McKesson 2015 Annual Report Download - page 129

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McKESSON CORPORATION
The following are descriptions of equity plans that have been approved by the Company’s stockholders. The
plans are administered by the Compensation Committee of the Board of Directors, except for the portion of the
2013 Stock Plan and 2005 Stock Plan related to non-employee directors, which is administered by the Board of
Directors or its Governance Committee.
2013 Stock Plan: The 2013 Stock Plan was adopted by the Board of Directors on May 22, 2013 and
approved by the Company’s stockholders on July 31, 2013. The 2013 Stock Plan permits the grant of awards in
the form of stock options, stock appreciation rights, restricted stock (“RS”), restricted stock units (“RSUs”),
performance-based restricted stock units (“PeRSUs”), performance shares and other share-based awards. The
number of shares reserved for issuance under the 2013 Stock Plan equals the sum of (i) 30,000,000 shares,
(ii) the number of shares reserved but unissued under the 2005 Stock Plan as of the effective date of the 2013
Stock Plan, and (iii) the number of shares that become available for reuse under the 2005 Stock Plan following
the effective date of the 2013 Stock Plan. For any one share of common stock issued in connection with an RS,
RSU, performance share or other full share award, three and one-half shares shall be deducted from the shares
available for future grants. Shares of common stock not issued or delivered as a result of the net exercise of a
stock option, including in respect of the payment of applicable taxes, or shares repurchased on the open market
with proceeds from the exercise of options shall not be returned to the reserve of shares available for issuance
under the 2013 Stock Plan. Shares withheld to satisfy tax obligations relating to the vesting of a full-share award
shall be returned to the reserve of shares available for issuance under the 2013 Stock Plan.
Stock options are granted at no less than fair market value and those options granted under the 2013 Stock
Plan generally have a contractual term of seven years. Options generally become exercisable in four equal annual
installments beginning one year after the grant date. The vesting of RS or RSUs is determined by the
Compensation Committee at the time of grant. RS and RSUs generally vest over four years. PeRSUs vest three
years following the end of the performance period. Beginning in May 2014, the Company’s executive officers
are annually granted performance awards called Total Shareholder Return Units (“TSRUs”), which have a three-
year performance period and are payable in shares without an additional vesting period.
Non-employee directors may be granted an award on the date of each annual meeting of the stockholders for
up to 5,000 RSUs, as determined by the Board. Such non-employee director award is fully vested on the date of
the grant.
2005 Stock Plan: The 2005 Stock Plan was adopted by the Board of Directors on May 25, 2005 and approved
by the Company’s stockholders on July 27, 2005. The 2005 Stock Plan permits the granting of up to 42.5 million
shares in the form of stock options, RS, RSUs, PeRSUs, performance shares and other share-based awards. For
any one share of common stock issued in connection with an RS, RSU, performance share or other full-share
award, two shares shall be deducted from the shares available for future grants. Shares of common stock not
issued or delivered as a result of the net exercise of a stock option, shares withheld to satisfy tax obligations
relating to the vesting of a full-share award or shares repurchased on the open market with proceeds from the
exercise of options shall not be returned to the reserve of shares available for issuance under the 2005 Stock Plan.
Following the effectiveness of the 2013 Stock Plan, no further shares were made subject to award under the
2005 Stock Plan. Shares reserved but unissued under the 2005 Stock Plan as of the effective date of the 2013
Stock Plan, and shares that become available for reuse under the 2005 Stock Plan following the effectiveness of
the 2013 Stock Plan, will be available for awards under the 2013 Stock Plan.
Stock options are granted at no less than fair market value and those options granted under the 2005 Stock
Plan generally have a contractual term of seven years. Options generally become exercisable in four equal annual
installments beginning one year after the grant date. The vesting of RS or RSUs is determined by the
Compensation Committee at the time of grant. RS and RSUs generally vest over four years. PeRSUs vest three
years following the end of the performance period.
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