Exhibit 10.12

McKESSON CORPORATION

EXECUTIVE MEDICAL PLAN

(As Amended and Restated Effective January 1, 2004)

 

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TABLE OF CONTENTS

             
A.
  PURPOSE     2  
 
           
B.
  ERISA PLAN     2  
 
           
C.
  PARTICIPATION OF EXECUTIVES     2  
 
           
D.
  PARTICIPATION OF DEPENDENTS     3  
 
           
E.
  ENROLLMENT PERIODS     3  
 
           
F.
  CESSATION OF PARTICIPATION     6  
 
           
G.
  MEDICAL, DENTAL, VISION AND DRUG BENEFITS     8  
 
           
H.
  GENERAL PLAN EXCLUSIONS     8  
 
           
I.
  COBRA CONTINUATION COVERAGE     12  
 
           
J.
  CLAIMS AND APPEALS     18  
 
           
K.
  COORDINATION OF BENEFITS     24  
 
           
L.
  PAYMENT OF BENEFITS     28  
 
           
M.
  SOURCE OF CONTRIBUTIONS     30  
 
           
N.
  ADMINISTRATION OF THE PLAN     31  
 
           
O.
  DURATION AND AMENDMENT OF THE PLAN     32  
 
           
P.
  DEFINITIONS     32  
 
           
Q.
  SUCCESSORS     36  
 
           
R.
  EXECUTION     36  

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McKESSON CORPORATION

EXECUTIVE MEDICAL PLAN

(As of January 1, 2004)

A. PURPOSE

     This Plan was established to enable the Company to attract and retain key
executive personnel by providing medical, prescription drug, dental and vision
benefits to Executives and their eligible Dependents. This Plan has been amended
and restated to read as set forth herein effective January 1, 2004. Claims for
benefits under the Plan incurred prior to January 1, 2004 shall be governed by
the terms of the Plan as in effect at the time the claim was incurred.

B. ERISA PLAN

     This Plan is a welfare benefit plan intended primarily 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 the reporting and
disclosure provisions of Part 1 of Title I of ERISA.

     All benefits under the Plan are provided through a group insurance contract
or contracts issued by an Insurance Company or Companies.

C. PARTICIPATION OF EXECUTIVES

     1. Selection by Compensation Committee. The Compensation Committee may
select, at its discretion and from time to time as it decides, the key
Executives who participate in this Plan. Participation in the Plan shall be
limited to those Executives of the Company who are selected by the Compensation
Committee. Selection of a key Executive to participate in the Plan may be
evidenced by the terms of his contract of employment with the Company. Prior to
January 1, 2004, the Board had reserved to itself the power to select Executives
to participate in the Plan.

     2. Each eligible Executive shall commence participation in the Plan on the
date specified by the Compensation Committee provided that such Executive makes
an election to participate in accordance with Section E. and has commenced
Active Service with the Company.

     An Executive who has been selected by the Compensation Committee to
participate in the Plan and has enrolled in the Plan may continue to actively
participate in the Plan following the Executive’s Approved Retirement from the
Company.

     3. Election Not to Participate. Subject to the restrictions on cessation of
participation in the McKesson Corporation Cafeteria Arrangement, an Executive
may elect not to participate in this Plan. Such election shall be in writing and
shall become effective upon its receipt by the Administrator. No compensation or
benefits in lieu of this Plan shall be paid to an Executive who elects not to
participate.

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     4. Addition and Removal of Participants. The Compensation Committee may, at
its discretion and at any time, designate additional Executives to participate
in the Plan and remove Executives from participation in the Plan. When an
Executive is removed from participation in the Plan by the Compensation
Committee, he or she shall be treated, solely for purposes of this Plan, as if
he or she had terminated his or her employment with the Company for reasons
other than Approved Retirement. Prior to January 1, 2004, the Board had reserved
to itself the power to designate additional Executives to participate in the
Plan and to remove Executives from participation in the Plan.

     5. Notification of Participants. The Administrator shall annually notify
each Executive that he or she is a participant in the Plan.

     6. Relation to Other Plans. If an Executive participates in this Plan, he
or she shall not participate in any other medical, prescription drug, dental
and/or vision plan or similar program sponsored by the Company unless otherwise
specifically approved by the Administrator in writing.

D. PARTICIPATION OF DEPENDENTS

     A Dependent of an Executive is eligible to commence participation in the
Plan on the same date as the Executive or, if later, the date on which the
Dependent becomes eligible for coverage. If the Dependent is newly acquired and
the Executive is already covered, the Dependent becomes eligible on the date the
Executive first acquires the Dependent. The date that an Executive first
acquires a Dependent is:

     1. In the case of marriage, on the date of marriage; or

     2. In the case of a Domestic Partnership, within 30 days of meeting the
Affidavit Declaring Domestic Partners requirements, provided, however, that the
six month Domestic Partner relationship requirement is waived if the Executive
had a Domestic Partner who died during the six months prior to meeting the
remaining requirements of the Affidavit Declaring Domestic Partners or

     3. In the case of a Dependent’s birth, on the date of such birth; or

     4. In the case of a Dependent’s adoption or placement for adoption, on the
date of such adoption or placement for adoption.

     Notwithstanding the foregoing, no Dependent may become covered for benefits
prior to the date the Executive becomes covered.

E. ENROLLMENT PERIODS

     1. Initial Enrollment Period. Following an Executive’s selection to
participate in the Plan by the Compensation Committee, an Executive may elect
participation for himself and his eligible Dependents by submitting a notice of
election in any manner permitted by the Plan to the Company within 31 days of
the later of the following: the date the Executive becomes eligible to

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participate or the date enrollment materials are provided by the Plan to the
Executive. Coverage will commence on the date the Executive commences Active
Service.

     If an Executive has a Spouse or child who meets the definition of Dependent
but the Executive has not elected coverage for the Spouse or child during the
Initial Enrollment Period, the Spouse or child may be enrolled upon the Plan’s
receipt of a court order requiring the Executive to provide coverage for such
Spouse or child. Coverage will become effective on the date of the court order.

     2. Special Enrollment Periods. Certain Executives and Dependents may be
eligible to enroll mid-year because (a) his or her prior coverage under a
different group health plan was lost, or (b) a new Dependent was acquired

          a. Criteria to enroll for those losing other coverage. An Executive
who has previously waived coverage under the Plan or an eligible Dependent for
whom the Executive has previously waived coverage under the Plan is eligible to
enroll in the Plan within 31 days after the termination of coverage under any
other group medical plan or health insurance. For this purpose, “termination of
coverage” includes loss of coverage resulting from:

               i. Reduction in the number of hours of employment of the
Dependent through whom the Executive or Dependent had the other coverage; or

               ii. Termination of employment of the Dependent through whom the
Executive or Dependent had the other coverage; or

               iii. Death of the Dependent through whom the Executive or
Dependent had the other coverage; or

               iv. Divorce or legal separation; or

               v. The termination of employer contributions towards such
coverage; or

               vi. The exhaustion of COBRA coverage if the prior coverage was
pursuant to COBRA; or

               vii. The termination of no share-of-cost Medi-Cal coverage if the
prior coverage was no share-of-cost Medi-Cal coverage.

     An Executive or Dependent will not be eligible to enroll in the Plan
pursuant to this Section if the prior medical coverage was terminated due to
(i) the failure of the Executive or participant in the other medical plan to pay
premiums on a timely basis, or (ii) misconduct such as making a fraudulent claim
or intentionally misrepresenting a material fact in connection with the prior
plan.

     Coverage pursuant to this section will become effective on the date of the
election.

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          b. Criteria to enroll for those who acquired a new Dependent through
birth, adoption or placement for adoption: An otherwise eligible Executive who
has previously waived medical and prescription drug coverage under the Plan who
later acquires a Dependent through birth, adoption, or placement for adoption is
eligible to commence participation in the Plan on the date that the Executive
first acquires the Dependent (i.e., the date of birth, adoption, or placement
for adoption), provided that the Dependent enrolls concurrently with the
Executive and such enrollment occurs within 31 days of the Executive’s acquiring
the new Dependent.

     Coverage pursuant to this section will commence on the date of the newly
acquired Dependent’s birth, adoption or placement for adoption.

          c. Criteria to enroll for those who acquired a new Dependent through
marriage. An otherwise eligible Executive who has previously waived coverage
under the Plan and who later acquires a Dependent through marriage is eligible
to commence participation in the Plan for himself and his Spouse, provided that
the Dependent enrolls concurrently with the Executive and such enrollment occurs
within 31 days of the Executive’s acquiring the new Dependent. Coverage pursuant
to this section will commence on the date of the election.

          d. Criteria to enroll for those who acquired a new Dependent through
Domestic Partnership: An otherwise eligible Executive who has previously waived
coverage under the Plan who later acquires a Dependent through a Domestic
Partnership is eligible to commence participation in the Plan on the date that
the Executive first acquires the Dependent (i.e., within 30 days of meeting the
Affidavit Declaring Domestic Partners requirements provided, however, that the
six month Domestic Partnership requirement is waived if the Executive had a
Domestic Partner who died during the six months prior to meeting the remaining
requirements of the Affidavit Declaring Domestic Partners) provided that the
Dependent enrolls concurrently with the Executive and such enrollment occurs
within 31 days of the Executive’s acquiring the new Dependent.

     Coverage pursuant to this section will become effective on the date of the
election.

     3. Annual enrollment period. An otherwise eligible Executive or Dependent
who is not covered by the Plan may enroll or may be enrolled by the Executive
during the annual enrollment period conducted by the Company. Such coverage will
commence on the date prescribed by the Company, provided the Executive is in
Active Service on that date. If the Executive is not in Active Service on that
date, coverage will become effective on the date he returns to Active Service.

     4. Procedures with Respect to Medical Child Support Orders. In the event
that a Medical Child Support Order is received by the Plan, the Company shall
promptly notify the affected Executive and the Alternate Recipient (or such
recipient’s designated representative) of the receipt of such order and the
Plan’s procedures for determining the qualified status of such order under
Section 609 of ERISA. The Company shall then, within a reasonable period after
receipt of such order, determine whether such order is a Qualified Medical Child
Support Order and notify the Executive and each Alternate Recipient (or such
Alternate Recipient’s designated representative) of its determination. If the
Plan receives a National Medical Support Notice, the

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Company shall, within 40 business days after the date of the notice or sooner if
reasonable, determine whether such notice is a Qualified Medical Child Support
Order and notify the applicable State IV-D agency, the affected Executive and
the Alternate Recipient (or such Alternate Recipient’s designated
representative) of the Company’s determination. Coverage for the Alternate
Recipient will become effective on the date of the Qualified Medical Child
Support Order.

     Notwithstanding any other provision of the Plan, any payment for benefits
made by the Plan pursuant to a Qualified Medical Child Support Order shall be
made to the Alternate Recipient’s custodial parent, unless that person
authorizes payment to be made directly to the provider of services or supplies.

F. CESSATION OF PARTICIPATION

     1. Executives. Subject to Section I., an Executive shall cease to
participate in the Plan on the earliest of:

          a. The last day of the month for which the Executive makes the
required contribution, if any, as determined by the Company; or

          b. The date that the Executive terminates employment with the Company,
unless the Executive retires from the Company under an Approved Retirement and
is eligible to receive benefits under the McKesson Corporation Retirement Plan;
or

          c. The date the Executive enters the armed forces of any country,
unless he is on a leave of absence that requires continued participation in the
Plan during the period of the leave, as described in Section I.; or

          d. The date the individual ceases to qualify as an Executive;

          e. The date the Executive dies; or

          f. The date the Plan is terminated.

     2. Executives on Leave. An Executive’s employment will be considered to
terminate when he is no longer actively engaged in work for the Company or its
subsidiary or affiliate. However, the Executive may continue participation in
the Plan for himself and his Dependents, upon payment of any required
contribution, in the event of certain approved circumstances according to the
following leave classifications:

          a. Personal Leave and Educational Leave. Duration of the Company
approved leave but not to exceed the end of the month following the month in
which the leave commenced;

          b. Family and Medical Leave. Duration of the leave as established
under the Family and Medical Leave Act;

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          c. Military Leave. Duration of the leave up to the limits as
established under the Uniformed Services Employment and Reemployment Act of
1994, as described in Section I.;

          d. Layoff. Duration of leave but not to exceed the end of the month
following the month in which the layoff began;

          e. Disability Leave. Duration of the Company approved leave but not to
exceed beyond 30 months from the start of the leave.

     3. Dependents of Executives. Subject to Section I. a Dependent of an
Executive ceases to participate in the Plan on the earliest of:

          a. The last day of the month that the Executive ceases to participate
in the Plan; or

          b. The last day of the month for which the Executive makes the
required contributions, if any, as determined by the Company; or

          c. The last day of the month in which the Dependent ceases to be
eligible as defined herein; or

          d. The date that Dependent coverage under the Plan is discontinued; or

          e. The date the Plan is terminated.

     A Dependent child’s coverage whose coverage is continued after attainment
of age 19 as a result of the Dependent child’s handicap will cease on the
earliest of the following: (1) the cessation of the child’s handicap; (2) the
failure to provide proof of the continuation of the child’s handicap; (3) the
failure to undergo any exam required by the Plan or the Insurance Company; and
(4) the termination of child’s coverage for any reason other than reaching the
maximum age for coverage.

     4. Termination of Coverage for False Representations. Notwithstanding any
other provision of the Plan, if an Executive or Dependent makes a false
representation to the Plan or the Insurance Company, coverage for the Executive
and his Dependent(s) may be immediately and permanently terminated by the Plan
in its sole discretion. The Plan reserves the right to seek financial damages
resulting from such false representation, and may pursue legal action against
the Participant and/or Dependent who made the false representation. For purposes
of the Plan, “false representation” includes, but is not limited to, submitting
falsified claims or covering an individual who does not qualify as a Dependent
under the terms of the Plan.

     5. Certificate of Group Health Plan Coverage. An Executive or a Dependent
having coverage will receive a Certificate of Creditable Coverage upon losing
coverage under the Plan for any reason. This Certificate offers proof that the
individual had been covered under the Plan, and it may allow the individual to
receive credit toward a new plan’s waiting period for preexisting conditions.

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G. MEDICAL, DENTAL, VISION AND DRUG BENEFITS

     The benefits provided under the Plan shall be insured under a group
insurance contract or contracts that shall be issued in a form approved by the
Company by one or more Insurance Companies selected by the Company. The terms of
this Plan together with the Certificate of Coverage and Summary of Coverage
issued by the Insurance Company are hereby incorporated by reference and shall
be an integral part of the Plan. The Certificate of Coverage and Summary of
Coverage describe the terms of coverage, under the group insurance contract or
contracts including, but not limited to, the covered services and supplies,
exclusions, limitations on benefits, coordination of benefits, right of
reimbursement and/or subrogation, any applicable copayments or coinsurance,
deductibles, out-of-pocket maximums, lifetime maximum benefits, provider
networks, continuation of coverage and conversion privileges, if any, and claims
and appeal procedures.

     Covered Expenses. The Plan pays benefits for medically necessary medical
(including over the counter drugs and medicines), dental and vision expenses
that would be considered “medical care” as defined under Internal Revenue Code
section 213(d).

     The Lifetime Maximum Benefit per covered person under the Plan is
$2,000,000. If, as of the end of a calendar year during which a Participant has
been covered by this Plan the Participant has used some but not all of his
Lifetime Maximum Benefit, then at the beginning of the following calendar year
any previously used portion of a Participant’s Lifetime Maximum Benefit will be
automatically reinstated for future charges to the extent of the lesser of (1)
$10,000 or (2) the amount needed to reinstate his entire Lifetime Maximum
Benefit. No portion of the Participant’s Lifetime Maximum Benefit will be
reinstated under this paragraph in the following calendar year if, as of the end
of a calendar year, the Participant has used his entire Lifetime Maximum
Benefit.

     The Insurance Company is independent of the Company, and the Company does
not guarantee nor shall it be responsible for the financial soundness of the
Insurance Company or the quality of care provided by the Insurance Company. The
Company cannot assist Executives or their Dependents in recovering from the
Insurance Company any benefits due to the Executive or Dependent or protect the
Executive or Dependent from any liability due to the Insurance Company’s failure
to fulfill its obligations. Although the terms of coverage under the group
insurance contract or contracts may differ from the terms of the Plan and may
state different age requirements for dependents, an individual must be eligible
to participate under the terms of this Plan in order to obtain benefits under
the insurance contract or contracts.

H. GENERAL PLAN EXCLUSIONS

     Coverage under the Plan is not provided for any of the following charges:

     1. Those for care, treatment, services, or supplies that are not
prescribed, recommended, or approved by the person’s attending physician or
dentist.

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     2. Those for or in connection with services or supplies that are, as
determined by the Insurance Company in its sole discretion, to be experimental
or investigational. A drug, a device, a procedure, or treatment will be
determined to be experimental or investigational if:

          a. There are insufficient outcomes data available from controlled
clinical trials published in the peer reviewed literature to substantiate its
safety and effectiveness for the disease or injury involved; or

          b. If required by the FDA, approval has not been granted for
marketing; or

          c. A recognized national medical or dental society or regulatory
agency has determined, in writing, that it is experimental, investigational, or
for research purposes ; or

          d. The written protocol or protocols used by the treating facility, or
the protocol or protocols of any other facility studying substantially the same
drug, device, procedure, or treatment, or the written informed consent used by
the treating facility or by another facility studying the same drug, device,
procedure, or treatment states that it is experimental, investigational, or for
research purposes.

     However, this exclusion will not apply with respect to services or supplies
(other than drugs) received in connection with a disease; if the Insurance
Company determines that:

               i. the disease can be expected to cause death within one year, in
the absence of effective treatment; and

               ii. the care or treatment is effective for that disease or shows
promise of being effective for that disease as demonstrated by scientific data.
In making this determination the Insurance Company will take into account the
results of a review by a panel of independent medical professionals. They will
be selected by the Insurance Company. This panel will include professionals who
treat the type of disease involved.

     Also, this exclusion will not apply with respect to drugs that:

               iii. have been granted treatment investigational new drug
(IND) or Group c/treatment IND status; or

               iv. are being studied at the Phase III level in a national
clinical trial sponsored by the National Cancer Institute;

if the Insurance Company determines that available scientific evidence
demonstrates that the drug is effective or shows promise of being effective for
the disease.

     3. Those for or related to services, treatment, education testing, or
training related to learning disabilities or developmental delays.

     4. Those for care furnished mainly to provide a surrounding free from
exposure that can worsen the person’s disease or injury.

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     5. Those for or related to the following types of treatment: primal
therapy; rolfing; psychodrama; megavitamin therapy; bioenergetic therapy; vision
perception training; or carbon dioxide therapy.

     6. Those for treatment of covered health care providers who specialize in
the mental health care field and who receive treatment as a part of their
training in that field.

     7. Those for services of a resident physician or intern rendered in that
capacity.

     8. Those that are made only because there is health coverage.

     9. Those that a covered person is not legally obliged to pay.

     10. Those, as determined by the Insurance Company, to be for custodial
care.

     11. To the extent allowed by the law of the jurisdiction where the group
contract is delivered, those for services and supplies:

          a. Furnished, paid for, or for which benefits are provided or required
by reason of the past or present service of any person in the armed forces of a
government.

          b. Furnished, paid for, or for which benefits are provided or required
under any law of a government. (This exclusion will not apply to “no fault” auto
insurance if it: is required by law; is provided on other than a group basis;
and is included in the definition of “other plan” in Section K.1. In addition,
this exclusion will not apply to: a plan established by government for its own
employees or their dependents; or Medicaid.)

     12. Those for education, special education, or job training whether or not
given in a facility that also provides medical or psychiatric treatment.

     13. Those for therapy, supplies, or counseling for sexual dysfunctions or
inadequacies that do not have a physiological or organic basis.

     14. Those for or related to sex change surgery or to any treatment of
gender identity disorders.

     15. Those for or in connection with career, social adjustment, pastoral, or
financial counseling.

     16. Those for or in connection with speech therapy. This exclusion does not
apply to charges for speech therapy that is expected to restore speech to a
person who has lost existing speech function (the ability to express thoughts,
speak words, and form sentences) as the result of a disease or injury.

     17. Those to the extent they are not reasonable charges.

     18. Those for more than a 90 day supply per prescription or refill.

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     19. Those for the administration or injection of any drug.

     20. Those for the following injectable drugs:

          a. Allergy sera or extracts; and

          b. Imitrex, if it is more than the 48th such kit or 96th such vial
dispensed to the person in any year

     21. Those for any refill of a drug if it is more than the number of refills
specified by the prescriber. Before recognizing charges, the Insurance Company
may require a new prescription or evidence as to need;

     22. If the prescriber has not specified the number of refills; or

     23. If the frequency or number of prescriptions or refills appears
excessive under accepted medical practice standards.

     24. Those for any refill of a drug dispensed more than one year after the
latest prescription for it or as permitted by the law of the jurisdiction in
which the drug is dispensed.

     25. Those for any drug provided by or while the person is an inpatient in
any health care facility; or for any drug provided on an outpatient basis in any
health care facility to the extent benefits are paid for it under any other part
of this Plan or under any other medical or prescription drug expense benefit
plan carried or sponsored by the Company.

     26. Those for immunization agents.

     27. Those for any contraceptive drugs, except oral contraceptives.

     28. Those for more than four unit doses per 30 day supply for the following
treatment of erectile dysfunction, impotence, or sexual dysfunction or
inadequacy:

          a. Sildenafil citrate;

          b. Phentolamine;

          c. Apomorphine;

          d. Alprostadil;

     29. Any other prescription drug that is in a similar or identical class and
has a similar or identical mode of action or exhibits similar or identical
outcomes.

     30. This limitation applies whether or not the prescription drug is
delivered in oral, injectable, or topical (including, but not limited to, gels,
creams, ointments, and patches) forms. If the drug is not taken orally, the
dosage covered will be determined by the Insurance Company based on the
comparable cost for a 30 day supply of pills.

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     31. Those for a prescription drug dispensed by a mail order pharmacy.

     32. Any other item excluded in the Certificate of Coverage provided by the
Insurance Company.

     33. Any exclusion above will not apply to the extent that coverage of the
charges is required under any law that applies to the coverage.

     34. The law of the jurisdiction where a person lives when a claim occurs
may prohibit some benefits. If so, they will not be paid.

I.   COBRA CONTINUATION COVERAGE

     The COBRA Continuation Coverage described in this Section I. shall apply in
regard to an Executive’s or Dependent’s right to continuation coverage under
federal law. The Certificate of Coverage issued by the Insurance Company may
provide for additional rights to continuation coverage under state law.

     1. Eligibility for COBRA Continuation Coverage. If an Executive’s or a
Dependent’s coverage under the Plan terminates under Section F. due to a
Qualifying Event, such Executive or Dependent shall be eligible for COBRA
Continuation Coverage under the Plan pursuant to the provisions of this
Section I. For the purposes of this Section I. “Dependent” includes a child born
to, adopted or placed for adoption with a covered Executive during a period of
COBRA Continuation Coverage; thus such a child has equivalent COBRA rights as
other Dependents whose coverage under the Plan was terminated due to a
Qualifying Event. An Executive’s “Qualifying Event” is the event which causes
the Executive’s loss of status as an Executive due to termination of employment,
retirement or reduction of hours. For purposes of this Section I., the
“Qualifying Event” for an Executive on an unpaid leave covered by the federal
Family and Medical Leave Act shall be deemed to occur at the end of such leave
or, if earlier, on the date the Executive notifies the Company that he will not
return to employment following such leave. A “Qualifying Event” of a covered
Dependent of an Executive is one of the following events:

          a. The Qualifying Event of the Executive; or

          b. The death of the Executive; or

          c. The divorce or legal separation of the Executive from the
Executive’s Spouse, or termination of Domestic Partnership; or

          d. The loss of status as a Dependent for any reason, including age,
marriage, cessation of disability, or cessation of financial dependence on the
Executive.

     COBRA Continuation Coverage is not available to any individual who was not
a Executive or covered Dependent immediately before the Qualifying Event, except
as provided in Section I.2.b. below.

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     2. Benefits Available During COBRA Continuation Coverage.

     An individual who elects COBRA Continuation Coverage under this Section I.
shall continue his or her status as an Executive or a Dependent under the Plan,
except that a Dependent who individually elects COBRA Continuation Coverage
under Section I.4. shall be treated as an Executive. Such individuals are
entitled to the same rights and benefits available to individuals who became
Executives or Dependents pursuant to Sections C or D, except to the extent
otherwise provided in this Section I.

          a. Medical Benefits. An Executive or an individual who is treated as
an Executive may elect COBRA Continuation Coverage for medical and prescription
drug coverage.

          b. Added Dependents. An Executive or an individual who is treated as
an Executive may add an individual as a Dependent during a period of COBRA
Continuation Coverage pursuant to the provisions of Sections E.2. and E.3. Any
individual so added is entitled to benefits under the Plan until the earlier of
the date the Executive’s COBRA Continuation Coverage ends or the date the
individual ceases to be a Dependent.

          c. Maximum Benefits.

               i. Lifetime Maximum Benefit. Any amounts paid under the Plan that
counted towards an individual’s Lifetime Maximum Benefit under Section G. before
a Qualifying Event, shall apply against such individual’s Lifetime Maximum
Benefit after the Qualifying Event.

               ii. Annual Maximums. Any amounts paid under the Plan that counted
towards any annual maximum payable under the Plan under Section G. before a
Qualifying Event are counted toward the individual’s annual maximum after the
Qualifying Event.

          d. Annual Enrollment Periods. Any individual who elects COBRA
Continuation Coverage under Section I.4.a. is entitled to change coverage during
the annual enrollment period to any option that would be available to such
individual immediately before COBRA Continuation Coverage became effective for
such individual. Each individual who is an Executive or covered Dependent
pursuant to this Section I. (other than an individual who was added as a
Dependent under Section I.2.b. above) may make such election on an individual
basis.

          e. Certificate of Group Health Plan Coverage. An individual covered
under Section I.3. will receive a Certificate of Group Health Plan Coverage upon
losing COBRA Continuation Coverage for any reason. This Certificate offers proof
that the individual had been covered under the McKesson Corporation Executive
Medical Plan, and it may allow the individual to receive credit toward a new
health plan’s waiting period for preexisting conditions.

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     3. Period of COBRA Continuation Coverage.

          a. In General. Each Executive or Dependent’s period of COBRA
Continuation Coverage shall begin on the date coverage is lost as a result of
the Qualifying Event which made the Executive or Dependent eligible for COBRA
Continuation Coverage and shall end on the earliest of the following dates:

               i. The date for which COBRA Contributions were not timely made
for the individual, pursuant to Section I.5.; or

               ii. The date after the election of COBRA Continuation Coverage
when the individual first becomes covered under another group health plan, as an
employee or otherwise, unless the other group health plan contains an exclusion
or limitation for any preexisting condition of that individual; or

               iii. The date after the election of COBRA Continuation Coverage
when the individual first becomes covered by and entitled to Medicare; or

               iv. The date when the employer ceases to provide any group health
plan to any employee; or

               v. The date specified in (b), (c), (d), (e), or (f) below,
whichever is applicable to the Qualifying Event; or

               vi. The last day of the month for which contributions were made
when the Executive or Dependent elects to terminate COBRA Continuation Coverage.

          b. Special Rule for Periods of COBRA Continuation Coverage Subject to
the Uniformed Services Employment and Reemployment Rights Act of 1994.
Notwithstanding the foregoing, an Executive or Dependent’s period of COBRA
Continuation Coverage that is subject to the Uniformed Services Employment and
Reemployment Rights Act of 1994 (“USERRA”) shall begin on the date of the
Qualifying Event which results in the Executive or Dependent becoming eligible
for COBRA Continuation Coverage and shall end on the earliest of the following
dates:

               i. The 18-month period beginning on the date on which the
Executive’s absence begins; or

               ii. The period ending on the day after the date on which the
Executive fails to apply for or return to a position of employment with the
Company, as determined under § 4312(e) of USERRA.

          c. Termination of Employee Status. If the first Qualifying Event of an
Executive or a Dependent is the event which causes the Executive’s loss of
status as an Executive as a result of a termination of employment, each
individual’s period of COBRA Continuation Coverage will end 18 months after the
date that coverage is lost due to the Qualifying Event (unless an earlier date
is required by Section I.3.a.). Notwithstanding the above

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ending date, if a Covered Executive or Dependent is determined by the Social
Security Administration to be disabled under Title II or XVI of the Social
Security Act at any time during the first 60 days of COBRA Continuation Coverage
and notifies the Company of such determination within 18 months following the
loss of coverage due to the Qualifying Event then the disabled Executive or
Dependent (and such person’s family members who also have COBRA Continuation
Coverage) is entitled to continue their COBRA Continuation Coverage for up to
29 months from the date of the Qualifying Event; provided, however, that if
following the end of the initial 18 months of COBRA Continuation Coverage, the
disabled individual is determined by the Social Security Administration to no
longer be disabled, COBRA Continuation Coverage shall end on the first day of
the month that is at least 30 days after the date of the final Social Security
determination that the individual is no longer disabled. Notwithstanding both of
the above ending dates, if an individual incurs a subsequent Qualifying Event
before end of the initial 18-month period of COBRA Continuation Coverage and
elects COBRA Continuation Coverage for that Qualifying Event, COBRA Continuation
Coverage for the prior Qualifying Event shall terminate immediately and coverage
shall continue in accordance with Section I.3.f. below.

          d. Death of the Executive. If a Dependent’s first Qualifying Event is
the death of the Executive, then the Dependent’s period of COBRA Continuation
Coverage shall end 36 months after the date coverage is lost due to the
Executive’s death unless an earlier ending date is required by Section I.3.a.

          e. Loss of Status as a Dependent. If a Dependent’s first Qualifying
Event is his or her loss of status as a Dependent for any reason, including age,
marriage, cessation of disability, cessation of financial dependence or divorce
from the Executive, then the Dependent’s period of COBRA Continuation Coverage
will end 36 months after coverage is lost due to such loss of status, unless an
earlier ending date is required by Section I.3.a.

          f. Special Rule for Multiple Qualifying Events. If COBRA Continuation
Coverage of an Executive or a Dependent ceases under Section I.3.a. due to a
subsequent Qualifying Event which occurs coincident with or prior to the close
of the 18-month period of COBRA Continuation Coverage, such Executive or
Dependent will be entitled to COBRA Continuation Coverage for the subsequent
Qualifying Event; provided, however, that the total period of COBRA Continuation
Coverage for all Qualifying Events with respect to any individual shall not
exceed 36 months from the date coverage is lost due to the first Qualifying
Event.

          g. Executive’s Entitlement to Medicare. If an Executive becomes
entitled to Medicare following the Executive’s termination of employment,
retirement or reduction in hours of employment, the Dependent’s period of COBRA
Continuation Coverage for this event will not be extended.

     4. Election of COBRA Continuation Coverage; Notice Requirements.

          a. Method of Election. An individual who is or will become eligible
for COBRA Continuation Coverage under this Section I. may elect such coverage by
filing the

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prescribed form with the Company at any time during the Election Period. The
“Election Period” begins on or before the date of the Qualifying Event
applicable to the individual and ends 60 days following the later of the date of
such Qualifying Event or the date notice of availability of COBRA Continuation
Coverage is sent to the individual pursuant to (b) below. Any election of COBRA
Continuation Coverage which is not made during the Election Period shall be
void. An election by the Executive or by the surviving Spouse or such
Executive’s Domestic Partner, or former Spouse of an Executive will be deemed an
election of COBRA Continuation Coverage on behalf of any Dependent who would
lose coverage by reason of the same Qualifying Event; provided, however, that a
Dependent (other than a minor child) may elect COBRA Continuation Coverage for
himself if the Executive or the Spouse or such Executive’s Domestic Partner or
former Spouse of the Executive does not elect COBRA Continuation Coverage for
the Dependent. The election shall be effective as of the first day that the
individual otherwise would lose coverage under the Plan. The former Spouse,
surviving Spouse or surviving Domestic Partner or child of an Executive who
individually elects COBRA Continuation Coverage pursuant to this Section I.4. a
shall be treated as an Executive for all Plan purposes, including the required
contributions under Section I.5.

          b. Notice by Employer. Within 44 days following the date that the
Executive ceases to be an Executive as a result of a termination of employment,
the Company or employing subsidiary shall notify the Executive and each
Dependent of the Executive of the right to elect COBRA Continuation Coverage
under this Section I. Within 44 days following an Executive’s death, the Company
shall notify each Dependent of the Executive of the right to elect COBRA
Continuation Coverage under this Section I. Within 14 days following receipt of
a timely notice described in Section I.4.c. below, the Company shall notify each
Dependent of the right to elect COBRA Continuation Coverage. Notification to the
Spouse or Domestic Partner of the Executive will be deemed notification to all
other Dependents of the Executive.

          c. Notice by Executive or Dependent. Each Executive or Dependent is
responsible for notifying the Company or employing subsidiary of the divorce of
the Executive and the Executive’s Spouse or the termination of a Domestic
Partnership or the loss of status as a Dependent child. Such notification must
be made within 60 days following such divorce, termination of a Domestic
Partnership or loss of Dependent status. Each Executive or Dependent is
responsible for notifying the Company or employing subsidiary within 30 days of
a determination by the Social Security Administration that such Executive or
Dependent is disabled within 18 months following the loss of coverage due to the
Qualifying Event. Each Executive or Dependent is also responsible for notifying
the Company or employing subsidiary of a later final determination by the Social
Security Administration that such individual is no longer disabled within
30 days following such determination.

          d. Notice to the Insurance Company. As often as the Company or a party
to whom such responsibility is properly delegated by the Company deems
appropriate, the Company will notify the Insurance Company of an individual’s
status as an Executive or Dependent under this Section I.

     5. COBRA Contributions.

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          a. Amount of COBRA Contributions. “COBRA Contributions” are required
to be paid by the Participant for each period of the Participant’s COBRA
Continuation Coverage. The COBRA Contributions for continued coverage cannot
exceed 102% of the estimated cost of providing such benefits under the Plan for
the current year for similarly situated beneficiaries with respect to whom a
Qualifying Event has not occurred. Notwithstanding the foregoing, the COBRA
Contributions during the 19th through 29th month of COBRA Continuation Coverage,
for Executives and Dependents who are determined by the Social Security
Administration to be disabled under Title II or XVI of the Social Security Act
at any time during the first 60 days of COBRA Continuation Coverage, shall be an
amount determined by the Company, in its sole discretion; provided, however that
such amount will not exceed 150% of such estimated cost. Such estimated cost
will be determined by the Company based on (i) the projected costs for such year
determined on the basis of actuarial factors prescribed by regulations under
section 4980B(f) of the Code, or (ii) the actual cost to the Plan for the
preceding year for such similarly situated beneficiaries, adjusted by the
percentage increase or decrease in the implicit price deflator of the gross
national product (calculated by the Department of Commerce and published in the
Survey of Current Business) for the 12-month period ending on the last day of
the sixth month of such preceding year. However, (ii) above will not apply in
any year in which there is a significant difference in Plan benefits or in the
number of Executives covered by the Plan since the preceding year.

     Notwithstanding the foregoing, the COBRA Contributions for continued
medical, dental or vision coverage, or any combination thereof, as applicable,
for Executive who perform service in the Uniformed Services of the United States
for less than 31 days as provided under USERRA, cannot exceed the Executive
share, if any, with respect to an Executive for whom a Qualifying Event has not
occurred.

          b. Due Dates of COBRA Contributions. An Executive’s COBRA
contributions for each month of COBRA Continuation Coverage are due prior to the
first day of that month. However, any payment made within 30 days after the due
date will be considered timely made. COBRA Contributions for any retroactive
election of COBRA Continuation Coverage made pursuant to Section I.5. are due
and payable within 45 days after the date of election.

          c. COBRA Contribution Shortfalls. If an Executive or an individual who
is treated as an Executive remits a timely monthly contribution to the Plan or
Insurance Company that is significantly less than the actual COBRA Contribution
due for the month, the period of COBRA Continuation Coverage of the Executive or
the individual who is treated as an Executive will be terminated immediately. If
an Executive or an individual who is treated as an Executive remits a timely
monthly payment that is not significantly less than the actual COBRA
Contribution due for the month, the payment will be deemed to satisfy the Plan’s
requirement for the amount that must be paid, unless the Plan notifies the
Executive or the individual who is treated as an Executive of the amount of the
deficiency and permits the Executive or the individual who is treated as an
Executive to pay the deficiency within 30 days of the date of the notice of
deficiency. Executives and individuals who are treated as Executives are
responsible for paying all deficiencies. A monthly contribution of an Executive
or an individual who is treated as an Executive will not be considered
significantly less than the actual COBRA

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Contribution due if the amount paid is less than or equal to the lesser of $50
(or such other amount as the Commissioner may provide in an IRS revenue ruling,
notice, or other guidance published in the Internal Revenue Bulletin) or 10% of
the actual COBRA Contribution due.

J. CLAIMS AND APPEALS

     The claims procedures described in this Section J shall apply except to the
extent that there are alternate claims procedures described in the Certificate
of Coverage issued by the Insurance Company.

     1. Claims Procedure.

          a. Application for Benefits. To entitle himself to the payment of any
benefits for which he is eligible under the Plan, the Participant shall comply
with such rules and procedures as the Company and the Insurance Company may
prescribe with reference to the completion and filing of a claim form or forms
and the furnishing of such pertinent information as the Insurance Company may
request, together with documentary evidence in support of his claim to the
Insurance Company. The Insurance Company may require that itemized bills,
receipts and other proof of the loss be submitted in addition to the claim form.
The Insurance Company may request that the Participant give the Insurance
Company written authorization to obtain information from the Participant’s
Physician pertaining to the diagnosis and related matters. Except as otherwise
stated below, claims for benefits under this Plan must be submitted to the
Insurance Company within 20 days after the date of the loss causing the claim or
as soon as reasonably possible. The Insurance Company will furnish the
Participant with a claim form within 15 days of the notice of the claim

     All claims must be filed no later than 90 days after the date of the loss
causing the claim. If a Participant is not able to meet this deadline for filing
a claim, a claim will still be accepted if the Participant’s delay was not
caused by the Participant’s own fault and the Participant files the claim as
soon as possible. If a Participant is legally incapacitated, a late claim will
still be accepted if it is filed no more than two years after the deadline.

          b. Health Care Examinations. While a certification or claim is
pending, the claimant must undergo a health care examination whenever reasonably
required by the Insurance Company. No benefits will be paid if a claimant
refuses to undergo such health care examination. The Insurance Company will have
the right to have a physician or dentist of its choice conduct the examination.
Such examinations shall be at the Insurance Company’s expense.

          c. Timing of Claims Decision. The Insurance Company shall adhere to
certain time limits when processing a claim for a Plan benefit. If a claimant
does not follow the proper procedures for submitting a claim, the Insurance
Company shall notify the claimant of the proper procedures within the time
frames shown in the chart below. If additional information is needed to process
a claimant’s claim, the Insurance Company shall notify the claimant within the
time frames shown in the chart below, and the claimant shall be provided
additional time within which to provide the requested information.

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     The Insurance Company will make a determination on a claim for a Plan
benefit within the time frames indicated below based upon the type of claim:
Urgent Care Claim, Pre-Service Claim, Post-Service Claim or Concurrent Care
Claim.

                          Type of Notice or                       Claim Event  
  Urgent Care Claim     Pre-Service Care Claim     Post-Service Care Claim      
                     
Notice of Failure to Follow the Proper Procedure to File a Claim
    Not later than 24 hours after receiving the improper claim.     Not later
than 5 days after receiving the improper claim.     Not later than 30 days after
receiving the improper claim                            
Notice of Initial Claim Decision
    If the claim when initially filed is proper and complete, a decision will be
made as soon as possible, taking into account the medical exigencies, but not
later than 72 hours after receiving the initial claim.

If the claim is not complete, the Insurance Company shall notify the claimant as
soon as possible, but not later than 24 hours after receipt of the claim. The
claimant shall have 48 hours to provide the information necessary to complete
the claim. A decision will be made not later than 48 hours after receiving the
requested information or, within 48-hours after the expiration of the 48-hour
claimant deadline, whichever is earlier.     If the claim when initially filed
is proper and complete, a decision will be made within a reasonable period of
time appropriate to the medical circumstances, but not later than 15 days after
receiving the initial claim, unless an extension, of up to 15 days, is necessary
due to matters beyond the control of the Plan. The claimant shall be notified
within the initial 15 days if an extension will be needed by the Plan. The
notice shall state the reason for the extension.

A decision will be made not later than 15 days after receiving the initial
claim, unless additional information is required from the claimant. The claimant
will be notified during the initial 15 day period, and shall have 45 days to
provide the additional information requested by the Plan. A decision will be
made within 15 days after receiving the additional information or, within
15 days after the expiration of the 45-day claimant deadline, whichever is
earlier.     If the claim when initially filed is proper and complete, a
decision will be made within a reasonable period of time, but not later than
30 days after receiving the initial claim, unless an extension, of up to
15 days, is necessary due to matters beyond the control of the Plan. The
claimant shall be notified within the initial 30 days if an extension will be
needed by the Plan. The notice shall state the reason for the extension.

A decision will be made not later than 30 days after receiving the initial
claim, unless additional information is required from the claimant. The claimant
will be notified during the initial 30 day period, and shall have 45 days to
provide the additional information requested by the Plan. A decision will be
made within 15 days after receiving the additional information or, within
15 days after the expiration of the 45-day claimant deadline, whichever is
earlier.                          

     If the claimant’s Concurrent Care Claim is also an Urgent Care Claim to
extend a previously approved on-going course of treatment provided over a period
of time or number of treatments, the Insurance Company will make a determination
as soon as possible, taking into account the medical exigencies, and notify the
claimant of the determination within 24 hours

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after receipt of the claim, provided that the claim was made to the Insurance
Company at least 24 hours prior to the expiration of the prescribed period of
time or number of treatments previously approved. If the claimant’s request for
extended treatment is not made at least 24 hours prior to the end of the
prescribed period of time or number of treatments, the request will be treated
as an Urgent Care Claim and decided according to the timeframes described in the
chart above.

     If an ongoing course of treatment was previously approved for a specific
period of time or number of treatments, and the claimant requests to extend
treatment in a non-urgent circumstance, the claimant’s request will be
considered a new claim and decided according to the Post-Service Claim or
Pre-Service Claim time limits, whichever applies.

     If the claimant’s Concurrent Care Claim is not an Urgent Care Claim, and
there is a reduction or termination of the previously approved on-going course
of treatment provided over a period of time or number of treatments (other than
by Plan amendment or termination) before the end of the period of time or number
of treatments, the claimant will be notified by the Insurance Company
sufficiently in advance of the reduction or termination to allow the claimant to
appeal the denial and receive a determination on appeal before the reduction or
termination of the benefit. To appeal a denial of a Concurrent Care Claim, the
claimant must follow the appeal procedures described in Section J.2.

          d. Denial of Claims. In the event any claim for benefits is denied, in
whole or in part, the Insurance Company shall notify the claimant of such denial
in writing within the time frames set forth in Section J.1.c.; provided,
however, that the notice of denial for an Urgent Care Claim may be provided
orally and a written or electronic confirmation shall follow within three (3)
days. Such written notice shall set forth, in a manner calculated to be
understood by the claimant, the following information:

               i. The specific reason(s) for the denial; and

               ii. Reference to the specific Plan provision(s) on which the
denial is based; and

               iii. A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

               iv. A description of the Plan’s review 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 second review; and

               v. If an internal rule, guideline, protocol, or other similar
criterion was relied upon in denying the claim, either the specific rule,
guideline, protocol, or other similar criterion, or a statement that such rule,
guideline, protocol or other similar criterion was relied upon in denying the
claim, and that a copy of such rule, guideline, protocol, or other similar
criterion will be provided to the claimant free of charge upon request; and

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               vi. If the denial is based on a medical necessity or experimental
treatment or similar exclusion or limit, either an explanation of the scientific
or clinical judgment for the determination, applying the terms of the Plan to
the claimant’s medical circumstances, or a statement that such explanation will
be provided to the claimant free of charge upon request.

     2. Review of Denied Claims.

          a. Named Fiduciary. The Insurance Company is the named fiduciary which
has the discretionary authority to act with respect to any appeal from a denial
of benefits. The Company is the named fiduciary which has the discretionary
authority to determine eligibility for benefits and to construe the terms of the
Plan.

          b. Right to Appeal. The Insurance Company provides for a two-level
appeal process. Any person whose claim for benefits is denied, in whole or in
part, or such person’s authorized representative, may appeal the denial by
submitting a written request for a review of the claim to the Insurance Company
within one hundred eighty (180) days after receiving written notice of the
denial from the Insurance Company. A request for review shall set forth all of
the grounds upon which it is based, all facts in support thereof, and any other
matters which the claimant deems pertinent. The claimant shall be solely
responsible for submitting a written request for review of the claim and any
other information or evidence which the claimant intends the Insurance Company
to consider in order to render a decision on review. A claimant requesting an
appeal of a denied Urgent Care Claim may initiate an expedited appeal by calling
the Insurance Company at the toll-free number on the ID card issued by the
Insurance Company. The Insurance Company may require the claimant to submit such
additional facts, documents or other material as it may deem necessary or
appropriate in making its review.

          c. Procedures on Review. If the claimant (or the claimant’s authorized
representative) requests a review of a denied claim, the following procedures
shall apply:

               i. The claimant (or the claimant’s authorized representative)
shall have the opportunity to submit written comments, documents, records, and
other information relating to the claim; and

               ii. The claimant (or the claimant’s authorized representative)
shall be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information Relevant to the
claimant’s claim for benefits (other than legally or medically privileged
documents); and

               iii. The review shall take into account all comments, documents,
records, and other information submitted by the claimant relating to the claim,
without regard to whether such comments, documents, records, and other
information were submitted or considered in the initial benefit determination;
and

               iv. The review shall not afford deference to the initial claim
denial and shall be conducted by an appropriate named fiduciary of the Plan who
is neither the individual

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who made the adverse benefit determination that is the subject of the appeal,
nor the subordinate of that individual; and

               v. In deciding an appeal that is based in whole or in part on a
medical judgment, including determinations with regard to whether a particular
treatment, drug or other item is experimental, investigational, or not medically
necessary or appropriate, the appropriate named fiduciary shall consult with a
health care professional who has appropriate training and experience in the
field of medicine involved in the medical judgment, and such health care
professional shall not be the individual who was consulted in connection with
the adverse benefit determination that is the subject of the appeal (nor the
subordinate of such individual); and

               vi. The Insurance Company shall, upon request, provide for the
identification of any medical or vocational experts whose advice was obtained on
behalf of the Plan in connection with the claimant’s adverse benefit
determination, without regard to whether the advice was relied upon in making
the benefit determination.

          d. Decision on First Review. The Insurance Company shall act upon each
request for a first review within the time frames indicated in the chart below.

                    Urgent Care Claim     Pre-Service Claim     Post-Service
Claim                      
Not later than 36 hours after receiving the appeal
    Not later than 15 days after receiving the appeal     Not later than 30 days
after receiving the appeal.    
 
                               

     In the event that the Insurance Company determines on first review that
benefits are payable under the Plan, the Insurance Company will process payment
of the claim in accordance with the provisions of Section L.1. In the event that
the Insurance Company confirms the denial of the claim, in whole or in part, the
Insurance Company shall notify the claimant of such denial in writing. Such
written notice shall set forth, in a manner calculated to be understood by the
claimant, the following information:

               i. The specific reason(s) for the denial; and

               ii. Reference to the specific Plan provision(s) on which the
denial is based; and

               iii. A statement that the claimant 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 claimant’s claim for benefits;
and

               iv. A statement describing any voluntary appeal procedures
offered by the Plan and the claimant’s right to obtain the information about
such procedures, and a statement of the claimant’s right to bring an action
under Section 502(a) of ERISA following the completion of all levels of appeal
required by the Plan; and

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               v. If an internal rule, guideline, protocol, or other similar
criterion was relied upon in denying the claim, either the specific rule,
guideline, protocol, or other similar criterion, or a statement that such rule,
guideline, protocol or other similar criterion was relied upon in denying the
claim, and that a copy of such rule, guideline, protocol, or other similar
criterion will be provided to the claimant free of change upon request; and

               vi. If the denial is based on a medical necessity or experimental
treatment or similar exclusion or limit, either an explanation of the scientific
or clinical judgment for the determination, applying the terms of the Plan to
the claimant’s medical circumstances, or a statement that such explanation will
be provided to the claimant free of charge upon request.

          e. Right to Second Appeal. If on first review, the Insurance Company
upholds the denial of a claimant’s claim for benefits, the claimant (or the
claimant’s authorized representative) may again appeal the denial by submitting
a written request for a second review of the claim to the Insurance Company
within 60 days after receiving the written notice described in Section J.2.d.

     A request for a second review shall set forth all of the grounds upon which
it is based, all facts in support thereof, and any other matters that the
claimant deems pertinent. The procedures set forth in Section J.2.c. shall apply
to the second review.

          f. Decision on Second Review. The Insurance Company shall act upon
each request for a second review within the time frames indicated below.

               i. For Urgent Care Claims, not later than 36 hours after
receiving the second appeal.

               ii. For Pre-Service Claims, not later than 15 days after
receiving the second appeal.

               iii. For Post-Service Claims, not later than 30 days after
receiving the second appeal.

     In the event that the Insurance Company determines on second review that
benefits are payable under the Plan, the Insurance Company will process payment
of the claim in accordance with the provisions of Section L.1. In the event that
the Insurance Company confirms the denial of the claim, in whole or in part, the
Insurance Company shall notify the claimant of such denial in writing. Such
written notice shall set forth, in a manner calculated to be understood by the
claimant, the information specified in Section J.2.d.

     3. Voluntary Appeal.

     The Insurance Company provides for a voluntary level of appeal if a
claimant’s claim for benefits has been denied following the required second
level of review. The procedure for the voluntary level of appeal is described in
the Certificate of Coverage or Summary of Coverage provided by the Insurance
Company.

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     4. Exhaustion of Remedies.

     No action at law or in equity shall be brought to recover benefits under
the Plan unless the action is commenced within three years after the occurrence
of the loss for which a claim is made. No action at law or in equity shall be
brought to recover a benefit unless and until the claimant has:

          a. Submitted a written claim for benefits; and

          b. Been notified by the Insurance Company that the claim is denied;
and

          c. Timely filed a written request for a first review of the claim with
the Insurance Company; and

          d. Been notified in writing that the denial of the claim has been
affirmed on first review; and

          e. Timely filed a written request for a second review of the claim
with the Insurance Company, if applicable; and

          f. Been notified in writing that the denial of the claim has been
affirmed on second review, if applicable.

     5. Right to Receive and Release Necessary Information.

     For the purposes of determining the applicability of and implementing the
terms of the provisions of the Plan or any provision of similar purpose of any
other plan, the Insurance Company may, without the consent of or notice to any
individual, release to or obtain from any insurance company or other
organization or individual any information with respect to any individual which
the Insurance Company deems to be necessary for such purposes.

     Any individual claiming benefits under this Plan shall furnish to the
Insurance Company such information as may be necessary to implement this
provision.

     Notwithstanding the above, no release of individual identifiable medical
information will be made without the written authorization of that individual or
his parent, conservator or guardian, if appropriate.

K. COORDINATION OF BENEFITS

     1. Provision for Coordination of Benefits.

          a. Coordination of Benefits.

               In coordinating benefits, one of the two or more plans involved
shall be designated the primary plan and the others shall be designated
secondary plans. The primary plan shall pay without regard to the other plans.
If the Plan is secondary, the Insurance Company

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on behalf of the Plan shall coordinate its payments with those of the other
plan(s) in accordance this Section K.

          b. Active Executives.

               With respect to active Executives and Dependents covered under
the Plan, the benefits for each claim for benefits that would otherwise be
payable during a calendar year under this Plan in the absence of this provision
shall be reduced by the benefits payable for such claim under the other plans
listed in Section K.1.d. below, for the expenses covered in whole or in part
under this Plan. The rules in this paragraph apply whether or not a claim is
made under one of the other plans listed in Section K.1.d. below. When another
plan provides benefits in the form of services, the reasonable cash value of
each service rendered, as determined within the sole discretion of the Insurance
Company will be considered both an expense incurred and a benefit payable.

          c. Allowable Expense.

               “Allowable Expense” for purposes of this Section K. means any
health expense, part or all of which is covered under any of the plans covering
the person for whom a claim is made. The difference between the cost of a
private hospital room and the semiprivate rate is not considered an Allowable
Expense unless the patient’s stay in a private hospital room is medically
necessary, either in terms of generally accepted medical practice or as
specifically defined in the Plan and the Insurance Contract.

          d. Other Plans.

               As used in this Section K., the term “other plans” means any
other plan of health expense coverage under group insurance or any other type of
coverage for persons in a group. This includes plans that are insured and those
that are not.

          e. Determination of Primary Plan.

               Except with respect to an involved plan which is the Medicare
program, the primary plan shall be determined as follows:

               i. A plan with no rules for coordination with other benefits will
be deemed to pay its benefits before a plan which contains such rules.

               ii. A plan which covers a person other than as a dependent will
be deemed to pay its benefits before a plan which covers the person as a
dependent.

               iii. Except in the case of a dependent child whose parents are
divorced or separated, the plan which covers the person as a dependent of a
person whose birthday comes first in a calendar year will be primary to the plan
which covers the person as a dependent of a person whose birthday comes later in
that calendar year. If both parents have the same birthday, the benefits of a
plan which covered one parent longer are determined before those of a plan which
covered the other parent for a shorter period of time.

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               If the other plan does not have the rule described in
Section K.1.e.iii. but instead has a rule based on the gender of the parent and
if, as a result, the plans do not agree on the order of benefits, the rule in
the other plan will determine the order of benefits.

               iv. In the case of a dependent child whose parents are divorced
or separated:

                    (i) If there is a court decree which states that the parents
shall share joint custody of a dependent child, without stating that one of the
parents is responsible for the health care expenses of the child, the order of
benefit determination rules specified in K.1.e.iii. will apply.

                    (ii) If there is a court decree which makes one parent
financially responsible for the medical, dental or other health care expenses of
such child, the benefits of a plan which covers the child as a dependent of such
parent will be determined before the benefits of any other plan which covers the
child as a dependent child.

                    (iii) If there is no such court decree:

                         (1) If the parent with custody has not remarried, the
benefits of a plan which covers the child as a dependent of the parent with
custody of the child will be determined before the benefits of a plan which
covers the child as a dependent of the parent without custody.

                         (2) If the parent with custody of the child has
remarried, the benefits of a plan which covers the child as a dependent of the
parent with custody shall be determined before the benefits of a plan which
covers that child as a dependent of the stepparent. The benefits of a plan which
covers that child as a dependent of the stepparent will be determined before the
benefits of a plan which covers that child as a dependent of the parent without
custody.

               v. If the rules specified in Sections K.1.e.i, K.1.e.ii,
K.1.e.iii. or K.1.e.iv do not establish an order of payment, the plan under
which the person has been covered for the longest will be deemed to pay its
benefits first; except that the benefits of a plan which covers the person on
whose expenses a claim is based as a laid off or retired employee or the
dependent of such person shall be determined after the benefits of any other
plan which covers such person as an employee who is not laid-off or retired or a
dependent of such person.

               If the other plan does not have provision regarding laid-off or
retired employees and, as a result, each plan determines its benefits after the
other, then the above paragraph will not apply.

               vi. The benefits of a plan which covers the person on whose
expenses a claim is based under a right of continuation pursuant to federal or
state law shall be determined after the benefits of any other plan which covers
the person other than under such right of continuation.

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               If the other plan does not have a provision regarding the right
of continuation coverage pursuant to federal or state law and, as a result, each
plan determines its benefits after the other, then the above paragraph will not
apply.

     2. Effect of Medicare.

          a. If an involved plan is Medicare, Medicare shall be the primary plan
and this Plan shall be the secondary plan except as provided below. This Plan
shall be the primary plan with respect to Medicare for the following expenses:

               i. For expenses incurred by a Participant who is either an
Executive or a Dependent who is the Spouse of an Executive, all Covered Expenses
incurred during the period:

                    (i) Beginning on the first day of the first month in which
the Participant became eligible for benefits under 42 U.S.C. § 426(a) (relating
to attainment of age 65); and

                    (ii) Ending on the day on which the Participant ceases to be
an Executive or a Dependent of an Executive;

Provided, however, that this period shall not include any month in which the
Participant would, upon application, be entitled to end-stage renal disease
benefits under 42 U.S.C. § 426-1.

               ii. For expenses incurred by a Participant who is either an
Executive or a Dependent of an Executive, all Covered Expenses incurred during
the period when:

                    (i) The Participant is eligible for or receives benefits
under 42 U.S.C. § 426(b) (relating to certain disabled individuals); or

                    (ii) The Participant is not or would not be, upon
application, entitled to end-stage renal benefits under 42 U.S.C. § 426-1; and

                    (iii) The Participant is covered by the Plan by virtue of
the Member’s status as an Executive under the Plan.

          b. Any covered person who eligible for Medicare will be subject to the
following requirements:

               i. All health expenses covered under the Plan will be reduced by
any Medicare benefits available for those expenses. This reduction will be done
before the health benefits of the Plan are figured.

               ii. Charges used to satisfy a persons Medicare Part B deductible
will be applied under the Plan in the order received by the Insurance Company.
Two or more charges received at the same time will be applied starting with the
largest first.

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               iii. Medicare benefits will be taken into account for any person
while he or she is eligible for Medicare, regardless of whether the person is
entitled to Medicare benefits.

               iv. Any rule for coordinating “other plan” benefits with those
under the Plan will be applied after the Plan’s benefits have been figured under
the rules of this Section K.2. Allowable Expenses will be reduced by any
Medicare benefits available for those expenses.

     A person is “eligible for Medicare” if the person is covered under Medicare
or is eligible for Medicare but has refused Medicare coverage, dropped Medicare
coverage or failed to make a proper requires for Medicare coverage.

     Coverage will not be changed at any time when the Company’s compliance with
federal law requires this Plan’s benefits for a person to be figured before
benefits are figured under Medicare.

     3. Effect on Benefits.

     When the provisions of Section K. operate to reduce the total amount of
benefits otherwise payable to a person covered under this Plan during a calendar
year, each benefit that would be payable in the absence of this provision will
be reduced proportionately, and such reduced amount will be charged against any
applicable benefit limit of this Plan.

     4. Right to Information and Recovery.

          a. Whenever payments which should have been made under this Plan in
accordance with Section K. have been made under any other plans, the Insurance
Company has the right to transfer to any organizations making these payments any
amounts the Insurance Company determines to be warranted in order to satisfy the
intent of the above provisions, and amounts paid in this manner will be
considered to be benefits paid under this Plan and, to the extent of these
payments, the Insurance Company will be fully discharged from liability under
this Plan.

          b. Whenever payments have been made by the Insurance Company, at any
time, for Allowable Expenses in a total amount at any time in excess of the
maximum amount of payment necessary at that time to satisfy the intent of the
above provisions, the Insurance Company will have the right to recover these
payments to the extent of such excess, from among one or more of the following
as the Insurance Company shall determine: any individuals to or for or with
respect to whom these payments were made, any insurance companies, health care
service plans or any organizations.

L.   PAYMENT OF BENEFITS

     1. Payment of Claims. The Insurance Company will process a claim in
accordance with this Section L promptly after it receives complete proof of the
claim. If the Insurance Company finds that the claim is payable under the Plan,
it will send payment to the Executive. The Insurance Company has the right to
pay any benefits directly to the provider of services or

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supplies, unless the Executive has informed the Insurance Company otherwise at
the time the claim is filed. Notwithstanding the foregoing, if the Plan has
received a Qualified Medical Child Support Order, payment will be made to the
Alternate Recipient’s custodial parent or legal guardian, unless payment
directly to the provider of services or supplies has been authorized. In the
event the Insurance Company pays any person less than the amount to which he or
she is entitled under the Plan, the Insurance Company will promptly adjust the
underpayment to the correct amount.

     2. Assignment. A Executive may assign his interest and property rights in
the Plan only with the consent of the Insurance Company as provided in the
Insurance Contract.

     3. Payment to Representative. In the event that a guardian, conservator,
committee or other legal representative has been duly appointed for an Executive
entitled to any payment under the Plan, any such payment due may be made to the
legal representative making a claim therefore, and such payment so made shall be
in complete discharge of the liabilities of the Plan therefore and the
obligations of the Insurance Company and the Company.

     4. Recovery of Overpayments. If the Insurance Company makes a benefit
payment to or on behalf of any person which exceeds the amount to which such
person is entitled to receive under the Plan and Insurance Contract, the
Insurance Company is entitled to require the return of the overpayment on
request or to reduce any future benefit payment to such person or another person
in such person’s family by the amount of the overpayment. This Section L.4 shall
not affect any other right of recovery the Insurance Company may have with
respect to such overpayment.

     5. Recovery for Third Party Expenses.

          a. Expenses Resulting From Acts of Third Person.

          When charges are incurred by a Participant for services relating to an
accident, injury, or sickness for which any benefits are payable under the
Plan., and the accident, injury or sickness arises under circumstances that my
create a legal liability in another individual or organization, and whenever the
Plan pays any amount to or on behalf of a Participant (a “Third Party Expense”),
the Participant’s right of recovery (if any) from a third party shall be
subrogated to the Plan to the extent of the Third Party Expense.

          b. Duty of Notification of Third Party Expenses.

          Any Participant claiming benefits under this Plan with respect to
Third Party Expenses shall notify the Claims Administrator of expenses which are
Third Party Expenses, in such manner as the Committee shall require, at the time
a claim for benefits is submitted under this Plan.

          The Participant shall submit all information, documents and any other
evidence which the Claims Administrator shall request in order to assist it in
determining whether the Participant has or will be reimbursed by any person for
the Third Party Expense.

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     6. Participant’s Obligations.

          If any Participant is injured through the act or omission an any third
person, or if expenses relating to an injury are reimbursable under a contract
of no fault automobile insurance, the Participant shall receive benefits under
the Plan only on the condition that the Participant agrees in writing to the
following:

          a. To reimburse the Plan for the full amount of the Third Party
Expense, not to exceed the amount of recovery received from the third party or
no fault automobile insurance. The Company has the discretion to agree to a
lesser amount of reimbursement, if determined to be in the best interest of the
Plan. Such amounts shall be payable immediately upon the receipt of any damages
collected against a third party or under no fault automobile insurance, whether
in a legal judgment, settlement or otherwise; provided, however, that such
reimbursement shall not include reasonable expenses in collecting such amount,
including reasonable attorneys’ fees; and

          b. To execute and deliver, at the request of the Claims Administrator,
such instruments, including an assignment to the Claims Administrator of any and
all claims to recover amounts from any person for a Third Party Expense up to
the amount of any benefits that would be paid under the Plan for such Third
Party Expense, and do whatever else is reasonably necessary to secure the Plan’s
rights to reimbursement out of such proceeds and

          c. To provide the Plan with a lien and order directing reimbursement
of medical payments against any damages collected against a third party or under
no fault automobile insurance, whether in a legal judgment, settlement or
otherwise provided, however, that such reimbursement shall not include
reasonable expenses in collecting such amount, including reasonable attorneys’
fees. Said lien and order shall be equal to the total amount of all benefits
paid under the Plan; and

          d. To agree to a credit against payments to be made under the Plan in
the future equal to the amount of any damages collected against a third party or
under no fault automobile insurance, whether by legal judgment, settlement or
otherwise, less any amount paid to the Plan pursuant to (1) above.

     In the event that the Participant fails to comply with the requirements of
this Section, such Participant shall not be eligible to receive any further
benefits under the Plan until such Participant has so complied.

     The Plan shall have the right to intervene in any suit or other proceeding
to protect the reimbursement rights hereunder. The Participant shall be
responsible for all fees of the attorney handling the claim against the third
party.

M. SOURCE OF CONTRIBUTIONS

     1. Insurance Contract. Benefits under the Plan are provided pursuant to an
insurance contract or contracts. Nothing contained in this Plan shall be deemed
to create a trust of any kind for the benefit of any Executive or Beneficiary,
or create any fiduciary relationship between the Company and any Executive or
Beneficiary with respect to any assets of the Company.

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     2. COBRA Contributions. Individuals who have COBRA Continuation Coverage
under Section H, shall be required to make COBRA Contributions as provided
therein. The amount of COBRA Contributions shall be determined by the Company,
in the manner provided by Section I.5.A, and the Company shall communicate any
change in these amounts to individuals who are required to contribute.

     3. Required Contributions. Each Executive who is receiving compensation
from the Company or a subsidiary or affiliate under the regular Payroll shall
make any required contributions to the Plan by Payroll deductions. Each other
Executive shall make any required contributions to the Plan on a monthly or
quarterly basis or in such other manner as determined by the Company. The
Company will remit such contributions to the Insurance Company as necessary to
pay required premiums under the Insurance Contract. The amount of an Executive’s
required contributions shall be determined by the Company on the basis of
premiums due under the Insurance Contract. The Company shall communicate any
change in the amount of an Executive’s required contributions to such
individuals from time to time.

     4. Company Contributions. The Company shall contribute to the Plan such
amounts as are necessary to pay required premiums under the Insurance Contract
or any reasonable administrative expenses of the Plan not paid by the Insurance
Company. Except to the extent used to pay the reasonable administrative expenses
of the Plan, all Company Contributions shall be remitted to the Insurance
Company in accordance with the terms of the Insurance Contract.

     5. Payment of Expenses. The Company shall pay all expenses of the Plan
except for such expenses as are paid by the Insurance Company pursuant to the
terms of the Insurance Contract or any other agreement between the Insurance
Company and the Company. The Company, or its delegate, shall have sole
discretion to determine whether an expense of the Plan shall be paid by the
Company or the Insurance Company, subject to the terms of the Insurance Contract
or any other agreement between the Insurance Contract and the Company.

     6. Limitation of Liability. No liability for the payment of benefits under
the Plan shall be imposed upon the Compensation Committee, the Company or its
Officers, members of its Board of Directors or shareholders.

N. ADMINISTRATION OF THE PLAN

     1. In General. The Plan shall be administered by the Senior Vice President,
Human Resources of McKesson. If the Senior Vice President, Human Resources is an
Executive participating in the Plan, then any discretionary action he or she
takes as Administrator which directly affects him or her as an Executive shall
be specifically approved by the Compensation Committee. The Administrator shall
have the ultimate 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 Administrator shall be final and binding on all
parties who have an interest in the Plan.

     2. Elections and Notices. All elections and notices made by an Executive
under this Plan shall be in writing and filed with the Administrator.

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     3. Action By Board and Compensation Committee. The Board and Compensation
Committee may act under this Plan in accordance with their normal procedures and
practice, including but not limited to delegation of their authority to act
under this Plan.

     4. Applicable Law and 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.

O. DURATION AND AMENDMENT OF THE PLAN

     1. Permanence of the Plan.

     The Plan shall continue in full force and effect unless terminated,
modified, altered or amended by the Company as provided in this Section O.

     Although the Company has established the Plan with the bona fide intention
and expectation that it will be able to make contributions indefinitely,
nevertheless the Company is not and shall not be under any obligation or
liability whatsoever to continue its contributions or to maintain the Plan for
any given length of time. The Company, through action of its Board of Directors,
may, in its sole and absolute discretion, discontinue such contributions or
terminate the Plan in accordance with its provisions at any time without any
liability whatsoever for such discontinuance or termination.

     2. Right to Amend.

     The Company shall have the power to modify, alter, amend or terminate the
Plan at any time. The Company, acting through the Board of Directors, may
delegate the power and authority to amend the Plan to other designated Company
employees. The Company has delegated the power and authority to amend the Plan
to the Vice President of Human Resources and Administration as discussed in this
Section O.2. The Vice President of Human Resources and Administration shall have
the power and authority to amend the Plan in order to comply with new or changed
legal requirements if such amendments do not materially increase the cost of the
Plan. The Company shall have the power and authority to amend the Plan in all
other instances. The Company shall also have the power to amend or terminate any
agreement with an Insurance Company in connection with the Plan at any time;
provided, however, that any amendment to any such agreement may be made only in
accordance with the provisions of such agreement. The Company shall have the
power to increase the COBRA Contributions or required contributions under the
Plan of Members and their Dependents. Anything in Section O to the contrary
notwithstanding, no such amendment, termination, or substitution shall operate
to reduce the amount of any benefit payment otherwise payable under the Plan for
charges incurred prior to the effective date of such amendment or termination.

P. DEFINITIONS

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

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relevant terms are described in the Certificate of Coverage provided by the
Insurance Company):

     1. “Active Service” means service with the Company by an Executive on a day
which is one of the Company’s scheduled work days if he is performing in the
customary manner the regular duties of his employment with the Company on that
day either at one of the Company’s business establishments or at some location
to which the Company’s business requires him to travel. An Executive will be
considered in Active Service on a day which is not one of the Company’s
scheduled work days only if he was performing in the customary manner the
regular duties of his employment on the next or preceding scheduled work day or
is on a Company approved vacation. Notwithstanding the foregoing, provided that
an Executive has actually begun employment (i.e., shown for work) with the
Company, for purposes of the Plan, such Executive shall also be considered to be
in Active Service on a day which is one of the Company’s scheduled work days if
he is not performing in the customary manner the regular duties of his
employment with the Company due to injury or illness.

     2. “Administrator” shall mean the person specified in Section N.1.

     3. “Approved Retirement” shall mean any termination of employment with the
Company after attainment of age 65 or any retirement before age 65 (other than a
termination prior to the date the Executive has both attained age 55 and
completed five “Years of Service” as defined in the [McKesson Corporation
Retirement Plan] with the approval of the Compensation Committee).

     4. “Board” shall mean the Board of Directors of McKesson.

     5. “Company” shall mean McKesson Corporation and any member of its
controlled group as defined by Sections 414(b) and 414(c) of the Internal
Revenue Code of 1986, as amended.

     6. “Compensation Committee” shall mean the Compensation Committee of the
Board.

     7. “Dependent” shall mean an Executive’s:

          a. Legally married Spouse unless legally separated;

          b. Domestic Partner;

          c. Unmarried children under 19 years of age from birth. Such children
include the Executive’s or Executive’s Domestic Partner’s (1) biological
children, (2) legally adopted children, (3) stepchildren, and (4) any other
children with whom the Executive lives in a parent-child relationship or whose
parent is the Executive’s child and is covered as a Dependent under the Plan.;

          d. Unmarried children after attainment of age 19 but under age 25 who
are wholly dependent on the Executive for maintenance and support and are
regular, full-time students at an accredited secondary school, college,
university, vocational or technical school for

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training of nurses. Such children must otherwise meet the definition of
Dependent children as provided in Section P.7.c above.

          e. Unmarried children after attainment of age 19 who are fully
handicapped and who have not been issued a personal medical conversion policy. A
child is fully handicapped if the child is not able to earn his or her own
living because of mental retardation or a physical handicap which commenced
prior to the child’s attainment of age 19 and is chiefly dependent on the
Executive for maintenance and support. Such children must otherwise meet the
definition of Dependent children as contained in Section P.7.c above. An
Executive must provide proof that a child is fully handicapped to the Insurance
Company and Plan Administrator no later than 31 days after the date the child
reaches age 19. The Insurance Company has the right to examine such a child as
often as needed while the handicap continues at the Insurance Company’s expense.
The Insurance Company will not require an exam more often than once each year
after two years from the date the child reached age 19.

     No one may be a Dependent of more than one Executive and no one may be
covered under this Plan as both an Executive and a Dependent. Any Dependent who
is also an Executive of the Company may elect not to be covered as an Executive
under the Plan.

     8. “Domestic Partner” shall mean a person who meets and continues to meet
all of the criteria detailed in McKesson Corporation’s Affidavit Declaring
Domestic Partners, provided that the Executive has confirmed that his or her
Domestic Partnership meets the requirements of the McKesson Corporation
Affidavit Declaring Domestic Partners in any manner authorized by the Company
and received a confirmation statement from the Company.

     9. “Domestic Partnership” shall mean a relationship between an Executive
and a Domestic Partner.

     10. “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended.

     11. “Executive” shall mean an employee of the Company selected by the
Compensation Committee to participate in this Plan pursuant to Section C.

     12. “Insurance Company” shall mean Aetna Life Insurance Company and any
successor insurance companies that may be appointed by the Company to provide
benefits under the Plan.

     13. “Insurance Contract” shall mean the group health insurance contract or
contracts issued to the Company by the Insurance Company pursuant to the Plan.

     14. “McKesson” shall mean McKesson Corporation, a Delaware corporation.

     15. “Medical Child Support Order” shall mean any judgment, decree, or order
(including approval of a settlement agreement) issued by a court of competent
jurisdiction which either (1) provides for child support with respect to a child
of an Executive or provides for health benefit coverage to such a child, is made
pursuant to a State domestic relations law (including a

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community property law), and which relates to benefits under the Plan or
(2) enforces a law relating to medical child support described in Section 1908
of the Social Security Act, as added by Section 13623 of the Omnibus Budget
Reconciliation Act of 1993, with respect to the Plan.

     16. “Member” shall mean each Executive of the Company and Retiree and who
elects to participate in the Plan in accordance with applicable eligibility and
enrollment procedures.

     17. “National Medical Support Notice” shall mean any notice issued by a
State IV-D agency pursuant to Section 466(a)(19) of the Social Security Act and
Section 609(a)(5)(C) of ERISA, to the Company pursuant to an order that
obligates a Member to provide health benefit coverage for the Member’s child or
children. If properly completed, a National Medical Support Notice will be
deemed to be a Qualified Medical Child Support Order.

     18. “Participant” shall mean any individual who is covered under the Plan.

     19. “Plan” shall mean this McKesson Corporation Management Survivor
Benefits Plan.

     20. “Qualified Medical Child Support Order” means a Medical Child Support
Order which creates or recognizes the existence of an Alternate Recipient’s
right to, or assigns to an Alternate Recipient the right to, receive benefits
for which a Member or beneficiary is eligible under the Plan, and satisfies the
requirements stated in a. and b. below:

          a. A Qualified Medical Child Support Order must clearly specify:

               i. The name and last known mailing address of the Member and of
each Alternate Recipient (or the applicable State official if the name and
address of a State official has been substituted for the mailing address of an
Alternate Recipient); and

               ii. A reasonable description of the type of coverage to be
provided by the Plan to the Alternate Recipient, or the manner in which such
type of coverage is to be determined; and

               iii. The period to which such order applies.

          b. A Qualified Medical Child Support Order may not require the Plan to
provide any type or form of benefit, or any option, not otherwise provided under
the Plan, except to the extent necessary to meet the requirements of a law
relating to medical child support described in Section 1396(g) of the Social
Security Act (title 42).

     A Qualified Medical Child Support Order shall also include a properly
completed National Medical Support Notice.

          c. “Retiree” shall mean a former Executive who had been selected to
participate in the Plan and who is eligible to continue coverage following his
Approved Retirement.

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          d. “Spouse” shall mean the person to whom the Executive is legally
married.

          e. “Uniformed Services” means the uniformed services specified in 38
U.S.C. § 4303(16).

          f. “USERRA” means the Uniformed Services Employment and Reemployment
Rights Act of 1994, as amended from time to time.

Q. SUCCESSORS

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

R. EXECUTION

     This Plan Document has been restated and adopted by McKesson Corporation
and such adoption is certified to by the undersigned Officer of the Company to
be effective January 1, 2004, except as otherwise stated herein.

              McKesson Corporation
 
       

  By    

       
 
       

      Paul E. Kirinic

      Senior Vice President, Human Resources

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