EXHIBIT 10.1
McKESSON CORPORATION
SUPPLEMENTAL PSIP II
Effective January 1, 2009
(Amended and Restated October 24, 2008)

 

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TABLE OF CONTENTS

             
A.
  PURPOSE     1    
B.
  ERISA PLAN     1    
C.
  PARTICIPATION     1    
D.
  AMOUNTS OF DEFERRAL     3    
E.
  COMPANY MATCH     3    
F.
  PAYMENT OF DEFERRED COMPENSATION     4    
G.
  BENEFICIARY DESIGNATION     7    
H.
  SOURCE OF PAYMENT     8    
I.
  MISCELLANEOUS     8    
J.
  ADMINISTRATION OF THE PLAN     9    
K.
  AMENDMENT OR TERMINATION OF THE PLAN     9    
L.
  CLAIMS AND APPEALS     10    
M.
  DEFINITIONS     12    
N.
  SUCCESSORS     14    
O.
  EXECUTION     14     APPENDIX A EXAMPLE OF DEFERRALS UNDER PLAN     A-1  

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McKESSON CORPORATION
SUPPLEMENTAL PSIP II
Effective January 1, 2009

A.   PURPOSE

  1.   This Plan is established to allow certain executives of the Company to
elect to defer compensation which cannot be deferred under the McKesson
Corporation Profit Sharing Investment Plan (“PSIP”) because of limitations of
tax laws and to provide for a Monthly Company Match and an Additional Company
Match on those deferrals at a rate equivalent to the PSIP’s “Matching Employer
Contribution” and “Additional Matching Employer Contribution.”     2.   This
Plan is the successor plan to the Supplemental PSIP, as in effect on
December 31, 2004 (the “Prior Plan”). Effective December 31, 2004, the Prior
Plan was frozen and no new deferrals shall be made to it nor shall any matching
contributions be allocated or vested under it after such date; provided,
however, that any deferrals that were made to the Prior Plan or matching
contributions that were allocated and vested under the Prior Plan before
January 1, 2005 shall continue to be governed by the terms and conditions of the
Prior Plan as in effect on December 31, 2004.     3.   Any deferrals made to or
matching contributions that were allocated or vested under the Prior Plan after
December 31, 2004 are deemed to have been made or allocated under this Plan and
all such deferrals and matching contributions shall be governed by the terms and
conditions of this Plan as it may be amended from time to time.     4.   This
Plan is intended to comply with the requirements of Code Section 409A.     5.  
Capitalized terms used in this Plan shall have the meaning set forth in Section
M hereof.

B.   ERISA PLAN

This Plan is an unfunded deferred compensation program for a select group of
management or highly compensated employees of the Company. The Plan, therefore,
is covered by Title I of ERISA except that it is exempt from Parts 2, 3, and 4
of Title I of ERISA.

C.   PARTICIPATION

  1.   Eligibility to Participate. The Administrator may, at his or her
discretion, and at any time, and from time to time, select executives of an
Employer who may elect to participate in this Plan (“Eligible Executives”).
Selection of Eligible Executives may be evidenced by the terms of the
executive’s employment

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      contract with the Company, or by inclusion among the persons specified in
writing by the Administrator. The Administrator may, at his or her discretion,
and at any time, and from time to time, provide that executives previously
designated as Eligible Executives are no longer Eligible Executives. If the
Administrator determines that an executive is no longer an Eligible Executive,
he or she shall remain a Participant in the Plan until all amounts credited to
his or her Account prior to such determination are paid out under the terms of
the Plan (or until death, if earlier).     2.   Election to Participate by
Eligible Executives and Deferral Election. Each Eligible Executive may become a
Participant in the Plan by electing to defer Compensation in accordance with the
terms of this Plan. An election to defer shall be in writing and shall be made
at the time and in the form specified by the Administrator. On electing to defer
Compensation under this Plan, the Eligible Executive shall be deemed to accept
all other terms and conditions of this Plan.

  (a)   Timing of Elections. All elections to defer amounts under this Plan
shall be irrevocable and shall be made pursuant to an election executed and
filed with the Administrator before the amounts so deferred are earned. An
election to defer Compensation shall be made prior to the beginning of the Plan
Year in which it is earned and shall become irrevocable on the December 31
preceding such Plan Year.     (b)   Newly Eligible Executive Elections. However,
if an executive becomes an Eligible Executive after the beginning of a Plan
Year, he or she may make an election to defer Compensation for that Plan Year no
later than 30 days after the date he or she becomes an Eligible Executive, which
election shall become irrevocable at the end of the 30-day period or an earlier
date that the Administrator prescribed; provided, however, such election shall
apply only to Compensation earned after the election becomes irrevocable or at
such later time the Administrator prescribes.     (c)   Modification of
Elections. An election filed in accordance with the provisions of the preceding
paragraphs (a) and (b) shall be applicable to the Plan Year with respect to
which it is made and shall continue for subsequent Plan Years until suspended or
modified in a writing delivered by the Participant to the Administrator, as
described in this paragraph (c). An election to suspend further deferrals or to
increase or decrease the amount deferred under the Plan shall apply only to
Compensation otherwise payable to the Participant after the end of the Plan Year
in which the election is delivered to the Administrator and such election shall
become irrevocable on the date that the Administrator prescribes, but in no
event later than December 31 of the Plan Year in which such election is made.

  3.   Relation to Other Plans.

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  (a)   Other Plans. An Eligible Executive may participate in this Plan and may
also participate in DCAP III or any successor plan. No amounts may be deferred
under this Plan which have been deferred under any other plan of the Company and
the Administrator may modify or render invalid a Participant’s election prior to
such election becoming irrevocable to accommodate deferrals made under other
plan(s).     (b)   Effect on Other Plans. For all other benefit programs
maintained by the Company, amounts deferred by an Eligible Executive under this
Plan may result in a reduction of benefits payable under the Social Security
Act, the McKesson Corporation Retirement Plan, the PSIP and the McKesson
Corporation Executive Benefit Retirement Plan.

D.   AMOUNTS OF DEFERRAL

  1.   PSIP Supplement. This Plan allows an Eligible Executive to defer
Compensation, and receive credit for a Monthly Company Match and Additional
Company Match, to the extent that such deferrals (and corresponding Monthly
Company Match and Additional Company Match) cannot be made under the PSIP
because of the limitations in Code Section 401(a)(17) (limiting the amount of
annual compensation to be taken into account under the PSIP to $210,000 in 2005,
as adjusted from time to time under the Code).     2.   Amount of Deferrals. As
illustrated in Appendix A, an Eligible Executive may elect to defer under this
Plan up to an amount equal to (a) minus (b), where:

  (a)   is the maximum rate of deferral for “Basic Contributions” under the PSIP
multiplied by the Eligible Executive’s Compensation, and     (b)   is the
maximum amount that the Eligible Executive is able to defer as a “Basic
Contribution” under the PSIP, taking into account the limits of Code
Section 401(a)(17).

E.   COMPANY MATCH

  1.   Eligibility.

  (a)   Monthly Company Match. A Monthly Company Match shall be credited, with
respect to each calendar month, to the Accounts of Eligible Executives who
actually defer Compensation under this Plan for such calendar month.     (b)  
Additional Company Match. An Additional Company Match may be credited, with
respect to each PSIP plan year, to the Accounts of Eligible Executives who
actually defer Compensation under this Plan.

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  2.   Amount of Match.

  (a)   Monthly Company Match. The amount of the Monthly Company Match to be
credited to the Account of an Eligible Executive for any calendar month shall be
a percentage of the Eligible Executive’s deferrals under this Plan for the
calendar month. This percentage shall be the same percentage as the “Matching
Employer Contribution” (as defined in the PSIP) percentage that would have been
credited to the Eligible Executive’s PSIP account if the Eligible Executive’s
deferrals under this Plan had been made under the PSIP. In determining this
amount, the Administrator shall take into account the different “Matching
Employer Contribution” rates that may apply.     (b)   Additional Company Match.
The amount of the Additional Company Match to be credited to the Account of an
Eligible Executive for any PSIP plan year shall be a percentage of the Eligible
Executive’s deferrals under this Plan for the PSIP plan year. This percentage
shall be the same percentage as the “Additional Matching Employer Contribution”
(as defined in the PSIP) percentage that would have been credited to the
Eligible Executive’s PSIP account if the Eligible Executive’s deferrals under
this Plan had been made under the PSIP. In determining this amount, the
Administrator shall take into account the different “Additional Matching
Employer Contribution” rates that may apply.

F.   PAYMENT OF DEFERRED COMPENSATION

  1.   Book Account and Interest Credit. Both Compensation deferred by a
Participant and any Monthly Company Match or Additional Company Match for the
benefit of a Participant shall be credited to a separate bookkeeping account
maintained for such Participant (the “Account”). Interest or earnings shall be
credited to each Account for each Plan Year at a rate equal to a rate declared
or any other measurement device (the “Declared Rate”) approved by the
Compensation Committee acting in its sole discretion after taking into account,
among other things, the following factors: McKesson’s cost of funds, corporate
tax brackets, expected amount and duration of deferrals, number and age of
eligible Participants, expected time and manner of payment of deferred amounts,
and expected performance of available fixed-rate insurance contracts covering
the lives of Participants. Notwithstanding the foregoing, if a Change in Control
occurs, the Declared Rate for the balance of the calendar year in which the
Change in Control occurs and for the two calendar years immediately following
the year in which the Change in Control occurs shall not be less than the
Declared Rate as in effect on the day before the Change in Control occurs.
Interest or earnings on each Account balance shall be compounded daily on each
business day within the Plan Year to yield the Declared Rate for the Plan Year.
Interest or earnings shall be credited to each Account as of the end of each
business day.

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  2.   Vesting.

  (a)   A Participant shall be 100% vested at all times in the value of the
Participant’s elective deferrals and earnings thereon credited to the
Participant’s Account.     (b)   A Participant shall vest in the amounts of
Monthly Company Match and the Additional Company Match and earnings thereon
credited to the Participant’s Account at the same time and in the same manner as
if these amounts were “Matching Employer Contributions” or “Additional Matching
Employer Contributions” under the PSIP and as if the rules of the PSIP
concerning vesting applied to such amounts. For this purpose, any Monthly
Company Match shall be deemed to be credited to an Account as of the last day of
the calendar month with respect to which such Monthly Company Match is
determined and any Additional Company Match shall be deemed to be credited to an
Account as of the March 31 with respect to which such Company Match is
determined. Any amounts that would be forfeited under the rules of the PSIP
applicable to “Matching Employer Contributions” or “Additional Matching Employer
Contributions” under the PSIP shall be forfeited hereunder. Any forfeiture under
this Plan of any portion of the Monthly Company Match or the Additional Company
Match credited to a Participant’s Account shall eliminate any obligation of the
Company to pay the forfeited amount hereunder.

  3.   Election of Methods of Payment. A Participant shall elect in writing, and
file with the Administrator, a method of payment of benefits under this Plan
from the following methods based upon the nature of the Payment Event. This
election must be made no later than the later of (i) December 31, 2007 or
(ii) 30 days after the date the Participant first becomes an Eligible Executive.

  (a)   Retirement or Disability. If the Payment Event is due to the
Participant’s Retirement or Disability, the Participant may choose one of the
following payment methods:

  (i)   Payment of the vested amounts credited to the Participant’s Account in
any specified number of approximately equal annual installments, not in excess
of the number of whole years remaining of the Participant’s life expectancy,
determined as of his or her Retirement or Disability and based upon the
mortality tables then in use under the McKesson Corporation Retirement Plan, the
first installment to be paid at a designated interval following the Payment
Event. For purposes of the Plan, installment payments shall be treated as a
single distribution under Code Section 409A.     (ii)   Payment of the vested
amounts credited to the Participant’s Account in a single lump sum upon the
occurrence of the Retirement or Disability.

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  (iii)   If a Participant does not make any election with respect to the
payment of the Participant’s Account, then such benefit shall be payable in a
lump sum upon the occurrence of Participant’s Retirement or Disability,
whichever is applicable.

      Payment under this paragraph (a) pursuant to Participant’s Retirement, is
subject to Section 5.     (b)   Death. Each Participant shall make an election
of the manner in which any amount remaining in the Participant’s Account at the
time of the Participant’s death shall be paid to his or her Beneficiary if such
Participant has not yet received or begun receiving a distribution under the
Plan. At the election of the Participant, benefits shall be paid in a lump sum
or in up to ten annual installments; provided, however, if a Participant is
in-pay status at the time of death, distribution of the Account, or portion of
the Account, that is in-pay shall continue to be distributed to the Beneficiary
as Participant elected to receive such distribution. A Beneficiary may not elect
to accelerate, change the form of the payments pursuant to the Participant’s
election, or further defer the payment of the Participant’s Account as described
in Section F.4.     (c)   Separation from Service Not Due to Retirement or
Death. If the Payment Event occurs as a result of the Participant’s Separation
from Service, and such separation is not due to the Participant’s death or
Retirement, payment of the vested amounts credited to the Participant’s Account
shall be made in a single lump sum upon the occurrence of the Participant’s
Separation from Service, subject to Section 5.         (If any Monthly Company
Match or Additional Company Match is payable under Section E hereunder, that
amount or first installment amount, whichever is applicable, may be paid
separately and at a later date as provided in such section but not later than
the end of the calendar year in which the Monthly Company Match or Additional
Company Match is credited to the Participant’s Account.)

  4.   Subsequent Change in Form of Payment. Once an election is made as to the
form of payment upon a Payment Event, a Participant may alter the form of
payment of amounts deferred under the Plan by a writing filed with the
Administrator; provided that such alteration is made at least one year prior to
the earliest Payment Event and does not provide for the receipt of such amounts
earlier than five years from the previously scheduled Payment Event. A change to
the form of a distribution may be modified or revoked until one year prior to
the time a distribution is originally scheduled to be made, at which time such
change shall become irrevocable. The last valid election accepted by the
Administrator shall govern the payout. A change to the form of distribution may
be modified or revoked until 12 months prior to the earliest scheduled Payment
Event, at which time any such modification or revocation shall become
irrevocable. The last valid election accepted by the Administrator shall govern
the form of payment.

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  5.   Deminimis Cashout. Notwithstanding the Participant’s election, the
Administrator in its sole discretion may distribute an Account to a Participant
or a Beneficiary in a single payment if the value of the Account, and any other
plan or arrangement with respect to which deferrals of compensation are treated
as having been deferred under a single nonqualified deferred compensation plan
under Treasury Regulation section 1.409A-1(c)(2), is less than the Code
Section 401(g)(1)(B) limit.     6.   Special Distribution Election on or before
December 31, 2006. Participants who are identified by the Compensation
Committee, in its sole discretion, may make a special distribution election to
receive a distribution of their Account in calendar year 2007 or later; provided
that the distribution election is made at least twelve months in advance of the
newly elected distribution date (and the previously scheduled distribution date,
if any) and the election is made no later than December 31, 2006. An election
made pursuant to this Section F.6 shall be subject to any special administrative
rules imposed by the Compensation Committee including rules intended to comply
with Code Section 409A. No election under this Section F.6 shall (i) change the
payment date of any distribution otherwise scheduled to be paid in 2006 or cause
a payment to be paid in 2006, or (ii) be permitted after December 31, 2006.    
7.   Date Payment Occurs. Payment shall be made or commence not later than
ninety (90) days following the date the earliest Payment Event occurs.
Notwithstanding the foregoing, a distribution scheduled to be made upon
Separation from Service to a Participant who is identified as a Specified
Employee as of the date he or she Separates from Service shall be delayed for a
minimum of six months following the Participant’s Separation from Service. Any
payment that otherwise would have been made pursuant to this Section F during
such six-month period, if any, shall be paid on the first day of the seventh
month following the Participant’s Separation from Service. The identification of
a Participant as a Specified Employee shall be made by the Administrator in his
or her sole discretion in accordance with Section M.26 of the Plan and Code
Sections 416(i) and 409A and the regulations promulgated thereunder.     8.  
Prohibition on Acceleration. Notwithstanding any other provision of the Plan to
the contrary, no distribution will be made from the Plan that would constitute
an impermissible acceleration of payment as defined in Code Section 409A(a)(3)
and the regulations promulgated thereunder.

G.   BENEFICIARY DESIGNATION

A Participant may designate any person or entity as his or her Beneficiary, but
may not designate more than one person or any person that is not a natural
person without the approval of the Administrator. Designation shall be in
writing and shall become effective only when filed with

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McKesson. Such filing must occur before the Participant’s death. A Participant
may change the Beneficiary, from time to time, by filing a completed beneficiary
designation with McKesson in the manner prescribed by McKesson in its sole
discretion. If the Participant fails to effectively designate a Beneficiary in
accordance with the Administrator’s procedures or the person designated by the
Participant is not living at the time the distribution is to be made, then his
or her Beneficiary shall be his or her beneficiary under the PSIP.

H.   SOURCE OF PAYMENT

Amounts paid under this Plan shall be paid from the general funds of McKesson,
and each Participant and his or her Beneficiaries shall be no more than
unsecured general creditors of McKesson with no special or prior right to any
assets of the Company for payment of any obligations hereunder. Nothing
contained in this Plan shall be deemed to create a trust of any kind for the
benefit of any Participant or Beneficiary or create any fiduciary relationship
between an Employer and any Participant or Beneficiary with respect to any
assets of the Company.

I.   MISCELLANEOUS

  1.   Withholding. Each Participant and Beneficiary shall make appropriate
arrangements with McKesson for the satisfaction of any federal, state, or local
income tax withholding requirements and Social Security or other employment tax
requirements applicable to the payment of benefits under this Plan. If no other
arrangements are made, McKesson may provide, at its discretion, for such
withholding and tax payments as may be required.     2.   No Assignment. Except
as otherwise provided in this Section I.2. or by applicable law, the benefits
provided under this Plan may not be alienated, assigned, transferred, pledged,
or hypothecated by any person, at any time. These benefits shall be exempt from
the claims of creditors or other claimants and from all orders, decrees, levies,
garnishments or executions.         If a court of competent jurisdiction
determines pursuant to a judgment, order or approval of a marital settlement
agreement that all or any portion of the benefits payable hereunder to a
Participant constitute community property of the Participant and his or her
spouse or former spouse (hereafter, the “Alternate Payee”) or property which is
otherwise subject to division by the Participant and the Alternative Payee, a
division of such property shall not constitute a violation of this Section I.2,
and any portion of such property may be paid or set aside for payment to the
Alternate Payee. The preceding sentence, however, shall not create any
additional rights and privileges for the Alternate Payee (or the Participant)
not already provided under the Plan; in this regard, the Administrator shall
have the right to refuse to recognize any judgment, order or approval of a
martial settlement agreement that provides for any additional rights and
privileges already not already provided under the Plan, including without
limitation with respect to form and time of payment.

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  3.   Applicable Law; Severability. The Plan hereby created shall be construed,
administered, and governed in all respects in accordance with ERISA and the laws
of the State of California to the extent that the latter are not preempted by
ERISA. If any provision of this instrument shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereunder
shall continue to be effective.     4.   No Right to Continued Employment, Etc.
Neither the establishment or maintenance of the Plan nor the crediting of any
amount to any Participant’s Account, nor the designation of an executive as an
Eligible Executive, shall confer upon any individual any right to be continued
as an employee of an Employer or shall affect the right of an Employer to
terminate any executive’s employment or change any terms of any executive’s
employment at any time.

J.   ADMINISTRATION OF THE PLAN

  1.   In General. The Plan Administrator shall be the Executive Vice President,
Human Resources of McKesson. If the Executive Vice President, Human Resources is
a Participant, any discretionary action taken as Administrator which directly
affects him or her as a Participant shall be specifically approved by the
Compensation Committee. The Compensation Committee shall have authority and
responsibility to interpret the Plan and shall adopt such rules and regulations
for carrying out the Plan as it may deem necessary or appropriate. Decisions of
the Compensation Committee shall be final and binding on all parties who have or
claim any interest in the Plan. The Plan Administrator or Compensation Committee
shall have the authority to delegate its authority under the Plan to an officer
or group of officers of McKesson.     2.   Elections and Notices. All elections
and notices made under this Plan shall be in writing and filed with the
Administrator at the time and in the manner specified by him or her.

K.   AMENDMENT OR TERMINATION OF THE PLAN

  1.   Amendment. The Compensation Committee may at any time, and from time to
time, amend the Plan. Unless otherwise specified, such action shall be
prospective only and shall not adversely affect the rights of any Participant or
Beneficiary to any benefit previously earned under the Plan.     2.  
Termination. The Board in its discretion may at any time terminate the Plan in
accordance with Treasury Regulation section 1.409A-3(j)(4)(ix).

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L.   CLAIMS AND APPEALS

  1.   Informal Resolution of Questions. Any Participant or Beneficiary who has
questions or concerns about his or her benefits under the Plan is encouraged to
communicate with the Human Resources Department of McKesson. If this discussion
does not give the Participant or Beneficiary satisfactory results, a formal
claim for benefits may be made in accordance with the procedures of this
Section L.     2.   Formal Benefits Claim – Review by Executive Vice President,
Human Resources. A Participant or Beneficiary may make a written request for
review of any matter concerning his or her benefits under this Plan. The claim
must be addressed to the Executive Vice President, Human Resources, McKesson
Corporation, One Post Street, San Francisco, California 94104. The Executive
Vice President, Human Resources or his or her delegate (“Executive Vice
President”) shall decide the action to be taken with respect to any such request
and may require additional information if necessary to process the request. The
Executive Vice President shall review the request and shall issue his or her
decision, in writing, no later than 90 days after the date the request is
received, unless the circumstances require an extension of time. If such an
extension is required, written notice of the extension shall be furnished to the
person making the request within the initial 90-day period, and the notice shall
state the circumstances requiring the extension and the date by which the
Executive Vice President expects to reach a decision on the request. In no event
shall the extension exceed a period of 90 days from the end of the initial
period.     3.   Notice of Denied Request. If the Executive Vice President
denies a request in whole or in part, he or she shall provide the person making
the request with written notice of the denial within the period specified in
Section L.2. The notice shall set forth the specific reason for the denial,
reference to the specific Plan provisions upon which the denial is based, a
description of any additional material or information necessary to perfect the
request, an explanation of why such information is required, and an explanation
of the Plan’s appeal procedures and the time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse benefit determination
on review.     4.   Appeal to Executive Vice President.

  (a)   A person whose request has been denied in whole or in part (or such
person’s authorized representative) may file an appeal of the decision in
writing with the Executive Vice President within 60 days of receipt of the
notification of denial. The appeal must be addressed to: Executive Vice
President, Human Resources, McKesson Corporation, One Post Street, San
Francisco, California 94104. The Executive Vice President, for good cause shown,
may extend the period during which the appeal may be filed for another 60 days.
The appellant and/or his or her authorized

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      representative shall be permitted to submit written comments, documents,
records and other information relating to the claim for benefits. Upon request
and free of charge, the applicant should be provided reasonable access to and
copies of, all documents, records or other information relevant to the
appellant’s claim.     (b)   The Executive Vice President’s review shall take
into account all comments, documents, records and other information submitted by
the appellant relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination. The Executive
Vice President shall not be restricted in his or her review to those provisions
of the Plan cited in the original denial of the claim.     (c)   The Executive
Vice President shall issue a written decision within a reasonable period of time
but not later than 60 days after receipt of the appeal, unless special
circumstances require an extension of time for processing, in which case the
written decision shall be issued as soon as possible, but not later than
120 days after receipt of an appeal. If such an extension is required, written
notice shall be furnished to the appellant within the initial 60-day period.
This notice shall state the circumstances requiring the extension and the date
by which the Executive Vice President expects to reach a decision on the appeal.
    (d)   If the decision on the appeal denies the claim in whole or in part,
written notice shall be furnished to the appellant. Such notice shall state the
reason(s) for the denial, including references to specific Plan provisions upon
which the denial was based. The notice shall state that the appellant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim
for benefits. The notice shall describe any voluntary appeal procedures offered
by the Plan and the appellant’s right to obtain the information about such
procedures. The notice shall also include a statement of the appellant’s right
to bring an action under Section 502(a) of ERISA.     (e)   The decision of the
Executive Vice President on the appeal shall be final, conclusive and binding
upon all persons and shall be given the maximum possible deference allowed by
law.

  5.   Exhaustion of Remedies. No legal or equitable action for benefits under
the Plan shall be brought unless and until the claimant has submitted a written
claim for benefits in accordance with Section L.2, has been notified that the
claim is denied in accordance with Section L.3, has filed a written request for
a review of the claim in accordance with Section L.4, and has been notified in
writing that the Executive Vice President has affirmed the denial of the claim
in accordance with Section L.4.

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M.   DEFINITIONS

For purposes of the Plan, the following terms shall have the meanings indicated:

  1.   “Account” shall mean the Account specified in Section F.l.     2.  
“Additional Company Match” shall mean, with respect to any Plan Year, the amount
credited to the Account of an Eligible Employee in accordance with Section
E.1(b).     3.   “Administrator” shall mean the person specified in Section J.1.
    4.   “Beneficiary” shall mean the person or entity described by Section G.  
  5.   “Board” shall mean the Board of Directors of McKesson.     6.   “Code”
shall mean the Internal Revenue Code of 1986, as amended.     7.   “Company”
shall mean McKesson and any affiliate that would be considered a service
recipient for purposes of Treasury Regulation section 1.409A-1(g).     8.  
“Compensation” shall mean “Compensation” as defined in Section 15.17 of the
PSIP; provided, however, that Compensation for purposes of this Plan shall be
determined without regard to the limit of Code Section 401(a)(17).     9.  
“Compensation Committee” shall mean the Compensation Committee of the Board.    
10.   “DCAP III” shall mean the McKesson Corporation Deferred Compensation
Administration Plan III and predecessor or successor plans, if applicable.    
11.   “Disability” shall mean that an individual is determined to be totally
disabled by the Social Security Administration.     12.   “Eligible Executive”
shall mean an employee of the Employer, or its affiliate or subsidiary, who is
eligible to participate in this Plan under Section C.     13.   “Employer” shall
mean McKesson and any other affiliate that would be considered a service
recipient or employer for purposes of Treasury Regulation section
1.409A-1(h)(3).     14.   “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended.     15.   “Identification Date” shall mean
each December 31.     16.   “McKesson” shall mean McKesson Corporation, a
Delaware corporation.

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  17.   “Monthly Company Match” shall mean, with respect to a calendar month,
the amount credited to the Account of an Eligible Executive in accordance with
Section E.1(a).     18.   “Participant” shall be any Eligible Executive or
former Eligible Executive for whom amounts are credited to an Account under this
Plan. Upon a Participant’s death his or her Beneficiary shall be a Participant
until all amounts are paid out of the decedent-Participant’s Account.     19.  
“Payment Event” shall mean the earliest of the following: Retirement, death,
Separation from Service other than due to Retirement or death, or Disability.  
  20.   “Plan” shall mean the McKesson Corporation Supplemental PSIP II.     21.
  “Plan Year” shall mean the calendar year.     22.   “Prior Plan” shall mean
the McKesson Corporation Supplemental PSIP.     23.   “PSIP” shall mean the
McKesson Corporation Profit-Sharing Investment Plan, as amended from time to
time.     24.   “Retirement” shall mean Separation from Service from the
Employer after the date on which the Participant has attained age 50 and has at
least five Years of Service.     25.   “Separation from Service” shall mean
termination of employment with the Employer, except in the event of death or
Disability. A Participant shall be deemed to have had a Separation from Service
if the Participant’s service with the Employer is reduced to an annual rate that
is equal to or less than twenty percent of the services rendered, on average,
during the immediately preceding three years of service with the Employer (or if
providing service to the Employer less than three years, such lesser period).  
  26.   “Specified Employee” shall mean a Participant who, on an Identification
Date, is:

  (a)   An officer of the Company having annual compensation greater than the
compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more
than fifty officers of the Company shall be determined to be Specified Employees
as of any Identification Date;     (b)   A five percent owner of the Company; or
    (c)   A one percent owner of the Company having annual compensation from the
Company of more than $150,000.

    For purposes of determining whether a Participant is a Specified Employee,
Treasury Regulation section 1.415(c)-2(d)(11)(ii) shall be used to calculate
compensation. If a Participant is identified as a Specified Employee on an
Identification Date, then such

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    Participant shall be considered a Specified Employee for purposes of the
Plan during the period beginning on the first April 1 following the
Identification Date and ending on the next March 31.

  27.   “Year of Service” shall have the same meaning as “Year of Service” as
defined in the PSIP.

N.   SUCCESSORS

This Plan shall be binding on the Company and any successors or assigns thereto.

O.   EXECUTION

To record the adoption of the Plan by the Compensation Committee of the Board of
McKesson Corporation at a meeting held on October 24, 2008, effective as of
January 1, 2009.
McKESSON CORPORATION

             
By
  /s/ Jorge L. Figueredo
 
        
 
  Jorge L. Figueredo             Executive Vice President, Human Resources    

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APPENDIX A
EXAMPLE OF DEFERRALS UNDER PLAN
The following example illustrates the extent to which a Participant could make
deferrals under this Plan. The example assumes that the applicable compensation
limit under Code Section 401(a)(17) is $210,000.
E’s Compensation is $350,000. E elects to make Basic Contributions under PSIP at
the rate of 5% of his Compensation. Because Code Section 401(a)(17) limits the
amount of E’s compensation which may be considered by PSIP to $210,000, E’s
Basic Contributions for the year are limited to $10,500 (5% of $210,000).
Accordingly, E may defer $7,000 (5% of his Compensation in excess of $210,000)
into this Plan. This deferral will then be eligible for a Monthly Company Match
and an Additional Company Match based on the PSIP’s “Matching Employer
Contribution” and “Additional Matching Employer Contribution” for the relevant
PSIP calendar months and plan year.

A-1