Litigation On December 5, 2012, a putative class action complaint was filed on behalf of an alleged public stockholder of PSS. The lawsuit, Baltimore County Employee's Retirement System v. Gary A. Corless , et al., Case No. 16-2012-CA-013015-XXXX-MA, was filed in the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida. The defendants in the lawsuit include PSS, members of the Company's board of directors, McKesson, The Goldman Sachs Group, Inc., and Goldman, Sachs &amp; Co. The lawsuit alleges , among other things, that PSS directors breached their fiduciary duties in connection with the proposed merger by failing to maximize stockholder value and by failing to disclose material information in the November 16, 2012 Preliminary Proxy Statement, and that McKesson and the Goldman Sachs entities aided and abetted the various breaches of fiduciary duty. In addition to monetary damages in an unspecified amount and other remedies, the lawsuit seeks to enjoin PSS and its directors from consummating the merger. The lawsuit is in its preliminary stage. The Company believes this lawsuit is without merit, and intends to vigorously defend against the action . The Company believes that the lawsuit will not delay the planned merger with McKesson. The Company is party to other various legal and administrative proceedings and claims arising in the normal course of business. While any litigation contains an element of uncerta inty, the Company, after consultation with legal counsel, believes that the outco me of such other proceedings or claims which are pending or known to be threatened will not have a material adverse effect on the Company's consolidated financial position, liquidity, or results of operations . Commitments and Other Contingencies The Company has employment agreements with certain executive officers which provide that in the event of their termination or resignation, under certain conditions, the Company may be required to pay severance to the executive officers in amounts ranging from o