AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”),
effective as of November 1, 2008 (the “Effective
Date”), is by and between McKesson Corporation (the
“Company”), a Delaware corporation with its principal
office at One Post Street, San Francisco, California, and Pamela J.
Pure (“Executive”).
A. WHEREAS,
Executive and the Company have previously entered into that certain
Employment Agreement dated as of April 1, 2004 (the
“Prior Employment Agreement”);
B. WHEREAS,
Executive and the Company have previously amended and restated the
terms of the Prior Employment Agreement, effective as of
November 1, 2006;
C. WHEREAS,
the Company, in its business, develops and uses certain
Confidential Information (as defined in Paragraph 7(b)(iii)
below). Such Confidential Information will necessarily be
communicated to or acquired by Executive by virtue of her
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;
D. WHEREAS,
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; and
E. WHEREAS,
Executive and the Company wish to amend and restate the terms of
the Agreement to comply with the final regulations promulgated
under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and preserve deductibility of
certain compensation under Section 162(m) of the Code in accordance
with Revenue Ruling 2008-13.
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 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 below.
2. Position
and Responsibilities . During the period of her employment
hereunder, Executive agrees to serve the Company, and the Company
shall employ Executive, as Executive Vice President and President,
McKesson Technology Solutions, or in such other senior corporate
executive capacity or capacities as may be specified from time to
time by the Chief Executive Officer of the Company (the
“Chief Executive Officer”).
(a) Term
of Employment . The period of Executive’s employment
under this Agreement shall be deemed to have commenced on the date
of this Agreement and shall continue until the third (3
rd ) anniversary of the Effective Date, unless
terminated earlier in accordance with Paragraphs 6-9 below;
provided, however, that the term of this Agreement shall
automatically be extended for one (1) additional year on each
anniversary of the Effective Date, unless terminated earlier in
accordance with Paragraph 8 below (the
“Term”).
(b)
Duties . During the period of her employment hereunder and
except for illness, reasonable vacation periods and reasonable
leaves of absence, Executive shall devote her best efforts and all
her business time, attention and skill 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 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 adversely
affect the performance of Executive’s duties pursuant to this
Agreement. The Company shall retain full direction and control of
the means and methods by which Executive performs the services for
which she is employed hereunder. The services which are to be
employed by Executive hereunder are to be rendered in the State of
Georgia, or in such other place or places in the United States or
elsewhere as may be determined from time to time by the
Board.
4.
Compensation and Reimbursement of Expenses .
(a)
Compensation . During the period of her employment
hereunder, Executive 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 Seven Hundred Sixty-Six Thousand Dollars ($776,000) 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 her yearly by the Board (or any duly authorized Committee
thereof). For purposes of the MIP (as defined in Paragraph 5
below), for each of the Company’s fiscal years ending during
the Term of this Agreement, Executive’s Individual Target
Award (as defined in the MIP) shall be ninety percent (90%) of her
base salary for the applicable Year (as defined in the MIP).
Executive shall also receive a Mortgage Allowance of Two Thousand
Six Hundred Forty-Six Dollars and Four Cents ($2,646.04), which
amount will be paid in a lump sum each month through
February 2013, or termination of employment, if earlier,
provided that her current residence remains her principal
residence.
(b)
Reimbursement of Expenses . The Company shall pay or
reimburse Executive, in accordance with its normal policies and
practices, for all reasonable travel and other expenses incurred by
Executive in performing her obligations hereunder; provided,
however, any such expenses eligible for reimbursement that are
taxable to Executive and incurred during the course
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of
Executive’s employment may not affect the expenses eligible
for reimbursement in any other taxable year.
5. Other
Benefits . During the period of her employment hereunder,
Executive shall be entitled to receive all other benefits of
employment generally available to other members of the
Company’s senior management and those benefits for which key
executives are or shall become eligible, when and as she becomes
eligible therefore, including without limitation, 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, Company-sponsored
medical plan, Management Incentive Plan (“MIP”),
Executive Benefit Retirement Plan (“EBRP”), Executive
Survivor Benefits Plan (“ESBP”), Long-Term Incentive
Plan, Employee Stock Purchase Plan, and the 1994 Stock Option and
Restricted Stock Plan, the 1999 Stock Option and Restricted Stock
Plan, the 2005 Stock Plan and any other similar plan or arrangement
(collectively, the “Stock Incentive Plans).
6. Benefits
Payable Upon Disability or Death .
(a)
Disability Benefits . If, during the term of this Agreement,
Executive sustains a disability, as defined in Treasury Regulation
section 1.409A-3(i)(4)(i) or -3(i)(4)(iii), the Company shall
continue to pay Executive her then current salary hereunder at the
time of the regular payroll schedule during the period of such
disability or, if less, for a period of twelve (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 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) at the time of the regular
payroll schedule 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 Paragraph 6 shall not
affect any rights of Executive’s heirs, administrators,
executors, legatees, beneficiaries or assigns under the
Company’s Profit-Sharing Investment Plan, EBRP, ESBP, Stock
Incentive Plans, any Employee 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
.
(a)
Noncompetition . Executive agrees that during the term of
her employment hereunder, that she will work exclusively for and
devote her substantial working energies solely to the benefit of
the Company. Executive further agrees that for a period of two
(2) years following the termination of her employment for
whatever reason, that Executive will not perform, in any state of
the United States of America, any like or similar services that
Executive performed during the course of her employment with
Company, for any competitor of Company. Executive agrees that, at
the time of execution of this Agreement, (1) the Company is
currently conducting or planning to solicit and conduct business in
each of the states of the United States of America, and
(2) that she has direct or indirect supervisory
responsibilities for such conduct or plans in each such
state.
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(b) Trade
Secret and Confidential Information . Executive acknowledges
and agrees that, during the course of her employment, Executive
will have produced and/or have access to trade secrets and
Confidential Information (as defined below), of the Company and
that the unauthorized use or disclosure of any of such trade
secrets and Confidential Information would harm the
Company.
(i)
Trade Secrets . Executive promises and agrees to take all
reasonable steps to maintain and protect the trade secrets of the
Company and its affiliates during and after Executive’s
employment with the Company. Executive further agrees not to use or
disclose any trade secret of the Company and its affiliates after
the termination of her employment.
(ii)
Confidential Information . Executive promises and agrees to
take all reasonable steps to maintain and protect the Confidential
Information (as defined below) of the Company during and for a
period of three (3) years after Executive’s employment
with the Company. Executive further agrees not to use or disclose
any Confidential Information of the Company for a three-year period
after the termination of her employment with the Company. Therefore
subject to these restrictions, 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 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 her responsibilities
hereunder while traveling for business purposes or otherwise
working away from her office) from the Company’s premises
without its prior written consent, and shall be promptly returned
to the Company upon termination of employment with the Company.
This Paragraph 7 (b) shall survive the termination or
expiration of this Agreement.
(iii)
Confidential Information Defined . For purposes of this
Agreement, “Confidential Information” excludes trade
secrets of the Company, but includes all other information (whether
reduced to written, electronic, magnetic or other tangible form)
acquired in any way by Executive during the course of her
employment with the Company concerning the products, projects,
activities, business or affairs of the Company, or the
Company’s customers, including without limitation, (i) all
information concerning computer programs, 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
her 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 her on a
non-confidential basis
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outside of her
employment with the Company, or (C) becomes available to her
on a non-confidential basis from a source other than the Company or
any of its agents, creditors, suppliers, lessors, lessees or
customers.
(c)
Non-solicitation of Employees . Executive agrees that for a
period of two (2) years following the termination of
Executive’s employment for any reason, that Executive will
not solicit, recruit or hire any employee of Company with whom
Executive had business contact or about whom Executive had access
to Confidential Information regarding the employee’s pay,
performance, duties or customer contacts.
(d)
Non-solicitation of Customers . Executive recognizes and
acknowledges that it is essential for the proper protection of the
business of the Company that Executive be restrained for a
reasonable period following the termination of Executive’s
employment with the Company from soliciting customers of the
Company. Executive agrees for a period of two (2) years
following the termination of Executive’s employment for
whatever reason, that Executive will not solicit for any
competitive purpose the customers of Company, such customers shall
be limited to those customers with whom Executive had material
personal, business contact within the last three years of
Executive’s employment with Company.
(e)
Remedy for Breach . Executive agrees that in the event of a
breach or 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
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
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.
(g)
Mutual Dependence . Executive understands and agrees that
her full compliance with Section 7 of this Agreement is an
express condition for and mutually dependent upon the obligations
of the Company to pay Executive her compensation and benefits,
including severance pay, during the remainder of the Term.
Executive further understands and agrees that in the event that any
provisions of Section 7
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