<PAGE>
As filed with the Securities and Exchange Commission on August 26, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
under
the Securities Act of 1933
----------------
McKESSON HBOC, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C>
Delaware 94-3207296
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
</TABLE>
McKesson Plaza
One Post Street
San Francisco, California 94104
(415) 983-8300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
Ivan D. Meyerson
Senior Vice President, General Counsel and Corporate Secretary
McKesson HBOC, Inc.
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)
----------------
Copy to:
Gregg A. Noel
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5000
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective.
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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. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of Each Class of Proposed Maximum Aggregate
Securities to be Amount to Offering Price Offering Amount of
Registered be Registered Per Share (1) Price (1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share........ 1,368,243 $29.75 $40,705,229.25 $11,317.00
Rights to Purchase
Series A Junior
Participating Preferred
Stock of McKesson HBOC,
Inc. (2)............... 684,121.5 N/A N/A N/A
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and based on the average of the high and low
prices for the common stock on August 24, 1999, as reported on the New York
Stock Exchange.
(2) Associated with the common stock are rights to purchase Series A Junior
Participating Preferred Stock of McKesson HBOC, Inc. 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 Series A
Preferred Stock.
----------------
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 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The +
+selling stockholders may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This prospectus is not an offer to sell these securities and the selling +
+stockholders are not soliciting an offer to buy these securities in any state +
+where such offer of sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated August 26, 1999
PROSPECTUS
1,368,243 Shares
of
Common Stock
McKesson HBOC, Inc.
McKesson Plaza
One Post Street
San Francisco, California 94104
(415) 983-8300
------------
The stockholders of McKesson HBOC, Inc. listed below may offer from time to
time 1,368,243 shares of our common stock under this prospectus. We will not
receive any part of the proceeds from such sales.
Our common stock is listed on the New York Stock Exchange, Inc. and the
Pacific Exchange, Inc. under the trading symbol "MCK." On August 25, 1999, the
closing price of one share of our common stock on the New York Stock Exchange
was $29 5/16.
An investment in our common stock involves risks. See the "Risk Factors"
section beginning on page 1 of this prospectus.
------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
------------
The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
Prospectus
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Page
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<S> <C>
Risk Factors............................................................... 1
Special Note Regarding Forward-Looking Statements.......................... 4
The Company................................................................ 5
Use of Proceeds............................................................ 5
Selling Stockholders....................................................... 6
Description of Capital Stock............................................... 7
Plan of Distribution....................................................... 11
Experts.................................................................... 11
Legal Matters.............................................................. 12
Where You Can Find More Information........................................ 12
</TABLE>
i
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RISK FACTORS
You should carefully consider the following risks as well as the other
information contained or incorporated by reference in this prospectus before
purchasing our common stock.
Adverse judgments regarding the restatement of our earnings may have a material
adverse impact on us.
On April 28, 1999, we announced that, during the course of our year-end
financial audit process, we determined that software sales transactions
(aggregating $26.2 million for the fourth quarter ended March 31, 1999 and
$16.0 million in the prior quarters of the fiscal year) were improperly
recorded because they were subject to contingencies and had been reversed. We
also announced that the audit process was ongoing. The Audit Committee of our
board of directors subsequently initiated an investigation into this matter. On
May 25, 1999, we announced that as a result of information developed through
our continuing year-end internal and external audit process and Audit Committee
review, additional instances of improper revenue recognition had been found,
that further downward revision would be required of the results for the fiscal
year ended March 31, 1999, as well as quarterly results during the fiscal year,
and that prior years' results of the Health Care Information Technology
Business unit could also require restatement.
On July 14, 1999, we announced revised financial results for fiscal years
ended March 31, 1999, 1998 and 1997. These restated results are included in our
Annual Report on Form 10-K/A filed with the Securities and Exchange Commission.
We revised downward our revenues by $245.8 million for the fiscal year ended
March 31, 1999, by $48.4 million for the fiscal year ended March 31, 1998, and
by $33.2 million for the fiscal year ended March 31, 1997. We revised downward
our income from continuing operations by $152.2 million and our earnings per
diluted share by 53 cents for the fiscal year ended March 31, 1999, by $25.8
million and nine cents for the fiscal year ended March 31, 1998, and by $13.5
million and five cents for the fiscal year ended March 31, 1997.
Since our announcement on April 28, 1999, and as of July 30, 1999, fifty-
five class action lawsuits, three derivative actions, and two individual
actions have been filed against us, and certain of our current or former
officers and directors. In addition, the United States Attorney's Office for
the Northern District of California and the San Francisco District Office of
the United States Securities and Exchange Commission has also commenced
investigations in connection with the matters relating to the restatement of
previously reported amounts, although the SEC has advised us that its inquiry
should not be construed as an indication by the SEC or its staff that any
violations of law have occurred.
We do not believe it is feasible to predict or determine the outcome or
resolution of these proceedings, or to estimate the amount of, or potential
range of, loss with respect to these proceedings. In addition, the timing of
the final resolution of these proceedings is uncertain. The range of possible
resolutions of these proceedings could include judgments against us or
settlements that could require substantial payments by us which could have a
material adverse impact on our financial position, results of operations and
cash flow.
Adverse effects of the restatement of our earnings may adversely affect the
management of our business.
The effect of the pending litigation and government investigations relating
to the previously announced financial restatement could present challenges in
attracting and retaining quality employees and managers. Such difficulties
could adversely affect our ability to manage our business.
Our business could be adversely affected if we are unable to complete and
integrate acquisitions successfully.
An element of our business is to pursue strategic acquisitions that either
expand or complement our business. We routinely review such potential
acquisition opportunities and have historically engaged in numerous
acquisitions. Integration of acquisitions, including the merger that created
McKesson HBOC, Inc., involve a number of special risks. Such risks include:
. the diversion of management's attention to the assimilation of the
operations of businesses we have acquired;
1
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. difficulties in the integration of operations and systems and the
realization of potential operating synergies;
. difficulties in the integration of any acquired companies operating in a
different sector of the health care industry;
. delays or difficulties in opening and operating larger distribution
centers in a larger and more complex 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 effects on operating results.
If we are unable to successfully complete and integrate strategic
acquisitions in a timely manner, our growth strategies could be adversely
affected.
Our issuance of equity to finance acquisitions could have a potential dilutive
effect on our stock.
We anticipate that we will finance acquisitions, at least partly by
incurring debt or by the issuance of additional securities. The use of equity
financing, rather than debt, for acquisitions would dilute the ownership of our
then current stockholders.
Changes in the United States healthcare environment could have a material
adverse effect on our operations.
In recent years, the healthcare industry has changed significantly in an
effort to reduce costs. These changes include increased use of managed care,
cuts in Medicare, consolidation of pharmaceutical and medical/surgical supply
distributors, and the development of large, sophisticated purchasing groups. We
expect the healthcare industry to continue to change significantly in the
future. Some of these changes may have a material adverse effect on our results
of operations, such as a reduction in governmental support of healthcare
services or adverse changes in legislation or regulations governing the
delivery or pricing of healthcare services or mandated benefits. Changes in
pharmaceutical manufacturers' pricing or distribution policies may also have a
material adverse effect on our results of operations.
The ability of the Health Care Information Technology business to attract and
retain customers due to challenges in integrating software products,
technological advances and Year 2000 concerns may have a material adverse
effect on our operations.
Challenges in integrating software products used by the Health Care
Information Technology business with those of its customers could have an
adverse affect on our ability to attract and retain customers and may adversely
affect our results of operations.
Future advances in the health care information systems industry could lead
to new technologies, products or services that are competitive with the
products and services offered by the Health Care Information Technology
business. Such technological advances could also lower the cost of such
products and services or otherwise result in competitive pricing pressure. The
success of the Health Care Information Technology business will depend, in
part, on its ability to be responsive to technological developments and
challenges, including pricing pressures and changing business models. In
addition, to remain competitive in the evolving health care information systems
marketplace, the Health Care Information Technology business must develop new
products on a timely basis. The failure to develop competitive products and to
introduce new products on a timely basis could have an adverse affect on the
ability of the Health Care Information Technology business to attract and
retain customers and may adversely affect our results of operations.
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<PAGE>
Finally, management believes that the costs of work by customers related to
Year 2000 Issues have caused some Health Care Information Technology customers
and prospective customers to defer current projects or prospective decisions
regarding the acquisition of new software. These Year 2000 concerns by existing
and potential new customers may adversely affect our results of operations.
Proprietary technology protections may not be adequate and proprietary rights
may infringe on rights of third parties.
We rely on a combination of trade secret, patent, copyright and trademark
laws, nondisclosure and other contractual provisions and technical measures to
protect our proprietary rights in our products. There can be no assurance that
these protections will be adequate or that our competitors will not
independently develop technologies that are substantially equivalent or
superior to our technology. Although we believe that our products and other
proprietary rights do not infringe upon the proprietary rights of third
parties, from time to time third parties have asserted infringement claims
against us and there can be no assurance that third parties will not assert
infringement claims against us in the future. Additionally, we may find it
necessary to initiate litigation to protect our trade secrets, to enforce our
patent, copyright and trademark rights, and to determine the scope and validity
of the proprietary rights of others. These types of litigation can be costly
and time consuming. These litigation expenses or any damage payments resulting
from adverse determinations of third party claims could be significant and
could have a material adverse effect on us.
Potential product liability claims arising from Health Care Information
Technology business products could materially adversely affect us.
Some products of the Health Care Information Technology business provide
information for use by health care providers in providing health care to
patients. Although we have not experienced any material claims to date, any
failure of our Health Care Information Technology business products to provide
accurate and timely information could result in claims against us. We maintain
insurance to protect against claims associated with the use of such products,
but there can be no assurance that our insurance coverage would adequately
cover any claims asserted against us. If our insurance coverage is not
adequate, we may be required to pay the damages which could have a material
adverse effect on us.
System errors and warranties in our Health Care Information Technology
business's products could cause unforeseen liabilities.
Our Health Care Information Technology business's systems are very complex.
As with complex systems offered by others, our systems may contain errors,
especially when first introduced. The Health Care Information Technology
business's systems are intended to provide information for health care
providers in providing health care to patients. Therefore, users of its
products have a greater sensitivity to system errors than the market for
software products generally. Failure of a client's system to perform in
accordance with its documentation could constitute a breach of warranty and
could require us to incur additional expense in order to make the system comply
with the documentation. If such failure is not timely remedied, it could
constitute a material breach under a contract allowing the client to cancel the
contract.
Our failure to address the Year 2000 issue adequately may have a material
adverse effect on our operations.
Software applications that use only two digits to identify a year in the
date field may fail or create errors in the year 2000. This potential problem
is known as the "Year 2000 Issue." We rely heavily on computer technologies to
operate our business and, accordingly, in response to the Year 2000 Issue, we
have undertaken an enterprise-wide Year 2000 project. Most of our mission
critical projects have been installed as of July 31, 1999 and we expect to
complete all phases of our identified Year 2000 projects by September 30, 1999.
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As our business relies in part on the computer-based systems of our
customers, suppliers and other third parties and on technology or data
purchased from third parties, we are reviewing the Year 2000 readiness of all
of these third parties and are developing contingency plans for Year 2000
problems. As of July 31, 1999, all of the computer hardware and purchased
software used for mission critical functions in our Health Care Supply
Management business was certified by vendors as being compliant. We also plan
to conduct systems testing with third parties during calendar year 1999.
In addition, our Health Care Information Technology business, which is
principally engaged in the sale and licensing of computer software and systems,
. has conducted an assessment which indicates that, with some exceptions,
products available for licensing and acquisition from the Health Care
Information Technology business were, as of March 31, 1999, year 2000
compliant,
. is making ongoing inquiries about the year 2000 readiness of its hardware
and software vendor business partners, and
. has substantially completed its assessment of internal systems except for
certain remote locations and expects that remediation efforts for all of
its material internal systems to be completed by September 30, 1999.
Also, our Health Care Information Technology business may experience an
increase in warranty claims relating to
. malfunctions in our products which have not been upgraded, either because
we have discontinued support for such products and have therefore not
provided the necessary enhancement or because the customer has not
installed an enhancement made available by us or
. malfunctions resulting from the Year 2000 Issue in third-party hardware
or software used in connection with the operation of our software
products.
Although such warranty claims are generally subject to contractual liability
limitations, we are not able to accurately assess or estimate the possible
impact of such claims.
In addition, management believes that the costs of work by customers related
to Year 2000 Issues have caused some Health Care Information Technology
customers and prospective customers to defer current projects or prospective
decisions regarding the acquisition of new software.
We believe that the most reasonably likely worse case Year 2000 scenario
would be a business disruption resulting from an extended and/or extensive
communications failure. We believe that such a disruption is likely to be
localized and of short duration and would therefore not be likely to have a
material adverse effect on us. However, given the range of possible issues and
large number of variables involved in Year 2000 preparations (including any
acquisitions which we may make), we cannot quantify the potential cost of
problems should our remediation efforts or the efforts of those with whom we do
business not be successful. Such costs and any failure of such remediation
efforts could result in a loss of business, damage to our reputation and legal
liability. Consequently such costs or failures could have a material adverse
effect on us.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed under the captions "Risk Factors," "The Company"
and "Financial Review" and elsewhere in this prospectus or in the information
incorporated by reference constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Some of the forward-looking statements can be
identified by the use of forward-looking words such as "believes," "expects,"
"may," "will," "should," "seeks," "approximately," "intends," "plans,"
"estimates," or
4
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"anticipates" or the negative of those words or other comparable terminology.
The discussion of financial trends, strategy, plans or intentions may also
include forward-looking statements. Forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from
those projected. These include, but are not limited to: the resolution or
outcome of the pending litigation and government investigations relating to the
previously announced financial restatement; our ability to successfully
integrate and operate acquired businesses and the risks associated with such
businesses, including the merger that created McKesson HBOC, Inc.; the changing
U.S. health care environment, including potential changes in private and
governmental reimbursement for health care services, the method by which such
services are delivered, legislation or regulations governing such services or
mandated benefits, and changes in manufacturers' pricing or distribution
policies; the ability of the Health Care Information Technology business to
retain existing customers and to attract new customers in light of rapid
technological advances and changing business models, slowing of demand for
software products because of Year 2000 concerns, and challenges in integrating
the Company's software products; our ability to protect our proprietary
technology and to not infringe on rights of third parties; the effect on us of
any potential product liability claims, breach of warranty claims or breach of
contract claims arising from the Health Care Information Technology business;
the effect of the pending litigation and government investigations relating to
the previously announced financial restatement on our ability to manage our
businesses and to attract and retain employees and management; and our ability
and the ability of our vendors and customers to complete the necessary actions
to achieve a Year 2000 conversion for computer systems and applications.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise. Readers are cautioned not to rely too heavily on these forward-
looking statements. The forward-looking statements by their nature are not
intended to be definitive predictions of future events. There is no general
duty for us to update forward-looking statements. There is, however, a duty for
us to correct information contained in this prospectus when a disclosure is
misleading when made or when a statement that was accurate when made becomes
misleading due to subsequent events.
THE COMPANY
On January 12, 1999, we completed a merger with HBO & Company, a leading
health care information technology company, by exchanging 177 million shares of
our common stock for all of the issued and outstanding shares of common stock
of HBO & Company. Each share of HBO & Company was exchanged for 0.37 of a share
of our common stock. We were renamed McKesson HBOC, Inc. The merger was
structured as a tax-free reorganization and was accounted for as a pooling of
interests.
We are a leading health care supply management company in North America. In
addition, we provide software solutions, technological innovation and
comprehensive services to the health care industry, and through our Water
Products segment, process and market pure drinking water.
Our mission is to be the world leader in health care supply management and
health care information technologies across the entire continuum of health
care, through the operation of market-leading businesses in pharmaceutical and
medical-surgical distribution and information technology and services for
health care providers and payors.
Our principal executive offices are located at McKesson Plaza, One Post
Street, San Francisco, California 94104, and our telephone number is (415) 983-
8300.
USE OF PROCEEDS
All net proceeds from the sale of the shares of our common stock will go to
the stockholders who offer and sell their shares. Accordingly, we will not
receive any of the proceeds from the sales of the shares of our common stock.
5
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SELLING STOCKHOLDERS
The selling stockholders obtained their shares of our common stock as a
result of the merger of Automated Prescription Systems, Inc. with and into
McKesson HBOC, Inc., previously McKesson Corporation. In the Registration
Rights Agreement, dated as of August 27, 1998, among us and the stockholders of
Automated Prescription Systems, Inc., we agreed to register the shares of our
common stock issued to the selling stockholders and to keep this registration
statement effective for at least 120 days, or until all of the registered
shares are sold under the registration statement, whichever comes first. Our
registration of shares of our common stock does not necessarily mean that the
selling stockholders will sell all or any of their shares of our common stock.
Bear Stearns Securities Corp. and Hibernia National Bank, as pledgees of some
of the shares of our common stock, may offer shares of our common stock by this
prospectus. In addition, donees and pledgees of shares of our common stock
received from the selling stockholders after the date of this prospectus may
offer shares of our common stock by this prospectus.
The following table sets forth information about the shares of our common
stock that are owned by the selling stockholders as of the date of this
prospectus. The number of shares of our common stock owned by the selling
stockholders after the offering assumes that all of the shares being offered
under this prospectus are sold, and that the selling stockholders acquire no
additional shares of our common stock before the completion of this offering.
Each selling stockholder owns less than 1% of the total number of shares of our
common stock outstanding.
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Shares Owned Shares Owned
Prior to Shares After
Name of Record Selling Stockholder the Offering Being Offered the Offering
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Baker Family Limited Partnership I.... 265,326 265,326 0
Diana Baker........................... 214,236 214,236 0
James R. Baker, Jr.................... 125,003 125,003 0
Mary P. Baker......................... 33,760 33,760 0
Bear Stearns Securities Corp.......... 254,443 254,443 0
Janelle Diane Hurst Holmstrom......... 19,181 19,181 0
Brian Jefferson Hurst................. 19,181 19,181 0
James R. Baker, Jr. Trustee
for the Baker Family Trust
for the Benefit of Sharon Baker
Petrovsky............................ 8,594 8,594 0
James R. Baker, Jr. Trustee
for the Baker Family Trust
for the Benefit of Sharon Baker White
..................................... 12,506 12,506 0
James R. Baker, Jr. Trustee
for the Baker Family Trust
for the Benefit of Diana Baker White
..................................... 7,980 7,980 0
James R. Baker, Jr. Trustee
for the Baker Family Trust
for the Benefit of Diana Baker Foshee
..................................... 15,540 15,540 0
James R. Baker, Sr. & Mary Parker
Baker Trustees
for the Benefit of the Baker
Grandchildren........................ 57,546 57,546 0
Walter G. Pearson..................... 38,363 10,527 27,836
Rex Ponthie........................... 1,534 1,534 0
Rusty Baker Family Limited
Partnership.......................... 122,764 122,764 0
Lena Smith............................ 3,836 3,836 0
Lena Smith, usufructuary with the
right of disposition,
Charles W. Smith, Jr., Charlene Smith
LaCroix, Tommy R. Smith, Doris Jean
Smith and Barbara Carolyn Smith
Reynolds,
as naked owners...................... 3,836 3,836 0
Sharon Baker White.................... 192,450 192,450 0
</TABLE>
Diana Baker, James R. Baker, Jr., James R. Baker, Sr., Mary Parker Baker and
Sharon Baker White served as directors of Automated Prescription Systems, Inc.
prior to its merger with us. In addition, James R. Baker, Jr. was the Chief
Executive Officer of Automated Prescription Systems, Inc. and currently serves
as a consultant to us and Mary Parker Baker was its Secretary.
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DESCRIPTION OF CAPITAL STOCK
The following is a description of the material terms of our capital stock
and of certain provisions of Delaware law. You should also read our Restated
Certificate of Incorporation, as amended (the "Certificate"), and our Restated
By-Laws, as amended (the "By-Laws"), and the Delaware law, and, regarding the
rights of holders of shares of our common stock to purchase shares of our
preferred stock, the Rights Agreement (as defined below under the heading
"Rights Plan"). We have previously filed copies of such documents with the SEC.
As of June 30, 1999, our capital stock consisted of 400,000,000 authorized
shares of our common stock and 100,000,000 authorized shares of our preferred
stock.
Common Stock
As of June 30, 1999, there were 281,227,000 shares of our common stock
issued and outstanding.
The holders of outstanding shares of our common stock are entitled to
receive dividends out of assets legally available therefor at such times and in
such amounts as our board of directors may from time to time determine. The
shares of our common stock are neither redeemable nor convertible, and do not
provide their holders with any preemptive or subscription rights to purchase
any of our securities. Upon our liquidation, dissolution or winding up, the
holders of our common stock are entitled to receive our assets which are
legally available for distribution, after payment of all debts, other
liabilities and any liquidation preferences of our outstanding preferred stock.
Each outstanding share of our 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 4,000,000
5% Trust Convertible Preferred Securities and 123,720 5% Trust Convertible
Common Securities (each, a "Trust Security"). Each Trust Security is
convertible into our 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 our common stock for each Trust Security (equivalent to a conversion price
of $37.26 per share of our common stock), subject to adjustment in certain
circumstances.
Preferred Stock
As of the date hereof, there were no shares of our preferred stock issued
and outstanding. Our board of directors is authorized to issue our preferred
stock in classes or series and to fix the designations, preferences,
qualifications, limitations, or restrictions of any class or series, the rate
and nature of dividends, the price and terms and conditions on which shares may
be redeemed, the amount payable in the event of voluntary or involuntary
liquidation, the terms and conditions for conversion or exchange into any other
class or series of the stock, voting rights and other terms. Of the 100,000,000
authorized shares of our preferred stock, 10,000,000 shares have been
designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock") and reserved for issuance under our Rights Agreement.
Anti-takeover Effects of Provisions of Our Restated Certificate of
Incorporation and By-Laws
Our Certificate and By-Laws contain 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 to be in the stockholder's best
interest. Such takeover attempts may include those which would result in a
premium over the market price for the shares held by stockholders.
The Certificate divides our board of directors 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 our
capital stock entitled to vote generally in the election of directors.
Vacancies and newly created directorships on our board of directors may be
filled only by a majority of the remaining directors or by the plurality vote
of the stockholders.
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The Certificate also provides that any action required or permitted to be
taken by the holders of our common stock may be effected only at an annual or
special meeting of such holders, and that the only other alternative available
for stockholder action is by unanimous written consent. The By-Laws provide
that special meetings of holders of our common stock may be called only by our
chairman of the board or our president or our board of directors. Holders of
our common stock are not permitted to call a special meeting or to require that
our board of directors 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 our board of directors, of candidates for
election as directors as well as for other stockholder proposals to be
considered at annual meetings of stockholders. In general, we must receive
notice of the intent of a stockholder to nominate a director or to raise
business at such meetings not less than 90 nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting and such notice
must contain 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 some provisions of the By-Laws may only
be amended by the affirmative vote of the holders of 75% of our outstanding
stock 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 our
voting stock and two-thirds of the voting stock other than voting stock held by
an interested stockholder is necessary to approve some business combinations
proposed by an interested stockholder.
The foregoing summary outlines material provisions of the Certificate and
By-Laws. You should also read the Certificate and By-Laws, copies of which have
been filed with the SEC.
Rights Plan
Our board of directors declared a dividend distribution of one right (a
"Right") for each outstanding share of our common stock to our stockholders of
record at November 1, 1994 (the "Record Date"). As a result of the two-for-one
stock split effective January 2, 1998, each share of our common stock has
attached to it one-half of a Right. Each Right entitles the registered holder
to purchase from us a unit consisting of one one-hundredth of a share of our
Series A Preferred Stock at a purchase price of $100 per unit. The Rights
expire on October 21, 2004, unless redeemed earlier by our board of directors.
The terms of the Rights are set forth in a Rights Agreement, as amended,
between us and a rights agent (the "Rights Agreement"). The following summary
outlines the material provisions of the Rights Agreement. You should also read
the Rights Agreement, a copy of which has been filed with the SEC.
The Rights are attached to all of our common stock certificates representing
shares outstanding at the Record Date and shares issued between the Record Date
and the Distribution Date (as defined below), and no separate rights
certificates (the "Rights Certificates") have been distributed. The Rights will
separate from our common stock, separate Rights Certificates will be issued and
a distribution date (the "Distribution Date") will occur when the first of the
following events takes place:
. 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"),
. ten business days (or such later date as our board of directors may
determine) following commencement of a tender or exchange offer that
would result in the offeror beneficially owning 15% or more of our common
stock, or
. ten business days after our board of directors determines that the
ownership of 10% or more of our outstanding common stock by a person is
(1) intended to cause us to repurchase our common stock beneficially
owned by such person or (2) is causing, or is reasonably likely to cause,
a material adverse impact on us.
8
<PAGE>
The term "Acquiring Person" means any person who, together with its
affiliates and associates, acquires beneficial ownership of shares of our
common stock representing 15% or more of our common stock, but shall not
include us, any of our subsidiaries, any of our employee benefit plans or any
of our subsidiaries' employee benefits plans, or any person or entity we
organized, appointed or established for or under the terms of such plans.
In the event that a person becomes an Acquiring Person (except in connection
with an offer for all outstanding shares of our common stock which the
independent directors determine to be fair to and otherwise in our best
interests and that of our stockholders), following a Distribution Date, each
holder of a Right will thereafter have the right to receive, upon exercise, our
common stock (or, in certain circumstances, cash, property or other of our
securities) having a calculated value equal to two times the exercise price of
the Right. Notwithstanding the foregoing, following the occurrence of such
event, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by an Acquiring Person and certain
related persons and transferees will be null and void. However, Rights are not
exercisable following the occurrence of such event until such time as the
Rights are no longer redeemable as set forth below.
At any time prior to the tenth day following the Stock Acquisition Date, we
may redeem the Rights, in whole, but not in part, at a price of $.01 per Right.
Until a Right is exercised, the holder of the Right, as such, will have no
rights as our stockholder, including without limitation, the right to vote or
to receive dividends.
In general, the Rights Agreement may be amended by our board of directors
(1) prior to the Distribution Date in any manner and (2) on or after the
Distribution Date in certain respects including (A) to shorten or lengthen 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 anti-takeover effects and will cause substantial dilution to
a person or group that attempts to acquire us on terms not approved by our
board of directors. The Rights should not interfere with any merger or other
business combination approved by our board of directors, since our board of
directors may redeem the Rights as provided above.
Section 203 of Delaware General Corporation Law
We are 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:
. such transaction is approved by our board of directors prior to the date
the interested stockholder obtains such status,
. 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 (1)
persons who are directors and also officers and (2) 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
. the "business combination" is approved by our 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 its affiliates and
9
<PAGE>
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 with us
or other takeover or change in control attempts directed at us and,
accordingly, may discourage attempts to acquire us.
Effects of Authorized But Unissued Stock
Our authorized but unissued shares of common stock and preferred stock may
be issued without additional stockholder approval and may be utilized for a
variety of corporate purposes, including future offerings to raise additional
capital or to facilitate corporate acquisitions.
The issuance of our preferred stock could have the effect of delaying or
preventing a change in control of us. The issuance of our preferred stock could
decrease the amount of earnings and assets available for distribution to the
holders of our common stock or could adversely affect the rights and powers,
including voting rights, of the holders of our common stock. In certain
circumstances, such issuance could have the effect of decreasing the market
price of our common stock.
One of the effects of the existence of our unissued and unreserved common
stock or preferred stock may be to enable our board of directors to issue
shares to persons friendly to current management which could render more
difficult or discourage an attempt to obtain control of us by means of a
merger, tender offer, proxy contest or otherwise, and thereby protect the
continuity of management. Such additional shares could also be used to dilute
the stock ownership of persons seeking to obtain control of us.
As of July 31, 1999, we have reserved for issuance 48,875,000 shares of our
common stock for the exercise of options or grants of restricted stock which
have been granted or which may be granted in the future to our directors,
officers and employees and the conversion of the Trust Securities. We do not
currently have any plans to issue shares of our preferred stock, although
10,000,000 shares have been designated Series A Preferred Stock in accordance
with our Rights Agreement.
Limitation of Directors Liability
The Certificate contains a provision that limits the liability of our
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 for:
. any breach of the director's duty of loyalty to us or our stockholders,
. acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law,
. unlawful dividend payments or stock redemptions or purchases, and
. any transaction from which the director derives an improper personal
benefit.
The effect of this provision is to eliminate our rights and the rights of
our stockholders (through stockholders' derivative suits on our behalf) 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 above. This provision
does not limit or eliminate our rights or rights of 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, our directors and officers
have indemnification protection.
10
<PAGE>
PLAN OF DISTRIBUTION
We are registering shares of our common stock on behalf of the selling
stockholders. As used herein, "selling stockholders" include Bear Stearns
Securities Corp. and Hibernia National Bank, as pledgees of some of the shares
of our common stock and any other donees and pledgees selling shares received
from a named selling stockholder after the date of this prospectus. The selling
stockholders or their respective successors in interest may offer their shares
of our common stock at various times, depending on market conditions and other
factors, in one or more transactions on any of the United States securities
exchanges where our common stock is listed, including the New York Stock
Exchange, Inc. and the Pacific Exchange, Inc., in the over-the-counter market
or in transactions other than on such exchanges or in the over-the-counter
market. The selling stockholders may sell their shares at market prices
prevailing at the time of the sale, at negotiated prices or at fixed prices.
The selling stockholders may offer their shares of our common stock in any
manner permitted by law, including through underwriters, brokers, dealers or
agents and directly to one or more purchasers. Sales of the shares of our
common stock may involve:
. sales to underwriters who will acquire the shares of our common stock for
their own account and resell them in one or more transactions at fixed
prices or at varying prices determined at the time of sale;
. block transactions in which the broker or dealer engaged will attempt to
sell the shares of our common stock as an agent but may position and
resell a portion of the block as a principal to facilitate the
transaction;
. purchases by a broker or dealer as principal and resale by such broker or
dealer for its account;
. an exchange distribution in accordance with the rules of any such
exchange; and
. ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
Brokers and dealers may receive compensation in the form of underwriting
discounts, concessions or commission from the selling stockholders and/or
purchasers of shares of our common stock for whom they may act as agents (which
compensation may be in excess of customary commissions). The selling
stockholder and any broker or dealer that participates in the distribution of
shares of our common stock may be deemed to be underwriters and any commissions
received by them and any profit on the resale of shares of our common stock
positioned by a broker or dealer may be deemed to be underwriting discounts and
commissions under the Securities Act. In the event any selling stockholder
engages an underwriter in connection with the sale of the shares of our common
stock, if required, a prospectus supplement will be distributed, which will set
forth the number of shares of our common stock being offered and the terms of
the offering, including the names of the underwriters, any discounts,
commissions and other items constituting compensation to underwriters, dealers
or agents, the public offering price and any discounts, commissions or
concessions allowed or reallowed or paid by underwriters to dealers. In
addition, upon our being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, a supplement to this prospectus
will be filed.
In addition, the selling stockholders may from time to time sell shares of
our common stock in transactions under Rule 144 promulgated under the
Securities Act.
In accordance with the Registration Rights Agreement, we will pay all
registration expenses in connection with the registration of the shares of our
common stock. We and the selling stockholders have agreed to indemnify each
other against certain civil liabilities, including certain liabilities under
the Securities Act.
EXPERTS
The consolidated financial statements and related consolidated financial
statement schedule of McKesson HBOC, Inc. and its consolidated subsidiaries,
except for HBOC & Company and its subsidiaries as of March 31, 1998 and 1997
and for the years then ended, included in McKesson HBOC, Inc.'s Annual Report
on Form 10-K/A for the year ended March 31, 1999 which is incorporated by
reference in this prospectus and
11
<PAGE>
elsewhere in the registration statement have been audited by Deloitte & Touche
LLP as stated in their report (which report expresses an unqualified opinion
and includes an explanatory paragraph referring to certain shareholder
litigation as discussed in Financial Note 19 to the consolidated financial
statements) and have been so included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
The financial statements of HBOC & Company and its subsidiaries referred to
above (not separately presented herein), which are included in our Annual
Report on Form 10-K/A for the year ended March 31, 1999 which is incorporated
by reference in this prospectus and elsewhere in this registration statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report (which expresses an unqualified opinion and includes
an explanatory paragraph related to certain shareholder litigation) with
respect thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said report.
LEGAL MATTERS
Ivan D. Meyerson, our Senior Vice President, General Counsel and Corporate
Secretary will issue an opinion about the validity of the shares of our common
stock. Mr. Meyerson owns shares of, and holds options to purchase, in the
aggregate, less than 1% of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any documents we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we later file with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act:
1. Annual Report on Form 10-K/A for the fiscal year ended March 31, 1999.
2. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
3. Current Report on Form 8-K, dated May 3, 1999.
You may request a copy of these filings, at no cost by writing or
telephoning us at the following address:
Ivan D. Meyerson
Senior Vice President, General Counsel and Corporate Secretary
McKesson HBOC, Inc.
McKesson Plaza
One Post Street
San Francisco, California 94104
(415) 983-8300
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. The selling
stockholders will not make an offer of the shares of our common stock in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
12
<PAGE>
[MCKESSONHBOC LOGO APPEARS HERE]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following expenses (other than the Securities and Exchange Commission
(the "Commission") filing fee) are estimated.
<TABLE>
<S> <C>
Commission registration fee...................................... $11,317.00
Printing and engraving expenses.................................. 10,000.00
Accountants' fees and expenses................................... 20,000.00
Attorneys' fees and expenses..................................... 50,000.00
Miscellaneous.................................................... 4,683.00
----------
Total.......................................................... $95,000.00
==========
</TABLE>
McKesson HBOC, Inc. (the "Company") will pay all registration expenses in
connection with the registration of the shares of the Company's common stock.
Item 15. Indemnification of Directors and Officers.
Article VIII of the Restated By-Laws, as amended, of the Company (the "By-
Laws"), 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 such person is or was a director or
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 such person acted in good faith and in a manner
that such person reasonably believed to be in or not opposed to the best
interests of the Company, and, in the case of any criminal action or
proceeding, if such person had no reasonable cause to believe that his or her
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 such
person acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of the Company, except that such
person may not be indemnified in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless a
court determines otherwise.
Article VIII of the By-Laws allows the Company to maintain director and
officer liability insurance on behalf of any person who is or was a director or
officer of the Company or such person who serves or served as director,
officer, employee or agent of another corporation, partnership or other
enterprise at the request of the Company.
Article VI of the Company's Restated Certificate of Incorporation, as
amended, 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 such
director's fiduciary duty as a director; provided, however, that such clause
shall not apply to any liability of a director (1) for any breach of such
director's 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.
II-1
<PAGE>
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.1 Restated Certificate of Incorporation of the Company (Exhibit 3.2(1)).
4.2 Certificate of Amendment to the Restated Certificate of Incorporation
of the Company (Exhibit 4.3(2)).
4.3 Amended and Restated By-Laws of the Company, as amended through July
15, 1999 (Exhibit 4.5(3)).
4.4 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 4.7(3)).
4.5 Amendment No. 1 to Rights Agreement, dated as of October 19, 1998, by
and between the Company and First Chicago Trust Company of New York as
Rights Agent (Exhibit 99.1(4))
5.1* Opinion of Ivan D. Meyerson, Senior Vice President, General Counsel
and Corporate Secretary of the Company.
10.1* Registration Rights Agreement, dated as of August 27, 1998, by and
among the Company and the Selling Stockholders.
23.1* Consent of Ivan D. Meyerson (included in Exhibit 5.1).
23.2* Consent of Deloitte & Touche LLP.
23.3* Consent of Arthur Andersen LLP.
24.1* Power of Attorney.
24.2* Power of Attorney.
</TABLE>
- --------
(1) Incorporated by reference to the designated exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
(2) Incorporated by reference to the designated exhibit to the Company's
Registration Statement on Form S-8 as filed with the Commission on January
12, 1999.
(3) Incorporated by reference to the designated exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
(4) Incorporated by reference to designated exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998.
* Filed herewith.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(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.
II-2
<PAGE>
(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 (i) and (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
with or furnished to the Commission by the Registrant pursuant to
Section 13 or 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered thereby, and 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 registrant pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, the registrant has 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 registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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 registrant 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 Act and will be governed by the final
adjudication of such issue.
II-3
<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 26th day
of August, 1999.
McKesson HBOC, Inc.
By: /s/ Heidi E. Yodowitz
----------------------------------
Name: Heidi E. Yodowitz
Title: Senior Vice President and
Controller and Acting
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
--------- -----
<C> <S>
* Co-President and
_____________________________________________ Co-Chief Executive Officer and Director
John H. Hammergren (principal executive officer)
* Co-President and
_____________________________________________ Co-Chief Executive Officer and Director
David L. Mahoney (principal executive officer)
/s/ Heidi E. Yodowitz Senior Vice President and Controller and
_____________________________________________ Acting Chief Financial Officer
Heidi E. Yodowitz (principal financial and accounting
officer)
* Director
_____________________________________________
Alfred C. Eckert
* Director
_____________________________________________
Tully M. Friedman
* Director
_____________________________________________
Alton F. Irby III
* Director
_____________________________________________
M. Christine Jacobs
* Director
_____________________________________________
Gerald E. Mayo
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Director
_____________________________________________
James V. Napier
* Director
_____________________________________________
David S. Pottruck
* Director
_____________________________________________
Carl E. Reichardt
* Chairman of the Board and
_____________________________________________ Director
Alan Seelenfreund
* Director
_____________________________________________
</TABLE> Jane E. Shaw
*By: /s/ Ivan D. Meyerson August 26, 1999
------------------------------------
Ivan D. Meyerson
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
5.1 Opinion of Ivan D. Meyerson, Senior Vice President, General Counsel
and Corporate Secretary of the Company.
10.1 Registration Rights Agreement, dated as of August 27, 1998, by and
among the Company and the Selling Stockholders.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney.
24.2 Power of Attorney.
</TABLE>
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF McKESSON HBOC, INC.]
August 26, 1999
The Board of Directors
McKesson HBOC, Inc.
McKesson Plaza
One Post Street
San Francisco, California 94104
Ladies and Gentlemen:
I am General Counsel of McKesson HBOC, Inc., a Delaware corporation (the
"Company"), and have acted in such capacity in connection with the issuance of
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of the Company to the former stockholders of Automated Prescription
Systems, Inc. (the "Selling Stockholders").
This opinion is being furnished in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Securities Act").
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction of (i) the Registration
Statement on Form S-3 as filed with the Securities and Exchange Commission (the
"Commission") on the date hereof (the Registration Statement, at the time it
becomes effective, being hereinafter referred to as the "Registration
Statement"); (ii) the Agreement and Plan of Merger, dated as of August 27, 1998
(the "Merger Agreement"), by and among the Company, Red Acquisition Corp., a
Louisiana corporation, and Automated Prescription Systems, Inc., a Louisiana
corporation, and the selling stockholders parties thereto; (iii) the
certificates representing the shares of Common Stock registered in the
respective names of the Selling Stockholders; (v) the Restated Certificate of
Incorporation of the Company, as in effect on August 27, 1998 and the date
hereof; (vi) the Restated By-Laws of the Company, as in effect on August 27,
1998 and the date hereof; and (vii) certain resolutions of the Board of
Directors of the Company relating to the Merger Agreement and the transactions
contemplated thereby. I have also examined originals or copies, certified or
otherwise identified to my satisfaction, of such records of the Company and such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as I have deemed necessary or appropriate as a basis
for the opinions set forth herein.
<PAGE>
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making my
examination of documents executed or to be executed by parties other than the
Company, I have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to the opinions expressed herein which I have
not independently established or verified, I have relied upon statements and
representations of officers and other representatives of the Company and others.
I am admitted to the bar of the State of California and do not express any
opinion as to any laws other than the General Corporation Law of the State of
Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
issuance and sale of the Shares was duly authorized and that the Shares were
validly issued and are fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. I also consent to the reference to me in
the Registration Statement under the caption "Legal Matters." In giving this
consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Ivan D. Meyerson
Ivan D. Meyerson
Senior Vice President, General Counsel
and Corporate Secretary
2
<PAGE>
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of August 27, 1998
<PAGE>
REGISTRATION RIGHTS AGREEMENT, dated as of August 27, 1998, by
McKesson Corporation, a Delaware corporation (the "Company"), and the other
undersigned parties hereto.
1. Introduction: Term of Agreement. The Company is a party to the
-------------------------------
separate Agreement and Plan of Merger (the "Merger Agreement"), dated as of
August 27, 1998, among the Company, Red Acquisition Corp., a Louisiana
corporation, Automated Prescription Systems, Inc., a Louisiana corporation, and
the selling stockholders parties thereto (the "Stockholders") pursuant to which
the Company has agreed, among other things, to acquire through merger APS and,
in connection therewith, to issue to the Stockholders shares of common stock of
the Company (the "Common Stock") as specified in the Merger Agreement. This
Agreement shall become effective upon the Effective Time (as defined in the
Merger Agreement). This Agreement shall terminate and be of no further force and
effect on the second anniversary date of the Effective Time. Notwithstanding the
preceding sentence, with respect to Registrable Securities being placed in
escrow pursuant to the Merger Agreement, (i) section 2. l hereof shall terminate
and be of no further force and effect on the second anniversary date of the
Effective Time, and (ii) the other provisions hereof shall terminate and be of
no further force and effect on the third anniversary date of the Effective Time.
Certain capitalized terms used in this Agreement are defined in section 3
hereof; references to sections shall be to sections of this Agreement.
2. Registration under Securities Act etc.
--------------------------------------
2.1 Registration on Request.
-----------------------
(a) Demand Request. Upon the written request of the Initiating
--------------
Holders (on their own and/or on behalf of the other Stockholders), requesting
that the Company effect the registration under the Securities Act of all or part
of such initiating Holders' Registrable Securities or the Registrable Securities
owned by other Stockholders and specifying the intended method or methods of
disposition thereof (a "Demand Request"), the Company will, as promptly as
reasonably practicable but in no event later than 20 days after such request,
give written notice of such requested registration to all registered holders of
Registrable Securities who would be entitled to participate in such
registration, and thereupon the Company will, subject to the terms of this
Agreement, use its best efforts to effect the registration under the Securities
Act of:
1
<PAGE>
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders (on their own and/or on
behalf of the other Stockholders) for disposition in accordance with the
intended method or methods of disposition stated in such request;
(ii) all other Registrable Securities the holders of which
shall have made a written request to the Company for registration thereof
within 30 days after the receipt of such written notice from the Company
(which request shall specify the intended method or methods of disposition
of such Registrable Securities);
(iii) all shares of Common Stock which the Company may elect to
register in connection with the offering of Registrable Securities pursuant
to this section 2.1; and
(iv) all shares of Common Stock which the Company may be
required to register in connection with "piggyback" or incidental
registration rights granted to any other Person;
all to the extent requisite to permit the disposition (in accordance with the
intended method or methods of distribution specified in the Demand Request) of
the Registrable Securities and the additional shares of Common Stock, if any, so
to be registered, provided, however that such Demand Request shall be for not
-------- -------
less than 400,000 shares of Common Stock. Subject to the provisions of section
2. 1(d), the Initiating Holders will have the right pursuant to this section 2.
1(a) to make one Demand Request.
Without limiting the generality of the foregoing, the Initiating
Holders shall have the right to request registration pursuant to this Section
2.1 and specify that one of the methods of disposition of Registrable Securities
shall be a block trade or trades involving Registrable Securities held by such
Initiating Holders and/or other Stockholders and that, in connection therewith,
the Company shall file with the Commission a registration statement under Rule
415 covering all of the Registrable Securities to be sold in the block trade or
trades. In such case, the Company shall file an appropriate shelf registration
statement with the Commission as promptly as reasonably practicable and in
accordance with the provisions of section 2.3. Subject to the provisions of
section 2.1(d), a shelf registration which involves a block trade or block
trades as an intended method of disposition, whether or not any such block
2
<PAGE>
trade is made, shall be considered as the exercise of the Demand Request
permitted by this section 2.1(a).
Notwithstanding anything herein to the contrary, it is understood and
agreed that the Initiating Holders may make a Demand Request for registration
pursuant to this section 2.1(a) 30 days prior to the date on which it is agreed
by the parties that the restricted period under Accounting Series Release No.
135 would expire.
(b) Registration Statement Form. The registration under this section
---------------------------
2. l shall be on such appropriate registration form of the Commission (i) as
shall be selected by the Company and, as shall be reasonably acceptable to the
Initiating Holders of the Registrable Securities so to be registered and (ii) as
shall permit the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition specified in the request for such
registration.
(c) Expenses. The Company will pay all Registration Expenses in
--------
connection with the registration requested pursuant to this section 2.l
(including any registration deemed not to be "effected" under section 2.l).
(d) Effective Registration Statement. The registration requested
--------------------------------
pursuant to this section 2.l shall not be deemed to have been effected (and
therefore shall not constitute the Demand Request) (i) unless the registration
statement with respect thereto has become effective in accordance with the
manner of disposition specified by the requesting holders, provided that a
--------
registration which does not become effective after the Company has filed the
registration statement with respect thereto solely by reason of the refusal to
proceed of the Initiating Holders (other than a refusal to proceed based upon
the advice of counsel relating to a matter with respect to the Company) shall be
deemed to have been effected by the Company at the request of the Initiating
Holders unless the Initiating Holders shall have elected to pay all Registration
Expenses in connection with such registration, (ii) if, after it has become
effective, such registration becomes subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason, or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement, if any, entered into in connection
with such registration are not satisfied, other than by reason of some act or
omission by a holder of Registrable Securities.
3
<PAGE>
(e) Selection of Underwriters. If a requested registration pursuant
-------------------------
to this section 2.1 involves an underwritten offering, the underwriter or
underwriters thereof shall be selected by the Company, subject to the approval
of the holders of a majority of the Registrable Securities which the Company has
been requested to register, which approval shall not be unreasonably withheld.
(f) Priority in Requested Registrations. If the requested registration
-----------------------------------
pursuant to this section 2.l involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of securities requested to be included in such registration (including
securities of the Company which are not Registrable Securities) exceeds the
number which can be sold in such offering within a price range acceptable to the
holders of a majority of the Registrable Securities requested to be included in
such registration, the Company will include in such registration, to the extent
of the number which the Company is so advised can be sold in such offering, (i)
first, Registrable Securities requested to be included in such registration by
the holders of Registrable Securities, pro rata among such holders requesting
--- ----
such registration on the basis of the number of such securities requested to be
included by such holders, and (ii) second, subject to section 2.1(a) hereof,
securities the Company proposes to sell and other securities of the Company
included in such registration by other holders who may have "piggyback" or
incidental registration rights.
(g) Delay Periods. The Company shall be entitled to Postpone the
-------------
filing of any registration statement otherwise required to be prepared and filed
by the Company pursuant to this section 2.1, or suspend the use of any effective
registration statement under this section 2.1, for a reasonable period of time,
but not in excess of 90 days (a "Delay Period"), if (i) such postponement or
suspension is required by applicable law arising from events outside of the
control of the Company or (ii) any senior executive officer of the Company
determines that in such senior executive officer's reasonable good faith
judgment the registration and distribution of the Registrable Securities covered
or to be covered by such registration statement would interfere with any pending
material financing, acquisition, corporate reorganization, business combination,
joint venture, strategic alliance, commercial alliance, customer contract or
other transaction involving the Company or any of its subsidiaries or would
require premature disclosure thereof and promptly gives the initiating Holders
written notice of such determination, and an approximation of the period of the
anticipated delay; provided, however, that (i) the aggregate number of days
included in all Delay Periods during any consecutive 12 months shall not exceed
the
4
<PAGE>
aggregate of 180 days and (ii) a period of at least 90 days shall elapse
between the termination of any Delay Period and the commencement of the
immediately succeeding Delay Period. Immediately upon receipt of a written
notice of suspension, each holder of Registrable Securities who made a request
to participate in the underwritten offering pursuant to this section 2.1 shall
cease all disposition efforts with respect to Registrable Securities held by
such holder. If the Company shall so postpone the filing of a registration
statement, the Holders of Registrable Shares to be registered shall
automatically be deemed to have withdrawn the request for registration and such
request shall not constitute the Demand Request for registration to which the
Initiating Holders of Registrable Shares are entitled pursuant to this section
2.l. The time period for which the Company is required to maintain the
effectiveness of the registration statement shall be extended by the aggregate
Delay Periods during such registration.
2.2 Incidental Registration.
-----------------------
(a) Right to Include Registrable Securities. If the Company at
---------------------------------------
any time proposes to register any of its shares of Common Stock (other than in
connection with a registration of securities which are convertible or
exchangeable into Common Stock) under the Securities Act (other than by a
registration on Form S-4 or S-8, or any successor or similar forms and other
than pursuant to section 2.1), whether or not for sale for its own account, it
will each such time give prompt written notice to all holders of Registrable
Securities of its intention to do so and of such holders' rights under this
section 2.2. Upon the written request of any such holder made within 30 days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method or methods of disposition thereof), the Company will, subject to
the terms of this Agreement, use its best efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the holders thereof, to the extent requisite to
permit the disposition (in accordance with the intended method or methods of
distribution thereof specified in the requests of such holders) of the
Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the registration statement which covers the securities which the
Company proposes to register; provided that if, at any time after giving written
--------
notice of its intention to register any securities and prior to the effective
date of the registration statement flied in connection with the registration of
the Registrable Securities and the securities which the Company proposes to
sell, the Company shall determine for any reason either not to register or to
delay registration of the securities which the Company proposes to sell, the
Company may, at its election, postpone or
5
<PAGE>
withdraw the registration statement and give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to request that such registration be
effected as a registration under section 2.l, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. No registration effected under this section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
section 2.l, nor shall any such registration hereunder be deemed to have been
effected pursuant to section 2.1. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this section 2.2, and each holder whose Registrable Securities are
included in a registration requested pursuant to this section 2.2 will pay any
underwriting discounts and commissions and fees of such holder's counsel in
connection therewith.
(b) Priority in Incidental Registrations. If (i) a registration
------------------------------------
pursuant to this section 2.2 involves an underwritten offering of the securities
so being registered, whether or not for sale for the account of the Company, to
be distributed (on a firm commitment basis) by or through one or more
underwriters of recognized standing under underwriting terms appropriate for
such a transaction, and (ii) the managing underwriter of such underwritten
offering shall inform the Company and holders of the Registrable Securities
requesting such registration by letter of its belief that the number of
securities requested to be included in such registration exceeds the number
which can be sold in (or during the time of) such offering, then the Company
will include in such registration:
(i) first, all the securities the Company proposes to sell for
its own account,
(ii) second, all securities of any other holder who has made a
demand for registration, and
(iii) third, to the extent that the number of securities which
the Company and any such other holders proposed to include pursuant to
clauses (i) and (ii) is less than the number of securities which the
Company has been advised can be sold in such
6
<PAGE>
offering, the number of (x) such Registrable Securities requested to be
included in such registration by the holders of Registrable Securities
pursuant to section 2.2(a) hereof and (y) other equity securities of the
Company requested to be included in such registration by holders of such
securities who are entitled to incidental registration rights under any
other registration rights agreements with the Company shall be allocated
pro rata among all such holders on the basis of the relative number of
--- ----
Registrable Securities and other equity securities each such holder has
requested to be included in such registration.
2.3 Registration Procedures. If and whenever the Company is
-----------------------
required to effect the registration of any Registrable Securities under the
Securities Act as provided in sections 2.l and 2.2, the Company shall, as
expeditiously as reasonably possible:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration (including such audited
financial statements as may be required by the Securities Act or the rules
and regulations promulgated thereunder) and thereafter cause such
registration statement to become and remain effective for a period of at
least 120 days, provided however that the Company may discontinue any
--------
registration of its securities which are not Registrable Securities (and,
under the circumstances specified in section 2.2(a), its securities which
are Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of at least 120 days (30 days in the case
of any registration pursuant to section 2.2) and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until the earlier of such
time as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth
in such registration statement or such other time as is required by the
Securities Act;
7
<PAGE>
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each underwriter, if any, of the securities
being sold by such seller such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed pursuant to Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller and underwriter, if any, may reasonably request;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other state securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities
being sold by such seller shall reasonably request, to keep such
registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of the securities owned by
such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this
subsection (iv) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(v) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of:
(X) an opinion of counsel for the Company (which shall be
outside counsel if outside counsel is rendering such opinion in the
transaction and otherwise may be the Company's inside counsel), dated
the effective date of such registration statement (or, if such
registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement),
customary for a transaction of such type, and
8
<PAGE>
(Y) a "comfort" letter (or, in the case of any such Person
which does not satisfy the conditions for receipt of a "comfort"
letter specified in Statement on Auditing Standards No. 72, as amended
by Statements on Auditing Standards Nos. 76 and 86, an "agreed upon
procedures" letter), dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, a letter of like kind dated the date of the closing under
the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement, covering substantially the
same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of the accountants'
letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities (with, in
the case of an "agreed upon procedures" letter, such modifications or
deletions as may be required under Statement on Auditing Standards No.
75) and, in the case of the accountants' letter, such other financial
matters customarily covered in a transaction of such type;
(vi) notify the holders of Registrable Securities and the
managing underwriter or underwriters, if any, promptly:
(V) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(W) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(X) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings by any Person for that purpose;
9
<PAGE>
(Y) if at any time the representations and warranties of the
Company made as contemplated by section 2.4 below cease to be true and
correct; and
(Z) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(vii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon the Company's
discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, and at the request of any such seller promptly
prepare and furnish to such seller and each underwriter, if any, a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(viii) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the registration statement as
promptly as possible;
(ix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and, if required, make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but not
more than eighteen months, beginning with the first day of the Company's
first full calendar quarter after the effective date of such registration
statement, which earnings statement
10
<PAGE>
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, and use its best efforts to furnish to each such
seller at least one business day prior to the filing thereof a copy of any
amendment or supplement to such registration statement or prospectus and
shall not file any thereof to which any such seller shall have reasonably
objected on the grounds that such amendment or supplement does not comply
in all material respects with the requirements of the Securities Act or of
the rules or regulations thereunder;
(x) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(xi) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the securities of the same class as the Registrable Securities are
then listed.
The Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto to which the holders of at
least a majority of the Registrable Securities covered by such registration
statement or the underwriter or underwriters, if any, shall reasonably object.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing in order to assure compliance
with applicable securities laws and applicable rules and regulations of
securities exchanges.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in paragraph (vii) of this section
2.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (vii) of this
section 2.3 and, if so directed by
11
<PAGE>
the Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
period mentioned in paragraph (ii) of this section 2.3 shall be extended by the
length of the period from and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received such notice to the date on which each such seller has received the
copies of the supplemented or amended prospectus contemplated by paragraph (vii)
of this section 2.3.
2.4 Underwritten Offerings.
----------------------
(a) Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under section 2.l, the Company will enter
into an underwriting or similar agreement with such underwriters for such
offering, such agreement to be reasonably satisfactory in substance and form to
the Company, each such holder and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in section 2.6. The
holders of the Registrable Securities will cooperate with the Company in the
negotiation of the underwriting or similar agreement and will give consideration
to the reasonable suggestions of the Company regarding the form thereof,
provided that nothing herein contained shall diminish the foregoing obligations
- --------
of the Company. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement, which agreement
shall provide that any or all of the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall be
conditions precedent to the obligations of such holders of Registrable
Securities. No underwriting or similar agreement shall require any holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters, other than representations and
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method or methods of distribution and any
other representation required by law, or to make any agreements with the Company
or the underwriters with respect to indemnification of any Person or the
contribution obligations of any Person that would impose any obligation
12
<PAGE>
which is broader than the indemnity furnished by such holder pursuant to the
provisions of section 2.6. In addition, the holders of Registrable Securities
shall cooperate with the Company in an effort to provide that any such agreement
will contain a provision modifying the indemnification of the underwriter to the
effect that neither the Company nor the holders of the Registrable Securities
will be liable to any Person who participates as an underwriter in the offering
or sale of Registrable Securities with respect to any preliminary prospectus, to
the extent that any such loss, claim, damage or liability of such underwriter
results from such underwriter having sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus, if the Company has previously
furnished copies thereof to such underwriter and such final prospectus as then
amended or supplemented, has corrected any such misstatement or omission.
(b) Incidental Underwritten Offerings. If the Company at any time
---------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in section 2.2 and subject to the
provisions of section 2.2(b), use its best efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such underwriters. The
holders of Registrable Securities to be distributed by such underwriters shall
be parties to the underwriting agreement between the Company and such
underwriters, which agreement shall provide that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters, other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method or methods of distribution and any other representation
required by law, or to make any agreements with the Company or the underwriters
with respect to indemnification of any Person or the contribution obligations of
any Person that would impose any obligation which is broader than the indemnity
furnished by such holder pursuant to the provisions of section 2.6. In
addition, the holders of Registrable Securities shall cooperate with the Company
in an effort to provide that any such agreement will
13
<PAGE>
contain a provision modifying the indemnification of the underwriter to the
effect that neither the Company nor the holders of the Registrable Securities
will be liable to any Person who participates as an underwriter in the offering
or sale of Registrable Securities with respect to any preliminary prospectus, to
the extent that any such loss, claim, damage or liability of such underwriter
results from such underwriter having sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus, if the Company has previously
furnished copies thereof to such underwriter and such final prospectus as then
amended or supplemented, has corrected any such misstatement or omission.
(c) Holdback Agreements.
-------------------
(i) Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities, if and to the extent so required by the
managing underwriter, not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of or
otherwise dispose of any securities of the Company, during the 7 days prior
to and the 90 days after any underwritten registration pursuant to section
2.l or 2.2 has become effective and in which the holders of Registrable
Securities have the opportunity to participate, except as part of such
underwritten registration, whether or not such holder participates in such
registration, unless the underwriters managing the registered public
offering otherwise agree, provided that the foregoing restrictions shall
--------
not apply with regard to any Stockholder to the transfer to any Affiliate
of such Person, or to any bona fide pledge of such Registrable Securities,
provided that such Affiliate or other transferee and/or lender or creditor
acknowledges in writing that it is bound by the provisions of this section
2.4(c). Each holder of Registrable Securities agrees that the Company may
instruct its transfer agent to place stop transfer notations in its records
to enforce this section 2.4(c).
(ii) The Company agrees (X) if so required by the managing
underwriter not to sell, make any short sale of, loan, grant any option for
the purchase of, effect any sale or distribution of or otherwise dispose of
its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days prior to and
the 90 days after any underwritten registration
14
<PAGE>
pursuant to section 2.1 or 2.2 has become effective, except as part of such
underwritten registration and except pursuant to registrations on Form S-4,
S-8, or any successor or similar forms thereto, and (Y) to cause each
holder of its securities purchased from the Company, or any securities
convertible into or exchangeable or exercisable for such securities, at any
time after the date of this Agreement (other than in a public offering) to
agree not to sell, make any short sale of, loan, grant any option for the
purchase of, effect any sale or distribution of or otherwise dispose of
such securities during such periods, unless the underwriters managing the
registered public offering otherwise agree.
(d) Participation in Underwritten Offerings. No Person may
---------------------------------------
participate in any underwritten offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions hereof, by the
Company and the holders of a majority of the Registrable Securities to be
included in such underwritten offering and the Initiating Holders, if
applicable, and (ii) completes and executes all questionnaires, indemnities,
underwriting agreements and other documents (other than powers of attorney)
required under the terms of such underwriting arrangements. Notwithstanding the
foregoing, no underwriting agreement (or other agreement in connection with such
offering) shall require any holder of Registrable Securities to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties regarding such holder,
such holder's Registrable Securities and such holder's intended method or
methods of distribution and any other representation required by law, or to make
any agreements with the Company or the underwriters with respect to
indemnification of any Person or the contribution obligations of any Person that
would impose any obligation which is broader than the indemnity furnished by
such holder pursuant to the provisions of section 2.6.
2.5 Preparation: Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such reasonable access during
normal business hours to its books, records, and properties, and cause the
Company's officers, employees and the
15
<PAGE>
independent public accountants who have certified its financial statements to
supply all information reasonably requested by such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
2.6 Indemnification.
---------------
(a) Indemnification by the Company. In the event of any registration
------------------------------
of any securities of the Company under the Securities Act pursuant to section
2.l or 2.2, the Company will, and hereby does agree to, indemnify and hold
harmless the holder of any Registrable Securities covered by such registration
statement and its partners, if any, its and their respective directors,
officers, partners, agents and Affiliates, each other Person who participates as
an underwriter in the offering or sale of such securities and each other Person,
if any, who controls such holder or any such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such holder or partner thereof or any such director or officer
or partner or agent or Affiliate or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such holder, its respective partners and each such
director, officer, partner, agent, Affiliate, underwriter and controlling person
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
--------
the extent that any such loss, claim, damage, liability (or act on or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such holder, specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or partner
thereof or any
16
<PAGE>
such director, officer, partner, agent, Affiliate, underwriter or controlling
person and shall survive the transfer of such securities by such holder. The
indemnity agreement contained in this section 2.6 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld.
(b) Indemnification by the Sellers. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed pursuant to section 2.3, that the Company shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify severally, not jointly and severally, and
hold harmless (in the same manner and to the same extent as set forth in
subsection (a) of this section 2.6) the Company, each director of the Company,
each officer of the Company and each other person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by the
prospective seller of the Registrable Securities through an instrument duly
executed by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling person
and shall survive the transfer of such securities by such seller. The indemnity
agreement provided for in this section 2.6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, action or proceeding if
such settlement is effected without the consent of such seller (which consent
shall not be unreasonably withheld). The parties hereto hereby acknowledge and
agree that, unless otherwise expressly agreed to in writing by holders of
Registrable Securities to the contrary, for all purposes of this Agreement the
only information furnished or to be furnished to the Company for use in any
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto are
statements specifically relating to (i) the beneficial ownership of shares of
Common Stock by such holders and its Affiliates, (ii) the name and address of
such holder and (iii) the method or methods of distribution of such holders.
The indemnity provided for under this section 2.6(b) shall be limited in
17
<PAGE>
amount to the net amount of proceeds actually received by such seller from the
sale of Registrable Securities pursuant to such registration statement.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
----------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this section 2.6, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
--------
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this section 2.6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to sue, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party, which consent
shall not be unreasonably withheld.
(d) Indemnification Payments. The indemnification required by this
------------------------
section 2.6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(e) Contribution. If the indemnification provided for in the
------------
preceding subsections of this section 2.6 is unavailable to an indemnified party
in respect of any expense, loss, claim, damage or liability referred to therein,
then each
18
<PAGE>
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative benefits and the relative fault of the
Company on the one hand and the holder or underwriter, as the case may be, on
the other in connection with the distribution of the Registrable Securities and
the statements or omissions which result in any expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the holder or underwriter, as the
case may be, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the
Company, by the holder or by the underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subsection (e)
were determined by pro rata allocation (even if the holders and any underwriters
--- ----
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in the preceding sentence and subsection
(c) of this section 2.6, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.
Notwithstanding the provisions of this subsection (e), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder the net
proceeds actually received by such holder from the sale of Registrable
Securities or (ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages that
such holder or underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. No party shall be liable for contribution under
this section 2.6 except to the extent and under such circumstances as such
19
<PAGE>
party would have been liable to indemnified under this section 2.6 if such
indemnification were enforceable under applicable law.
2.7 Limitations on Registrations of Registrable Securities. The
------------------------------------------------------
Company shall not be required to effect any registration of Registrable
Securities pursuant to section 2.l or 2.2 hereof (other than with respect to a
registration pursuant to section 2.l of Registrable Securities of the Initiating
Holders) if it shall deliver (i) to the requesting holder of Registrable
Securities an opinion of counsel (which opinion and counsel shall be reasonably
satisfactory to the Initiating Holders, or other requesting holder of
Registrable Securities, if applicable) to the effect that all Registrable
Securities held by such Initiating Holders, or other requesting holder of
Registrable Securities, if applicable, may be sold immediately in the public
market without registration under the Securities Act and any applicable state
securities laws and (ii) to the Company's stock transfer agent a letter of
instruction removing any stop order and restrictive legends on such Registrable
Securities.
3. Definitions. As used herein, unless the context otherwise
-----------
requires, the following terms have the following respective meanings.
Affiliate: As defined in Rule l2b-2 promulgated under the Exchange
---------
Act.
Beneficially Own or Beneficial Ownership: With respect to any
----------------- --------------------
securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule l3d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing. Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a
person shall include securities Beneficially Owned by all Affiliates
of such Person and all other Persons with whom such person would
constitute a "group" within the meaning of Section 13 (d) of the
Exchange Act and the rules promulgated thereunder.
Commission: The Securities and Exchange Commission or any other
----------
Federal agency at the time administering the Securities Act.
Common Stock: As defined in section 1.
------------
20
<PAGE>
Company: As defined in the introductory paragraph of this Agreement.
-------
Delay Period: As defined in section 2.1(g).
------------
Demand Request: As defined in section 2.1(a).
--------------
Effective Time: As defined in the Merger Agreement.
--------------
Exchange Act: The Securities Exchange Act of 1934, or any similar
------------
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934 shall
include a reference to the comparable Section, if any, of any such
similar federal statute.
Initiating Holders: Any holder or holders of not less than 50% of the
------------------
aggregate number of Registrable Securities held by all holders of
Registrable Securities.
Merger Agreement: As defined in section l.
----------------
Person: A corporation, an association, a partnership, an
------
organization, business, an individual, a governmental or political
subdivision thereof or a governmental agency.
Registrable Securities: The Common Stock issued pursuant to the
----------------------
transactions contemplated by the Merger Agreement and any securities
issued or issuable with respect to any Common Stock by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once issued,
such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such
securities have been disposed of in accordance with such registration
statement, (b) they shall have been distributed to the public pursuant
to Rule 144 (or any successor provision) under the Securities Act, (c)
all of the Registrable Securities held by such holder
21
<PAGE>
shall be eligible for disposition under Rule 144, or (d) they shall
have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
---------------------
performance of or compliance with section 2, including, without
limitation, all registration, filing and NASD fees, all stock exchange
listing fees, all fees and expenses of complying with securities or
blue sky laws, all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, and any fees and
disbursements of underwriters customarily paid by issuers or sellers
or securities, but excluding underwriting discounts and commissions
and transfer taxes, if any.
Securities Act: The Securities Act of 1933, or any similar Federal
--------------
statute, and the rules and regulations of the Commission thereunder,
all as of the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a
reference to the comparable Section, if any, of any such similar
Federal statute.
Transfer: A transfer, sale, pledge, hypothecation, encumbrance,
--------
assignment or other conveyance or disposition except an assignment by
operation of law.
4. Rule 144. The Company shall timely file the reports required to
--------
be filed by it under the Securities Act and the Exchange Act (including but not
limited to the reports under sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder and will take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, the Company will (a) deliver to
such holder a written statement as to whether it has
22
<PAGE>
complied with the requirements of this section 4 or (b) take such action as is
necessary to allow transfer of such Registrable Securities in accordance with
the provisions of Rule 144(k) (or any successor provision) under the Securities
Act, including without limitation, if necessary, the issuance of new
certificates for such Registrable Securities bearing a legend restricting
further transfer.
5. Amendments and Waivers. This Agreement may be amended and the
----------------------
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of more than 50% of the shares of Registrable Securities and in the case
of any such amendment, action or omission to act in respect of the first
sentence of section 4, the written consent of each holder affected thereby. Each
holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any consent authorized by this section 5, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
7. Notices. Except as otherwise provided in this Agreement, all
-------
notices, requests and other communications to any Person provided for hereunder
shall be in writing and shall be given to such Person (a) in the case of any
Stockholder, addressed to such party as provided in the Merger Agreement, or at
such other address as such party shall have furnished to the Company in writing,
(b) in the case of any other holder of Registrable Securities, at the address
that such holder shall have furnished to the Company in writing, or, until any
such other holder so furnishes to the Company an address, then to and at the
address of the last holder of such Registrable Securities who has furnished an
address to the Company or (c) in the case of the Company, at McKesson
Corporation, One Post Street, San Francisco, California 94104, to the attention
of its General Counsel, or at such other address, or
23
<PAGE>
to the attention of such other officer, as the Company shall have furnished to
each holder of Registrable Securities at the time outstanding. Each such notice,
request or other communication shall be effective (i) if given by mail, on the
second business day after such communication is deposited in the mail with first
class postage prepaid, addressed as aforesaid or (ii) if given by any other
means (including without limitation, by air courier), when delivered at the
address specified above, provided that any such notice, request or communication
to any holder of Registrable Securities shall not be effective until received.
8. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. No holder of Registrable Securities shall assign this
Agreement or any rights hereunder without the prior written consent of the
Company (which consent may be withheld for any reason in the sole discretion of
the Company), except that this Agreement and any rights hereunder may be
assigned by operation of law and may be assigned to any Affiliate of any
Stockholder. Notwithstanding the foregoing, the provisions of this Agreement may
be assigned by any holder of Registrable Securities (the "Assignor") to a
subsequent holder (the "Assignee") if (i) the Assignor assigned to the Assignee
all of his, her or its Registrable Securities and (ii) such Assignee did not
acquire such Registrable Securities in a registered public offering of such
Registrable Securities or pursuant to a sale made in accordance with the
provisions of Rule 144 under the Act or (directly or indirectly) from a holder
who acquired the Registrable Securities through such a public offering or sale.
9. Descriptive Heading. The descriptive headings of the several
-------------------
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF DELAWARE WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.
11. Counterparts. This Agreement may be executed simultaneously in
------------
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
24
<PAGE>
12. Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding between the Company and each other party hereto relating to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
13. Severability. If any provision of this Agreement, or the
------------
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provisions
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
14. Disposition of Shares. In the event of any public sales or
---------------------
distribution of the Registrable Securities effected pursuant to section 2 of
this Agreement, the Stockholders shall use their reasonable best efforts to
effect, or cause to be effected, such public sale or distribution, so that,
without the prior written consent of the Company (which shall not be
unreasonably withheld), no participant or purchaser would Beneficially Own in
the aggregate 3% or more of all outstanding Common Stock of the Company. The
holders of Registrable Securities shall use their respective reasonable efforts
in cooperation with the Company to effect as broad a disposition in any such
public sale or distribution as is reasonably practicable.
25
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
McKESSON CORPORATION
By: /s/ Mark T. Majeski
------------------------------
Name: Mark T. Majeski
Title: Vice President
STOCKHOLDERS:
The James R. Baker, Sr. & Mary Parker Baker
Trust for the Benefit of the Baker Grandchildren
By: /s/ James R. Baker, Jr.
------------------------------
Its:
------------------------------
Baker Family Limited Partnership I
By: /s/ James R. Baker, Sr.
------------------------------
Its: General Partner
------------------------------
/s/ Mary P. Baker
-----------------------------------
Mary P. Baker
Rusty Baker Family Limited Partnership
By: /s/ James R. Baker, Jr.
------------------------------
Its:
------------------------------
/s/ James R. Baker, Jr.
-----------------------------------
James R. Baker, Jr.
/s/ James R. Baker, Jr.
-----------------------------------
Diana Baker Foshee
26
<PAGE>
Baker Family Trust for the Benefit of Diana Baker
White
By: /s/ James R. Baker, Jr.
--------------------------------------------
James R. Baker, Jr., Trustee
/s/ James R. Baker, Jr.
-------------------------------------------------
Sharon Baker White
Baker Family Trust for the Benefit of Sharon Baker
Petrovsky
By: /s/ James R. Baker, Jr.
--------------------------------------------
James R. Baker, Jr., Trustee
Baker Family Trust for the Benefit of Sharon Baker
White
By: /s/ James R. Baker, Jr.
--------------------------------------------
James R. Baker, Jr., Trustee
/s/ Brian Jefferson Hurst
-------------------------------------------------
Brian Jefferson Hurst
/s/ Janelle Hurst Holstrom
-------------------------------------------------
Janelle Hurst Holstrom
/s/ Walter Pearson
-------------------------------------------------
Walter Pearson
/s/ Lena Smith
-------------------------------------------------
Mrs. Lena Smith
/s/ Rex Ponthie
-------------------------------------------------
Rex Ponthie
27
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
McKesson HBOC, Inc., on Form S-3 of our report dated July 12, 1999 (which report
(1) was modified to indicate that the consolidated financial statements of HBO &
Company ("HBOC"), as of and for the two years ended March 31, 1998 were audited
by other auditors whose report (which expresses an unqualified opinion and
includes an explanatory paragraph related to certain shareholder litigation) has
been furnished to us, and our opinion, insofar as it relates to the amounts
included for HBOC as of and for the years ended March 31, 1998 and 1997 is based
solely on the report of such auditors, and (2) contained an explanatory
paragraph referring to certain shareholder litigation as discussed in Financial
Note 19 to the consolidated financial statements), appearing in the Annual
Report on Form 10-K/A of McKesson HBOC, Inc., and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
DELOITTE & TOUCHE LLP
San Francisco, California
August 20, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated July
12, 1999 included in McKesson HBOC, Inc.'s Form 10-K/A for the year ended March
31, 1999 and to all references to our firm included in this registration
statement.
Reference is made to said report in which the opinion contains an explanatory
fourth paragraph with respect to certain shareholder litigation as discussed in
Note 10 to the consolidated financial statements.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
August 20, 1999
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
Each of the undersigned directors and each of the undersigned officers of
McKesson HBOC, Inc., a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Ivan D. Meyerson and Kristina Veaco as his or her true
and lawful attorney-in-fact and agent, each 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) under the Securities Act of 1933, as
amended, or any successor thereto (the "Securities Act")) for the
purpose of registering under the Securities Act, shares of the
Corporation's common stock, par value $0.01 (the "Shares"), that were
issued in connection with the merger of Automated Prescription Systems
with and into the Corporation;
(b) any and all supplements and amendments (including, without limitation,
post-effective amendments) to such Registration Statements; and
(c) any and all other documents and instruments in connection with the
registration of the Shares which such attorney-in-fact and agent deems
necessary or advisable 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 attorney-in-fact and agent
or his 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 attorney-in-fact and
agent, or his substitute or substitutes, shall lawfully do or cause to be done
by virtue hereof. Such attorney-in-fact and agent shall have, and may exercise,
all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 26th day of April, 1999.
<PAGE>
/s/ Charles W. McCall /s/ Heidi E. Yodowitz
-------------------------------- --------------------------------
Charles W. McCall Heidi E. Yodowitz
/s/ Mark A. Pulido /s/ Alfred C. Eckert III
-------------------------------- --------------------------------
Mark A. Pulido Alfred C. Eckert III
/s/ Tully M. Friedman /s/ James V. Napier
-------------------------------- --------------------------------
Tully M. Friedman James V. Napier
/s/ Alton F. Irby III /s/ David S. Pottruck
-------------------------------- --------------------------------
Alton F. Irby III David S. Pottruck
/s/ M. Christine Jacobs /s/ Carl E. Reichardt
-------------------------------- --------------------------------
M. Christine Jacobs Carl E. Reichardt
/s/ Gerald E. Mayo /s/ Alan Seelenfreund
-------------------------------- --------------------------------
Gerald E. Mayo Alan Seelenfreund
/s/ Jane E. Shaw /s/ Richard H. Hawkins
-------------------------------- --------------------------------
Jane E. Shaw Richard H. Hawkins
2
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
Each of the undersigned directors and each of the undersigned officers of
McKesson HBOC, Inc., a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Ivan D. Meyerson and Kristina Vesco as his or her true
and lawful attorney-in-fact and agent, each 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 under the Securities Act of 1933, as amended, or any successor thereto (the
"Securities Act")) for the purpose of registering under the Securities Act,
shares of the Corporation's common stock, par value $0.01 (the "Shares"), that
were issued in connection with the merger of Automated Prescription Systems with
and into the Corporation;
(b) any and all supplements and amendments (including, without limitation,
post-effective amendments) to such Registration Statements; and
(c) any and all other documents and instruments in connection with the
registration of the Shares which such attorney-in-fact and agent deems necessary
or advisable 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 attorney-in-fact or his
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 deeds all that such attorney-in-fact and agent, or his
substitute or substitutes, shall lawfully do or cause to be done by virtue
hereof. Such attorney-in-fact and agent shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 6th day of August, 1999.
/s/ John H. Hammergren /s/ David L. Mahoney
- -------------------------------------- ------------------------------
John H. Hammergren David L. Mahoney
