McKesson 2006 Annual Report Download - page 101

(G) If a Participant who ceases to be a bona fide employee of the Corporation or an affiliate is subsequently rehired prior to the
expiration of his or her Option, then the Option shall continue to remain outstanding until such time as the Participant subsequently terminates
employment. Upon the Participant’s subsequent termination of employment, the post-termination exercise period calculated pursuant to the
terms and conditions of this Section II.5 shall be reduced by the number days between the date of the Participant’s initial termination of
employment and his or her re-hire date; provided, however, that if the rehired Participant continues to be employed by the Corporation or an
affiliate for at least one year from his or her rehire date, then the post termination exercise period for the Option shall be determined in
accordance with Sections II.5(A) through (F) and shall not be adjusted as described above.
6. Method of Exercise. A Participant may exercise an Option with respect to all or any part of the exercisable Shares as follows:
(A) By giving the Corporation, or its authorized representative designated for this purpose, written notice of such exercise specifying the
number of Shares as to which the Option is so exercised. Such notice shall be accompanied by an amount equal to the Exercise Price of such
Shares, in the form of any one or combination of the following: cash or a certified check, bank draft, postal or express money order payable to
the order of the Corporation in lawful money of the United States. The Participant may pay the Exercise Price, in whole or in part, by tendering
to the Corporation or its authorized representative Shares which have been owned by the Participant for at least six months prior to said tender,
and having a fair market value, as determined by the Corporation, equal to the Exercise Price, or in lieu of the delivery of actual Shares in such
tender, the Corporation may accept an attestation by the Participant, in a form prescribed by the Corporation or its authorized representative,
that the Participant owns sufficient Shares, which have been owned by the Participant for at least six months prior to said tender, of record or in
an account in street name to satisfy the Exercise Price, and such attestation will be deemed a tender of Shares for purposes of this method of
exercise. In the event a Participant tenders Shares to pay the Exercise Price, tender of Shares acquired through exercise of an Incentive Stock
Option may result in unfavorable income tax consequences unless such Shares are held for at least two years from the Grant Date of the
Incentive Stock Option and one year from the date of exercise of the Incentive Stock Option. The Corporation or its authorized representative
may accept payment of the Exercise Price in the form of a Participant’s personal check. Payment may also be made by delivery (including by
FAX transmission) to the Corporation or its authorized representative of an executed irrevocable option exercise form together with irrevocable
instructions to an approved registered investment broker to sell Shares in an amount sufficient to pay the Exercise Price plus any applicable
withholding taxes and to transfer the proceeds of such sale to the Corporation.
(B) If required by the Corporation, by giving satisfactory assurance in writing, signed by the Participant, the Participant shall give his or
her assurance that the Shares subject to the Option are being purchased for investment and not with a view to the distribution thereof; provided
that such assurance shall be deemed inapplicable to (1) any sale of the Shares by such Participant made in accordance with the terms of a
registration statement covering such sale, which has heretofore been (or may hereafter be) filed and become effective under the Securities Act
of 1933, as amended (the “Securities Act”) and with respect to which no stop order suspending the effectiveness thereof has been issued, and
(2) any other sale of the Shares with respect to which, in the opinion of counsel for the Corporation, such assurance is not required to be given
in order to comply with the provisions of the Securities Act.
(C) As soon as practicable after receipt of the notice and the assurance described in Sections II.6(A) and (B), the Corporation shall,
without transfer or issue tax (except for withholding tax arrangements contemplated in Section VII.6) and without other incidental expense to
the Participant, cause an appropriate book entry to be entered in the records of the Corporation’s transfer agent recording the Participant’s
unrestricted interest in the purchased Shares; provided, however, that the time of such delivery may be postponed by the Corporation for such
period as may be required for it with reasonable diligence to comply with applicable registration requirements under the Securities Act, the
Exchange Act, any applicable listing requirements of any national securities exchange and requirements under any other law or regulation
applicable to the issuance or transfer of the Shares.
7. Limitations on Transfer. 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 or the laws of descent and
distribution. Notwithstanding the foregoing, (i) a
3