THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

McKesson Corporation (MCK)

6/15/2006 Proxy Information

The Company and its subsidiaries may have transactions in the ordinary course of business with unaffiliated companies of which certain of the Company’s non-employee directors are directors and/or executive officers. The Company does not consider the amounts involved in such transactions to be material in relation to the businesses of such other companies or the interests of the directors involved. The Company anticipates that similar transactions may occur in FY 2007. In addition, Mr. Hammergren’s brother-in-law is a manager in the Company’s Pharmaceutical Solutions segment and received approximately $113,000 in salary and bonus during FY 2006. Such compensation was established by the Company in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Ms. Pure’s husband held an executive position in a business recently acquired by the Company; and, as a result, will be employed by the Company for a brief period in order to assist with the transition. He will receive approximately $80,000 in connection with his services to, and severance from, the Company. The Company believes that any such relationships and transactions described herein were on terms that were reasonable and in the best interests of the Company.

Certain Legal Proceedings

Following the announcements by McKesson in April, May and July of 1999 that McKesson had determined that certain software sales transactions in its Information Solutions segment, formerly HBO & Company (“HBOC”) and now known as McKesson Information Solutions LLC, were improperly recorded as revenue and reversed, as of March 31, 2006, ninety-two lawsuits had been filed against McKesson, HBOC and other defendants which in some cases included then current and former directors of McKesson and HBOC. A more detailed description of the litigation arising out of the accounting issues at HBOC (“Accounting Litigation”) may be found in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006.

Only two Accounting Litigation actions now remain pending in which current directors of McKesson have been named as defendants. First, certain directors (“Current Director Defendants”) were named in the federal securities class action captioned In re McKesson HBOC, Inc. Securities Litigation, (No. C-99-20743 RMW) (the “Consolidated Action”). Claims against all Current Director Defendants have been dismissed with prejudice following motions to dismiss, although a right of appeal by the class would be possible, absent final settlement of the action as to Current Director Defendants. On February 24, 2006, the Honorable Ronald M. Whyte signed a Final Judgment and Order of Dismissal (the “Judgment”), in which the Court gave its final approval to a settlement of the Consolidated Action and dismissed on the merits and with prejudice all claims asserted in that action against certain defendants, including the Current Director Defendants. The Judgment provides for releases of claims of all class members against the Current Director Defendants. On March 30, 2006, the Company paid approximately $960 million into an escrow account established in connection with the settlement of the Consolidated Action in full satisfaction of its payment obligations under the Judgment.

On March 23, 2006, Defendant Bear, Stearns filed an appeal of the Judgment to the United States Court of Appeals for the Ninth Circuit, challenging certain provisions of the settlement that restrict Bear Stearns’ ability to bring certain claims in the future against the Company, HBOC and certain other persons released in the settlement. The outcome of the Bear Stearns appeal will not affect the Company’s right and ability to enjoy the other benefits of the settlement, including releases by class members of their claims against the Current Director Defendants.

The second pending Accounting Litigation action which named Current Director Defendants, is a class action filed on June 28, 2001, against the Company and other defendants, alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA Act”), In re McKesson HBOC, Inc. ERISA Litigation, (No. C-02-0685 RMW) (the “ERISA Action”). Claims against all Current Director Defendants have been dismissed with prejudice following motions to dismiss, although a right of appeal by the class would be possible, absent a final settlement of the action as to Current Director Defendants. In March of 2006, the Company reached an agreement to settle the final portion of the ERISA Action which purports to assert ERISA Act claims on behalf of a class of former participants in the McKesson Profit-Sharing Investment Plan for approximately $19 million. On May 19, 2006, the settlement received preliminary approval by the Court. The settlement remains subject to various contingencies, including notice to the class and final approval by the Court. If finalized, the settlement will effect the release of all remaining claims against all defendants, including any Current Director Defendants, pending in the ERISA Action. Neither of these actions names Ms. Knowles nor Messrs. Hammergren, Matschullat, Budd or Lawrence as a defendant.

Indebtedness of Executive Officers The table below shows, as to each executive officer who was indebted to the Company in an amount exceeding $60,000 at any time during the period April 1, 2005 through March 31, 2006, (i) the largest aggregate amount of indebtedness outstanding during such period, and (ii) the amount of indebtedness outstanding at March 31, 2006. The indebtedness shown for Messrs. Hammergren and Kirincic reflects the balance owed on a secured housing loan in the original principal amount of $500,000 each. Mr. Hammergren paid off his loan in January 2006. The indebtedness shown for Mr. Julian reflects the balance owed on secured housing loans in the aggregate amount of $1,250,000. These housing loans were entered into prior to the adoption of the provisions of the Sarbanes-Oxley Act in 2002 which prohibit loans to executive officers, and are without interest unless and until the individuals fail to pay any amount under the loans when due and thereafter at a market rate. (See page 30 of proxy for table).

6/15/2005 Proxy Information

Alton F. Irby III is also a director of McKesson Information Solutions UK Limited, an indirect wholly-owned subsidiary of the Company, and currently receives 20,000 pounds sterling per year for his service as a Board member of that company.

The Company and its subsidiaries have transactions in the ordinary course of business with unaffiliated companies of which certain of the Company’s non-employee directors are directors and/or executive officers. The Company does not consider the amounts involved in such transactions to be material in relation to the businesses of such other companies or the interests of the directors involved. The Company anticipates that similar transactions will occur in FY 2006. In addition, Mr. Hammergren’s brother-in-law is a manager in the Company’s Pharmaceutical Solutions segment and received $99,053 in salary and bonus during FY 2005. Such compensation was established by the Company in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. The Company believes that any such relationships and transactions described herein were on terms that were reasonable and in the best interests of the Company.

Certain Legal Proceedings

Since the announcements by McKesson in April, May and July of 1999 that McKesson had determined that certain software sales transactions in its Information Solutions segment, formerly HBO & Company (“HBOC”) and now known as McKesson Information Solutions LLC, were improperly recorded as revenue and reversed, as of March 31, 2005, ninety-one lawsuits have been filed against McKesson, HBOC, certain of McKesson’s or HBOC’s current or former officers or directors, and other defendants, including Bear Stearns & Co. Inc. and Arthur Andersen LLP. Current directors of McKesson are named as defendants in certain of the actions as described below. A more detailed description of the litigation arising out of accounting issues at HBOC may be found in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005.

On January 12, 2005, we announced that we reached an agreement to settle the previously-reported action in the Northern District of California captioned: In re McKesson HBOC, Inc. Securities Litigation (Case No. C-99-20743 RMW)(the “Consolidated Action”). In general, under the agreement to settle the Consolidated Action, we will pay the settlement class a total of $960 million in cash. Plaintiffs’ attorneys’ fees, in an amount yet to be determined, will be deducted from the settlement amount prior to payments to class members. The settlement agreement is subject to various conditions, including, but not limited to, preliminary approval by the Court, notice to the Class, and final approval by the Court after a hearing. On May 20, 2005, Judge Whyte issued an order denying “without prejudice” preliminary approval of the proposed settlement. The order expressed the court’s objection to two non-monetary provisions of the settlement. The Company is working with Lead Plaintiff in an effort to fully address and resolve the court’s objections. Claims against current directors of McKesson in the Consolidated Action have been dismissed with prejudice, and no current directors of McKesson remain as defendants in the case. The release of claims contemplated as part of the settlement of the Consolidated Action would include a release of claims by all members of the settlement class against current directors of the Company.

Other than the Consolidated Action and the ERISA action (as discussed below), none of the previously reported Accounting Litigation has been resolved by the settlement described in the preceding paragraph. During the third quarter of 2005, we established a reserve of $240 million, which the Company believes will be adequate to address its remaining potential exposure with respect to all other previously reported Accounting Litigation, including the previously reported State Actions (discussed below). However, in view of the number of remaining cases, the uncertainties of the timing and outcome of this type of litigation, and the substantial amounts involved, it is possible that the ultimate costs of these matters may exceed or be below the reserve. The range of possible resolutions of these proceedings could include judgments against the Company or settlements that could require payments by the Company in addition to the reserve, which could have a material adverse impact on McKesson’s financial position, results of operations and cash flows.

The previously-reported individual actions in the Northern District of California captioned Jacobs v. McKesson HBOC, Inc., et al. (C-99-21192 RMW), Jacobs v. HBO & Company (Case No. C-00-20974 RMW), Bea v. McKesson HBOC, Inc. et al. (Case No. C-00-20072 RMW), Cater v. McKesson Corporation et al. (Case No. C-00-20327 RMW), Baker v. McKesson HBOC, Inc., et al. (Case No. CV 00-0188), Pacha, et al. v. McKesson HBOC, Inc., et al. (Case No. C01-20713 PVT), and Hess v. McKesson HBOC, Inc. et al. (Case No. C-20003862) remain stayed and are consolidated with the Consolidated Action. The Pacha, Hess and Baker actions name Ms. Shaw as one of the defendants. No other current directors are named as defendants in these individual actions in federal court.

The related federal class action, In re McKesson HBOC, Inc. ERISA Litigation (Northern District of California No. C-00-20030 RMW) (the “ERISA Action”), pending before Judge Whyte, involves ERISA claims brought on behalf of the HBOC Profit Sharing and Savings Plan (the “HBOC Plan”) and the McKesson Profit Sharing and Investment Plan (the “McKesson Plan”), as well as participants in those plans. A Stipulation and Agreement of Settlement has been executed for that portion of the ERISA Action that involves claims by the HBOC Plan or on behalf of a class of HBOC Plan Participants. The settlement resolves all claims by the HBOC Plan and its participants in consideration of an $18.2 million cash payment by the Company. On May 10, 2005, the Court issued an order preliminarily approving the settlement. The settlement is subject to various conditions, including, but not limited to, notice to the class and final approval by the Court after a hearing. The separate ERISA claims of the McKesson Plan and its participants are not resolved by this settlement. The Company’s motion to dismiss those claims remains pending before the Court. This consolidated ERISA class action names certain of the Company’s current and former officers and directors as defendants.

Twenty-four actions have also been filed in various state courts in California, Colorado, Delaware, Georgia, Louisiana and Pennsylvania (the “State Actions”). As with the Consolidated Action, the State Actions generally allege misconduct by McKesson or HBOC (and others) in connection with the events leading to McKesson’s decision to restate HBOC’s financial statements. Of those, two cases, both shareholder derivative actions, assert claims against the directors: Ash, et al. v. McCall, et al., (Case No. 17132) (re-named Saito et al. v. McCall, (Civil Action No. 17132)) filed in the Delaware Chancery Court on April 30, 1999 and Mitchell v. McCall et al., (Case No. 304415), filed in California Superior Court, City and County of San Francisco on June 23, 1999. As a result of the Company’s various pretrial motions, only a single post-merger accounting oversight claim against the directors of post-merger McKesson remains to be litigated in the Saito action. The Company is a nominal defendant in each of these actions.

None of the Federal or State Actions names Mr. Budd, Mr. Hammergren, Ms. Knowles, Dr. Lawrence, Mr. Matschullat or Mr. Syron as a defendant.

Indebtedness of Executive Officers

The table below shows, (see page 42 of proxy) as to each executive officer who was indebted to the Company in an amount exceeding $60,000 at any time during the period April 1, 2004 through March 31, 2005, (i) the largest aggregate amount of indebtedness outstanding during such period, and (ii) the amount of indebtedness outstanding at March 31, 2005. The indebtedness shown for Messrs. Hammergren and Kirincic reflects the balance owed on a secured housing loan in the original principal amount of $500,000 each. The indebtedness shown for Mr. Julian reflects the balance owed on secured housing loans in the aggregate amount of $1,250,000. These housing loans are without interest unless and until the individuals fail to pay any amount under the loans when due and thereafter at a market rate.

6/14/2004 Proxy Information

Certain executive officers have immediate family members who are employed by the Company or a subsidiary. The compensation of each such family member was established by the Company in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Hammergren’s brother-in-law is a manager in the Company’s Pharmaceutical Solutions segment and received $103,411 in salary and bonus during FY 2004. Mr. King’s son is a sales manager for the Company’s Provider Technologies segment and received $189,610 in salary and bonus during FY 2004. Mr. King retired from the Company in April 2004. The husband of Pamela Pure, Executive Vice President and President, McKesson Provider Technologies, was employed by the Company as a sales manager in the Company’s Provider Technologies segment, and received $224,653 in salary, bonus and commissions during FY 2004. He has since left the Company, and in connection with his separation, received severance pay in the amount of $224,673. The Company believes that these various relationships and transactions were on terms that were reasonable and in the best interests of the Company.

6/13/2003 Proxy Information

The Company and its subsidiaries have transactions in the ordinary course of business with unaffiliated companies of which certain of the Company’s non-employee directors are directors and/or executive officers. The Company does not consider the amounts involved in such transactions to be material in relation to the businesses of such other companies or the interests of the directors involved. The Company anticipates that similar transactions will occur in fiscal year 2004. In addition, Mr. Hammergren’s brother-in-law is a manager in the Company’s Pharmaceutical Solutions segment and received $86,651 in salary and bonus during FY 2003. Mr. King’s son is a sales manager for the Company’s Information Solutions segment and received $103,584 in salary and bonus during FY 2003. The Company believes that these various relationships and transactions were on terms that were reasonable and in the best interests of the Company