EXHIBIT 10.10
McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
(Amended and Restated as of October 27, 2006)

 

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McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
TABLE OF CONTENTS

         
A. PURPOSE
    1  
 
       
B. ERISA PLAN
    1  
 
       
C. PARTICIPATION
    1  
 
       
D. BENEFITS ON APPROVED RETIREMENT
    2  
 
       
E. DEATH BENEFITS
    4  
 
       
F. SEPARATION FROM SERVICE BEFORE APPROVED RETIREMENT
    5  
 
       
G. SPECIAL FORFEITURE AND REPAYMENT RULES
    8  
 
       
H. METHOD OF PAYMENT
    9  
 
       
I. SOURCE OF PAYMENT
    11  
 
       
J. MISCELLANEOUS
    11  
 
       
K. ADMINISTRATION OF THE PLAN
    13  
 
       
L. AMENDMENT OR TERMINATION OF THE PLAN
    13  
 
       
M. CLAIMS AND APPEALS
    14  
 
       
N. DEFINITIONS
    15  
 
       
O. SUCCESSORS
    19  
 
       
P. EXECUTION
    19  
 
       
APPENDIX A SAMPLE CALCULATION EARLY RETIREMENT
    A-1  
 
       
APPENDIX B SAMPLE CALCULATION SURVIVOR BENEFIT
    B-1  
 
       
APPENDIX C SAMPLE CALCULATION TERMINATION BEFORE APPROVED RETIREMENT
    C-1  

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McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
(Amended and Restated as of October 27, 2006)
A. PURPOSE
     This Plan was established to enable the Company to attract and retain key
executive personnel by assisting them and their survivors in maintaining their
standards of living on the Executive’s retirement or earlier death. The Plan has
been amended and restated on various occasions. The Plan as set forth in here is
amended and restated effective October 27, 2006.
B. ERISA PLAN
     This Plan is an unfunded deferred compensation program for a select group
of management or highly compensated employees of the Company. The Plan,
therefore, is covered by Title I of ERISA, except that it is exempt from Parts
2, 3, and 4 of Title I of ERISA.
C. PARTICIPATION
     1. Selection by the Compensation Committee. The Compensation Committee may
select, at its discretion and from time to time as it decides, the 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 an Executive to participate in the Plan may be evidenced by the
terms of the Executive’s contract of employment with the Company.
     2. 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. If an
Executive is removed from participation prior to reaching age 65, he or she
shall be entitled to receive benefits, if any, as specified in Section D or F.
     3. Relation to Other Plans. If an Executive participates in this Plan, he
or she shall not participate in or receive benefits under any other Company-paid
plan, program or agreement that provides Company Executives, or the individual
Executive, with retirement benefits that supplement or are in addition to the
benefits under the Retirement Plan, Profit-Sharing Investment Plan or
Supplemental Profit-Sharing Investment Plan, unless otherwise specifically
approved by the Compensation Committee. This paragraph shall not limit an
Executive’s participation in or benefits under any plan or program under which
the Executive voluntarily defers for later payment compensation otherwise
currently payable to the Executive (such as, but not limited to, the Deferred
Compensation Administration Plan II or any successor or replacement plan).

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D. BENEFITS ON APPROVED RETIREMENT
     1. Amount of Benefits.
          a. In General. Except as otherwise provided herein, each Executive who
participates in the Plan and Separates from Service by reason of an Approved
Retirement shall be entitled to receive a benefit determined with reference to
the value of monthly payments equal to (1) reduced by (2), as follows:
               (1) the percentage of Average Final Compensation specified for
the Executive, which shall be as provided herein and no higher than 60% (unless
a higher percentage is specified in the Executive’s written employment contract
with the Company)
                    reduced by
               (2) the Executive’s Basic Retirement Benefits.
The percentage stated in clause (1) may be specified by the Compensation
Committee or may be specified in the Executive’s written employment contract
with the Company. Unless otherwise determined by the Compensation Committee, the
percentage of Average Final Compensation specified in clause (1) shall be 20%
plus 0.148% for each completed month (1.77% per completed year) of the
Executive’s full-time continuous employment with the Company, but in no event
shall such percentage be higher than 60% (unless a higher percentage is
specified in the Executive’s written employment contract with the Company).
          b. Special Rule. The benefit of an Executive under this Section D. who
is a participant in the Plan as of August 28, 1996, shall not be less than such
Executive’s benefit calculated pursuant to Section F.1.a of the Plan, without
regard to any reduction required by Section D.3 of the Plan.
          c. Effect of Plan Termination. If the Plan is terminated in accordance
with Section L, an Executive who later Separates from Service by reason of an
Approved Retirement shall be entitled to receive upon such Approved Retirement
monthly payments equal to (1) the applicable percentage of Average Final
Compensation under Section D.1.a multiplied by the Executive’s Pro Rata
Percentage, reduced by (2) the Executive’s Basic Retirement Benefits. For
purposes of this section, the Executive’s Pro Rata Percentage and Average Final
Compensation shall be calculated by treating the date of Plan termination as the
date that the Executive Separates from Service with the Company.
          d. Removal from Participation. If an Executive is removed from Plan
participation and later Separates from Service by reason of an Approved
Retirement, the Executive shall be treated as if the Plan were terminated with
respect to the Executive as of the date of removal, and the Executive’s benefits
shall be determined under Section D.1.c above except that the Executive’s Basic
Retirement Benefits reduction shall be determined as of the date of the
Executive’s Approved Retirement.
          e. Change in Percentage. If the percentage of Average Final
Compensation specified in Section D.l.a is reduced, the percentage applied to
determine the Executive’s benefit

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shall be determined by averaging over the Executive’s period of participation in
the Plan the percentages that have been so specified. For example, if an
Executive’s percentage is reduced from 60% to 50%, and one-half of the
Executive’s Plan participation is at 60% and one-half at 50%, the percentage
used to determine the Executive’s benefits shall be 55%.
          In addition, the benefit payable under this Plan after a reduction in
such percentage shall not be less than the benefit that would have been paid if
the Plan had been terminated with respect to the Executive on the date of such
reduction.
          If the percentage of Average Final Compensation specified in
Section D.l.a is increased, such increased percentage shall apply for
determining Plan benefits without averaging it with prior percentages, and all
prior Plan participation shall be treated as having been participation under
that increased percentage.
          f. Reduction for Basic Retirement Benefits. The reduction for the
Executive’s Basic Retirement Benefits shall be applied, unless otherwise
provided herein, by calculating all benefits as if they were payable in the form
of a straight life annuity beginning at the date of Approved Retirement, without
survivor benefits. There is no requirement, however, that the benefits payable
under this Plan and any other plan be paid in the same form or at the same time.
     2. Time of Payment. The benefits provided on Approved Retirement shall be
made on the first day of the month following the date the Executive Separates
from Service. Effective January 1, 2005, the benefits provided on Approved
Retirement accrued after December 31, 2004 shall be made on the first day of the
eighth month following the date the Executive Separates from Service. Effective
for Executives who Separate from Service on or after October ___, 2006, all
benefits provided on Approved Retirement shall be made on the first day of the
eighth month following the date the Executive Separates from Service. Such
payment shall include an additional amount representing interest credited at the
rate being credited to accounts under the Company’s Deferred Compensation
Administration Plan III during the relevant eight-month period.
     3. Reduction for Early Commencement of Approved Retirement. If an
Executive’s Approved Retirement occurs before the date the Executive attains age
62, the Executive shall receive a reduced benefit commencing on the first day of
the month following such Approved Retirement. Effective January 1, 2005, an
Executive’s reduced benefit accrued after December 31, 2004 shall be made on the
first date of the eighth month following the date the Executive Separates from
Service. Effective for Executives who Separate from Service on or after October
___, 2006, an Executive’s entire reduced benefit shall be made on the first day
of the eighth month following the date the Executive Separates from Service.
This reduced benefit shall be reduced by 0.3% for each month the Executive’s
Approved Retirement precedes the date the Executive will attain age 62. The
reduction for Basic Retirement Benefits shall be applied by calculating all
benefits as if they were payable in the form of a straight life annuity at the
date of such Approved Retirement before age 62, without survivor benefits, to
determine the net benefit payable under this Plan. See Appendix A for an example
of this calculation.

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     4. No Delayed or Accelerated Retirement Benefit. An Executive may not elect
to delay the commencement date of his or her retirement benefits under the Plan
after the time for commencement specified in Section D.2 or D.3. Notwithstanding
any other provision of the Plan to the contrary, no distribution will be made
from the Plan that would constitute an impermissible acceleration of payment as
defined in Section 409A(a)(3) of the Code and the regulations promulgated
thereunder.
E. DEATH BENEFITS
     1. Death After Approved Retirement. If an Executive dies after Approved
Retirement, benefits shall be paid after the Executive’s death only in
accordance with the method of payment determined under Section H. For example,
if the Executive received a straight life annuity or a lump sum, no benefits
shall be paid under this Plan after the Executive’s death.
     2. Death While Employed.
          a. Benefits Payable to Beneficiary. If an Executive dies while
employed by the Company, the Executive’s beneficiary shall receive the monthly
benefit that would have been paid to such beneficiary if the Executive had
Separated from Service by reason of an Approved Retirement on the last day of
the month before the Executive’s death, had elected to receive benefits in the
actuarially reduced form of a joint and 100% survivor annuity with the
Executive’s beneficiary as the contingent annuitant, had begun to receive such
benefits on the day prior to the Executive’s death, and died immediately
thereafter. Such payment shall be calculated by first determining the amount
payable to the Executive under this Plan without reduction for Basic Retirement
Benefits (applying the reduction, if applicable, for early commencement of such
benefit as set forth in Section D.3 and applying the actuarial reduction for
joint and 100% survivor annuity) and only thereafter making a reduction for
Basic Retirement Benefits. The reduction for Basic Retirement Benefits in
connection with the Retirement Plan in this case shall be in the amount payable,
if any, under the Retirement Plan as a spouse allowance; if any spouse allowance
is payable under the Retirement Plan on account of the Executive, this reduction
shall be made even if the Executive’s beneficiary under this Plan is not the
Executive’s surviving spouse. See Appendix B for an example of this calculation.
The foregoing notwithstanding, if prior to death the Executive had made an
election to receive a lump sum form of distribution and the Compensation
Committee approves such form of distribution, distribution shall be made to the
beneficiary in the form of a lump sum payment; provided, however, that any
election made after December 31, 2004 shall not require Compensation Committee
approval but must comply with the last sentence of Section H.5. The present
value of benefits payable in a lump sum shall be determined under factors
established and uniformly applied by the Administrator in accordance with
Section H.1.
          b. Average Final Compensation. For purposes of the calculations under
this Section E.2, the Executive’s Average Final Compensation shall be based on
the compensation the Executive actually earned during the Executive’s employment
with the Company.
          c. No Designated Beneficiary. If an Executive dies before Approved
Retirement without having designated a beneficiary, and was married on the date
of death, the

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Executive’s surviving spouse shall be the Executive’s beneficiary, unless
otherwise provided by applicable community property or other laws or court
order. If an Executive dies before Approved Retirement, has no surviving spouse
and has not designated a beneficiary, the present value of the benefits that
would be paid to a surviving spouse of the same age as the Executive under a
joint and 100% survivor annuity form (and under the method of calculation
provided in Section E.2.a and b) shall be paid to the Executive’s estate in two
equal amounts in the 14 months following death. The present value of benefits
shall be determined under factors established and uniformly applied by the
Administrator in accordance with Section H.1.
     3. Designation of Beneficiary. An Executive may designate any natural
person as his or her beneficiary, but may not designate more than one person, or
any person not a natural person, without the approval of the Administrator.
Designation shall be made in writing and shall become effective only when filed
with the Administrator. Such filing must occur before the Executive’s death. An
Executive may change his or her beneficiary, from time to time, by filing a new
written designation with the Administrator. If the Executive is married, any
beneficiary designation which does not designate the Executive’s spouse to
receive at least one-half of the benefit payable on the Executive’s death shall
only become effective when approved in writing by the Executive’s spouse.
F. SEPARATION FROM SERVICE BEFORE APPROVED RETIREMENT
     1. Basic Rule.
          a. Termination Benefits. Subject to other applicable provisions in
this Plan, an Executive who Separates from Service with the Company other than
on Approved Retirement or death shall be entitled to receive a benefit
determined with reference to the value of monthly payments equal to his
Termination Benefits. An Executive’s Termination Benefits are equal to (1) the
applicable percentage of Average Final Compensation under Section D.1.a.,
multiplied by the Executive’s Pro Rata Percentage and reduced by (2) the
Executive’s Basic Retirement Benefits at the date of Separation from Service.
For purposes of the Plan, Termination Benefits are expressed as the present
value of a benefit payable at age 65, calculated using the GATT interest rate.
See Appendix C for an example of this calculation. Effective January 1, 2005,
the Termination Benefits accrued after December 31, 2004 shall be made on the
first day of the eighth month following the date the Executive Separates from
Service. Effective for Executives who Separate from Service on or after October
___, 2006, all Termination Benefits shall be made on the first day of the eighth
month following the date the Executive Separates from Service.
          b. Plan Termination or Removal from Participation. An Executive who
Separates from Service with the Company other than on Approved Retirement or
death and who has been removed from Plan participation (“removal”) or with
respect to whom the Plan has terminated in accordance with Section L prior to
his or her Separation from Service (“termination”) shall be entitled to receive,
beginning at age 65, monthly payments determined under this Section F but
treating the date of “removal” or “termination”, whichever is applicable, as the
date of Separation from Service for purposes of calculating the Executive’s Pro
Rata Percentage and Average Final Compensation. Effective January 1, 2005,
benefits payable under this Section F.1.b accrued after December 31, 2004 shall
be made on the on first day of the eighth month following the date the Executive
Separates from Service. Effective for Executives

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who Separate from Service on or after October ___, 2006, all Termination
Benefits shall be made on the first day of the eighth month following the date
the Executive Separates from Service.
          c. Reduction for Subsequent Employer Benefits. Prior to January 1,
2006, any amount payable under Section F.1.a or b shall be reduced by any
retirement benefit payable to the Executive or the Executive’s beneficiary on
account of service rendered to another employer after the Executive’s Separation
from Service with the Company.
     2. Limitations. No benefits shall be paid under this Section F to:
          a. Separation from Service for Cause. An Executive who is
involuntarily Separated from Service for Cause. If the Executive has a written
employment agreement, Cause shall be determined in accordance with that
agreement.
          b. Violation of Employment Agreement. An Executive who Separates from
Service in violation of a written employment agreement (if any). Separation from
Service is in violation of an employment agreement if the Separation from
Service occurs before the end of the term of that agreement and is not allowed
by the agreement (e.g., for “good reason”).
          c. No Vested Interest. An Executive who has not at the time of his or
her Separation from Service with the Company (i) completed five Years of Service
or (ii) attained age 65, or if later, the fifth anniversary of participation in
the Plan (or, in the case of an Executive who was Separated from Service prior
to April 26, 1999, an Executive who had no vested interest in benefits under the
Retirement Plan at the time of his or her Separation from Service with the
Company) shall have no vested interest in benefits under the Plan and upon
Separation from Service with the Company shall forfeit any benefit the Executive
had accrued under the Plan. For purposes of the foregoing, Years of Service
before a Break in Service shall not be counted if the consecutive one-year
Breaks in Service equal or exceed the greater of five or the aggregate number of
Years of Service before the Break in Service. An Executive who would have such a
vested interest (1) if the Executive was not involuntarily Separated from
Service by the Company in violation of the Executive’s employment agreement or
(2) if the Executive’s Separation from Service was not for “good reason” under
such agreement, shall be treated as having such a vested interest. This
Section F.2 shall not apply to any Executive who was a participant in this Plan
on September 29, 1993. The foregoing notwithstanding, effective January 30,
2002, the Compensation Committee may in its sole discretion waive the five Years
of Service requirement and confer vested rights on any Executive.
     3. Pro Rata Percentage. An Executive’s Pro Rata Percentage is the higher of
the following two percentages (but not greater than 100%). The first percentage
is determined by dividing the number of the Executive’s whole months of
employment with the Company by the number of whole months from the date that the
Executive was first hired by the Company to the date that the Executive will
reach age 65 and multiplying by 100. The second percentage is determined by
multiplying 4.44% by the number of the Executive’s whole and partial years of
completed employment with the Company.

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     4. Rules of Application.
          a. Periods of Employment. Effective April 26, 1999, for purposes of
determining employment with the Company, Years of Service before a Break in
Service (and, at the discretion of the Administrator, any other periods of
Service that would be disregarded under the Retirement Plan) shall not be
counted under this Section F if the consecutive one-year Breaks in Service equal
or exceed the greater of five or the aggregate number of the Executive’s Years
of Service before the Break in Service.
          b. Basic Retirement Benefits. For purposes of this Section F, an
Executive’s Basic Retirement Benefits shall be determined on the date the
Executive’s employment with the Company terminates. All benefits shall be
calculated as if they were payable in the form of a straight life annuity
beginning at the later of age 65 or the date of actual termination of
employment, without survivor benefits.
          c. Method of Payment. Benefits under this Section shall be paid in the
form provided in Section H.
          d. Date Benefits Begin. Benefits payable under this Section shall
begin on the first day of the month following the date the Executive reaches age
65. Effective January 1, 2005, benefits payable under this Section accrued after
December 31, 2004 shall be made on the on first day of the eighth month
following the date the Executive Separates from Service. Effective for
Executives who Separate from Service on or after October ___, 2006, benefits
payable under this Section shall be made on the first day of the eighth month
following the date the Executive Separates from Service.
          e. Death Benefits. For purposes of this Section:
              If an Executive dies after benefits have begun, benefits payable
thereafter, if any, shall be paid in accordance with the method of payment
determined under Section H.
              If an Executive who has Separated from Service and is entitled to
receive benefits under this Section F dies before benefits begin, the
Executive’s beneficiary shall receive the monthly benefit payable under an
actuarially reduced form of joint and 100% survivor annuity with the Executive’s
beneficiary as the contingent annuitant, payable beginning on the first day of
the month after the Executive would have reached age 65. The principles of the
second and third sentences of Section E.2.a and the principles of Section E.2.b
and of this Section shall apply for calculating these survivor benefits.
Effective with respect to benefits paid upon an Executive’s death on or after
January 1, 2005, distributions will be made to the beneficiary on the first day
of the month following the Executive’s death.
              The principles of Section E.2.c and of this Section shall apply if
there is no surviving spouse and no designation of beneficiary. The rules of
Section E.3 concerning designation of beneficiary shall apply.
          f. Change in Percentage. The principles of Section D.1.d shall apply
to benefits calculated under this Section F.

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     5. Other Agreement. If an Executive’s written employment agreement with the
Company provides higher benefits on Separation from Service before Approved
Retirement than provided under this Section F, such higher benefits shall be
paid.
     6. Forfeiture of Benefits. Except as provided in this Section, and as
provided elsewhere in this Plan with respect to Approved Retirement or death of
an Executive, an Executive or the Executive’s beneficiaries shall not be
entitled to any benefits under this Plan, all obligations of the Company to the
Executive and his or her beneficiaries shall cease, and the Company shall have
no further liability to the Executive or any other person under this Plan.
G. SPECIAL FORFEITURE AND REPAYMENT RULES
     Any other provisions of this Plan to the contrary notwithstanding, if the
Compensation Committee determines that an Executive has engaged in any of the
actions described in Section G.3 below, the consequences set forth in
Sections G.1 and 2 below shall result.
     1. Forfeiture of Benefits. To the extent that the benefit that otherwise
would be payable under this Plan exceeds the benefit, if any, that would have
been payable if the Executive’s Separation from Service had occurred on
November 1, 1993, such excess portion shall be forfeited and shall not be
payable at any time under this Plan.
     2. Repayment. If the Executive received a payment under this Plan at any
time within six months prior to the date the Company discovered that the
Executive engaged in any action described in Section G.3 below, the Executive,
upon written notice from the Company, shall repay to the Company in cash the
excess portion of any such payment, such excess portion to be calculated in the
manner described in Section G.1 above.
     3. The consequences described in Sections G.1 and 2 above shall apply if
the Executive, either before or after Separation from Service with the Company,
engages in any of the following:
          a. Accepts a position as a consultant to or an employee of a business
enterprise that is in direct competition with any line of business engaged in by
the Company at the time of the Executive’s Separation from Service.
          b. Discloses to others, or takes or uses for the Executive’s own
purpose or the purpose of others, any trade secrets, confidential information,
knowledge, data or know-how belonging to the Company and obtained by the
Executive during the term of the Executive’s employment, whether or not they are
the Executive’s work product. Examples of such confidential information or trade
secrets include (but are not limited to) customer lists, supplier lists, pricing
and cost data, computer programs, delivery routes, advertising plans, wage and
salary data, financial information, research and development plans, processes,
equipment, product information and all other types and categories of information
as to which the Executive knows or has reason to know that the Company intends
or expects secrecy to be maintained.
          c. Fails to promptly return all documents and other tangible items
belonging to the Company in the Executive’s possession or control, including all
complete or partial copies, recordings, abstracts, notes or reproductions of any
kind made from or about such documents or

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information contained therein, upon Separation from Service, whether pursuant to
an Approved Retirement or otherwise.
          d. Fails to provide the Company with at least 30 days’ written notice
prior to directly or indirectly engaging in, becoming employed by, or rendering
services, advice or assistance to any business in competition with the Company.
As used herein, “business in competition” means any person, organization or
enterprise which is engaged in or is about to become engaged in any line of
business engaged in by the Company at the time of the Executive’s Separation
from Service with the Company.
          e. Fails to inform any new employer, before accepting employment, of
the terms of this Section and of the Executive’s continuing obligation to
maintain the confidentiality of the trade secrets and other confidential
information belonging to the Company and obtained by the Executive during the
term of the Executive’s employment with the Company.
          f. Induces or attempts to induce, directly or indirectly, any of the
Company’s customers, employees, representatives or consultants to terminate,
discontinue or cease working with or for the Company, or to breach any contract
with the Company, in order to work with or for, or enter into a contract with,
the Executive or any third party.
          g. Engages in conduct which is not in good faith and which disrupts,
damages, impairs or interferes with the business, reputation or employees of the
Company.
          The Compensation Committee shall determine in its sole discretion
whether the Executive has engaged in any of the acts set forth in a through g
above, and its determination shall be conclusive and binding on all interested
persons.
          Any provision of this Section which is determined by a court of
competent jurisdiction to be invalid or unenforceable shall be construed or
limited in a manner that is valid and enforceable and that comes closest to the
business objectives intended by such invalid or unenforceable provision, without
invalidating or rendering unenforceable the remaining provisions of this
Section.
H. METHOD OF PAYMENT
     1. Normal Form. The Normal Form of Benefit under this Plan shall be a
straight life annuity of monthly payments over the lifetime of the Executive,
with payments ceasing on the first day of the month in which the Executive dies.
Effective October ___, 2006, the Normal Form of Benefit under this Plan shall be
an actuarial equivalent value lump sum distribution, where the actuarial
equivalent value is determined as follows: (i) the interest rate is the interest
rate prescribed by the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a lump sum distribution on plan termination for
the month in which the Executive’s Approved Retirement is approved by the
Compensation Committee and (ii) a table based upon a fixed blend of 50 percent
of male mortality rates and 50 percent of female mortality rates from the 1983
Group Annuity Mortality Table; provided, however, that effective October 28,
2004 the table shall be based on the 1994 Group Annuity Reserving Table (1994
GAR). Notwithstanding the foregoing, effective January 1, 2005, for purposes of
calculating a lump sum benefit payable under Section F, the interest rate is the
GATT interest rate for purposes of

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determining the present value of a lump sum distribution under a tax-qualified
defined benefit retirement plan.
     2. Joint and Survivor Annuity. If the Executive is married at the time the
benefits become payable, then unless the Executive has elected otherwise (as
described below), the Executive’s benefits shall be paid in the actuarially
reduced form of a joint and 50% survivor annuity payable to the Executive and
the Executive’s spouse. Prior to January 31, 2006 and with the approval of the
Administrator if the election is made prior to January 1, 2005, the Executive
may elect, in writing, not to receive this form of benefit, but any such
election which provides a benefit for a beneficiary other than the Executive’s
spouse must be approved in writing by the Executive’s spouse to be effective.
Such election shall become effective when filed with the Administrator and must
be filed before the Executive’s Separation from Service with the Company. If an
Executive is first selected for participation in the Plan after December 31,
2006, then the Executive may make an election pursuant to this Section within
thirty days of such selection for participation.
     3. Lump Sum Distribution Prior to January 1, 2005. An Executive who
Separates from Service by reason of an Approved Retirement on or after June 1,
1997 and prior to January 1, 2005, may elect to have the actuarial equivalent
value of his or her benefits paid in the form of a lump sum distribution in
cash, where actuarial equivalence is determined as follows: (i) the interest
rate prescribed by the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a lump sum distribution on plan termination for
the month in which the Executive makes the lump sum distribution election and
(ii) a table based upon a fixed blend of 50 percent of male mortality rates and
50 percent of female mortality rates from the 1983 Group Annuity Mortality
Table; provided, however, that effective October 28, 2004 the table shall be
based on the 1994 Group Annuity Reserving Table (1994 GAR).
An election of a lump sum form of distribution made between June 1, 1997 and
December 31, 2004, must be made at least 12 months prior to the Executive’s
Approved Retirement (except that an election made prior to January 1, 1997 shall
be effective as to any Approved Retirement occurring during calendar year 1997)
and shall be void and of no effect if either of the following occurs: (a) the
Executive’s Separation from Service with the Company does not occur within
24 months after the date on which the Executive made the election of a lump sum
form of distribution; or (b) the Executive makes a new election under this
Section H.3 at least 12 months after the date of the Executive’s previous
election under this Section H.3.
     An Executive who is married at the time benefits become payable under this
Section H.3 may not receive a lump sum form of distribution unless the
Executive’s spouse approves of the election in writing.
     An Executive, between June 1, 1997 and December 31, 2004, may elect a lump
sum form of distribution less than 12 months prior to Approved Retirement, but
in such event the amount of the lump sum distribution shall be reduced by ten
percent.
     4. Lump Sum Distribution Between January 1, 2005 and December 31, 2006. An
Executive who Separates from Service by reason of an Approved Retirement and who
is to receive a lump sum distribution on or after January 1, 2005 and prior to
December 31, 2006, may

10

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elect to have the actuarial equivalent value of his or her benefits paid in the
form of a lump sum distribution in cash, where actuarial equivalence is
determined as follows: (i) the interest rate prescribed by the Pension Benefit
Guaranty Corporation for purposes of determining the present value of a lump sum
distribution on plan termination for the month in which the Executive makes the
lump sum distribution election and (ii) a table based upon a fixed blend of
50 percent of male mortality rates and 50 percent of female mortality rates from
the 1983 Group Annuity Mortality Table; provided, however, that effective
October 28, 2004 the table shall be based on the 1994 Group Annuity Reserving
Table (1994 GAR).
     An election made pursuant to this Section H.4. shall be treated as an
initial distribution election and shall be subject to any special administrative
rules imposed by the Administrator including rules intended to comply with
Section 409A of the Code and Notice 2005-1, A-19. No election under this
Section H.4 shall (i) change the payment date of any distribution otherwise
scheduled to be paid in 2006 or cause a payment to be paid in 2006, or (iv) be
permitted after December 31, 2006.
     5. Additional Forms of Benefits. With the approval of the Administrator,
the Executive may elect to receive his or her benefits in the form of a single
life annuity, a joint and survivor annuity with a 100% or 50% annuity to the
surviving spouse, or a lump sum distribution or such other form as permitted by
the Administrator. All such forms of payment shall be the actuarial equivalent
of the single life annuity with actuarial equivalence determined pursuant to
Section H.3. If the Executive is married, any such election must be approved in
writing by the Executive’s spouse to be effective, if it would provide the
spouse with a benefit less than that provided under Section H.2. Prior to
April 26, 1999, the Executive, with the approval of the Administrator, could
elect to receive benefits in one of the actuarially equivalent benefit forms
permitted under the Retirement Plan or such other form as permitted by the
Administrator. Effective October ___, 2006, the Executive may elect to receive
his or her benefits in any form provided for in this Section H.5; provided,
however, that the election must be made not later than the later of
(i) December 31, 2006 or (ii) thirty days after the Executive is first selected
for participation by the Compensation Committee in accordance with Section C.1.
I. SOURCE OF PAYMENT
     The benefits paid under this Plan shall be paid from the general funds of
the Company, and the Executive and the Executive’s beneficiaries shall be no
more than unsecured general creditors of the Company with no special or prior
right to any assets of the Company for payment of any obligations hereunder.
Nothing contained in this Plan shall be deemed to create a trust of any kind for
the benefit of the Executive or any beneficiary, or create any fiduciary
relationship between the Company and the Executive or any beneficiary with
respect to any assets of the Company.
J. MISCELLANEOUS
     1. Withholding. The Executive and any beneficiary shall make appropriate
arrangements with the Company for the satisfaction of any federal, state or
local income tax withholding requirements and Social Security or other employee
tax requirements applicable to

11

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the payment of benefits under this Plan. If no other arrangements are made, the
Company may provide, at its discretion, for such withholding and tax payments as
may be required.
     2. No Assignment.
          a. Other than as provided in Section J.2.b below, benefits provided
under this Plan may not be alienated, assigned, transferred, pledged or
hypothecated by any person, at any time, or to any person whatsoever. These
benefits shall be exempt from the claims of creditors or other claimants and
from all orders, decrees, levies, garnishment or executions to the fullest
extent allowed by law.
          b. If a court of competent jurisdiction determines pursuant to a
judgment, order or approval of a marital settlement agreement that all or any
portion of the benefits payable hereunder to an Executive constitute community
property of the Executive and his or her spouse or former spouse (hereafter, the
“Alternate Payee”) or property which is otherwise subject to division by the
Executive and the Alternative Payee, a division of such property shall not
constitute a violation of Section J.2.a, and any portion of such property may be
paid or set aside for payment to the Alternate Payee. The preceding sentence of
this Section J.2.b, however, shall not create any additional rights and
privileges for the Alternate Payee (or the Executive) not already provided under
the Plan; in this regard, the Administrator shall have the right to refuse to
recognize any judgment, order or approval of a martial settlement agreement that
provides for any additional rights and privileges already not already provided
under the Plan, including without limitation with respect to form and time of
payment.
     3. Fiduciary Insurance. The Company may purchase insurance for its
directors, officers, employees and agents to cover potential liability arising
from their acts and omissions concerning this Plan.
     4. Applicable Law; Severability. The Plan hereby created shall be
construed, administered, and governed in all respects in accordance with ERISA
and the laws of the State of California to the extent 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 hereof shall continue to be fully effective. The Plan is intended to
comply with the requirements of Code Section 409A.
     5. No Right to Continued Employment. Each Executive selected to participate
in the Plan is deemed by the Company to be a bona fide executive or in a high
policy making position for purposes of the Age Discrimination in Employment Act
and state laws of similar effect. Accordingly, the terms of the Plan shall not
confer any legal rights upon any Executive to continued employment or employment
past age 65, nor shall the Plan interfere with the rights of the Company to
discharge any Executive or to treat the Executive without regard to the effect
which that treatment might have upon the Executive as a participant in the Plan.
     6. Offset for Indebtedness. To the extent permitted by law, if at the time
an Executive becomes entitled to receive any payment under the Plan the
Executive is indebted to the Company, the amount of the payment shall be reduced
by the amount of any such

12

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indebtedness then due and owing to the Company. The indebtedness shall then be
reduced to the extent of such reduction.
K. ADMINISTRATION OF THE PLAN
     1. In General. The Plan shall be administered by the Executive Vice
President, Human Resources of McKesson under the direction of the Compensation
Committee. If the Executive Vice President, Human Resources, is an Executive
participating in the Plan, then any discretionary action taken as Administrator
which directly affects the Executive Vice President, Human Resources, 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.
     3. Action by Board of Directors and Compensation Committee. The Board and
the Compensation Committee may act under this Plan in accordance with their
normal procedures and practices, including but not limited to delegation of
their authority to act under the Plan.
     4. Plan Year. The Plan Year is the calendar year.
L. AMENDMENT OR TERMINATION OF THE PLAN
     The Compensation Committee may at any time amend, alter or modify and the
Board may at any time terminate the Plan.
     Effective October 27, 2006, the Board, in its discretion, may terminate the
Plan at any time and in the Board’s discretion any benefits payable to
Executives may be accelerated and paid within the period beginning twelve months
after the date the Plan was terminated and ending twenty-four months after the
date the Plan was terminated, or pursuant to Section D, E or F of the Plan, if
earlier. If the Plan is terminated and benefits payments are accelerated, the
Company shall terminate all non-account balance non-qualified deferred
compensation plans with respect to all participants and shall not adopt a new
non-account balance non-qualified deferred compensation plan for at least five
years after the date the Plan was terminated.
     Effective October 27, 2006, the Board, in its discretion, may terminate the
Plan upon a corporate dissolution of the Company that is taxed under Section 331
of the Code or with the approval of a bankruptcy court pursuant to 11 U.S.C.
Section 503(b)(1(A), provided that the any benefits payable to Executives are
distributed and included in the gross income of the Executives by the latest of
(i) the calendar year in which the Plan terminates or (ii) the first calendar
year in which payment of the benefits is administratively practicable.

13

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M. CLAIMS AND APPEALS
     1. Informal Resolution of Questions. Any Executive or beneficiary who has
questions or concerns about his or her benefits under the Plan is encouraged to
communicate with the Human Resources Department of McKesson. If this discussion
does not give the Executive or beneficiary satisfactory results, a formal claim
for benefits may be made in accordance with the procedures of this Section M.
     2. Formal Benefits Claim – Review by Executive Vice President, Human
Resources. An Executive or beneficiary may make a written request for review of
any matter concerning his or her benefits under this Plan. The claim must be
addressed to the Executive Vice President, Human Resources, McKesson
Corporation, One Post Street, San Francisco, California 94104. The Executive
Vice President, Human Resources or his or her delegate (“Executive Vice
President”) shall decide the action to be taken with respect to any such request
and may require additional information if necessary to process the request. The
Executive Vice President shall review the request and shall issue his or her
decision, in writing, no later than 90 days after the date the request is
received, unless the circumstances require an extension of time. If such an
extension is required, written notice of the extension shall be furnished to the
person making the request within the initial 90-day period, and the notice shall
state the circumstances requiring the extension and the date by which the
Executive Vice President expects to reach a decision on the request. In no event
shall the extension exceed a period of 90 days from the end of the initial
period.
     3. Notice of Denied Request. If the Executive Vice President denies a
request in whole or in part, he or she shall provide the person making the
request with written notice of the denial within the period specified in
Section M.2. The notice shall set forth the specific reason for the denial,
reference to the specific Plan provisions upon which the denial is based, a
description of any additional material or information necessary to perfect the
request, an explanation of why such information is required, and an explanation
of the Plan’s appeal procedures and the time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse benefit determination
on review.
     4. Appeal to Executive Vice President.
          a. A person whose request has been denied in whole or in part (or such
person’s authorized representative) may file an appeal of the decision in
writing with the Executive Vice President within 60 days of receipt of the
notification of denial. The appeal must be addressed to: Executive Vice
President, Human Resources, McKesson Corporation, One Post Street, San
Francisco, California 94104. The Executive Vice President, for good cause shown,
may extend the period during which the appeal may be filed for another 60 days.
The appellant and/or his or her authorized representative shall be permitted to
submit written comments, documents, records and other information relating to
the claim for benefits. Upon request and free of charge, the applicant should be
provided reasonable access to and copies of, all documents, records or other
information relevant to the appellant’s claim.

14

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          b. The Executive Vice President’s review shall take into account all
comments, documents, records and other information submitted by the appellant
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination. The Executive Vice President
shall not be restricted in his or her review to those provisions of the Plan
cited in the original denial of the claim.
          c. The Executive Vice President shall issue a written decision within
a reasonable period of time but not later than 60 days after receipt of the
appeal, unless special circumstances require an extension of time for
processing, in which case the written decision shall be issued as soon as
possible, but not later than 120 days after receipt of an appeal. If such an
extension is required, written notice shall be furnished to the appellant within
the initial 60-day period. This notice shall state the circumstances requiring
the extension and the date by which the Executive Vice President expects to
reach a decision on the appeal.
          d. If the decision on the appeal denies the claim in whole or in part
written notice shall be furnished to the appellant. Such notice shall state the
reason(s) for the denial, including references to specific Plan provisions upon
which the denial was based. The notice shall state that the appellant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim
for benefits. The notice shall describe any voluntary appeal procedures offered
by the Plan and the appellant’s right to obtain the information about such
procedures. The notice shall also include a statement of the appellant’s right
to bring an action under Section 502(a) of ERISA.
          e. The decision of the Executive Vice President on the appeal shall be
final, conclusive and binding upon all persons and shall be given the maximum
possible deference allowed by law.
     5. Exhaustion of Remedies. No legal or equitable action for benefits under
the Plan shall be brought unless and until the claimant has submitted a written
claim for benefits in accordance with Section M.2, has been notified that the
claim is denied in accordance with Section M.3, has filed a written request for
a review of the claim in accordance with Section M.4, and has been notified in
writing that the Executive Vice President has affirmed the denial of the claim
in accordance with Section M.4.
N. DEFINITIONS
     For purposes of the Plan, the following terms shall have the meanings
indicated:
     1. “Administrator” shall mean the person specified in Section K.
     2. “Approved Retirement” shall mean (i) any Separation from Service with
the Company after attainment of age 62; (ii) any involuntary Separation from
Service after both attainment of age 55 and completion of 15 Years of Service;
or (iii) any other Separation from Service prior to (i) or (ii) above (but not
earlier than the Executive’s attainment of age 55 and completion of five Years
of Service) if the Compensation Committee has determined that such Separation
from Service will be an Approved Retirement. Such a determination by the
Compensation Committee may occur at the time of the Executive’s Separation from
Service with the Company or at any earlier time. Notwithstanding the foregoing,
if an Executive’s written

15

--------------------------------------------------------------------------------

 

employment agreement so requires or if the Board so decides, the Board may, in
its sole discretion, grant an Approved Retirement at any earlier Separation from
Service either with or without the reduction for early commencement of benefits
in Section D.3.
          Notwithstanding the foregoing, “Approved Retirement” shall not include
any Separation from Service for Cause.
     3. “Average Final Compensation” shall mean one-fifth of the sum of the base
salary and annual bonuses under the Management Incentive Plan (“MIP”) or any
successor or replacement plans (including base salary and annual MIP bonuses or
portions thereof voluntarily deferred under a cash or deferred plan or any other
tax qualified or non-qualified salary deferral plan such as the Deferred
Compensation Administration Plan II (or any successor or replacement plans) or
bonuses relinquished in favor of a stock option grant under the 1994 Stock
Option and Restricted Stock Plan) earned by an Executive for the five
consecutive years of full-time continuous employment with the Company which
(a) fall within the 15-year period ending on the first day of the month
following the Executive’s Separation from Service with the Company and
(b) produce the highest such sum. If the Executive has had less than five years
of full time continuous employment, Average Final Compensation shall be base
salary and annual bonuses, including amounts voluntarily deferred or
relinquished as described in the previous sentence, for the entire period of
such employment with the Company, divided by the number of whole and partial
years of service.
     4. “Basic Retirement Benefits” shall mean the monthly annuity benefit
payable under the Retirement Plan and a hypothetical monthly annuity benefit
payable to the Executive under the Profit-Sharing Investment Plan as follows:
          Benefits from the Executive’s interest in the Retirement Plan shall be
calculated on a straight life annuity basis payable (i) to the Executive in the
event of normal retirement, retirement after age 65, early retirement, or
termination allowance as defined in the Retirement Plan, or (ii) as a spouse
allowance in the event of the Executive’s death before Approved Retirement or
before benefits begin (Section F.4.e).
          The hypothetical annuity benefit payable under the Profit-Sharing
Investment Plan shall be calculated by first determining the value of each share
credited to the Executive’s Retirement Share Plan account under the
Profit-Sharing Investment Plan as of the date it was credited and applying an
annual rate of 12% to such value from the date such share was credited to such
account to the date the Executive’s benefit under this Plan is to commence. The
aggregate value of all of the shares credited to the Executive’s Retirement
Share Plan account so determined shall then be converted to a straight life
annuity using the factors for determining actuarial equivalence set forth in
Section H.3.
     5. “Board” shall mean the Board of Directors of McKesson.
     6. “Break in Service” shall occur when an Executive does not perform any
Service during a 12 consecutive month period beginning on a date after the
Executive separates from Service. A Break in Service occurs on the earlier of
(i) the date on which the Executive quits,

16

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retires, is discharged or dies, or (ii) he or she fails to return to work as
determined at the discretion of the Administrator.
     7. “Cause” shall be determined in accordance with the terms of the
Executive’s written employment agreement, if any, or if there is none, “Cause”
shall mean (i) Executive’s misconduct, dishonesty, habitual neglect, or other
knowing and material violation of Company’s policies and procedures in effect
from time to time, (ii) actions (or failures to act) by Executive in bad faith
and to the detriment of Company, or (iii) conviction of a felony or a crime of
moral turpitude.
     8. “Company” shall mean McKesson and any member of its controlled group as
defined by Section 414(b) and Section 414(c) of the Internal Revenue Code of
1986, as amended.
     9. “Compensation Committee” shall mean the Compensation Committee of the
Board.
     10. “Deferred Compensation Administration Plan II” or “DCAP II” shall mean
the McKesson Corporation Deferred Compensation Administration Plan II or any
successor or replacement plan.
     11. “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended.
     12. “Executive” shall mean an employee of the Company selected to
participate in this Plan.
     13. “McKesson” shall mean McKesson Corporation, a Delaware corporation.
     14. “Normal Form of Benefit” is that form described in Section H.l.
     15. “Plan” or “EBRP” shall mean this McKesson Corporation Executive Benefit
Retirement Plan, as amended from time.
     16. “Pro Rata Percentage” is defined in Section F.3.
     17. “Profit-Sharing Investment Plan” or “PSIP” shall mean the McKesson
Corporation Profit-Sharing Investment Plan.
     18. “Retirement Plan” shall mean the McKesson Corporation Retirement Plan.
     19. “Separation from Service” or “Separated from Service” shall mean
termination of employment. Effective January 1, 2005, an Executive shall not be
deemed to have Separated from Service if the Executive continues to provide
services to the Company in a capacity other than as an employee and if the
former employee is providing services at an annual rate that is fifty percent or
more of the services rendered, on average, during the immediately preceding
three full calendar years of employment with the Company (or if employed by the
Company less than three years, such lesser period) and the annual remuneration
for such services is fifty

17

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percent or more of the average annual remuneration earned during the final three
full calendar years of employment (of if less, such lesser period); provided,
however, that a Separation from Service will be deemed to have occurred if an
Executive’s service with the Company is reduced to an annual rate that is less
than twenty percent of the services rendered, on average, during the immediately
preceding three full calendar years of employment with the Company (or if
employed by the Company less than three years, such lesser period) or the annual
remuneration for such services is less than twenty percent of the average annual
remuneration earned during the three full calendar years of employment with the
Company (or if less, such lesser period).
     20. “Service” shall mean the period commencing with the first day of an
Executive’s employment with the Company and ending with the day he or she
separates from Service with the Company. An Executive separates from Service on
the earlier of the date he or she resigns, retires, is discharged or dies, or on
the first anniversary of his or her absence from work for any other reason.
Notwithstanding the foregoing, an Executive’s period of Service shall also
include certain periods after he or she has separated from Service:
          (1) If an Executive separates from Service by resignation, discharge
or retirement and thereafter returns to the employ of the Company within one
year, the period of separation shall be considered as part of the Executive’s
Service.
          (2) An Executive’s Service shall also continue during his or her
absence caused by sickness, accident, layoff where rehire is anticipated,
required military service or any other absence authorized by the Company on a
uniform and nondiscriminatory basis. If, after such absence, the individual
fails to return to work as an employee of the Company within the time prescribed
on a uniform and nondiscriminatory basis by the Administrator for such absences,
or within the period during which his or her reemployment rights are protected
by law, Service shall be deemed broken as of the date the Executive should have
returned to work, as determined by the Administrator.
          (3) If an Executive Separates from Service because of the pregnancy of
the Executive, the birth of a child of the Executive, the placement of a child
with the Executive in connection with the adoption of the child by the
Executive, or for the purpose of caring for such child by the Executive for a
period immediately following birth or placement, the one-year period following
such separation shall be deemed Service of the Executive (“maternity or
paternity absence”). Also, no separation from Service on account of such absence
shall occur until the earliest of resignation, retirement, death, discharge or
the second anniversary of the date the maternity or paternity absence began. The
period after the first anniversary of such absence and its second anniversary is
neither a period of Service or separation. An Executive must furnish the
Administrator with such timely information as the Administrator may reasonably
require to establish that the absence is for a reason described herein.
          (4) Effective as of May 13, 1993, if an Executive who separates from
Service receives severance pay immediately after such separation from Service,
the period for which the Executive receives such severance pay shall be
considered part of the Executive’s Service.

18

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     21. “Supplemental Profit-Sharing Investment Plan” or “Supplemental PSIP”
shall mean the McKesson Corporation Supplemental Profit-Sharing Investment Plan
or any successor or replacement plan.
     22. “Termination Benefits” shall mean those benefits specified in
Section F.l.a.
     23. “Year of Service” shall mean a period of 365 aggregate days of Service
(including holidays, weekends, and other non-working days). A Year of Service is
measured beginning on the Executive’s first employment commencement date with
the Company. To determine the number of whole years of an Executive’s Service,
nonsuccessive periods of Service must be aggregated and less than whole year
periods of Service must be aggregated. However, both aggregation rules are
subject to the Break in Service and other rules, as set forth in the Retirement
Plan, and as applied at the discretion of the Plan Administrator.
O. SUCCESSORS
     This Plan shall be binding on the Company and any successors or assigns
thereto.
P. EXECUTION
     To record the amendment and restatement of the Plan by the Board of
Directors of McKesson Corporation at a meeting held on October 27, 2006.
McKESSON CORPORATION

         
By:
       
 
 
 
Paul E. Kirincic    
 
  Executive Vice President, Human Resources    

19

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McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX A
SAMPLE CALCULATION
EARLY RETIREMENT
Executive retires at age 59, three years early, with 25 Years of Service
Final Average Compensation: $600,000
Percentage of Final Average Compensation
specified under the Plan: 60% (20% + 1.77% for each of 25 years, capped at 60%)

              Income Objective        
 
  (60% x $600,000)   $ 360,000  
 
           
LESS:
  Early Retirement Reduction        
 
  (0.003 per month x 36 months = 10.8%)     (38,800 )
 
            Adjusted Objective     321,120  
 
           
LESS:
  Single Life Retirement Plan Benefit and        
 
  annuitized value of PSIP Retirement Share Plan Account     (38,000 )
 
         
 
            Annual Single Life EBRP Benefit   $ 283,120  

NOTE:   Retirement Plan benefits are governed by the terms of that plan, and
incorporate the appropriate reduction for early retirement. As intended, the
Plan provides a retirement income that, when added to income from the Retirement
Plan and the PSIP, if any, provides the executive with retirement income equal
to the adjusted objective.

A-1

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McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX B
SAMPLE CALCULATION
SURVIVOR BENEFIT

              Death age 57 with 20 Years of Service        
 
            Final Average Compensation:   $ 500,000  
 
            Percentage of Final Average Compensation         specified under the
Plan: 55.4% (20% + 1.77% for each of 20 years)        
 
            Income Objective        
 
  (55.4% % x $500,000)   $ 277,000  
 
           
LESS:
  Early Retirement Reduction        
 
  (0.003 per month x 60 months = 18%)     (49,860 )
 
         
 
           
Subtotal
      $ 227,140  
 
            Application of 100% J&S Factor     80 %
 
          Adjusted Objective   $ 181,712  
 
           
LESS:
  Retirement Plan Spouse Allowance and     (25,000 )
 
         
 
  annuitized value of PSIP Retirement Share Plan Account        
 
            Annual EBRP Survivor Benefit   $ 156,712  

NOTE:   As intended, the Plan Survivor Benefit provides a supplement to the
Retirement Plan and the PSIP so that the total of these sources of
Company-provided benefits equals the survivor’s adjusted income objective. This
method would apply even if the Retirement Plan Spouse Allowance were paid to a
minor child, and the Plan benefit were paid to the spouse.

B-1

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McKESSON CORPORATION
EXECUTIVE BENEFIT RETIREMENT PLAN
APPENDIX C
SAMPLE CALCULATION
TERMINATION BEFORE APPROVED RETIREMENT
Executive is hired at age 40 and terminates at age 50.

     
Final Average Compensation:
  $600,000
 
   
Percentage of Final Average
   
Compensation specified under the Plan:
  37.7% (20% + 1.77% for each of 10 years)
 
   
Pro Rata Percentage Applied:
  44.4% (Greater of 120 months/300 months and 4.44% x 10 years
 
   
Vested benefit at age 65:
  44.4% of 37.7% (or 16.74%) of Final Average Compensation, less the Executive’s
Basic
 
  Retirement Benefit.

The benefit payable at age 50 is equal to the present value of the benefit
payable at age 65, calculated using the GATT interest rate.

C-1