exv10w10



 






Exhibit 10.10




McKESSON CORPORATION




EXECUTIVE BENEFIT
RETIREMENT PLAN




(Amended and Restated as of October 28, 2004)





 









 





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
	 	 	3	 
	 
	 	 	 	 	 	 
	F.

	 	TERMINATION BEFORE APPROVED RETIREMENT
	 	 	5	 
	 
	 	 	 	 	 	 
	G.

	 	SPECIAL FORFEITURE AND REPAYMENT RULES
	 	 	7	 
	 
	 	 	 	 	 	 
	H.

	 	METHOD OF PAYMENT
	 	 	8	 
	 
	 	 	 	 	 	 
	I.

	 	SOURCE OF PAYMENT
	 	 	10	 
	 
	 	 	 	 	 	 
	J.

	 	MISCELLANEOUS
	 	 	10	 
	 
	 	 	 	 	 	 
	K.

	 	ADMINISTRATION OF THE PLAN
	 	 	11	 
	 
	 	 	 	 	 	 
	L.

	 	AMENDMENT OR TERMINATION OF THE PLAN
	 	 	11	 
	 
	 	 	 	 	 	 
	M.

	 	CLAIMS AND APPEALS
	 	 	12	 
	 
	 	 	 	 	 	 
	N.

	 	DEFINITIONS
	 	 	13	 
	 
	 	 	 	 	 	 
	O.

	 	SUCCESSORS
	 	 	16	 
	 
	 	 	 	 	 	 
	P.

	 	EXECUTION
	 	 	17	 
	 
	 	 	 	 	 	 
	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 28, 2004)




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 28, 2004, except as otherwise
indicated below.



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).



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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 terminates employment by reason of an Approved Retirement shall be entitled to
receive 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%



                      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%.




          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 with respect to any or all
Executives, each affected Executive who later terminates employment 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’s employment
with the Company terminates.




          d. Removal from Participation. If an Executive is removed from Plan participation and
later terminates employment 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.b 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 shall be determined by averaging over the
Executive’s period of participation in the Plan (and in the Executive Benefit




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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 commence on
the first day of the month following the date the Executive’s Service terminates.



     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. This 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.



     4. No Election of Delayed Retirement Benefit. An Executive may not elect to delay the
beginning of his or her retirement benefits under the Plan after the time for commencement
specified in Section D.2.



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.



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     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 terminated employment 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.




          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 by 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 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.




     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.



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F. TERMINATION BEFORE APPROVED RETIREMENT




     1. Basic Rule.



          a. Termination Benefits. Subject to other applicable provisions in this Plan, an
Executive who terminates employment with the Company other than on Approved Retirement or death
shall be entitled to receive, beginning at age 65, 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 later of age 65 or the date of
actual termination. See Appendix C for an example of this calculation.




          b. Plan Termination or Removal from Participation. An Executive who terminates
employment 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 prior to his or
her termination of employment (“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 termination of employment for purposes of
calculating the Executive’s Pro Rata Percentage and Average Final Compensation.




          c. Reduction for Subsequent Employer Benefits. 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 termination of
employment with the Company.




     2. Limitations. No benefits shall be paid under this Section F to:



          a. Termination for Cause. An Executive who is terminated for Cause. If the Executive
has a written employment agreement, Cause shall be determined in accordance with that agreement.
Otherwise, Cause shall be determined by the Administrator.




          b. Violation of Employment Agreement. An Executive who terminates employment in
violation of a written employment agreement (if any). Termination is in violation of an employment
agreement if termination occurs before the end of the term of that contract 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 termination
of employment 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
terminated 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 termination of employment with the Company) shall have no
vested interest in benefits under the Plan and upon termination of employment 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’s
employment was not terminated by the




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Company in violation of the Executive’s employment agreement or (2) if the Executive’s
employment was not terminated 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.



     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 at the time that the Executive terminates employment with
the Company, calculating all benefits 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.




          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 terminated employment 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.




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                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.




     5. Other Agreement. If an Executive’s written employment agreement with the Company
provides higher benefits on termination of employment 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 termination of employment 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 termination of employment 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
termination of the Executive’s employment.




          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




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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 information
contained therein, upon termination of employment, 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 termination of the Executive’s employment
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.



     2. Joint and Survivor Annuity. If the Executive is married at the time benefits
become payable, then, unless the Executive has elected otherwise (as described below), the



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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. With the approval of the
Administrator, 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 termination of
employment with the Company.




     3. Lump Sum Distribution. An Executive whose employment terminates by reason of an
Approved Retirement on or after June 1, 1997, 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 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 employment with the Company
does not terminate 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 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. 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.



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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 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. If any provision this amendment



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and restatement is deemed to be a “material modification” of this Plan which would cause
amounts deferred or accrued under this Plan prior to 2005 to be subject to the deferred
compensation provisions of section 885 of the American Jobs Creation Act of 2004, if such
legislation is enacted into law, such provision shall be null, void and without effect retroactive
to October 28, 2004.




     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 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. This Plan shall be treated as a plan covered by Section 301 of the
Retirement Equity Act for purposes of amendment and termination.



11









 





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 (the “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
shall be provided reasonable access to and copies of, all documents, records or other information
relevant to the appellant’s claim.




12









 








          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 termination of employment with the Company after
attainment of age 62; (ii) any involuntary termination of employment after both attainment of age
55 and completion of 15 Years of Service; or (iii) any other termination of employment 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 termination will be an
Approved Retirement. Such a determination by the Compensation Committee may occur at the time of
the Executive’s termination of employment with the Company or at any earlier time. Notwithstanding
the foregoing, if an Executive’s written



13









 





employment agreement so requires or if the Board so decides, the Board may, in its sole
discretion, grant an Approved Retirement at any earlier termination of employment either with or
without the reduction for early commencement of benefits in Section D.3.




          Notwithstanding the foregoing, “Approved Retirement” shall not include any termination for
“cause,” which shall be determined as provided in Section F.2.a. hereof.




     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 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 termination of
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.
Separation from Service occurs on the earlier of (i) the date on which the Executive quits,
retires, is discharged or dies, or (ii) he or she fails to return to work as determined at the
discretion of the Administrator.



14









 





     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.



     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 1984 Executive Benefit Retirement
Plan.



     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. “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.




15









 








          (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 terminates employment 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
termination 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.




     20. “Social Security Normal Retirement Age” shall mean age 65 in the case of an Executive
attaining age 62 before January 1, 2000, age 66 for an Executive attaining age 62 after December
31, 1999 and before January 1, 2017, and age 67 for an Executive attaining age 62 after December
31, 2016.



     21. “Supplemental Profit-Sharing Investment Plan” or “Supplemental PSIP” shall mean the
McKesson Corporation Supplemental Profit-Sharing Investment 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 (the “Anniversary 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.



16









 





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 28, 2004.



McKESSON CORPORATION




	 	 	 
	By:
	 	 
	

	 	 
	

	 	Paul E. Kirincic
	

	 	Executive Vice President, Human Resources






17









 






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









 






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
	 	 		
	 
	 	annuitized value of PSIP Retirement Share Plan Account	 	 	(25,000	)
	 
	 	 	 	 	 	 
	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.






A-2









 






McKESSON CORPORATION

EXECUTIVE BENEFIT RETIREMENT PLAN




APPENDIX C




SAMPLE CALCULATION

TERMINATION BEFORE APPROVED RETIREMENT




Executive is hired at age 40 and terminated 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.







C-1