McKesson 2005 Annual Report Download - page 108

effective January 1, 2000, the Executive Vice President of Human Resources may change the maximum amount (expressed as a percentage
limit) of base salary that Eligible Executives as a group may defer under the Plan for any Year. Notwithstanding these limits, deferrals may be
reduced by the Company to leave sufficient remaining compensation legally required for taxes and other authorized deductions, including, but
not limited to, those for Company benefit programs.
3. Maximum Deferral for Eligible Directors. The maximum amount of compensation which an Eligible Director may defer under this
Plan for any Year is the amount of any annual retainer (other than the portion of the annual retainer subject to Mandatory Deferral under and as
defined in the 1997 Non-Employee Directors’ Equity Compensation and Deferral Plan) and other fees from McKesson earned by him or her in
any such Year.
E. PAYMENT OF DEFERRED COMPENSATION
1. Book Account and Interest Credit. Compensation deferred by a Participant under the Plan shall be credited to a separate bookkeeping
account for such Participant (the “Account”). (Sub-Accounts may be established for each Year for which the Participant elects to defer
compensation.) Interest shall be credited to each Account (including Sub-Accounts established thereunder) for each Year at a rate equal to a
rate declared by the Compensation Committee acting in its sole discretion after taking into account, among other things, the following factors:
McKesson’s cost of funds, corporate tax brackets, expected amount and duration of deferrals, number and age of eligible Participants, expected
time and manner of payment of deferred amounts, and expected performance of available fixed-rate insurance contracts covering the lives of
Participants (the “Declared Rate”). Notwithstanding the foregoing, if a Change in Control (as defined in Section E.10 below) occurs, the
Declared Rate for the balance of the calendar year in which the Change in Control occurs and for the two calendar years immediately following
the year in which the Change in Control occurs shall not be less than the Declared Rate as in effect on the day before the Change in Control
occurs. Interest on each Account balance shall be compounded daily on each business day within the Year to yield the Declared Rate for the
Year. (Prior to January 1, 2000, each Account balance was compounded monthly at the twelfth root of the annual Declared Rate.) In the case of
installment payments as provided in Section E.3 below, interest shall be credited on all amounts remaining in a Participant’s Account until all
amounts are paid out.
2. Length of Deferral. An Eligible Executive or Eligible Director shall elect in writing, and file with the Administrator, at the same time as
such Eligible Executive or Eligible Director makes any election to defer compensation, the period of deferral with respect to such election,
subject to the minimum required period of deferral and the maximum permissible period of deferral. The minimum required period of deferral
is five years after the end of the Year for which compensation is deferred. Notwithstanding the foregoing, the five-year minimum deferral
period shall not apply to payments made as a result of death, Disability, Retirement, pre-retirement termination, a Change in Control or
hardship. Payment must commence no later than the end of the maximum period of deferral, which is the January following the year in which
the Eligible Executive reaches age 72 or, in the case of an Eligible Director, the January after McKesson’s annual meeting of stockholders next
following the
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