**Exhibit 10.16**

 

**Level 3 Officer Agreement**

 

**EMPLOYMENT AGREEMENT**

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 1st day of April, 2004 by and between PSS World Medical, Inc., a Florida corporation (hereinafter, the “Company” which term shall include theCompany’s other subsidiaries, affiliates and successors), and Kevin P. English (hereinafter, “Executive”). 

 

BACKGROUND 

 

The Company desires to engage Executive in the executive capacities set forth herein, in accordance with the terms and conditions of this Agreement.Executive is willing to serve as such in accordance with the terms and conditions of this Agreement. 

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

 

1. Effective Date. This Agreement is effective as of April 1, 2004 (the “Effective Date”). 

 

2. Employment. Executive is currently employed as the Vice Presidentof Finance of PSS World Medical, Inc. The purpose of this Agreement is to set forth the terms of Executive’s employment. Executive’s responsibilities under this Agreement shall be in accordance with the policies and objectives establishedby the Chief Executive Officer or the Board of Directors of the Company (the “Board”) and shall be consistent with the responsibilities of similarly situated executives of comparable companies in similar lines of business. 

 

3. Employment Period. Unless earlier terminated herein in accordancewith Section 7 hereof, Executive’s employment shall be for a two-year term (the “Employment Period”), beginning on the Effective Date. The Employment Period shall, without further action by Executive or the Company, be extended by anadditional one-year period on each anniversary of the Effective Date; *provided, however*, that either party may, by notice to the other, cause the Employment Period to cease to extend automatically. Upon such notice, the Employment Periodshall terminate upon the expiration of the then-current term, including any prior extensions. Notwithstanding the foregoing, if a Change in Control occurs the Employment Period shall be automatically extended through the later of (i) the secondanniversary of the Change in Control, or (ii) the normal expiration of the then-current term, including any prior extensions. 

4. Extent of Service. During the Employment Period, and excluding any periods of vacation and sickleave to which Executive is entitled, Executive agrees to devote his business time, attention, skill and efforts exclusively to the faithful performance of his duties hereunder; *provided, however*, that it shall not be a violation of thisAgreement for Executive to (i) devote reasonable periods of time to charitable and community activities and, with the approval of the Company, industry or professional activities, and/or (ii) manage personal business interests and investments, solong as such activities do not materially interfere with the performance of Executive’s responsibilities under this Agreement. 

 

5. Compensation and Benefits. 

 

(a) Base Salary. During the Employment Period, the Company will pay to Executive a base salary in an amount not less than that in effect forExecutive on the Effective Date (“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Company’s payroll practices from time to time. The Compensation Committee ofthe Board shall review Executive’s Base Salary annually and in its sole discretion, subject to approval of the Board, may increase Executive’s Base Salary from year to year. The annual review of Executive’s salary by the Board willconsider, among other things, Executive’s own performance and the Company’s performance. 

 

(b) Incentive, Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all incentive, savings andretirement plans, practices, policies and programs applicable generally to level 3 officers of the Company and its affiliated companies (“Peer Executives”), and on the same basis as such Peer Executives. 

 

(c) Welfare Benefit Plans. During the Employment Period, Executive andExecutive’s family shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical,prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to Peer Executives. 

 

(d) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for allreasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to Peer Executives. 

 

(e) Fringe Benefits. During the Employment Period, Executive shall beentitled to fringe benefits in accordance with the plans, practices, programs and policies of the Company and its affiliated companies in effect for Peer Executives. 

 

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6. Change in Control. A “Change in Control” shall mean: 

 

(a) The acquisition by any individual, entity or group (within the meaningof Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of either (i) 25%or more of the then outstanding shares of common stock of the Company (“Company Common Stock”), or (ii) securities of the Company representing 25% or more of the combined voting power of the then outstanding securities of the Companyeligible to vote for the election of directors (the “Company Voting Securities”); *provided, however*, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (w) an acquisitiondirectly from the Company, (x) an acquisition by the Company or any corporation controlled by the Company, (y) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by theCompany, or (z) any acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (c) of this definition); or 

 

(b) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least amajority of the Board; *provided, however*, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority ofthe directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, *provided, however*, that no individual initially elected or nominated as a director of the Company as aresult of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than theBoard (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or 

 

(c) Consummation of a reorganization, merger or consolidation, statutory share exchange or similar form of corporatetransaction involving the Company or a corporation controlled by the Company, or the sale or other disposition of all or substantially all of the Company’s assets, or the acquisition by the Company of assets or stock of another corporation (anyof such transactions, a “Business Transaction”), unless immediately following such Business Transaction, all of the following are true: (i) all or substantially all of the individuals and entities who were the beneficial owners,respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares ofcommon stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Transaction (including, withoutlimitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries, the 

 

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“Surviving Corporation”) in substantially the same proportions as their ownership, immediately prior to suchBusiness Transaction of the outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, and (ii) no Person (other than (x) the Company or any subsidiary of the Company, (y) the Surviving Corporation or itsultimate parent corporation, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) beneficially owns, directly or indirectly, 25% or more of the total common stock of the Surviving Corporation or 25% ormore of the combined voting power of the then outstanding voting securities eligible to elect directors of the Surviving Corporation, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majorityof the members of the board of directors of the Surviving Corporation were members of the Incumbent Board at the time of the Board approval of the execution of the initial agreement providing for such Business Transaction (any Business Transactionwhich satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”). 

 

7. Termination of Employment. 

 

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during theEmployment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or if there is no such retirement plan, “Retirement” shall mean voluntarytermination after age 65 with ten years of service. If the Company determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give Executivewritten notice in accordance with Section 15(f) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of suchwritten notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement,“Disability” shall mean a mental or physical disability as determined by the Board in accordance with standards and procedures similar to those under the Company’s employee long-term disability plan, if any. At any time that theCompany does not maintain such a long-term disability plan, Disability shall mean the inability of Executive, as determined by the Board, to perform the essential functions of his regular duties and responsibilities (with or without reasonableaccommodation) due to a medically determinable physical or mental illness which has lasted (or can reasonably be expected to last) for a period of six consecutive months. 

 

(b) Termination by the Company. The Company may terminate Executive’s employment during the Employment Periodwith or without Cause. For purposes of this Agreement, “Cause” shall mean: 

 

(i) the willful and continued failure of Executive to perform 

 

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substantially Executive’s duties with the Company (other than any such failure resulting from incapacity due tophysical or mental illness, and specifically excluding any failure by Executive, after reasonable efforts, to meet performance expectations), after a written demand for substantial performance is delivered to Executive by the Board whichspecifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties, or 

 

(ii) the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. 

 

For purposes of this provision, no act or failure to act, on the part ofExecutive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Company. Any act, orfailure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in thebest interests of the Company. The cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than amajority of the entire membership of the Board (excluding Executive if Executive is a director) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to Executive and Executive is given an opportunity,together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. 

 

(c) Termination by Executive. Executive’s employment may beterminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean: 

 

(i) without the written consent of Executive, the assignment to Executive of any duties materially inconsistent with Executive’s position (includingstatus, offices, titles and reporting requirements), authority, duties or responsibilities as in effect on the Effective Date, or any other action by the Company which results in a material diminution in such position, authority, duties orresponsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive; 

 

(ii) a reduction by the Company in Executive’s Base Salary and benefitsas in effect on the Effective Date or as the same may be increased from time to time, unless a similar reduction is made in salary and benefits of Peer Executives generally; 

 

(iii) after the occurrence of a Change in Control, the Company’s 

 

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requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitanarea or the Company’s requiring Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date; or 

 

(iv) any failure by the Company to comply with and satisfy Section 14(b) of this Agreement. 

 

(d) Notice of Termination. Any termination by the Company for Cause,or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a writtennotice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of suchnotice). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company, respectively, hereunderor preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder. 

 

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated bythe Company for Cause, or by Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein (which date shall be not more than 30 days after the giving of such notice), as the case may be, (ii) ifExecutive’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice ofTermination (which date shall be not more than 30 days after the giving of such notice), and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death orRetirement of Executive or the Disability Effective Date, as the case may be. 

 

8. Obligations of the Company upon Termination. 

 

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate Executive’s employmentother than for Cause, death or Disability, or Executive shall terminate employment for Good Reason within a period of 30 days after the occurrence of the event giving rise to Good Reason, then in consideration of Executive’s services renderedprior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, 

 

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and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below, only if Executive executes aRelease in substantially the form of Exhibit A hereto (the “Release”): 

 

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination or, with respect to the prorata bonus described in clause A(2) below, within 30 days after the determination ofthe bonus amount, the aggregate of the following amounts: 

 

A. the sum of (1) Executive’s Base Salary through the Date of Termination to the extent not theretofore paid, (2) if the Date of Termination occurs after or in connection with the occurrence of a Change inControl, the product of (x) Executive’s annual bonus that would have been payable with respect to the fiscal year in which the Date of Termination occurs (determined at the end of such year based on actual performance results through the end ofsuch year) and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, and (3) any accrued vacation pay, to the extent not theretofore paid (thesum of the amounts described in clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued Obligations”); and 

 

B. the amount equal to three-quarters (0.75) times the sum of (1) Executive’s annual Base Salary in effect as of the Date ofTermination, and (2) Executive’s target annual bonus for the year in which the Date of Termination occurs (“Target Bonus”) (such amount is referred to as the “Severance Payment”); *provided, however*, that if the Dateof Termination occurs after or in connection with the occurrence of a Change in Control, the Severance Payment shall be the amount equal to one and one-half (1.5) times the sum of (1) Executive’s annual Base Salary in effect as of the Date ofTermination, and (2) Executive’s Target Bonus; and 

 

(ii)for nine months after Executive’s Date of Termination (or eighteen months in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control), or such longer period as may be provided by the termsof the appropriate plan, program, practice or policy, the Company shall continue benefits to Executive and/or Executive’s family at least equal to those which would have been provided to them in accordance with the welfare plans, programs,practices and policies described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generally at any time thereafter with respect to Peer Executives and theirfamilies, *provided, however*, that if Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits describedherein shall be secondary to those provided under such other plan during such applicable period of eligibility (“Welfare Benefits”); and 

 

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(iii) the Company shall, within 30 days of receipt of reasonably documented invoices therefor, reimburseExecutive’s actual cost (not to exceed $15,000) for outplacement expenses incurred within one year after the Date of Termination; and 

 

(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to Executive any other amounts or benefits required to bepaid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the“Other Benefits”). 

 

(b) Death. IfExecutive’s employment is terminated by reason of Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to Executive’s legal representatives under this Agreement, other than forpayment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive’s estate or beneficiary, asapplicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 8(b) shall include, without limitation, and Executive’s estate and/orbeneficiaries shall be entitled to receive, benefits under such plans, programs, practices and policies relating to death benefits, if any, as applicable to Executive on the Date of Termination. 

 

(c) Disability. If Executive’s employment is terminated by reasonof Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term OtherBenefits as used in this Section 8(c) shall include, without limitation, and Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits under such plans, programs, practices and policies relating todisability, if any, as applicable to Executive on the Date of Termination. 

 

(d) Retirement. If Executive’s employment is terminated by reason of Executive’s Retirement during the Employment Period, this Agreement shall terminate without further obligations to Executive, otherthan for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 8(d) shall include, without limitation, and Executive shall be entitled after the Date of Termination to receive,retirement and other benefits under such plans, programs, practices and policies relating to retirement, if any, as applicable to Executive on the Date of Termination. 

 

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(e) Cause or Voluntary Termination without Good Reason. If Executive’s employment shall beterminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the Employment Period without Good Reason, this Agreement shall terminate without further obligations to Executive, other than for payment ofAccrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. 

 

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan,program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to Section 15(d), shall anything herein limit or otherwise affect such rights as Executive may have under anycontract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with theCompany or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 

 

10. Certain Additional Payments by the Company. 

 

(a) Anything in this Agreement to the contrary notwithstanding and except asset forth below, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement orotherwise, but determined without regard to any additional payments required under this Section 10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executivewith respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then: Executive shall be entitled to receive an additional payment (a“Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penaltiesimposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), ifit shall be determined that Executive is entitled to a Gross-Up Payment, but that Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account bothincome taxes and any Excise Tax) as compared to the net after-tax proceeds to Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such thatthe receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. Executive may select the Payments to be limited orreduced. 

 

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(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the Company’s regular independent accounting firm at theexpense of the Company or, at the election and expense of Executive, another nationally recognized independent accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations. Any determination by theAccounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-UpPayments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) andExecutive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit ofExecutive. 

 

(c) Executive shall notify the Company in writingof any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive isinformed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the dateon which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desiresto contest such claim, Executive shall: 

 

(i) give the Companyany information reasonably requested by the Company relating to such claim, 

 

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to suchclaim by an attorney reasonably selected by the Company, 

 

(iii) cooperate with the Company in good faith in order effectively to contest such claim, and 

 

(iv) permit the Company to participate in any proceedings relating to such claim; 

 

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*provided, however*, that the Company shall bear and pay directly all costs and expenses (including additionalinterest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result ofsuch representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 10(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgoany and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in anypermissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; *provided,however*, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an after-taxbasis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of thestatute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contestshall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxingauthority. 

 

(d) If, after the receipt by Executive of an amountadvanced by the Company pursuant to Section 10(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 10(c)) promptly pay to theCompany the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). 

 

11. Costs of Enforcement. In any action taken in good faith relating to the enforcement of this Agreement or any provision herein after theoccurrence of a Change in Control, Executive shall be entitled to be paid any and all costs and expenses incurred by him in enforcing or establishing his rights thereunder, including, without limitation, reasonable attorneys’ fees, whether suitbe brought or not, and whether or not incurred in trial, bankruptcy or appellate proceedings. In all other circumstances, each party in any such action shall pay his or its own such costs and expenses. 

 

12. Representations and Warranties. Executive hereby represents andwarrants to the Company that Executive is not a party to, or otherwise subject to, any covenant not to compete (other than as contained herein) with any person or entity, and Executive’s execution of this Agreement and performance of hisobligations hereunder will not violate the terms or conditions of any contract or obligation, written or oral, between Executive and any other person or entity. 

 

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13. Restrictions on Executive’s Conduct. 

 

(a) General. Executive and the Company understand and agree that thepurpose of the provisions of this Section 13 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company *per se*, noris it intended to impair or infringe upon Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Executive hereby acknowledges that Executive has received good and valuable consideration for thepost-employment restrictions set forth in this Section 13 in the form of the compensation and benefits provided for herein. Executive hereby further acknowledges that the post-employment restrictions set forth in this Section 13 are reasonable andthat they do not, and will not, unduly impair Executive’s ability to earn a living after the Date of Termination. Therefore, subject to the limitations of reasonableness imposed by law, Executive shall be subject to the restrictions set forthin this Section 13. 

 

(b) Definitions. The followingcapitalized terms used in this Section 13 shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms: 

 

*“Competitive Position”* means any position with a Competitor as a Principal or Representative in whichExecutive will use or is likely to use any Confidential Information or Trade Secrets of the Company, or in which Executive has duties for, provides services to, or otherwise assists such Competitor where such duties, services or assistance involveCompetitive Services. 

 

*“Competitive Services”*means any activities engaged in by the Company as of the Date of Termination that relate directly to (a) the distribution of medical supplies, equipment and pharmaceuticals to (i) primary care and other office-based physicians, or (ii) nursinghomes, extended care facilities, assisted living facilities, or home care or visiting nurse associations or agencies, or (b) the distribution of medical diagnostic imaging supplies, chemicals, equipment and service to the acute care and alternatecare market; *provided, however*, that Competitive Services shall not include (x) the manufacture of medical supplies, equipment or pharmaceuticals or medical diagnostic imaging supplies, chemicals or equipment (collectively “MedicalProducts”), (y) the provision of e-commerce or internet services with respect to the dissemination of information or services related to the distribution of Medical Products (but which is not the distribution of Medical Products), or (z) theprovision of group purchasing, contract pricing or cost analyses for physicians or medical practices. 

 

*“Competitor”* means any Person engaged, wholly or in material part, in Competitive Services.****

 

*“Confidential Information”* means all information regardingthe Company, its activities, business or clients that is the subject of reasonable efforts by the 

 

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Company to maintain its confidentiality and that is not generally disclosed by practice or authority to persons notemployed by the Company, but that does not rise to the level of a Trade Secret. “Confidential Information” shall include, but is not limited to, financial plans and data concerning the Company; management planning information; businessplans; operational methods; market studies; marketing plans or strategies; product development techniques or plans; customer lists; details of customer contracts; current and anticipated customer requirements; past, current and planned research anddevelopment; business acquisition plans; and new personnel acquisition plans. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose suchinformation without violating any right or privilege of the Company. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. 

 

*“Person”* means any individual or any corporation,partnership, joint venture, limited liability company, association or other entity or enterprise. 

 

*“Principal or Representative”* means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director,officer, manager, employee, agent, representative or consultant. 

 

*“Protected Customers”* means any Person to whom the Company has sold its products or services or to whom the Company has submitted a written proposal to sell its products or services during the twelve (12) months prior tothe Date of Termination. 

 

*“Protected Employees”*means employees of the Company who were employed by the Company at any time within six (6) months prior to the Date of Termination. 

 

*“Restricted Period”* means the term of Executive’s employment hereunder and a period extending until eighteen (18) months from theDate of Termination. 

 

*“Restricted Territory”*means the territory in which Executive provided Competitive Services to the Company at any time during the twenty-four (24) month period prior to the Date of Termination. 

 

*“Restrictive Covenants”* means the restrictive covenants contained in Section 13(d) hereof. 

 

*“Trade Secret”* means all information, without regard toform, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a listof actual or potential 

 

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customers, advertisers or suppliers which is not commonly known by or available to the public and which information: (A)derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts thatare reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory law of the Stateof Florida. 

 

(c) Protectable Employer Interests.Executive and the Company acknowledge and agree as follows: (i) that Executive’s services on behalf of the Company require special expertise and talent in the provision of Competitive Services and, pursuant to Executive’s employment withthe Company, the Company shall devote time and money to the enhancement of Executive’s professional skills and education through specialized training; (ii) that Executive is in a position of trust and responsibility and will have access to asubstantial amount of Confidential Information and Trade Secrets belonging to the Company; (iii) that, during the term of Executive’s employment by the Company, Executive will develop substantial relationships with prospective and existingcustomers of the Company; and (iv) that as a manager of the Company, Executive will be the repository of a substantial portion of the goodwill of the Company. 

 

(d) Restrictive Covenants. 

 

(i) Restriction on Disclosure and Use of Confidential Information and Trade Secrets. Executive understands and agrees that the ConfidentialInformation and Trade Secrets constitute valuable assets of the Company and its affiliated entities, and may not be converted to Executive’s own use. Accordingly, Executive hereby agrees that Executive shall not, directly or indirectly, at anytime during the Restricted Period reveal, divulge, or disclose to any Person not expressly authorized by the Company any Confidential Information, and Executive shall not, directly or indirectly, at any time during the Restricted Period use or makeuse of any Confidential Information in connection with any business activity. For a period of five years after the date of Termination, Executive shall not directly or indirectly transmit or disclose any Trade Secret of the Company to any Person,and shall not make use of any such Trade Secret, directly or indirectly, for himself or for others, without the prior written consent of the Company. Executive and the Company acknowledge and agree that this Section 13 is not intended to, and doesnot, alter either the Company’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Notwithstanding the above, this covenant shall expire (except withrespect to Trade Secrets) upon the occurrence of a Change in Control. 

 

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees that the relationship between the Company and each of its Protected Employees constitutes a valuable asset of the Company and may not be converted throughExecutive’s solicitation to Executive’s own use. Accordingly, Executive hereby agrees 

 

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that during the Restricted Period, Executive will not, directly or indirectly, on his own behalf or as a Principal orRepresentative of any Person or otherwise, solicit or induce any Protected Employee to terminate his or her employment relationship with the Company or to enter into any relationship of employment, agency or independent contractorship with any otherPerson. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change in Control. 

 

(iii) Restriction on Relationships with Protected Customers. Executive understands and agrees that the relationship between the Company and eachof its Protected Customers constitutes a valuable asset of the Company and may not be converted through Executive’s solicitation to Executive’s own use. Accordingly, Executive hereby agrees that, during the Restricted Period, Executivewill not, without the prior written consent of the Company, directly or indirectly, on his own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose ofproviding or selling Competitive Services; *provided, however*, that the prohibition of this covenant shall apply only to Protected Customers with whom Executive had Material Contact on the Company’s behalf during the twelve (12) monthsimmediately preceding the Date of Termination. For purposes of this Agreement, Executive had “Material Contact” with a Protected Customer if (a) Executive had business dealings with the Protected Customer on the Company’s behalf; (b)Executive was responsible for supervising or coordinating the dealings between the Company and the Protected Customer; or (c) Executive obtained Trade Secrets or Confidential Information about the customer as a result of Executive’s associationwith the Company. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change in Control. 

 

(iv) Noncompetition with the Company. Executive understands and agrees that he is capable of obtaining gainful, lucrative and desirable employmentthat does not violate the restrictions contained in this Agreement. In consideration of the compensation and benefits being paid and to be paid by the Company to Executive hereunder, Executive hereby agree that, during the Restricted Period,Executive will not, without prior written consent of the Company, directly or indirectly seek or obtain a Competitive Position in the Restricted Territory with a Competitor; *provided, however*, that the provisions of this Agreement shall notbe deemed to prohibit the ownership by Executive of any securities of the Company or its affiliated entities or not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to theSecurities Exchange Act of 1934, as amended. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change in Control. 

 

(e) Exceptions from Disclosure Restrictions. Anything herein to the contrary notwithstanding, Executive will not be restricted from disclosing orusing Confidential Information that: (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by Executive or Executive’s agent; (ii) becomes available to Executive in a manner that is not incontravention of applicable 

 

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law from a source (other than the Company or its affiliated entities or one of its or their officers, employees, agentsor representatives) that is not bound by a confidential relationship with the Company or its affiliated entities or by a confidentiality or other similar agreement; (iii) was known to Executive on a non-confidential basis and not in contravention ofapplicable law or a confidentiality or other similar agreement before its disclosure to Executive by the Company or its affiliated entities or one of its or their officers, employees, agents or representatives; or (iv) is required to be disclosed bylaw, court order or other legal process; *provided, however*, that in the event disclosure is required by law, Executive will provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protectiveorder prior to any such required disclosure by Executive. 

 

(f)Reasonableness. The covenants contained in this Section 13 are considered by the parties hereto to be fair, reasonable and necessary for the protection of the legitimate business interests of the Company. 

 

(g) Enforcement of Restrictive Covenants. 

 

(i) Rights and Remedies Upon Breach. In the event Executivebreaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the following rights and remedies, which shall be independent of any others and severally enforceable, and shall be in additionto, and not in lieu of, any other rights and remedies available to the Company at law or in equity: (1) the right and remedy to enjoin, preliminarily and permanently, Executive from violating or threatening to violate the Restrictive Covenants andto have the Restrictive Covenants specifically enforced, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy tothe Company; and (2) the right and remedy to cease any further Severance Payment or provision of Welfare Benefits to Executive under Section 8 of this Agreement and to require Executive to account for and pay over to the Company any SeverancePayment previously paid to Executive under Section 8. 

 

(ii)Severability of Covenants. Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in time and scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any partthereof, are invalid or unenforceable, the remainder of the Restrictive Covenants will not thereby be affected and will be given full effect, without regard to the invalid portions. 

 

(iii) Reformation. Executive and the Company agree that it is their mutual intention that the Restrictive Covenantsbe enforced in accordance with their terms to the maximum extent possible under applicable law. Executive and the Company further agree that, in the event any court of competent jurisdiction shall find that any provision hereof is not enforceable inaccordance with its terms, the court shall reform the Restrictive Covenants such that they will be enforceable to the maximum extent permissible at law. 

 

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(iv) Survival of the Restrictive Covenants. Executive and the Company agree that the terms ofthis Section 13 shall survive the termination or expiration of the Employment Period, unless expressly terminated by a writing signed by both parties hereto, which makes specific reference to this Section 13. 

 

14. Assignment and Successors. 

 

(a) Executive. This Agreement is personal to Executive and without theprior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

 

(b) The Company. This Agreement shall inure to thebenefit of and be binding upon the Company and its successors and assigns. The Company will require any successor to all or substantially all of the business and/or assets of the Company (whether direct or indirect, by purchase, merger,consolidation or otherwise) to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement,“the Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise. 

 

15. Miscellaneous. 

 

(a) Waiver. Failure of either party to insist, in one or moreinstances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term orcondition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the party making the waiver. 

 

(b) Severability. If any provision or covenant, or any part thereof, of this Agreement should be held by any court to be invalid, illegal orunenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, of this Agreement, all of which shallremain in full force and effect. 

 

(c) Other Agents.****Nothing in this Agreement is to be interpreted as limiting the Company from employing other personnel on such terms and conditions as may be satisfactory to it. 

 

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company andExecutive with respect to the subject 

 

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matter hereof, and it supersedes and invalidates any previous agreements or contracts between them which relate to thesubject matter hereof. No representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein shall be of any force or effect. 

 

(e) Choice of Law; Forum Selection. The validity, interpretation and performance of this Agreement shall be governedby and controlled in accordance with the laws of the State of Florida, including said State’s choice of law rules. The parties hereto voluntarily submit themselves to the jurisdiction of the state or federal district courts in the State ofFlorida which shall have exclusive jurisdiction over any case or controversy arising under or in connection with this Agreement, including with respect to an action to remedy any breach of or otherwise to enforce the terms and conditions of thisAgreement. 

 

(f) Notices. All notices, requests, demandsand other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or three days after mailing if mailed, first class, certified mail, postage prepaid: 

 

To Company:
 
PSS World Medical, Inc.
  
4345 Southpoint Boulevard
  
Jacksonville, Florida 32216
  
Facsimile No. (904) 332-3209
  
Attention: Chief Executive Officer

To Executive:
 
 
  
 
  
 

 

Any party may change the address towhich notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein. 

 

(g) Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by both partieshereto, which makes specific reference to this Agreement. 

 

(signatures on following page) 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Employment Agreement as ofthe date first above written. 

 

PSS WORLD MEDICAL, INC.

By:
 
/s/ David A. Smith
  
David A. Smith
  
President and Chief Executive Officer

EXECUTIVE:
  
/s/ Kevin P. English
  
Kevin P. English

 

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EXHIBIT A 

 

Form of Release of Claims 

 

THIS RELEASE (“Release”) is granted effective as of the              day of            , 20    , by Kevin P. English (“Executive”) in favor of PSS World Medical, Inc. (the “Company”). This is the Releasereferred to that certain Employment Agreement dated as of             , 2002 by and between the Company and Executive (the “Employment Agreement”). Executive gives thisRelease in consideration of the Company’s promises and covenants as recited in the Employment Agreement, with respect to which this Release is an integral part. 

 

1. Release of the Company. Executive, for himself, his successors, assigns, attorneys, and all those entitled toassert his rights, now and forever hereby releases and discharges the Company and its respective officers, directors, stockholders, trustees, employees, agents, parent corporations, subsidiaries, affiliates, estates, successors, assigns andattorneys (the “Released Parties”), from any and all claims, actions, causes of action, sums of money due, suits, debts, liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements, promises, demands, claimsfor attorney’s fees and costs, or liabilities whatsoever, in law or in equity, which Executive ever had or now has against the Released Parties arising by reason of or in any way connected with any employment relationship which existed betweenthe Company or any of its parents, subsidiaries, affiliates, or predecessors, and Executive. It is understood and agreed that this Release is intended to cover all actions, causes of action, claims or demands for any damage, loss or injury arisingfrom the aforesaid employment relationship, or the termination of that relationship, that Executive has, had or purports to have, from the beginning of time to the date of this Release, whether known or unknown, that now exists related to theaforesaid employment relationship including but not limited to claims for employment discrimination under federal or state law, except as provided in Paragraph 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C. § 2002(e),etseq. or the Americans With Disabilities Act, 42 U.S.C. § 12101 etseq.; claims for statutory or common law wrongful discharge, including any claims arising under the Fair Labor Standards Act, 29 U.S.C. § 201etseq.; claims for attorney’s fees, expenses and costs; claims for defamation; claims for wages or vacation pay; claims for benefits, including any claims arising under the Employee Retirement Income Security Act, 29 U.S.C.§ 1001, etseq.; and provided, however, that nothing herein shall release the Company of their obligations to Executive under the Employment Agreement or any other contractual obligations between the Company or its affiliates andExecutive, or any indemnification obligations to Executive under the Company’s bylaws, articles of incorporation, Florida law or otherwise. 

 

2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the generality of the foregoing, Executive agrees that byexecuting this Release, he has released and waived any and all claims he has or may have as of the date of this Release for age discrimination under the Age Discrimination in Employment Act, 

29 U.S.C. § 621, etseq. It is understood that Executive is advised to consult with an attorney priorto executing this Release; that he in fact has consulted a knowledgeable, competent attorney regarding this Release; that he may, before executing this Release, consider this Release for a period of twenty-one (21) calendar days; and that theconsideration he receives for this Release is in addition to amounts to which he was already entitled. It is further understood that this Release is not effective until seven (7) calendar days after the execution of this Release and that Executivemay revoke this Release within seven (7) calendar days from the date of execution hereof. 

 

Executive agrees that he has carefully read this Release and is signing it voluntarily. Executive acknowledges that he has had twenty one (21) days from receipt of this Release to review it prior to signing or that,if Executive is signing this Release prior to the expiration of such 21-day period, Executive is waiving his right to review the Release for such full 21-day period prior to signing it. Executive has the right to revoke this Release within seven (7)days following the date of its execution by him. However, if Executive revokes this Release within such seven (7) day period, no severance benefit will be payable to him under the Employment Agreement and he shall return to the Company any suchpayment received prior to that date. 

 

EXECUTIVE HAS CAREFULLYREAD THIS RELEASE AND ACKNOWLEDGES THAT IT CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY AND ITS AFFILIATES UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITYTO CONSULT WITH AN ATTORNEY OR OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY AND ITS AFFILIATES FROM ALL SUCH CLAIMS.

 

 
Kevin P. EnglishDate:                            
 

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