Document:

<PAGE>

                                                                   EXHIBIT 10.40

                     Syndicated Revolving Promissory Note

                           Dated as of May 28, 1999

                                    made by

                              McKesson HBOC, Inc.

                                  in favor of

                        Bank of America National Trust
                      and Savings Association, as Agent,

                                      and

                    The Other Noteholders Signatory Hereto

                        Banc of America Securities LLC,
                             as Sole Lead Arranger

                                BANK OF AMERICA
<PAGE>

                              McKESSON HBOC, INC.
                     SYNDICATED REVOLVING PROMISSORY NOTE

$575,000,000                                                          May28,1999
                                                       San Francisco, California

     1.  FOR VALUE RECEIVED, the undersigned McKESSON HBOC, INC. (formerly named
McKesson Corporation) (the "Company") hereby promises to pay to the order of
                            -------
each of the undersigned banks (each a "Bank" and collectively, the "Banks") the
                                       ----                         -----
amount of its Note Commitment, or such lesser amount as shall equal the
aggregate unpaid principal amount of  each Loan made by such Bank under this
revolving promissory note (this "Note").  The undersigned also promises to pay
                                 ----
interest on the principal amount of each Loan remaining unpaid hereunder from
the date such Loan is made until the date each Loan is paid in full, at the
rates and payable as hereinafter set forth.  The principal indebtedness
evidenced by this Note shall be payable as provided herein, and in any event on
the Maturity Date.  Subject to Paragraph 11, terms not defined herein or on
Exhibit A hereto shall have the meanings assigned to them in the Incorporated
---------
Agreement.  Unless otherwise noted, all references herein to paragraphs shall be
to paragraphs of this Note, and all references herein to sections shall be to
sections of the Incorporated Agreement.

     2.  The Note Commitments.  Each Bank severally agrees, on and subject to
the terms and conditions set forth herein, to make Loans in United States
Dollars to the Company from time to time as requested by the Company in the
manner provided by Section 2.3 and 11.2 of the Incorporated Agreement on any
Business Day during the period from the Closing Date to the Maturity Date, in an
aggregate amount not to exceed at any time outstanding the amount set forth
opposite its name on Schedule 1 hereto (such amount, as the same may be reduced
                     ----------
in the manner provided by Section 2.5 of the Incorporated Agreement or as a
result of one or more assignments in the manner provided by Section 11.8 of the
Incorporated Agreement, such Bank's "Note Commitment"); provided, however, that,
                                     ---------------    --------  -------
after giving effect to any Borrowing, the aggregate principal amount of all
outstanding Loans made by any Bank shall not at any time exceed its Note
Commitment and the aggregate principal amount of all outstanding Loans made by
all Banks shall not at any time exceed the combined Note Commitments.  Within
the limits of each Bank's Note Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this Paragraph 2, prepay in the
manner provided by Section 2.6 of the Incorporated Agreement and reborrow under
this Paragraph 2.  Loans made by each Lender shall be evidenced in the manner
provided by Section 2.2 of the Incorporated Agreement.

     3.  Procedure for Borrowings, Conversions and Continuations of Loans.  The
Company may irrevocably request Borrowings in the manner provided by Section 2.3
of the Incorporated Agreement (Procedure for Borrowing) and Conversions and
Continuations in the manner provided by Section 2.4 (Conversion and Continuation
Elections) of the Incorporated Agreement, using a Notice of Borrowing and Notice
of Conversion/Continuation substantially similar to the forms of such notices
set forth in the Incorporated Agreement but referring to this Note; provided,
                                                                    --------
however, that Loans shall be available in United States Dollars only.  Notices
-------
of

                                      -1-
<PAGE>

Borrowings, Conversions and Continuations shall be given, and Loans shall be
funded, in the manner provided in the Incorporated Agreement. Notwithstanding
the definition of "Interest Period" in the Incorporated Agreement, Interest
Periods for Offshore Rate Loans shall not exceed three months.

     4.  Termination or Reduction of Note Commitments.  The Company may reduce
or terminate the Note Commitments in the manner provided by Section 2.5 of the
Incorporated Agreement (Voluntary Termination or Reduction of Commitments) or
prepay Loans in the manner provided by Section 2.6 of the Incorporated Agreement
(Optional Prepayments).

     5.  Repayment.  If not sooner paid, the Company agrees to repay to the
Agent for payment to the Banks the outstanding principal amount of all Loans
outstanding on the Maturity Date. If the aggregate principal amount of all Loans
at any time exceeds the combined Note Commitments, the Company shall prepay
Loans to the extent necessary so that the aggregate principal amount of Loans
outstanding does not exceed the combined Note Commitments.

     6.  Interest.  (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date as follows: (i) if a
Base Rate Loan, then at a rate per annum equal to the Base Rate, and (ii) if an
Offshore Rate Loan, then at a rate per annum equal to the Offshore Rate plus the
                                                                        ----
Applicable Margin.  Default interest shall be payable at the times and in the
amount set forth in Section 2.8 (c) of the Incorporated Agreement.  Payment of
interest shall be subject to Section 2.8 (d) of the Incorporated Agreement.
Interest shall be computed and payable as set forth in the Incorporated
Agreement, with the final payment to be made on the Maturity Date.

     7.  Fees.  (a) On June 1, 1999 the Company shall pay an arrangement fee to
the Arranger for the Arranger's own account, and shall pay an agency fee to the
Agent for the Agent's own account, as required by the letter agreement between
the Company and the Arranger and the Agent dated May 24, 1999.

     (b) The Company shall pay an upfront fee to the Agent for the account of
each Bank on June 1, 1999 in the amount set forth below, payable on each Bank's
final allocated Note Commitment:

               Final Allocated          Upfront Fee
               Commitment               (in basis points)
               ------------------------------------------
               *  $100,000,000                12.5
               ** $100,000,000                10.0

     (c) The Company shall pay to the Agent for the account of each Bank a
facility fee equal to its Pro Rata Share of the Applicable Facility Fee.  The
facility fee for any period shall be

*More than or equal to
**Less than

                                      -2-
<PAGE>

equal to the actual daily amount of the combined Note Commitments multiplied by
                                                                  -------------
the Applicable Facility Fee.  Such facility fee shall accrue from the Closing
Date to the Maturity Date and shall be computed and payable as set forth in the
Incorporated Agreement, with the final payment to be made on the Maturity Date;
provided that, in connection with any reduction or termination of the Note
-------- ----
Commitments, the accrued facility fee calculated for the period ending on such
date shall also be paid on the date of such reduction or termination, with the
following quarterly payment being calculated on the basis of the period from
such reduction or termination date to such quarterly payment date.  If there is
any change in the Applicable Facility Fee or Note Commitments during any
quarter, the actual daily Note Commitments shall be computed and multiplied by
the Applicable Facility Fee separately for each period during such quarter that
such Applicable Facility Fee and Note Commitments was in effect.  The facility
fee provided in this paragraph shall accrue at all times from the Closing Date,
including at any time during which one or more conditions set forth or referred
to in Paragraph 9 are not met.

     8.  Computation of Fees and Interest; Payment; Sharing Payments.  Fees and
interest hereunder shall be calculated in the same manner as provided by Section
2.10 of the Incorporated Agreement (Computation of Fees and Interest) and
payment shall be made by the Company, the Agent and the Banks in the manner as
provided by Section 2.11 (Payments by the Company) and 2.12 (Payments by the
Banks to the Agent) of the Incorporated Agreement.  The Banks shall comply with
Section 2.13 of the Incorporated Agreement (Sharing of Payments, Etc.).

     9.  (a)  Conditions Precedent to Initial Loans.  Notwithstanding Section
4.1 of the Incorporated Agreement, the obligation of each Bank to make its
initial Loan hereunder is subject to the condition that the Agent have received
on or before the date the initial Loan is made, but not later than 15 days after
the date hereof, all the following, in form and substance satisfactory to the
Agent and each Bank, and in sufficient copies for each Bank:

         (i)   Note.  This Note executed by the Company and each Bank and, if
     requested by any Bank, a separate promissory note executed by the Company
     in favor of such Bank;

         (ii)  Resolutions; Incumbency.

               (A)  Copies of the resolutions of the board of directors of the
         Company authorizing the transactions contemplated hereby, certified as
         of the Closing Date by the Secretary or an Assistant Secretary of the
         Company; and

               (B)  A certificate of the Secretary or Assistant Secretary of the
         Company, certifying the names and true signatures of the officers of
         the Company authorized to execute, deliver and perform, as applicable,
         this Note, and all other documents to be delivered by it hereunder;

         (iii) Legal Opinion.  An opinion of Ivan D. Meyerson, Senior Vice
     President and General Counsel of the Company, addressed to the Agent and
     the Banks,

                                      -3-
<PAGE>

     substantially in the form of Exhibit D to the Incorporated Agreement,
     modified to refer to this Note;

          (iv)   Payment of Fees. Evidence of payment by the Company of all
     accrued and unpaid fees, costs and expenses to the extent then due and
     payable on the Closing Date, including any such costs, fees and expenses
     arising under or referenced in Paragraph 7;

          (v)   Company Certificate. A certificate signed by a Responsible
     Officer of the type referred to in Section 4.1 (f) of the Incorporated
     Agreement; and

          (vi)  Other Documents. Such other assurances, certificates, documents,
     consents or opinions as any Bank or the Agent reasonably may request.

     (b)  Conditions to All Borrowings. The obligation of each Bank to make any
Loan to be made by it (including its initial Loan) or to continue or convert any
Loan under Paragraph 3 is subject to the satisfaction of the conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date set
forth in Section 4.2 of the Incorporated Agreement.

     10.  Events of Default.  (a) Any of the following shall constitute an
"Event of Default" hereunder:

          (i)   The Company fails to pay, (i) when and as required to be paid
     herein, any amount of principal of any Loan, or (ii) within 5 days after
     the same becomes due, any interest, fee or any other amount payable by the
     Company hereunder; or

          (ii)  Any representation or warranty by the Company made or deemed
     made herein, or which is contained in any certificate, document or
     financial or other statement by the Company or any Responsible Officer,
     furnished at any time under this Note is incorrect in any material respect
     on or as of the date made or deemed made; or

          (iii) The Company fails to perform or observe any covenant,
     undertaking or agreement incorporated herein by reference pursuant to
     Paragraph 11 of this Note, subject to any grace period or notice
     requirements set forth in the Incorporated Agreement; or

          (iv)  The Company fails to perform or observe any other term or
     covenant contained in this Note, and such default shall continue unremedied
     for a period of 20 days after the earlier of (i) the date upon which a
     Responsible Officer knew of such failure or (ii) the date upon which
     written notice thereof is given to the Company by the Agent or any Bank; or

          (v)   The occurrence of any Event of Default as defined in the
     Incorporated Agreement.

                                           -4-
<PAGE>

     (b)  Remedies.  If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks,

          (i)   declare the commitment of each Bank to make Loans hereunder to
     be terminated, whereupon such commitments shall be terminated;

          (ii)  declare the unpaid principal amount of all outstanding Loans,
     all interest accrued and unpaid thereon, and all other amounts owing or
     payable under this Note to be immediately due and payable, without
     presentment, demand, protest or other notice of any kind, all of which are
     hereby expressly waived by the Company; and

          (iii) exercise on behalf of itself and the Banks all rights and
     remedies available to it and the Banks under this Note, the Incorporated
     Agreement or applicable law;

provided, however, that upon the occurrence of any event specified in subsection
--------  -------
(f) or (g) of Section 9.1 of the Incorporated Agreement (in the case of clause
(i) of subsection (g) upon the expiration of the 60-day period mentioned
therein), the obligation of each Bank to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Agent or any Bank.

     (c)  Rights Not Exclusive. The rights provided for in this Note are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.

     11.  Incorporation of Incorporated Agreement Provisions.  (a) Except as
otherwise provided or defined herein, all definitions, representations and
warranties, covenants, cost reimbursement provisions, indemnities and other
terms and conditions of the Incorporated Agreement are hereby incorporated
herein by reference, and the parties hereto shall be bound thereby as if set
forth in full herein; provided, however, that all references in such provisions
                      --------  -------
to "Agreement," "Loan Document," "Agent," "Banks," "Borrower," "Company,"
"Facility B Commitments," "Loans," "Obligations" and other terms, shall be
deemed to refer mutatis mutandis to this Note, the Agent hereunder, the Banks
hereunder, the Company, the Note Commitments, the Loans hereunder, the
Obligations of Company hereunder and to analogous terms contained herein.

     (b)  Section 2.1 (Amounts and Term of Commitments), 2.7 (Repayments), 2.14
(Optional Increase in Commitments), 2.15 (Conversion of Facility B Loans to Term
Loans), 2.16 (Utilization of Facility A Commitments in Canadian Dollars), 2.17
(Currency Exchange Fluctuations), 2.18 (Bankers' Acceptances for Medis),
2.19(Replacement of a Bank) and Article VIII (The Company's Guaranty of Medis'
Obligations) of the Incorporated Agreement and Schedules 2.1 and exhibits D-2,
F-2, F-3, G, H-1 and H-2 to the Incorporated Agreement shall not be deemed
incorporated by reference in, or otherwise applicable to, this Note.  References
to

                                      -5-
<PAGE>

Schedule 2.1 in the Incorporated Agreement shall be deemed a reference to
Schedule 1 hereto.  All references to Canadian Dollars, the Canadian
Administrative Agent, Canadian Participants, Term Loans and documentation agents
are not incorporated herein.

     (c)  All sections of the Incorporated Agreement incorporated herein or
referred to herein shall mean the Incorporated Agreement as amended, restated or
waived from time to time; provided, however, that a waiver of a Default or Event
                          --------  -------
of Default (as defined in the Incorporated Agreement) occurring under any
provision of the Incorporate Agreement will not operate to waive a Default or
Event of Default occurring hereunder by reason such provision being incorporated
herein by reference without the express separate consent of the Majority Banks
or all Banks, as required by Section 11.1 of the Incorporated Agreement
(Amendments and Waivers), hereunder.  If the Incorporated Agreement is
terminated, references herein to the Incorporated Agreement shall mean any new
agreement agreed upon by the Banks and the Company at such time or, failing such
agreement, to the Incorporated Agreement as in effect immediately prior to such
termination.

     (d)  To the extent the Company delivers documents and certificates under
the Incorporated Agreement, they shall deemed delivered hereunder.

     12.  Use of Proceeds. Proceeds of the Loans shall be used for general
corporate purposes, including refinancing existing indebtedness.

     13.  Miscellaneous.

     (a)  This Note may be executed in one or more counterparts, and each
counterpart, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same instrument. This Note shall
become effective as of the date first written above upon the execution hereof by
each of the Company, all Banks and the Agent and delivery of the same to the
Agent.

     (b)  THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE AGENT AND THE
BANKS IN THE STATE OF CALIFORNIA, AND SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS THEREOF.

     14.  Successors and Assign; SPC. (a) This Note shall be binding upon and
inure to the benefit of the Banks, the Agent, the Company and their respective
successors and assigns, except that the Company may not assign or transfer any
of its respective rights or obligations hereunder without the prior written
consent of all the Banks.

     (b)  Notwithstanding anything to the contrary contained herein, any Bank (a
"Granting Lender") may grant to a special purpose funding vehicle (an "SPC") of
 ---------------                                                       ---
such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Agent and the Company, the option to provide to the
Company all or part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrower hereunder, provided that (i)
                                             --------

                                      -6-
<PAGE>

nothing herein shall constitute a commitment to make any Loan by and SPC and
(ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof.  The making of a Loan by an SPC
hereunder shall utilize the Note Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by the Granting Lender.  The Company and
each Bank agree that no SPC shall be liable for any indemnity or similar payment
obligation under this Note (all liability for which shall remain with the
Granting Bank).  In furtherance of the foregoing, each party hereto hereby
agrees, which agreement shall survive the termination of this Note, that, prior
to the date that is one year and one day after the later of (i) the payment in
full of all outstanding senior indebtedness of any SPC it will not  institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States or any State thereof.
In addition, notwithstanding anything to the contrary contained in this
Paragraph, any SPC may (i) with notice, but without prior written consent of,
the Company or the Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans to its Granting Lender or to any
financial institutions providing liquidity and/or credit facilities to or for
the account of such SPC to fund the Loans made by such SPC or to support the
securities (if any) issued by such SPC to fund such Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPC.  In no event shall the Company be
obligated to pay to an SPC that has made a Loan any greater amount than the
Company would have been obligated to pay under this Note if the Granting Lender
had made such a Loan.  This Paragraph may not be amended without the written
consent of the Granting Bank.  No SPC shall have any voting rights under this
Note.

                                      -7-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

                                        McKESSON HBOC, INC.

                                        By: /s/ Nicholas A. Loiacono
                                            ---------------------------------

                                        Name:   Nicholas A. Loiacono
                                             --------------------------------
                                        Title:  Vice President, Finance
                                              -------------------------------
                                                and Treasurer
                                              -------------------------------

                                        By: /s/ Lincoln K. Walworth
                                           ----------------------------------

                                        Name:   Lincoln K. Walworth
                                             --------------------------------

                                        Title:  Assistant Treasurer
                                              -------------------------------

Noteholders:

Agreed and Accepted:

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent

By:
   ---------------------------------
            Gina Meador
            Vice President

(Signatures continue)

                                     S-1-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

                                        McKESSON HBOC, INC.

                                        By:_________________________________

                                        Name: ______________________________

                                        Title: _____________________________

                                        By:_________________________________

                                        Name: ______________________________

                                        Title: _____________________________

Noteholders:

Agreed and Accepted:

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent

By:   /s/ Gina Meador
   -------------------------------
          Gina Meador
          Vice President

(Signatures continue)

                                      S-1
<PAGE>

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank

By:   /s/ Vanessa Sheh Meyer
   ---------------------------------
          Vanessa Sheh Meyer
          Managing Director

                                      S-2
<PAGE>

Intentionally left blank

                                      S-3
<PAGE>

THE FIRST NATIONAL BANK OF CHICAGO

By:       /s/
   -----------------------------

Title:  Executive Vice President
      --------------------------

                                     S-4-
<PAGE>

FIRST UNION NATIONAL BANK

By:  /s/ John E. Reid
   --------------------------------

Title:   Vice President
      -----------------------------

                                      S-5
<PAGE>

MELLON BANK, N.A.

By:     /s/
   --------------------------------

Title:  Vice President
      -----------------------------

                                     S-6-
<PAGE>

TORONTO DOMINION (TEXAS), INC.

By:   /s/ Alva J. Jones
   --------------------------------

Title:    Vice President
      -----------------------------

                                    S-7-
<PAGE>

EXHIBIT A
                              CERTAIN DEFINITIONS

     Subject to Paragraph 11, except as otherwise defined the Note to which
this Exhibit A is attached or in the Incorporated Agreement, as used in this
Note, the following terms have the following meanings:

Applicable Facility Fee: on any date (subject to clauses (b) through (d) of the
-----------------------
                         definition of "Applicable Rating Level" in the
                         Incorporated Agreement), the applicable fee (in basis
                         points) set forth below based on the Applicable Rating
                         Level on such date:

                              Applicable         Applicable Facility
                             Rating Level       Fee (in basis points)
                         -----------------------------------------------
                               Level I                  10.0
                               Level II                 12.5
                               Level III                15.0
                               Level IV                 20.0
                               Level V                  25.0
                               Level VI                 30.0

    Applicable Margin:   on any date and with respect to each Offshore Rate Loan
    -----------------
                         (subject to clauses (b) through (d) of the definition
                         of "Applicable Rating Level" in the Incorporated
                         Agreement), the applicable margin (in basis points) set
                         forth below based on the type of Loan and the
                         Applicable Rating Level on such date:

                              Applicable          Applicable Margin
                             Rating Level       Fee (in basis points)
                         -----------------------------------------------
                               Level I                   40.0
                               Level II                  50.0
                               Level III                 72.5
                               Level IV                  92.5
                               Level V                  112.5
                               Level VI                 145.0

Arranger:                Banc of America Securities LLC.
--------

Closing Date:            May 28,1999.
------------

                                      A-1
<PAGE>

Default:          any event that, with the giving of any applicable notice or
-------
                  passage of time specified in Paragraph 10 of the Note, or
                  both, would be an Event of Default.

Incorporated      that certain Credit Agreement dated as of November 10, 1998,
Agreement:        as amended from time to time, among the Company, Medis Health
----------
                  and Pharmaceutical Services Inc., the banks from time to time
                  party thereto, Bank of America National Trust and Savings
                  Association as agent, Bank of America Canada, as Canadian
                  administrative agent, and The Chase Manhattan Bank, First
                  Union National Bank and The First National Bank of Chicago, as
                  documentation agents.

Majority Banks:   at any time Banks then holding more than 50% of the then
---------------
                  aggregate unpaid principal amount of the Loans, or, if no such
                  principle amount is then outstanding, Banks then having more
                  than 50% of the Note Commitments.

Maturity Date:    October 29, 1999.
--------------

Note Commitment:  as to each Bank, the meaning specified in Paragraph 2, and
---------------
                  "Note Commitments" means the aggregate amount of the Note
                   ----------------
                  Commitments for each Bank in effect on such date.

Pro Rata Share:   as to each Bank, the amount set forth under "Pro Rata Share"
--------------
                  on Schedule 1 hereto.

                                     A-2
<PAGE>

                                                                      SCHEDULE 1

                                NOTE COMMITMENTS
                              AND PRO RATA SHARES

<TABLE>
<CAPTION>
             Bank                      Note Commitment        Pro Rata Share
<S>                                    <C>                    <C>
Bank of America National Trust           $175,000,000            30.4347826%
 and Savings Association

First Union National Bank                $125,000,000            21.7391304%

The First National Bank of               $100,000,000            17.3913043%
 Chicago

Toronto Dominion (Texas), Inc.           $100,000,000            17.3913043%

Mellon Bank, N.A.                        $ 75,000,000            13.0434783%
                                         ============           ===========

Total                                    $575,000,000           100.0000000%
</TABLE>

                                     -1-<PAGE>

                                                                   EXHIBIT 10.41

                             EMPLOYMENT AGREEMENT
                             --------------------

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
                                   --------

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
     ----------
     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 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
          ------------------
          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
          ------
          illness, reasonable vacation periods, and reasonable leaves of
          absence, Executive shall

<PAGE>

          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
                    --------  -------
          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,
          --------------------
          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.
     ----------------------------------------------------------

     (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 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
          -------------------------
          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
          --------------
          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,

                                       2
<PAGE>

          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
          -------------
          and ESBP, Executive shall be subject to the terms and conditions of
          such plan, provided, however, that, in the event Executive's
                     --------  -------
          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
                                                    --------  -------
          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
     ------------------------
     incentive awards specified in subparagraphs (a) and (b) below:

     (a)  Retention Bonus. The Company shall pay Executive a special, one-time
          ---------------
          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,
          -------------
          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

                                       3
<PAGE>

          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.
     -----------------------------------------

     (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.

     (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 Section 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, 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.
     ----------------------------------------------------

     (a)  Noncompetition. Executive agrees that during the term of his
          --------------
          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

                                       4
<PAGE>

          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
          --------------------------------------------
          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,
          --------------------------------
          "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,

                                       5
<PAGE>

          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
          ---------------
          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
          -----------------
          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

                                       6
<PAGE>

          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.

8.  Termination.

     (a)  For Cause. Notwithstanding anything herein to the contrary, the
          ---------
          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
          -------------------------------------
          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
          -------------------------------------------------
          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,

                                       7
<PAGE>

          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

                                       8
<PAGE>

                 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
                 --------  -------
                 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
                                                         --------  -------
                 (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

                                       9
<PAGE>

                 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.

                                       10
<PAGE>

     (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,
                      -------
          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

                                       11
<PAGE>

          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
<PAGE>

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.

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