McKesson 2005 Annual Report Download - page 132

McKESSON CORPORATION
MANAGEMENT DEFERRED COMPENSATION PLAN
(Amended and Restated as of October 28, 2004)
A. PURPOSE
This Plan was established to enhance the Company’s ability to attract and retain executive personnel of the Company and members of the
Board not employed by the Company. This Plan was originally approved by the Board and became effective on November 1, 1989. Since its
original effective date, 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 set forth below.
B. ERISA PLAN
This Plan is an unfunded deferred compensation program for a select group of management 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
This Plan and participation in the Plan were frozen as of January 1, 1994. No individual who was not a Participant in the Plan prior to
January 1, 1994 shall become a Participant in this Plan.
D. AMOUNTS OF DEFERRAL
No new deferrals shall be made under this Plan on and after January 1, 1994. Deferrals made prior to such date are governed by the
provisions of the Plan as in effect on the date of such deferrals.
E. PAYMENT OF DEFERRED COMPENSATION
1. Book Account and Interest Credit. Compensation deferred by a Participant under the Plan prior to January 1, 1994 is 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: the Company’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