EMPLOYMENT AGREEMENT

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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 21, 1999 (the

"Effective Date"), by and between McKesson HBOC, Inc. (the "Company"), a

Delaware corporation with its principal office at One Post Street, San

Francisco, California, and Graham O. King ("Executive").



                                   RECITALS

                                   --------



A.   The Company, in its business, develops and uses certain Confidential

     Information (as defined in Paragraph 7(c) below). Such Confidential

     Information will necessarily be communicated to or acquired by Executive by

     virtue of his employment with the Company, and the Company has spent time,

     effort and money to develop such Confidential Information and to promote

     and increase its goodwill; and



B.   The Company desires to retain the services of, and employ, Executive on its

     own behalf and on behalf of its affiliated companies for the period

     provided in this Agreement and, in so doing, to protect its Confidential

     Information and goodwill, and Executive is willing to accept employment by

     the Company on a full-time basis for such period, upon the terms and

     conditions hereinafter set forth.



NOW, THEREFORE, in consideration of the foregoing premises and the mutual

covenants herein contained, the parties hereto agree as follows:



1.   Employment.  Subject to the terms and conditions of this Agreement, the

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     Company agrees to employ Executive, and Executive agrees to accept

     employment from, and remain in the employ of, the Company for the period

     stated in Paragraph 3 hereof.



2.   Position and Responsibilities.  During the period of his employment

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     hereunder, Executive agrees to serve the Company, and the Company shall

     employ Executive, as President, Information Technology Business ("ITB") of

     the Company or in such other senior corporate executive capacity or

     capacities as may be mutually agreed upon from time to time between

     Executive and the Chief Executive Officer or either of the Co-Chief

     Executive Officers, as the case may be, of the Company (either, hereinafter

     referred to as the "Chief Executive Officer").



3.   Term and Duties.



     (a)  Term of Employment. The term of this Agreement shall be deemed to have

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          commenced on the date of this Agreement and shall continue until the

          earlier of (i) March 31, 2004, or (ii) the date that Executive shall

          have been granted "Approved Retirement status under the Company's 1984

          Executive Benefit Retirement Plan ("EBRP").



     (b)  Duties. During the period of his employment hereunder and except for

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          illness, reasonable vacation periods, and reasonable leaves of

          absence, Executive shall



{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

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          Executive Officer, Executive may serve, or continue to serve, on the

          boards of directors of, hold any other offices or positions in,

          companies or organizations which, in such officer's judgment, will not

          present any conflict of interest with the Company or any of its

          subsidiaries or affiliates or divisions, or materially affect the

          performance of Executive's duties pursuant to this Agreement.



     (c)  Place of Performance.  So long as Executive shall be President, ITB,

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          he shall provide his services primarily at the headquarters of the

          ITB, presently located in the Atlanta, Georgia metropolitan area.

          Notwithstanding the foregoing, Executive shall be under no obligation

          throughout the term of this Agreement to relocate his permanent

          residences, presently located in Hinsdale, Illinois and Jupiter,

          Florida.



4.   Compensation and Reimbursement of Expenses; Other Benefits.

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



     (a)  Compensation. During the period of his employment hereunder, Executive

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          shall be paid a salary, in monthly or semi-monthly installments (in

          accordance with the Company's normal payroll practices for senior

          executive officers), at the rate of Five Hundred Eighty Thousand

          Dollars ($580,000.00) per year, or such higher salary as may be from

          time to time approved by the Board (or any duly authorized Committee

          thereof) (any such higher salary so approved to be thereafter the

          minimum salary payable to Executive during the remainder of the term

          hereof), plus such additional incentive compensation, if any, as may

          be awarded to him yearly by the Board (or any duly authorized

          Committee thereof). For purposes of the MIP (as defined in

          subparagraph (c) below), for each of the Company's fiscal years ending

          during the term of this Agreement, Executive's Individual Target Award

          shall be 75% of his base salary for the applicable Year (as defined in

          the MIP). Executive shall also receive an automobile allowance from

          the Company of One Thousand Dollars ($1,000.00) per month during the

          term of this Agreement.



     (b)  Reimbursement of Expenses. The Company shall pay or reimburse

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

          Executive, in accordance with its normal policies and practices, for

          all reasonable travel and other expenses incurred by Executive in

          connection with the performance of his obligations hereunder. The

          Company further agrees to furnish Executive with such living and

          entertainment assistance and accommodations as shall be suitable to

          the character of Executive's position with the Company and adequate

          for the performance of his duties hereunder.



     (c)  Other Benefits. Executive shall be entitled to receive all other

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          benefits of employment generally available to other members of the

          Company's executive management and those benefits for which key

          executives are or shall become eligible, when and as he becomes

          eligible therefor, including without limitation,



                                       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

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          and ESBP, Executive shall be subject to the terms and conditions of

          such plan, provided, however, that, in the event Executive's

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          performance regarding the rebuilding of ITB and the development of a

          successor is satisfactory to the Chief Executive Officer (the

          "Accomplishment of ITB Rebuilding and Development"), management shall

          recommend to the Board that Executive be granted "Approved Retirement"

          status pursuant to the EBRP and the ESBP; provided, further, that, if

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

          Executive accrues five years of actual service credit pursuant to the

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