McKesson Trust upon (i) full payment of
the redemption price, if any, and accrued and unpaid distributions with
respect to all related Preferred Securities, (ii) distribution of the Debt
Securities held by the McKesson Trust to the holders of its Preferred
Securities, (iii) full payment of the amounts payable under its Declaration
upon liquidation of the McKesson Trust, or (iv) the distribution of the
underlying securities to the holder thereof upon any conversion or exchange of
such holder's Preferred Securities into the designated security of the
Company, and will terminate completely upon full payment of the amounts
payable in accordance with the applicable Declaration. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of related Preferred Securities must restore payment of any
sum paid under such Preferred Securities or the Preferred Securities
Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
(a) the failure of the Company to perform any of its payment or other
obligations thereunder or (b) if applicable, the failure by the Company to
deliver the designated securities upon an appropriate election by the holder
or holders of related Preferred Securities to convert the Preferred Securities
into such designated security.
The holders of a majority in liquidation amount of Preferred Securities then
outstanding relating to the Preferred Securities Guarantee have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Preferred Securities Guarantee Trustee under the related
Preferred Securities. If the Preferred Securities Guarantee Trustee fails to
enforce the Preferred Securities Guarantee, any holder of the related
Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Preferred Securities Guarantee Trustee's rights under
the Preferred Securities Guarantee, without first instituting a legal
proceeding against the McKesson Trust, the Preferred Securities Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a Preferred Securities Guarantee Payment, the
related holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Preferred Securities Guarantee for
such payment. The Company waives any right or remedy to require that any
action be brought first against each McKesson Trust or any other person or
entity before proceeding directly against the Company.
STATUS OF THE PREFERRED SECURITIES GUARANTEE; SUBORDINATION
The Preferred Securities Guarantee will constitute an unsecured obligation
of the Company and will rank in right of payment to all other liabilities of
the Company in the manner set forth in the applicable Prospectus Supplement.
The terms of the Preferred Securities provide that each holder of Preferred
Securities by acceptance
30
<PAGE>
thereof agrees to the subordination provisions, if any, and other terms of the
Preferred Securities Guarantee relating thereto.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity). The Preferred Securities Guarantee does not place
a limitation on the amount of additional indebtedness that may be incurred by
the Company.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
Each Preferred Securities Guarantee Trustee, prior to the occurrence of a
default with respect to the related Preferred Securities Guarantee, undertakes
to perform only such duties as are specifically set forth in the Preferred
Securities Guarantee and, after default with respect to that Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
person would exercise in the conduct of his or her own affairs. Subject to
such provision, a Preferred Securities Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Preferred
Securities Guarantee at the request of any holder of related Preferred
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
GOVERNING LAW
Each Preferred Securities Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to
the holders, a specified number of shares of Common Stock at a future date or
dates. The price per share of Common Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts. The Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Senior Subordinated Debt Securities, Subordinated Debt Securities
or Junior Subordinated Debt Securities, (y) debt obligations of third parties,
including U.S. Treasury securities or (z) Preferred Securities of a McKesson
Trust securing the holder's obligations to purchase the Common Stock under the
Stock Purchase Contracts. The Stock Purchase Contracts may require the Company
to make periodic payments to the holders of the Stock Purchase Units or vice
versa, and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner and in certain circumstances the Company may
deliver newly issued prepaid stock purchase contracts ("Prepaid Securities")
upon release to a holder of any collateral securing such holder's obligations
under the original Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements,
if applicable, relating to such Stock Purchase Contracts or Stock Purchase
Units and, if applicable, the Prepaid Securities and the document pursuant to
which such Prepaid Securities will be issued.
31
<PAGE>
GOVERNING LAW
Each Stock Purchase Contract will be governed by, and construed in
accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company and/or McKesson Trust may sell the Offered Securities directly
or through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company and/or a McKesson Trust from time to time. Any such agent, who
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Offered Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable
by the Company and/or a McKesson Trust to such agent set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment, The Company and/or a McKesson Trust may also sell
Offered Securities to an agent as principal. Agents may be entitled to, under
agreements which may be entered into with the Company and/or a McKesson Trust,
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If any underwriters are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, the Company and/or a McKesson
Trust will enter into an underwriting agreement with such underwriters and the
names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales of the Offered Securities in respect of which this Prospectus is
delivered to the public. Underwriters may offer and sell the Offered
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The underwriters may be
entitled, under the relevant underwriting agreement, to indemnification by the
Company against certain liabilities, including liabilities under the
Securities Act, and may be customers of, engage in transactions with or
perform services for the Company in the ordinary course of business.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company and/or a McKesson Trust will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("Remarketing firms"), acting as principals
for their own accounts or as agents for the Company and/or a McKesson Trust.
Any Remarketing firm will be identified and the terms of its agreement, if
any, with the Company and/or a McKesson Trust and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Offered Securities remarketing thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company and/or a McKesson Trust to indemnification by the Company
and/or a McKesson Trust against certain liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with
or perform services for the Company and/or a McKesson Trust in the ordinary
course of business.
If so indicated in the Prospectus Supplement, the Company and/or a McKesson
Trust will authorize agents and underwriters or dealers to solicit offers by
certain purchasers to purchase Offered Securities from the
32
<PAGE>
Company and/or a McKesson Trust at the public offering price set forth in the
Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to only those conditions set forth in the Prospectus Supplement, and
the Prospectus Supplement will set forth the commission payable for
solicitation of such offers.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Offered Securities of McKesson will be passed upon for
McKesson by Ivan D. Meyerson, Vice President and General Counsel of McKesson,
and by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California,
special counsel to the Company and the McKesson Trusts.
EXPERTS
The consolidated financial statements of the Company and the related
financial statement schedule incorporated in this Registration Statement by
reference from the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 and the consolidated financial statements of FoxMeyer for
the year ended March 31, 1996 incorporated in this Registration Statement by
reference from McKesson's Current Report on Form 8-K/A filed with the
Commission on April 28, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports incorporated herein by
reference, (which report dated May 16, 1997 on McKesson's consolidated
financial statements expresses an unqualified opinion and which report on
FoxMeyer's consolidated financial statements dated June 28, 1996 (March 18,
1997 as to paragraph seven of Note Q), expresses an unqualified opinion and
includes an explanatory paragraph relating to the sale of the principal assets
of FoxMeyer and its Chapter 7 bankruptcy filing). Such consolidated financial
statements and financial statement schedules have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts
in auditing and accounting.
33
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee............................................... $221,250
Printing and engraving.............................................
Legal fees and expenses............................................
Fees of accountants................................................
Fees of trustee....................................................
Blue sky fees and expenses.........................................
Rating agency fees.................................................
Miscellaneous......................................................
--------
Total............................................................
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the By-Laws of the Company, in accordance with the
provisions of Section 145 of the General Corporation Law of Delaware (the
"Delaware Corporation Law"), provides that the Company shall indemnify any
person in connection with any threatened, pending or completed legal
proceeding (other than a legal proceeding by or in the right of the Company)
by reason of the fact that he is or was a director of officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred in connection with such
legal proceeding if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any a criminal action or proceeding, if he had no reasonable
cause to believe that his conduct was unlawful. If the legal proceeding is by
or in the right of the Company, the director or officer may be indemnified by
the Company against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of such legal
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, except that he may
not be indemnified in respect of any claim, issue or matter as to which he
shall have been adjudged to be liable to the Company unless a court determines
otherwise.
Article VIII of the Company's By-Laws allows the Company to maintain
director and officer liability insurance on behalf of any person who is or was
a director or officer of the Company or such person who serves or served as
director, officer, employee or agent of another corporation, partnership or
other enterprise at the request of the Company.
Article VI of the Company's Certificate, in accordance with Section
102(b)(7) of the Delaware Corporation Law, provides that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for any breach of his fiduciary duty as a director; provided,
however, that such clause shall not apply to any liability of a director (1)
for any breach of his duty of loyalty to the Company or its stockholders, (2)
for acts or omissions that are not in good faith or involve intentional
misconduct or a knowing violation of the law, (3) under Section 174 of the
Delaware Corporation Law, or (4) for any transaction from which the director
derived an improper personal benefit.
Each Declaration of Trust (a "Declaration") of a McKesson Trust provides
that no Trustee, affiliate of any Trustee or any officers, directors,
stockholders, members, partners, employees, representatives or agents of any
Trustee or any employee or agent of such McKesson Trust or its affiliates
(each, an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to any employee or agent of such McKesson Trust
II-1
<PAGE>
or its affiliates, or any officers, directors, shareholders, employees,
representatives or agents of the Company or its affiliates or to any holders
of Trust Securities of such McKesson Trust for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such McKesson Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by the Declaration of such
McKesson Trust or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or, in the case of the Institutional Trustee of
such McKesson Trust, negligence) or willful misconduct with respect to such
acts or omissions. Each Declaration also provides that, to the fullest extent
permitted by applicable law, the Company shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of such McKesson Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by such Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of
any loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence (or, in the case of the Institutional Trustee of such
McKesson Trust, negligence) or willful misconduct with respect to such acts or
omissions. Each Declaration further provides that to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or the final
disposition of such claim, demand, action, suit or proceeding shall, from time
to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified pursuant to such Declaration.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1.1* Form of Underwriting Agreement (Debt).
1.2* Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company (Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May 30, 1997
(Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and between the
Company and First Chicago Trust Company of New York as Rights Agent
(Exhibit 4.1(3)).
4.1 Indenture between the Company and The First National Bank of Chicago,
dated as of March 11, 1997 (Exhibit 4.1 (4)).
4.2*** Form of Indenture.
4.3*** Form of Declaration of Trust.
4.4*** Form of Warrant (Equity).
4.5*** Form of Warrant (Debt).
4.6*** Form of Preferred Securities Guarantee Agreement.
4.7*** Form of Purchase Contract Agreement.
4.8*** Form of Pledge Agreement.
4.9*** Form of Deposit Agreement.
5.1*** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the Debt Securities, Common Stock, Preferred Stock, Warrants,
Preferred Securities, Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered hereby.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
12.1*** Ratio of Earnings to Fixed Charges of McKesson Corporation.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
23.2** Independent Auditors' Consent.
24** Power of Attorney.
</TABLE>
- --------
(1) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, as amended
by Amendment No. 1 on Form 10-K/A, filed on February 13, 1997, File No. 1-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K dated June 24, 1997, File No. 1-13252.
(3) Incorporated by reference to designated exhibit to Amendment No. 3 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 27, 1994, File No. 1-13252.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed under subsequent Form 8-K
** Filed herewith
*** To be filed by amendment
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934
II-3
<PAGE>
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities
offered thereby, and for the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions referred
to in Item 15 of this registration statement, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such.
(d)(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430(A) and contained
in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering hereof.
(e) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-4
<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-3 and has duly caused this 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 24th day
of April, 1998.
McKESSON CORPORATION
/s/ Richard H. Hawkins
By: ___________________________
Name: Richard E. Hawkins
Title: Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Chief April 24, 1998
____________________________________ Executive
Mark A. Pulido Officer and Director
(principal executive
officer)
* Vice President and April 24, 1998
____________________________________ Chief Financial Officer
Richard H. Hawkins (principal financial
officer)
* Controller April 24, 1998
____________________________________ (principal accounting
Heidi E. Yodowitz officer)
* Director April 24, 1998
____________________________________
Mary G. F. Bitterman
* Director April 24, 1998
____________________________________
Tully M. Friedman
* Director April 24, 1998
____________________________________
John M. Pietruski
* Director April 24, 1998
____________________________________
David S. Pottruck
* Director April 24, 1998
____________________________________
Carl E. Reichardt
* Director; April 24, 1998
____________________________________ Chairman of the Board
Alan Seelenfreund
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director April 24, 1998
_____________________________________
Jane E. Shaw
* Director April 24, 1998
_____________________________________
Robert H. Waterman, Jr.
*By: /s/ Nancy A. Miller
____________________________________
Nancy A. Miller
Attorney-in-fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, McKesson
Financing Trust II, McKesson Financing Trust III and McKesson Financing Trust
IV, each certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on
April 24, 1998.
McKESSON FINANCING TRUST II
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST III
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST IV
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
1.1* Form of Underwriting Agreement (Debt).
1.2* Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase
Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company
(Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May
30, 1997 (Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and
between the Company and First Chicago Trust Company of
New York as Rights Agent (Exhibit 4.1(3)).
4.1 Indenture between the Company and The First National
Bank of Chicago, dated as of March 11, 1997 (Exhibit
4.1 (4)).
4.2*** Form of Indenture.
4.3*** Form of Declaration of Trust.
4.4*** Form of Warrant (Equity).
4.5*** Form of Warrant (Debt).
4.6*** Form of Preferred Securities Guarantee Agreement.
4.7*** Form of Purchase Contract Agreement.
4.8*** Form of Pledge Agreement.
4.9*** Form of Deposit Agreement.
5.1*** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as
to the legality of the Debt Securities, Common Stock,
Preferred Stock, Warrants, Preferred Securities,
Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered
hereby.
12.1*** Ratio of Earnings to Fixed Charges of McKesson
Corporation.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
23.2** Independent Auditors' Consent.
24** Power of Attorney.
</TABLE>
- --------
(1) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, as amended by
Amendment No. 1 on Form 10-K/A, filed on February 13, 1997, File No. 1-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K dated June 24, 1997, File No. 1-13252.
(3) Incorporated by reference to designated exhibit to Amendment No. 3 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 27, 1994, File No. 1-13252.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed under subsequent Form 8-K
** Filed herewith
*** To be filed by amendment
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
McKesson Corporation ("McKesson") on Form S-3 of our reports dated May 16, 1997
on McKesson's consolidated financial statements and consolidated supplementary
financial schedule, appearing in and incorporated by reference in the Annual
Report on Form 10-K of McKesson Corporation for the year ended March 31, 1997,
and our report on FoxMeyer Corporation's consolidated financial statements dated
June 28, 1996 (March 18, 1997 as to paragraph seven of Note Q), which report
expresses an unqualified opinion and includes an explanatory paragraph relating
to the sale of the principal assets of FoxMeyer Corporation and its Chapter 7
bankruptcy filing, appearing in the Current Report on Form 8-K/A of McKesson
Corporation filed with the Securities and Exchange Commission on April 28, 1997.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ Deloitte & Touche L.L.P.
San Francisco, California
Dallas, Texas
April 23, 1998
<PAGE>
Exhibit 24
POWER OF ATTORNEY
Each of the undersigned directors and each of the undersigned
officers of McKesson Corporation, a Delaware corporation (the "Corporation"),
does hereby constitute and appoint Ivan D. Meyerson and Nancy A. Miller, and
each of them, as his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead in any and all capacities, to execute and deliver in his
or her name and on his or her behalf:
(a) one or more Registration Statements (with all exhibits thereto)
of the Corporation on Form S-3 or any other appropriate form proposed to be
filed by the Corporation with the Securities and Exchange Commission (the
"SEC") (including, without limitation, Registration Statements filed
pursuant to Rule 462(b) ("Rule 462(b)") under the Securities Act of 1933,
as amended, or any successor thereto (the "Securities Act")) for the
purpose of registering under the Securities Act, up to $750,000,000 in
aggregate gross proceeds, plus any amounts that may be registered pursuant
to Rule 462(b), of (i) debt securities (the "Debt Securities") of the
Corporation consisting of debentures, notes and/or other unsecured
evidences of indebtedness, including senior debt securities, senior
subordinated debt securities, subordinated debt securities or junior
subordinated debt securities; (ii) shares of Series Preferred Stock, par
value $0.01 per share (the "Preferred Stock"), of the Corporation; (iii)
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of
the Corporation; (iv) depositary shares (the "Depositary Shares")
representing interests in the Preferred Stock; (v) warrants (the
"Warrants") to purchase Debt Securities of one or more series, Preferred
Stock or Common Stock; (vi) preferred securities (the "Preferred
Securities") of McKesson Financing Trust II, McKesson Financing Trust III
and McKesson Financing Trust IV (collectively, the "McKesson Trusts" and
each, a "McKesson Trust"); (vii) preferred securities guarantees (the
"Preferred Securities Guarantees"), representing the Corporation's
guarantee to the purchasers of Preferred Securities of the McKesson Trusts;
(viii) stock purchase contracts (the "Stock Purchase Contracts")
<PAGE>
representing contracts obligating the holder to purchase from the
Corporation, and the Corporation to sell to the holders, a specific number
of shares of Common Stock at a future date or dates at a fixed price or as
may be determined by reference to a specific formula set forth in the Stock
Purchase Contracts and (ix) stock purchase units (together with the Debt
Securities, Preferred Stock, Common Stock, Depositary Shares, Warrants,
Preferred Securities, Preferred Securities Guarantees and Stock Purchase
Contracts, the "Securities"), which shall consist of a Stock Purchase
Contract and either (x) one of more Debt Securities, (y) debt obligations
of third parties, including U.S. Treasury securities, or (z) Preferred
Securities of a McKesson Trust securing the holder's obligations to
purchase the Common Stock under the Stock Purchase Contracts;
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements; and
(c) any and all other certificates, letters, reports, statements,
applications and any other documents and instruments in connection with the
registration of the Securities which such attorneys-in-fact and agents, or
any one of them, deem necessary, advisable or appropriate to enable the
Corporation to comply with (i) the Securities Act, the Securities Exchange
Act of 1934, as amended, and the other federal securities laws of the
United States of America and the rules, regulations and requirements of the
SEC in respect of any thereof; (ii) the securities or Blue Sky laws of any
state or other governmental subdivision of the United States of America;
and (iii) the securities or similar applicable laws of any foreign
jurisdiction;
and each of the undersigned hereby grants unto such attorneys-in-fact and
agents, and each of them, or his or her substitute or substitutes, each and
every act and thing requisite and necessary to be done in and about the premises
as fully as to all intents and purposes as he or she might or could do in
person, and does hereby ratify and confirm as his or her own acts and deeds all
that such attorneys-in-fact and agents, and each of them, or his or her
substitute or substitutes, shall lawfully do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 24th day of April 1998.
/s/ Mark A. Pulido /s/ John M. Pietruski
- ------------------------------ ------------------------------
Mark A. Pulido John M. Pietruski
/s/ Richard H. Hawkins /s/ David S. Pottruck
- ------------------------------ ------------------------------
Richard H. Hawkins David S. Pottruck
/s/ Heidi E. Yodowitz /s/ Carl E. Reichardt
- ------------------------------ ------------------------------
Heidi E. Yodowitz Carl E. Reichardt
/s/ Alan Seelenfreund /s/ Jane E. Shaw
- ------------------------------- ------------------------------
Alan Seelenfreund Jane E. Shaw
/s/ Mary G. F. Bitterman /s/ Robert H. Waterman, Jr.
- ------------------------------- ------------------------------
Mary G. F. Bitterman Robert H. Waterman, Jr.
/s/ Tully M. Friedman
- -------------------------------
Tully M. Friedman
