-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I4ji6seA9VCWHRWx2mzD88uQSkyjRmYe9kvFEwGofp/53o3SX/ZRXCjWSbm9eq9C iTe23JmuZa3nE50AysXD6w== 0000898430-98-003771.txt : 19981102 0000898430-98-003771.hdr.sgml : 19981102 ACCESSION NUMBER: 0000898430-98-003771 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19981030 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCKESSON CORP CENTRAL INDEX KEY: 0000927653 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 943207296 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-66359 FILM NUMBER: 98733925 BUSINESS ADDRESS: STREET 1: ONE POST ST STREET 2: MCKESSON PLAZA CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4159838300 MAIL ADDRESS: STREET 1: ONE POST ST CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FORMER COMPANY: FORMER CONFORMED NAME: SP VENTURES INC DATE OF NAME CHANGE: 19940728 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1998 REGISTRATION NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- MCKESSON CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 94-3207296 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 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) NANCY A. MILLER VICE PRESIDENT AND CORPORATE SECRETARY MCKESSON CORPORATION MCKESSON PLAZA, ONE POST STREET SAN FRANCISCO, CALIFORNIA 94104 (415) 983-8300 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) --------------- COPIES TO: IVAN D. MEYERSON GREGG A. NOEL VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP MCKESSON CORPORATION 300 SOUTH GRAND AVENUE, SUITE 3400 MCKESSON PLAZA, ONE POST STREET LOS ANGELES, CALIFORNIA 90071 SAN FRANCISCO, CALIFORNIA 94104 (213) 687-5000 (415) 983-8300
--------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this registration statement becomes effective. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities being offered only in connection with dividend or interest reinvestment plans, please check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] ____________________________________________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------ PROPOSED PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE - ------------------------------------------------------------------------------------ Common Stock, par value $0.01 per share....... 1,869,182 $71.09 $132,880,148.38 $36,941.00 - ------------------------------------------------------------------------------------ Rights to Purchase Series A Junior Participating Preferred Stock of McKesson Corporation(2)........ N/A N/A N/A - ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------
(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 October 23, 1998, 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 Corporation 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 for 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. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +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 THE OFFER TO BUY THESE SECURITIES IN ANY + +STATE WHERE SUCH OFFER OR SALE IS NOT PERMITTED. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED OCTOBER 30, 1998 PROSPECTUS 1,869,182 SHARES OF COMMON STOCK MCKESSON CORPORATION ----- The stockholders of McKesson Corporation listed below may offer from time to time 1,869,182 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 October 29, 1998, the closing price of one share of our common stock on the New York Stock Exchange was $74 7/8. SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN MATTERS THAT YOU SHOULD CONSIDER BEFORE PURCHASING OUR COMMON STOCK. ----- 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 , 1998. ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration process. Under this shelf process, the selling stockholders, may sell up to 1,869,182 shares of our common stock. This prospectus provides you with a general description of our common stock which the selling stockholders may offer. When the selling stockholders sell our common stock, we may provide, if necessary, a prospectus supplement that will contain specific terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with the additional information described under the heading "Where You Can Find More Information." SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain matters discussed under the captions "Risk Factors" and "The Company" 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 "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 the speed of the integration of businesses we acquire, the impact of continued competition in our industry, the success of strategic initiatives, the implementation of new technologies, continued industry consolidation, changes in customer mix, changes in pharmaceutical manufacturers' pricing and distribution policies, the changing United States health care environment and other factors discussed in this prospectus or incorporated by reference in this prospectus. TABLE OF CONTENTS PROSPECTUS
PAGE ---- About This Prospectus...................................................... i Special Note Regarding Forward-Looking Statements.......................... i The Company................................................................ 1 Use of Proceeds............................................................ 2 Risk Factors............................................................... 3 Selling Stockholders....................................................... 5 Description of Capital Stock............................................... 6 Plan of Distribution....................................................... 10 Experts.................................................................... 12 Legal Matters.............................................................. 12 Where You Can Find More Information........................................ 13
i THE COMPANY We are the leading health care supply management company in North America. We also develop and manage innovative marketing programs for pharmaceutical manufacturers and, through McKesson Water Products Company ("Water Products"), we process, deliver and sell bottled drinking water. Our objective is to become the world leader in health care supply and comprehensive pharmaceutical management across the entire supply chain, from manufacturer to patient. We conduct our operations through two operating business segments: the Health Care Services segment and the Water Products segment. Our principal executive offices are located at McKesson Plaza, One Post Street, San Francisco, California 94104, and our telephone number is (415) 983- 8300. On October 17, 1998, McKesson Corporation ("McKesson") and HBO & Company ("HBOC"), a leading healthcare information company, signed a definitive merger agreement for McKesson to acquire HBOC. Under the terms of the merger agreement, stockholders of HBOC would receive 0.37 shares of McKesson common stock for each share of HBOC common stock in a tax-free exchange. The merger of the two companies, which is subject to regulatory approval, the approval of our stockholders and the stockholders of HBOC and other customary conditions, would be accounted for as a pooling of interests and is anticipated to close in the first quarter of 1999. The new company would be named McKesson HBOC, and the corporate headquarters of McKesson HBOC would be located in San Francisco, California. Upon completion of the merger, Charles W. McCall, currently president and chief executive officer of HBOC, would become chairman of McKesson HBOC's board of directors, and Mark A. Pulido, currently our president and chief executive officer, would become president and chief executive officer of McKesson HBOC. Also upon completion of the merger, McKesson HBOC's board of directors would consist of ten members, which would include five members from the our current board and five from the current HBOC board. HBOC provides integrated patient care, clinical, financial, managed care and strategic management software solutions for the healthcare industry. These open systems applications facilitate the integration of clinical, financial and administrative data from a wide range of customer systems and software. HBOC's broad product portfolio can be implemented in a variety of combinations from stand-alone to enterprisewide, enabling healthcare organizations to add incremental capabilities to their existing information systems without making prior capital investments obsolete. HBOC also provides a full complement of network communications technologies, including wireless capabilities, as well as outsourcing services that are offered under contract management agreements whereby its staff manages and operates data centers, information systems, medical call centers, organizations and business offices of healthcare institutions of various sizes and structures. In addition, HBOC offers a wide range of electronic commerce services, including electronic medical claims and remittance advice services as well as statement processing. HBOC markets its products and services to integrated health delivery networks, hospitals, physicians' offices, home health providers, pharmacies, reference laboratories, managed care 1 providers and payors. HBOC also sells its products and services internationally through subsidiaries and/or distribution agreements in the United Kingdom, Canada, Ireland, Saudi Arabia, Kuwait, Australia, Puerto Rico and New Zealand. HBOC has entered into an Agreement of Merger dated July 23, 1998 among HBOC, HBO & Company of Georgia ("HBOC-GA") and IMNET Systems, Inc. ("IMNET"), which provides electronic information and document management solutions for the healthcare industry. Such agreement is subject, among other things, to IMNET stockholder approval at a meeting scheduled to occur on October 30, 1998. If the merger is completed, HBOC will issue up to approximately 12.7 million shares of HBOC Common Stock to IMNET stockholders and optionholders. HBOC, HBOC-GA and Access Health, Inc. ("Access") entered into an Agreement of Merger dated as of September 28, 1998, as amended. Access provides clinically based care management programs and health care information services. The merger is subject to certain conditions, including the approval by Access stockholders. If the merger is completed, HBOC will issue up to approximately 38,932,001 shares of HBOC common stock to Access stockholders and optionholders. 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. 2 RISK FACTORS RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS An element of our growth strategy is to pursue strategic acquisitions that either expand or complement our business. We routinely review such potential acquisition opportunities. Acquisitions 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; . difficulties in the integration of operations and systems; . 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 short-term effects on operating results and the ratings assigned to our debt. In addition, in order to fund future acquisitions, we may be required to borrow money or issue additional equity on terms which may be unfavorable to us. In some instances, we may not be able to raise funds for future acquisitions. Our inability to successfully finance, complete and integrate strategic acquisitions in a timely manner could have an adverse impact on our results of operations and our ability to effect a portion of our growth strategy. In October 1998, we entered into a merger agreement to acquire HBOC. The merger of the two companies is subject to regulatory approval, the approval of our stockholders and the stockholders of HBOC and other customary conditions. It is anticipated that the merger will close in the first quarter of 1999. However, there can be no assurance that the merger will be completed or that it will be completed as contemplated or what the results of the merger will be. CHANGING UNITED STATES HEALTH CARE ENVIRONMENT In recent years, the health care industry has undergone significant change driven by various efforts to reduce costs. Such efforts include potential national health care reform, trends toward managed care, cuts in Medicare, consolidation of pharmaceutical and medical/surgical supply distributors, and the development of large, sophisticated purchasing groups. This industry is expected to continue to undergo significant changes for the foreseeable future. Other healthcare industry factors that could have a material adverse effect on our results of operations include: . changes in governmental support of health care services; . the method by which such services are delivered or the prices for such services; . other legislation or regulations governing such services or mandated benefits; or . changes in pharmaceutical manufacturers' pricing or distribution policies. 3 COMPUTER TECHNOLOGIES We rely heavily on computer technologies to operate our business. In 1996, we began an assessment of our information technology which might be impacted by the Year 2000 problem. Based on that assessment, we developed an enterprise- wide Year 2000 project which consists of hundreds of individual projects under the oversight of a central Year 2000 project office. We currently expect to complete most of our mission critical projects by December 31, 1998 and all phases of our identified projects by June 30, 1999. In addition, our business relies in part on the computer-based systems of our customers and trade suppliers, and on technology or data purchased from third parties. We are reviewing the Year 2000 readiness of all of these third parties and are continuing to develop contingency plans for any Year 2000 problems. We also plan to conduct systems testing with third parties during calendar year 1999. We believe that the most reasonably likely worst 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, because of the range of possible issues and the large number of variables involved (including any acquisitions 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 McKesson's reputation and legal liability. Consequently such costs or failures could have a material adverse effect on us. We expect to incur a total projected cost of less than $40 million in connection with our Year 2000 remediation efforts. Such costs are difficult to estimate accurately and the projected cost could change due to unanticipated technological difficulties, project vendor delays, project vendor cost overruns and the degree to which systems of newly acquired businesses are compliant. For a further discussion about our Year 2000 readiness, see our filings with the SEC made pursuant to the Exchange Act. 4 SELLING STOCKHOLDERS The selling stockholders obtained their shares of our common stock as a result of the merger of Hawk Medical Supply, Inc. ("Hawk") with and into McKesson. Under the Registration Rights Agreement, dated as of June 22, 1998, among McKesson and the stockholders and warrant holders of Hawk (the "Registration Rights Agreement"), we agreed to register, under certain circumstances, 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. This 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. The following table sets forth certain information about the shares of our common stock that are owned by the selling stockholders as of the date of this prospectus:
SHARES OWNED SHARES OWNED PRIOR TO THE SHARES BEING AFTER THE NAME OF SELLING STOCKHOLDER OFFERING OFFERED OFFERING(2) - --------------------------- ------------ ------------ ------------ Bruce K. Anderson..................... 8,836(1) 0 Russell L. Carson..................... 8,836(1) 0 Anthony J. de Nicola.................. 803(1) 0 John R. Hamilton...................... 21,731 0 James B. Hoover....................... 2,410(1) 0 James B. Hoover-IRA................... 803(1) 0 David S. Mawhinney.................... 21,731 0 Thomas E. McInerney................... 2,123(1) 0 Robert A. Minicucci................... 1,767(1) 0 David A. Nelson....................... 81,490 0 Andrew M. Paul........................ 8,033(1) 0 Premier Purchasing Partners, L.P. .... 758,373 0 Paul B. Queally....................... 1,928(1) 0 John G. Rex-Waller and Carlisle Rex- Waller, as joint tenants............. 21,731 0 Rudolph E. Rupert..................... 321(1) 0 Richard H. Stowe-IRA.................. 1,285(1) 0 Laura M. VanBuren..................... 803(1) 0 WCAS Healthcare Partners, L.P. ....... 24,098(1) 0 Patrick J. Welsh...................... 8,836(1) 0 Welsh, Carson, Anderson & Stowe VII, L.P. ................................ 893,244(1) 0
- -------- (1) Pursuant to a pledge agreement dated August 3, 1998, between McKesson and certain selling stockholders, certain of such selling stockholders' shares are pledged against the payment by such selling stockholders, to us, when due, of the principal and interest on certain promissory notes. The selling stockholders' shares which are pledged to us may not be sold until such notes are paid in full. (2) Assumes that all of the shares held by the selling stockholders and being offered under this prospectus are sold, and that the selling stockholders acquire no additional shares of common stock before the completion of this offering. After the offering, each selling stockholder will own less than 1% of the total number of shares of common stock outstanding. 5 DESCRIPTION OF CAPITAL STOCK The following descriptions of our capital stock and of certain provisions of Delaware law do not purport to be complete and are subject to and qualified in their entirety by reference to our Restated Certificate of Incorporation (the "Certificate") and Restated By-Laws (the "By-Laws") and Delaware law, and, with respect to certain rights of holders of shares of our common stock, the Rights Agreement (as defined below under the heading "Rights Plan") and Amendment No. 1 thereto. We have filed copies of such documents with the SEC and have incorporated such documents as exhibits to the registration statement of which this prospectus is a part. As of the date hereof, our capital stock consists of 400,000,000 authorized shares of common stock and 100,000,000 authorized shares of Series Preferred Stock, par value $0.01 per share (the "Preferred Stock"). COMMON STOCK As of September 30, 1998, there were 99,271,776 shares of common stock issued and outstanding. The holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as our Board of Directors (the "Board") may from time to time determine. The shares of 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 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 outstanding Preferred Stock. Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of stockholders. There is no cumulative voting. In February 1997, McKesson Financing Trust issued an aggregate of 4,000,000 5% Trust Convertible Preferred Securities and 123,720 5% Trust Convertible Common Securities (each, a "Trust Security"). Each Trust Security is convertible into common stock at any time prior to the close of business on the business day prior to June 1, 2027 (or prior to the date of redemption of the Trust Security), at the option of the holder, at the rate of 1.3418 shares of common stock for each Trust Security (equivalent to a conversion price of $37.26 per share of common stock), subject to adjustment in certain circumstances. PREFERRED STOCK As of the date hereof, there were no shares of Preferred Stock issued and outstanding. The Board is authorized to issue the Preferred Stock in classes or series and to fix the designations, preferences, qualifications, limitations, or restrictions of any class or series with respect to the rate and nature of dividends, the price and terms and conditions on which shares may be redeemed, the amount payable in the event of voluntary or involuntary liquidation, the terms and conditions for conversion or exchange into any other class or series of the stock, voting rights and other terms. Of the 100,000,000 authorized shares of Preferred Stock, 10,000,000 shares have been designated Series A Junior Participating Preferred Stock (the "Series A Preferred Stock") and reserved for issuance pursuant to our Rights Agreement. 6 ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS Our Certificate and By-Laws contain certain provisions that may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider 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. Pursuant to the Certificate, the Board is divided into three classes serving staggered three-year terms. Directors can be removed from office only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the then outstanding shares of any class or series of capital stock of McKesson entitled to vote generally in the election of directors. Vacancies and newly created directorships on the Board may be filled only by a majority of the remaining directors or by the plurality vote of the stockholders. The Certificate also provides that any action required or permitted to be taken by the holders of common stock may be effected only at an annual or special meeting of such holders, and that stockholders may act in lieu of such meetings only by unanimous written consent. The By-Laws provide that special meetings of holders of common stock may be called only by our Chairman or President or the Board. Holders of common stock are not permitted to call a special meeting or to require that the Board call a special meeting of stockholders. The By-Laws establish an advance notice procedure for the nomination, other than by or at the direction of the Board, of candidates for election as directors as well as for other stockholder proposals to be considered at annual meetings of stockholders. In general, we must receive notice of the intent of a stockholder to nominate a director or to raise business at such meetings not less than 60 nor more than 90 days prior to the date of the annual meeting and such notice must contain certain specified information concerning the person to be nominated or the matters to be brought before the meeting and concerning the stockholder submitting the proposal. The Certificate also provides that certain provisions of the By-Laws may only be amended by the affirmative vote of the holders of 75% of our outstanding shares 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 certain business combinations proposed by an interested stockholder. The foregoing summary is qualified in its entirety by the provisions of the Certificate and By-Laws, copies of which have been filed with the SEC. RIGHTS PLAN Pursuant to our Rights Agreement, the Board declared a dividend distribution of one right (a "Right") for each outstanding share of 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 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 Series A Preferred Stock at a purchase price of $100 per unit. The Rights expire on October 21, 2004, unless redeemed 7 earlier by the Board. The terms of the Rights are set forth in a Rights Agreement, as amended, between the Company and a rights agent (the "Rights Agreement"), a copy of which is filed with the SEC. The following summary outlines certain provisions of the Rights Agreement and is qualified by reference to the full text of the form of the Rights Agreement. The Rights are attached to all common stock certificates representing shares outstanding at the Record Date and shares issued between the Record Date and the Distribution Date (as defined below), and no separate rights certificates (the "Rights Certificates") have been distributed. The Rights will separate from the common stock, separate Rights Certificates will be issued and a distribution date (the "Distribution Date") will occur 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 the Board may determine) following commencement of a tender or exchange offer that would result in the offeror beneficially owning 15% or more of the common stock, or . ten business days after the Board determines that the ownership of 10% or more of our outstanding common stock by a person is (A) intended to cause us to repurchase the common stock beneficially owned by such person or (B) is causing, or is reasonably likely to cause, a material adverse impact on us. The term "Acquiring Person" means any person who, together with affiliates and associates, acquires beneficial ownership of shares of common stock representing 15% or more of the common stock, but shall not include 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 pursuant to the terms of such plans. In the event that a person becomes an Acquiring Person (except pursuant to an offer for all outstanding shares of common stock which the independent directors determine to be fair to and otherwise in 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, 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. 8 In general, the Rights Agreement may be amended by the Board (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 certain anti-takeover effects and will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by the Board. The Rights should not interfere with any merger or other business combination approved by the Board, since the Board may redeem the Rights as provided above. In connection with the definitive merger agreement (the "HBOC Merger Agreement") by and among McKesson, a wholly owned subsidiary of McKesson and HBOC, McKesson and the rights agent entered into Amendment No. 1 to the Rights Agreement (the "Rights Agreement Amendment"). The Rights Agreement Amendment provides, among other things, that HBOC shall not be deemed to be an "Acquiring Person" as defined in the Rights Agreement as a result of the execution of the HBOC Merger Agreement or the associated stock option agreement. 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 the 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 the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66% of the outstanding voting stock which is not owned by the "interested stockholder." A "business combination" includes mergers, asset sales and other transactions resulting in financial benefit to the "interested stockholder." An "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years, did own) beneficially 15% or more of a corporation's voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us. CERTAIN 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. 9 The issuance of Preferred Stock could have the effect of delaying or preventing a change in control of McKesson. The issuance of 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 unissued and unreserved common stock or Preferred Stock may be to enable the Board to issue shares to persons friendly to current management which could render more difficult or discourage an attempt to obtain control of 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. We have reserved for issuance shares of common stock for the exercise of options 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 Preferred Stock, although 10,000,000 shares have been designated Series A Preferred Stock pursuant to 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, . in respect of certain unlawful dividend payments or stock redemptions or purchases, and . for 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. PLAN OF DISTRIBUTION We are registering shares of our common stock on behalf of the selling stockholders. As used herein, "selling stockholders" includes 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 10 securities exchanges where our capital 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, to the extent 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. Unless this prospectus is accompanied by a prospectus supplement stating otherwise, offers and sales may be made pursuant to this prospectus only in ordinary broker's transactions made on the New York Stock Exchange, Inc. or the Pacific Exchange, Inc. in transactions involving ordinary and customary brokerage commissions. 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. Pursuant to 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. 11 EXPERTS The consolidated financial statements of McKesson and the related financial statement schedule incorporated in this prospectus and elsewhere in the registration statement by reference from McKesson's Annual Report on Form 10-K for the fiscal year ended March 31, 1998 and the consolidated financial statements of FoxMeyer Corporation ("FoxMeyer") for the year ended March 31, 1996 incorporated in this prospectus and elsewhere in the registration statement by reference from McKesson's Current Report on Form 8-K/A filed with the SEC on April 28, 1997 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports incorporated herein by reference, (which report dated May 18, 1998 on McKesson's consolidated financial statements expresses an unqualified opinion and which report on a FoxMeyer's consolidated financial statements dated June 28, 1996, (March 18, 1997 as to paragraph seven of Note Q), expresses an unqualified opinion and includes an explanatory paragraph relating to the sale of the principal assets of FoxMeyer and its Chapter 7 bankruptcy filing). Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The audited financial statements and schedule of HBOC incorporated by reference in this prospectus and elsewhere in the registration statement of which this prospectus is a part, to the extent and for the periods indicated in their reports, have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in giving said reports. With respect to the unaudited interim financial information of HBOC for the three and nine months ended September 30, 1997 and 1998, which are incorporated by reference herein, Arthur Andersen LLP has applied limited procedures in accordance with professional standards for a review of that information. However, their separate report thereon states that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their report on that information should be restricted in light of the limited nature of the review procedure applied. In addition, the accountants are not subject to the liability provisions of Section 11 of the Securities Act, for their report on the unaudited interim financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act. LEGAL MATTERS Ivan D. Meyerson, Vice President and General Counsel of McKesson 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. 12 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 for the fiscal year ended March 31, 1998, as amended by Amendment No. 1 to Form 10-K, filed with the SEC on July 29, 1998; 2. Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998 and September 30, 1998; and 3. Current Reports on Form 8-K dated November 22, 1996 (as amended by Amendment No. 1 on Form 8-K/A filed on January 21, 1997 as further amended by Amendment No. 2 on Form 8-K/A, filed on April 28, 1997) and October 19, 1998 (as amended by Amendment No. 1 on Form 8-K/A, filed on October 30, 1998). You may request a copy of these filings, at no cost by writing or telephoning us at the following address: Nancy A. Miller Vice President and Corporate Secretary McKesson Corporation 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. 13 [LOGO OF MCKESSON] PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following expenses (other than the SEC filing fee) are estimated. SEC registration fee.................................................. $ Printing and engraving expenses....................................... Accountants' fees and expenses........................................ Attorneys' fees and expenses.......................................... Miscellaneous......................................................... ----- Total............................................................... =====
The Company will pay all registration expenses in connection with the registration of the shares of our common stock. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article VIII of the Restated By-Laws (the "Bylaws") of McKesson Corporation (the "Company"), in accordance with the provisions of Section 145 of the General Corporation Law of Delaware (the "Delaware Corporation Law"), provides that the Company shall indemnify any person in connection with any threatened, pending or completed legal proceeding (other than a legal proceeding by or in the right of the Company) by reason of the fact that 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, with respect to 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 Company's Restated 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, 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 ITEM 16. LIST OF EXHIBITS.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1 Restated Certificate of Incorporation of the Company (Exhibit 3.2(1)). 3.2 Restated Bylaws of the Company, as amended through May 30, 1997 (Ex- hibit 3.1(2)). 3.3 Rights Agreement, dated as of October 21, 1994, by and between the Company and First Chicago Trust Company of New York as Rights Agent (Exhibit 4.1(3)). 3.4 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, Vice President and General Counsel of the Company. 10.1* Registration Rights Agreement, dated as of June 22, 1998, among the Company and the Selling Stockholders. 23.1 Consent of Ivan D. Meyerson (included in Exhibit 5.1). 23.2* Independent Auditors' Consent--Deloitte & Touche LLP. 23.3* Consent of Independent Public Accountants--Arthur Andersen LLP. 24.1* Power of Attorney.
- -------- * Filed herewith (1) Incorporated by reference to designated exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. (2) Incorporated by reference to designated exhibit to the Company's Current Report on Form 8-K as filed with the Commission on June 24, 1997. (3) Incorporated by reference to designated exhibit to Amendment No. 3 to the Company's Registration Statement on Form 10 filed with the Commission on October 27, 1994. (4) Incorporated by reference to designated exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. 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. (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. (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. II-2 (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 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 30th day of October, 1998. McKESSON CORPORATION /s/ Richard H. Hawkins By: _________________________________ Name:Richard H. Hawkins Title:Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Mark A. Pulido President and Chief October 30, 1998 ____________________________________ Executive Officer and Mark A. Pulido Director (principal executive officer) /s/ Richard H. Hawkins Vice President and October 30, 1998 ____________________________________ Chief Financial Officer Richard H. Hawkins (principal financial officer) /s/ Heidi E. Yodowitz Controller October 30, 1998 ____________________________________ (principal accounting Heidi E. Yodowitz officer) * Director October 30, 1998 ____________________________________ Mary G.F. Bitterman Director ____________________________________ Tully M. Friedman * Director October 30, 1998 ____________________________________ John M. Pietruski ____________________________________ Director David S. Pottruck ____________________________________ Director Carl E. Reichardt * Director; October 30, 1998 ____________________________________ Chairman of the Board Alan Seelenfreund
II-4
SIGNATURE TITLE DATE --------- ----- ---- * Director October 30, 1998 ____________________________________ Jane E. Shaw * Director October 30, 1998 ____________________________________ Robert H. Waterman, Jr.
/s/ Nancy A. Miller *By: __________________________ Nancy A. Miller Attorney-in-fact II-5 EX-10.1 2 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.1 REGISTRATION RIGHTS AGREEMENT Dated as of June 22, 1998 EXHIBIT 10.1 REGISTRATION RIGHTS AGREEMENT, dated as of June 22, 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 June 22, 1998, among the Company, HMS Acquisition Corp., a Delaware corporation and Hawk Medical Supply, Inc., a Delaware corporation ("Hawk"), pursuant to which the Company has agreed, among other things, to acquire through merger Hawk and, in connection therewith, to issue to the stockholders and warrant holders of Hawk (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. 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 an Initiating -------------- Holder (on its 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 Holder's 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: (i) the Registrable Securities which the Company has been so requested to register by such Initiating Holder (on its 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 giving of such written notice by 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 each such Demand Request shall be for -------- ------- not less than 400,000 shares of Common Stock. Subject to the provisions of section 2.1(d), each Initiating Holder (on its own and/or on behalf of the other Stockholders) will have the right pursuant to this section 2.1(a) to make one Demand Request (i.e., an aggregate of two Demand Requests). Without limiting the generality of the foregoing, an Initiating Holder 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 Holder 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), any shelf registration which involves a block trade or block trades as an intended method of disposition, whether or not any such block trade is made, shall be considered as the exercise of one of the two Demand Requests permitted by this section 2.1(a). Notwithstanding anything herein to the contrary, it is understood and agreed that an Initiating Holder may at any time on or after the earlier of (i) 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 and (ii) October 1, 1998 (the "Commencement Date") make a Demand Request for registration pursuant to this section 2.1(a) and, in the event an Initiating Holder makes such a request, the Company shall use its best efforts to file a registration statement with the Commission with respect to such request not later than the thirtieth day following such request. (b) Registration Statement Form. Registrations under this section 2.1 --------------------------- 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 -2- Holder 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 any registration requested pursuant to this section 2.1 (including any registration deemed not to be "effected" under section 2.1). (d) Effective Registration Statement. A registration requested -------------------------------- pursuant to this section 2.1 shall not be deemed to have been effected (and therefore not requested for purposes of the limitations in section 2.1(a) on the number of requests for registration that can be made pursuant to section 2.1(a)) (i) unless a registration statement with respect thereto has become effective, provided that a registration which does not become effective after the Company - -------- has filed a registration statement with respect thereto solely by reason of the refusal to proceed of the Initiating Holder (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 Holder unless the Initiating Holder 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 entered into in connection with such registration are not satisfied, other than by reason of some act or omission by the Initiating Holder or any other holder of Registrable Securities. (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 Initiating Holder from a list of underwriters to be agreed upon by the Initiating Holder and the Company. (f) Priority in Requested Registrations. If a requested registration ----------------------------------- pursuant to this section 2.1 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 Initiating Holder, (ii) second, Registrable Securities requested to be included in -3- such registration by any other holder of Registrable Securities, pro rata among --- ---- such other holders requesting such registration on the basis of the number of such securities requested to be included by such holders and (iii) third, 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 materially interfere with any pending material financing, acquisition, corporate reorganization, business combination, joint venture, strategic alliance, commercial alliance or customer contract involving the Company or any of its subsidiaries or would require premature disclosure thereof and promptly gives the Initiating Holder 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 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 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 be counted for purposes of determining the number of Demand Requests for registration to which the Initiating Holder of Registrable Shares is entitled pursuant to this section 2.1. The time period for which the Company is required to maintain the effectiveness of any registration statement shall be extended by the aggregate Delay Periods during such registration. The Company shall not be entitled to initiate a Delay Period unless it shall (A) to the extent permitted by agreements with other security holders of the Company, concurrently prohibit sales by such other security holders under registration statements covering securities held by such other security holders and (B) in the case of a delay arising as a result of premature disclosure, in accordance with the Company's policies from time to time in effect, forbid purchases and sales in the open market by senior executives of the Company. Notwithstanding the foregoing, in the case of a Demand Request made within 15 days -4- from and including the Commencement Date (and, if the filing of the registration statement is postponed as provided in this sentence, in the case of any Demand Request made in substitution for such Demand Request until a registration statement has been filed pursuant to this Section 2.1), (i) the Company shall only be entitled to exercise its postponement rights under this paragraph (g) by reason of a pending material acquisition, corporate reorganization, business combination, joint venture, strategic alliance, commercial alliance or customer contract (but not by reason of a pending material financing transaction) involving the Company or any of its subsidiaries or if required by applicable law arising from events outside of the control of the Company; provided, -------- however, in the case of a pending material joint venture, strategic alliance, - ------- commercial alliance or customer contract the applicable Delay Period shall be no longer than fifty (50) days, and, (ii) for a period of 60 days following the filing with the Commission of the registration statement relating to the Registrable Securities covered by such Demand Request, the Company shall not be entitled to exercise its suspension rights under this paragraph (g), except as required by applicable law arising from events outside of the control of the Company. In addition, in the case of a Demand Request other than a Demand Request described in the preceding sentence, for a period of 60 days following the filing with the Commission of the registration statement relating to the Registrable Securities covered by such Demand Request, the Company shall only be entitled to exercise its suspension rights under this paragraph (g) by reason of a pending material acquisition, corporate reorganization, business combination, joint venture, strategic alliance, commercial alliance or customer contract (but not by reason of a pending material financing transaction) involving the Company or any of its subsidiaries or if required by applicable law arising from events outside of the control of the Company. 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 -5- 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 filed in connection with such registration, the Company shall determine for any reason either not to register or to delay registration of such securities, the Company may, at its election, 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 2.1, 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 2.1, 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, (iii) third, all securities of any holder who is entitled to incidental registration rights under the registration rights agreement dated -6- as of September 22, 1997 by and between the Company and 399 Venture Partners, Inc.(the Amerisource Agreement"), and (iv) fourth, to the extent that the number of securities which the Company and any such other holders proposed to include pursuant to clauses (i), (ii) and (iii) is less than the number of securities which the Company has been advised can be sold in such 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 2.1 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 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 -7- thereof set forth in such registration statement or such other time as is required by the Securities Act; (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- (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- (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 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 -10- 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. 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 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: ---------------------- -11- (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 2.1, 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 and may, at their option, require 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. 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 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 the Company will not 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 -12- 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 and may, at their option, require 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 contain a provision modifying the indemnification of the underwriter to the effect that the Company will not 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 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 2.1 or 2.2 has become effective, except as part of such underwritten registration, whether or not such holder participates in such registration, provided that the foregoing -------- restrictions shall not apply (x) with regard to any Stockholder in a distribution of Registrable Securities to its partners or to the transfer to any -13- Affiliate of such Persons, 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) and (y) unless the senior executive officers and directors of the Company agree to be so restricted. 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 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 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. (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 Registrable Securities to be included in such underwritten offering and the Initiating Holder, 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 -14- 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 and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of 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 2.1 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 action 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 -15- shall remain in full force and effect regardless of any investigation made by or on behalf of such holder or partner thereof or any 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. (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 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 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 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 -16- 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. (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 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 -17- 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 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 party would have been liable to indemnify 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 2.1 or 2.2 hereof (other than with respect to a registration pursuant to Section 2.1 of Registrable Securities of an Initiating Holder) 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 such Initiating Holder, or other requesting holder of Registrable Securities, if applicable) to the effect that all Registrable Securities held by such Initiating Holder, 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. -18- 2.8 Restrictions Imposed by Amerisource Agreement. Each holder --------------------------------------------- of Registrable Securities agrees that, as required by Section 2.4(c) of the Amerisource Agreement, notwithstanding any other provision of this Agreement, such holder shall not 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 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 pursuant to Section 2.1 (demand requests) or 2.2 (incidental registration) of the Amerisource Agreement has become effective, other than the right of such holder of Registrable Securities to include Registrable Securities in such registration pursuant to Section 2.2 hereof; provided that the foregoing restrictions shall not apply (x) with regard to any Stockholder in a distribution of Registrable Securities to its partners or to the transfer to any Affiliate of such Persons, 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 2.8 and (y) unless the senior executive officers and directors of the Company agree to be so restricted. 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 2.8. 3. Definitions. As used herein, unless the context otherwise ----------- requires, the following terms have the following respective meanings. Affiliate: As defined in Rule 12b-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 13d-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. ------------ -19- 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 Holder: Either Premier Purchasing Partners, L.P. or ----------------- Welsh, Carson, Anderson & Stowe VII L.P. Merger Agreement: As defined in section 1. ---------------- 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) a disposition of all of them by the holder thereof shall not require registration or qualification of them under the Securities Act or shall be eligible for disposition under Rule 144, or (d) they shall have ceased to be outstanding. -20- 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 form 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 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. -21- 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 care of Welsh, Carson, Anderson & Stowe, 320 Park Avenue, Suite 2500, New York, New York 10022 to the attention of Paul B. Queally with a copy to Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller Plaza, New York, New York 10111 to the attention of Othon Prounis, Esq. and care of Premier, Inc., 12225 El Camino Real, San Diego, California 92130 to the attention of Bary G. Bailey with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Chicago, Illinois 60602 to the attention of Charles E. Gerber, Esq., 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 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, -22- 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 partner or Affiliate of any Stockholder. 9. Descriptive Headings. 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. 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 4% or more of all outstanding Common Stock of the Company. The holders of Registrable Securities shall use their respective reasonable -23- efforts in cooperation with the Company to effect as broad a disposition in any such public sale or distribution as is reasonably practicable. -24- 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/ Nancy A. Miller _________________________________ Name: Nancy A. Miller Title: Vice President and Corporate Secretary PREMIER PURCHASING PARTNERS, L.P. By: Premier Plans, Inc., its general partner By: /s/ Robert W. O'Leary _________________________________ Name: Robert W. O'Leary Title: CEO WELSH, CARSON, ANDERSON & STOWE VII, L.P. By: WCAS VII Partners, L.P., its general partner By: /s/ Russell Carson _________________________________ Name: Russell Carson Title: General Partner WCAS HEALTHCARE PARTNERS, L.P. By: WCAS HC Partners, its general partner By: /s/ Russell Carson _________________________________ Name: Russell Carson Title: General Partner /s/ Patrick J. Welsh ____________________________________ Patrick J. Welsh /s/ Russell L. Carson ____________________________________ Russell L. Carson -25- /s/ Bruce K. Anderson _______________________________________ Bruce K. Anderson DELAWARE CHARTER TRUST CO., as Trustee for the Benefit of the IRA Rollover of Richard H. Stowe /s/ Richard H. Stowe _______________________________________ Richard H. Stowe /s/ Andrew M. Paul _______________________________________ Andrew M. Paul /s/ Thomas E. McInerney _______________________________________ Thomas E. McInerney /s/ Laura VanBuren _______________________________________ Laura VanBuren /s/ James B. Hoover _______________________________________ James B. Hoover DELAWARE CHARTER TRUST CO., as Trustee for the Benefit of the IRA Rollover of James B. Hoover /s/ James B. Hoover ______________________________________ James B. Hoover /s/ Robert A. Minicucci _______________________________________ Robert A. Minicucci /s/ Anthony de Nicola _______________________________________ Anthony de Nicola /s/ Rudolph E. Rupert _______________________________________ Rudolph E. Rupert /s/ Paul B. Queally _______________________________________ Paul B. Queally /s/ Theodore H. Pacha _______________________________________ Theodore H. Pacha -26- /s/ David Nelson _______________________________________ David Nelson /s/ John Hamilton _______________________________________ John Hamilton /s/ John Rex-Waller _______________________________________ John Rex-Waller /s/ David Mawhinney _______________________________________ David Mawhinney /s/ Jeff Liesendahl _______________________________________ Jeff Liesendahl /s/ Michael Brennan _______________________________________ Michael Brennan -27- EX-23.2 3 CONSENT -- DELOITTE & TOUCHE LLP EXHIBIT 23.2 [LETTERHEAD OF DELOITTE & TOUCHE] INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of McKesson Corporation ("McKesson") on Form S-3 of our reports dated May 18, 1998 on McKesson's consolidated financial statements and financial statement schedule, appearing in and incorporated by reference in the Annual Report on Form 10-K of McKesson for the year ended March 31, 1998, and our report on FoxMeyer Corporation's consolidated financial statements dated June 28, 1996 (March 18, 1997 as to paragraph seven of Note Q), which report expresses an unqualified opinion and includes an explanatory paragraph relating to the sale of the principal assets of FoxMeyer Corporation and its Chapter 7 bankruptcy filing, appearing in the Current Report on Form 8K/A of McKesson filed with the Securities and Exchange Commission on April 28, 1997. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ Deloitte & Touche LLP San Francisco, California Dallas, Texas October 30, 1998 EX-23.3 4 CONSENT -- ARTHUR ANDERSEN LLP 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 McKesson Corporation of our reports dated February 6, 1998, with respect to the consolidated financial statements of HBO & Company as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997, included in the Form 8-K/A of McKesson Corporation, and to all references to our Firm, included in this Registration Statement. ARTHUR ANDERSEN LLP Atlanta, Georgia October 29, 1998 EX-24.1 5 POWER OF ATTORNEY EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS THAT the undersigned directors and officers of McKesson Corporation, a Delaware corporation (the "Company"), do hereby constitute and appoint Ivan D. Meyerson and Nancy A. Miller his or her true and lawful attorneys-in-fact and agents, each with full power and authority (acting alone or without the other) to execute in the name and on behalf of the undersigned as such Director and/or Officer, a Registration Statement under the Securities Act of 1933, as amended, with respect to the registration of shares of the Company's Common Stock, that may be issued in connection with the proposed merger of wholly-owned subsidiary of the Company into Hawk Medical Supply, Inc. and to execute any and all amendments to such Registration Statement, and to file the same with all exhibits thereto and other documents in connection therewith, whether filed prior or subsequent to the time such Registration Statement becomes effective. The undersigned hereby grants unto such attorneys and agents, and each of them, full power of substitution and revocation in the premises and hereby ratifies and confirms all that such attorneys and agents may do or cause to be done by virtue hereof. Signature Capacity --------- -------- /s/ Mark A. Pulido President, Chief Executive Officer and Director - ------------------------------- Mark A. Pulido /s/ Richard H. Hawkins Vice President and Chief Financial Officer - ------------------------------- Richard H. Hawkins /s/ Heidi E. Yodowitz Controller - ------------------------------- Heidi E. Yodowitz /s/ Alan Seelenfreund Director, Chairman of the Board - ------------------------------- Alan Seelenfreund /s/ Mary G.F. Bitterman Director - ------------------------------- Mary G.F. Bitterman Director - ------------------------------- Tully M. Friedman /s/ John M. Pietruski Director - ------------------------------- John M. Pietruski Director - ------------------------------- David S. Pottruck Director - ------------------------------- Carl E. Reichardt /s/ Jane E. Shaw Director - ------------------------------- Jane E. Shaw /s/ Robert H. Waterman, Jr. Director - ------------------------------- Robert H. Waterman, Jr. Dated: May 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----