EXHIBIT 10.17
PSS World Medical, Inc.
4345 Southpoint Boulevard
Jacksonville, Florida 32216
March 21, 2001
Mr. Patrick C. Kelly
1091 Ponte Vedra Boulevard
Ponte Vedra Beach, Florida 32082
Dear Patrick:
This letter will memorialize our agreement with respect to your resignation
as the Chairman of the Board and Chief Executive Officer of PSS World Medical,
Inc. (the "Company"), as well as all other positions you held with the Company
and its affiliates. Please acknowledge your agreement by signing in the space
indicated at the end of this letter.
1. Termination of Employment. Effective October 2, 2000 (the "Separation
Date"), your employment with the Company and its affiliates was terminated. You
and the Company have agreed that this termination will be treated as a
"termination without Cause" for purposes of your Employment Agreement with the
Company, dated March 4, 1998, as amended (your "Employment Agreement").
2. Severance Benefits. In consideration of your promises and covenants made
in this agreement, and in recognition of the terms of your Employment Agreement,
the Company agrees to provide you the following benefits:
(a) the Company has paid to you your base salary in effect as of the
Separation Date ($660,000 per year) and maintained your medical and
insurance benefits through December 31, 2000;
(b) the Company shall pay to you $677,000 in cash within ten (10) days
of the execution hereof (but not sooner than the expiration of the
seven-day revocation period described in Section 5(b) of this agreement)
and receipt of all executed exhibits and documents (including shares of
Company stock pledged pursuant to Section 2(g)(i)(C) below) related thereto
and hereto;
(c) the Company shall pay to you, on the first day of each month from
July, 2002, through December, 2002 (the last six months of the Restricted
Period, as defined in Section 3(b) below), $55,000 in cash, which in total
represents six months of your base salary ($330,000);
(d) until June 30, 2003, you and your family will be eligible for
participation in Welfare Benefit Plans, in accordance with Section 6(c) of
your Employment Agreement, as in effect generally at any time prior to June
30, 2003, with respect to and on the same basis as other peer executives of
the Company and its affiliated companies and their families; provided,
however, that if you become re-employed with another employer before June
30, 2003, and are eligible to receive medical or other welfare benefits
under another employer provided plan, while you are so employed the medical
and other welfare benefits described herein shall be secondary to those
provided under such other plan until the earlier of the date such
re-employment ends or June 30, 2003, and if such re-employment ends before
June 30, 2003, the full benefits coverage described in the first part of
this sentence shall once again resume until the earlier of June 30, 2003,
or the date of additional re-employment;
(e) the Company has paid to you $55,250 on January 31, 2001 and
$50,000 on March 7, 2001, and shall pay to you $44,750 on the date of
execution hereof (such payment to be made upon the same conditions as
payment in Section 2(b) above);
(f) the obligations reflected in that certain Promissory Note from you
to the Company, dated September 16, 1997, in the original principal amount
of $3,000,000, shall be amended, with such amendments embodied in a new
note in the form attached hereto as Exhibit A (the "Note"), which shall be
executed contemporaneously herewith, such that:
(i) until the third anniversary of the date of the last interest
payment, made April 30, 2000, interest accruing (and accruing thereon)
shall be deferred, to be due and payable upon the earlier of a Change
of Control, as defined in Section 3(b) below, or maturity, with
interest accruing thereafter to be due and payable annually,
(ii) upon a Change of Control, as defined below, the principal of
the Note shall be forgiven, but any and all interest that has accrued,
regardless of any deferral of such interest under subsection (i)
above, shall become immediately due and payable, and
(iii) the Company shall purchase and pay the premiums on, and be
named beneficiary under, a six-year term life insurance policy on your
life in the amount of $4,000,000, which shall satisfy any remaining
obligations on the Note in the event of your death;
(g) the $1,994,243 advance loaned to you by the Company (the "Margin
Loan") shall be satisfied as follows:
(i) as to $997,122:
(A) interest shall accrue at the lowest acceptable rate
published by the Internal Revenue Service to avoid imputation of
income to you,
(B) the principal, which shall include the interest
outstanding on the Margin Loan as of the date hereof, and the
interest that accrues on such principal shall become due and
payable three (3) years from the Separation Date, though either
or both may be paid, in full or in part, prior to the maturity
date,
(C) the above terms shall be evidenced by a note that will
be secured by the 340,000 shares of Company common stock you
currently own, which may be sold by you to satisfy the principal
or the accrued interest or both, in the form of the Secured
Recourse Promissory Note and Pledge Agreement annexed hereto as
Exhibit B (the "Margin Note"), which shall be executed
contemporaneously herewith, and
(ii) as to the balance ($997,121) (the "Margin Loan Balance"),
you promise to pay the Margin Loan Balance in the following manner:
(A) the Company agrees to extend the date on which the
Margin Loan Balance is to be repaid in the manner set forth in
the Note annexed hereto as Exhibit C, and
(B) pursuant to a Split Dollar Agreement in the form
attached to this Agreement as Exhibit D, you shall purchase and
the Company shall pay the premiums on a "split-dollar" life
insurance policy on your life, and in exchange for the Company's
payment of these premiums (i) you shall grant the Company a
collateral assignment of all cash surrender value and such amount
of the death benefit to repay the Company the Termination
Priority Amount as such term is defined in the Split-Dollar
Agreement, and (ii) you shall name the Company as a beneficiary
of your portion of the death benefit under the policy sufficient
in amount to repay the Termination Priority Amount as defined in
the Split-Dollar Agreement, on your death;
(h) the Company shall terminate the "split-dollar" life insurance
policy the Company currently maintains on your life;
(i) all of your options to acquire stock of the Company (the
"Options") shall fully and immediately vest as of the Separation Date,
and in acknowledgement that all of the Options are currently
"underwater," the Options are hereby amended as of the Separation Date
to provide that they shall remain exercisable until the end of the
original term;
(j) you shall be permitted to purchase from the Company the automobile
that you were using as of the Separation Date at the Company's book value
of $19,543;
(k) your vesting and payout in the ODIP Deferred Compensation Plan
shall be in accordance with the terms of the plan; and
(l) the provisions of Section 11 of your Employment Agreement, which
relate to the excise tax-gross up obligations of the Company in the event
of a Change of Control, as defined below, shall survive the Separation Date
and continue in full force and effect.
You acknowledge that the payments and benefits described herein are in
exchange for your signing this agreement and exceed the payments and benefits to
which you would be entitled but for this agreement.
3. Restrictions on Your Conduct.
(a) General. The restrictive covenants in this Section 3 replace the
restrictive covenants in your Employment Agreement, which shall be void and
of no further force or effect from and after the effectiveness hereof. You
and the Company understand and agree that the purpose of the provisions of
this Section 3 is to protect legitimate business interests of the Company,
as more fully described below, and is not intended to eliminate your
post-employment competition with the Company per se, nor is it intended to
impair or infringe upon your right to work, earn a living, or acquire and
possess property from the fruits of your labor. You hereby acknowledge that
the post-employment restrictions set forth in this Section 3 are reasonable
and that they do not, and will not, unduly impair your ability to earn a
living after the effectiveness hereof. Therefore, in consideration of the
benefits you received under your Employment Agreement as well as the
severance benefits you are to receive under Section 2 of this letter
agreement, you shall be subject to the restrictions set forth in this
Section 3, subject to the limitations of reasonableness imposed by law.
(b) Definitions. The following capitalized terms used in this Section
3 or elsewhere in this agreement, as the case may be, shall have the
meanings assigned to them below, which definitions shall apply to both the
singular and the plural forms of such terms:
"Change of Control" means:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (for the purposes of
this definition, a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or
more of the combined voting power of the then outstanding voting
securities of the Holder entitled to vote generally in the election of
directors (the "Outstanding Holder Voting Securities"); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (A) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Holder or any corporation controlled by the
Holder, or (B) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection
(iii) of this definition; or
(ii) Individuals who, as of January 1, 2001 (the "Effective
Date"), constitute the Board of Directors of the Holder (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors of the Holder (the "Board");
provided, however, that any individual becoming a director subsequent
to the Effective Date whose election, or nomination for election by
the Holder's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Holder (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the then outstanding shares of common stock of the
Holder (the "Outstanding Holder Common Stock") and Outstanding Holder
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 80% of,
respectively, the then outstanding shares of common 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 Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Holder or all or substantially all of the
Holder's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Holder Common
Stock and Outstanding Holder Voting Securities, as the case may be,
(B) no Person (excluding the Holder or any employee benefit plan (or
related trust) of the Holder or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 35%
or more of the combined voting power of the then outstanding voting
securities of such corporation resulting from such Business
Combination except to the extent that such ownership existed prior to
the Business Combination, and (C) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
"Competitive Services" means any activities engaged in by the
Company as of the Separation Date, including but not limited to the
following: (i) the marketing, sale and distribution of medical
supplies, equipment and pharmaceuticals to primary care and other
office-based physicians; (ii) the marketing, sale and distribution of
medical diagnostic imaging supplies, chemicals, equipment and services
to the acute care and alternate care market; (iii) the marketing, sale
and distribution of medical supplies, equipment and pharmaceuticals to
the long-term care market; and (iv) the provision of special group
purchasing contract pricing or cost analyses to physicians or medical
practices.
"Confidential Information" means any confidential or proprietary
information possessed by, or relating to the business of, the Company
or any of its affiliates, including but not limited to the following:
o financial information, plans and data, management planning
information, business acquisition plans, new personnel
acquisition plans;
o business plans, market studies, marketing plans or
strategies, pricing policies and lists;
o Company "know-how," operational methods, product
development techniques or plans;
o customer lists, details of customer or consultant
contracts, current or anticipated customer requirements;
o past, current and planned research and development,
inventions and ideas; and
o computer software programs (including object and source
codes), data and documentation, database technologies, systems,
structures and architectures, and other compilations, devises,
methods, techniques and processes.
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
provided its products or services or to whom the Company has submitted
a written proposal to provide its products or services during the
eighteen (18) months prior to the Separation Date.
"Protected Employees" means employees of the Company who were
employed by the Company at the date hereof.
"Restricted Period" means the period extending from the
Separation Date until the earlier of (i) January 1, 2003, except that
the period shall extend until January 1, 2005, with regard to the
restrictions on disclosure of Trade Secrets under Section (3)(c)
below, or (ii) the occurrence of a Change of Control, as defined
above; provided, however, that such period shall be extended by any
length of time during which you are in breach of any of the
Restrictive Covenants.
"Restrictive Covenants" means the restrictive covenants contained
in Section 3(c) hereof.
"Trade Secret" means all information, without regard to form,
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 list of actual or potential
customers, advertisers or suppliers which is not commonly known by or
available to the public, and such information: (i) 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 (ii) is the
subject of efforts that are 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 State of
Florida.
(c) Restrictive Covenants.
(i) Restriction on Disclosure and Use of Confidential Information
and Trade Secrets. You understand and agree that the Confidential
Information and Trade Secrets constitute valuable assets of the
Company and its affiliated entities, and may not be converted to your
own use. Accordingly, you hereby agree that you shall not, directly or
indirectly, at any time during the Restricted Period reveal, divulge
or disclose any Confidential Information to any Person not expressly
authorized by the Company, and you shall not, directly or indirectly,
at any time during the Restricted Period use or make use of any
Confidential Information in connection with any business activity.
During the Restricted Period, you 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 yourself or for others, without the prior written
consent of the Company. You and the Company acknowledge and agree that
this Section 3 is not intended to, and does not, alter either the
Company's rights or your obligations under any state or federal
statutory or common law regarding trade secrets and unfair trade
practices.
(ii) Restriction on Relationships with and Solicitation of
Protected Employees. You understand and agree that the relationship
between the Company and each of its Protected Employees constitutes a
valuable asset of the Company and may not be converted through
solicitation to your own use. Accordingly, you hereby agree that
during the Restricted Period you shall not, directly or indirectly, on
your own behalf or as a Principal or Representative of any Person or
otherwise, enter into any relationship of employment, agency or
independent contractorship with any Protected Employee, or 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 other
Person.
(iii) Restriction on Relationships with Protected Customers. You
understand and agree that the relationship between the Company and
each of its Protected Customers constitutes a valuable asset of the
Company and may not be converted to your own use. Accordingly, you
hereby agree that during the Restricted Period you shall not, without
the prior written consent of the Company, become a Principal or
Representative of, or otherwise provide services to, a Protected
Customer, or solicit, divert or attempt to solicit or divert, directly
or indirectly, on your own behalf or as a Principal or Representative
of any Person, a Protected Customer for the purpose of providing or
selling Competitive Services.
(iv) Noncompetition with the Company. The parties acknowledge the
following:
o that your services on behalf of the Company required
special expertise and talent in the provision of Competitive
Services and that you have had substantial contacts with
customers of the Company;
o that pursuant to your employment with the Company, you
have been in a position of trust and responsibility and you have
had access to a substantial amount of Confidential Information
and Trade Secrets and that the Company has placed you in such
position and given you access to such information in reliance
upon your agreement not to compete with the Company during the
Restricted Period;
o that due to your management duties, you have been the
repository of a substantial portion of the goodwill of the
Company and would have an unfair advantage in competing with the
Company;
o that you are capable of competing with the Company; and
o that you are capable of obtaining gainful, lucrative and
desirable employment that does not violate the restrictions
contained in this Agreement.
Therefore, you hereby agree that during the Restricted Period you shall
not, without prior written consent of the Company, directly or indirectly
provide, or consult with regard to, any Competitive Services to any Person
within the territory in which the Company provides Competitive Services as of
the Separation Date.
You also hereby agree that during the Restricted Period you shall not,
without prior written consent of the Company, (A) be connected as a Principal or
Representative with, (B) own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
(C) permit your name to be used by or in connection with, any Person engaged in
providing Competitive Services to any other Person conducting business
activities within the territory in which the Company provides Competitive
Services as of the Separation Date.
Provided, however, that the provisions of this Agreement shall not be
deemed to prohibit the ownership by you 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 the Securities Exchange Act of 1934, as amended.
(d) Exceptions from Disclosure Restrictions. Anything herein to the
contrary notwithstanding, you will not be restricted from disclosing or using
information that:
(i) is or becomes generally available to the public other than as a
result of an unauthorized disclosure by you or your agent;
(ii) becomes available to you in a manner that is not in contravention
of applicable law from a source (other than the Company or its affiliated
entities or one of its or their officers, employees, agents or
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 you on a non-confidential basis and not in
contravention of applicable law or a confidentiality or other similar
agreement before its disclosure to you 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 by law, court order or other legal
process, provided, that in the event disclosure is required by law you
shall provide the Company with prompt notice of such requirement, so that
the Company may seek an appropriate protective order prior to any such
required disclosure by you.
(e) Reasonableness. The covenants contained in this Section 3 are
considered by the parties hereto to be fair, reasonable and necessary for the
protection of the legitimate business interests of the Company.
(f) Enforcement of Restrictive Covenants.
(i) Rights and Remedies Upon Breach. In the event you breach, or
threaten 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, severally enforceable, and in addition
to, not in lieu of, any other rights and remedies available to the Company
at law or in equity: (A) the right and remedy to enjoin, preliminarily and
permanently, you from violating or threatening to violate the Restrictive
Covenants and to have the Restrictive Covenants specifically enforced by
any court of competent jurisdiction, it being agreed that any breach or
threatened breach of any of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would not provide
an adequate remedy to the Company; and (B) the right and remedy to require
you to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits you derive or receive as the
result of any transactions constituting a breach of any of the Restrictive
Covenants.
(ii) Severability of Covenants. You acknowledge and agree 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 part thereof, 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. You and the Company agree that it is our mutual
intention that the Restrictive Covenants be enforced in accordance with
their terms to the maximum extent possible under applicable law. You and
the Company further agree that, in the event any court of competent
jurisdiction shall find that any provision hereof is not enforceable in
accordance with its terms, the court shall reform the Restrictive Covenants
such that they will be enforceable to the maximum extent permissible at
law.
(iv) Elective Right of the Company. In the event that you challenge
the enforceability of the Restrictive Covenants (or assert an affirmative
defense to an action seeking to enforce the Restrictive Covenants) based on
an argument that the Restrictive Covenants are not enforceable as a matter
of law, unreasonable in geographical scope or duration or void as against
public policy, the Company shall have the right (A) to cease making the
payments required under Sections 2(a) through (e), and, upon demand, to
have you repay, within 10 business days of any such demand, any such
payments previously made under those Sections, and (B) notwithstanding the
provisions of Sections 2(f) and 2(g), to demand that the interest and
principal due on the Note and the Margin Note shall be accelerated and be
immediately due and payable, regardless of whether any such challenge (or
defense) is found to be meritorious, in whole or in part. Any right
afforded to, or exercised by, the Company hereunder shall in no way affect
the enforceability of the Restrictive Covenants or any other right of the
Company hereunder. Nothing in this Section 3(f)(iv) shall be construed to
preclude a challenge (or defense) by you against the application of the
Restrictive Covenants as to a particular set of facts and circumstances (as
opposed to the arguments enumerated above). 4. Certain Additional
Covenants.
(a) Consulting Services. You agree to provide consulting services
and advice to the Company on an as requested basis until January 1,
2003, provided, however, that the Company shall not require you to
provide more than eight (8) hours of service in any month and shall
not require you to travel to provide such services, other than to and
from the Company's offices in Jacksonville, Florida.
(b) Agreement Not to Disparage. You and the Company agree that
neither shall say, write or communicate in any manner to any person or
entity in the medical community or the medical, imaging or long-term
care distribution industries anything substantially derogatory about
the other, regardless of the truth or falsity of the information;
provided, however, that nothing contained herein is intended to or
shall limit your or the Company's ability to comply with applicable
laws, rules or regulations, to obtain any benefits under any bond or
insurance policy, or to commence, institute, prosecute or defend any
lawsuit, action, claim or proceeding before or in any court,
regulatory, governmental, arbitral or other authority. In this
connection, you specifically agree that, for purposes hereof, the
"Company" means and includes the Company and its officers, directors,
employees, affiliates and representatives.
(c) Return of Company Property. You will deliver promptly to the
Company all property belonging to the Company, including, without
limitation, all confidential information of the Company in your
possession, including soft and hard copies thereof, and all keys to
the Company premises. The Company will provide you with a written
receipt identifying all such materials that are returned to the
Company.
5. General Release and Forbearance.
(a) Release by Employee. Except for obligations of the Company to you
under this agreement and vested benefits payable to you under the Company's
benefit programs, in consideration of the severance benefits provided to
you by the Company, you, for yourself, your successors, heirs, legatees,
personal and legal representatives, and assigns (the "Releasors"), hereby
forever release and discharge the Company, its officers, directors,
stockholders, employees, agents, corporate affiliates, controlling persons,
and successors, and their representatives (the "Releasees") from any
claims, demands, causes of action, suits, contracts or liabilities
whatsoever, in law or in equity, whether known or unknown or suspected to
exist by you, which you have had or may now have against the Company or any
of such related parties arising from or connected with your employment with
the Company or the termination of that employment, but specifically
excluding whatever rights the Releasors might have to indemnification or
payment of expenses arising under the Company's charter or bylaws or any
other source (the "Release"). Such claims or causes of action shall
include, but not be limited to, any claims, demands, suits or causes of
action (i) in connection with any privacy right, civil rights claim, claim
for emotional and mental distress, your employment with the Company; or the
termination of that employment, or (ii) pursuant to any federal, state, or
local employment laws, regulations, executive orders, or other
requirements, including without limitation those that may relate to sex,
race or other forms of discrimination, including, without limitation, Title
VII of the Civil Rights Act of 1964, The Americans With Disabilities Act,
and the Age Discrimination in Employment Act Title VII of the Civil Rights
Act of 1964; provided, however, that this Release covers only claims that
you may have under the Age Discrimination in Employment Act as of the
effective date of this Release. Without limiting the generality of the
foregoing, you hereby acknowledge and covenant that you have knowingly
relinquished and forever released any and all rights and remedies which
might otherwise be available to you, including claims for back pay,
liquidated damages, recovery of interest, costs, punitive damages or
attorneys' fees, and any claims for employment or re-employment with the
Company.
(b) Acknowledgments. You acknowledge that you have been advised in
writing to consult with an attorney before signing this agreement and the
Release. You acknowledge that you have read this Release and understand
that it is a general release of the Company from any past or existing claim
that you have against the Company, including any claim relating to your
employment or termination of employment. You acknowledge that you have had
twenty-one (21) days from receipt of this Release to review it prior to
signing (or have voluntarily signed this Release prior to the expiration of
such 21-day prior review period) and have voluntarily decided to sign this
Release. You have the right to revoke this Release within seven (7) days
following the date of its execution by you. However, if you fail to execute
this Release or revoke this Release within such seven (7) day period, no
benefits will be payable to you under this agreement and you shall return
to the Company any payments thus received prior to that date.
(c) Release by Company. Except for your obligations to the Company
under this agreement, which shall remain effective in accordance with their
terms, the Company, on behalf of itself, its affiliates, its successors,
and assigns, irrevocably and unconditionally, releases, acquits, and
forever discharges you and your attorneys, executors, administrators and
heirs from any and all charges, complaints, claims, contracts, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes
of action, suits, rights, demands, costs, losses, debts and expenses
(including attorneys' fees and legal expenses), of any nature whatsoever,
in law or in equity, whether known or unknown, (excluding any claims for
which you would not be entitled to indemnification pursuant to the
Company's certificate of incorporation, the Company's by-laws, and relevant
law) which the Company now has, or may hereafter claim to have had, against
you by reason of any matter, act, omissions, cause or event that has
occurred up to the present date, except any claims pursuant to or arising
from this agreement. The Company expressly acknowledges that this release
agreement may be pled as a complete defense and will fully and finally bar
any such known or unknown claim or claims based on any acts or omissions of
you up to the present date.
6. Indemnification and Insurance. The Company shall continue to provide for
you the indemnification provisions contained in the Company's by-laws and shall
continue to maintain for your benefit such policies of liability insurance,
providing protection to you as an officer, director, agent or employee of the
Company and its subsidiaries, as may from time to time be purchased by the
Company for officers and directors generally as authorized by or in furtherance
of the indemnification provisions contained in the Company's by-laws. Neither
the insurance nor your right to indemnification thereunder may be canceled by
the Company without your permission for a period of five (5) years following the
Separation Date, except in the event of a Change of Control, as defined above;
provided, however, that the Company may obtain a substitute insurance policy as
long as the rights of indemnity to you are at least equivalent to the most
favorable rights provided under the policies in effect immediately prior to your
Separation Date.
7. Tax Matters. You and the Company acknowledge and agree that the payments
and benefits described herein may be taxable income, and we each covenant to
comply with all federal and state income and employment tax requirements,
including all reporting and withholding requirements, relating thereto.
8. Prior Agreements. You and the Company agree that, except as set forth in
this agreement, this agreement and all documents entered into in connection
herewith supersede and terminate any and all prior employment, separation or
similar agreements, oral or written, between you and the Company, including
without limitation your Employment Agreement, and that the mutual benefits and
obligations of each of the parties are solely as provided for and contained in
this agreement.
9. Governing Law. Except to the extent preempted by federal law, and
without regard to conflict of laws principles, the laws of the State of Florida
shall govern this agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
10. Right of Set-off. You and the Company agree that the Company shall have
the right to set-off any amounts due to you pursuant to this agreement to the
extent that you have failed to make payment to the Company of any amounts owed
by you to the Company pursuant to this agreement including the exhibits hereto
when such amounts become due. You hereby grant, and agree to cooperate with the
Company in perfecting, a security interest in any such amounts.
Again, to indicate your acknowledgment of our agreement as
memorialized above, please sign and date this letter and the enclosed duplicate
copy in the space provided below and return one originally executed copy to the
Company.
Very truly yours,
PSS WORLD MEDICAL, INC.
By: /s/ David A. Smith
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David A. Smith
President
The undersigned has carefully read this Release and
acknowledges that it constitutes a general release of all known and unknown
claims against the Company under the Age Discrimination in Employment Act. The
undersigned acknowledges that he has had a full opportunity to consult with an
attorney or other advisor of his choosing concerning the execution of this
Release and that he is signing this Release voluntarily and with the full intent
of releasing the Company from all such claims.
Acknowledged as being the true agreement of the parties, this 21st day of March,
2001.
/s/ Patrick C. Kelly
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Patrick C. Kelly