Exhibit 10.14
CEO

FORM OF
McKESSON CORPORATION
STATEMENT OF TERMS AND CONDITIONS
APPLICABLE TO AWARDS MADE TO
THE CHIEF EXECUTIVE OFFICER
PURSUANT TO THE LONG-TERM INCENTIVE PLAN

The following terms and conditions shall apply to awards made under the McKesson
Corporation Long-Term Incentive Plan on or after May 24, 2016 to a key executive
of the Company (the “Participant”). Capitalized terms used herein are defined in
Section 7.

1. Committee Action.

The Target Award is the amount specified by the Committee at the time of making
the award. Notwithstanding any provision of the Plan to the contrary, no amount
shall be payable with respect to a Performance Period unless the Committee
certifies that it is satisfied that the requirements (performance or otherwise)
associated with such payment have been fully met.

2. Performance Measures.

Any payment pursuant to the Target Award shall be contingent upon the Company’s
performance during the Performance Period. The final amount to be paid pursuant
to the Target Award shall be calculated by determining the percentage,
determined with reference to the Performance Chart (with interpolation), and
then applying the result to the Target Award (such finally determined amount,
the “Actual Award”). The Target Award and the Actual Award may be referred to
herein cumulatively as the “Awards.”
    
The Committee reserves the right to reduce the individual payments determined
according to the above formula.
    
Payment of the Actual Award, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the
Committee’s certification as set forth in Section 1, subject to forfeiture as
provided in Section 3 below or acceleration as provided in Section 4 below;
provided, however, that the Actual Award shall not be paid later than following
the end of the calendar year in which the Performance Period ends, unless as
otherwise provided below.

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CEO

3. Effect of a Termination of Employment. Except as provided in Section 4, the
following provisions shall apply in the event of the termination of a
Participant’s employment with the Company.

(a)
Termination of Employment Prior to Payment of the Actual Award – General Rule

Except as provided in Sections 3(b), 3(c) and 3(d), if the Participant ceases to
be a bona fide employee of the Company prior to payment of the Actual Award for
any reason, the Participant’s interest in the associated Awards shall be
forfeited in its entirety and no amount shall be payable to the Participant with
respect to service during the Performance Period.

(b)
Termination of Employment by Reason of Death or Long-Term Disability On or After
Completion of One Half of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of one half of the Performance Period of a Target Award due to death
or Long-Term Disability, the Participant (or the Participant’s Beneficiary, if
payment is made on account of the death of the Participant) shall be entitled to
receive the following as soon as reasonably practicable after the end of the
Performance Period, but prior to the end of the calendar year in which the
Performance Period ends:

The pro-rata portion of the Actual Award adjusted by the actual service during
the Performance Period; provided, the fraction representing the pro-rata amount
shall be applied to the Actual Award, which is based on the actual performance
during the Performance Period, and not the Target Award.

(c)
Termination of Employment by Reason of Retirement On or After Completion of the
First Year of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of the first year of the Performance Period of a Target Award due to
Retirement, the Participant shall be entitled to receive the Actual Award
associated with such Target Award as soon as reasonably practicable after the
end of the Performance Period, but prior to the end of the calendar year in
which the Performance Period ends.

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CEO

(d)
Termination of Employment by Reason of Severance

If the Participant ceases to be a bona fide employee of the Company due to
Severance, and the Participant’s termination date with the Company is within six
months prior to the end of the Performance Period of a Target Award, then the
Participant shall be entitled to receive the Actual Award associated with such
Target Award as soon as reasonably practicable after the end of the Performance
Period, but prior to the end of the calendar year in which the Performance
Period ends.

4. Effect of Change in Control.

In the event of the occurrence of a Change in Control prior to the termination
of the Participant’s employment with the Company, the Actual Award will be
calculated and replaced with an award of restricted cash with a dollar amount
equal to the dollar amount of the Actual Award assuming attainment of target
performance or actual performance achieved, if greater, as of the Change in
Control and with the restrictions on such restricted cash award lapsing at the
end of the Performance Period applicable to the Target Award without regard to
the Change in Control. In the event that the Participant’s employment is
terminated by the Company without Cause or for Retirement, death or Long Term
Disability or by the Participant for Good Reason during the vesting period of
the restricted cash award, such restricted cash award shall immediately vest and
be paid out as follows:

The Participant shall receive a cash payment determined based on the Performance
Chart measured through the last full fiscal year completed prior to the
employment termination date, and paid as soon as practicable following the
employment termination date, but in no event later than the date that is the
later of (i) the end of the calendar year or (ii) two and one-half months after,
such employment termination date.

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CEO

5. Section 409A.

It is the Company’s intent that the Awards under the Plan do not constitute
deferred compensation subject to section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”); however, to the extent any amount payable
under the Plan, when considered together with any other payments or benefits
which may be considered deferred compensation subject to Section 409A (as
determined by the Company in its reasonable judgment), would result in the
imposition of additional tax under Section 409A if paid on or within six months
following such termination of employment, such amount shall instead be paid on
the date that follows the date of such termination of employment by six months
or such longer time as required to avoid tax liabilities under Section 409A. For
purposes of this Statement of Terms and Conditions, “termination of employment”
and similar iterations, shall have the same meaning as “Separation from Service”
as defined in DCAP III.

6. Employment Agreement.
    
Notwithstanding the foregoing, no provision in this document herein shall
adversely affect any provision in the employment agreement by and between the
Participant and the Company, if any, in effect at the time when payments are
made under the Plan.

7. Definitions.

When capitalized in the text of this Statement of Terms and Conditions the
following terms shall have the meaning set forth below:

(a)
“Beneficiary” means the person, persons or entity designated by a Participant in
accordance with any procedures established by the Committee to receive any
amounts distributable under the Plan in the event of the death of the
Participant. If no Beneficiary is designated or if no designated Beneficiary is
living when a distribution is to be made, then the Beneficiary shall be the
Participant’s current lawful spouse if then living or, if not, the Participant’s
estate. A Participant may change or revoke a previous designation of a
Beneficiary at any time.

(b)
“Cause” means termination of the Participant’s employment with the Company upon
the Participant’s negligent or willful engagement in misconduct which, in the
sole determination of the Chief Executive Officer (“CEO”) (or his designee), is
injurious to the Company, its employees, or its customers.

(c)
“Change in Control” shall have the meaning set forth in Section 6 of the Plan.

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CEO

(d)
“Committee” means the Compensation Committee of the Board of Directors of the
Company.

(e)
“Company” means McKesson Corporation, a Delaware corporation, including its
subsidiaries and affiliates.

(f)
“DCAP III” means the McKesson Corporation Deferred Compensation Administration
Plan III, as amended from time to time.

(g)
“Good Reason” means any of the following actions, if taken without the express
written consent of the Participant:

(i)
Any material change by the Company in the CEO’s functions, duties or
responsibilities as President and Chief Executive Officer, which change would
cause the CEO’s position with the Company to become of less dignity,
responsibility, importance, or scope as compared to the position and attributes
that applied to the CEO immediately prior to the Change in Control, or an
adverse change in the CEO’s title, position or his obligation and right to
report directly to the Board;

(ii)
Any reduction in the CEO’s base annual salary, MIP target or Long Term Incentive
compensation (LTI) targets, which LTI targets include cash awards with
performance periods greater than one year and equity based grants, except for
reductions that are equivalent to reductions applicable to executive officers of
the Company;

(iii)
Any material failure by the Company to comply with any of the provisions of an
award (or of any employment agreement between the parties) subsequent to a
Change in Control;

(iv)
The Company’s requiring the CEO to be based at any office or location more than
25 miles from the office at which the CEO is based on the date immediately
preceding the Change in Control, except for travel reasonably required in the
performance of the CEO’s responsibilities;

(v)
Cancellation of the automatic renewal mechanism set forth in the CEO’s
Employment Agreement;

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CEO

(vi)
If the Board removes the CEO as Chairman at or after a Change in Control (or
prior to a Change in Control if at the request of any third party participating
in or causing the Change in Control), unless such removal is required by
then-applicable law; or

(vii)
A change in the majority of the members of the Board as it was construed
immediately prior to the Change in Control;

provided that the Participant (A) has given written notice to the Board as to
the details of the basis for such Good Reason within thirty (30) days following
the date on which the Participant alleges the condition giving rise to such Good
Reason initially occurs and the Company has failed to provide a reasonable cure
within thirty (30) business days after its receipt of such notice and (B)
Participant’s Separation from Service occurs within ninety (90) days of the time
in which the condition giving rise to such Good Reason initially occurs.

(h)
“Long-Term Disability” shall mean a physical or mental condition in respect of
which the administrator of the Company’s long-term disability plan has
determined that the Participant is eligible to receive income replacement
benefits; or, if the Participant is not then a participant in the Company’s
long-term disability plan, a physical or mental condition that the administrator
of the Company’s long-term disability plan determines would have rendered the
Participant eligible to receive income replacement benefits, had the Participant
been enrolled in such plan.

(i)
The “Performance Chart” shall be the performance measure(s) and award scale(s),
specified by the Committee at the time of making the award.

(j)
“Performance Period” is the period of time, identified by a beginning and end
date, specified by the Committee at the time of making the award over which
performance is measured.

(k)
“Plan” means the McKesson Corporation Long-Term Incentive Plan, as amended from
time to time.

(l)
“Retirement” means termination of employment with the Company (other than due to
death, Long-Term Disability or for Cause) at or after age 60 (57, in the case of
a participant in the McKesson Corporation 1984 Executive Benefit Retirement
Plan) with at least 10 years of service with the Company and designation as a
retiree by the Compensation Committee of the Board. For purposes of determining
eligibility for Retirement, a

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CEO

“year of service” means a completed whole year (12 consecutive months); provided
that if a Participant who has a termination of employment with the Company by
reason of Severance would have attained the aforementioned requirements for
Retirement within six months after the Participant’s termination date, then such
termination of employment with the Company shall be deemed to be “Retirement.”
(m)
“Severance” means termination of employment with the Company, and qualified for
participation in and entitlement to benefits under the McKesson Corporation
Severance Pay Plan, in accordance with the terms and conditions of such plan.

(n)
“Target Award” means the amount specified by the Committee payable to a
participant for the Performance Period and payable for achievement at 100%.

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OFFICERS

FORM OF
McKESSON CORPORATION
STATEMENT OF TERMS AND CONDITIONS
APPLICABLE TO AWARDS MADE TO
CERTAIN OFFICERS
PURSUANT TO THE LONG-TERM INCENTIVE PLAN

The following terms and conditions shall apply to awards made under the McKesson
Corporation Long-Term Incentive Plan on or after May 24, 2016 to a key executive
of the Company (the “Participant”). Capitalized terms used herein are defined in
Section 7.

1. Committee Action.

The Target Award is the amount specified by the Committee at the time of making
the award. The Committee reserves the right to adjust an individual’s Target
Award prior to the date of payment of such award if there is a change in an
individual’s duties and/or responsibilities. Notwithstanding any provision of
the Plan to the contrary, no amount shall be payable with respect to a
Performance Period unless the Committee certifies that it is satisfied that the
requirements (performance or otherwise) associated with such payment have been
fully met.

2. Performance Measures.

Any payment pursuant to the Target Award shall be contingent upon the Company’s
performance during the Performance Period. The final amount to be paid pursuant
to the Target Award shall be calculated by determining the percentage,
determined with reference to the Performance Chart (with interpolation), and
then applying the result to the Target Award (such finally determined amount,
the “Actual Award”). The Target Award and the Actual Award may be referred to
herein cumulatively as the “Awards.”
    
The Committee reserves the right to reduce the individual payments determined
according to the above formula.
    
Payment of the Actual Award, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the
Committee’s certification as set forth in Section 1, subject to forfeiture as
provided in Section 3 below or acceleration as provided in Section 4 below;
provided, however, that the Actual Award shall not be paid later than following
the end of the calendar year in which the Performance Period ends, unless as
otherwise provided below.

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OFFICERS

3. Effect of a Termination of Employment. Except as provided in Section 4, the
following provisions shall apply in the event of the termination of a
Participant’s employment with the Company.

(a)
Termination of Employment Prior to Payment of the Actual Award – General Rule

Except as provided in Sections 3(b), 3(c) and 3(d), if the Participant ceases to
be a bona fide employee of the Company prior to the payment of the Actual Award
for any reason, the Participant’s interest in the associated Awards shall be
forfeited in its entirety and no amount shall be payable to the Participant with
respect to service during the Performance Period.

(b)
Termination of Employment by Reason of Death or Long-Term Disability On or After
Completion of One Half of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of one half of the Performance Period of a Target Award due to death
or Long-Term Disability, the Participant (or the Participant’s Beneficiary, if
payment is made on account of the death of the Participant) shall be entitled to
receive the following as soon as reasonably practicable after the end of the
Performance Period, but prior to the end of the calendar year in which the
Performance Period ends:

The pro-rata portion of the Actual Award adjusted by the actual service during
the Performance Period; provided, the fraction representing the pro-rata amount
shall be applied to the Actual Award, which is based on the actual performance
during the Performance Period, and not the Target Award.

(c)
Termination of Employment by Reason of Retirement On or After Completion of the
First Year of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of the first year of the Performance Period of a Target Award due to
Retirement, the Participant shall be entitled to receive the Actual Award
associated with such Target Award as soon as reasonably practicable after the
end of the Performance Period, but prior to the end of the calendar year in
which the Performance Period ends.

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OFFICERS

(d)
Termination of Employment by Reason of Severance

If the Participant ceases to be a bona fide employee of the Company due to
Severance, and the Participant’s termination date with the Company is within six
months prior to the end of the Performance Period of a Target Award, then the
Participant shall be entitled to receive the Actual Award associated with such
Target Award as soon as reasonably practicable after the end of the Performance
Period, but prior to the end of the calendar year in which the Performance
Period ends.

4. Effect of Change in Control.

In the event of the occurrence of a Change in Control prior to the termination
of the Participant’s employment with the Company, the Actual Award will be
calculated and replaced with an award of restricted cash with a dollar amount
equal to the dollar amount of the Actual Award assuming attainment of target
performance or actual performance achieved, if greater, as of the Change in
Control and with the restrictions on such restricted cash award lapsing at the
end of the Performance Period applicable to the Target Award without regard to
the Change in Control. In the event that the Participant’s employment is
terminated by the Company without Cause or for Retirement, death or Long Term
Disability or by the Participant for Good Reason during the vesting period of
the restricted cash award, such restricted cash award shall immediately vest and
be paid out as follows:

The Participant shall receive a cash payment determined based on the Performance
Chart measured through the last full fiscal year completed prior to the
employment termination date, and paid as soon as practicable following the
employment termination date, but in no event later than the date that is the
later of (i) the end of the calendar year or (ii) two and one-half months after,
such employment termination date.

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OFFICERS

5. Section 409A.

It is the Company’s intent that the Awards under the Plan do not constitute
deferred compensation subject to section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”); however, to the extent any amount payable
under the Plan, when considered together with any other payments or benefits
which may be considered deferred compensation subject to Section 409A (as
determined by the Company in its reasonable judgment), would result in the
imposition of additional tax under Section 409A if paid on or within six months
following such termination of employment, such amount shall instead be paid on
the date that follows the date of such termination of employment by six months
or such longer time as required to avoid tax liabilities under Section 409A. For
purposes of this Statement of Terms and Conditions, “termination of employment”
and similar iterations, shall have the same meaning as “Separation from Service”
as defined in DCAP III.

6. Employment Agreement.
    
Notwithstanding the foregoing, no provision in this document herein shall
adversely affect any provision in the employment agreement by and between the
Participant and the Company, if any, in effect at the time when payments are
made under the Plan.

7. Definitions.

When capitalized in the text of this Statement of Terms and Conditions the
following terms shall have the meaning set forth below:

(a)
“Beneficiary” means the person, persons or entity designated by a Participant in
accordance with any procedures established by the Committee to receive any
amounts distributable under the Plan in the event of the death of the
Participant. If no Beneficiary is designated or if no designated Beneficiary is
living when a distribution is to be made, then the Beneficiary shall be the
Participant’s current lawful spouse if then living or, if not, the Participant’s
estate. A Participant may change or revoke a previous designation of a
Beneficiary at any time.

(b)
“Cause” means termination of the Participant’s employment with the Company upon
the Participant’s negligent or willful engagement in misconduct which, in the
sole determination of the Chief Executive Officer (or his designee), is
injurious to the Company, its employees, or its customers.

(c)
“Change in Control” shall have the meaning set forth in Section 6 of the Plan.

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OFFICERS

(d)
“Committee” means the Compensation Committee of the Board of Directors of the
Company.

(e)
“Company” means McKesson Corporation, a Delaware corporation, including its
subsidiaries and affiliates.

(f)
“DCAP III” means the McKesson Corporation Deferred Compensation Administration
Plan III, as amended from time to time.

(g)
“Good Reason” means any of the following actions, if taken without the express
written consent of the Participant:

(i)
Any material adverse change by the Company in the Participant’s authorities,
duties, or responsibilities, which change would cause the Participant’s position
with the Company to become of less dignity, responsibility, importance, or scope
from the position and attributes that applied to the Participant immediately
prior to the Change in Control;

(ii)
Any significant reduction in the Participant’s base salary immediately prior to
the Change in Control, other than a reduction effected as part of an
across-the-board reduction affecting all Plan participants;

(iii)
Any material failure by the Company to comply with any of the provisions of an
award (or of any employment agreement between the parties) subsequent to a
Change in Control;

(iv)
The Company’s requiring the Participant to be based at any office or location
more than 25 miles from the office at which the Participant is based on the date
immediately preceding the Change in Control; or

(v)
Any change in the person to whom the Participant reports, as this relationship
existed immediately prior to a Change in Control;

provided that the Participant (A) has given written notice to the Board as to
the details of the basis for such Good Reason within thirty (30) days following
the date on which the Participant alleges the condition giving rise to such Good
Reason initially occurs and the Company has failed to provide a reasonable cure
within thirty (30) business days after its receipt

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OFFICERS

of such notice and (B) Participant’s Separation from Service occurs within
ninety (90) days of the time in which the condition giving rise to such Good
Reason initially occurs.
(h)
“Long-Term Disability” shall mean a physical or mental condition in respect of
which the administrator of the Company’s long-term disability plan has
determined that the Participant is eligible to receive income replacement
benefits; or, if the Participant is not then a participant in the Company’s
long-term disability plan, a physical or mental condition that the administrator
of the Company’s long-term disability plan determines would have rendered the
Participant eligible to receive income replacement benefits, had the Participant
been enrolled in such plan.

(i)
The “Performance Chart” shall be the performance measure(s) and award scale(s),
specified by the Committee at the time of making the award.

(j)
“Performance Period” is the period of time, identified by a beginning and end
date, specified by the Committee at the time of making the award over which
performance is measured.

(k)
“Plan” means the McKesson Corporation Long-Term Incentive Plan, as amended from
time to time.

(l)
“Retirement” means termination of employment with the Company (other than due to
death, Long-Term Disability or for Cause) at or after age 60 (57, in the case of
a participant in the McKesson Corporation 1984 Executive Benefit Retirement
Plan) with at least 10 years of service with the Company and designation as a
retiree by the Compensation Committee of the Board. For purposes of determining
eligibility for Retirement, a “year of service” means a completed whole year (12
consecutive months); provided that if a Participant who has a termination of
employment with the Company by reason of Severance would have attained the
aforementioned requirements for Retirement within six months after the
Participant’s termination date, then such termination of employment with the
Company shall be deemed to be “Retirement.”

(m)
“Severance” means termination of employment with the Company, and qualified for
participation in and entitlement to benefits under the McKesson Corporation
Severance Pay Plan, in accordance with the terms and conditions of such plan.

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OFFICERS

(n)
“Target Award” means the amount specified by the Committee payable to a
participant for the Performance Period and payable for achievement at 100%.

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EMPLOYEES

FORM OF
McKESSON CORPORATION
STATEMENT OF TERMS AND CONDITIONS
APPLICABLE TO AWARDS MADE TO
CERTAIN EMPLOYEES
PURSUANT TO THE LONG-TERM INCENTIVE PLAN

The following terms and conditions shall apply to awards made under the McKesson
Corporation Long-Term Incentive Plan on or after May 24, 2016 to a key executive
of the Company (the “Participant”). Capitalized terms used herein are defined in
Section 6.

1. Committee Action.

The Target Award is the amount specified by the Committee at the time of making
the award. The Committee reserves the right to adjust an individual’s Target
Award prior to the date of payment of such award if there is a change in an
individual’s duties and/or responsibilities. Notwithstanding any provision of
the Plan to the contrary, no amount shall be payable with respect to a
Performance Period unless the Committee certifies that it is satisfied that the
requirements (performance or otherwise) associated with such payment have been
fully met.

2. Performance Measures.

Any payment pursuant to the Target Award shall be contingent upon the Company’s
performance during the Performance Period. The final amount to be paid pursuant
to the Target Award shall be calculated by determining the percentage,
determined with reference to the Performance Chart (with interpolation), and
then applying the result to the Target Award (such finally determined amount,
the “Actual Award”). The Target Award and the Actual Award may be referred to
herein cumulatively as the “Awards.”
    
The Committee reserves the right to reduce the individual payments determined
according to the above formula.
    
Payment of the Actual Award, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the
Committee’s certification as set forth in Section 1, subject to forfeiture as
provided in Section 3 below or acceleration as provided in Section 4 below;
provided, however, that the Actual Award shall not be paid later than following
the end of the calendar year in which the Performance Period ends, unless as
otherwise provided below.

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EMPLOYEES

3. Effect of a Termination of Employment. Except as provided in Section 4, the
following provisions shall apply in the event of the termination of a
Participant’s employment with the Company.

(a)
Termination of Employment Prior to Payment of the Actual Award – General Rule

Except as provided in Sections 3(b), 3(c) and 3(d), if the Participant ceases to
be a bona fide employee of the Company prior to payment of the Actual Award for
any reason, the Participant’s interest in the associated Awards shall be
forfeited in its entirety and no amount shall be payable to the Participant with
respect to service during the Performance Period.

(b)
Termination of Employment by Reason of Death or Long-Term Disability On or After
Completion of One Half of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of one half of the Performance Period of a Target Award due to death
or Long-Term Disability, the Participant (or the Participant’s Beneficiary, if
payment is made on account of the death of the Participant) shall be entitled to
receive the following as soon as reasonably practicable after the end of the
Performance Period, but prior to the end of the calendar year in which the
Performance Period ends:

The pro-rata portion of the Actual Award adjusted by the actual service during
the Performance Period; provided, the fraction representing the pro-rata amount
shall be applied to the Actual Award, which is based on the actual performance
during the Performance Period, and not the Target Award.

(c)
Termination of Employment by Reason of Retirement On or After Completion of the
First Year of the Performance Period

If the Participant ceases to be a bona fide employee of the Company on or after
completion of the first year of the Performance Period of a Target Award due to
Retirement, the Participant shall be entitled to receive the Actual Award
associated with such Target Award as soon as reasonably practicable after the
end of the Performance Period, but prior to the end of the calendar year in
which the Performance Period ends.

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EMPLOYEES

(d)
Termination of Employment by Reason of Severance

If the Participant ceases to be a bona fide employee of the Company due to
Severance, and the Participant’s termination date with the Company is within six
months prior to the end of the Performance Period of a Target Award, then the
Participant shall be entitled to receive the Actual Award associated with such
Target Award as soon as reasonably practicable after the end of the Performance
Period, but prior to the end of the calendar year in which the Performance
Period ends.

4. Effect of Change in Control.

In the event of the occurrence of a Change in Control prior to the termination
of the Participant’s employment with the Company, the Actual Award will be
calculated and replaced with an award of restricted cash with a dollar amount
equal to the dollar amount of the Actual Award assuming attainment of target
performance or actual performance achieved, if greater, as of the Change in
Control and with the restrictions on such restricted cash award lapsing at the
end of the Performance Period applicable to the Target Award without regard to
the Change in Control. In the event that the Participant’s employment is
terminated by the Company without Cause or for Retirement, death or Long Term
Disability or by the Participant for Good Reason during the vesting period of
the restricted cash award, such restricted cash award shall immediately vest and
be paid out as follows:

The Participant shall receive a cash payment determined based on the Performance
Chart measured through the last full fiscal year completed prior to the
employment termination date, and paid as soon as practicable following the
employment termination date, but in no event later than the date that is the
later of (i) the end of the calendar year or (ii) two and one-half months after
such employment termination date.

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EMPLOYEES

5. Section 409A.

It is the Company’s intent that the Awards under the Plan do not constitute
deferred compensation subject to section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”); however, to the extent any amount payable
under the Plan, when considered together with any other payments or benefits
which may be considered deferred compensation subject to Section 409A (as
determined by the Company in its reasonable judgment), would result in the
imposition of additional tax under Section 409A if paid on or within six months
following such termination of employment, such amount shall instead be paid on
the date that follows the date of such termination of employment by six months
or such longer time as required to avoid tax liabilities under Section 409A. For
purposes of this Statement of Terms and Conditions, “termination of employment”
and similar iterations, shall have the same meaning as “Separation from Service”
as defined in DCAP III.

6. Definitions.

When capitalized in the text of this Statement of Terms and Conditions the
following terms shall have the meaning set forth below:

(a)
“Beneficiary” means the person, persons or entity designated by a Participant in
accordance with any procedures established by the Committee to receive any
amounts distributable under the Plan in the event of the death of the
Participant. If no Beneficiary is designated or if no designated Beneficiary is
living when a distribution is to be made, then the Beneficiary shall be the
Participant’s current lawful spouse if then living or, if not, the Participant’s
estate. A Participant may change or revoke a previous designation of a
Beneficiary at any time.

(b)
“Cause” means termination of the Participant’s employment with the Company upon
the Participant’s negligent or willful engagement in misconduct which, in the
sole determination of the Chief Executive Officer (or his designee), is
injurious to the Company, its employees, or its customers.

(c)
“Change in Control” shall have the meaning set forth in Section 6 of the Plan.

(d)
“Committee” means the Compensation Committee of the Board of Directors of the
Company.

(e)
“Company” means McKesson Corporation, a Delaware corporation, including its
subsidiaries and affiliates.

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EMPLOYEES

(f)
“DCAP III” means the McKesson Corporation Deferred Compensation Administration
Plan III, as amended from time to time.

(g)
“Good Reason” means any of the following actions, if taken without the express
written consent of the Participant:

(i)
Any material adverse change by the Company in the Participant’s authorities,
duties, or responsibilities, which change would cause the Participant’s position
with the Company to become of less dignity, responsibility, importance, or scope
from the position and attributes that applied to the Participant immediately
prior to the Change in Control;

(ii)
Any significant reduction in the Participant’s base salary immediately prior to
the Change in Control, other than a reduction effected as part of an
across-the-board reduction affecting all Plan participants;

(iii)
Any material failure by the Company to comply with any of the provisions of an
award (or of any employment agreement between the parties) subsequent to a
Change in Control; or

(iv)
The Company’s requiring the Participant to be based at any office or location
more than 25 miles from the office at which the Participant is based on the date
immediately preceding the Change in Control;

provided that the Participant (A) has given written notice to the Board as to
the details of the basis for such Good Reason within thirty (30) days following
the date on which the Participant alleges the condition giving rise to such Good
Reason initially occurs and the Company has failed to provide a reasonable cure
within thirty (30) business days after its receipt of such notice and (B)
Participant’s Separation from Service occurs within ninety (90) days of the time
in which the condition giving rise to such Good Reason initially occurs.

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EMPLOYEES

(h)
“Long-Term Disability” shall mean a physical or mental condition in respect of
which the administrator of the Company’s long-term disability plan has
determined that the Participant is eligible to receive income replacement
benefits; or, if the Participant is not then a participant in the Company’s
long-term disability plan, a physical or mental condition that the administrator
of the Company’s long-term disability plan determines would have rendered the
Participant eligible to receive income replacement benefits, had the Participant
been enrolled in such plan.

(i)
The “Performance Chart” shall be the performance measure(s) and award scale(s),
specified by the Committee at the time of making the award.

(j)
“Performance Period” is the period of time, identified by a beginning and end
date, specified by the Committee at the time of making the award over which
performance is measured.

(k)
“Plan” means the McKesson Corporation Long-Term Incentive Plan, as amended from
time to time.

(l)
“Retirement” means termination of employment with the Company (other than due to
death, Long-Term Disability or for Cause) at or after age 60 (57, in the case of
a participant in the McKesson Corporation 1984 Executive Benefit Retirement
Plan) with at least 10 years of service with the Company and designation as a
retiree by the Compensation Committee of the Board. For purposes of determining
eligibility for Retirement, a “year of service” means a completed whole year (12
consecutive months); provided that if a Participant who has a termination of
employment with the Company by reason of Severance would have attained the
aforementioned requirements for Retirement within six months after the
Participant’s termination date, then such termination of employment with the
Company shall be deemed to be “Retirement.”

(m)
“Severance” means termination of employment with the Company, and qualified for
participation in and entitlement to benefits under the McKesson Corporation
Severance Pay Plan, in accordance with the terms and conditions of such plan.

(n)
“Target Award” means the amount specified by the Committee payable to a
participant for the Performance Period and payable for achievement at 100%.

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