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                                                                   Exhibit 10.1



                              MCKESSON CORPORATION

                   1999 STOCK OPTION AND RESTRICTED STOCK PLAN

                       (As Amended Through July 31, 2001)


        1. Establishment, Purpose and Definitions.

           (a) There is hereby adopted the McKesson Corporation 1999 Stock
Option and Restricted Stock Plan (the "Plan").

           (b) The purpose of this Plan is to provide a means whereby eligible
employees of McKesson Corporation (the "Company") and its affiliates may be
given an opportunity to purchase shares of the common stock ($0.01 par value) of
the Company (the "Stock") pursuant to options, which will not qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code, as
amended (the "Code"), and by providing participants with grants of restricted
shares of Stock ("Restricted Stock") in accordance with the terms and conditions
set forth herein.

        2. Stock Subject to the Plan.

           (a) The number of shares of Stock available for the grant of awards
hereunder shall be 32,700,000 (all such shares shall be subject to equitable
adjustment as provided herein). The maximum number of shares of Stock that may
be granted to any individual in the form of options during any plan year shall
not exceed 600,000; in each case, such maximum number shall be subject to
equitable adjustment as provided herein.

           As the Committee (as hereinafter defined) may determine from time to
time, the Stock may consist either in whole or in part of shares of authorized
but unissued Stock, or shares of authorized and issued Stock reacquired by the
Company and held in its treasury. If an option is surrendered for cash or for
any other reason (except surrender for shares of Stock) ceases to be exercisable
in whole or in part, the shares which were subject to such option but as to
which the option had not been exercised shall continue to be available for
grants of stock options under the Plan. If any shares of Stock underlying
Restricted Stock grants shall be reacquired by the Company pursuant to the
termination provisions described herein or in the instruments evidencing the
making of such Restricted Stock grants, such shares shall again be available for
grant of Restricted Stock awards under the Plan. Prior to the granting of
awards, the Company shall be under no obligation to reserve or retain in its
treasury any particular number of shares of Stock at any time, and no particular
shares of Stock, whether issued or held as treasury Stock, shall be identified
as being available for future awards under the Plan.

           (b) In the event that the Committee shall determine that any dividend
or other distribution (whether in the form of cash, stock, or other property),
recapitalization, stock split,


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reverse stock split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or share exchange, or other similar corporate
transaction or event, affects the Stock such that an adjustment is appropriate
in order to preserve (but not increase) the rights of participants under the
Plan, then the Committee shall make such equitable changes or adjustments as it
deems necessary or appropriate to any or all of (i) the number and kind of
shares which may thereafter be issued in connection with respect to both
Restricted Stock and option awards, (ii) the number and kind of shares issued in
respect of outstanding awards, and (iii) the exercise price relating to any
options.

        3. Eligibility.

           Persons who shall be eligible to have granted to them awards provided
for by the Plan shall be such key employees of the Company and its affiliates as
the Committee, in its sole discretion, shall designate from time to time.

        4. Administration of the Plan.

           (a) The Plan shall be administered by a committee (the "Committee")
consisting of not less than two directors of the Company to be appointed by the
Board each of whom a "non-employee director" within the meaning of Rule 16b-3
under the Exchange Act or such other committee as is established by the Board.

           (b) The Committee may from time to time determine which key employees
of the Company and its affiliates shall be granted awards under the Plan, the
terms thereof, and the number of shares covered by an option or the number of
shares of Restricted Stock to be granted.

           (c) The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan, to construe and
interpret the Plan, the rules and regulations, and the instruments evidencing
awards granted under the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan. All decisions,
determinations, and interpretations of the Committee shall be final and binding
on all participants and other interested parties.

        5. Stock Options and Stock Appreciation Rights.

           (a) The Option Price.

           The exercise price of each option shall not be less than the fair
market value of the Stock covered by such option on the date the option is
granted. Such fair market value shall, if the Stock is not listed or admitted to
trading on a stock exchange, be the mean between the lowest reported bid price
and highest reported asked price of the Stock on the date the option is granted
in the over-the-counter market, as reported by any publication of general
circulation selected by the Company which regularly reports the market price of
the Stock in such market, or, if the Stock is then listed or admitted to trading
on any stock exchange, the composite closing




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price on such day as reported in the Wall Street Journal. Such price shall be
subject to adjustment as provided in paragraph 2(b) hereof.

           (b) Terms and Conditions of Options.

               (i) Each option granted pursuant to the Plan shall be evidenced
by a written grant agreement (the "Agreement") executed by the Company and the
person to whom such option is granted which shall provide such terms and
conditions as the Committee may determine, in its sole discretion.

               (ii) Unless otherwise provided in the Agreement, the term of each
option shall be for no more than ten years and three months.

               (iii) The Agreement may contain such other terms, provisions, and
conditions as may be determined by the Committee (not inconsistent with this
Plan) including, without limitation, provisions relating to stock appreciation
rights ("SARs") with respect to options granted hereunder. Unless otherwise
provided in the Agreement, the Committee may, in its sole discretion, extend the
post-termination exercise period with respect to an option (but not beyond the
original term of such option).

               (iv) The Committee shall have the authority to accelerate the
exercisability of any outstanding option at such time and under such
circumstances as it, in its sole discretion, deems appropriate.

           (c) Stock Appreciation Rights.

           The Committee may, under such terms and conditions as it deems
appropriate, authorize the surrender by an optionee of all or part of an
unexercised option and authorize a payment in consideration thereof of an amount
equal to the difference obtained by subtracting the option price of the shares
then subject to exercise under such option from the fair market value of the
Stock represented by such shares on the date of surrender, provided that the
Committee determines that such settlement is consistent with the purpose of the
Plan. Such payment may be made in shares of Stock valued at their fair market
value on the date of surrender of such option or in cash, or partly in shares
and partly in cash. Acceptance of such surrender and the manner of payment shall
be in the discretion of the Committee. If an option is surrendered for cash, the
shares covered by the surrendered option will thereafter be available for grant
under the Plan to the extent permitted under Rule 16b-3 of the Exchange Act.

           (d) Use of Proceeds.

           Proceeds realized from the sale of Stock pursuant to options granted
under the Plan shall constitute general funds of the Company.

        6. Restricted Stock Awards.

           (a) Terms and Conditions.




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           Each Restricted Stock grant made pursuant to the Plan shall be
evidenced by an Agreement executed by the Company and the person to whom such
Restricted Stock is granted (the "Grantee"). Each Restricted Stock grant made
under the Plan shall, unless otherwise provided in the Agreement, contain the
following terms, conditions and restrictions and such additional terms,
conditions and restrictions as may be determined by the Committee.

           (b) Restrictions.

           Until the restrictions imposed on any Restricted Stock grant shall
lapse, shares of Stock granted to a participant pursuant to a Restricted Stock
grant:

               (i) Shall not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of, and

               (ii) Shall, if the Grantee's continuous employment with the
Company shall terminate for any reason, unless otherwise provided in the
Agreement, be returned to the Company forthwith, and all the rights of the
Grantee to such shares shall immediately terminate; provided that if the
Committee, in its sole discretion, shall within ninety (90) days of such
termination of employment, notify the participant in writing of its decision not
to terminate the Grantee's rights in such shares, then the Grantee shall
continue to be the owner of such shares subject to such continuing restrictions
as the Committee may prescribe in such notice. If the Grantee's interests in the
shares granted pursuant to a Restricted Stock grant shall be terminated, such
Grantee shall forthwith deliver or cause to be delivered to the Secretary of the
Company the certificate(s), if any, previously delivered to the Grantee for such
shares, accompanied by such endorsement(s) and/or instrument(s) of transfer as
may be required by the Secretary of the Company.

           (c) Lapse of Restrictions.

           Except as otherwise provided in the Plan or the Agreement, the
restrictions imposed on any Restricted Stock grant shall commence with the date
of the grant and continue during a period set by the Committee. Notwithstanding
the foregoing, the Committee may accelerate the lapsing of restrictions on a
Restricted Stock grant under such terms and conditions as it may deem
appropriate.

           (d) Restrictive Legend; Certificates May be Held in Custody.

           Each certificate evidencing shares granted pursuant to a Restricted
Stock grant may bear an appropriate legend referring to the terms, conditions
and restrictions described in the Plan and in the instrument evidencing the
Restricted Stock grant. Any attempt to dispose of such shares in contravention
of such terms, conditions and restrictions shall be invalid. The Committee may
enact rules which provide that the certificates evidencing such shares may be
held in custody by a bank or other institution, or that the Company may itself
hold such shares in custody, until restriction thereon shall have lapsed.




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           (e) Restrictions upon Making of Restricted Stock Grants.

           The registration or qualification under any federal or state law of
any shares to be granted pursuant to Restricted Stock grants or the resale or
other disposition of any such shares by or on behalf of the Grantees receiving
such shares may be necessary or desirable as a condition of or in connection
with such Restricted Stock grants, and, in any such event, if the Committee in
its sole discretion so determines, delivery of the certificates for such shares
shall not be made until such registration or qualification shall have been
completed.

        7. Change in Control.

           Upon a Change in Control (as hereinafter defined), then
notwithstanding anything herein to the contrary, all options granted under the
Plan that are outstanding at the time of such Change in Control shall become
immediately exercisable in full and all restrictions with respect to shares of
Restricted Stock shall lapse and such shares shall become fully vested and
exercisable.

           A "Change in Control" of the Company shall be deemed to have occurred
if any of the events set forth in any one of the following paragraphs shall
occur:

               (i) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act), excluding the Company or any of its affiliates, a
trustee or any fiduciary holding securities under an employee benefit plan of
the Company or any of its affiliates, an underwriter temporarily holding
securities pursuant to an offering of such securities or a company owned,
directly or indirectly, by stockholders of the Company in substantially the same
proportions as their ownership of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or

               (ii) During any period of not more than two consecutive years,
individuals who at the beginning of such period constitute the Board and any new
director (other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in clause (i),
(iii) or (iv) of this paragraph) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

               (iii) The shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into




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voting securities of the surviving entity), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or

               (iv) The shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

           Notwithstanding the foregoing, no Change in Control shall be deemed
to have occurred if there is consummated any transaction or series of integrated
transactions immediately following which the holders of the Stock immediately
prior to such transaction or series of transactions continue to have the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately prior to such transaction or series of
transactions.

        8. Amendment and Termination of the Plan.

           The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan. No suspension, termination, modification or amendment
of the Plan may adversely affect any award previously granted without the
written consent of the Grantee.

        9. Assignability.

           Each option award granted pursuant to this Plan shall, during the
participant's lifetime, be exercisable only by him. No award nor any right
thereunder shall be transferable by the participant by operation of law or
otherwise other than by will, the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined in the Code or the Employee
Retirement Income Security Act of 1974, as amended.

       10. Payment Upon Exercise.

           Payment of the purchase price upon exercise of any option granted
under this Plan shall be made in cash; provided that the Committee, in its sole
discretion, may permit an option holder to pay the option price, in whole or in
part, by tendering to the Company shares of Stock owned by the option holder,
and having a fair market value equal to the option price. The fair market value
of such Stock shall be determined by the Committee as it deems appropriate, or
as may be required in order to comply with any applicable law or regulation.

       11. Effective Date and Duration of the Plan.

           The Plan shall become effective upon its adoption by the Board of
Directors. Unless sooner terminated, the Plan shall remain in effect until
terminated by action of the Board,




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provided, however, that the duration of the Plan shall in no event exceed ten
years from the date of the adoption of the Plan by the Board. Termination of the
Plan shall not affect any awards previously granted pursuant thereto, which
shall remain in effect until their restrictions shall have lapsed (with respect
to Restricted Stock grants) or until exercised (with respect to option grants)
all in accordance with their terms.

       12. Agreement by Participant Regarding Withholding Taxes.

           If the Committee shall so require, as a condition of exercise of an
option or SAR or upon the lapsing of restrictions imposed on Restricted Stock
(each a "Tax Event"), each participant shall agree that no later than the date
of the Tax Event, the participant will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld upon the Tax Event.
Alternatively, the Committee may provide, in its sole discretion, that a
participant may elect, to the extent permitted or required by law, to have the
Company deduct federal, state and local taxes of any kind required by law to be
withheld upon the Tax Event from any payment of any kind due to the participant,
including withholding of Shares.

        13. Rights as a Shareholder.

           A participant granted an award hereunder or a transferee of an award
shall have no rights as a shareholder with respect to any shares covered by the
award until the date of the issuance of a stock certificate to him for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date such stock certificate is issued,
except as otherwise provided in the Plan.

        14. No Rights to Employment.

           Nothing in the Plan or in any award granted or Agreement entered into
pursuant hereto shall confer upon any participant the right to continue in the
employ of, or in an independent contractor relationship with, the Company or any
subsidiary or to be entitled to any remuneration or benefits not set forth in
the Plan or such Agreement or to interfere with or limit in any way the right of
the Company or any such subsidiary to terminate such participant's employment.
Awards granted under the Plan shall not be affected by any change in duties or
position of a participant as long as such participant continues to be employed
by, or, for awards granted prior to July 25, 2001, in a consultant relationship
with, the Company or any subsidiary.




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