401(k) Retirement Savings Plan - Amazon Web …...Plan Highlights 401(k) Retirement Savings Plan...

401(k) Retirement Savings PlanSummary Plan DescriptionEffective July 1, 2019

3 Introduction

4 Plan Highlights

6 Eligibility & Enrollment

6 Excluded Classes

6 Enrolling

6 Automatic Enrollment

6 Choosing Your Beneficiaries

6 Plan Employers

7 Your Plan Contributions

7 Elective Deferrals

7 Pre-Tax Deferrals

7 Roth Deferrals

7 After-Tax Contributions

8 Changing Your Contribution Amounts

8 Rollover Contributions

8 IRS Limits

9 Matching Contributions

10 Discretionary Additional Matching Contributions

10 Vesting

11 Plan Investments

11 The Importance of Diversifying Your Retirement Savings

11 Initial Investment Instructions

12 Changing Your Investment Elections

12 Default Investment

12 Keeping Track of Your Investments

12 Dividends on McKesson Stock

12 Voting and Tender of Shares of McKesson Stock

12 Status as Eligible Individual Account & ERISA § 404(c) Plan

13 Access to Plan Accounts While an Employee

13 Loans

13 Withdrawals

15 Distributions Following Employment

15 Distribution Upon Death

16 Payment Options

16 How to Request a Distribution

17 Tax Consequences of Plan Payments

17 Mandatory Income Tax Withholding

17 Rollovers and Direct Rollovers

18 Net Unrealized Appreciation

18 State Taxes

18 Excise Tax on Early Distributions or Withdrawals

18 Roth Conversions

18 Tax Advice and Changes in Tax Laws

19 Additional Information

19 Filing a Claim

19 Appealing a Claim Denial

19 Losing Your Benefits

20 Assignment or Pledge of Interest

20 No Employment Contract

20 No Pension Insurance

20 Termination, Amendment and Suspension

20 Special Plan Provisions and Inactive Accounts

20 Maintenance of Plan Records

20 Account Maintenance Fees

21 Plan Administration Information

22 Your Rights as a Plan Participant

23 Administrative Facts

Contents

2

Introduction

The McKesson Corporation 401(k) Retirement Savings Plan (the “Plan”) is intended to provide you the unique opportunity to set aside tax-deferred retirement savings through convenient payroll deductions while reducing your federal and state income taxes. With a McKesson matching contribution to supplement your own savings, the Plan can help you achieve your individual financial goals more quickly. You have significant flexibility and choice: whether or not to make contributions, how much to contribute and where to invest. The availability of loans and hardship withdrawals means that you have access to your Plan funds if your circumstances change. Your Plan account is fully portable and allows you to change jobs without a loss in retirement benefits.

Provisions of the Plan are summarized in this summary plan description (SPD). This description does not state all plan terms and conditions. The information provided here does not cover every situation and is not intended to replace the plan document — or to change its meaning. In all cases, the plan document — and not this summary — will govern benefits paid under the Plan.

We hope that the information provided in this SPD will answer most of the questions you have regarding your Plan benefits. When you need assistance or have specific questions, log on to www.netbenefits.com or call 888.625.7747.

Introduction

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Plan Highlights

401(k) Retirement Savings Plan Highlights

The Plan is a long-term savings plan designed to provide savings for your retirement years, but there is more. Here’s a look at what the Plan has to offer:

Employee Contributions - Elective Deferrals & Automatic Enrollment

You may elect to contribute 1% to 75% of your eligible compensation to the Plan as Elective Deferrals subject to IRS limits. There are two types of Elective Deferrals that you can make to the Plan: Pre-Tax Deferrals and After-Tax Roth Deferrals. You can change your contribution percentage at any time. Any change that you make will be reflected in the next pay period (or as soon as administratively practicable thereafter).

If you do not make an election to contribute when you are first eligible to participate in the Plan, you will be automatically enrolled in the Plan. You will have five percent (5%) of your eligible compensation for each payroll period contributed on your behalf as Pre-Tax Deferrals. At any time you can make an affirmative election to participate at a different rate (including 0%).

Employee Contributions - After-Tax Contributions

You may elect to contribute 1% to 25% of your eligible compensation to the Plan as After-Tax Contributions. You can change your contribution percentage at any time. Any change that you make will be reflected in the next pay period (or as soon as administratively practicable thereafter).

McKesson Matching Contributions

McKesson will match your Elective Deferrals by making a Matching Contribution of $1 for each $1 you contribute as Elective Deferrals up to 3% of your pay and 50¢ for each $1 you contribute as Elective Deferrals on the next 2% of your pay. Elective Deferrals of more than 5% of your pay, Catch-Up Contributions and After-Tax Contributions are not matched.

Eligibility

If you’re a regular full-time or part-time McKesson employee scheduled to work at least 20 hours per week, you’re eligible to participate on the first of the month after having completed 2 months of service. If you’re a casual or temporary employee, you’re eligible to participate on the first of the month after completing one year of service (generally, a 12-month period during which you are credited with 1,000 hours of service).

4

Plan Highlights

Loans

While you are a McKesson employee, you may take out a loan against your Plan account. There is $35 loan origination fee and a $15 annual loan maintenance fee. You may have only one loan outstanding at any time.

Administration Fee

You will be charged an account maintenance fee of $9.50 per quarter ($38 per year).* This fee is automatically deducted from your account and will show as a separate line item on your quarterly statement.

* The fee is subject to change.

Access to Your Plan Account While Employed by McKesson

To help ensure that money is there when you are ready to retire, current tax laws restrict withdrawals from the Plan. Other than Plan loans, your access to Plan funds while you are an employee is limited to withdrawals that are permitted under certain circumstances. Withdrawals and distributions are subject to income taxes and possible early withdrawal penalties if you do not roll them over to another employer’s qualified retirement plan, an IRA or a Roth IRA.

Additional Information

For additional information, log on to www.netbenefits.com or call 888.625.7747.

Distributions After McKesson Employment

When you are no longer employed by McKesson, you are entitled to receive the vested portion of your Plan account in the form of a single lump sum payment in cash, McKesson stock, a combination of both cash and McKesson stock and installments. If your account balance is $1,000 or less, your account will be automatically paid out in a lump sum.

In-Plan Roth Conversion

The Plan gives you the flexibility to convert certain Plan sub-accounts into After-Tax Roth accounts. Converted balances are credited to an In-Plan Roth Conversion sub account.

Your Plan Account

Your Elective Deferrals, After-Tax Contributions and McKesson’s Matching Contributions are credited to your Plan account. Your Plan account is made up of sub-accounts credited with contributions according to source and contribution type.

Vesting

Your Elective Deferrals, McKesson Matching Contributions and After-Tax Contributions are 100% vested immediately.

Investment Options

You have a wide range of investment options allowing you the flexibility to create a diversified portfolio which meets your retirement goals. You may invest your Plan account among Core Investment Options, Target Retirement Date Investment Options and Fidelity BrokerageLink®. If you do not provide investment direction, your contributions will be invested in the age-based Target Retirement Date Investment Option.

Rollover Contributions

If you have a balance in a former employer’s retirement plan or an IRA, you may be eligible to consolidate your assets by rolling those amounts into the Plan.

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Eligibility & Enrollment

If you are a regular, full-time or part-time McKesson employee scheduled to work at least 20 hours per week and not in any of the excluded classes described below, you are eligible to participate in the Plan on the first day of the month following your completion of 2 months of service. If you are a casual or temporary employee of McKesson, you are eligible to participate in the Plan on the first day of the month following your completion of one year of service, which is a 12-month period in which you complete at least 1,000 hours of service. You may begin Plan participation with the first available paycheck coinciding with or next following the date you become eligible (or as soon as administratively practicable thereafter).

Excluded ClassesAn individual is not eligible to participate in the Plan for any period of time that he or she is:

• a seasonal or leased employee,

• a member of a collective bargaining unit (unless the collective bargaining agreement provides for participation in the Plan),

• a non-resident alien with no U.S. source income,

• an employee of any business unit or McKesson entity that is not designated as participating in the Plan,

• an employee covered by a defined contribution plan of a McKesson affiliate, or

• in any other excluded class described in the Plan document.

Enrolling You will be sent an enrollment package approximately one month before becoming eligible for Plan participation. If you are a casual or temporary employee, you will be sent an enrollment package after your completing one year of service.

Your enrollment materials will include directions for enrolling. To enroll, you can log on to www.netbenefits.com or call 888.625.7747.

You may elect to make Elective Deferrals (Pre-Tax and/or Roth Deferrals), After-Tax Contributions, and Catch-Up Contributions (Pre-Tax and/or Roth Deferrals) if you are eligible beginning as of the payroll period coinciding with or next following the date you become eligible by authorizing a payroll deduction. To do so, you will designate the percentage of pay to be contributed to the Plan (see “Your Plan Contributions” on p. 7) and name a beneficiary (see “Choosing Your Beneficiaries” below). Your enrollment must be submitted within the time and in the manner prescribed by McKesson and described in your enrollment materials.

Automatic Enrollment If you first become eligible for Plan participation on or after January 1, 2019, you will automatically be enrolled in the Plan and will have five percent (5%) of your eligible compensation for each payroll period contributed on your behalf as Pre-Tax Deferrals. Automatic Pre Tax Deferrals will start as soon as administratively feasible following the date you become eligible to participate and after you have received advance notice that you are going to be automatically enrolled. You may elect at any time not to contribute to the Plan, or to defer a different percentage of your eligible compensation.

Choosing Your BeneficiariesWhen you become a participant, you will need to designate a beneficiary to inform McKesson who should receive payment of your Plan account in the event of your death. If you are married and you die, federal law generally entitles your spouse to receive your account. You may name someone other than your spouse as your primary beneficiary, but only if your spouse gives a written, notarized consent to your designation. If you are single, die before you retire, and have not named a beneficiary, your account will be paid to your estate.

Plan EmployersThe employers under the Plan are McKesson Corporation and those of its subsidiaries or affiliates designated by the Board of Directors of McKesson to participate in the Plan. Unless indicated otherwise, “McKesson” refers to McKesson Corporation and each participating Plan Employer.

Eligibility & Enrollment

6

Your Plan Contributions

Elective DeferralsYou may contribute 1% to 75% of your eligible compensation to the Plan as Elective Deferrals. There are two types of Elective Deferrals that you can make: Pre-Tax Deferrals and Roth Deferrals. A single IRS limit ($19,500 for 2019 and as adjusted in later years by the IRS) applies to Elective Deferrals (Pre-Tax Deferrals, Roth Deferrals or a combination of both) for each calendar year. If you are age 50 or older at any time during a calendar year, you can contribute up to an additional $6,000 in Catch-Up Contributions (as Pre-Tax Deferrals, Roth Deferrals or a combination of both) for that calendar year.

Your Elective Deferrals are put into one of the 4 following sub-accounts: (1) Pre-Tax Deferral sub-account; (2) Roth Deferral sub-account; (3) Pre-Tax Catch-Up Contribution sub-account; and (4) Roth Deferral Catch-Up Contribution sub-account.

Generally, your eligible compensation includes all cash wages reported on your Form W-2 except (1) reimbursements and expense allowances, (2) fringe benefits (cash and noncash), such as amounts realized from the exercise of stock options, moving expenses, welfare benefits, imputed interest from below-market-rate loans and compensation previously deferred, (3) payments under a McKesson long-term incentive plan, (4) extraordinary payments not made under McKesson’s regular bonus program such as signing and retention bonus payments, and (5) amounts paid after your termination of employment with McKesson, e.g., severance payments (except as described below).

Your eligible compensation includes the following amounts paid within certain time frames after you terminate employment with McKesson:

• regular compensation for services during your regular working hours, or compensation for services outside your regular working hours (such as overtime or shift differentials), commissions, bonuses (e.g., payments under the McKesson Corporation Management Incentive Plan) or similar payments provided that such payments would have been paid to you in the absence of your termination; and

• accrued bona fide sick leave, vacation or other leave, but only if you would have been able to use the leave if your employment had continued.

Pre-Tax DeferralsPre-Tax Deferrals are not subject to current income tax and are exempt from federal and state income tax withholding.* As a result, your current taxable income – the amount on which you pay taxes – is reduced, saving you current tax dollars. Your Pre-Tax Deferrals and earnings on these deferrals are tax-deferred and are not subject to income tax until a later time when they are distributed to you.

For example, if you earn $40,000 in a particular year and elect to make Pre-Tax Deferrals to the Plan of $4,000, you only recognize $36,000 in income on that year’s tax return. This would represent a $1,000 current tax savings.** You ultimately pay income taxes on your Pre-Tax Deferrals and earnings when they are distributed to you, generally during retirement when your income tax rates may be lower.

Roth DeferralsRoth Deferrals are subject to federal and state income tax and employment taxes at the time they are contributed. Their tax treatment when coming out of the Plan is different from that of distributions of Pre-Tax Deferrals. A Roth distribution is qualified if it is made after the five-year period beginning on January 1 of the first year that you made either a Roth Deferral or a Roth conversion (see p. 18) under the Plan and is either (1) made on or after the date you attain age 59½, (2) made after your death, or (3) attributable to your being disabled. If the distribution is qualified, no income tax is due on either the Roth Deferrals or earnings distributed from the Roth account. If the distribution is not qualified, income tax will be due on the portion attributable to earnings.

After-Tax ContributionsYou may elect to contribute 1% to 25% of your eligible compensation to the Plan as After-Tax Contributions. After-Tax Contributions are subject to federal and state income tax and employment taxes at the time they are contributed. Earnings on After-Tax Contributions are tax deferred and are not subject to income tax until a later time when they are distributed to you. If you convert your After-Tax Account into an In Plan Roth Conversion sub-account, earnings on your contributions are distributed tax-free if paid in a Roth qualified distribution. Under special IRS nondiscrimination rules, the maximum amount you may contribute may be a lower percentage. In order to meet these rules, After-Tax Contributions may be returned to you. You will be notified if your contributions will be returned.


* Pre-Tax Deferrals may be subject to income tax in certain states, e.g., Pennsylvania. ** This assumes single filing status, a 25% income tax rate and no other adjustments/deductions.

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The decision whether to make Pre-Tax Deferrals, Roth Deferrals or After-Tax Contributions is complex. You may wish to consult a personal tax adviser. There are a number of factors to consider such as your current income tax rates relative to your projected income tax rates when you retire (or whenever you expect to receive a distribution from the Plan), the amount of investment earnings you expect to accumulate, how long you expect to keep your Elective Deferrals in the Plan and whether you expect to keep Roth Deferrals in the Plan until you are eligible for a Roth qualified distribution.

Changing Your Contribution AmountsYou may change, suspend or renew at any time the percentage of pay you are contributing. Any change that you make will be reflected in the next available pay period (or as soon as administratively practicable thereafter).

Rollover ContributionsKeeping your retirement savings in a single plan can help simplify paperwork and investment performance tracking. If you have taxable amounts in a traditional IRA or in a former employer’s pension, 401(k), 403(b) or governmental 457(b) plan, you may consolidate your assets by rolling these amounts into the Plan. Nontaxable amounts (e.g., after-tax and Roth 401(k) contributions) from other employer plans may be accepted by the Plan if they are directly rolled over from the other plan. Roth IRAs and nontaxable amounts in traditional IRAs may not be rolled into the Plan. With the exception of the distribution tax rules applicable to Roth Deferrals, these rolled over amounts will be treated in the same manner as other rollover contributions.

IRS LimitsIn addition to the IRS limitation on Elective Deferrals described above, the maximum amount of a participant’s annual compensation that may be taken into account under the Plan in any Plan Year (April 1 through March 31) is subject to a specified limit ($280,000 for 2019; this limit may also be adjusted annually to reflect changes in the cost of living). The aggregate amount of contributions (including Elective Deferrals, After-Tax Contributions, Matching Contributions and Discretionary Additional Matching Contributions) that may be added to your Plan account in any Plan Year is limited to $56,000 for 2019 (this limit may also be adjusted annually to reflect changes in the cost of living). These IRS limits may require a reduction in the contributions elected by or provided to you as a Plan participant. McKesson calculates all of these contribution limits annually and monitors them throughout the year. If you are found to have exceeded any of these limits, you will be contacted and appropriate action will be taken in accordance with the Plan’s provisions and applicable law. However, if you participate in more than one employer’s plan during the year, it is your responsibility to make sure you stay within the legal limits described above.


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Matching Contributions

On your behalf, McKesson will allocate to the Plan an amount equal to 100% of the first 3% of your pay that you contribute as Elective Deferrals and 50% of the next 2% of your pay that you contribute as Elective Deferrals. This means that McKesson makes a Matching Contribution of up to 4% of pay to your account when you contribute at least 5% of your pay as Elective Deferrals to the Plan.

For example, assume your eligible compensation is $2,000 per pay period and you elect to make Elective Deferrals at the rate of 5% of pay. For each pay period, you will make Elective Deferrals of $100 ($2,000 x 5%). For the first 3% of your pay that you contribute, your account is credited with a Matching Contribution of $60 ($2,000 x 3%). For the next 2% of your pay that you contribute, your account is credited with a Matching Contribution of $20 ($2,000 x 2% x 50%). For each payroll period, you are credited with a total Matching Contribution of $80 (or 4% of pay).

Elective Deferrals in excess of 5% of pay and After-Tax Contributions are not matched. Also, Catch-Up Contributions are not matched unless they are later reclassified as regular Elective Deferrals. Catch-Up Contributions may be reclassified as regular Elective Deferrals if they do not exceed a limit under the terms of the Plan or an IRS limit (e.g., the $19,000 IRS limit described on p. 8).

The Matching Contribution will be allocated to your Plan account as soon as administratively practicable following each pay period or such other period as determined by McKesson.

McKesson may make a Matching Contribution after the end of the Plan Year (April 1 to March 31) in order for you to receive your full match based on the 4% annual limit (called a “true-up” contribution). The true-up contribution will be made to your account if your Matching Contribution determined on an annual basis exceeds the Matching Contribution already made to your account during the Plan Year. Any true-up contribution that you receive for a particular Plan Year will be credited to your Additional Matching Contribution sub-account and is treated in the same manner under the Plan as other Matching Contributions.

For example, assume your annual pay is $50,000. You elect to make Elective Deferrals at a rate of 10% for the first half of the Plan Year and then elect to make Elective Deferrals at the rate of 0% for the second half of the Plan Year. During the first 6 months, your Elective Deferrals are $2,500 ($25,000 x 10%) and your account is credited with a Matching Contribution of $1,000 ($25,000 x 4%). During the second 6 months of the Plan Year, your Elective Deferrals are $0 and your account is credited with a Matching Contribution of $0. In this case, you make total Elective Deferrals of $2,500 and are credited a total Matching Contribution of $1,000. At the end of the Plan Year, your Elective Deferral rate for the year is 5% ($2,500/$50,000) and the Matching Contribution determined on an annualized basis is $2,000 ($50,000 x 4%). The annual Matching Contribution ($2,000) exceeds the Matching Contribution of $1,000 already credited to your account during the Plan Year. Your account is credited with a true-up contribution of $1,000 so that your account is credited with a Matching Contribution based on your total annual compensation for the Plan Year.

Matching Contributions are made in cash and are invested in accordance with the same investment instructions that apply to your Elective Deferrals.

Matching Contributions

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Discretionary Additional Matching Contributions

Following the end of the Plan Year, a Discretionary Additional Matching Contribution may be allocated to your Plan account. The amount of this Discretionary Additional Matching Contribution for any given Plan Year (April 1 through March 31) will be determined by the McKesson Board of Directors in its sole discretion. Any Discretionary Additional Matching Contribution will be communicated and calculated as a percentage of your Elective Deferrals that are eligible for Matching Contributions for that Plan Year. McKesson does not make any Discretionary Additional Matching Contributions as a result of Elective Deferrals in excess of 5% of pay or Catch-Up Contributions (unless such contributions are reclassified as regular Elective Deferrals as described on p. 7).

Discretionary Additional Matching Contributions are made in cash that is invested in accordance with the same investment instructions that apply to your Elective Deferrals.

Vesting

Being “vested” in contributions under the Plan means you have an unconditional guaranteed right to those contributions, subject to any applicable distribution and/or withdrawal restrictions.

Elective Deferrals, After-Tax Contributions and McKesson Matching Contributions made under the Plan are 100% vested at all times. If you had an account balance under an acquired company’s 401(k) plan that was merged into the Plan, that account may continue to vest under the Plan according to the vesting schedule that applied under the prior plan.

Discretionary Additional Matching Contributions and Vesting

10

Plan Investments

To help you make the most of your retirement savings, the Plan offers a wide range of investment options. This flexibility provides you with the opportunity to create a diversified investment portfolio that’s right for you based on your investment objectives and tolerance for risk, your knowledge and experience with investments, and your time available to monitor your investments. Log on to www.netbenefits.com or call 888.625.7747 to review the participant disclosure notice* and other materials that contain the latest, up-to-date information about investment options available under the Plan. As of the date of this SPD, the Plan’s investment options are the following:

Core Investment Options:

• BNY Mellon Stable Value Portfolio

• McKesson Bond Portfolio

• Dodge & Cox Large Cap Value Portfolio

• State Street S&P 500 Index Fund

• McKesson Large Cap Growth Portfolio

• Fisher Investments Small Cap Value Portfolio

• McKesson Small Cap Growth Portfolio

• McKesson International Equity Portfolio

• McKesson Employee Stock Fund

The McKesson Employee Stock Fund was frozen to new investments effective August 31, 2018 (the “Freeze Date”). As of the Freeze Date, no new contributions, loan repayments, or investment exchanges were allowed into this Fund. Any existing balances you had in this Fund on the Freeze Date can remain in the Fund or you may exchange all or a part of your balance in the Fund into one or more of the other investment options.

• Target Retirement Date Investment Options:

• Vanguard® Target Retirement Income Trust Plus

• Vanguard® Target Retirement 2015 Trust Plus











• Fidelity BrokerageLink®

Fidelity BrokerageLink® allows you to choose from investments in addition to the Core Investment Options and Target Retirement Date Investment Options, such as mutual funds, stocks, corporate bonds and U.S. Treasury Securities. This feature is intended for investors who are comfortable actively managing a portfolio of expanded investment choices. McKesson does not provide any management oversight with respect to Fidelity BrokerageLink®.

The Importance of Diversifying Your Retirement SavingsTo help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investment options can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one category or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. Therefore, you should carefully consider the rights described in this SPD and how these rights affect the amount of money that you keep invested in the McKesson Employer and McKesson Employee Stock Funds.

It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. You may wish to log onto www.netbenefits.com to review available investment education tools.

Initial Investment InstructionsYou can make your initial investment choices by logging onto www.netbenefits.com or calling 888.625.7747. You may invest your savings in any percentage increment, as long as the combination adds up to 100%. For example, you may put 25% in one option, 33% in a second, and 42% in a third.

Plan Investments

* The Participant Disclosure Notice, which is legally required under DOL Regulations § 2550.404a-5, is incorporated by reference into this SPD and is also part of the Prospectus of the Plan. 11

Changing Your Investment ElectionsIn addition to selecting options, you have a number of choices when you change your investments. You can specify whether your elections apply to (1) current holdings only; (2) future contributions only; or (3) both current holdings and future contributions.

You can rebalance your entire Plan account by electing to change your current holdings only. Changes are generally effective on the day of the election or the following business day depending on the time of day that you make your election.

Default InvestmentIf you do not provide investment direction, your contributions (including automatic contributions to the Plan if you have been automatically enrolled) will be invested in the age-based Target Retirement Date Investment Option (listed on p. 11). Your Target Retirement Date Investment Option is based on the year closest to the year that you will attain age 65. You can change your investment of these contributions at any time in accordance with the procedures described above. However, unless you provide alternative direction, your contributions will continue to be invested in this default investment option.

Keeping Track of Your InvestmentsYou can log on to www.netbenefits.com or call 888.625.7747 to get current and year-to-date investment results for all options.

You can obtain your Plan statement on-line at any time. The statement shows the beginning and ending balance, your vested account balance and any other transactions affecting your account. It also shows the amount of Elective Deferrals, After-Tax Contributions, McKesson Matching Contributions and Discretionary Additional Matching Contributions along with the investment options’ performance during the year.

Dividends on McKesson StockThe dividends on the McKesson stock held in your McKesson Employer Stock Fund and Employee Stock Fund accounts will be automatically reinvested in shares of McKesson stock, unless you elect to have those dividends paid directly to you in cash, in accordance with procedures established by McKesson.

In the event of a capital adjustment resulting from a stock dividend, stock split, reorganization merger, consolidation or a combination or exchange of shares, shares of stock held in the McKesson Employer Stock Fund and McKesson Employee Stock Fund will be appropriately adjusted.

Voting and Tender of Shares of McKesson StockParticipants in the Plan are entitled to instruct the Trustee on a confidential basis (1) how to vote all shares of McKesson stock allocated to their accounts under the Plan, and (2) the manner in which the Trustee is to respond to a tender or exchange offer with respect to any or all shares of McKesson stock allocated to their accounts under the Plan. The Trustee votes the shares as instructed by participants. If no instructions are received with regard to shares of McKesson stock in a participant’s inactive PAYSOP account, such shares will not be voted. Any other shares of McKesson stock as to which the Trustee receives no voting instructions are voted by the Trustee in the same proportion as shares for which instructions are received. In the event of a tender or exchange offer, any shares of McKesson stock allocated to participants’ accounts as to which the Trustee receives no instructions shall be tendered or exchanged by the Trustee.

Status as Eligible Individual Account & ERISA § 404(c) PlanThe Plan is an employee stock ownership plan (an “ESOP”) and also an eligible individual account plan under the Employee Retirement Income Security Act of 1974 (“ERISA”). This means that it is specifically designed to invest in McKesson stock and, as a result, the diversification requirement and prudence requirement (to the extent it requires diversification) under ERISA are not violated by the acquisition or holding of McKesson stock. The terms of the Plan require that McKesson stock be offered as an investment option. Participants are solely responsible for any investment losses incurred as a result of investments in McKesson stock.

Also, the Plan is a plan which is described in ERISA Section 404(c) under which each participant exercises control over the assets in his accounts and shall be provided the opportunity to choose, from a broad range of investments, the manner in which the assets in his or her Plan accounts are invested. No person who is otherwise a fiduciary of Plan shall be liable for any loss which results from such exercise of control, whether by the participant’s affirmative direction or failure to direct an investment. For purposes of ERISA Section 404(c), self-directed brokerage investments are not designated investment alternatives, and no Plan fiduciary shall have the obligation to monitor or evaluate the prudence of such investments.

Plan Investments

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Access to Plan Accounts While an Employee

Although the Plan is intended primarily as a vehicle for long-term savings, you can gain access to all or portions of certain of your sub-accounts while an active McKesson employee under specified circumstances. Access to Plan sub-accounts is available through loans and withdrawals.

LoansYou may borrow from your Plan account for any reason and pay the principal, plus interest, back to your own Plan account. The minimum you can borrow is $1,000. The maximum you can borrow is the lowest of:

• 50% of the total vested value of your Plan account;

• $50,000 less your highest outstanding loan balance in the 12 months preceding your loan application; or

• The total value of your sub-accounts credited with Elective Deferrals (including Pre-Tax, Roth and Catch-Up contributions), After-Tax Contributions and Rollover Contributions.

There is a $35 loan origination fee and a $15 annual loan maintenance fee. The interest rate is the Prime rate, as published in The Wall Street Journal on the last day of the preceding month, plus 1%. The interest rate is fixed for the entire term of the loan. You are allowed only one loan at a time. You can choose a repayment term from 1 to 5 years; in the case of a residential loan, you are permitted a 10-year repayment term.

Your loan and the interest are repaid to your Plan account through easy, automatic payroll deductions. If you choose, you can repay the loan in full at any time.

If you leave McKesson before your loan has been fully repaid, you can choose to repay your loan in full, continue to repay via automated clearing house (ACH) or have your outstanding loan balance deducted from your Plan balance. Keep in mind that distributions are taxable, and if your loan is considered a distribution, you may be subject to an additional tax penalty.

Loans of Moneys From Predecessor Employers’ PlansCertain participants who had accounts in plans of predecessor employers which were merged into the Plan may be subject to different rules with respect to loans from the portion of their Plan accounts attributable to their interests in the prior plan.

WithdrawalsThe special tax benefits allowed for plans like the Plan are offered to encourage you to save for the future. To help ensure that money is there when you are ready to retire, current tax laws restrict withdrawals of this money during your working years.

Other than Plan loans, your access to Plan funds while you are an employee is limited to withdrawals that are permitted under certain circumstances. The types of withdrawals possible for employees are:

• Financial hardship withdrawals;

• Withdrawals after age 59½;

• Rollover Contribution withdrawals;

• Qualified Reservist Distributions; and

• Withdrawals of legacy After-Tax Contributions.

Withdrawals shall be made from the applicable sub-accounts available for such withdrawals in such order as prescribed by McKesson. If a withdrawal is made from a sub-account which is invested in more than one investment option, the amount withdrawn shall be charged to each investment in the same proportion as the sub-account is invested in such investment option.


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Hardship WithdrawalsYou may withdraw amounts in your sub-accounts credited with Elective Deferrals (including Pre-Tax, Roth and Catch-Up Contributions), regular After-Tax Contributions, legacy After-Tax Contributions and Rollover Contributions while you are working if you have a financial hardship and the withdrawal is necessary in light of your own immediate and heavy financial needs. If you made Pre-Tax Deferrals prior to January 1, 1987, you may also withdraw your pre-1987 earnings on those contributions.

You can withdraw only up to the amount you need to meet the financial hardship and only to the extent the money is not reasonably available from other sources. If you are under age 59½, you may be required to pay a 10% federal tax penalty, in addition to ordinary federal income taxes.

You can take a hardship withdrawal for the following purposes:

• The purchase of your principal residence

• Certain post-secondary educational expenses for you, your spouse, your dependents and your primary beneficiary

• Medical expenses not covered by insurance for you, your spouse, your dependents and your primary beneficiary

• Action to prevent eviction from or foreclosure on your principal residence

• Burial or funeral expenses for your deceased parent, spouse, children, dependents or primary beneficiary

• Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction on your federal tax return

For these purposes, your “primary beneficiary” is an individual named in your beneficiary designation form who has an unconditional right to all or a portion of your account after your death.

McKesson’s decision about your hardship withdrawal request will specify the amount that may be withdrawn and will be final and binding on all interested parties.

Withdrawals after Age 59½When you reach age 59½, you may withdraw in cash all or a part of amounts in your sub accounts credited with Elective Deferrals (including Pre-Tax, Roth and Catch-Up Contributions), regular After-Tax Contributions, legacy After-Tax Contributions, and Rollover Contributions for any reason—even if you are still an active employee of McKesson.

Qualified Reservist DistributionsIf you are ordered or called to active duty for a period in excess of 179 days or for an indefinite period of time by reason of being a member of a reserve component (as defined in section 101 of title 37, United States Code), you may, during your period of employment with McKesson beginning on the date of the order or call to active duty and ending at the close of the active duty period, withdraw in cash all or a part of amounts in your sub-accounts credited with Elective Deferrals (including Pre-Tax, Roth and Catch-Up Contributions), prior After-Tax Contributions, and Rollover Contributions.

Rollover Accounts During your employment with McKesson you may withdraw in cash all or a part of amounts in your sub-accounts credited with Rollover Contributions.

Withdrawal of Legacy After-Tax ContributionsPrior to September 1, 1983, participant contributions to the Plan were made on an after-tax basis. While you are an employee, you may withdraw all or any part of your Plan account’s Regular and Voluntary Contributions made before September 1, 1983. The amount available will be adjusted to account for any net losses. You may not withdraw earnings attributable to these Regular and Voluntary Contributions.

No Withdrawals From Certain AccountsWhile you are an employee, you cannot, under any circumstances, withdraw from amounts attributable to your McKesson Matching Contributions, Non-Matching Employer Contributions, Additional ESOP Matching Contributions, RSP Contributions, PAYSOP Contributions, or the Special 1994 Allocation.

Withdrawal of Amounts Under Predecessor Employers PlansCertain participants who had accounts in plans of predecessor employers which were merged into the Plan may have special protected withdrawal rights with respect to the portion of their Plan accounts attributable to their interests in the prior plan.


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Distributions Following Employment

A distribution of the vested portion of your Plan account is payable if you terminate employment for any reason or if you are disabled and receiving Social Security disability benefits. You (or your beneficiaries, in the case of your death) may elect to receive your Plan distribution at any time following your termination, or, if the value of your entire Plan account balance is greater than $1,000, you may defer payment to a later date. However, your Plan benefits generally must begin to be paid to you as required minimum distributions no later than the end of the calendar year in which you reach age 70½. If your entire Plan account balance is valued at $1,000 or less, your Plan benefits will be distributed to you (or your beneficiaries, as applicable) in a lump sum as soon as practicable following your termination.

Distribution Upon Death

If you die before distribution of your Plan benefits has begun, your vested benefits will be paid in a lump sum payment to your designated beneficiary as soon as practicable following your death. Alternatively, your designated beneficiary may elect to receive the distribution at a later date, provided that such distribution shall in no event be made later than 5 years after your death.

If you elect distribution of your Plan benefits in installment payments, and die before you receive your full benefit, your beneficiary may choose to receive the remaining benefit either in installment payments, or in one lump sum payment. If your beneficiary chooses installment payments and the beneficiary is your spouse, the payments may be made over a period of time no longer than your spouse’s remaining life expectancy (calculated at the time of your death). In all other cases, payments must be completed within 5 years after your death.

If you were married and your beneficiary designation does not provide for payment of death benefits to your spouse, that designation will be effective only if it includes the written and notarized consent of your spouse.

Distributions Following Employment and Distribution Upon Death

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Payment Options and How to Request a Distribution

Payment Options

You may elect a distribution of your Plan account in the form of a single lump sum payment in cash, McKesson stock (to the extent your Plan account is invested in McKesson stock) or a combination of both. Alternatively, you may elect to receive a distribution of your Plan account in installments (in cash only) over a period not to exceed your (or you and your spouse’s, if applicable) expected remaining lifetime.

How to Request a Distribution

To request a distribution, withdrawal or rollover to another plan or IRA, log on to www.netbenefits.com or call 888.625.7747. You must call the McKesson Service Center to request a distribution in installments, a withdrawal, a required minimum distribution, or if you want to roll over your entire distribution to another eligible retirement plan, such as a new employer’s 401(k) plan or to an IRA.

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Tax Consequences of Plan Payments

The Plan is intended to meet the qualification requirements of Sections 401(a) and 401(k) and related provisions of the Internal Revenue Code (the “Code”). As long as the Plan remains so qualified, the federal tax consequences of payments from the Plan will be as generally described below, subject to any changes in applicable federal tax laws and regulations.

All payments to you from the Plan are subject to federal income tax unless they (1) are properly rolled over to an IRA or to another plan as described below, or (2) represent amounts on which you already paid federal income tax such as Roth Deferrals, Roth converted amounts, After-Tax Contributions and pre September 1983 Regular and Voluntary Contributions. Earnings on Roth Deferrals and Roth converted amounts are exempt from federal income tax if paid in a Roth distribution that is qualified as described on p. 7. Under a special tax rule, while you are employed by McKesson, you may withdraw pre September 1983 Regular or Voluntary contributions on a tax-free basis; earnings on such contributions are taxed when paid after you are no longer a McKesson employee.

Prior to receiving a payment from the Plan, you have the right to receive a detailed explanation of the federal income tax consequences of the payment. This explanation is posted at www.netbenefits.com. For additional information about these tax rules that apply to Plan payments, refer to IRS Publication 575 “Pension and Annuity Income,” which is available from a local IRS office, on the internet at www.irs.gov or by calling 1-800-TAX-FORM.

Mandatory Income Tax WithholdingThe taxable part of any payment that is an eligible rollover distribution is subject to 20% income tax withholding. If the payment includes McKesson stock, the amount withheld will not exceed the amount payable in cash.

Certain states also may require additional mandatory withholding. The amount withheld is applied to your income tax liability for the year of the payment, like income taxes withheld from salary. The fact that you may make a regular rollover later has no bearing on mandatory withholding. Rollovers and direct rollovers are discussed below.

Rollovers and Direct RolloversSubject to the special rules applicable to Roth Deferrals described below, you may elect to roll over all or any portion of an eligible payment from the Plan to an IRA, a Roth IRA, a 403(b) plan, a governmental 457 plan or to a tax-qualified plan described in Section 401(a) of the Code of another employer such as a 401(k) plan that accepts rollovers (each, an “eligible retirement plan”). Hardship distributions, installments paid over 10 years or more, required minimum distributions and certain other payments are not eligible for roll over. The amount rolled over will not be subject to income tax until it is distributed from the eligible retirement plan. But the 20% withholding tax will still apply, unless you arrange a direct rollover as discussed below.

For example, assume that you are about to receive a taxable distribution of $10,000. If you do not arrange for a direct rollover, McKesson must withhold $2,000. As a result, you will have to contribute $2,000 from other sources in order to make a rollover of the full $10,000. Otherwise, you can only roll over $8,000, which means that you will owe tax on the $2,000. To the extent that the amount withheld is greater than the tax actually owed on the distribution (for instance because a rollover was made), the amount withheld may be applied to other income tax liabilities or will be refunded by the IRS. However, the Plan is not required to withhold any amount from the portion of a distribution that is made in McKesson stock.

You must make a rollover within 60 days after receipt of a distribution. Shares of McKesson stock may be rolled over in kind. Alternatively, the shares may be sold and the proceeds rolled over, in which event no gain or loss is recognized on the sale. If you make a rollover but choose to retain a part of the distribution that would have been eligible for inclusion in the rollover, then that part is taxed entirely as ordinary income.

In a direct rollover, all or part of a Plan payment is paid directly from the Plan to an eligible retirement plan (as defined above). (The plans of other employers are not required to accept rollovers.) You must provide McKesson with the information that it needs to arrange the direct rollover and comply with the other procedures adopted by McKesson. A direct rollover is the only way to avoid 20% income tax withholding on any taxable payment from the Plan.

The portion of your account attributable to Roth Deferrals can only be directly rolled over to a Roth IRA or to another employer’s tax-qualified plan such as a 401(k) plan that provides for Roth elective deferrals.

In general, the tax treatment and rollover rules described above that apply to payments made to you as an employee also apply to payments to your surviving spouse upon your death or to your spouse or former spouse who is an “alternate payee” under a qualified domestic relations order.


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A distribution made to a beneficiary other than your surviving or alternate payee spouse may also be rolled over, subject to the following rules: The non-spouse beneficiary must make a direct rollover of death benefits received from the Plan to an IRA or Roth IRA established to receive the distribution. Rollovers to another employer plan are not permitted. Also, the non-spouse beneficiary cannot receive a payment and then roll over the payment him/herself to the IRA. The IRA will be treated as an inherited IRA and will be subject to the required minimum distribution rules that apply to beneficiaries under the Plan and to inherited IRA beneficiaries. Your non-spouse beneficiary should consult with a personal tax adviser in order to understand these rules before electing a rollover.

Net Unrealized AppreciationThat portion of a distribution which represents the difference between the fair market value of any McKesson stock at the time it is distributed to you and the value of the stock at the time it was contributed to or otherwise acquired by the Trust is termed “net unrealized appreciation.” In the case of a distribution that is either attributable to after-tax contributions or paid in a lump sum after separation from service (or after age 59½, disability or death), the amount of any net unrealized appreciation with respect to any McKesson stock distributed to you will be excluded from your income and your cost basis for such stock will be the same as the cost basis to the Trust. Upon the subsequent disposition of the shares, the gain will be taxed as long-term capital gain to the extent of the net unrealized appreciation. Any additional appreciation realized from the disposition will be taxed as long-term or short-term capital gains depending on the period the stock is held after distribution from the Plan. The minimum period for which the stock must be held to qualify for long-term capital gains treatment is not less than 12 months.

State TaxesThe state tax rules applicable to qualified plan distributions vary from state to state. For instance, the California rules on lump sum distributions are different in some respects from the federal rules. Accordingly, a participant should consult his or her own personal tax adviser concerning the state tax consequences of a qualified plan distribution.

Excise Tax on Early Distributions or WithdrawalsA 10% additional income tax will apply to the taxable amount of payments made before age 59½ (including a distribution of earnings on Roth Deferrals that is not qualified as described on p. 7). Certain withdrawals or distributions, however, are exempt from the additional tax. Accordingly, a participant should consult his or her own qualified personal tax adviser concerning the 10% additional income tax on qualified plan distributions.

Roth ConversionsThe Plan gives you (or your surviving spouse beneficiary or alternate payee who is a spouse or former spouse) the flexibility to convert certain Plan sub-accounts (including your Pre-Tax Deferral, Pre-Tax Catch-Up Contribution, Matching Contribution and After-Tax Contribution sub-accounts) into after-tax Roth accounts. Converted balances are credited to an In-Plan Roth Conversion sub account. Roth conversions once made are irreversible. Loan balances, unvested amounts and special types of contribution sources are not eligible for Roth conversion.

Converted amounts will continue to be subject to the same distribution restrictions that applied prior to conversion, if any. Converted balances are subject to federal income tax in the year of conversion unless they represent amounts on which you already paid federal income tax. If converted amounts include McKesson stock, the amount subject to tax is based on the fair market value of the stock at the time of conversion. The favorable tax treatment afforded to net unrealized appreciation of McKesson stock described above may be lost if McKesson stock is included in the conversion. Because a conversion will trigger taxable income, you may need to increase tax withholding from other sources or make estimated tax payments to avoid tax underpayment penalties. A converted amount is not subject to the 10% excise tax on early distributions unless it is distributed within five years of conversion. If you have multiple Roth conversions, a separate five year period is tracked for each conversion. If the conversion amount is distributed within the five-year period, the 10% tax applies to the distribution as if it were taxable to you unless you are exempt from the tax at the time of distribution.

Amounts distributed from an In-Plan Roth Conversion sub-account are exempt from federal income tax if paid in a Roth distribution that is qualified as described on p. 7. For purposes of determining whether the distribution is Roth qualified, the 5-year period starts on January 1 of the first year that you either make a Roth Deferral or complete a Roth conversion under the Plan.

Tax Advice and Changes in Tax LawsYou are encouraged to consult a professional tax advisor before receiving a payment from the Plan and before electing a Roth conversion. The foregoing summary does not describe all of the complex tax rules that apply. Also, Congress may amend the Code at any time and the IRS may issue new regulations or rulings. Such developments could render all or any part of the foregoing tax summary discussion obsolete. McKesson assumes no responsibility for the continuing accuracy of the information provided above.


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Following is more important information that you should know about the Plan.

Filing a ClaimIf you or your beneficiary believe you are entitled to a benefit from the Plan which you have not yet received, you may file a claim by writing to the Senior Vice President, Total Rewards, McKesson Corporation, 6555 North State Highway 161, Irving, Texas 75039. You will receive written notice of the decision on your claim within 90 days of filing your request, unless special circumstances require an extension of up to an additional 90 days.

Appealing a Claim DenialIf your claim is denied in whole or in part, you will receive notice stating the reasons for the denial and specific Plan provisions upon which the denial is based, and an explanation of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action under section 502(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”) if your appeal is denied. If your claim is denied because you did not furnish complete information or documentation, the notice will also describe any additional information or material required to support your claim and an explanation of why such information is required.

You may then appeal the decision by filing a written notice of appeal with the Senior Vice President, Total Rewards, McKesson Corporation, 6555 North State Highway 161, Irving, Texas 75039, within 60 days after receipt of the notice of denial. The Senior Vice President, if good cause is shown, may extend the period during which the appeal may be filed for another 60 days. You and/or your authorized representative would be permitted to submit written comments, documents, records and other information relating to the claim for benefits. Upon request and free of charge, you and/or your authorized representative may also receive reasonable access to, and copies of, all documents, records or other information relevant to your claim.

The Senior Vice President’s review shall take into account all comments, documents, records and other information submitted by the appellant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination, and shall not be restricted to those provisions of the Plan cited in the original denial of the claim.

The Senior Vice President will issue his written decision within 60 days after receipt of the appeal, unless special circumstances require an extension of time for processing, in which case the written decision shall be issued as soon as possible, but not later than 120 days after receipt of an appeal. If such an extension is required, written notice shall be furnished to you within the initial 60-day period. This notice will state the circumstances requiring the extension and the date by which the Senior Vice President expects to reach a decision on your appeal.

If the decision on the appeal denies the claim in whole or in part, you will be provided with a written notice. The notice shall state the reason(s) for the denial, including references to specific Plan provisions upon which the denial was based. The notice will state that you and/or your authorized representative are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits, and will describe any voluntary appeal procedures, if any, offered by the Plan and your right to obtain the information about such procedures. The notice will also include a statement of your right to bring a legal action under Section 502(a) of ERISA after exhausting the claims procedure.

If you do not file a claim, follow the claims procedures, or appeal on time, you will give up legal rights, including your right to file a suit in federal court, as you will not have exhausted your internal administrative appeal rights. Generally, you must exhaust your internal administrative appeal rights before you can bring a suit in federal court.

No legal action may be commenced or maintained against the Plan, McKesson or the Plan Administrator more than one year after your appeal is denied.

Losing Your BenefitsYou may lose benefits under certain circumstances including:

• Termination of employment before completing vesting requirements (to the extent such vesting requirements are applicable to your McKesson contribution sub-accounts).

• A loss in value of your investments due to a drop in the value of any security or market fluctuations.

• Your benefit may be reduced by account maintenance fees.

• Your benefit may be reduced by amounts that you are ordered or required to pay under a qualified domestic relations order. The Plan’s procedures for determining whether a domestic relations order is a qualified domestic relations order are available, without charge, from the Plan Administrator.


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• Your benefits may be reduced by amounts that you are ordered or required to pay the Plan, where such order or requirement: (1) arises under a judgment of conviction for a crime involving the Plan or a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation of part 4 of subtitle B of Title I of ERISA; and (2) the judgment, order, decree or settlement provides for the offset of all or part of the amount ordered or required to be paid to the Plan against the benefits provided under the Plan.

Assignment or Pledge of InterestExcept pursuant to a qualified domestic relations order, your interest in the Plan, whether before or after you retire, may not be assigned or hypothecated by you or your beneficiary.

No Employment ContractNothing in the Plan or the Plan description confers any right of continued employment on any employee or in any way prohibits changes in the terms of, or the termination of, employment of any employee covered by the Plan.

No Pension InsuranceThe Plan is subject to the principal provisions of Titles I and II ERISA. The Plan is not subject to the provisions of Title IV of ERISA, which relates to plan termination insurance to be provided by the Pension Benefit Guaranty Corporation, a government corporation. Protections under Title IV are applicable to defined benefit plans only, whereas the Plan is a defined contribution plan.

Termination, Amendment and SuspensionMcKesson intends to continue the Plan indefinitely, but McKesson reserves the right to amend, suspend or terminate the Plan at any time and for any reason by resolution of its Board of Directors. The CEO of McKesson also may, at any time, adopt any amendments to the Plan as may be necessary to comply with applicable law and that do not materially increase the costs of the Plan. No such amendment, suspension or termination shall be made so as to permit any part of the Trust to be used for any purpose except for the exclusive benefit of participants and their beneficiaries nor to affect adversely any right the participant or his or her beneficiary may then have with respect to contributions previously made except as may be necessary to obtain or retain qualification of the Plan and the Trust under the Code.

The Plan is designed to qualify under Sections 401(a), 401(k), 409 and 4975(e) of the Internal Revenue Code. If it is ever finally determined that the Plan as adopted by any employer no longer satisfies these sections, such employer and its employees shall cease to participate in the Plan at the date of such determination.

In the event that the Plan is terminated or partially terminated, or if the contributions of any Plan Employer are completely discontinued, the amounts credited to the accounts of all affected employees shall be vested and non-forfeitable. McKesson shall determine the time and method of payment of such amounts on a uniform and nondiscriminatory basis. The Trust shall continue until, at the direction of McKesson, the entire value of the account of each participant has been distributed to or applied for the benefit of each participant or his or her beneficiary.

Special Plan Provisions and Inactive AccountsThe Plan contains several provisions that are not currently in effect, including Additional ESOP Matching Contributions, RSP Contributions, Non-Matching Employer Contributions, special provisions relating to the PCS Transaction, the special 1994 Allocation, PAYSOP contributions and Quarterly Contributions. Information about these obsolete provisions may be obtained from McKesson.

Maintenance of Plan RecordsThe McKesson Service Center maintains the records relating to the Plan. A report summarizing the status of a participant’s account is available to the participant upon request. Any such request should be directed as follows:

McKesson Corporation Service Center PO Box 770003Cincinnati, OH 45277-0065

Copies of the Plan document can be requested by calling 888.625.7747.

Account Maintenance FeesEach Plan participant is charged a fixed per participant account maintenance fee that will be the same regardless of contribution level or account balance. This fee is $9.50 per quarter ($38 per year) and is automatically deducted from accounts. The fee is subject to change.

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Plan Administration Information

Plan Administration Information

McKesson has full discretionary authority to administer the Plan and to interpret its provisions. McKesson will make such rules, regulations, computations, interpretations and decisions as necessary to administer the Plan in a nondiscriminatory manner for the exclusive benefit of the participants and their beneficiaries. The conclusions and decisions of McKesson on all such matters shall be final as to all interested parties.

McKesson has appointed Fidelity Management Trust Company as Trustee under the Plan. As frequently as weekly, McKesson turns over to the Trustee, and the Trustee has custody of, the contributions made on behalf of each participant. The Trustee is responsible for the administration of these contributions in accordance with the provisions of the Plan. From time to time, the Board of Directors of McKesson may appoint independent investment advisers to invest the Core Investment Options under the Plan. McKesson may from time to time give the Trustee such instructions and directions as may be necessary to administer the trust and to carry out the provisions of the Plan. Except for investment management fees for the participant-directed investment options, which are paid from the Plan Trust, McKesson has complete and unfettered discretion to determine whether an expense of the Plan is paid by McKesson or the Plan Trust.

If shares of McKesson Stock must be acquired by the Trust, the Trustee may purchase them at the prevailing market price established on the New York Stock Exchange or otherwise in the open market. Shares may be purchased on the open market or from McKesson. In addition, McKesson may contribute shares of McKesson Stock to the Plan from authorized, but unissued shares, or out of its treasury shares.

McKesson maintains accounts for each participant under the Plan. McKesson is required to provide to each a participant a quarterly statement with respect to the status of his or her account, setting forth the value of his or her account as of the end of the calendar quarter and the preceding calendar quarter, the amount of Elective Deferrals (including Pre-Tax, Roth and Catch-Up Contributions), After-Tax Contributions and Matching Contributions, and any withdrawals made by the participant during the calendar quarter.

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Your Rights as a Plan Participant

Your Rights as a Plan Participant

As a participant in the Plan, you are entitled to certain rights and protections under Title I of the Employee Retirement Income Security Act of 1974 (ERISA).

Right to InformationYou may examine without charge all official Plan documents during business hours in the McKesson Benefits Department. These documents include the legal texts of the Plan, insurance contracts, trust agreements, summary plan descriptions and annual reports that McKesson files with the U.S. Department of Labor.

You may also obtain a copy of any of these documents by writing to the Plan Administrator. You may be charged a reasonable fee for copies.

You have the right to receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

In addition to certain rights for Plan participants, ERISA imposes duties on people responsible for the operation of the Plan. These people, called fiduciaries, have a duty to operate the Plan prudently and in the interest of all Plan participants and beneficiaries.

No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way for obtaining benefits or exercising your ERISA rights.

Denied ClaimIf your claim for a benefit under the Plan is denied in whole or in part, you must receive a written explanation of the reason for denial, have the right to obtain copies of documents relating to the decision without charge, and have the right to appeal the denial, all within certain time schedules.

Enforcing Your RightsUnder ERISA, you can take steps to enforce these benefits rights. For instance, if you request materials from the Plan Administrator and do not receive them within 30 days, you may file suit in federal court after having exhausted the internal claims procedure. The court may require the Plan Administrator to provide the materials and pay up to $110 a day until you receive them, unless the materials could not be sent because of reasons beyond the Administrator’s control.

If your claim for benefits is denied or ignored in whole or in part and if you have exhausted the Plan’s claims procedure, you may file suit in a state or federal court. In addition, if you disagree with the Plan’s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court.

If the Plan’s fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or file suit in a federal court. The court decides who should pay court costs and legal fees. If you are successful, the court may order the person you sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees – for example, if it finds your claim is frivolous.

QuestionsIf you have questions about the Plan, log on to www.netbenefits.com, call 888.625.7747 or contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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Administrative Facts


Name of PlanMcKesson Corporation 401(k) Retirement Savings Plan

Type of PlanDefined Contribution Plan

Plan Number 002

Employer Identification Number94-3207296

Plan SponsorMcKesson Corporation 6555 North State Highway 161 Irving, TX 75039

Plan AdministratorMcKesson Corporationc/o Senior Vice President, Total RewardsMcKesson Corporation6555 North State Highway 161Irving, TX 75039Telephone: (415) 983-8300

Plan TrusteeFidelity Management Trust Co. 245 Summer StreetBoston, MA 02110

Investment ManagersStandish Mellon Asset Management Company LLC100 Pine Street, 32nd Floor San Francisco, CA 94111

Weatherbie Capital, LLC 265 Franklin Street Boston, MA 02110

Dodge & Cox 555 California Street, 40th FloorSan Francisco, CA 94104Eaton Vance ManagementTwo International Place, 10th FloorBoston, MA 02110

Fidelity Management & Research Company82 Devonshire St. Boston, MA 02109

Fisher Investments13100 Skyline BoulevardWoodside, CA 94062

J.P. Morgan Asset Management270 Park AveNew York, NY 10017

Brown Advisory901 South Bond StreetSuite 400Baltimore, MD 21231

State Street Global AdvisorsOne Lincoln StreetState Street Financial CenterBoston, MA 02111-2900

The Vanguard Group, Inc.P.O. Box 2900Valley Forge, PA 19482-2900

Manulife197 Clarendon St.Boston, MA 02116

Loomis SaylesOne Financial CenterBoston, MA 02111

Voya230 Park AvenueNew York, NY 10169

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Type of AdministrationThe Plan is administered by the sponsor. Certain administrative functions are outsourced to:

Fidelity Investments Institutional Operations Company, Inc. 82 Devonshire St. Boston, MA 02109

Funding MediumThe Plan is funded by employee and McKesson contributions. Benefits are paid from a Trust fund.

Plan YearApril 1 – March 31

TerminationIf the Plan is terminated in whole or in part, the rights of all affected participants to their accounts as of the date of termination will be 100% vested and non-forfeitable.

Service of ProcessThe Plan’s agent for service of legal process is McKesson’s Corporate Secretary at the following address:

Office of the Corporate SecretaryMcKesson Corporation6555 North State Highway 161Irving, TX 75039

Legal process may also be served on the Plan Administrator.

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Notes

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Notes

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Notes

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August 2019

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