EXHIBIT 10.2
McKESSON CORPORATION
1999 STOCK OPTION AND RESTRICTED STOCK PLAN
(As Amended Through July 31, 2002)
1. Establishment, Purpose and Definitions.
(a) There is hereby adopted the McKesson Corporation 1999
Stock Option and Restricted Stock Plan (the "Plan").
(b) The purpose of this Plan is to provide a means
whereby eligible employees of McKesson Corporation (the "Company") and its
affiliates may be given an opportunity to purchase shares of the common stock
($0.01 par value) of the Company (the "Stock") pursuant to options, which will
not qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code, as amended (the "Code"), and by providing participants with grants
of restricted shares of Stock ("Restricted Stock") in accordance with the terms
and conditions set forth herein.
2. Stock Subject to the Plan.
(a) The number of shares of Stock available for the grant
of awards hereunder shall be 45,200,000 (all such shares shall be subject to
equitable adjustment as provided herein). The maximum number of shares of Stock
that may be granted to any individual in the form of options during any plan
year shall not exceed 600,000; in each case, such maximum number shall be
subject to equitable adjustment as provided herein.
As the Committee (as hereinafter defined) may determine from
time to time, the Stock may consist either in whole or in part of shares of
authorized but unissued Stock, or shares of authorized and issued Stock
reacquired by the Company and held in its treasury. If an option is surrendered
for cash or for any other reason (except surrender for shares of Stock) ceases
to be exercisable in whole or in part, the shares which were subject to such
option but as to which the option had not been exercised shall continue to be
available for grants of stock options under the Plan. If any shares of Stock
underlying Restricted Stock grants shall be reacquired by the Company pursuant
to the termination provisions described herein or in the instruments evidencing
the making of such Restricted Stock grants, such shares shall again be available
for grant of Restricted Stock awards under the Plan. Prior to the granting of
awards, the Company shall be under no obligation to reserve or retain in its
treasury any particular number of shares of Stock at any time, and no particular
shares of Stock, whether issued or held as treasury Stock, shall be identified
as being available for future awards under the Plan.
(b) In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, stock, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share exchange, or
other similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to preserve (but not increase) the rights of
participants under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (i)
the number and kind of shares which may thereafter be issued in connection with
respect to both Restricted Stock and option awards, (ii) the number and kind of
shares issued in respect of outstanding awards, and (iii) the exercise price
relating to any options.
3. Eligibility.
Persons who shall be eligible to have granted to them awards
provided for by the Plan shall be such key employees of the Company and its
affiliates as the Committee, in its sole discretion, shall designate from time
to time.
4. Administration of the Plan.
(a) The Plan shall be administered by a committee (the
"Committee") consisting of not less than two directors of the Company to be
appointed by the Board each of whom a "non-employee director" within the meaning
of Rule 16b-3 under the Exchange Act or such other committee as is established
by the Board.
(b) The Committee may from time to time determine which
key employees of the Company and its affiliates shall be granted awards under
the Plan, the terms thereof, and the number of shares covered by an option or
the number of shares of Restricted Stock to be granted.
(c) The Committee shall have the sole authority, in its
absolute discretion, to adopt, amend, and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan, to construe
and interpret the Plan, the rules and regulations, and the instruments
evidencing awards granted under the Plan and to make all other determinations
deemed necessary or advisable for the administration of the Plan. All decisions,
determinations, and interpretations of the Committee shall be final and binding
on all participants and other interested parties.
5. Stock Options and Stock Appreciation Rights.
(a) The Option Price.
The exercise price of each option shall not be less than the
fair market value of the Stock covered by such option on the date the option is
granted. Such fair market value shall, if the Stock is not listed or admitted to
trading on a stock exchange, be the mean between the lowest reported bid price
and highest reported asked price of the Stock on the date the option is granted
in the over-the-counter market, as reported by any publication of general
circulation selected by the Company which regularly reports the market price of
the Stock in such market, or, if the Stock is then listed or admitted to trading
on any stock exchange, the composite closing price on such day as reported in
the Wall Street Journal. Such price shall be subject to adjustment as provided
in paragraph 2(b) hereof.
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(b) Terms and Conditions of Options.
(i) Each option granted pursuant to the Plan
shall be evidenced by a written grant agreement (the "Agreement") executed by
the Company and the person to whom such option is granted which shall provide
such terms and conditions as the Committee may determine, in its sole
discretion.
(ii) Unless otherwise provided in the Agreement,
the term of each option shall be for no more than ten years and three months.
(iii) The Agreement may contain such other terms,
provisions, and conditions as may be determined by the Committee (not
inconsistent with this Plan) including, without limitation, provisions relating
to stock appreciation rights ("SARs") with respect to options granted hereunder.
Unless otherwise provided in the Agreement, the Committee may, in its sole
discretion, extend the post-termination exercise period with respect to an
option (but not beyond the original term of such option).
(iv) The Committee shall have the authority to
accelerate the exercisability of any outstanding option at such time and under
such circumstances as it, in its sole discretion, deems appropriate.
(c) Stock Appreciation Rights.
The Committee may, under such terms and conditions as it deems
appropriate, authorize the surrender by an optionee of all or part of an
unexercised option and authorize a payment in consideration thereof of an amount
equal to the difference obtained by subtracting the option price of the shares
then subject to exercise under such option from the fair market value of the
Stock represented by such shares on the date of surrender, provided that the
Committee determines that such settlement is consistent with the purpose of the
Plan. Such payment may be made in shares of Stock valued at their fair market
value on the date of surrender of such option or in cash, or partly in shares
and partly in cash. Acceptance of such surrender and the manner of payment shall
be in the discretion of the Committee. If an option is surrendered for cash, the
shares covered by the surrendered option will thereafter be available for grant
under the Plan to the extent permitted under Rule 16b-3 of the Exchange Act.
(d) Use of Proceeds.
Proceeds realized from the sale of Stock pursuant to options
granted under the Plan shall constitute general funds of the Company.
6. Restricted Stock Grants.
(a) Terms and Conditions.
Each Restricted Stock Grant made pursuant to the Plan shall be
evidenced by an Agreement executed by the Company and the person to whom such
Restricted Stock is granted
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(the "Grantee"). Each Restricted Stock Grant made under the Plan shall, unless
otherwise provided in the Agreement, contain the following terms, conditions and
restrictions and such additional terms, conditions and restrictions as may be
determined by the Committee.
(b) Restrictions.
Until the restrictions imposed on any Restricted Stock Grant
shall lapse, shares of Stock granted to a participant pursuant to a Restricted
Stock grant:
(i) Shall not be sold, assigned, transferred,
pledged, hypothecated, or otherwise disposed of, and
(ii) Shall, if the Grantee's continuous
employment with the Company shall terminate for any reason, unless otherwise
provided in the Agreement, be returned to the Company forthwith, and all the
rights of the Grantee to such shares shall immediately terminate; provided that
if the Committee, in its sole discretion, shall within ninety (90) days of such
termination of employment, notify the participant in writing of its decision not
to terminate the Grantee's rights in such shares, then the Grantee shall
continue to be the owner of such shares subject to such continuing restrictions
as the Committee may prescribe in such notice. If the Grantee's interests in the
shares granted pursuant to a Restricted Stock Grant shall be terminated, such
Grantee shall forthwith deliver or cause to be delivered to the Secretary of the
Company the certificate(s), if any, previously delivered to the Grantee for such
shares, accompanied by such endorsement(s) and/or instrument(s) of transfer as
may be required by the Secretary of the Company.
(c) Lapse of Restrictions.
Except as otherwise provided in the Plan or the Agreement, the
restrictions imposed on any Restricted Stock Grant shall commence with the date
of the grant and continue during a period set by the Committee. Notwithstanding
the foregoing, the Committee may accelerate the lapsing of restrictions on a
Restricted Stock Grant under such terms and conditions as it may deem
appropriate.
(d) Restrictive Legend; Certificates May be Held in
Custody.
Each certificate evidencing shares granted pursuant to a
Restricted Stock Grant may bear an appropriate legend referring to the terms,
conditions and restrictions described in the Plan and in the instrument
evidencing the Restricted Stock Grant. Any attempt to dispose of such shares in
contravention of such terms, conditions and restrictions shall be invalid. The
Committee may enact rules which provide that the certificates evidencing such
shares may be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody, until restriction thereon shall
have lapsed.
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(e) Restrictions upon Making of Restricted Stock Grants.
The registration or qualification under any federal or state
law of any shares to be granted pursuant to Restricted Stock Grants or the
resale or other disposition of any such shares by or on behalf of the Grantees
receiving such shares may be necessary or desirable as a condition of or in
connection with such Restricted Stock Grants, and, in any such event, if the
Committee in its sole discretion so determines, delivery of the certificates for
such shares shall not be made until such registration or qualification shall
have been completed.
7. Change in Control.
Upon a Change in Control (as hereinafter defined), then
notwithstanding anything herein to the contrary, all options granted under the
Plan that are outstanding at the time of such Change in Control shall become
immediately exercisable in full and all restrictions with respect to shares of
Restricted Stock shall lapse and such shares shall become fully vested and
exercisable.
A "Change in Control" of the Company shall be deemed to have
occurred if any of the events set forth in any one of the following paragraphs
shall occur:
(i) Any "person" (as such term is used in
sections 13(d) and 14(d) of the Exchange Act), excluding the Company or any of
its affiliates, a trustee or any fiduciary holding securities under an employee
benefit plan of the Company or any of its affiliates, an underwriter temporarily
holding securities pursuant to an offering of such securities or a company
owned, directly or indirectly, by stockholders of the Company in substantially
the same proportions as their ownership of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or
(ii) During any period of not more than two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a Person who
has entered into an agreement with the Company to effect a transaction described
in clause (i), (iii) or (iv) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(iii) The shareholders of the Company approve a
merger or consolidation of the Company with any other company, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities of the Company
or such surviving entity
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outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 50% of the combined
voting power of the Company's then outstanding securities; or
(iv) The shareholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
Notwithstanding the foregoing, no Change in Control shall be
deemed to have occurred if there is consummated any transaction or series of
integrated transactions immediately following which the holders of the Stock
immediately prior to such transaction or series of transactions continue to have
the same proportionate ownership in an entity which owns all or substantially
all of the assets of the Company immediately prior to such transaction or series
of transactions.
8. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend,
terminate, modify or amend the Plan. No suspension, termination, modification or
amendment of the Plan may adversely affect any award previously granted without
the written consent of the Grantee.
9. Assignability.
(a) General Rule.
Each option award granted pursuant to this Plan shall, during
the participant's lifetime, be exercisable only by him. No award nor any right
thereunder shall be transferable by the participant by operation of law or
otherwise except to the extent permitted by Section 9(b).
(b) Exceptions to General Rule.
Notwithstanding Section 9(a), this Plan shall not preclude:
(i) any participant from designating a
beneficiary to succeed, after the participant's death, to all of the
participant's option awards outstanding on the date of the participant's death
(including, without limitation, the right to exercise any unexercised option
awards); or
(ii) any participant from transferring an option
award or any right thereunder pursuant to a qualified domestic relations order
as defined in the Code or the Employee Retirement Income Security Act of 1974,
as amended; or
(iii) any participant who is a senior executive
officer recommended by the Chief Executive Officer and approved by the Committee
from voluntarily transferring any option award granted pursuant to this Plan to
a family member as a gift or through a transfer to
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an entity in which more than fifty percent of the voting interests are owned by
family members (or the participant) in exchange for an interest in that entity.
(c) Definitions.
(i) Beneficiary. The term "beneficiary" shall
mean a person or persons designated by the participant to succeed to, in the
event of death, all outstanding option awards granted to the participant or any
right thereunder. Any participant, subject to applicable laws and such
limitations as may be prescribed by the Committee, to designate one or more
persons primarily or contingently as beneficiaries in writing by notice
delivered to the Company, and to revoke such designations in writing. If a
participant fails effectively to designate a beneficiary, or if the
participant's designated beneficiary(ies) does not survive the participant, the
participant's estate shall be the participant's beneficiary.
(i) Family Member. The term "family member"
shall include any person identified as an "immediate family" member in Rule
16(a)-1(e) of the Exchange Act, as such Rule may be amended from time to time.
Notwithstanding the foregoing, the Committee may designate any other person(s)
or entity(ies) as a "family member."
10. Payment Upon Exercise.
Payment of the purchase price upon exercise of any option
granted under this Plan shall be made in cash; provided that the Committee, in
its sole discretion, may permit an option holder to pay the option price, in
whole or in part, by tendering to the Company shares of Stock owned by the
option holder, and having a fair market value equal to the option price. The
fair market value of such Stock shall be determined by the Committee as it deems
appropriate, or as may be required in order to comply with any applicable law or
regulation.
11. Effective Date and Duration of the Plan.
The Plan shall become effective upon its adoption by the Board
of Directors. Unless sooner terminated, the Plan shall remain in effect until
terminated by action of the Board, provided, however, that the duration of the
Plan shall in no event exceed ten years from the date of the adoption of the
Plan by the Board. Termination of the Plan shall not affect any awards
previously granted pursuant thereto, which shall remain in effect until their
restrictions shall have lapsed (with respect to Restricted Stock grants) or
until exercised (with respect to option grants) all in accordance with their
terms.
12. Agreement by Participant Regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise
of an option or SAR or upon the lapsing of restrictions imposed on Restricted
Stock (each a "Tax Event"), each participant shall agree that no later than the
date of the Tax Event, the participant will pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld upon the Tax
Event. Alternatively, the Committee may provide, in its sole discretion, that a
participant may elect, to
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the extent permitted or required by law, to have the Company deduct federal,
state and local taxes of any kind required by law to be withheld upon the Tax
Event from any payment of any kind due to the participant, including withholding
of Shares.
13. Rights as a Shareholder.
A participant granted an award hereunder or a transferee of an
award shall have no rights as a shareholder with respect to any shares covered
by the award until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distribution of
other rights for which the record date is prior to the date such stock
certificate is issued, except as otherwise provided in the Plan.
14. No Rights to Employment.
Nothing in the Plan or in any award granted or Agreement
entered into pursuant hereto shall confer upon any participant the right to
continue in the employ of, or in an independent contractor relationship with,
the Company or any subsidiary or to be entitled to any remuneration or benefits
not set forth in the Plan or such Agreement or to interfere with or limit in any
way the right of the Company or any such subsidiary to terminate such
participant's employment. Awards granted under the Plan shall not be affected by
any change in duties or position of a participant as long as such participant
continues to be employed by, or, for awards granted prior to July 25, 2001, in a
consultant relationship with, the Company or any subsidiary.
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