EXHIBIT 10.24
SEPARATION AND MUTUAL GENERAL RELEASE AGREEMENT
This Separation and Mutual General Release Agreement (the "Agreement" or
"Separation Agreement") is entered into as of February 12, 1996 by and between
______________ ("Executive"), an individual, and McKesson Corporation, a
Delaware corporation (the "Company").
In consideration of the covenants undertaken and the releases contained in
this Agreement and for other good and valuable consideration, Executive and the
Company agree as follows:
1. Termination of Employment.
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Executive's employment with the Company will terminate effective February
29, 1996 (the "Separation Date"). As of that date, except as expressly
provided herein, all compensation, benefit coverage and other perquisites
of employment will cease.
2. Salary Continuation Payments.
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For a period of twelve (12) months from the date of this Agreement, but
subject to the provisions of Paragraph 10 below, Executive will continue to
receive his regular bi-weekly salary of $11,923.08, less applicable federal
and state withholding and other payroll taxes and deductions. Such Salary
Continuation Payments shall not be reduced or otherwise affected by any
earnings, commissions, fees or other compensation received by Executive
from any source subsequent to the Separation Date. Should Executive obtain
full-time employment during the period in which the Salary Continuation
Payments are to be made,
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Company agrees that, upon Executive's written request, it shall pay to
Executive, in one lump sum, the then present value of all remaining Salary
Continuation Payments and benefits less applicable federal and state
withholding and other payroll taxes and deductions.
3. Stock Options.
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Executive presently holds options to purchase shares of McKesson
Corporation, a Delaware Corporation, under the McKesson Corporation 1978
Stock Option Plan and 1994 Stock Option and Restricted Stock Plan. A
complete and accurate summary of the options currently held by Executive is
attached hereto and designated as Attachment A. Company has determined to
defer Executive's Separation Date beyond February 1, 1996 in order to
provide Executive with the benefit of receiving those additional stock
options which have vested during calendar year 1996. Executive shall be
eligible to exercise those grants that are vested and unexercised as of the
Separation Date, subject to and in strict accordance with the Statements of
Terms and Conditions applicable to the option plans. Options that are not
vested as of such date shall be cancelled, and Executive's rights with
respect to said options shall cease and terminate.
4. Restricted Stock.
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Executive presently holds 5,000 shares of McKesson Corporation common stock
granted to him under the Company's 1988 Restricted Stock Plan and/or 1994
Stock Option and Restricted Stock Plan. Executive received the restricted
stock grant on or about February 1, 1994, and the restrictions applicable
thereto remain in effect until February 1, 1998. On the Separation Date,
all of Executive's rights with respect to the restricted stock grant
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shall cease and terminate and said restricted shares shall be cancelled and
returned to Company.
5. MIP Award.
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Executive shall be eligible for consideration for an award under Company's
Management Incentive Program ("MIP") for the fiscal year ending March 31,
1996. Company agrees that the amount of such award shall be Fifty Thousand
Dollars ($50,000), payable within ten (10) business days of execution of
this Agreement by the parties.
6. Housing Loan.
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Executive affirms that he is indebted to Company in the principal amount of
Four Hundred Thousand Dollars ($400,000). Said indebtedness is more fully
described and evidenced by a secured promissory note, dated March 6, 1994,
a copy of which is attached hereto as Attachment B (the "Promissory Note").
Notwithstanding anything to the contrary contained in Section 1.b. of the
Promissory Note, the parties agree that so long as Executive is complying
with the terms of this Agreement, repayment shall not be required until the
first to occur of (i) sale of the property which secures said indebtedness,
or (ii) one year from Separation Date. Company further agrees that interest
shall continue to be waived by Company (and imputed as income to Executive)
until repayment of the indebtedness is due and payable pursuant to the
provisions of this Paragraph 6.
7. Benefits Coverage/Perquisites.
-----------------------------
Executive shall continue to be covered (subject to his continued monthly
payment of required premiums) under the Company's Executive Medical Plan
until the earlier of (i) one year from the Separation Date, or (ii) the
date upon which he first becomes eligible for
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primary coverage under another employer's medical plan. On whichever date
is applicable pursuant to the preceding sentence, Executive's coverage
under the Executive Medical Plan shall cease and Executive shall be given
an opportunity to elect continuation coverage in accordance with applicable
law. Executive shall also continue to be covered under Company's Executive
Survivor Benefit Plan until the earlier of (i) one year from the Separation
Date, or (ii) the date upon which he first becomes eligible for coverage
under another employer's life insurance or survivor benefit plan. Executive
shall also receive any earned vacation pay as of the Separation Date.
Executive shall be entitled to receive any fully vested benefits in
accordance with the terms of the Company's Profit-Sharing Investment Plan
as of the Separation Date. Executive will not be a participant in or
otherwise be entitled to coverage or benefits under the Company's
disability plans, Life Insurance Plan, Profit-Sharing Investment Plan,
Retirement Plan, MIP, or any other benefit plan or policy provision at any
time subsequent to the Separation Date, and his accrual and coverage under
all other Company plans and policies shall cease as of the Separation Date,
except as expressly set forth in this Separation Agreement.
During the period of Salary Continuation Payments specified herein,
Executive shall continue to receive from Company his existing (i) monthly
automobile allowance, and (ii) health club membership dues.
8. Amended Termination Agreement.
-----------------------------
The Amended Termination Agreement dated February 1, 1994, as further
amended, between the Company and Executive shall be terminated as of the
date of this Separation
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Agreement, and the Executive shall not retain any rights arising out of the
Amended Termination Agreement.
9. Litigation Cooperation.
----------------------
Executive agrees to make himself reasonably available to cooperate in any
actual or anticipated litigation or arbitration matter in which Company
reasonably requests his assistance based upon his duties with the Company
during the period for which he receives payments under paragraph 2. Once
such payments have ended, Company shall pay Executive a daily consulting
fee for such assistance in the amount of $750.00, subject to a one-half day
minimum, and shall reimburse Executive for his reasonable out-of-pocket
expenses in connection with any such assistance.
10. Termination.
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Company may terminate this Agreement in the event of Executive's breach of
any of the covenants set forth in paragraphs 13, 14, 15, 17, and 18, or if
he accepts a position as an employee or an independent contractor with a
competitor of Company. For purposes of this Agreement, "competitor" shall
mean any company primarily engaged in the wholesale distribution of
pharmaceutical and health and beauty-aid products. The Chief Executive
Officer of Company shall have sole discretion to determine whether a
company is a Competitor, and such determination shall be final and binding.
Notice of termination shall be in writing and shall be effective upon
delivery. Upon termination of this Agreement in accordance with this
paragraph, all of Executive's Salary Continuation Payments and other
benefits under this Agreement shall cease, and Company shall have no
further obligation to make such payments or provide such benefits to
Executive.
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11. Mutual General Release.
----------------------
In consideration of the payments and other consideration set forth in this
Separation Agreement, Executive on his own behalf and on behalf of his
heirs, dependents, assigns and successors, hereby releases the Company and
each of its past and present subsidiaries, affiliates, directors, officers,
agents, employees, representatives, assigns and successors from any and all
actions, charges, suits, grievances, damages, costs, expenses or other
claims or liabilities of any kind or nature, (including, but not limited
to, claims under ERISA, the Age Discrimination in Employment Act, or the
Civil Rights Acts of 1964 and 1991) whether known or unknown, suspected or
unsuspected, which Executive has, has had, may have, or may hereafter have,
either in his own name, in a representative capacity or as a shareholder of
Company ("Claims"), arising out of, or by reason of, any cause, matter or
thing whatsoever existing as of the date of execution of this Separation
Agreement including, without limitation, any Claims arising out of or
related in any way to Executive's employment. Excepted from this release
are this Separation Agreement and any rights or obligations under it.
Company hereby releases Executive and his heirs, dependents, assigns and
successors from any and all actions, charges, suits, grievances, damages,
costs, expenses, or other claims or liabilities of any kind or nature,
whether known or unknown, suspected or unsuspected, which Company has, has
had, may have, or hereafter have ("Claims") arising out of, or by reason
of, any cause, matter or thing whatsoever existing as of the date of
execution of this Separation Agreement including, without limitation, any
Claims arising
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out of or related in any way to Executive's employment. Excepted from this
release are this Separation Agreement (and the Promissory Note) and any
rights or obligations under it or them.
12. Effect of Release; Complete Waiver.
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Company and Executive understand that except (i) in the case of Company, as
provided in the last sentence of Paragraph 11, and (ii) in the case of
Executive, as provided in the last sentence of the first paragraph of
Paragraph 11, they are waiving all claims, whether known or unknown, and
whether or not they suspect that those claims exist or might exist at this
time. Company and Executive acknowledge that they are familiar with Section
1542 of the California Civil Code, which provides that:
A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Executive and Company, being aware of this provision and its effect upon
their respective rights, expressly waive any rights each one may have under
section 1542 or under any statutes or common law principles of similar
effect.
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13. Confidentiality.
---------------
Executive covenants and agrees not to disclose any information relating to
the existence and terms of this Separation Agreement and shall take every
precaution to prevent disclosure of such information to third parties other
than members of his immediate family and his personal financial and legal
advisors, unless such disclosure is required by law. Executive acknowledges
that violation of this covenant would constitute a material breach of this
Separation Agreement.
14. Limited Rights Against Company.
------------------------------
Executive agrees that he will not seek, in any way, any payments or
benefits based upon his employment with the Company, his separation from
employment and/or conduct prior to the execution of this Separation
Agreement, other than as expressly set forth in this Separation Agreement.
Executive waives any and all right or entitlement to any such payments or
benefits. Executive further agrees that he has no intention to, and will
not, file any charge or action, whether based on tort, express or implied
contract, or any federal, state or local law, statute or regulation
(including, but not limited to, ERISA or the Civil Rights Acts of 1964 and
1991) relating to his employment, his eligibility for benefits, or the
termination or terms and conditions of his employment. Executive agrees
that this Agreement may be pleaded as a complete bar to any action or suit
before any court or administrative body with respect to any claim relating
to his employment with, or termination from, Company.
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15. Protection of "Proprietary Information".
---------------------------------------
Executive acknowledges that, in the course of his work as an employee of
the Company, he has had and may have access to Proprietary Information (as
defined below) concerning the Company, its products, customers and methods
of doing business. Executive acknowledges that the Company has developed,
compiled and otherwise obtained, often at great expense, this information,
which has great value to the Company's business. Executive agrees to hold
in strict confidence and not disclose any Proprietary Information, directly
or indirectly, to anyone outside of the Company, or use, copy, publish,
summarize, or remove from Company premises such information. Executive
agrees to deliver promptly to Company all tangible Proprietary Information
which is in his possession or under his control.
16. "Proprietary Information" Defined.
---------------------------------
For purposes of this Separation Agreement, but subject to the remaining
provisions of this Paragraph the reference to "Proprietary Information"
means all information and any idea in whatever form, tangible or
intangible, whether disclosed to or learned or developed by Executive,
pertaining to or affecting the business of the Company or its parent or
other affiliated companies or their clients, consultants, or business
associates unless: (a) the information is or becomes publicly known through
lawful means not requiring the permission or license of the Company; (b)
the information was rightfully in Executive's possession or part of his
general knowledge prior to his employment by the Company or by virtue of
his activities not related to his employment by the Company; (c) the
information is disclosed to Executive without confidential or proprietary
restriction by a
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third party who rightfully possesses the information (without confidential
or proprietary restriction for the benefit of the Company) and did not
learn it, directly or indirectly, from the Company on a confidential basis.
Executive and the Company further agree that the following information is
included, without limitation, in the definition of Proprietary Information
if the same is encompassed by the preceding sentence: (i) processes, trade
secrets, electronic codes, computer software, source codes, proprietary
techniques, inventions, improvements and research projects; (ii)
information about costs, budgets, profits, markets, employees, terms of
sale, sales and lists of customers or vendors; (iii) plans for future
development, strategies, potential acquisitions, and new product concepts
and marketing; and (iv) all documents, books, papers, drawings, models,
sketches, studies, consultant's reports and other data of any kind and
description, including electronic data recorded or retrieved by any means,
that have been or will be given to Executive by the Company or its parent
or other affiliated companies, as well as written or oral instructions or
comments.
The parties acknowledge and agree that Executive is not intended by this
Paragraph 16 to be restricted generally from using his experience and
knowledge (including experience and knowledge derived during his employment
by the Company) for such purposes and/or in competition with the Company.
The parties' intention is that Executive is to be prohibited only from
disclosing or using to the detriment of the Company and its affiliates
Proprietary Information of the Company and its affiliates, as distinct from
non-confidential information pertaining to industry conditions, trends and
strategies, customers and potential
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customers, strengths and weaknesses of industry participants and,
generally, information that could have been learned by Executive had he
been employed by one of Company's competitors (or another business not
affiliated with the Company) in a comparable position for a comparable
period.
17. Solicitation of Employees.
-------------------------
Executive agrees that he will not, directly or indirectly, solicit or
assist in the solicitation of any employees of Company from the date of
this Separation Agreement until the Separation Date or for a period of
twelve (12) months following the Separation Date.
18. No Disparagement/References.
---------------------------
Executive covenants and agrees that he will in no way disparage Company or
its products, services, employees, or business reputation, to any person or
entity whether or not said person or entity is a current or prospective
supplier, customer or employee of Company. Executive further covenants and
agrees that he will not otherwise engage in conduct which is not in good
faith and which disrupts, damages, impairs or interferes with the business,
reputation or employees of Company. Company agrees that all inquiries by
prospective employers of Executive shall be directed solely to William A.
Armstrong, Vice President Human Resources and Administration, and that the
response of Company shall be essentially as set forth on Attachment C
hereto.
19. Absence of Reliance.
-------------------
Executive acknowledges that, in agreeing to the terms of this Separation
Agreement, he has not relied in any way upon any representations or
statements of the Company
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regarding the subject matter hereof, or the basis or effect of this
Separation Agreement other than those representations or statements set
forth in this Separation Agreement.
20. No Representations.
------------------
This Agreement expresses the full settlement terms upon which Executive and
Company sever their employment relationship. There are no other
representations or terms relating to the employment relationship and/or its
severance that have not been identified in writing in this Agreement.
21. Entire Agreement; Amendment.
---------------------------
This instrument contains the entire agreement and understanding concerning
Executive's employment with the Company and separation of employment and
the other subject matters addressed herein between the parties, and
supersedes all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters thereof. This
Separation Agreement may be amended or modified only by a written document
executed by all of the parties hereto.
22. Severability.
------------
If any provision of this Separation Agreement or the application thereof is
held invalid, the invalidity shall not affect other provisions or
applications of this Separation Agreement which can be given effect without
the invalid provisions or applications. To this end, the provisions of this
Separation Agreement are declared to be severable.
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23. Governing Law.
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This Separation Agreement and all transactions hereunder shall be governed
by, interpreted and enforced in accordance with the laws of the State of
California without reference to principles of conflict of laws.
24. Forum Selection.
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Any and all litigation relating to state law causes of action arising out
of this Separation Agreement shall be heard exclusively in California state
courts. To that end, the parties to this Separation Agreement consent to
jurisdiction in California state courts and waive any defense of lack of
personal jurisdiction.
Any and all litigation relating to federal law causes of action arising out
of this Separation Agreement shall be heard exclusively in California
federal courts. The parties also consent to jurisdiction in California
federal courts and waive any defense of lack of personal jurisdiction.
25. Counterparts.
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This Separation Agreement may be executed in counterparts with the same
force and effect as if all signatures were set forth in a single
instrument.
26. Headings.
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Headings of sections in this Separation Agreement have been included solely
for convenience and reference and are not part of the Agreement.
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27. Voluntary Agreement.
-------------------
It is understood and agreed that both the Company and Executive are
voluntarily entering into this Separation Agreement as a way of severing
the employment relationship existing between the parties. Executive
acknowledges that he has been informed by the Company that he should
consult with legal counsel concerning the contents of this Separation
Agreement. This Separation Agreement is not to be construed as an
allegation or admission on the part of either party that either has
violated any order, ruling, law, statute, regulation, contract or covenant,
express or implied.
28. Period for Review and Revocation.
--------------------------------
Executive confirms that he has had at least twenty-one (21) days to review
and consider the waiver and release provisions of this Agreement, including
but not limited to such provisions concerning claims (if any) under the Age
Discrimination in Employment Act ("ADEA"). The parties agree that Executive
shall have a period of seven (7) days following his execution of this
Agreement to revoke said ADEA waiver, and that such waiver is neither
effective nor enforceable until the expiration of such seven-day period.
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In the event this agreement is revoked by Executive in accordance with the
provisions of this Paragraph 28, Executive agrees to return to Company all
consideration and benefit provided by Company to which Executive would not
be entitled absent this agreement.
Date of
Execution: March 6, 1996 ______________________________________
Executive
McKESSON CORPORATION
Date of
Execution: March 6, 1996
By: ______________________________________
Vice President, Human
Resources and Administration
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