Document:

exv10w2

Exhibit 10.2

CEO

FORM OF

McKESSON CORPORATION

STATEMENT OF TERMS AND CONDITIONS

APPLICABLE TO AWARDS MADE TO

THE CHIEF EXECUTIVE OFFICER

PURSUANT TO THE LONG-TERM INCENTIVE PLAN

     The following terms and conditions shall apply to awards made under the McKesson Corporation
Long-Term Incentive Plan on or after May 26, 2009 to a key executive of the Company (the
“Participant”). Capitalized terms used herein are defined in Section 7.

     1. Committee Action.

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

     2. Performance Measures.

     Any payment shall be contingent upon the Company’s performance during the Performance Period.
The final award shall be calculated by determining the percentage, determined with reference to the
Performance Chart (with interpolation), and then applying the result to the Participant’s Target
Award (the “Award”).

     The Committee reserves the right to reduce the individual payments determined according to the
above formula.

     Payment of the amount determined above, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the Committee’s
certification as set forth in Section 1, subject to forfeiture as provided in Section 3 below or
acceleration as provided in Section 4 below; provided, however, that the payment amount determined
above shall not be paid later than following the end of the calendar year in which the Performance
Period ends, unless as otherwise provided below.

     3. Effect of a Termination of Employment Prior to the End of the Performance Period on
the Award.

	 	(a)	 	Termination of Employment Due to Retirement, Death or Long-Term Disability;
Prior Completion of One Half of the Performance Period; Termination for Any Reason
Other Than Retirement, Death and Long-Term Disability Prior to Payment of the Final
Award

 

 

CEO

If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates prior to completion of one half of the Performance
Period, for any reason, or prior to the payment of the final award for any reason
other than Retirement, Long-Term Disability or death, the Participant’s interest in
the Target Award shall be forfeited and no amount shall be payable to the
Participant with respect to service during the Performance Period.

	 	(b)	 	Termination of Employment by Reason of Retirement, Death or Long-Term
Disability On or After Completion of One Half of the Performance Period
	 
	 	 	 	If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates, on or after completion of one half of the Performance
Period, due to Retirement, Long-Term Disability or death, the Participant (or the
Participant’s Beneficiary, if payment is made on account of the death of the
Participant) shall be entitled to receive the following as soon as reasonably
practicable after the end of the Performance Period, but prior to the end of the
calendar year in which the Performance Period ends:

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

     4. Effect of Change in Control.

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

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

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CEO

     5. Section 409A.

     It is the Company’s intent that the Awards under this Plan do not constitute deferred
compensation subject to section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”); however, if any and all amounts payable under this Plan in connection with a termination of
employment that constitute deferred compensation subject to Section 409A, as determined by the
Company in its reasonable judgment, the Participant is a “Specified Employee,” as defined in DCAP
III, and that would (but for this sentence) if paid within six months following such termination of
employment, cause a penalty tax to be imposed on such amounts under Section 409A, such amounts
shall instead be paid on the date that follows the date of such termination of employment by six
months or such longer time to avoid tax liabilities under Section 409A. For purposes of these
Statement of Terms and Conditions, “termination of employment” and similar iterations, shall have
the same meaning as “Separation from Service” as defined in DCAP III.

     6. Employment Agreement.

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

     7. Definitions.

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

	 	(a)	 	“Beneficiary” means the person, persons or entity designated by
a Participant in accordance with any procedures established by the Committee to
receive any amounts distributable under the Plan in the event of the death of
the Participant. If no Beneficiary is designated or if no designated
Beneficiary is living when a distribution is to be made, then the Beneficiary
shall be the Participant’s current lawful spouse if then living or, if not, the
Participant’s estate. A Participant may change or revoke a previous
designation of a Beneficiary at any time.
	 
	 	(b)	 	“Cause” means termination of the Participant’s employment with
the Corporation or an affiliate upon the Participant’s negligent or willful
engagement in misconduct which, in the sole determination of the Chief
Executive Officer (or his designee), is injurious to the Corporation, its
employees, or its customers.
	 
	 	(c)	 	“Change in Control” shall have the meaning set forth in Section
6 of the Plan.
	 
	 	(d)	 	“Committee” means the Compensation Committee of the Board of
Directors of the Company.

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CEO

	 	(e)	 	“Company” means McKesson Corporation, a Delaware corporation.
	 
	 	(f)	 	“DCAP III” means the McKesson Corporation Deferred Compensation
Administration Plan III, as amended from time to time.
	 
	 	(g)	 	“Good Reason” means any of the following actions, if taken
without the express written consent of the Participant:

	 	(i)	 	Any material change by the Company in the CEO’s
functions, duties or responsibilities as President and Chief Executive
Officer, which change would cause the CEO’s position with the Company
to become of less dignity, responsibility, importance, or scope as
compared to the position and attributes that applied to the CEO
immediately prior to the Change in Control, or an adverse change in the
CEO’s title, position or his obligation and right to report directly to
the Board;
	 
	 	(ii)	 	Any reduction in the CEO’s base annual salary,
MIP target or Long Term Incentive compensation (LTI) targets, which LTI
targets include cash awards with performance periods greater than one
year and equity based grants, except for reductions that are equivalent
to reductions applicable to executive officers of the Company;
	 
	 	(iii)	 	Any material failure by the Company to comply
with any of the provisions of an award (or of any employment agreement
between the parties) subsequent to a Change in Control;
	 
	 	(iv)	 	The Company’s requiring the CEO to be based at
any office or location more than 25 miles from the office at which the
CEO is based on the date immediately preceding the Change in Control,
except for travel reasonably required in the performance of the CEO’s
responsibilities;
	 
	 	(v)	 	Cancellation of the automatic renewal mechanism
set forth in the CEO’s Employment Agreement;
	 
	 	(vi)	 	If the Board removes the CEO as Chairman at or
after a Change in Control (or prior to a Change in Control if at the
request of any third party participating in or causing the Change in
Control), unless such removal is required by then-applicable law; or
	 
	 	(vii)	 	A change in the majority of the members of the
Board as it was construed immediately prior to the Change in Control.

provided that the Participant (A) has given written notice to the Board as
to the details of the basis for such Good Reason within thirty (30) days
following the date on which the Participant alleges the condition giving

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CEO

rise to such Good Reason initially occurs and the Company has failed to
provide a reasonable cure within thirty (30) business days after its receipt
of such notice and (B) Participant’s Separation from Service occurs within
ninety (90) days of the time in which the condition giving rise to such Good
Reason initially occurs.

	 	(h)	 	“Long-Term Disability” shall mean that an individual is
determined by the Social Security Administration to be totally disabled.
	 
	 	(i)	 	The “Performance Chart” shall be the performance measure(s) and
award scale(s), specified by the Committee at the time of making the award.
	 
	 	(j)	 	“Performance Period” is the period of time, identified by a
beginning and end date, specified by the Committee at the time of making the
award over which performance is measured.
	 
	 	(k)	 	“Plan” means the McKesson Corporation Long-Term Incentive Plan,
as amended from time to time.
	 
	 	(l)	 	“Retirement” means Approved Retirement in accordance with the
McKesson Executive Benefit Retirement Plan or having age plus service equal to
or greater than 65 and designation as a retiree by the Compensation Committee
of the Board.
	 
	 	(m)	 	“Target Award” means the amount specified by the Committee
payable to a participant for the Performance Period and payable for achievement
at 100%.

5

 

OFFICERS

FORM OF

McKESSON CORPORATION

STATEMENT OF TERMS AND CONDITIONS

APPLICABLE TO AWARDS MADE TO

CERTAIN OFFICERS

PURSUANT TO THE LONG-TERM INCENTIVE PLAN

     The following terms and conditions shall apply to awards made under the McKesson Corporation
Long-Term Incentive Plan on or after May 26, 2009 to a key executive of the Company (the
“Participant”). Capitalized terms used herein are defined in Section 7.

     1. Committee Action.

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

	2.	 	Performance Measures.

     Any payment shall be contingent upon the Company’s performance during the Performance Period.
The final award shall be calculated by determining the percentage, determined with reference to the
Performance Chart (with interpolation), and then applying the result to the Participant’s Target
Award (the “Award”).

     The Committee reserves the right to reduce the individual payments determined according to the
above formula.

     Payment of the amount determined above, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the Committee’s
certification as set forth in Section 1, subject to forfeiture as provided in Section 3 below or
acceleration as provided in Section 4 below; provided, however, that the payment amount determined
above shall not be paid later than following the end of the calendar year in which the Performance
Period ends, unless as otherwise provided below.

1

 

OFFICERS

     3. Effect of a Termination of Employment Prior to the End of the Performance Period on
the Award.

	 	(a)	 	Termination of Employment Due to Retirement, Death or Long-Term Disability;
Prior Completion of One Half of the Performance Period; Termination for Any Reason
Other Than Retirement, Death and Long-Term Disability Prior to Payment of the Final
Award
	 
	 	 	 	If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates prior to completion of one half of the Performance
Period, for any reason, or prior to the payment of the final award for any reason
other than Retirement, Long-Term Disability or death, the Participant’s interest in
the Target Award shall be forfeited and no amount shall be payable to the
Participant with respect to service during the Performance Period.
	 
	 	(b)	 	Termination of Employment by Reason of Retirement, Death or Long-Term
Disability On or After Completion of One Half of the Performance Period
	 
	 	 	 	If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates, on or after completion of one half of the Performance
Period, due to Retirement, Long-Term Disability or death, the Participant (or the
Participant’s Beneficiary, if payment is made on account of the death of the
Participant) shall be entitled to receive the following as soon as reasonably
practicable after the end of the Performance Period, but prior to the end of the
calendar year in which the Performance Period ends:

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

     4. Effect of Change in Control.

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

2

 

OFFICERS

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

     5. Section 409A.

     It is the Company’s intent that the Awards under this Plan do not constitute deferred
compensation subject to section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”); however, if any and all amounts payable under this Plan in connection with a termination of
employment that constitute deferred compensation subject to Section 409A, as determined by the
Company in its reasonable judgment, the Participant is a “Specified Employee,” as defined in DCAP
III, and that would (but for this sentence) if paid within six months following such termination of
employment, cause a penalty tax to be imposed on such amounts under Section 409A, such amounts
shall instead be paid on the date that follows the date of such termination of employment by six
months or such longer time to avoid tax liabilities under Section 409A. For purposes of these
Statement of Terms and Conditions, “termination of employment” and similar iterations, shall have
the same meaning as “Separation from Service” as defined in DCAP III.

     6. Employment Agreement.

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

     7. Definitions.

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

	 	(n)	 	“Beneficiary” means the person, persons or entity designated by
a Participant in accordance with any procedures established by the Committee to
receive any amounts distributable under the Plan in the event of the death of
the Participant. If no Beneficiary is designated or if no designated
Beneficiary is living when a distribution is to be made, then the Beneficiary
shall be the Participant’s current lawful spouse if then living or, if not, the
Participant’s estate. A Participant may change or revoke a previous
designation of a Beneficiary at any time.
	 
	 	(o)	 	“Cause” means termination of the Participant’s employment with
the Corporation or an affiliate upon the Participant’s negligent or willful
engagement in misconduct which, in the sole determination of the Chief
Executive Officer (or his designee), is injurious to the Corporation, its
employees, or its customers.

3

 

OFFICERS

	 	(p)	 	“Change in Control” shall have the meaning set forth in Section
6 of the Plan.
	 
	 	(q)	 	“Committee” means the Compensation Committee of the Board of
Directors of the Company.
	 
	 	(r)	 	“Company” means McKesson Corporation, a Delaware corporation.
	 
	 	(s)	 	“DCAP III” means the McKesson Corporation Deferred Compensation
Administration Plan III, as amended from time to time.
	 
	 	(t)	 	“Good Reason” means any of the following actions, if taken
without the express written consent of the Participant:

	 	(viii)	 	Any material adverse change by the Company in the Participant’s
authorities, duties, or responsibilities, which change would cause the
Participant’s position with the Company to become of less dignity,
responsibility, importance, or scope from the position and attributes
that applied to the Participant immediately prior to the Change in
Control;
	 
	 	(ix)	 	Any significant reduction in the Participant’s
base salary immediately prior to the Change in Control, other than a
reduction effected as part of an across-the-board reduction affecting
all Plan participants;
	 
	 	(x)	 	Any material failure by the Company to comply
with any of the provisions of an award (or of any employment agreement
between the parties) subsequent to a Change in Control;
	 
	 	(xi)	 	The Company’s requiring the Participant to be
based at any office or location more than 25 miles from the office at
which the Participant is based on the date immediately preceding the
Change in Control; or
	 
	 	(xii)	 	Any change in the person to whom the
Participant reports, as this relationship existed immediately prior to
a Change in Control.

	 	 	 	provided that the Participant (A) has given written notice to the Board as
to the details of the basis for such Good Reason within thirty (30) days
following the date on which the Participant alleges the condition giving
rise to such Good Reason initially occurs and the Company has failed to
provide a reasonable cure within thirty (30) business days after its receipt
of such notice and (B) Participant’s Separation from Service occurs within
ninety (90) days of the time in which the condition giving rise to such Good
Reason initially occurs.
	 
	 	(u)	 	“Long-Term Disability” shall mean that an individual is
determined by the Social Security Administration to be totally
disabled.

4

 

OFFICERS

	 
	 	(v)	 	The “Performance Chart” shall be the performance measure(s) and
award scale(s), specified by the Committee at the time of making the award.
	 
	 	(w)	 	“Performance Period” is the period of time, identified by a
beginning and end date, specified by the Committee at the time of making the
award over which performance is measured.
	 
	 	(x)	 	“Plan” means the McKesson Corporation Long-Term Incentive Plan,
as amended from time to time.
	 
	 	(y)	 	“Retirement” means Approved Retirement in accordance with the
McKesson Executive Benefit Retirement Plan or having age plus service equal to
or greater than 65 and designation as a retiree by the Compensation Committee
of the Board.
	 
	 	(z)	 	“Target Award” means the amount specified by the Committee
payable to a participant for the Performance Period and payable for achievement
at 100%.

5

 

EMPLOYEES

FORM OF

McKESSON CORPORATION

STATEMENT OF TERMS AND CONDITIONS

APPLICABLE TO AWARDS MADE TO

CERTAIN EMPLOYEES

PURSUANT TO THE LONG-TERM INCENTIVE PLAN

     The following terms and conditions shall apply to awards made under the McKesson Corporation
Long-Term Incentive Plan on or after May 26, 2009 to a key executive of the Company (the
“Participant”). Capitalized terms used herein are defined in Section 6.

     1. Committee Action.

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

	2.	 	Performance Measures.

     Any payment shall be contingent upon the Company’s performance during the Performance Period.
The final award shall be calculated by determining the percentage, determined with reference to the
Performance Chart (with interpolation), and then applying the result to the Participant’s Target
Award (the “Award”).

     The Committee reserves the right to reduce the individual payments determined according to the
above formula.

     Payment of the amount determined above, if any, shall be made in a lump sum as soon as
reasonably practicable following the end of the Performance Period and the Committee’s
certification as set forth in Section 1, subject to forfeiture as provided in Section 3 below or
acceleration as provided in Section 4 below; provided, however, that the payment amount determined
above shall not be paid later than following the end of the calendar year in which the Performance
Period ends, unless as otherwise provided below.

1

 

EMPLOYEES

     3. Effect of a Termination of Employment Prior to the End of the Performance Period on
the Award.

	 	(a)	 	Termination of Employment Due to Retirement, Death or Long-Term Disability;
Prior Completion of One Half of the Performance Period; Termination for Any Reason
Other Than Retirement, Death and Long-Term Disability Prior to Payment of the Final
Award
	 
	 	 	 	If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates prior to completion of one half of the Performance
Period, for any reason, or prior to the payment of the final award for any reason
other than Retirement, Long-Term Disability or death, the Participant’s interest in
the Target Award shall be forfeited and no amount shall be payable to the
Participant with respect to service during the Performance Period.
	 
	 	(b)	 	Termination of Employment by Reason of Retirement, Death or Long-Term
Disability On or After Completion of One Half of the Performance Period
	 
	 	 	 	If the Participant ceases to be a bona fide employee of the Company or of its
subsidiaries and affiliates, on or after completion of one half of the Performance
Period, due to Retirement, Long-Term Disability or death, the Participant (or the
Participant’s Beneficiary, if payment is made on account of the death of the
Participant) shall be entitled to receive the following as soon as reasonably
practicable after the end of the Performance Period, but prior to the end of the
calendar year in which the Performance Period ends:

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

     4. Effect of Change in Control.

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

2

 

EMPLOYEES

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

     5. Section 409A.

     It is the Company’s intent that the Awards under this Plan do not constitute deferred
compensation subject to section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”); however, if any and all amounts payable under this Plan in connection with a termination of
employment that constitute deferred compensation subject to Section 409A, as determined by the
Company in its reasonable judgment, the Participant is a “Specified Employee,” as defined in DCAP
III, and that would (but for this sentence) if paid within six months following such termination of
employment, cause a penalty tax to be imposed on such amounts under Section 409A, such amounts
shall instead be paid on the date that follows the date of such termination of employment by six
months or such longer time to avoid tax liabilities under Section 409A. For purposes of these
Statement of Terms and Conditions, “termination of employment” and similar iterations, shall have
the same meaning as “Separation from Service” as defined in DCAP III.

     6. Definitions.

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

	 	(a)	 	“Beneficiary” means the person, persons or entity designated by
a Participant in accordance with any procedures established by the Committee to
receive any amounts distributable under the Plan in the event of the death of
the Participant. If no Beneficiary is designated or if no designated
Beneficiary is living when a distribution is to be made, then the Beneficiary
shall be the Participant’s current lawful spouse if then living or, if not, the
Participant’s estate. A Participant may change or revoke a previous
designation of a Beneficiary at any time.
	 
	 	(b)	 	“Cause” means termination of the Participant’s employment with
the Corporation or an affiliate upon the Participant’s negligent or willful
engagement in misconduct which, in the sole determination of the Chief
Executive Officer (or his designee), is injurious to the Corporation, its
employees, or its customers.
	 
	 	(c)	 	“Change in Control” shall have the meaning set forth in Section
6 of the Plan.
	 
	 	(d)	 	“Committee” means the Compensation Committee of the Board of
Directors of the Company.

3

 

EMPLOYEES

	 	(e)	 	“Company” means McKesson Corporation, a Delaware corporation.
	 
	 	(f)	 	“DCAP III” means the McKesson Corporation Deferred Compensation
Administration Plan III, as amended from time to time.
	 
	 	(g)	 	“Good Reason” means any of the following actions, if taken
without the express written consent of the Participant:

	 	(i)	 	Any material adverse change by the Company in
the Participant’s authorities, duties, or responsibilities, which
change would cause the Participant’s position with the Company to
become of less dignity, responsibility, importance, or scope from the
position and attributes that applied to the Participant immediately
prior to the Change in Control;
	 
	 	(ii)	 	Any significant reduction in the Participant’s
base salary immediately prior to the Change in Control, other than a
reduction effected as part of an across-the-board reduction affecting
all Plan participants;
	 
	 	(iii)	 	Any material failure by the Company to comply
with any of the provisions of an award (or of any employment agreement
between the parties) subsequent to a Change in Control; or
	 
	 	(iv)	 	The Company’s requiring the Participant to be
based at any office or location more than 25 miles from the office at
which the Participant is based on the date immediately preceding the
Change in Control;

	 	 	 	provided that the Participant (A) has given written notice to the Board as
to the details of the basis for such Good Reason within thirty (30) days
following the date on which the Participant alleges the condition giving
rise to such Good Reason initially occurs and the Company has failed to
provide a reasonable cure within thirty (30) business days after its receipt
of such notice and (B) Participant’s Separation from Service occurs within
ninety (90) days of the time in which the condition giving rise to such Good
Reason initially occurs.
	 
	 	(h)	 	“Long-Term Disability” shall mean that an individual is
determined by the Social Security Administration to be totally disabled.
	 
	 	(i)	 	The “Performance Chart” shall be the performance measure(s) and
award scale(s), specified by the Committee at the time of making the award.
	 
	 	(j)	 	“Performance Period” is the period of time, identified by a
beginning and end date, specified by the Committee at the time of
making the award over which performance is measured.

4

 

EMPLOYEES

	 
	 	(k)	 	“Plan” means the McKesson Corporation Long-Term Incentive Plan,
as amended from time to time.
	 
	 	(l)	 	“Retirement” means Approved Retirement in accordance with the
McKesson Executive Benefit Retirement Plan or having age plus service equal to
or greater than 65 and designation as a retiree by the Compensation Committee
of the Board.
	 
	 	(m)	 	“Target Award” means the amount specified by the Committee
payable to a participant for the Performance Period and payable for achievement
at 100%.

5exv10w3

Exhibit 10.3

McKESSON CORPORATION

2005 MANAGEMENT INCENTIVE PLAN

Amended and Restated on April 21, 2010, Effective July 28, 2010

 

 

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	 	 	 	 	PAGE
	A.

	 	NAME; EFFECTIVE TIME
	 	1
	 
	 	 	 	
	B.

	 	PURPOSE
	 	1
	 
	 	 	 	 
	C.

	 	ADMINISTRATION
	 	1
	 
	 	 	 	 
	D.

	 	PARTICIPATION
	 	2
	 
	 	 	 	 
	E.

	 	INDIVIDUAL TARGET AWARDS FOR PARTICIPANTS
	 	2
	 
	 	 	 	 
	F.

	 	BASIS OF AWARDS
	 	3
	 
	 	 	 	
	G.

	 	AWARD DETERMINATION
	 	4
	 
	 	 	 	 
	H.

	 	PROCEDURES APPLICABLE TO COVERED EMPLOYEES
	 	4
	 
	 	 	 	 
	I.

	 	PAYMENT OF AWARDS
	 	5
	 
	 	 	 	 
	J.

	 	EMPLOYMENT ON PAYMENT DATE
	 	5
	 
	 	 	 	 
	K.

	 	CHANGE IN CONTROL
	 	6
	 
	 	 	 	 
	L.

	 	FORFEITURE
	 	6
	 
	 	 	 	 
	M.

	 	RECOUPMENT
	 	8
	 
	 	 	 	 
	N.

	 	WITHHOLDING TAXES
	 	8
	 
	 	 	 	 
	O.

	 	EMPLOYMENT RIGHTS
	 	8
	 
	 	 	 	 
	P.

	 	NONASSIGNMENT; PARTICIPANTS ARE GENERAL CREDITORS
	 	8
	 
	 	 	 	 
	Q.

	 	AMENDMENT OR TERMINATION
	 	8
	 
	 	 	 	 
	R.

	 	SUCCESSORS AND ASSIGNS
	 	9
	 
	 	 	 	 
	S.

	 	GOVERNING LAW
	 	9
	 
	 	 	 	 
	T.

	 	INTERPRETATION AND SEVERABILITY
	 	9
	 
	 	 	 	 
	U.

	 	DEFINITIONS
	 	9
	 
	 	 	 	 
	V.

	 	EXECUTION
	 	11
	 
	 	 	 	 

i.

 

McKESSON CORPORATION

2005 MANAGEMENT INCENTIVE PLAN

Amended and Restated on April 21, 2010, Effective July 28, 2010

A. NAME; EFFECTIVE TIME.

     The name of this plan is the McKesson Corporation 2005 Management Incentive Plan. The Plan
replaces in its entirety the Company’s 1989 Management Incentive Plan. On May 25, 2005, the Board
adopted the Plan, effective for fiscal years of the Company commencing on and after April 1, 2005,
with such adoption subject to stockholder approval, which was granted on July 27, 2005. The
Committee subsequently amended and restated the Plan on and effective October 27, 2006, amended and
restated the Plan on October 24, 2008, effective January 1, 2009, and amended and restated the Plan
on and effective April 20, 2010. The Board amended and restated the Plan on April 21, 2010,
effective as of July 28, 2010, subject to stockholder approval, which was granted and the Plan
became effective on July 28, 2010.

B. PURPOSE.

     The purpose of the Plan is to advance and promote the interests of the Company and its
stockholders by providing performance-based incentives to certain employees and to motivate those
employees to set and achieve above-average financial and non-financial objectives.

C. ADMINISTRATION.

     The Committee shall have full power and authority, subject to the provisions of the Plan,
(i) to designate employees as Participants for any Performance Period, (ii) to add and delete
employees, subject to the eligibility requirement set forth in paragraph D.1 below, from the list
of designated Participants, (iii) to establish Individual Target Awards for Participants, (iv) to
establish performance goals upon achievement of which the Individual Target Awards will be based,
and (v) to take all action in connection with the foregoing or in relation to the Plan as it deems
necessary or advisable. Decisions and selections of the Committee shall be made by a majority of
its members and, if made pursuant to the provisions of the Plan, shall be final.

     Notwithstanding the foregoing, the Committee may delegate to the Chief Executive Officer (the
“CEO”) the power and authority, subject to the provisions of the Plan, (i) to designate employees
who are not members of the Officer Group as Participants, (ii) to recommend members of the Officer
Group to the Committee for designation as Participants; provided that the Committee shall review
and approve members of the Officer Group as Participants recommended by the CEO, (iii) to add and
delete employees who are not members of the Officer Group, subject to the eligibility requirement
set forth in paragraph D.1 below, from the list of designated Participants, (iv) to establish
Individual Target Awards for Participants who are not members of the Officer Group, (v) to
establish

1

 

performance goals upon achievement of which such Individual Target Awards will be based, and
(vi) to review and approve, modify or disapprove, or otherwise adjust or determine the amount, if
any, to be paid to Participants who are not members of the Officer Group for the applicable
Performance Period based on such Participants’ performance goals and individual performance. In
addition to the forgoing, the CEO may further delegate his authority to other executive offices of
the Company, except that the CEO may not delegate his authority to recommend members of the Officer
Group to the Committee for designation as Participants. References to the Committee herein shall
include references to the CEO and his designees to the extent that the Committee has delegated
power and authority under the Plan to the CEO and to the extent that the CEO has further delegated
power and authority under the Plan to other executive officers of the Company.

     The Committee may promulgate such rules and regulations as it deems necessary for the proper
administration of the Plan and the CEO (but not his designees) may promulgate rules and regulations
as he deems necessary for the proper administration of the Plan with respect to Participants who
are not members of the Officer Group. The Committee may interpret the provisions and supervise the
administration of the Plan, and take all action in connection therewith or in relation to the Plan
as it deems necessary or advisable. The interpretation and construction by the Committee of any
provision of the Plan or of any award shall be final.

D. PARTICIPATION.

     1. Eligibility—Executives, Managers and Professionals

     Only active employees of the Company who are employed in an executive, managerial or
professional capacity may be designated as Participants under the Plan.

     2. Designation of Participants

     No person shall be entitled to any award under the Plan for any Performance Period unless he
or she is so designated as a Participant for that Performance Period.

E. INDIVIDUAL TARGET AWARDS FOR PARTICIPANTS.

     At the beginning of each Performance Period, the Committee shall establish an Individual
Target Award for each Participant. An Individual Target Award shall only be a target and the
amount of the target may or may not be paid to the Participant. Establishment of an Individual
Target Award for an employee for any Performance Period shall not imply or require that an
Individual Target Award or an Individual Target Award at any specified level will be set for any
subsequent year. The amount of any actual award paid to any Participant may be greater or less
than this target. As set forth in paragraph G.4 below (but subject to the limitations applicable
to Covered Employees contained in Article H), the actual award may be as much as three times target
or as low as zero for any Performance Period. The Individual Target Award may be established for
a Participant by name, job level, position or any other similar identifier.

2

 

F. BASIS OF AWARDS.

     1. Performance Goals

     The Committee shall establish measures, which may include financial and non-financial
objectives (“Performance Goals”) for each segment of the Company. These Performance Goals shall be
determined by the Committee in advance of each Performance Period or within such period as may be
permitted by the regulations issued under Section 162(m), and to the extent that awards are paid to
Covered Employees, the performance criteria to be used shall be any of the following, either alone
or in any combination, which may be expressed with respect to the Company or one or more operating
units or groups, as the Committee may determine: cash flow; cash flow from operations; total
earnings; earnings per share, diluted or basic; earnings per share from continuing operations,
diluted or basic; earnings before interest and taxes; earnings before interest, taxes,
depreciation, and amortization; earnings from operations; net asset turnover; inventory turnover;
capital expenditures; net earnings; operating earnings; gross or operating margin; debt; working
capital; return on equity; return on net assets; return on total assets; return on investment;
return on capital; return on committed capital; return on invested capital; return on sales; net or
gross sales; market share; economic value added; cost of capital; change in assets; expense
reduction levels; debt reduction; productivity; stock price; customer satisfaction; employee
satisfaction; total shareholder return; average invested capital; credit rating; gross margin;
improvement in workforce diversity; operating expenses; operating expenses as a percentage of
revenue; and succession plan development and implementation.

     2. Adjustment Of Performance Goals

     The Committee may determine Performance Goals on an absolute basis or relative to internal
goals or relative to levels attained in prior years or related to other companies or indices or as
ratios expressing relationships between two or more Performance Goals. In addition, Performance
Goals may be based upon the attainment of specified levels of Company performance criteria under
one or more of the measures described above relative to the performance of other corporations or a
designated comparison group. The Committee shall specify the manner of adjustment of any
Performance Goal to the extent necessary to prevent dilution or enlargement of any award as a
result of extraordinary events or circumstances, as determined by the Committee, or to exclude the
effects of extraordinary, unusual, or non-recurring items; changes in applicable laws, regulations,
or accounting principles; currency fluctuations; discontinued operations; non-cash items, such as
amortization, depreciation, or reserves; asset impairment; or any recapitalization, restructuring,
reorganization, merger, acquisition, divestiture, consolidation, spin-off, split-up, combination,
liquidation, dissolution, sale of assets, or other similar corporate transaction.

     3. Performance Goals Related To More Than One Segment Of The Company

     Awards may be based on performance against objectives for more than one segment of the
Company. For example, awards for corporate management may be based on overall

3

 

corporate performance against objectives, but awards for a unit’s management may be based on a
combination of corporate, unit and sub-unit performance against objectives.

     4. Performance Period; Individual Performance

     The Committee shall specify the Performance Period over which period Performance Goals will be
measured and determined.

     Subject to the limitations set forth in Article H below, individual performance of each
Participant may be measured and used in determining awards under the Plan.

G. AWARD DETERMINATION.

     1. Award Determined By Committee

     After any Performance Period for which an Individual Target Award is established for a
Participant under the Plan, the Committee shall review and approve, modify or disapprove the
amount, if any, to be paid to the Participant for the Performance Period. The amount paid shall be
the Individual Target Award adjusted to reflect both the results against the Participant’s
Performance Goals and the Participant’s individual performance. Subject to Article H, all awards
are subject to adjustment at the sole discretion of the Committee.

     2. Financial And Non-Financial Performance

     Individual Target Award amounts will be modified based on the achievement of financial and
non-financial objectives by the Company and relevant units and/or sub-units. Performance results
against objectives shall be reviewed and approved by the Committee in accordance with paragraph F.2
above, as applicable.

     3. Individual Performance

     Any Individual Target Award, adjusted to reflect financial performance, may be further
adjusted with the review and approval of the Committee to give full weight to the Participant’s
individual performance during the Performance Period.

     4. Overall Effect

     Subject to Article H, the combination of any financial performance adjustment and individual
performance adjustment may increase the amount paid under the Plan to a Participant for any
Performance Period to as much as three times the Individual Target Award, and may reduce any amount
payable to zero.

H. PROCEDURES APPLICABLE TO COVERED EMPLOYEES.

     Awards under the Plan to Participants who are Covered Employees shall be subject to
pre-established Performance Goals as set forth in this Article H. Notwithstanding the provisions
of paragraph G.3 above, the Committee shall not have discretion to modify the terms of awards to
such Participants except as specifically set forth in this Article H.

4

 

     At the beginning of a Performance Period, the Committee shall establish Individual Target
Awards for such of the Participants who may be Covered Employees, payment of which shall be
conditioned upon satisfaction of specific Performance Goals for the Performance Period established
by the Committee in writing in advance of the Performance Period, or within such period as
applicable regulations under Section 162(m) may permit to qualify payments to be
“performance-based”. The Performance Goals established by the Committee shall be based on one or
more of the criteria set forth in paragraph F.1 above. The extent, if any, to which an award will
be payable will be based upon the degree of achievement of the Performance Goals in accordance with
a pre-established objective formula or standard as determined by the Committee. The application of
the objective formula or standard to the Individual Target Award will determine whether the Covered
Employee’s award for the Performance Period is greater than, equal to or less than the
Participant’s Individual Target Award. To the extent that the minimum Performance Goals are
satisfied or surpassed, and upon written certification by the Committee that the Performance Goals
have been satisfied to a particular extent, payment of the award shall be made as soon as
reasonably practicable after the Payment Date in accordance with the objective formula or standard
applied to the Individual Target Award unless the Committee determines, in its sole discretion, to
reduce or eliminate the payment to be made.

     Notwithstanding any other provision of the Plan, the maximum award payable to any Participant
who is a Covered Employee for any fiscal year of the Company shall not exceed $6,000,000.

I. PAYMENT OF AWARDS.

     An award under the Plan shall be paid in a single sum to the Participant as soon as reasonably
practicable after Payment Date, unless the Participant elects to defer his or her award pursuant to
the terms and conditions of the Company’s Deferred Compensation Administration Plan III
(“DCAP III”) and in compliance with Section 409A of the Code. To the extent that an award is not
deferred under DCAP III, such award shall be paid no later than the end of the period under which
payment would be deemed to be a “short-term deferral” as defined in the regulations under Section
409A of the Code.

J. EMPLOYMENT ON PAYMENT DATE.

     No award shall be made to any Participant who is not an active employee of the Company on the
Payment Date; provided, however, that the Committee, in its sole and absolute discretion, may make
pro-rata awards to Participants in circumstances that the Committee deems appropriate in its
discretion, including, but not limited to, a Participant’s death, disability, retirement or other
termination of employment prior to the Payment Date. Any such pro-rated awards shall be determined
by the Committee in accordance with Article G above after taking into account the portion of the
Performance Period completed. Notwithstanding the foregoing, any pro-rata award that the Committee
in its sole and absolute discretion, may make to a Covered Employee upon a circumstance that is not
death, disability or a Change in Control, shall be based on the attainment of the pre-established
Performance Goals designated for the applicable performance period under Article H above.

5

 

K. CHANGE IN CONTROL.

     In the event of a Change in Control, the Company or any successor or surviving corporation
shall pay to each Participant an award for the Performance Period in which the Change in Control
occurs and for any previous Performance Period for which awards have been earned but not yet paid;
provided, however, any awards for any previous Performance Period paid to a Covered Employee shall
be based on the attainment of the pre-established Performance Goals designated for the applicable
performance period under Article H above. Subject to the employment requirements of Article J,
each such award shall be equal to the greatest of the following: (i) the Participant’s Individual
Target Award for the applicable Performance Period; (ii) the Participant’s Individual Target Award
for the applicable Performance Period adjusted based on the actual performance outcome for that
Performance Period, provided, that the Committee may not invoke its discretionary authority to
reduce the amount of such an award; or (iii) the average of awards earned and paid to (or deferred
by) the Participant in the three (or such fewer number of years that the Participant has been
eligible for such an award) completed Performance Periods immediately preceding the applicable
Performance Period. Such awards shall be paid by the Company or any successor or surviving
corporation at such time as the awards otherwise would be payable under the Plan; provided,
however, that if a Participant is terminated without Cause or terminates for Good Reason within
twelve months after a Change in Control, then such Participant shall be paid his or her awards
determined under this Article K, within thirty days of such termination. Notwithstanding the
foregoing, any award determined pursuant to this Article K shall be reduced by any corresponding
award payable under a Participant’s individual written employment agreement, if any.

L. FORFEITURE.

     Any other provision of the Plan to the contrary notwithstanding, if the Committee determines
that a Participant has engaged in any of the actions described below, then upon written notice from
the Company to the Participant (i) the Participant shall not be eligible for any award for the year
in which such notice is given or for the preceding year, if such award has not been paid as of the
date of the notice, (ii) any payment of an award received by the Participant within twelve months
prior to the date that the Company discovered that the Participant engaged in any action described
below shall immediately be repaid to the Company by the Participant in cash (including amounts
withheld pursuant to Article M) and (iii) any award deferred pursuant to Article I within twelve
months prior to the date that the Company discovered that the Participant engaged in any action
described below shall be forfeited immediately and shall not be distributed to the Participant
under any circumstances.

     The consequences described above shall apply if the Participant, either before or after
termination of employment with the Company:

	 	1.	 	Discloses to others, or takes or uses for his or her own purpose or the purpose
of others, any trade secrets, confidential information, knowledge, data or know-how or
any other proprietary information or intellectual property belonging to the Company and
obtained by the Participant during the term of

6

 

	 	 	 	his or her employment, whether or not they are the Participant’s work product.
Examples of such confidential information or trade secrets include, without
limitation, 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
Participant knows or has reason to know that the Company intends or expects secrecy
to be maintained; or
	 
	 	2.	 	Fails to promptly return all documents and other tangible items belonging to
the Company in the Participant’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 retirement or otherwise; or
	 
	 	3.	 	Fails to provide the Company with at least thirty (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 Participant’s employment with the
Company; or
	 
	 	4.	 	Fails to inform any new employer, before accepting employment, of the terms of
this Article L and of the Participant’s continuing obligation to maintain the
confidentiality of the trade secrets and other confidential information belonging to
the Company and obtained by the Participant during the term of his or her employment
with the Company; or
	 
	 	5.	 	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 Participant or any third party;
or
	 
	 	6.	 	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; or
	 
	 	7.	 	Directly or indirectly engages in, becomes employed by, or renders services,
advice or assistance to any business in competition with the Company, at any time
during the twelve months following termination of employment with the Company.

     The Committee shall determine in its sole discretion whether the Participant has engaged in
any of the acts set forth in subsections 1 through 7 above, and its determination shall be
conclusive and binding on all interested persons.

7

 

     Any provision of this Article L which is determined by a court of competent jurisdiction to be
invalid or unenforceable should 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
Article L.

M. RECOUPMENT.

     Individual Target Awards, and payments made under such awards, are subject to the
Corporation’s Compensation Recoupment Policy, which was first adopted by the Corporation on January
20, 2010, as amended from time to time, and which is hereby incorporated by reference into this
Plan.

N. WITHHOLDING TAXES.

     Whenever the payment of an award is made, such payment shall be net of an amount sufficient to
satisfy federal, state and local income and employment tax withholding requirements and authorized
deductions.

O. EMPLOYMENT RIGHTS.

     Neither the Plan nor designation as a Plan Participant shall be deemed to give any individual
a right to remain employed by the Company. The Company reserves the right to terminate the
employment of any employee at any time, with or without cause or for no cause, subject only to the
requirements of a written employment contract (if any).

P. NONASSIGNMENT; PARTICIPANTS ARE GENERAL CREDITORS.

     The interest of any Participant under the Plan shall not be assignable either by voluntary or
involuntary assignment or by operation of law (except by designation of a beneficiary or
beneficiaries to the extent allowed under DCAP III or a successor plan with respect to amounts
deferred under Article I) and any attempted assignment shall be null, void and of no effect.

     Amounts paid under the Plan shall be paid from the general funds of the Company, and each
Participant shall be no more than an unsecured general creditor of the Company with no special or
prior right to any assets of the Company for payment of any obligations hereunder. Nothing
contained in the Plan shall be deemed to create a trust of any kind for the benefit of any
Participant, or create any fiduciary relationship between the Company and any Participant with
respect to any assets of the Company.

Q. AMENDMENT OR TERMINATION.

     The Board of Directors may terminate or suspend the Plan at any time. The Committee may amend
the Plan at any time; provided that (i) to extent required under Section 162(m), the Plan will not
be amended without prior approval of the Company’s stockholders, and (ii) no amendment shall
retroactively and adversely affect the payment of any award previously made. Notwithstanding the
foregoing, no amendment adopted

8

 

following the occurrence of a Change in Control shall be effective if it (a) would reduce a
Participant’s Individual Target Award for the Performance Period in which the Change in Control
occurs, (b) would reduce an award payable to a Participant based on the achievement of Performance
Goals in the Performance Period before the Performance Period in which the Change in Control
occurs, or (c) modify the provisions of this Article P.

R. SUCCESSORS AND ASSIGNS.

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

S. GOVERNING LAW.

     The law of the State of Delaware shall govern all question concerning the construction,
validity and interpretation of the Plan, without regard to the state’s conflict of laws rules.

T. INTERPRETATION AND SEVERABILITY.

     The Plan is intended to comply with Section 162(m), and all provisions contained herein shall
be construed and interpreted in a manner to so comply. In case any one or more of the provisions
contained in the Plan shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision of
the Plan, but the Plan shall be construed as if such invalid, illegal or unenforceable provisions
had never been contained herein.

U. DEFINITIONS.

     1. “Cause”

     “Cause” shall mean termination of the Participant’s employment upon the Participant’s willful
engagement in misconduct which is demonstrably and materially injurious to the Company. No act, or
failure to act, on the part of the Participant shall be considered “willful” unless done, or
omitted to be done, by the Participant not in good faith and without reasonable belief that the
Participant’s action or omission was in the best interest of the Company.

     2. “Change in Control”

     A “Change in Control” shall mean the occurrence of any change in ownership of the Company,
change in effective control of the Company, or change in the ownership of a substantial portion of
the assets of the Company, as defined in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of
1986, as amended, the regulations thereunder, and any other published interpretive authority, as
issued or amended from time to time.

     3. “Code”

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

9

 

     4. “Committee”

     “Committee” shall mean the Compensation Committee of the Board of Directors of McKesson
Corporation; provided, however, that the Committee shall consist solely of two or more “outside
directors”, in conformance with Section 162(m) of the Code.

     5. “Company”

     “Company” shall mean McKesson Corporation, a Delaware corporation, including its subsidiaries
and affiliates.

     6. “Covered Employee”

     “Covered Employee” shall mean an eligible Participant designated by the Committee who is, or
is expected to be, a “covered employee” within the meaning of Section 162(m) for the Performance
Period in which an award is payable hereunder.

     7. “Good Reason”

     “Good Reason” shall mean any of the following actions, if taken without the express written
consent of the Participant:

	 	a.	 	any material change by the Company in the functions, duties, or
responsibilities of the Participant, which change would cause such
Participant’s position with the Company to become of less dignity,
responsibility, importance, or scope from the position and attributes that
applied to the Participant immediately prior to the Change in Control;
	 
	 	b.	 	any reduction in the Participant’s base salary;
	 
	 	c.	 	any material failure by the Company to comply with any of the
provisions of any employment agreement between the Company and the Participant;
	 
	 	d.	 	the requirement by the Company that the Participant be based at
any office or location more than 25 miles from the office at which the
Participant is based on the date immediately preceding the Change in Control,
except for travel reasonably required in the performance of the Participant’s
responsibilities and commensurate with the amount of travel required of the
Participant prior to the Change in Control; or
	 
	 	e.	 	any failure by the Company to obtain the express assumption of
this Plan by any successor or assign of the Company.

10

 

     8. “Individual Target Award”

     “Individual Target Award” shall mean the target award established for each Participant under
Article E, which shall be a percentage of the Participant’s base salary or a fixed dollar amount,
as determined by the Committee.

     9. “Officer Group”

     “Officer Group” shall mean the Covered Employees and any other officer of the Company
designated as part of the Officer Group by the Committee.

     10. “Participants”

     “Participants” shall mean those employees specifically designated as Participants for a
Performance Period under Article D.

     11. “Payment Date”

     “Payment Date” shall mean the date following the conclusion of a Performance Period on which
the Committee certifies that applicable Performance Goals have been satisfied and authorizes
payment of corresponding awards.

     12. “Performance Goals”

     “Performance Goals” shall have the meaning set forth in Article F hereof.

     13. “Performance Period”

     “Performance Period” shall mean the time period over which Performance Goals of the Company
are measured, as the Committee determines in its discretion; provided that if the Committee does
not designate a time period, then the Performance Period shall mean the fiscal year of the Company.

     14. “Plan”

     “Plan” shall mean the McKesson Corporation 2005 Management Incentive Plan, as amended from
time to time.

     15. “Section 162(m)”

     “Section 162(m)” shall mean Section 162(m) of the Code and regulations promulgated thereunder,
as may be amended from time to time.

V. EXECUTION.

     This amended and restated 2005 Management Incentive Plan was adopted by the Board on April 21,
2010, , subject to stockholder approval, which was granted and this amended and restated 2005
Management Incentive Plan became effective on July 28, 2010.

11

 

	 	 	 	 	 
	 	McKESSON CORPORATION

 	 
	 	By:  	/s/ Jorge L. Figueredo
 	 
	 	 	Jorge L. Figueredo 	 
	 	 	Executive Vice President, Human Resources 	 
	 

12

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