Document:

MCK_Exhibit 10.1_06.30.2015

Exhibit 10.1
FORM OF
McKESSON CORPORATION
STATEMENT OF TERMS AND CONDITIONS
APPLICABLE TO AWARDS
PURSUANT TO THE MANAGEMENT INCENTIVE PLAN
Effective May 26, 2015
The following terms and conditions shall apply to awards made under the McKesson Corporation Management Incentive Plan (the “Plan”) to an executive, managerial or professional employee of the Company who is specifically designated as a participant in the Plan.  Capitalized terms used herein are defined in the Plan or in Section 10.  In the event these terms and conditions conflict with the terms of the Plan document, the Plan document shall control.
		
	1.
	Participant.

Only an active employee of the Company who is employed in an executive, managerial or professional capacity may be designated as a Participant under the Plan; provided, however, that designation as a Participant is contingent upon the execution and delivery to the Company of an agreement, within a period following presentment and in a form that is satisfactory to the Company, regarding confidentiality, intellectual property and/or other restrictive covenants, as well as compliance with such agreement; and provided, further, that the Committee shall determine in its sole discretion whether the Participant has complied with the provisions of any such agreement, which determination shall be conclusive and binding on all interested persons.  
The Committee shall review those employees who are eligible to participate in the Plan and recommended by management and determine which of those employees will become Plan Participants.  The Committee may add to or delete individuals from the list of designated Participants at any time and from time to time, at its sole discretion.  The Committee has delegated the authority to approve Plan Participants to the Chief Executive Officer of the Company.  
Participation in the Plan during the Performance Period does not guarantee payment of an Actual Award under the Plan for the Performance Period.  Participation in the Plan during one Performance Period does not guarantee participation during a subsequent Performance Period.
		
	2.
	Individual Target Award.

The Individual Target Award is the percentage of base annual salary specified at the beginning of the Performance Period (or beginning of participation, if later) for a Participant.
		
	A.
	Newly Eligible Employees.

A newly hired employee, or an employee who is promoted into or transferred from an ineligible position to an eligible position during a Performance Period, may be designated a Participant with an Individual Target Award for that Performance Period.

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	B.
	Transfers, Promotions and Demotions.

A Participant who moves during the Performance Period from one eligible position to a new eligible position with a higher Individual Target Award will, in general, have the determination of his or her Actual Award prorated between the two Individual Target Awards.
A Participant who during the Performance Period is demoted to or transferred to a new eligible position with a lower Individual Target Award will have the determination of his or her Actual Award prorated in management’s discretion.
A Participant who during the Performance Period is demoted from or transferred from an eligible position to an ineligible position will have the determination of his or her Actual Award prorated in management’s discretion.
Notwithstanding the foregoing, any proration must be based on the achievement of Performance Goals for the Performance Period.  
		
	3.
	Performance Measures and Goals.

Each Participant shall have one or more Individual Performance Measures.  Individual Performance Measures may be quantitative, qualitative or both.  The Performance Goals (defined in Article F of the Plan) established for each segment of the Company are referred to as the Business Scorecard.  A Participant’s Individual Performance Measures and the Performance Goals, taken as a whole, will determine the amount of the Participant’s Actual Award.
A Participant who changes jobs and / or organizations during the Performance Period may have different Business Scorecards applicable to each job / organization.  The Participant may, in management’s discretion, have the determination of his or her Actual Award prorated between the two Business Scorecards.
		
	4.
	Individual Performance Modifier.

Actual Awards will be adjusted, in management’s discretion, to reflect the Participant’s individual contribution to Business Scorecard results and the Participant’s Individual Performance Measures.
		
	5.
	Other Individual Requirements.

Notwithstanding any provision of the Plan to the contrary, no amount shall be payable with respect to the Performance Period unless the Committee certifies that it is satisfied that the requirements (performance or otherwise) associated with such payment have been fully met.  Such requirements may include, but are not limited to:
		
	•
	Completion of the Company’s Legal and Regulatory Compliance and Ethics Training Program.

		
	6.
	Award Determination.

Any payment to a Participant shall be based on Business Scorecard results during the Performance Period as modified by the Participant’s Individual Performance Modifier.  The Actual Award is determined by:
		
	•
	Taking the Covered Compensation received during the Performance Period;

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	•
	Multiplying by the Individual Target Award;

		
	•
	Multiplying that result by the Business Scorecard results (actual vs. target);

		
	•
	Adjusting the result determined above, up or down, by the Individual Performance Modifier.

Management and the Committee shall review and approve, modify or disapprove the Actual Award, if any, to be paid to a Participant for the Performance Period.  Management and the Committee reserve the right to reduce or increase or eliminate the individual payments determined according to the above method.  No Personal Modifier shall exceed 150%.
Notwithstanding the foregoing, any Awards to Covered Employees shall be made and determined in a manner consistent with the Plan and Section 162(m) of the Code.
		
	7.
	Effect of a Termination of Employment, Prior to the End of the Performance Period, on Awards.

		
	A.
	Termination of Employment for Other Than Death, Retirement, Severance or Long‐Term Disability.

If the Participant ceases to be a bona fide employee of the Company prior to the payment of the Actual Award, for any reason other than death, Retirement, Severance or Long-Term Disability, the Participant’s interest in the Awards shall be forfeited and no amount shall be payable to the Participant with respect to service during the Performance Period.
		
	B.
	Termination of Employment by Reason of Death or Long‐Term Disability.

If the Participant ceases to be a bona fide employee of the Company due to death or Long‐Term Disability during the Performance Period, the Participant (or the Participant’s Beneficiary, if payment is made on account of the death of the Participant) shall be entitled to receive an Actual Award as calculated under Paragraph 6 above.
		
	C.
	Termination of Employment by Reason of Retirement.

If the Participant ceases to be a bona fide employee of the Company due to Retirement prior to January 1 of the Performance Period, the Participant’s interest in the Awards shall be forfeited and no amount shall be payable to the Participant with respect to service during the Performance Period.
If the Participant ceases to be a bona fide employee of the Company due to Retirement on or after January 1 of the Performance Period, the Participant shall be entitled to receive an Actual Award as calculated under Paragraph 6 above.  
		
	D.
	Termination of Employment by Reason of Severance.

If the Participant ceases to be a bona fide employee of the Company due to Severance prior to January 1 of the Performance Period, the Participant’s interest in the Awards shall be forfeited and no amount shall be payable to the Participant with respect to service during the Performance Period.
If the Participant ceases to be a bona fide employee of the Company due to Severance on or after January 1 of the Performance Period, the Participant shall be entitled to receive an Actual Award as calculated under Paragraph 6 above.  

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	8.
	Data Privacy.

By accepting the Award, the Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Participant’s employer (the “Employer”) and the Company for the exclusive purpose of implementing, administering and managing participation in the Plan.
The Participant understands that the Company and the Employer hold certain personal information about the Participant, including but not limited to his or her name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any shares of Company stock or directorships held in the Company, details of all compensation or any other entitlement to Company-sponsored benefits for the purpose of implementing, administering and managing the Plan (“Data”).  The Participant understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Participant’s country or elsewhere, such as in the United States of America, and that the recipient’s country may have different data privacy laws and protections than the Participant’s country.  The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the local human resources representative.  The Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan.  The Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan.  The Participant understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, without cost, by contacting in writing the local human resources representative.  The Participant understands, however, that refusing or withdrawing consent may affect his or her ability to participate in the Plan.  For more information on the consequences of refusal to consent or withdrawal of consent, the Participant understands that he or she may contact the local human resources representative.
		
	9.
	GOVERNING LAW.

The law of the State of Delaware shall govern all question concerning the construction, validity and interpretation of the Plan and any Awards, without regard to the state’s conflict of laws rules.
		
	10.
	Definitions.

Capitalized terms shall have the same meaning as provided in the Plan.  Additional capitalized text that is not included in the Plan, but is used in this Statement of Terms and Conditions, shall have the meaning set forth below:
		
	(a)
	“Actual Award” means the finally determined amount payable under the Plan for a Performance Period.

		
	(b)
	“Awards” means, collectively, Individual Target Awards and Actual Awards.

		
	(c)
	“Covered Compensation” means regular wages earned by and paid to the Participant during the Performance Period, including any Paid Time Off (PTO) pay.  Covered Compensation does not include any other compensation received during the Performance Period, including, but not limited to, earnings received during a paid leave, overtime or commission pay.

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	(d)
	“Long‐Term Disability” means (i) a physical or mental condition which, in the judgment of the Committee based on competent medical evidence satisfactory to the Committee, including, if required by the Committee, medical evidence obtained by an examination conducted by a physician selected by the Committee, renders an individual unable to engage in any substantial gainful activity for the and which impairment is likely to result in death or to be of long, continued and indefinite duration, or (ii) a judicial declaration of incompetence.

		
	(e)
	“Retirement” means termination from the Company with age plus years of service equal to at least 65.

		
	(f)
	“Severance” means participation in and entitlement to benefits under the Company’s Severance Pay Plan in accordance with the terms and conditions of such plan.

5MCK_Exhibit 10.2_06.30.2015

Exhibit 10.2

McKESSON CORPORATION
LONG-TERM INCENTIVE PLAN
As Amended and Restated Effective May 26, 2015

TABLE OF CONTENTS
 
	
			
	 
	 
	Page

	 
	 
	 

	1.
	NAME AND PURPOSE
	1

	 
	 
	 

	2.
	ADMINISTRATION OF THE PLAN
	1

	 
	 
	 

	3.
	ELIGIBILITY
	1

	 
	 
	 

	4.
	CALCULATION OF AWARDS
	1

	 
	 
	 

	5.
	PAYMENT OF AWARDS
	2

	 
	 
	 

	6.
	CHANGE IN CONTROL
	4

	 
	 
	 

	7.
	TRANSFERABILITY
	4

	 
	 
	 

	8.
	RECOUPMENT
	4

	 
	 
	 

	9.
	WITHHOLDING TAXES
	5

	 
	 
	 

	10.
	FUNDING
	5

	 
	 
	 

	11.
	AMENDMENT
	5

	 
	 
	 

	12.
	TERMINATION
	5

	 
	 
	 

	13.
	GOVERNING LAW
	5

	 
	 
	 

	14.
	NOTICES
	5

	 
	 
	 

	15.
	SEVERABILITY
	5

	 
	 
	 

	16.
	SUCCESSOR OF THE COMPANY
	5

	 
	 
	 

	17.
	EXECUTION
	6

McKESSON CORPORATION
LONG-TERM INCENTIVE PLAN

As Amended and Restated Effective May 26, 2015
		
	1.
	NAME AND PURPOSE.

The name of this plan is the McKesson Corporation Long-Term Incentive Plan (the “Plan”). Its purpose is to advance and promote the interests of the stockholders of McKesson Corporation, a Delaware corporation (the “Company”) by attracting and retaining employees who strive for excellence, and to motivate those employees to set and achieve above-average financial objectives by providing competitive compensation for those who contribute most to the operating progress and earning power of the Company, its subsidiaries and affiliates.
		
	2.
	ADMINISTRATION OF THE PLAN.

The Plan shall be administered by a committee (the “Committee”) consisting of not less than two directors of the Company to be appointed by the Board, each of whom is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. No member of the Committee shall be eligible to receive benefits under the Plan.  The Committee shall have the sole authority, in its absolute discretion, to adopt, amend, and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan, to construe and interpret the Plan, the rules and regulations, and to make all other determinations deemed necessary or advisable for the administration of the Plan.  All decisions, determinations and interpretations of the Committee shall be final and binding on all employees who participate in the Plan (the “Participants”) and other interested parties.
		
	3.
	ELIGIBILITY.

Participation in the Plan shall be limited to those salaried key officers and/or other employees of the Company, its subsidiaries and affiliates who are selected from time to time by the Committee.  Participants in the Plan are also eligible to participate in any incentive plan of the Company.
		
	4.
	CALCULATION OF AWARDS.

Awards under the Plan shall be made in the sole discretion of the Committee.  After the close of the period for which an award may be made (a “Performance Period”), the Committee shall determine the dollar amount of the award to be made to each Participant whom the Committee has selected to be an award recipient for that Performance Period; provided, however, that the award amount for any individual who is a “covered employee” (as defined in regulations adopted pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”)) of the Company on the last day of a Performance Period (the “Specified Officers”) shall be subject to the following limitations:

1

(a)2.0% of the Company’s aggregate “Annual Income” for the Performance Period shall be set aside for awards to the Specified Officers.  For this purpose, “Annual Income” shall mean reported net income before gains and losses from the sales of businesses and settlements or awards paid or accrued for claims, controversies or litigation against or related to the Company or its businesses.
(b)The maximum awards to the following Specified Officers shall equal the indicated percentage of the aggregate fund set forth in (a) above, determined pursuant to the following schedule:
	
		
	Officer
	Percentage

	Chief executive officer
	40%

	The four highest compensated officers  
(other than the CEO)
	15% each

	Total
	100%

(c)The Committee in its sole discretion may reduce the award otherwise payable to any Specified Officer as determined above, but in no event may any such reduction result in an increase of the award payable to any other Participant, including but not limited to any other Specified Officer.
		
	5.
	PAYMENT OF AWARDS.

All awards to Participants pursuant to the Plan shall be paid in cash. Prior to January 1, 2005, awards shall be paid as soon as practicable after the end of the Performance Period; provided, however, that, at the Participant’s election, receipt of all or part of an award may be deferred under the terms of the Company’s Deferred Compensation Administration Plan II in the manner prescribed by regulations established by the Committee. After December 31, 2004, all awards shall be paid no later than the later of two and one-half months following the end of the Company’s fiscal year or the end of the calendar year in which the award is no longer subject to a substantial risk of forfeiture; provided, however, that, at the Participant’s election, receipt of all or part of an award may be deferred under the terms of the Company’s Deferred Compensation Administration Plan III (“DCAP III”) and in compliance with Section 409A of the Code.
A Participant shall have no right to receive payment of any award under the Plan unless he or she has satisfied regulations prescribed by the Committee at the time of making the award and the Committee has determined that the performance objectives applicable to such award, if any, have been achieved.
Any other provision of the Plan to the contrary notwithstanding, if the Committee determines that a Participant has engaged in any of the actions described in (c) below, the consequences set forth in (a) and (b) below shall result:

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(a)Any outstanding award shall be forfeited immediately and automatically and shall not be payable to the Participant under any circumstances.
(b)If the Participant received payment of an award within six months prior to the date that the Company discovered that the Participant engaged in any action described in (c) below the Participant, upon written notice from the Company, shall immediately repay to the Company in cash the amount of such award (including any amounts withheld pursuant to Paragraph 9).
(c)The consequences described in (a) and (b) shall apply if the Participant, either before or after termination of employment with the Company or one of its subsidiaries or affiliates:
(i)discloses to others, or takes or uses for his or her own purpose or the purpose of others, any trade secrets, confidential information, knowledge, data or know-how belonging to the Company or any of its subsidiaries or affiliates and obtained by the Participant during the term of his or her employment, whether or not they are the Participant’s work product.  Examples of such confidential information or trade secrets include (but are not limited to) customer lists, supplier lists, pricing and cost data, computer programs, delivery routes, advertising plans, wage and salary data, financial information, research and development plans, processes, equipment, product information and all other types and categories of information as to which the Participant knows or has reason to know that the Company or its subsidiaries or affiliates intends or expects secrecy to be maintained;
(ii)fails to promptly return all documents and other tangible items belonging to the Company or any of its subsidiaries or affiliates in the Participant’s possession or control, including all complete or partial copies recordings, abstracts, notes or reproductions of any kind made from or about such documents or information contained therein, upon termination of employment, whether pursuant to retirement or otherwise;
(iii)fails to provide the Company with at least thirty (30) days’ written notice prior to directly or indirectly engaging in, becoming employed by, or rendering services, advice or assistance to any business in competition with the Company or any of its subsidiaries or affiliates. As used herein, “business in competition” means any person, organization or enterprise which is engaged in or is about to become engaged in any line of business engaged in by the Company or any of its subsidiaries or affiliates at the time of the termination of the Participant’s employment with the Company or any of its subsidiaries or affiliates;
(iv)fails to inform any new employer, before accepting employment, of the terms of this paragraph 5 an of the Participant’s continuing obligation to maintain the confidentiality of the trade secrets and other confidential information belonging to the Company or any of its subsidiaries or affiliates and obtained by the Participant during the term of his or her employment with the Company or any of its subsidiaries or affiliates;
(v)induces or attempts to induce, directly or indirectly, any of the customers of the Company or its subsidiaries or affiliates, employees, representatives or consultants to terminate, discontinue or cease working with or for the Company, or any of its subsidiaries or affiliates, or to 

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breach any contract with the Company or any of its subsidiaries or affiliates, in order to work with or for, or enter into a contract with the Participant or any third party;
(vi)engages in conduct which is not in good faith and which disrupts, damages, impairs or interferes with the business, reputation or employees of the Company or any of its subsidiaries or affiliates; or
(vii)directly or indirectly engages in, becomes employed by, or renders services, advice or assistance to any business in competition with the Company or its affiliates, at any time during the twelve months following termination of employment with the Company.
The Committee shall determine in its sole discretion whether the Participant has engaged in any of the acts set forth in (i) through (vii) above, and its determination shall be conclusive and binding on all interested persons.
Any provision of this paragraph 5 which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such invalid or unenforceable provision, without invalidating or rendering unenforceable the remaining provisions of this paragraph 5.
		
	6.
	CHANGE IN CONTROL.

The statement of terms and conditions adopted pursuant to the Plan shall prescribe rules for the acceleration of awards in the event of a “Change in Control” of the Company. For this purpose, a Change in Control shall mean the occurrence of any change in ownership of the Company, change in effective control of the Company, or change in the ownership of a substantial portion of the assets of the Company, as defined in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended, the regulations thereunder, and any other published interpretive authority, as issued or amended from time to time.
		
	7.
	TRANSFERABILITY.

Awards made pursuant to the Plan are not transferable or assignable by the Participant other than by will or the laws of descent and distribution, and payment thereunder during the Participant’s lifetime shall be made only to the Participant or to the guardian or legal representative of the Participant. Payments which are due to a deceased Participant pursuant to the Plan shall be paid to the person or persons to whom such right to payment shall have been transferred by will or the laws of descent and distribution.
		
	8.
	RECOUPMENT.

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

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	9.
	WITHHOLDING TAXES.

Whenever the payment of an award is made, such payment shall be net of an amount sufficient to satisfy federal, state and local withholding tax requirements and authorized deductions.
		
	10.
	FUNDING.

No provision of the Plan, or regulations adopted hereunder, shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or segregate or place any assets in a trust or other entity to which contributions are made.
		
	11.
	AMENDMENT.

The Committee may amend the Plan at any time; provided that (i) to extent required under Section 162(m), the Plan will not be amended without prior approval of the Company’s stockholders, and (ii) no amendment shall retroactively and adversely affect the payment of any award previously made.
		
	12.
	TERMINATION.

The Plan may be terminated at any time and for any reason by resolution of the Board of Directors of the Company by the affirmative vote of a majority of the directors in office; provided, however, that such termination shall not affect any incentive award which shall have been granted prior to such termination.
		
	13.
	GOVERNING LAW.

This Plan and all determinations made and actions taken pursuant hereto shall be governed by the substantive laws, but not the choice of law rules, of the state of California.
		
	14.
	NOTICES.

All notices under this Plan shall be sent in writing to the Secretary of the Company. All correspondence to a Participant shall be sent in writing to the Participant at the address which is his or her recorded address as listed on the most recent election form or as specified in the Company’s records.
		
	15.
	SEVERABILITY.

If any provision of the Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereunder shall continue to be effective.
		
	16.
	SUCCESSOR OF THE COMPANY.

This Plan shall be binding upon and inure to the benefit of any successor or successors of the Company.

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	17.
	EXECUTION.

This amended and restated McKesson Corporation Long-Term Incentive Plan was adopted on May 26, 2015.
McKESSON CORPORATION
By:    /s/ Jorge L. Figueredo__________________
Jorge L. Figueredo 
Executive Vice President, Human Resources

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