EXHIBIT 10.41
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 21, 1999 (the
"Effective Date"), by and between McKesson HBOC, Inc. (the "Company"), a
Delaware corporation with its principal office at One Post Street, San
Francisco, California, and Graham O. King ("Executive").
RECITALS
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A. The Company, in its business, develops and uses certain Confidential
Information (as defined in Paragraph 7(c) below). Such Confidential
Information will necessarily be communicated to or acquired by Executive by
virtue of his employment with the Company, and the Company has spent time,
effort and money to develop such Confidential Information and to promote
and increase its goodwill; and
B. The Company desires to retain the services of, and employ, Executive on its
own behalf and on behalf of its affiliated companies for the period
provided in this Agreement and, in so doing, to protect its Confidential
Information and goodwill, and Executive is willing to accept employment by
the Company on a full-time basis for such period, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
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Company agrees to employ Executive, and Executive agrees to accept
employment from, and remain in the employ of, the Company for the period
stated in Paragraph 3 hereof.
2. Position and Responsibilities. During the period of his employment
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hereunder, Executive agrees to serve the Company, and the Company shall
employ Executive, as President, Information Technology Business ("ITB") of
the Company or in such other senior corporate executive capacity or
capacities as may be mutually agreed upon from time to time between
Executive and the Chief Executive Officer or either of the Co-Chief
Executive Officers, as the case may be, of the Company (either, hereinafter
referred to as the "Chief Executive Officer").
3. Term and Duties.
(a) Term of Employment. The term of this Agreement shall be deemed to have
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commenced on the date of this Agreement and shall continue until the
earlier of (i) March 31, 2004, or (ii) the date that Executive shall
have been granted "Approved Retirement status under the Company's 1984
Executive Benefit Retirement Plan ("EBRP").
(b) Duties. During the period of his employment hereunder and except for
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illness, reasonable vacation periods, and reasonable leaves of
absence, Executive shall
devote his best efforts and all his business time, attention, skill
and efforts to the business and affairs of the Company and its
affiliated companies, as such business and affairs now exist and as
they may be hereafter changed or added to, under and pursuant to the
general direction of the Board of Directors of the Company (the
"Board"); provided, however, that, with the approval of the Chief
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Executive Officer, Executive may serve, or continue to serve, on the
boards of directors of, hold any other offices or positions in,
companies or organizations which, in such officer's judgment, will not
present any conflict of interest with the Company or any of its
subsidiaries or affiliates or divisions, or materially affect the
performance of Executive's duties pursuant to this Agreement.
(c) Place of Performance. So long as Executive shall be President, ITB,
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he shall provide his services primarily at the headquarters of the
ITB, presently located in the Atlanta, Georgia metropolitan area.
Notwithstanding the foregoing, Executive shall be under no obligation
throughout the term of this Agreement to relocate his permanent
residences, presently located in Hinsdale, Illinois and Jupiter,
Florida.
4. Compensation and Reimbursement of Expenses; Other Benefits.
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(a) Compensation. During the period of his employment hereunder, Executive
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shall be paid a salary, in monthly or semi-monthly installments (in
accordance with the Company's normal payroll practices for senior
executive officers), at the rate of Five Hundred Eighty Thousand
Dollars ($580,000.00) per year, or such higher salary as may be from
time to time approved by the Board (or any duly authorized Committee
thereof) (any such higher salary so approved to be thereafter the
minimum salary payable to Executive during the remainder of the term
hereof), plus such additional incentive compensation, if any, as may
be awarded to him yearly by the Board (or any duly authorized
Committee thereof). For purposes of the MIP (as defined in
subparagraph (c) below), for each of the Company's fiscal years ending
during the term of this Agreement, Executive's Individual Target Award
shall be 75% of his base salary for the applicable Year (as defined in
the MIP). Executive shall also receive an automobile allowance from
the Company of One Thousand Dollars ($1,000.00) per month during the
term of this Agreement.
(b) Reimbursement of Expenses. The Company shall pay or reimburse
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Executive, in accordance with its normal policies and practices, for
all reasonable travel and other expenses incurred by Executive in
connection with the performance of his obligations hereunder. The
Company further agrees to furnish Executive with such living and
entertainment assistance and accommodations as shall be suitable to
the character of Executive's position with the Company and adequate
for the performance of his duties hereunder.
(c) Other Benefits. Executive shall be entitled to receive all other
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benefits of employment generally available to other members of the
Company's executive management and those benefits for which key
executives are or shall become eligible, when and as he becomes
eligible therefor, including without limitation,
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group health and life insurance benefits, short and long-term
disability plans, deferred compensation plans, and participation in
the Company's Profit-Sharing Investment Plan, Employee Stock Purchase
Plan, Executive Medical Plan, 1989 Management Incentive Plan ("MIP"),
EBRP, 1988 Executive Survivor Benefits Plan ("ESBP"), Stock Purchase
Plan and 1994 Restricted Stock and Stock Option Plan (or any other
similar plan or arrangement), and the Company agrees that none of such
benefits shall be altered in any manner or in such a way as to reduce
any then existing entitlement of Executive thereunder.
(d) EBRP and ESBP. With respect to Executive's participation in the EBRP
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and ESBP, Executive shall be subject to the terms and conditions of
such plan, provided, however, that, in the event Executive's
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performance regarding the rebuilding of ITB and the development of a
successor is satisfactory to the Chief Executive Officer (the
"Accomplishment of ITB Rebuilding and Development"), management shall
recommend to the Board that Executive be granted "Approved Retirement"
status pursuant to the EBRP and the ESBP; provided, further, that, if
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Executive accrues five years of actual service credit pursuant to the
EBRP and the ESBP (regardless of having earlier been granted "Approved
Retirement" status, Executive shall be granted additional service
credit thereunder for prior service with US Servis and HBO & Company.
Executive and the Chief Executive Officer will work together in the
future to establish objective criteria by which Executive may be
judged to have achieved the Accomplishment of ITB Rebuilding and
Development. In the event Executive (a) resigns as President of ITB
following the grant of Approved Retirement status and (b) otherwise
remains employed by the Company in a mutually agreed upon position,
for purposes of the EBRP and the ESBP only, the EBRP and ESBP benefits
payable to Executive upon termination of employment shall be
calculated based upon the Executive's compensation at the time of
Executive's resignation as President, ITB.
5. Initial Incentive Grants. Executive shall receive the following initial
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incentive awards specified in subparagraphs (a) and (b) below:
(a) Retention Bonus. The Company shall pay Executive a special, one-time
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bonus of Two Million Five Hundred Thousand Dollars ($2,500,000.00),
payable in two installments of $1,250,000.00 each on (i) as soon as
practicable following execution of this Agreement, and (ii) the
anniversary of the Effective Date, provided Executive is employed on
such dates or his employment terminates earlier as a result of his
death, disability, a termination by the Company other than for Cause
(as defined in Paragraph 8(a)) or a termination by Executive for Good
Reason (as defined in Paragraph 8(d)(iv)). This bonus is not to be
construed as a salary type payment but rather a retention payment.
(b) Stock Options. Executive will be granted on or about August 16, 1999,
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a non-qualified stock option to purchase One Million (1,000,000)
shares of the Company's common stock, at a per share exercise price
equal to the fair market value of a share of the Company's common
stock on the date of grant (the "Grant
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Date"), which option will vest at the rate of fifty percent (50%) on
the second anniversary of the Grant Date, seventy-five percent (75%)
on the third anniversary of the Grant Date and one hundred percent
(100%) on the fourth anniversary of the Grant Date. Notwithstanding
the foregoing, the option granted pursuant to this Section 5(b) shall
vest if and at such time as Executive is granted "Approved Retirement"
status under the EBRP, as is contemplated in Section 4(d). If
Executive's employment is terminated by either party for any reason
other than for Cause, such option shall be exercisable, to the extent
it is vested on the date of termination or becomes vested thereafter
pursuant to Section 8(d)(iii)(D), for a period of thirty-six (36)
months following the later of termination of Executive's employment or
the vesting of such option. Such option will otherwise be subject to
the terms and conditions of the Company's Stock Option and Restricted
Stock Plan (or any other similar plan or arrangement).
6. Benefits Payable Upon Disability or Death.
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(a) Disability Benefits. If, during the term of this Agreement, Executive
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shall be prevented from properly performing services hereunder by
reason of his illness or other physical or mental incapacity, the
Company shall continue to pay Executive his then current salary
hereunder during the period of such disability; or, if less, for a
period of (12) calendar months, at which time the Company's
obligations hereunder shall cease and terminate.
(b) Death Benefits. In the event of the death of Executive during the term
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of this Agreement, Executive's salary payable hereunder shall continue
to be paid to Executive's surviving spouse, or if there is no spouse
surviving, then to Executive's designee or representative (as the case
may be) through the six-month period following the end of the calendar
month in which Executive's death occurs. Thereafter, all of the
Company's obligations hereunder shall cease and terminate.
(c) Other Plans. The provisions of this Section 6 shall not affect any
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rights of Executive's heirs, administrators, executors, legatees,
beneficiaries or assigns under the Company's Profit-Sharing Investment
Plan, EBRP, ESBP, Restricted Stock and Stock Option Plan (or any other
similar plan or arrangement), any stock purchase plan or any other
employee benefit plan of the Company, and any such rights shall be
governed by the terms of the respective plans.
7. Obligations of Executive During and After Employment.
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(a) Noncompetition. Executive agrees that during the term of his
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employment hereunder, and for the "Restricted Period" (as hereinafter
defined) thereafter following the termination of Executive's
employment with the Company for any reason, he will not, within the
United States, participate, engage or have any interest in, directly
or indirectly, any person, firm, corporation, or business (whether as
an employee, officer, director, agent, creditor, or consultant or in
any capacity which calls for the rendering of personal services,
advice, acts of
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management, operation or control) which carries on any business or
activity competitive with the Company or any affiliated company
(including, without limitation, any products or services sold,
investigated, developed or otherwise pursued by the Company or any
affiliated company at any time or from time to time) without the prior
written consent of the Chief Executive Officer. For purposes of this
Paragraph 7, the "Restricted Period" shall be deemed to be the longer
of (i) one (1) year (two (2) years when the term is used in Paragraph
7(d)) following termination of Executive's employment for any reason
or (ii) the period during which Executive is receiving salary
continuation payments hereunder. This Paragraph 7(a) shall survive the
termination or expiration of this Agreement.
(b) Unauthorized Use of Confidential Information. Executive acknowledges
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and agrees that (i) during the course of his employment Executive will
have produced and/or have access to Confidential Information (as
defined in subparagraph (c) hereof), of the Company and its affiliated
companies, and (ii) the unauthorized use or sale of any of such
confidential or proprietary information at any time would harm the
Company and would constitute unfair competition with the Company.
Executive promises and agrees not to engage in any unfair competition
with the Company either during or after the term of this Agreement.
Therefore, during and subsequent to his employment by the Company and
its affiliated companies, Executive agrees to hold in confidence and
not, directly or indirectly, disclose, use, copy or make lists of any
such information, except to the extent expressly authorized by the
Company in writing or as required by law. All records, files,
drawings, documents, equipment, and the like, or copies thereof,
relating to the Company's business, or the business of any of its
affiliated companies, which Executive shall prepare, use, or come into
contact with, shall be and remain the sole property of the Company,
and shall not be removed (except to allow Executive to perform his
responsibilities hereunder while traveling for business purposes or
otherwise working away from his office) from the Company's or the
affiliated company's premises without its prior written consent, and
shall be promptly returned to the Company upon termination of
employment with the Company and its affiliated companies. This
paragraph 7(b) shall survive the termination or expiration of this
Agreement.
(c) Confidential Information Defined. For purposes of this Agreement,
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"Confidential Information" means all information (whether reduced to
written, electronic, magnetic or other tangible form) acquired in any
way by Executive during the course of his employment with the Company
or any of its affiliated companies concerning the products, projects,
activities, business or affairs of the Company and its affiliated
companies, or the Company's or any of its affiliated company's
customers, including, without limitation, (i) all information
concerning trade secrets of the Company and its affiliated companies,
including computer programs,
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system documentation, special hardware, product hardware, related
software development, manuals, formulae, processes, methods, machines,
compositions, ideas, improvements or inventions of the Company and its
affiliated companies, (ii) all sales and financial information
concerning the Company and its affiliated companies, (iii) all
customer and supplier lists of the Company and its affiliated
companies, (iv) all information concerning products or projects under
development by the Company or any of its affiliated companies or
marketing plans for any of those products or projects, and (v) all
information in any way concerning the products, projects, activities,
business or affairs of customers of the Company or any of its
affiliated companies which was furnished to him by the Company or any
of its agents or customers; provided, however, that Confidential
Information does not include information which (A) becomes available
to the public other than as a result of a disclosure by Executive, (B)
was available to him on a non-confidential basis outside of his
employment with the Company, or (C) becomes available to him on a non-
confidential basis from a source other than the Company or any of its
agents, creditors, suppliers, lessors, lessees or customers.
(d) Nonsolicitation. Executive recognizes and acknowledges that it is
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essential for the proper protection of the business of the Company and
its affiliated companies that Executive be restrained for a reasonable
period following the termination of Executive's employment with the
Company and its affiliated companies from: (i) soliciting or inducing
any employee of the Company or any of its affiliated companies to
leave the employ of the Company or any of its affiliated companies;
(ii) hiring or attempting to hire any employee of the Company or any
of its affiliated companies; or (iii) soliciting the trade of or
trading with the customers of the Company or any of its affiliated
companies for any competitive business purpose. Accordingly, Executive
agrees that during the term of his employment hereunder, and for the
Restricted Period thereafter following the termination of Executive's
employment with the Company and its affiliated companies for any
reason, Executive shall not, directly or indirectly, (x) hire,
solicit, aid in or encourage the hiring and/or solicitation of,
contract with, aid in or encourage the contracting with, or induce or
encourage to leave the employment of the Company or any of its
affiliated companies, any employee of the Company or any of its
affiliated companies; and (y) solicit, aid in or encourage the
solicitation of, contract with, aid in or encourage the contracting
with, service, or contact any person or entity which is, or was,
within three years prior to the termination of Executive's employment
with the Company and its affiliated companies, a customer or client of
the Company or any of its affiliated companies for the purpose of
offering or selling a product or service competitive with any of those
offered by the Company of any of its affiliated companies. This
Paragraph 7(d) shall survive the termination or expiration of this
Agreement.
(e) Remedy for Breach. Executive agrees that in the event of a breach or
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threatened breach of any of the covenants contained in this Paragraph
7, the Company shall have the right and remedy to have such covenants
specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that any material
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breach of any of the covenants will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to
the Company.
(f) Blue-Penciling. Executive acknowledges and agrees that the
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noncompetition and nonsolicitation provisions contained herein are
reasonable and valid in geographic, temporal and subject matter scope
and in all other respects, and do not impose limitations greater than
are necessary to protect the goodwill, Confidential Information and
other business interests of the Company. Nevertheless, if any court
determines that any of said noncompetition and other restrictive
covenants and agreements, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision, such
court shall have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable to the maximum extent permitted by
applicable law.
8. Termination.
(a) For Cause. Notwithstanding anything herein to the contrary, the
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Company may, without liability, terminate Executive's employment
hereunder for Cause at any time upon written notice from the Board (or
any duly authorized Committee thereof) specifying such Cause, and
thereafter, the Company's obligations hereunder (other than the
obligation to pay any accrued salary or benefits) shall cease and
terminate; provided, however, that such written notice shall not be
delivered until after the Board (or any duly authorized Committee
thereof) shall have given Executive written notice specifying the
conduct alleged to have constituted such Cause and Executive has
failed to cure such conduct, if curable, within fifteen (15) days
following receipt of such notice. As used herein, the term "Cause"
shall mean (i) Executive's willful misconduct, habitual neglect,
dishonesty or other intentional actions (or failures to act) which are
materially and demonstrably injurious to the Company, or (ii) a
material breach by Executive of one or more terms of this Agreement.
(b) Arbitration Required to Confirm Cause. In the event of a termination
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for Cause pursuant to subparagraph (a) above, the Company shall
continue to pay Executive's then current compensation as specified in
this Agreement until the issuance of an arbitration award affirming
the Company's action. Such arbitration shall be held in accordance
with the provisions of Paragraph 9(d) below. In the event the award
upholds the action of the Company, Executive shall promptly repay to
the Company any sums received pursuant to this subparagraph 8(b),
following termination of employment.
(c) Other than for Cause; Performance, Reorganization. Notwithstanding
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anything herein to the contrary, the Company may also terminate
Executive's employment (without regard to any general or specific
policies of the Company relating to the employment or termination of
its employees) (i) should Executive fail to perform his duties
hereunder in a manner satisfactory to the Chief Executive Officer,
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provided that Executive shall first be given written notice of such
unsatisfactory performance and a period of ninety (90) days to improve
such performance to a level deemed acceptable to the Chief Executive
Officer, (ii) should Executive's position be eliminated as a result of
a reorganization or restructuring of the Company or any of its
affiliated companies or (iii) for any other reason or reasons.
(d) Obligations of the Company on Termination of Employment.
i) If the Company terminates Executive's employment pursuant to
subparagraph 8(a) above and the Company's action is affirmed as
specified in subparagraph 8(b) above or Executive terminates
his employment with the Company other than for Good Reason (as
defined in subparagraph (d)(iii)), then all of the Company's
obligations hereunder (other than the obligation to pay any
accrued salary or benefits) shall immediately cease and
terminate. Executive shall thereupon have no further right or
entitlement to additional salary, incentive compensation
payments or awards, or any perquisites from the Company
whatsoever, and Executive's rights, if any, under the Company's
employee and executive benefit plans shall be determined solely
in accordance with the express terms of the respective plans.
Notwithstanding the foregoing, termination by Executive without
Good Reason shall not affect Executive rights with regard to
vested options.
ii) In the event that Executive shall terminate his employment for
any reason after Executive shall have been granted "Approved
Retirement" status under the EBRP, as is contemplated in
Section 4(d), Executive shall be eligible for the continuation
of health benefits as are described in Section 8(d)(iii)(C).
This provision will survive the termination of this Agreement.
iii) If the Company terminates Executive's employment pursuant to
subparagraph 8(c) above or Executive terminates his employment
with the Company for Good Reason prior to the expiration of
this Agreement, then in lieu of any benefits payable pursuant
to the Company's Executive Severance Policy (so long as the
compensation and benefits payable hereunder equal or exceed
those payable under said Policy) and in complete satisfaction
and discharge of all of its obligations to Executive hereunder,
the Company shall, provided Executive is not in breach of the
provisions of Paragraph 7 hereof, and except as provided in
Paragraph 9(c) below, (A) continue Executive's then base
salary, without increase, for the remainder of the term of this
Agreement, provided, however, that the Company's obligation to
make such salary payments shall be reduced by any compensation
received by Executive from a subsequent employer during such
term, (B) consider Executive for a bonus under the terms of the
Company's MIP for the fiscal year in which termination occurs
(but not for any subsequent year) provided that any such bonus,
if earned, shall be pro-rated to reflect the portion of the
year for which Executive was
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actively employed, (C) continue Executive's automobile
allowance, financial planning allowance, and Executive Medical
Plan benefits until the expiration date of this Agreement,
provided, however, that Executive may thereafter elect to
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continue his Executive Medical Plan benefits (or, at his
choice, any lesser medical coverage offered by the Company at
the time of termination) by paying the Company's actual cost
for said benefit, (D) subject to the express special forfeiture
and repayment provisions of the respective plans (or the terms
and conditions applicable thereto), continue the accrual and
vesting of Executive's rights, benefits and existing awards for
the remainder of the term of this Agreement for purposes of the
EBRP, ESBP and the Stock Option and Restricted Stock Plan (or
any other similar plan or arrangement), provided, however, that
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(unless the Board, or any duly authorized Committee, in its
sole discretion, determines otherwise) Executive shall in no
event receive or be entitled either to additional grants or
awards subsequent to the date of termination, or "Approved
Retirement" status, under the foregoing plans, and (E)
terminate Executive's participation in the Company's tax-
qualified profit-sharing plans and stock purchase plans,
pursuant to the terms of the respective plans, as of the date
of Executive's termination of employment.
iv) For purposes of this Agreement, "Good Reason" shall mean any of
the following actions, if taken without the express written
consent of Executive, (A) any material change by the Company in
Executive's functions, duties, or responsibilities as
President, Information Technology Business, which changes would
cause Executive's position with the Company to become of less
dignity, responsibility, importance or scope as compared to the
position and attributes that applied to Executive as of the
Effective Date; (B) any reduction in Executive's base salary,
other than a reduction effect as part of an across-the-board
reduction affecting all executives of the Company; (C) any
material failure by the Company to comply with any of the
provisions of the Agreement; (D) the requirement made by the
Company that Executive change his manner of performing his
responsibilities so as to require a change in his residence;
(E) a removal of the principal place of business of the ITB to
a place more than 1,000 miles from Chicago, Illinois; (F) a
Change of Control; or (G) any failure by the Company to obtain
the express assumption of the Agreement by any successor or
assign of the Company.
v) a "Change of Control shall have been deemed to have occurred if
at any time during the term of the Agreement: (A) the Company
sells. or otherwise disposes of substantially all of the assets
of the ITB or a majority of the equity ownership or voting
control of any corporation or other entity holding
substantially all of the assets of the ITB in a single
transaction or series of related transactions, or (B)(i) any
"person" (as defined in the Securities Exchange Act of 1934, as
amended) other than the Company or any of its subsidiaries or a
trustee or any fiduciary holding securities under
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an employee benefit plan of the Company or any of its
subsidiaries, acquires securities representing 30% or more of
the combined voting power of the Company's then outstanding
securities; (ii) during any period of not more than two
consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company and any
new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds 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; (iii) the stockholders 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, 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
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
stockholders 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 its assets.
Notwithstanding the foregoing, no Change of Control shall be
deemed to have occurred for purposes of subsection (B) of this
paragraph, (i) as a result of the consummation of any
transaction occurring prior to the date of the Agreement, or
(ii) if there is consummated any transaction or series of
integrated transactions immediately following which, in the
judgement of the Compensation Committee of the Board, the
holders of the Company's Common 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.
9. General Provisions.
(a) Executive's rights and obligations hereunder shall not be transferable
by assignment or otherwise. Nothing in this Agreement shall prevent
the consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its properties or assets; and this Agreement shall inure to the
benefit of, be binding upon and be enforceable by, any successor
surviving or resulting corporation, or other entity to which such
assets shall be transferred. This Agreement shall not be terminated by
the voluntary or involuntary dissolution of the Company.
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(b) This Agreement (together with the Termination Agreement of even date
herewith and the Indemnification Agreement dated August 25, 1999) and
the rights of Executive with respect to the benefits of employment
referred to in Paragraph 4(c) constitute the entire agreement between
the parties hereto in respect of the employment of Executive by the
Company. This Agreement supersedes and replaces all prior oral and
written agreements, understandings, commitments, and practices between
the parties with regard to such employment. To the extent that the
terms of Section 13(b) of the Termination Agreement are inconsistent
with the provisions of this subsection (b), this subsection (b) shall
control.
(c) In the event Executive's employment with the Company shall terminate
under circumstances otherwise providing Executive with a right to
benefits under both Section 5 of the Termination Agreement and
Paragraph 8(d)(iii) of this Agreement, Executive shall be entitled to
receive the greater of the benefits provided therein or herein,
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calculated individually, without duplication. The obligation of the
Employee to remain in the employ of the Company as set forth in
Section 2 of the Termination Agreement shall relate only to potential
benefits to be derived under the Termination Agreement and in no case
shall be deemed to effect or limit any rights or obligations that
Employee shall have under this Agreement or any other agreement
between the Company and Employee (which rights and obligations shall
be governed solely by the provisions of such agreements) other than
the Termination Agreement.
(d) Any dispute, controversy or claim arising under or in connection with
this Agreement, or the breach hereof, other than any dispute,
controversy claim or breach arising under Paragraph 7 of this
Agreement, shall be settled exclusively by arbitration in accordance
with the Rules of the American Arbitration Association then in effect.
Judgment upon the award rendered by the arbitrator may be entered in
any court of competent jurisdiction. Any arbitration held pursuant to
this paragraph in connection with any termination of Executive's
employment shall take place in San Francisco, California at the
earliest possible date. If any proceeding is necessary to enforce or
interpret the terms of this Agreement, or to recover damages for
breach thereof, the prevailing party shall be entitled to reasonable
attorneys fees and necessary costs and disbursements, not to exceed in
the aggregate one percent (1%) of the net worth of the other party, in
addition to any other relief to which he or it may be entitled.
(e) Executive expressly acknowledges and agrees that, in the event the
benefits provided hereunder are subject to the excise tax provision
set forth in Section 4999 of the Internal Revenue Code of 1986, as
amended, (i) Executive shall be responsible for and (ii) Executive
shall not be entitled to any additional payment from the Company for
any Federal, state, and local income and employment taxes, interest or
penalties that may arise in connection with such benefits.
(f) The provisions of this Agreement shall be regarded as divisible, and
if any of said provisions or any part hereof are declared invalid or
unenforceable by a court of
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competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts hereof and the applicability
hereof shall not be affected thereby.
(g) This Agreement may not be amended or modified except by a written
instrument executed by the Company and Executive.
(h) This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of
Georgia without regard to its principles of conflict of laws.
(i) The Company shall indemnify and hold harmless Executive from all legal
fees and expenses of counsel arising out of or incurred in connection
with any claims, by or on behalf of, or against, SMS under that
certain Employment Agreement dated January 10, 1991 between SMS and
Executive, that certain Separation Agreement dated as of November 30,
1993 or otherwise, arising as a result of Executive's employment with
the Company or actions taken by Executive in connection therewith.
Expenses incurred by Executive in connection with any claim for
indemnification shall be paid by the Company in advance upon the
written request of Executive. Executive shall reimburse the Company
for such expenses in the event and only to the extent that it shall be
ultimately determined that Executive is not entitled under applicable
state law to be indemnified for such expenses.
(j) This Agreement and all rights of Executive hereunder shall inure to
the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(k) The waiver by either party hereto of any right hereunder or of any
failure to perform or breach by the other party hereto shall not be
deemed a waiver of any other right hereunder or of any other failure
or breach by the other party hereto, whether of the same or a similar
nature or otherwise. No waiver shall be deemed to have occurred unless
set forth in a writing executed by or on behalf of the waiving party.
No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only
as to the specific term or condition waived and shall not constitute a
waiver of such term or condition for the future or as to any act other
than that specifically waived.
(signature page follows)
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
McKESSON HBOC, INC.
A Delaware Corporation
By /s/ Ivan D. Meyerson
--------------------------
Senior Vice President
ATTEST:
/s/ Kristina Veaco
- -----------------------
Assistant Secretary
/s/ Graham O. King
------------------
Executive
By the Authority of the
Compensation Committee
of the Board of Directors
of McKesson HBOC, Inc.
on July 6, 1999.