McKesson 2005 Annual Report Download - page 120

McKESSON CORPORATION
OPTION GAIN DEFERRAL PLAN
(Amended and Restated as of October 28, 2004)
A. PURPOSE
This Plan was established to allow those Company executives and members of the Board who are not employed by the Company who hold
exercisable stock options granted under the McKesson Corporation 1978 Stock Option Plan (the “1978 Plan”) to defer the cash portion of the
gain (the “Cash Gain”) such individual realizes from his or her exercisable stock options in connection with the restructuring of McKesson
resulting in the sale of PCS Health Systems, Inc. to Eli Lilly and Company (the “Transaction”). The Plan was originally effective on
January 27, 1994, the date the Plan was initially approved by the Board. The Plan has been amended and restated on various occasions. This
amendment and restatement has been approved by the Board as of October 28, 2004 and shall be effective as of such date except as otherwise
indicated below.
B. ERISA PLAN
This Plan is an unfunded deferred compensation program for a select group of management and highly compensated employees of the
Company and members of the Board who are not employed by the Company. The Plan, therefore, is covered by Title I of ERISA except that it
is exempt from Parts 2, 3 and 4 of Title I of ERISA.
C. PARTICIPATION
1. Eligibility to Participate.
a. Eligible Executives. Company executives who (i) are actively employed, and (ii) hold exercisable stock options granted under the
1978 Plan as of the date the Transaction closes may elect to participate in this Plan (“Eligible Executives”).
b. Eligible Directors. Each member of the Board of McKesson who (i) is not a Company employee and (ii) holds exercisable stock
options granted under the 1978 Plan as of the date the Transaction closes may participate in this Plan (“Eligible Directors”).
2. Election to Participate. An Eligible Executive or an Eligible Director may become a Participant in the Plan by electing to defer the Cash
Gain in accordance with the terms of this Plan. An election to defer shall be in writing, shall be irrevocable and shall be made at the time and in
the form specified by the Administrator. On electing to defer amounts under this Plan, the Participant shall be deemed to accept all of the terms
and conditions of this Plan. All elections to defer under this Plan shall be made pursuant to an election executed and filed with the
Administrator before the amounts so deferred are earned. Other than to avoid the expiration of an option in accordance with its terms, a
Participant shall not exercise any option with respect to which he or she has made a deferral election.
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