AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated
as of November 1, 2006 (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 Paul C. Julian
(“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 wish to amend and restate the terms of
Executive’s employment with the Company, as set forth
herein;
C. 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
D. 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 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 hereunder, Executive agrees to serve the Company, and
the Company shall employ Executive, as Executive Vice President and
Group President, 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
anniversary of the Effective Date; 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 his employment hereunder and
except for illness, reasonable vacation periods and reasonable
leaves of absence, Executive shall devote his best efforts and all
his 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 he is employed
hereunder. The services which are to be employed by Executive
hereunder are to be rendered in the State of California, or in such
other place or places in the United States or elsewhere as may be
determined from time to time by the Board, but are to be rendered
primarily at the headquarters of the Company in San Francisco,
California.
4.
Compensation and Reimbursement of Expenses .
(a)
Compensation . During the period of his 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 Eight Hundred Forty Thousand, Eight Hundred and Twenty-Nine
Dollars ($840,829) 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 paragraph 5 below), for each of the Company’s
fiscal years ending during the term of this Agreement,
Executive’s Individual Target Award shall be 100% during
fiscal year 2007 and 110% thereafter of his base salary for the
applicable Year (as defined in the MIP).
(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 his obligations hereunder.
5.
Other Benefits . During the period of his 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 he 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, Employee Stock
Purchase Plan, Executive Medical Plan, Management Incentive Plan
(“MIP”), Executive Benefit Retirement Plan
(“EBRP”), Executive Survivor Benefits Plan
(“ESBP”), Long-Term Incentive Plan
(“LTIP”). Stock Purchase Plan and 1994 Stock Option and
Restricted Stock Plan, the 2005 Stock Plan, (or any other similar
plan or arrangement).
6.
Benefits Payable Upon Disability or Death .
(a)
Disability Benefits . If, during the term of this Agreement,
Executive 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.
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(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)
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, 1994
Stock Option and Restricted Stock 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
.
(a)
Noncompetition . Executive agrees that during the term of
his employment hereunder, and for the “Noncompetition
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 (where as an employee, officer,
director, agent, creditor, or consultant or in any capacity which
calls for the rendering of personal services, advice, acts of
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(a), the “Noncompetition
Period” shall be deemed to be the period during which
Executive is receiving salary continuation payments hereunder.
Should Executive violate his obligations under this
Paragraph 7(a), any further salary continuation payments or
other severance benefits shall immediately cease. This Paragraph
7(a) shall survive the termination or expiration of this
Agreement.
(b)
Unauthorized Use of Confidential Information . Executive
acknowledges 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 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.
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(c)
Confidential Information Defined . For purposes of this
Agreement, “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, 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 of Employees . Executive recognizes and
acknowledges that it is 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, and
(ii) hiring or attempting to hire any employee of the Company
or any of its affiliated companies. Accordingly, Executive agrees
that during the term of his employment hereunder, and for the
Nonsolicitation 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, 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 its affiliated companies any employee of the Company or any
of its affiliated Companies. For purposes of this
Paragraph 7(d), the “Nonsolicitation Period” shall
be deemed to be the longer of (i) two (2) years following
termination of Executive’s employment for any reason, or
(ii) the period during which Executive is receiving salary
continuation payments hereunder. Should Executive violate his
obligations under this Paragraph 7(d), any further salary
continuation payments or other severance benefits shall immediately
cease. This Paragraph 7(d) shall survive the termination or
expiration of this Agreement.
(e)
Nonsolicitation of Customers . Executive recognizes and
acknowledges that it is 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 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
Nonsolicitation Period thereafter following the termination of
Executive’s employment with the Company and its affiliated
companies for any reason, Executive shall not,
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directly or
indirectly, 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 or any of its affiliated companies.
For purposes of this Paragraph 7(e), the
“Nonsolicitation Period” shall be deemed to be the
longer of (i) two (2) years following termination of
Executive’s employment for any reason, or (i
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