Document:

exv4w14

EXHIBIT 4.14

 

 

GUARANTEE AGREEMENT

BETWEEN

CITIZENS REPUBLIC BANCORP, INC.

AS GUARANTOR

AND

[__________]

AS GUARANTEE TRUSTEE

RELATING TO

CITIZENS FUNDING TRUST [____]

DATED AS OF [_______________], 20[___]

 

 

 

 

CITIZENS FUNDING TRUST [____]

CERTAIN SECTIONS OF THIS GUARANTEE AGREEMENT RELATING TO

SECTIONS 310 THROUGH 318 OF THE

TRUST INDENTURE ACT OF 1939

	 	 	 
	SECTION OF	 	SECTION OF
	TRUST INDENTURE ACT	 	GUARANTEE AGREEMENT
	310(a)
	 	4.1(a)

	(b)
	 	4.1(c), 2.8

	(c)
	 	Inapplicable

	311(a)
	 	2.2(b)

	(b)
	 	2.2(b)

	(c)
	 	Inapplicable

	312(a)
	 	2.2(a)

	(b)
	 	2.2(b)

	313
	 	2.3

	314(a)
	 	2.4

	(b)
	 	Inapplicable

	(c)
	 	2.5

	(d)
	 	Inapplicable

	(e)
	 	1.1, 2.5, 3.2

	(f)
	 	2.1, 3.2

	315(a)
	 	3.1(d)

	(b)
	 	2.7

	(c)
	 	3.1(c)

	(d)
	 	3.1(d)

	316(a)
	 	1.1, 2.6, 5.4

	(b)
	 	5.3, 5.7

	(c)
	 	8.2

	317(a)
	 	Inapplicable

	(b)
	 	Inapplicable

	318(a)
	 	2.1(b)

	(b)
	 	2.1

	(c)
	 	2.1(a)

 

			
	Note:	 	This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement and shall not affect the

interpretation of any of its terms or provisions.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I
	 	INTERPRETATION AND DEFINITIONS	 	 	1	 
	Section 1.1
	 	Interpretation	 	 	1	 
	Section 1.2
	 	Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	TRUST INDENTURE ACT	 	 	5	 
	Section 2.1
	 	Trust Indenture Act; Application	 	 	5	 
	Section 2.2
	 	List of Holders	 	 	5	 
	Section 2.3
	 	Reports by the Guarantee Trustee	 	 	5	 
	Section 2.4
	 	Periodic Reports to the Guarantee Trustee	 	 	5	 
	Section 2.5
	 	Evidence of Compliance with Conditions Precedent	 	 	6	 
	Section 2.6
	 	Events of Default; Waiver	 	 	6	 
	Section 2.7
	 	Events of Default; Notice	 	 	6	 
	Section 2.8
	 	Conflicting Interests	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE	 	 	6	 
	Section 3.1
	 	Powers and Duties of the Guarantee Trustee	 	 	6	 
	Section 3.2
	 	Certain Rights of Guarantee Trustee	 	 	8	 
	Section 3.3
	 	Compensation; Indemnity; Fees	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	GUARANTEE TRUSTEE	 	 	10	 
	Section 4.1
	 	Guarantee Trustee; Eligibility	 	 	10	 
	Section 4.2
	 	Appointment, Removal and Resignation of the Guarantee Trustee	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	GUARANTEE	 	 	11	 
	Section 5.1
	 	Guarantee	 	 	11	 
	Section 5.2
	 	Waiver of Notice and Demand	 	 	11	 
	Section 5.3
	 	Obligations Not Affected	 	 	11	 
	Section 5.4
	 	Rights of Holders	 	 	12	 
	Section 5.5
	 	Guarantee of Payment	 	 	12	 
	Section 5.6
	 	Subrogation	 	 	12	 
	Section 5.7
	 	Independent Obligations	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	COVENANTS AND SUBORDINATION	 	 	13	 
	Section 6.1
	 	Subordination	 	 	13	 
	Section 6.2
	 	Pari Passu Guarantees	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 	TERMINATION	 	 	13	 
	Section 7.1
	 	Termination	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	MISCELLANEOUS	 	 	13	 
	Section 8.1
	 	Successors and Assigns	 	 	13	 
	Section 8.2
	 	Amendments	 	 	14	 

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	 	 	 	 	Page
	 
	 	 	 	 	 	 
	Section 8.3
	 	Notices	 	 	14	 
	Section 8.4
	 	Benefit	 	 	15	 
	Section 8.5
	 	Governing Law	 	 	15	 
	Section 8.6
	 	Counterparts	 	 	15	 

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     THIS GUARANTEE AGREEMENT, dated as of [_______________], 20[___], is executed and delivered by
CITIZENS REPUBLIC BANCORP, INC., a Michigan corporation (the “Guarantor”) having its principal
office at 328 S. Saginaw Street, Flint, Michigan 48502, and [__________], a [__________], as
trustee (the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to
time of the Capital Securities (as defined herein) of CITIZENS FUNDING TRUST [____], a Delaware
statutory trust (the “Issuer Trust”).

WITNESSETH:

     WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of [_______________],
20[___] (the “Trust Agreement”), among the Guarantor, as Depositor, the Property Trustee, the
Delaware Trustee and the Administrative Trustees named therein and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer Trust, the Issuer Trust is issuing $[*]
aggregate Liquidation Amount (as defined in the Trust Agreement) of its [*]% Enhanced Trust
Preferred Securities, Liquidation Amount $25 per Capital Security (the “Capital Securities”),
representing preferred undivided beneficial interests in the assets of the Issuer Trust and having
the terms set forth in the Trust Agreement;

     WHEREAS, the Capital Securities will be issued by the Issuer Trust and the proceeds thereof,
together with the proceeds from the issuance of the Issuer Trust’s Common Securities (as defined
below), will be used to purchase the Junior Subordinated Debentures (as defined in the Trust
Agreement) of the Guarantor which will be deposited with [__________], as Property Trustee under
the Trust Agreement, as trust assets;

     WHEREAS, as an incentive for the Holders to purchase the Capital Securities, the Guarantor
irrevocably and unconditionally agrees, to the extent set forth herein, to pay to the Holders of
the Capital Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase by each Holder of Capital Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement to provide as follows for the benefit of the Holders from time to
time of the Capital Securities:

ARTICLE I

INTERPRETATION AND DEFINITIONS

Section 1.1 Interpretation. In this Guarantee Agreement, unless the context otherwise
requires:

     (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.2;

     (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout;

 

 

     (c) all references to “the Guarantee Agreement” or “this Guarantee Agreement” are to this
Guarantee Agreement as modified, supplemented or amended from time to time;

     (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and
Sections of this Guarantee Agreement unless otherwise specified;

     (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee
Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise
requires;

     (f) a reference to the singular includes the plural and vice-versa; and

     (g) the masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.

Section 1.2 Definitions. As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings:

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person; provided,
however, that the Issuer Trust shall not be deemed to be an Affiliate of the Guarantor. For the
purposes of this definition, “control,” when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     “Board of Directors” means either the board of directors of the Guarantor or any committee of
that board duly authorized to act hereunder.

     “Common Securities” means the securities representing common undivided beneficial interests in
the assets of the Issuer Trust.

     “Event of Default” means a default by the Guarantor on any of its payment or other obligations
under this Guarantee Agreement; provided, however, that, except with respect to a default in
payment of any Guarantee Payments, the Guarantor shall have received notice of default and shall
not have cured such default within 30 days after receipt of such notice.

     “Guarantee Payments” means the following payments or distributions, without duplication, with
respect to the Capital Securities, to the extent not paid or made by or on behalf of the Issuer
Trust: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) required to
be paid on the Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the “Redemption Price”), with respect to any Capital
Securities called for redemption by the Issuer Trust, to the extent the Issuer Trust shall have
funds on hand available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding up or liquidation of the Issuer Trust, unless Junior Subordinated Debentures
are distributed to the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $25
per Capital Security plus accumulated and unpaid Distributions on

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the Capital Securities to the date of payment to the extent that the Issuer Trust shall have
funds available therefor at such time and (b) the amount of assets of the Issuer Trust remaining
available for distribution to Holders in liquidation of the Issuer Trust (in either case, the
“Liquidation Distribution”).

     “Guarantee Trustee” means [__________], until a Successor Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Guarantee Agreement, and thereafter
means each such Successor Guarantee Trustee.

     “Holder” means any holder, as registered on the books and records of the Issuer Trust, of any
Capital Securities; provided, however, that in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice, consent or waiver hereunder,
“Holder” shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.

     “Indenture” means the Indenture dated as of [_______________], 20[___], between the Guarantor and
[__________], as trustee, as supplemented and amended from time to time.

     “Junior Subordinated Debt” has the meaning specified in the Indenture.

     “List of Holders” has the meaning specified in Section 2.2(a).

     “Majority in Liquidation Amount of the Capital Securities” means, except as provided by the
Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the
Liquidation Amount of all then outstanding Capital Securities issued by the Issuer Trust.

     “Officers’ Certificate” means, with respect to any Person, a certificate signed by the
Chairman or a Vice Chairman of the Board of Directors of such Person or the President or a Vice
President of such Person, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers’
Certificate delivered with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:

     (a) a statement that each officer signing the Officers’ Certificate has read the covenant or
condition and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or investigation undertaken
by each officer in rendering the Officers’ Certificate;

     (c) a statement that each officer has made such examination or investigation as, in such
officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and

     (d) a statement as to whether, in the opinion of each officer, such condition or covenant has
been complied with.

     “Person” means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated

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association, or government or any agency or political subdivision thereof, or any other entity
of whatever nature.

     “Responsible Officer” means, with respect to the Guarantee Trustee, any Managing Director, any
Director, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Associate, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer
or any other officer of the Corporate Trust Department of the Guarantee Trustee and also means,
with respect to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer’s knowledge of and familiarity with the particular subject.

     “Senior Indebtedness” means the principal, premium (if any) and interest (including interest
accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the
Guarantor, whether or not such claim for post-petition interest is allowed in such proceeding) on
and of all indebtedness and obligations (other than the Capital Securities, but including any
debentures, notes or other evidence of indebtedness issued under the Indenture) of, or guaranteed
or assumed by, the Guarantor that (i) are for borrowed money (ii) are evidenced by bonds,
debentures, notes or other similar instruments, (iii) represent obligations to policyholders of
insurance or investment contracts, (iv) represent a reimbursement obligation with respect to a
letter of credit, banker’s acceptance or similar facility, or (v) represent the deferred purchase
price of property or services, in each case, whether outstanding on the date of issuance of the
Capital Securities or thereafter created, incurred, assumed or guaranteed, and all amendments,
renewals, extensions, modifications and refundings of such indebtedness and obligations, unless in
any such case the instrument by which such indebtedness or obligations are created, incurred,
assumed or guaranteed by the Guarantor, or are otherwise evidenced, provides that they are
subordinated, or are not superior, in right of payment to the Securities; provided, however, that
Senior Indebtedness shall not include, as applicable:

          (1) any obligation of the Guarantor to any Subsidiary of the Guarantor,

          (2) any liability for Federal, state, local or other taxes owed or owing by the Guarantor or
any Subsidiary of the Guarantor,

          (3) any accounts payable or other liability to trade creditors (including guarantees thereof
or instruments evidencing such liabilities)

          (4) any obligations with respect to any capital stock of the Guarantor, or

          (5) any indebtedness which by its terms is expressly made equal in rank and payment with or
subordinated to the Securities;

     provided further, that if any Senior Indebtedness is disallowed, avoided or subordinated
pursuant to the provisions of Section 548 of Title 11 of the United States Code or any applicable
state fraudulent conveyance law, such Senior Indebtedness nevertheless will constitute Senior
Indebtedness.

     “Successor Guarantee Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.1.

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     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

     Capitalized or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date hereof.

ARTICLE II

TRUST INDENTURE ACT

Section 2.1 Trust Indenture Act; Application.

     (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by
such provisions.

     (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act
through the operation of Section 318(c) thereof, such imposed duties shall control. If any
provision of this Guarantee Agreement modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to apply to this
Guarantee Agreement as so modified or to be excluded, as the case may be.

Section 2.2 List of Holders.

     (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (i)
semiannually, on or before June 30 and December 31 of each year, commencing December 31, 20[___], a
list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of
the Holders (the “List of Holders”) as of a date not more than 15 days prior to the delivery
thereof, and (ii) at such other times as the Guarantee Trustee may request in writing, within 30
days after the receipt by the Guarantor of any such request, a List of Holders as of a date not
more than 15 days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

     (b) The Guarantee Trustee shall comply with its obligations under Section 311(a), Section
311(b) and Section 312(b) of the Trust Indenture Act.

Section 2.3 Reports by the Guarantee Trustee. Not later than 60 days after May 15 of each
year, commencing May 15, 20[___], the Guarantee Trustee shall provide to the Holders such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with
the requirements of Section 313(d) of the Trust Indenture Act. The Guarantor will notify the
Guarantee Trustee if and when any Capital Securities are listed on any stock exchange and of any
delisting thereof.

Section 2.4 Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the
Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents,

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reports and information, if any, as required by Section 314 of the Trust Indenture Act and the
compliance certificate required by Section 314 of the Trust Indenture Act, in the form, in the
manner and at the times required by Section 314 of the Trust Indenture Act.

Section 2.5 Evidence of Compliance with Conditions Precedent. The Guarantor shall provide
to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any,
provided for in this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer of
the Guarantor pursuant to Section 314(c)(1) may be given in the form of an Officers’ Certificate.

Section 2.6 Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of
the Capital Securities may, by vote, on behalf of the Holders, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.

Section 2.7 Events of Default; Notice.

     (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders, notices of all Events of Default
known to the Guarantee Trustee, unless such defaults have been cured before the giving of such
notice, provided, that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long as the Board of
Directors, the executive committee or a trust committee of directors and/or Responsible Officers of
the Guarantee Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

     (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless
the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice, of such Event of
Default.

Section 2.8 Conflicting Interests. The Trust Agreement and the Indenture shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

ARTICLE III

POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

Section 3.1 Powers and Duties of the Guarantee Trustee.

     (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the
Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except
a Holder exercising his or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee
Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, upon acceptance by such Successor

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Guarantee Trustee of its appointment hereunder, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

     (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce
this Guarantee Agreement for the benefit of the Holders.

     (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing
of all Events of Default that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

     (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee
Trustee from liability for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:

          (i) prior to the occurrence of any Event of Default and after the curing or waiving of all
such Events of Default that may have occurred:

          (A) the duties and obligations of the Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and

          (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
Trustee may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof or of the Trust Indenture Act
are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;

          (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by
a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;

          (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and

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          (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it.

Section 3.2 Certain Rights of Guarantee Trustee.

     (a) Subject to the provisions of Section 3.1:

          (i) The Guarantee Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.

          (ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officers’ Certificate unless otherwise prescribed herein.

          (iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking, suffering or omitting to
take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an
Officers’ Certificate which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.

          (iv) The Guarantee Trustee may consult with legal counsel of its selection, and the advice or
opinion of such legal counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion. Such legal counsel may be
legal counsel to the Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent jurisdiction.

          (v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security and indemnity reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys’ fees and
expenses) and liabilities that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement.

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          (vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

          (vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through its agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.

          (viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders,
(B) may refrain from enforcing such remedy or right or taking such other action until such
instructions are received, and (C) shall be protected in acting in accordance with such
instructions.

     (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation
on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.

Section 3.3 Compensation; Indemnity; Fees. The Guarantor agrees:

     (a) to pay to the Guarantee Trustee from time to time such compensation as shall be agreed in
writing for all services rendered by it hereunder (which compensation shall not be limited by any
provisions of law in regard to the compensation of a trustee of an express trust);

     (b) except as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable expenses, disbursements and advances incurred or made by the Guarantee
Trustee in accordance with any provision of this Guarantee Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad faith; and

     (c) to indemnify the Guarantee Trustee and its directors, officers, agents and employees for,
and to hold it harmless against, any and all loss, liability, damage, claim or expense, including
taxes, incurred without negligence or bad faith on the part of the Guarantee Trustee, arising out
of or in connection with the acceptance or administration of this Guarantee Agreement, including
the costs and expenses of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Guarantee Trustee will not
claim or exact any lien or charge on any Guarantee Payments as a result of any amount due to it
under this Guarantee Agreement;

9

 

     (d) in no event shall the Guarantee Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Guarantee Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action;

     (e) the rights, privileges, protections, immunities and benefits given to the Guarantee
Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Guarantee Trustee in each of its capacities hereunder, and each agent,
custodian and other Person employed to act hereunder; and

     (f) the Guarantee Trustee may request that the Guarantor deliver a certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture.

     The provisions of this Section 3.3 shall survive the termination of this Guarantee Agreement
or the earlier resignation or removal of the Guarantee Trustee.

ARTICLE IV

GUARANTEE TRUSTEE

Section 4.1 Guarantee Trustee; Eligibility.

     (a) There shall at all times be a Guarantee Trustee which shall:

          (i) not be an Affiliate of the Guarantor; and

          (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published.

     (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section
4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).

     (c) If the Guarantee Trustee has or shall acquire any “conflicting interest” within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee.

     (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause
at any time by the Guarantor.

10

 

     (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

     (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee
Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor
and the resigning Guarantee Trustee.

     (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery of an instrument of resignation or
removal, the Guarantee Trustee resigning or being removed may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.

ARTICLE V

GUARANTEE

Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer Trust may have or assert, except the defense of payment. The
Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.

Section 5.2 Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance
of this Guarantee Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Guarantee Trustee, the
Issuer Trust or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

Section 5.3 Obligations Not Affected. The obligations, covenants, agreements and duties of
the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the performance or observance
by the Issuer Trust of any express or implied agreement, covenant, term or condition relating to
the Capital Securities to be performed or observed by the Issuer Trust;

     (b) the extension of time for the payment by the Issuer Trust of all or any portion of the
Distributions (other than an extension of time for payment of Distributions that results from the
extension of any interest payment period on the Junior Subordinated Debentures as provided

11

 

in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Capital Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce,
assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the Issuer Trust granting indulgence
or extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the
Issuer Trust or any of the assets of the Issuer Trust;

     (e) any invalidity of, or defect or deficiency in, the Capital Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or

     (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor (other than payment of the underlying obligation), it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.

Section 5.4 Rights of Holders. The Guarantor expressly acknowledges that: (i) this
Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of
the Holders; (iii) the Holders of a Majority in Liquidation Amount of the Capital Securities have
the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against the Guarantee Trustee,
the Issuer Trust or any other Person.

Section 5.5 Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment
and not of collection. This Guarantee Agreement will not be discharged except by payment of the
Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer Trust) or
upon distribution of Junior Subordinated Debentures to Holders as provided in the Trust Agreement.

Section 5.6 Subrogation. The Guarantor shall be subrogated to all rights (if any) of the
Holders against the Issuer Trust in respect of any amounts paid to the Holders by the Guarantor
under this Guarantee Agreement and shall have the right to waive payment by the Issuer Trust
pursuant to Section 5.1; provided, however, that the Guarantor shall not (except to the extent

12

 

required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts
are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.

Section 5.7 Independent Obligations. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.

ARTICLE VI

COVENANTS AND SUBORDINATION

Section 6.1 Subordination. The obligations of the Guarantor under this Guarantee Agreement
will constitute unsecured obligations of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Indebtedness of the Guarantor. The obligations of the Guarantor
under this Guarantee Agreement do not constitute Senior Indebtedness.

Section 6.2 Pari Passu Guarantees. The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with the obligations of the Guarantor under any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred or capital securities
issued by any Citizens Trust (as defined in the Indenture).

ARTICLE VII

TERMINATION

Section 7.1 Termination. This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Capital Securities, (ii) the
distribution of Junior Subordinated Debentures to the Holders in exchange for all of the Capital
Securities or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any time any Holder must
restore payment of any sums paid with respect to Capital Securities or this Guarantee Agreement.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Successors and Assigns. All guarantees and agreements contained in this
Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that
is permitted under Article VIII of the Indenture and pursuant to which the successor or

13

 

assignee agrees in writing to perform the Guarantor’s obligations hereunder, the Guarantor shall
not assign its obligations hereunder.

Section 8.2 Amendments. Except with respect to any changes which do not adversely affect
the rights of the Holders in any material respect (in which case no consent of the Holders will be
required), this Guarantee Agreement may only be amended with the prior approval of the Holders of
not less than a Majority in Liquidation Amount of the Capital Securities. The provisions of Article
VI of the Trust Agreement concerning meetings of the Holders shall apply to the giving of such
approval.

Section 8.3 Notices. Any notice, request or other communication required or permitted to
be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:

     (a) if given to the Guarantor, to the address set forth below or such other address, facsimile
number or to the attention of such other Person as the Guarantor may give notice to the Holders:

Citizens Republic Bancorp, Inc.

328 South Saginaw Street

Flint, Michigan 48502

Facsimile No.: (810) 768-4725

Attention: Thomas W. Gallagher

     (b) if given to the Issuer Trust, in care of the Guarantee Trustee, at the Issuer Trust’s (and
the Guarantee Trustee’s) address set forth below or such other address as the Guarantee Trustee on
behalf of the Issuer Trust may give notice to the Holders:

Citizens Funding Trust [___]

c/o Citizens Republic Bancorp, Inc.

328 South Saginaw Street

Flint, Michigan 48502

Facsimile No.: (810) 768-4725

Attention: Thomas W. Gallagher

with a copy to:

[__________]

[__________]

[__________]

Facsimile No.: [(___) ___-_______]

Attn: [__________]

     (c) if given to any Holder, at the address set forth on the books and records of the Issuer
Trust.

14

 

     All notices hereunder shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or
other document is refused delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

Section 8.4 Benefit. This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.

Section 8.5 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 8.6 Counterparts. This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS.]

15

 

     IN WITNESS WHEREOF, the undersigned have executed this Guarantee Agreement as of the date
first above written.

	 	 	 	 	 
	 	CITIZENS REPUBLIC BANCORP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[____________],

as Guarantee Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

16exv10w1

Table of Contents

Exhibit 10.1

MCKESSON CORPORATION

2005 STOCK PLAN

As
amended through July 22, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. PURPOSE
	 	 	1	 
	 
	 	 	 	 
	2. EFFECTIVE DATE
	 	 	1	 
	 
	 	 	 	 
	3. ADMINISTRATION
	 	 	1	 
	 
	 	 	 	 
	4. ELIGIBILITY
	 	 	2	 
	 
	 	 	 	 
	5. STOCK
	 	 	3	 
	 
	 	 	 	 
	6. OPTIONS
	 	 	3	 
	 
	 	 	 	 
	7. STOCK APPRECIATION RIGHTS
	 	 	5	 
	 
	 	 	 	 
	8. RESTRICTED STOCK
	 	 	7	 
	 
	 	 	 	 
	9. RESTRICTED STOCK UNITS
	 	 	8	 
	 
	 	 	 	 
	10. OUTSIDE DIRECTOR AWARDS
	 	 	9	 
	 
	 	 	 	 
	11. PERFORMANCE SHARES
	 	 	10	 
	 
	 	 	 	 
	12. OTHER SHARE-BASED AWARDS
	 	 	11	 
	 
	 	 	 	 
	13. PERFORMANCE OBJECTIVES
	 	 	12	 
	 
	 	 	 	 
	14. ACCELERATION OF VESTING AND EXERCISABILITY
	 	 	13	 
	 
	 	 	 	 
	15. CHANGE IN CONTROL
	 	 	13	 
	 
	 	 	 	 
	16. RECAPITALIZATION
	 	 	14	 
	 
	 	 	 	 
	17. TERM OF PLAN
	 	 	14	 
	 
	 	 	 	 
	18. SECURITIES LAW REQUIREMENTS AND LIMITATION OF RIGHTS
	 	 	14	 
	 
	 	 	 	 
	19. AWARDS IN FOREIGN COUNTRIES
	 	 	15	 
	 
	 	 	 	 
	20. BENEFICIARY DESIGNATION
	 	 	15	 
	 
	 	 	 	 
	21. AMENDMENT OF THE PLAN
	 	 	15	 
	 
	 	 	 	 
	22. NO AUTHORITY TO REPRICE
	 	 	16	 
	 
	 	 	 	 
	23. USE OF PROCEEDS FROM STOCK
	 	 	16	 
	 
	 	 	 	 
	24. NO OBLIGATION TO EXERCISE OPTION OR STOCK APPRECIATION RIGHT
	 	 	16	 
	 
	 	 	 	 
	25. APPROVAL OF STOCKHOLDERS
	 	 	16	 
	 
	 	 	 	 
	26. GOVERNING LAW
	 	 	16	 
	 
	 	 	 	 
	27. INTERPRETATION
	 	 	16	 
	 
	 	 	 	 
	28. WITHHOLDING TAXES
	 	 	17	 
	 
	 	 	 	 
	29. DEFINITIONS
	 	 	17	 
	 
	 	 	 	 
	30. EXECUTION
	 	 	20	 

i

Table of Contents

1. PURPOSE.

     This McKesson Corporation 2005 Stock Plan is intended to provide Employees and Directors the
opportunity to receive equity-based, long-term incentives so that the Corporation may effectively
attract and retain the best available personnel, promote the success of the Corporation by
motivating Employees and Directors to superior performance, and align Employee and Director
interests with those of the Corporation’s stockholders.

2. EFFECTIVE DATE.

     This Plan was initially adopted by the Board on May 25, 2005, subject to stockholder approval,
which was granted on July 25, 2005. On October 27, 2006, the Board retroactively amended and
restated the Plan to comply with proposed regulations issued under Code section 409A. On May 23,
2007, the Plan was amended by the Board to increase the share reserve by 15,000,000 Shares, with
such amendment subject to stockholder approval, which was granted on July 25, 2007. On July 23,
2008, the Board approved an amendment and restatement of the Plan regarding the timing of the
distribution of Shares underlying grants of Restricted Stock Unit Awards to Outside Directors. On
May 26, 2009, the Compensation Committee of the Board approved an amendment of the Plan regarding
the circumstances under which a merger or consolidation involving the
Corporation would constitute a
Change in Control. On May 27, 2009, the Board amended and restated the Plan to increase the share
reserve by 14,500,000 Shares, with such amendment and restatement subject to stockholder approval,
which was granted on July 22, 2009.

3. ADMINISTRATION.

     (a) Administration with respect to Outside Directors.

     With respect to Awards to Outside Directors, the Plan shall be administered by (A) the Board
or (B) the Committee on Directors and Corporate Governance of the Board; provided that such
committee consists solely of Directors who qualify as “non-employee directors” for purposes of Rule
16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, all Awards made to
members of the Committee on Directors and Corporate Governance shall be approved by the Board.

     (b) Administration with respect to Employees.

     With respect to Awards to Employees, the Plan shall be administered by (A) the Board, (B) the
Compensation Committee of the Board; provided that such committee consists solely of Directors who
qualify as “outside directors” for purposes of Code section 162(m) and “non-employee directors” for
purposes of Rule 16b-3 promulgated under the Exchange Act, or (C) in limited situations, by an
officer or officers of Corporation pursuant to Section 3(c) below.

     (c) Delegation of Authority to an Officer of the Corporation.

          (i) The Board may delegate to a Director the authority to administer the Plan with respect to
Awards made to Employees who are not subject to Section 16 of the Exchange Act.

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          (ii) The Board may delegate to an officer or officers of the Corporation the authority to
administer the Plan with respect to Options granted to Employees who are not subject to Section 16
of the Exchange Act.

     (d) Powers of the Administrator.

     The Administrator shall from time to time at its discretion make determinations with respect
to Employees and Directors who shall be granted Awards, the number of Shares or Share Equivalents
to be subject to each Award, the vesting of Awards, the designation of Options as Incentive Stock
Options or Nonstatutory Stock Options and other conditions of Awards to Employees and Directors.

     The Administrator shall have the full power and authority, in its sole discretion, to
promulgate any rules and regulations which it deems necessary for the proper administration of the
Plan, to supervise the administration of the Plan, to make factual determinations relevant to Plan
entitlements, to adopt subplans applicable to specified Affiliates or locations and to take all
actions in connection with the administration of the Plan as it deems necessary or advisable.

     The Administrator shall have, subject to the terms and conditions and within the limitations
of Plan, including the limitations of Section 22, the authority to modify, extend or renew
outstanding Awards granted to Employees and Directors under the Plan in a manner that will not
cause the Awards that are exempt from the application of Code section 409A to be subject to Code
section 409A pursuant to such modification, extension or renewal. Notwithstanding the foregoing,
however, no modification of an Award shall, without the consent of the Participant, impair any
Award previously granted under the Plan.

     The interpretation and construction by the Administrator of any provisions of the Plan or of
any Award shall be final. No member of a Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Award.

4. ELIGIBILITY.

     Subject to the terms and conditions set forth below, Awards may be granted to Employees and
Directors. Notwithstanding the foregoing, only employees of the Corporation and its Subsidiaries
may be granted Incentive Stock Options.

     (a) Ten Percent Stockholders.

     An Employee who owns more than 10% of the total combined voting power of all classes of
outstanding stock of the Corporation, its parent or any of its Subsidiaries is not eligible to
receive an Incentive Stock Option pursuant to this Plan unless the Exercise Price of the Incentive
Stock Option is at least 110% of the Fair Market Value of the underlying Shares on the date of the
grant and the term of the option does not exceed five years. For purposes of this Section 4(a) the
stock ownership of an Employee shall be determined pursuant to Code section 424(d).

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     (b) Number of Awards.

     A Participant may receive more than one Award, including Awards of the same type, but only on
the terms and subject to the restrictions set forth in the Plan. Subject to adjustment as provided
in Section 16, the maximum aggregate number of Shares or Share Equivalents that may be subject to
Full Value Awards granted to a Participant in any fiscal year of the Corporation is 500,000 Shares
or Share Equivalents and the maximum number of Shares or Share Equivalents that may be subject to
Options or Stock Appreciation Rights granted to a Participant in any fiscal year of the Corporation
is 1,000,000 Shares or Share Equivalents.

5. STOCK.

     (a) Share Reserve.

     Subject to adjustment as provided in Section 16, the aggregate number of Shares subject to
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares or
Other Share-Based Awards issued under this Plan shall not exceed 42,500,000 Shares, which Shares
shall be Shares of the Corporation’s authorized but unissued or reacquired Common Stock bought on
the market or otherwise. If any outstanding Option or Stock Appreciation Right under the Plan for
any reason expires or is terminated or any Restricted Stock or Other Share-Based Award is
forfeited, then the Shares allocable to the unexercised portion of such Option or Stock
Appreciation Right or the forfeited Restricted Stock or Other Share-Based Award may again be
available for issuance under the Plan. The following Shares may not again be made available for
issuance under the Plan: Shares not issued or delivered as a result of the net exercise of a Stock
Appreciation Right or Option; Shares used to pay the withholding taxes related to an Award; or
Shares repurchased on the open market with the proceeds of an Exercise Price.

     (b) Limitation.

     Notwithstanding any other provision of Section 5, for any one Share issued in connection with
a Full Value Award or a stock-settled Stock Appreciation Right, that Share and one additional Share
shall no longer be available for issuance in connection with future Awards.

6. OPTIONS.

     Options granted to Employees and Directors pursuant to the Plan shall be evidenced by written
Option Agreements in such form as the Administrator shall determine. Options shall be designated
as Incentive Stock Options or Nonstatutory Stock Options and shall be subject to the following
terms and conditions:

     (a) Number of Shares.

     Each Option shall state the number of Shares to which it pertains, which shall be subject to
adjustment in accordance with Section 16.

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     (b) Exercise Price.

     Each Option shall state the Exercise Price, determined by the Administrator, which shall not
be less than 100% the Fair Market Value of a Share on the date of grant, except as provided in
Section 16.

     (c) Method of Payment.

     An Option may be exercised, in whole or in part, by giving notice of exercise in the manner
prescribed by the Corporation specifying the number of Shares to be purchased. Such notice shall
be accompanied by payment in full of the Exercise Price in cash or, if acceptable to the
Administrator in its sole discretion (i) in Shares already owned by the Participant (including,
without limitation, by attestation to the ownership of such Shares), (ii) by the withholding and
surrender of the Shares subject to the Option, or (iii) by delivery (on a form prescribed by the
Administrator) of an irrevocable direction to a securities broker approved by the Administrator to
sell Shares and to deliver all or part of the sales proceeds to the Corporation in payment of all
or part of the purchase price and any withholding taxes. Payment may also be made in any other
form approved by the Administrator, consistent with applicable law, regulations and rules.

     (d) Term and Exercise of Options.

     Each Option shall state the time or times when it may become exercisable. No Option shall be
exercisable after the expiration of seven years from the date it is granted.

     (e) Limitations on Transferability.

     An Option shall, during a Participant’s lifetime, be exercisable only by the Participant. No
Option or any right granted thereunder shall be transferable by the Participant by operation of law
or otherwise, other than by will, the laws of descent and distribution. Notwithstanding the
foregoing, (i) a Participant may designate a beneficiary to succeed, after the Participant’s death,
to all of the Participant’s Options outstanding on the date of death; (ii) a Nonstatutory Stock
Option or any right granted thereunder may be transferable pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement Income Security Act;
and (iii) any Participant, who is a senior executive officer recommended by the Chief Executive
Officer and approved by the Administrator may voluntarily transfer any Nonstatutory Stock Option to
a Family Member as a gift or through a transfer to an entity in which more than 50% of the voting
interests are owned by Family Members (or the Participant) in exchange for an interest in that
entity. In the event of any attempt by a Participant to alienate, assign, pledge, hypothecate, or
otherwise dispose of an Option or of any right thereunder, except as provided herein, or in the
event of the levy of any attachment, execution, or similar process upon the rights or interest
hereby conferred, the Corporation at its election may terminate the affected Option by notice to
the Participant and the Option shall thereupon become null and void.

     (f) Termination of Employment.

     Each Option Agreement shall set forth the extent to which the Participant shall have the right
to exercise the Option following termination of the Participant’s employment or service with the
Corporation and its Affiliates. Such provisions shall be determined in the sole

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discretion of the Administrator, need not be uniform among all Options issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination of employment. Unless
otherwise provided in Section 3(d) and the Option Agreement, the Administrator 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).

     (g) Rights as a Stockholder.

     A Participant or a transferee of a Participant shall have no rights as a stockholder with
respect to any Shares covered by his or her Option until the date of issuance of such Shares.
Except as provided in Section 16, no adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such Shares are issued.

     (h) Limitation of Incentive Stock Option Awards.

     If and to the extent that the aggregate Fair Market Value (determined as of the date the
Option is granted) of the Shares with respect to which any Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year under this Plan and all other plans
maintained by the Corporation, its parent or its Subsidiaries exceeds $100,000, the Options
covering Shares in excess of such amount (taking into account the order in which the Options were
granted) shall be treated as Nonstatutory Stock Options.

     (i) Other Terms and Conditions.

     The Option Agreement may contain such other terms and conditions, including restrictions or
conditions on the vesting of the Option or the conditions under which the Option may be forfeited,
as may be determined by the Administrator that are consistent with the Plan.

7. STOCK APPRECIATION RIGHTS.

     Stock Appreciation Rights granted to Employees pursuant to the Plan may be granted alone, in
addition to, or in conjunction with, Options. Stock Appreciation Rights shall be evidenced by
written Stock Appreciation Right Agreements in such form as the Administrator shall determine and
shall be subject to the following terms and conditions:

     (a) Number of Shares.

     Each Stock Appreciation Right shall state the number of Shares or Share Equivalents to which
it pertains, which shall be subject to adjustment in accordance with Section 16.

     (b) Calculation of Appreciation; Exercise Price.

     The appreciation distribution payable on the exercise of a Stock Appreciation Right will be
equal to the excess of (i) the aggregate Fair Market Value (on the date of exercise of the Stock
Appreciation Right) of a number of Shares equal to the number of Shares or Share Equivalents in
which the Participant is vested under such Stock Appreciation Right on such date, over (ii) an
amount that will be determined by the Administrator on the date of grant of the Stock

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Appreciation Right but that shall not be less than 100% of the Fair Market Value of a Share on
the date of grant (the “Exercise Price”).

     (c) Term and Exercise of Stock Appreciation Rights.

     Each Stock Appreciation Right shall state the time or times when may become exercisable. No
Stock Appreciation Right shall be exercisable after the expiration of seven years from the date it
is granted.

     (d) Payment.

     The appreciation distribution in respect of a Stock Appreciation Right may be paid in Common
Stock or in cash, or any combination of the two, or in any other form of consideration as
determined by the Administrator and contained in the Stock Appreciation Right Agreement.

     (e) Limitations on Transferability.

     A Stock Appreciation Right shall, during a Participant’s lifetime, be exercisable only by the
Participant. No Stock Appreciation Right or any right granted thereunder shall be transferable by
the Participant by operation of law or otherwise, other than by will, the laws of descent and
distribution. Notwithstanding the foregoing, (i) a Participant may designate a beneficiary to
succeed, after the Participant’s death, to all of the Participant’s Stock Appreciation Rights
outstanding on the date of death; (ii) a stand-alone Stock Appreciation Right or a Stock
Appreciation Right granted in conjunction with a Nonstatutory Stock Option or any right granted
thereunder may be transferable pursuant to a qualified domestic relations order as defined in the
Code or Title I of the Employee Retirement Income Security Act; and (iii) any Participant, who is a
senior executive officer recommended by the Chief Executive Officer and approved by the
Administrator may voluntarily transfer any stand-alone Stock Appreciation Right or a Stock
Appreciation Right granted in conjunction with a Nonstatutory Stock Option to a Family Member as a
gift or through a transfer to an entity in which more than 50% of the voting interests are owned by
Family Members (or the Participant) in exchange for an interest in that entity. In the event of
any attempt by a Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of a
Stock Appreciation Right or of any right thereunder, except as provided herein, or in the event of
the levy of any attachment, execution, or similar process upon the rights or interest hereby
conferred, the Corporation at its election may terminate the affected Stock Appreciation Right by
notice to the Participant and the Stock Appreciation Right shall thereupon become null and void.

     (f) Termination of Employment.

     Each Stock Appreciation Right Agreement shall set forth the extent to which the Participant
shall have the right to exercise the Stock Appreciation Right following termination of the
Participant’s employment or service with the Corporation and its Affiliates. Such provisions shall
be determined in the sole discretion of the Administrator, need not be uniform among all Stock
Appreciation Right Agreements entered into pursuant to the Plan, and may reflect distinctions based
on the reasons for termination of employment.

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     (g) Rights as a Stockholder.

     A Participant or a transferee of a Participant shall have no rights as a stockholder with
respect to any Shares covered by his or her Stock Appreciation Right until the date of issuance of
such Shares. Except as provided in Section 16, no adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date such Shares are
issued.

     (h) Other Terms and Conditions.

     The Stock Appreciation Right Agreement may contain such other terms and conditions, including
restrictions or conditions on the vesting of the Stock Appreciation Right or the conditions under
which the Stock Appreciation Right may be forfeited, as may be determined by the Administrator that
are consistent with the Plan.

8. RESTRICTED STOCK.

     (a) Grants.

     Subject to the provisions of the Plan, the Administrator shall have sole and complete
authority to determine the Employees to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares of Restricted Stock to be awarded, the price (if any) to
be paid by the recipient of Restricted Stock, the time or times within which such Awards may be
subject to forfeiture, and all other terms and conditions of the Awards. The Administrator may
condition the grant of Restricted Stock upon the attainment of specified performance objectives
established by the Administrator pursuant to Section 13 or such other factors as the Administrator
may determine, in its sole discretion.

     The terms of each Restricted Stock Award shall be set forth in a Restricted Stock Agreement
between the Corporation and the Participant, which Agreement shall contain such provisions as the
Administrator determines to be necessary or appropriate to carry out the intent of the Plan. A
book entry shall be made in the records of the Corporation’s transfer agent for each Participant
receiving a Restricted Stock Award, alternatively, such Participant shall be issued a stock
certificate in respect of such shares of Restricted Stock. If a certificate is issued, it shall be
registered in the name of such Participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award. The Administrator shall require that
stock certificates evidencing such shares be held by the Corporation until the restrictions lapse
and that, as a condition of any Restricted Stock Award, the Participant shall deliver to the
Corporation a “stock assignment separate from certificate” relating to the stock covered by such
Award.

     (b) Restrictions and Conditions.

     The shares of Restricted Stock awarded pursuant to this Section 8 shall be subject to the
following restrictions and conditions:

          (i) During a period set by the Administrator commencing with the date of such Award (the
“Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge, assign or
encumber shares of Restricted Stock, other than pursuant to a qualified

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domestic relations order as defined in the Code or Title I of the Employee Retirement Income
Security Act. Within these limits, the Administrator, in its sole discretion, may provide for the
lapse of such restrictions in installments and may accelerate or waive such restrictions in whole
or in part, based on service, performance, a Change in Control or such other factors or criteria as
the Administrator may determine in its sole discretion.

          (ii) Except as provided in this paragraph (ii) and paragraph (i) above, the Participant shall
have, with respect to the shares of Restricted Stock, all of the rights of a stockholder of the
Corporation, including the right to vote the shares and the right to receive any cash dividends.
The Administrator, in its sole discretion, as determined at the time of Award, may provide that the
payment of cash dividends shall or may be deferred and, if the Administrator so determines,
invested in additional shares of Restricted Stock to the extent available under Section 5, or
otherwise invested. Stock dividends issued with respect to Restricted Stock shall be treated as
additional shares of Restricted Stock that are subject to the same restrictions and other terms and
conditions that apply to the shares with respect to which such dividends are issued.

          (iii) The Administrator shall specify the conditions under which shares of Restricted Stock
may be forfeited and such conditions shall be set forth in the Restricted Stock Agreement.

          (iv) If and when the Restriction Period applicable to shares of Restricted Stock expires
without a prior forfeiture of the Restricted Stock, an appropriate book entry recording the
Participant’s interest in unrestricted Shares shall be entered on the records of the Corporation’s
transfer agent or, if appropriate, certificates for an appropriate number of unrestricted Shares
shall be delivered promptly to the Participant, and the certificates for the shares of Restricted
Stock shall be canceled.

9. RESTRICTED STOCK UNITS.

     (a) Grants.

     Subject to the provisions of the Plan, the Administrator shall have sole and complete
authority to determine the Employees and Directors to whom, and the time or times at which, grants
of Restricted Stock Units will be made, the number of Restricted Stock Units to be awarded, the
price (if any) to be paid by the recipient of the Restricted Stock Units, the time or times within
which such Restricted Stock Units may be subject to forfeiture, and all other terms and conditions
of the Restricted Stock Unit Awards. The Administrator may condition the grant of Restricted Stock
Unit Awards upon the attainment of specified performance objectives established by the
Administrator pursuant to Section 13 or such other factors as the Administrator may determine, in
its sole discretion.

     The terms of each Restricted Stock Unit Award shall be set forth in a Restricted Stock Unit
Award Agreement between the Corporation and the Participant, which Agreement shall contain such
provisions as the Administrator determines to be necessary or appropriate to carry out the intent
of the Plan. No book entry shall be made in the records of the Corporation’s transfer agent for a
Participant receiving a Restricted Stock Unit Award, nor shall such

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Participant be issued a stock certificate in respect of such Restricted Stock Units, and the
Participant shall have no right to or interest in shares of Common Stock of the Corporation as a
result of the grant of Restricted Stock Units.

     (b) Restrictions and Conditions.

     The Restricted Stock Units awarded pursuant to this Section 9 shall be subject to the
following restrictions and conditions:

          (i) At the time of grant of a Restricted Stock Unit Award, the Administrator may impose such
restrictions or conditions on the vesting of the Restricted Stock Units, as the Administrator deems
appropriate. During such vesting period, the Participant shall not be permitted to sell, transfer,
pledge, assign or encumber the Restricted Stock Units, other than pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement Income Security Act.
Within these limits, the Administrator, in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions in whole or in part,
based on service, performance, a Change in Control or such other factors or criteria as the
Administrator may determine in its sole discretion.

          (ii) Dividend equivalents may be credited in respect of Restricted Stock Units, as the
Administrator deems appropriate. Such dividend equivalents may be credited on behalf of the
Participant to a deferred cash account (in a manner prescribed by the Administrator and in
compliance with Code section 409A) or converted into additional Restricted Stock Units by dividing
(1) the aggregate amount or value of the dividends paid with respect to that number of Shares equal
to the number of Restricted Stock Units then credited by (2) the Fair Market Value per Share on the
payment date for such dividend. The additional Restricted Stock Units credited by reason of such
dividend equivalents will be subject to all of the terms and conditions of the underlying
Restricted Stock Unit Award to which they relate.

          (iii) The Administrator shall specify the conditions under which Restricted Stock Units may be
forfeited and such conditions shall be set forth in the Restricted Stock Unit Agreement.

     (c) Deferral Election.

     Each recipient of a Restricted Stock Unit Award shall be entitled to elect to defer all or a
percentage of any Shares he or she may be entitled to receive upon the lapse of any restrictions or
vesting period to which the Award is subject. This election shall be made by giving notice in a
manner and within the time prescribed by the Administrator and in compliance with Code section
409A.

10. OUTSIDE DIRECTOR AWARDS.

     Each Outside Director may be granted a Restricted Stock Unit Award on the date of each annual
meeting of stockholders for up to 5,000 Share Equivalents, as determined by the Board. Such
limitation is subject to adjustment as provided in Section 16. Each Restricted Stock Unit Award
shall be fully vested on the date of grant. With respect to the grant of each Restricted Stock
Unit Award to an Outside Director prior to the date of the annual meeting of stockholders

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held July 23, 2008 (the “2008 Annual Meeting”), receipt of any Shares as payment for the
Restricted Stock Unit Award shall be delayed until such time as the Outside Director experiences a
Separation from Service, as defined in the McKesson Corporation Deferred Compensation
Administration Plan III, as amended, and subject to any other terms and conditions prescribed by
the Administrator and in compliance with Code section 409A (the “Automatic Deferral Requirement”).
With respect to the grant of each Restricted Stock Unit Award to an Outside Director on the date of
the 2008 Annual Meeting, and any subsequent grant of a Restricted Stock Unit Award to an Outside
Director, each Outside Director shall receive on the grant date the Shares underlying such Award;
provided, however, that the Outside Director may voluntarily elect to defer receipt of the Shares
underlying such Award by giving notice in a manner and within the time prescribed by the
Administrator and in compliance with Code section 409A, so long as at the time of any such
voluntary deferral the Outside Director satisfies the stock ownership guidelines then in effect for
Outside Directors. If the Corporation determines that the Outside Director will not satisfy such
stock ownership guidelines on the last day of the deferral election period applicable to such
Award, the Automatic Deferral Requirement shall apply as to the Shares underlying such Award.
Dividend equivalents may be credited in respect of Restricted Stock Units, as the Administrator
deems appropriate. Such dividend equivalents may be credited on behalf of the Participant to a
deferred cash account (in a manner prescribed by the Administrator and in compliance with Code
section 409A) or converted into additional Restricted Stock Units by dividing (1) the aggregate
amount or value of the dividends paid with respect to that number of Shares equal to the number of
Restricted Stock Units then credited by (2) the Fair Market Value per Share on the payment date for
such dividend. The additional Restricted Stock Units credited by reason of such dividend
equivalents will be subject to all of the terms and conditions of the underlying Restricted Stock
Unit Award to which they relate. Other terms and conditions of the Restricted Stock Unit Awards
granted to Outside Directors shall be determined by the Board subject to the provisions of Section
9 and the Plan.

11. PERFORMANCE SHARES.

     (a) Grants.

     Subject to the provisions of the Plan, the Administrator shall have sole and complete
authority to determine the Employees to whom, and the time or times at which, grants of Performance
Shares will be made, the number of Performance Shares to be awarded, the price (if any) to be paid
by the recipient of the Performance Shares, the time or times within which such Performance Shares
may be subject to forfeiture, and all other terms and conditions of the Performance Shares.

     The terms of Performance Shares shall be set forth in a Performance Share Agreement between
the Corporation and the Participant, which Agreement shall contain such provisions as the
Administrator determines to be necessary or appropriate to carry out the intent of the Plan. With
respect to a Performance Shares, no book entry shall be made in the records of the Corporation’s
transfer agent nor shall certificate for shares of Common Stock be issued at the time the grant is
made, and the Participant shall have no right to or interest in shares of Common Stock of the
Corporation as a result of the grant of Performance Shares.

     (b) Restrictions and Conditions.

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          (i) The Performance Shares awarded pursuant to this Section 11 shall be subject to the
following restrictions and conditions: The Administrator may condition the grant of Performance
Shares upon the attainment of specified performance objectives established by the Administrator
pursuant to Section 13 or such other factors as the Administrator may determine, in its sole
discretion or the Administrator may, at the time of grant of a Performance Share Award, set
performance objectives in its discretion which, depending on the extent to which they are met, will
determine the number of Performance Shares that will be paid out to the Participant. In either
case, the time period during which the performance objectives must be met is called the
“Performance Period.” After the applicable Performance Period has ended, the recipient of the
Performance Shares will be entitled to receive the number of Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the extent to which the
corresponding performance objectives have been achieved, and which shares may be subject to
additional vesting. After the grant of Performance Shares, the Administrator, in its sole
discretion, may reduce or waive any performance objective for such Performance Shares.

12. OTHER SHARE-BASED AWARDS.

     (a) Grants.

     Other Awards of Shares and other Awards that are valued in whole or in part by reference to,
or are otherwise based on, Shares (“Other Share-Based Awards”), may be granted either alone or in
addition to or in conjunction with other Awards under this Plan. Awards under this Section 12 may
include (without limitation) the grant of Shares conditioned upon some specified event, the payment
of cash based upon the performance of the Common Stock or the grant of securities convertible into
Common Stock.

     Subject to the provisions of the Plan, the Administrator shall have sole and complete
authority to determine the Employees to whom and the time or times at which Other Share-Based
Awards shall be made, the number of Shares, Share Equivalents or other securities, if any, to be
granted pursuant to Other Share-Based Awards, and all other conditions of the Other Share-Based
Awards. The Administrator may condition the grant of an Other Share-Based Award upon the
attainment of specified performance goals or such other factors as the Administrator shall
determine, in its sole discretion. In granting an Other Share-Based Award, the Administrator may
determine that the recipient of an Other Share-Based Award shall be entitled to receive, currently
or on a deferred basis, interest or dividends or dividend equivalents with respect to the Shares or
other securities covered by the Award, and the Administrator may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or otherwise reinvested. The terms of
any Other Share-Based Award shall be set forth in an Other Share-Based Award Agreement between the
Corporation and the Participant, which Agreement shall contain such provisions as the Administrator
determines to be necessary or appropriate to carry out the intent of the Plan.

     (b) Terms and Conditions.

     In addition to the terms and conditions specified in the Other Share-Based Award Agreement,
Other Share-Based Awards shall be subject to the following:

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          (i) Any Other Share-Based Award may not be sold, assigned, transferred, pledged or otherwise
encumbered, other than pursuant to a qualified domestic relations order as defined in the Code or
Title I of the Employee Retirement Income Security Act, prior to the date on which the Shares are
issued or the Award becomes payable, or, if later, the date on which any applicable restriction,
performance or deferral period lapses.

          (ii) The Other Share-Based Award Agreement shall contain provisions dealing with the
disposition of such Award in the event of termination of the Employee’s employment or the
Director’s service prior to the exercise, realization or payment of such Award, and the
Administrator in its sole discretion may provide for payment of the Award in the event of the
Participant’s termination of employment or service with the Corporation or a Change in Control,
with such provisions to take account of the specific nature and purpose of the Award.

13. PERFORMANCE OBJECTIVES.

     The Administrator shall determine the terms and conditions of Awards at the date of grant or
thereafter; provided that performance objectives, if any, for each year related to an Award granted
to a Covered Employee shall be established by the Administrator not later than the latest date
permissible under Section 162(m). To the extent that such 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 Corporation or one or more operating units
or groups, as the Compensation Committee of the Board 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; and total shareholder return. In addition, such performance goals may be
based upon the attainment of specified levels of the Corporation’s performance under one or more of
the measures described above relative to the performance of other corporations, may be (but need
not be) different from year-to-year, and different performance objectives may be applicable to
different Participants.

     Performance objectives may be determined 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 objectives. In addition, performance
objectives may be based upon the attainment of specified levels of corporate performance under one
or more of the measures described above relative to the performance of other corporations. The
Administrator shall specify the manner of adjustment of any performance objective to the extent
necessary to prevent dilution or enlargement of any Award as a result of extraordinary events or
circumstances, as determined by the Administrator, 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,

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restructuring, reorganization, merger, acquisition, divestiture, consolidation, spin-off,
split-up, combination, liquidation, dissolution, sale of assets, or other similar corporate
transaction.

14. ACCELERATION OF VESTING AND EXERCISABILITY.

     The Administrator shall have the power to accelerate the time at which an Award may first be
exercised or the time during which an Award or any part thereof will vest, notwithstanding the
provisions in the Award stating the time at which it may first be exercised or the time during
which it will vest.

15. CHANGE IN CONTROL.

     (a) An Award may be subject to additional acceleration of vesting and exercisability upon or
after a Change in Control as may be provided in the applicable agreement and determined by the
Committee on a grant by grant basis or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant; provided, however, that in the absence of such
provision, no such acceleration shall occur.

     (b) A “Change in Control” of the Corporation 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 Corporation or any of its affiliates, a trustee or any fiduciary holding securities
under an employee benefit plan of the Corporation or any of its affiliates, an underwriter
temporarily holding securities pursuant to an offering of such securities or a Corporation owned,
directly or indirectly, by stockholders of the Corporation in substantially the same proportions as
their ownership of the Corporation, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Corporation representing 30%
or more of the combined voting power of the Corporation’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 Corporation 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 Corporation’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 stockholders of the Corporation approve a merger or consolidation of the Corporation
with any other Corporation and such merger or consolidation is consummated, other than (A) a merger
or consolidation which would result in the voting securities of the
Corporation outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being
converted into 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 Corporation, at
least 50% of the combined voting power of the voting securities of the Corporation or such
surviving entity outstanding immediately after such merger or consolidation,

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or (B) a merger or consolidation effected to implement a recapitalization of the Corporation
(or similar transaction) in which no person acquires more than 50% of the combined voting power of
the Corporation’s then outstanding securities; or

          (iv) The stockholders of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation’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 Corporation immediately prior to such transaction or series of transactions.

16. RECAPITALIZATION.

     In the event that the Administrator, in its sole discretion, shall determine that any dividend
or other distribution (whether in the form of cash, stock, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event, affects the Common
Stock such that an adjustment is appropriate in order to preserve (but not increase) the rights of
participants under the Plan, then the Administrator 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 Awards pursuant to Sections 4(b) and
5, (ii) the number and kind of shares issued in respect of outstanding Awards, and (iii) the
Exercise Price relating to any Options or Stock Appreciation Right.

17. TERM OF PLAN.

     Awards may be granted pursuant to the Plan until the termination of the Plan on May 24, 2015.

18. SECURITIES LAW REQUIREMENTS AND LIMITATION OF RIGHTS.

     (a) Securities Law.

     No Shares shall be issued pursuant to the Plan unless and until the Corporation has determined
that: (i) it and the Participant have taken all actions required to register the Shares under the
Securities Act of 1933 or perfected an exemption from registration; (ii) any applicable listing
requirement of any stock exchange on which the Common Stock is listed has been satisfied; and (iii)
any other applicable provision of state or federal law has been satisfied.

     (b) Employment Rights.

     Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a
right to remain employed by the Corporation or an Affiliate or to remain in service as a Director.
The Corporation and its Affiliates reserve the right to terminate the employment of

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any Employee at any time, with or without cause or for no cause, subject only to a written
employment contract (if any), and the Board reserves the right to terminate a Director’s membership
on the Board for cause in accordance with the Corporation’s Certificate of Incorporation.

     (c) Stockholders’ Rights.

     Except as otherwise provided in the Plan, a Participant shall have no dividend rights, voting
rights or other rights as a stockholder with respect to any Shares covered by his or her Award
prior to an appropriate book entry recording the Participant’s interest in Shares being entered on
the records of the Corporation’s transfer agent or, if appropriate, the issuance of a stock
certificate for such Shares. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date when such book entry is made or such certificate is
issued.

19. AWARDS IN FOREIGN COUNTRIES.

     The Administrator shall have the authority to adopt such modifications, rules, procedures and
subplans as may be necessary or desirable to facilitate compliance with the provisions of the laws
and procedures of foreign countries in which the Corporation or its Affiliates may operate to
assure the viability of the benefits of Awards made to Participants employed in such countries and
to meet the intent of the Plan.

20. BENEFICIARY DESIGNATION.

     Participants and their Beneficiaries may designate on the prescribed form one or more
Beneficiaries to whom distribution shall be made of any Award outstanding at the time of the
Participant’s or Beneficiary’s death. A Participant or Beneficiary may change such designation at
any time by filing the prescribed form with the Administrator. If a Beneficiary has not been
designated or if no designated Beneficiary survives the Participant, distribution will be made to
the Participant’s spouse, or if none, the Participant’s children in equal shares, or if none, to
the residuary beneficiary under the terms of the Participant’s or Beneficiary’s last will and
testament or, in the absence of a last will and testament, to the Participant’s or Beneficiary’s
estate as Beneficiary. Notwithstanding the foregoing, the Administrator may prescribe specific
methods or restrictions on beneficiary designations made Participants or Beneficiaries located
outside of the United States.

21. AMENDMENT OF THE PLAN.

     The Board may suspend or discontinue the Plan at any time. The Compensation Committee of the
Board may amend the Plan with respect to any Shares at the time not subject to Awards; provided,
however, that only the Board may amend the Plan and submit the Plan to the stockholders of the
Corporation for approval with respect to amendments that:

     (a) Increase the number of Shares available for issuance under the Plan or increase the number
of Shares available for issuance pursuant to Incentive Stock Options under the Plan;

     (b) Materially expand the class of persons eligible to receive Awards;

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     (c) Expand the types of awards available under the Plan;

     (d) Materially extend the term of the Plan;

     (e) Materially change the method of determining the Exercise Price or purchase price of an
Award;

     (f) Delete or limit the requirements of Section 22;

     (g) Remove the administration of the Plan from the Administrator; or

     (h) Amend this Section 21 to defeat its purpose.

22. NO AUTHORITY TO REPRICE.

     Without the consent of the stockholders of the Corporation, except as provided in Section 16,
the Administrator shall have no authority to effect either (i) the repricing of any outstanding
Options or Stock Appreciation Rights under the Plan or (ii) the cancellation of any outstanding
Options or Stock Appreciation Rights under the Plan and the grant in substitution therefor of new
Options or Stock Appreciation Rights under the Plan covering the same or different numbers of
Shares.

23. USE OF PROCEEDS FROM STOCK.

     Proceeds from the sale of Common Stock pursuant to Awards shall constitute general funds of
the Corporation.

24. NO OBLIGATION TO EXERCISE OPTION OR STOCK APPRECIATION RIGHT.

     The granting of an Option or Stock Appreciation Right shall impose no obligation upon the
Participant to exercise such Option or Stock Appreciation Right.

25. APPROVAL OF STOCKHOLDERS.

     This Plan and any amendments requiring stockholder approval pursuant to Section 21 shall be
subject to approval by affirmative vote of the stockholders. Such vote shall be taken at the first
annual meeting of stockholders of the Corporation following the adoption of the Plan or of any such
amendments, or any adjournment of such meeting.

26. 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.

27. INTERPRETATION.

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     The Plan is designed and intended to comply with Rule 16b-3 promulgated under the Exchange
Act, Code section 162(m), and Code section 409A and guidance promulgated thereunder, and all
provisions hereof shall be construed in a manner to so comply.

28. WITHHOLDING TAXES.

     (a) General.

     To the extent required by applicable law, the recipient of any payment or distribution under
the Plan shall make arrangements satisfactory to the Corporation for the satisfaction of any
required income tax, social insurance, payroll tax or other tax related to withholding obligations
that arise by reason of such payment or distribution. The Corporation shall not be required to make
such payment or distribution until such obligations are satisfied.

     (b) Other Awards.

     The Administrator may permit a Participant who exercises an Option or Stock Appreciation Right
or who vests in an other Award to satisfy all or part of his or her withholding tax obligations by
having the Corporation withhold a portion of the Shares that otherwise would be issued to him or
her under such Awards. Such Shares shall be valued at the Fair Market Value on the date when taxes
otherwise would be withheld in cash. The payment of withholding taxes by surrendering Shares to the
Corporation, if permitted by the Administrator, shall be subject to such restrictions as the
Administrator may impose, including any restrictions required by rules of the Securities and
Exchange Commission.

29. DEFINITIONS.

     (a) “Administrator” means the Board, either of the Committees appointed to administer
the Plan or, if applicable, an officer of the Corporation appointed to administer the Plan in
accordance with Section 3(c).

     (b) “Affiliate” means any entity, whether a corporation, partnership, joint venture or
other organization that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the Corporation.

     (c) “Award” means any award of an Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Units, Performance Shares or an Other Share-Based Award under the Plan.

     (d) “Beneficiary” means a person designated as such by a Participant or a Beneficiary
for purposes of the Plan or determined with reference to Section 20.

     (e) “Board” means the Board of Directors of the Corporation.

     (f) “Code” means the Internal Revenue Code of 1986, as amended.

     (g) “Committee” means the Compensation Committee of the Board or the Committee on
Directors and Corporate Governance of the Board, or both, as applicable.

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     (h) “Common Stock” means the $0.01 par value common stock of the Corporation.

     (i) “Corporation” means McKesson Corporation, a Delaware corporation.

     (j) “Covered Employee” means the Chief Executive Officer or any Employee whose total
compensation for the taxable year is required to be reported to stockholders under the Exchange Act
by reason of such Employee being among the four highest compensated officers for the taxable year
(other than the chief executive officer).

     (k) “Director” means a member of the Board.

     (l) “Employee” means an individual employed by the Corporation or an Affiliate (within
the meaning of Code section 3401 and the regulations thereunder).

     (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (n) “Exercise Price” means the price per Share at which an Option or Stock
Appreciation Right may be exercised.

     (o) “Fair Market Value” of a Share as of a specified date means

          (i) if the Common Stock is listed or admitted to trading on any stock exchange, the closing
price on the date the Award is granted as reported by such stock exchange (for example, on its
official web site, such as www.nyse.com), or

          (ii) if the Common Stock is not listed or admitted to trading on a stock exchange, the mean
between the lowest reported bid price and highest reported asked price of the Common Stock on the
date the Award is granted in the over-the-counter market, as reported by such over-the-counter
market (for example, on its official web site, such as www.otcbb.com), or if no official report
exists, as reported by any publication of general circulation selected by the Corporation which
regularly reports the market price of the Shares in such market.

     (p) “Family Member” means any person identified as an “immediate family” member in
Rule 16(a)-1(e) of the Exchange Act, as such Rule may be amended from time to time. Notwithstanding
the foregoing, the Committee may designate any other person(s) or entity(ies) as a “family member.”

     (q) “Full Value Award” means an Award that does not provide for full payment in cash
or property by the Participant.

     (r) “Incentive Stock Option” means an Option described in Code section 422(b).

     (s) “Nonstatutory Stock Option” means an Option not described in Code section 422(b)
or 423(b).

     (t) “Option” means an Incentive Stock Option or Nonstatutory Stock Option granted
pursuant to Section 6. “Option Agreement” means the agreement between the Corporation and
the Participant which contains the terms and conditions pertaining to the Option.

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     (u) “Other Share-Based Award” means an Award granted pursuant to Section 12.
“Other Share-Based Award Agreement” means the agreement between the Corporation and the
recipient of an Other Share-Based Award which contains the terms and conditions pertaining to the
Other Share-Based Award.

     (v) “Outside Director” means a Director who is not an Employee.

     (w) “Participant” means an Employee or Director who has received an Award.

     (x) “Performance Shares” means an Award denominated in Share Equivalents granted
pursuant to Section 11 that may be earned in whole or in part based upon attainment of performance
objectives established by the Administrator pursuant to Section 13. “Performance Share
Agreement” means the agreement between the Corporation and the recipient of the Performance
Shares which contains the terms and conditions pertaining to the Performance Shares.

     (y) “Plan” means this McKesson Corporation 2005 Stock Plan.

     (z) “Restricted Stock” means Shares granted pursuant to Section 8. “Restricted
Stock Agreement” means the agreement between the Corporation and the recipient of the
Restricted Stock which contains the terms, conditions and restrictions pertaining to the Restricted
Stock.

     (aa) “Restricted Stock Unit” means an Award denominated in Share Equivalents granted
pursuant to Section 9 in which the Participant has the right to receive a specified number of
Shares at or over a specified period of time. “Restricted Stock Unit Agreement” means the
agreement between the Corporation and the recipient of the Restricted Stock Unit Award which
contains the terms and conditions pertaining to the Restricted Stock Unit Award.

     (bb) “Share” means one share of Common Stock, adjusted in accordance with Section 16
(if applicable).

     (cc) “Share Equivalent” means a bookkeeping entry representing a right to the
equivalent of one Share.

     (dd) “Stock Appreciation Right” means a right, granted pursuant to Section 7, to
receive an amount equal to the value of a specified number of Shares which will be payable in
Shares or cash as established by the Administrator. “Stock Appreciation Right Agreement”
means the agreement between the Corporation and the recipient of the Stock Appreciation Right which
contains the terms and conditions pertaining to the Stock Appreciation Right.

     (ee) “Subsidiary” means any corporation in an unbroken chain of corporations beginning
with the Corporation if each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

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30. EXECUTION.

     This amended and restated 2005 Stock Plan
was adopted by the Board on May 27, 2009, subject to
stockholder approval of the amendment to Section 5(a) adopted by the Board on said date, which
approval was granted on July 22, 2009.

	 	 	 	 	 	 	 
	 	 	McKESSON CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jorge L. Figueredo	 	 
	 

	 	 	 	 

Jorge L. Figueredo	 	 
	 

	 	 	 	Executive Vice President, Human Resources	 	 

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