Exhibit 10.18
Employment AGREEMENT
This EMPLOYMENT Agreement (this "Agreement") is made and entered into
this 7th day of January, 2002 by and between PSS World Medical, Inc., a Florida
corporation (hereinafter, the "Company" which term shall include the Company's
other subsidiaries, affiliates and successors), and David Bronson (hereinafter,
"Executive").
BACKGROUND
The Company desires to engage Executive in 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 January 7, 2002
(the "Effective Date").
2. Employment. Executive is hereby employed on the Effective Date as
the Chief Financial Officer of PSS World Medical, Inc. Executive's
responsibilities under this Agreement shall be in accordance with the policies
and objectives established by the President or the Board of Directors of the
Company 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 accordance
with 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 an
additional 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 Period
shall terminate upon the expiration of the then-current term, including any
prior extensions. Notwithstanding the foregoing, if a Change of Control occurs
the Employment Period shall be automatically extended through the later of (i)
the second anniversary of the Change of 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 sick leave 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 this Agreement 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, so long 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 for Executive
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 of the Board of
Directors of the Company shall review Executive's Base Salary annually and in
its sole discretion, subject to approval of the Board of Directors of the
Company, may increase Executive's Base Salary from year to year. The annual
review of Executive's salary by the Board will consider, 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 and
retirement plans, practices, policies and programs applicable generally to peer
executives 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 and
Executive'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 all reasonable 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 be
entitled to fringe benefits in accordance with the plans, practices, programs
and policies of the Company and its affiliated companies in effect for Peer
Executives.
6. Change of Control. A "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of 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 35% or more of the
combined voting power of the then outstanding voting securities of the Company
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entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (ii) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of 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 a majority 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 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
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (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 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 Company or all or
substantially all of the Company'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 Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding the Company or any employee benefit plan (or related trust) of
the Company 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 (iii) 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; or
(d) If Executive's employment responsibilities are primarily with
Diagnostic Imaging, Inc., a disposition by the Company of a majority of the
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stock or substantially all of the assets of Diagnostic Imaging, Inc.; provided,
however, that if Executive is offered and accepts a position with the Company or
another subsidiary or division of the Company immediately following such
disposition of Diagnostic Imaging, Inc., then a Change of Control shall not be
deemed to have occurred by virtue of this subsection (d); or
(e) If Executive's employment responsibilities are primarily with Gulf
South Medical Supply, Inc., a disposition by the Company of a majority of the
stock or substantially all of the assets of Gulf South Medical Supply, Inc.;
provided, however, that if Executive is offered and accepts a position with the
Company or another subsidiary or division of the Company immediately following
such disposition of Gulf South Medical Supply, Inc., then a Change of Control
shall not be deemed to have occurred by virtue of this subsection (e); or
(f) If Executive's employment responsibilities are primarily with the
Physician Sales & Service division of the Company, a disposition by the Company
of substantially all of the assets of such division; provided, however, that if
Executive is offered and accepts a position with the Company or another
subsidiary or division of the Company immediately following such disposition of
the Physician Sales & Service division, then a Change of Control shall not be
deemed to have occurred by virtue of this subsection (f).
7. Termination of Employment.
(a) Death, Retirement or Disability. Executive's employment shall terminate
automatically upon Executive's death or Retirement during the Employment Period.
For purposes of this Agreement, "Retirement" shall mean normal retirement as
defined in the Company's then-current retirement plan, or there is no such
retirement plan, "Retirement" shall mean voluntary termination 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 to Executive written
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 such written
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 of
Directors of the Company in accordance with standards and procedures similar to
those under the Company's employee long-term disability plan, if any. At any
time that the Company 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 reasonable accommodation) 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.
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(b) Termination by the Company. The Company may terminate Executive's
employment during the Employment Period with or without Cause. For purposes of
this Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to
perform substantially Executive's duties with the Company (other
than any such failure resulting from incapacity due to physical
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 President or the Board of
Directors of the Company which specifically identifies the manner
in which such Board or the President 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, or
(iii) Executive engages in any misconduct involving moral
turpitude whether occurring in the performance of his duties or
otherwise.
For purposes of this provision, no act or failure to act, on the part of
Executive, 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, or failure
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
the best 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 three-quarters of the entire membership of the Board of
the Company at a meeting of such 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 such Board), finding
that, in the good faith opinion of such Board, Executive is guilty of the
conduct described in subparagraph (i), (ii) or (iii) above, and specifying the
particulars thereof in detail.
(c) Termination by Executive. Executive's employment may be terminated 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 (including status, 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 or responsibilities, 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;
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(ii) a reduction by the Company in Executive's Base Salary
and benefits as in effect on the Effective Date or as the came
may be increased from time to time, unless a similar reduction is
made in salary and benefits of Peer Executives, or the failure by
the Company to increase Executive's Base Salary each year during
the Employment Period by an amount which at least equals, on a
percentage basis, the mean average percentage increase in base
salary for Peer Executives, unless such failure to increase is
based on nonarbitrary criteria applied to Executive and Peer
Executives;
(iii) after the occurrence of a Change of Control, the
Company's requiring Executive to be based at any office or
location other than in the greater Jacksonville, Florida
metropolitan area or the Company's requiring Executive to travel
on Company business to a substantially greater extent than
required immediately prior to the Effective Date;
(iv) any failure by the Company to comply with and satisfy
Section 14(b) of this Agreement; or
(v) any termination by Executive for any reason or no reason
during the 30-day period beginning on the first anniversary of a
Change of Control.
(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 written notice
which (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's
employment 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 such notice). 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, hereunder or 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 by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if Executive'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 and (iii) if Executive's employment is terminated by reason of
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death, Retirement or Disability, the Date of Termination shall be the date of
death or Retirement 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 employment other 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 rendered prior to such termination
and as reasonable compensation for his compliance with the Restrictive Covenants
in Section 13 hereof:
(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 of the 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 of Control, 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 of such 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 compensation previously deferred by Executive (together
with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not
theretofore paid (the sum 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 twelve times Executive's monthly
Base Salary in effect as of the Date of Termination (the
"Severance Payment"); provided, however, that if the Date of
Termination occurs after or in connection with the
occurrence of a Change of Control, the Severance Payment
shall be the amount equal to two times Executive's annual
Base Salary in effect as of the Date of Termination; and
(ii) for twelve months after Executive's Date of Termination
(or two years in the event that the Date of Termination occurs
after or in connection with the occurrence of a Change of
Control), or such longer period as may be provided by the terms
of 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
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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 their families,
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 described herein shall be
secondary to those provided under such other plan during such
applicable period of eligibility ("Welfare Benefits"); and
(iii) the Company shall, within 30 days of receipt of
reasonably documented invoices therefor, reimburse Executive'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 be paid 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. If Executive'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 for payment of Accrued Obligations (excluding the pro-rata bonus
described in clause 2 of Section 8(a)(i)(A)), the timely payment or provision of
Other Benefits, and a lump sum amount equal to one and one half (1 1/2 ) months'
salary, based on Executive's Base Salary in effect as of the date of death.
Accrued Obligations shall be paid to Executive's estate or beneficiary, as
applicable, 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
utilized in this Section 8(b) shall include, without limitation, and Executive's
estate and/or beneficiaries 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 reason of
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
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 30
days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized 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 to disability, 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, other than for payment of
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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 30
days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized 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.
(e) Cause or Voluntary Termination without Good Reason. If Executive's
employment shall be terminated 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 of Accrued Obligations (excluding the pro-rata
bonus described in clause 2 of Section 8(a)(i)(A)), the continuation of Welfare
Benefits for a period of 30 days after the Date of Termination, payment of a
lump sum amount equal to 30 days' salary, based on Executive's Base Salary in
effect as of the Date of Termination, 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 any contract 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 the Company 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
as set 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 or otherwise, 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 Executive with 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
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
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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), if it 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 both income 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 that the 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. The
Executive may select the Payments to be limited or reduced.
(b) Subject to the provisions of Section 10(c), all determinations required
to be made under this Section 10, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by the Company's
regular independent accounting firm at the expense 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 the Accounting 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-Up Payments 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) and Executive 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 of
Executive.
(c) Executive shall notify the Company in writing of 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 is informed 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 date
on 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 desires to contest such claim, Executive shall:
(i) give the Company any 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
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representation with respect to such claim 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; provided, however, that the Company shall
bear and pay directly all costs and expenses (including
additional interest 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
of such 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 forgo any 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 any permissible
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-tax basis, 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 the statute 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 contest shall 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
taxing authority.
(d) If, after the receipt by Executive of an amount advanced 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 the Company 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 the occurrence
of a Change of 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 suit be
brought or not, and whether or not incurred in trial, bankruptcy or appellate
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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 and
warrants 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 his
obligations hereunder will not violate the terms or conditions of any contract
or obligation, written or oral, between Executive and any other person or
entity.
13. Restrictions on Conduct of Executive.
(a) General. Executive and the Company understand and agree that the
purpose 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, nor
is 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 the post-employment restrictions set forth in this
Section 13 are reasonable and that they do not, and will not, unduly impair his
ability to earn a living after the termination of this Agreement. Therefore,
subject to the limitations of reasonableness imposed by law upon the
restrictions set forth herein, Executive shall be subject to the restrictions
set forth in this Section 13.
(b) Definitions. The following capitalized 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 Services" means any services provided by Company at
the Determination Date, including, but not limited to the marketing, sale and
distribution of medical supplies, equipment and pharmaceuticals to primary care
and other office-based physicians; the marketing, sale and distribution of
medical diagnostic imaging supplies, chemicals, equipment and service to the
acute care and alternate care market; and the provisions of special group
purchasing contract pricing and periodic cost analyses to help manage the supply
needs of individual physicians or practices.
"Confidential Information" means any confidential or proprietary
information possessed by the Company or its affiliated entities or relating to
its or their business, including without limitation, any confidential
"know-how", customer lists, details of client or consultant contracts, current
and anticipated customer requirements, pricing policies price lists, market
studies, business plans, operational methods, marketing plans or strategies,
product development techniques or plans, computer software programs (including
object code and source code), data and documentation, data base technologies,
systems, structures and architectures, inventions and ideas, past, current and
planned research and development, compilations, devices, methods, techniques,
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processes, financial information and data, business acquisition plans, new
personnel acquisition plans and any other information that would constitute a
Trade Secret (as defined herein).
"Determination Date" means the date of termination of Executive's
employment with the Company for any reason whatsoever or any earlier date
(during the Employment Period) of an alleged breach of the Restrictive Covenants
by Executive.
"Person" means any individual or any corporation, partnership,
joint venture, 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 Clients" means any Person to whom the Company provided
services or submitted a written proposal therefor, within eighteen (18) months
prior to the Determination Date.
"Protected Employees" means employees of the Company who were
employed by the Company at any time within six (6) months prior to the
Determination Date.
"Restricted Period" means the term of Executive's employment
hereunder and a period extending until eighteen (18) months from the Date of
Termination; provided, however that such period shall be extended by any length
of time during which Executive is in breach of the Restricted Covenants.
"Restrictive Covenants" means the restrictive covenants contained
in Section 13(c) hereof.
"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. Executive understands and agrees that the
Confidential Information constitutes a valuable asset 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 any time 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 make use of any
Confidential Information in connection with any business activity
other than that of the Company; provided, however, in the event
the Confidential Information constitutes a Trade Secret, the
Restricted Period referred to above shall be five (5) years.
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Notwithstanding the above, this covenant shall expire (except
with respect to Trade Secrets) upon the occurrence of a Change of
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 to Executive's own use.
Accordingly, Executive hereby agrees that during the Restricted
Period Executive shall not directly or indirectly on Executive's
own behalf or as a Principal or Representative 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 other Person. Notwithstanding the above,
this covenant shall expire upon the occurrence of a Change of
Control.
(iii) Restriction on Relationships with Protected Clients.
Executive understands and agrees that the relationship between
the Company and each of its Protected Clients constitutes a
valuable asset of the Company and may not be converted to
Executive's own use. Accordingly, Executive hereby agrees that
during the Restricted Period Executive shall not, without the
prior written consent of the Company, become a Principal or
Representative of a Protected Client or otherwise provide
services to a Protected Client as a consultant or independent
contractor. Notwithstanding the above, this covenant shall expire
upon the occurrence of a Change of Control.
(iv) Noncompetition with the Company. During the Restricted
Period Executive, unless acting in accordance with the Company's
prior written consent, will not directly provide any Competitive
Services to, and will not, directly or indirectly, (i) own,
manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or
(ii) be connected as a Principal or Representative or otherwise
with, or (iii) permit Executive's name to be used by or in
connection with, any Person engaged in providing Competitive
Services to any Person conducting business activities within the
territory in which the Company is or was engaged in the provision
of the Competitive Services on the Determination Date; provided,
however, that the provisions of this Agreement shall not be
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 the Securities
Exchange Act of 1934, as amended. Notwithstanding the above, this
covenant shall expire upon the occurrence of a Change of Control.
(d) Exceptions from Disclosure Restrictions. Anything herein to the
contrary notwithstanding, Executive shall not be restricted from disclosing or
using Confidential Information that: (a) is or becomes generally available to
the public other than as a result of an unauthorized disclosure by Executive or
his agent; (b) becomes available to Executive 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
14
agreement; (c) was known to Executive on a non-confidential basis and not in
contravention of applicable 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 (d) is
required to be disclosed by law, court order or other legal process; provided,
however, that in the event disclosure is required by law, Executive 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 Executive.
(e) Enforcement of Restrictive Covenants.
(i) Rights and Remedies Upon Breach. In the event Executive
breaches, 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 addition
to, and 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,
Executive 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 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 Executive to account for and pay
over to the Company all compensation, profits, monies, accruals, increments
or other benefits derived or received by Executive as the result of any
transactions constituting a breach of the Restrictive Covenants.
(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 part thereof, are
invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
14. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and without the
prior 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 the benefit 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
15
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 more instances, 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 or
condition 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 or
unenforceable, 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 shall remain 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 and Executive with respect to the
subject matter hereof, and it supersedes and invalidates any previous agreements
or contracts between them which relate to the subject matter hereof. No
representations, inducements, promises or agreements, oral or otherwise, which
are not embodied herein shall be of any force or effect.
(e) 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.
(f) Notices. All notices, requests, demands and 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: President
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To Executive: David Bronson
PSS World Medical, Inc.
4345 Southpoint Boulevard
Jacksonville, Florida 32216
Any party may change the address to which 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 parties hereto, which makes specific reference
to this Agreement; provided, however, that if, in the opinion of the
Corporation's accountants, any provision of this Agreement would preclude the
use of "pooling of interest" accounting treatment for a Change of Control
transaction that (1) would otherwise qualify for such accounting treatment, and
(2) is contingent upon qualifying for such accounting treatment, then Executive
and the Company agree to negotiate in good faith to amend this Agreement so that
it will not preclude the use of "pooling of interest" accounting treatment for
such Change of Control transaction.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
PSS WORLD MEDICAL, INC.
By: /s/ David A. Smith
------------------------------
David A. Smith
President
EXECUTIVE:
/s/ David Bronson
------------------------------
David Bronson
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