Exhibit 10.20a
EXHIBIT B
PSS WORLD MEDICAL, INC.
AMENDED AND RESTATED
OFFICER STOCK OPTION GRANT PROGRAM
(as amended through July 1, 2003)
ARTICLE 1
BACKGROUND AND PURPOSE
1.01 Purpose. PSS World Medical, Inc. desires to recognize the valuable
contribution of its selected officers by providing the Officer Deferral
Incentive Program, an executive benefit program consisting of (i) the
Officer Deferred Compensation Plan, under which participants may
voluntarily defer compensation, which, together with a Company matching
contribution on deferrals of up to a designated percentage of
compensation, will earn a return based on the performance of one or more
benchmark investments, and (ii) this Officer Stock Option Grant Program,
which provides participants in the Officer Deferred Compensation Plan the
opportunity to purchase Company stock when the growth in the stock value
exceeds a designated formula amount.
1.02 Employee Stock Option Plan. The Company maintains the Physician Sales &
Service, Inc. Amended and Restated 1994 Long Term Stock Plan, the
Physician Sales & Service, Inc. Amended and Restated 1994 Long Term
Incentive Plan, and the PSS World Medical, Inc. 1999 Long-Term Incentive
Plan, or any successor plan(s) (the "Employee Stock Option Plan"), under
which the Compensation Committee of the Board of Directors has the
discretion to grant to selected employees or officers of the Company
options to acquire common stock of the Company. Pursuant to such authority
under the Employee Stock Option Plan, the Compensation Committee hereby
establishes, as a grant program for awards to participants in the Officer
Deferred Compensation Plan, this Officer Stock Option Grant Program.
Options granted pursuant to this program shall be issued under, and shall
be subject to the terms and conditions of, the Employee Stock Option Plan.
ARTICLE 2
DEFINITIONS
2.01 Definitions. Certain terms used herein have defined meanings set forth in
this Article and which shall govern unless the context in which they are
used clearly indicates that some other meaning is intended.
Annual Option Limit. The maximum aggregate number of stock options that
may be granted in any one Plan Year (beginning with Plan Year 2004) under
this Officer Stock Option Grant Program, the Company's ELITe Stock Option
Grant Program and the Company's Leader's Stock Option Grant Program
(collectively, the "PSS Deferred Compensation Programs") shall be a number
to be determined by the Committee from time to time (the "Annual Option
Limit"). Until further changed by the Committee, the Annual Option Limit
shall be 250,000. To the extent that the aggregate number of options that
would otherwise be granted under the PSS Deferred Compensation Programs in
any such Plan Year exceeds the Annual Option Limit, a prorata reduction
shall be made in the option grants to each participant in the PSS Deferred
Compensation Programs for such Plan Year. Such prorata reduction in the
number of options for each participant shall be calculated by multiplying
(i) the number of options that such participant would have earned in that
Plan Year without regard for the Annual Option Limit, by (ii) a fraction,
the numerator of which is the Annual Option Limit, and the denominator of
which is the aggregate number of options that would have been earned by
all participants under the PSS Deferred Compensation Programs for that
Plan Year without regard for the Annual Option Limit, and (iii) rounding
the resulting number to the next lowest whole number of shares.
Beneficiary. Any person or persons designated by a Participant, in
accordance with procedures established by the Committee or Program
Administrator, to receive benefits hereunder in the event of the
Participant's death. If any Participant shall fail to designate a
Beneficiary or shall designate a Beneficiary who shall fail to survive the
Participant, the Beneficiary shall be the Participant's surviving spouse,
or, if none, the Participant's surviving descendants (who shall take per
stirpes) and if there are no surviving descendants, the Beneficiary shall
be the Participant's estate.
Board. The Board of Directors of the Company.
Company Matching Contribution. The matching contributions made by the
Company to Participants' Deferral Accounts in accordance with the Deferred
Compensation Plan.
Committee. The committee of the Board described in Article 3.
Company. PSS World Medical, Inc. and its corporate successors.
Compensation. The total salary and cash bonus payable by the Company to a
Participant in the relevant Plan Year for services to the Company or any
of its affiliates, as such amount may be changed from time to time.
Deferral Accounts. A Participant's deferral accounts under the Deferred
Compensation Plan.
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Deferred Compensation Plan. The PSS World Medical, Inc. Officer Deferred
Compensation Plan, as amended from time to time.
Designated Interest Rate. A rate to be determined annually by the Board,
but which shall not be less than the 90 day U.S. Treasury Bill rate in
effect on the first date of the Plan Year. Until changed by the Board, the
Designated Interest Rate shall be 5.13%.
Disability. A Disability as defined in the Employee Stock Option Plan.
Effective Date. August 1, 1998.
Employee Stock Option Plan. The PSS World Medical, Inc. 1999 Long-Term
Incentive Plan, as amended from time to time, the Physician Sales &
Service, Inc. Amended and Restated 1994 Long Term Stock Plan, as amended
from time to time, or any successor plan under which stock options may be
granted to officers of the Company.
Fair Market Value. The Fair Market Value of a share of Stock, as defined
in the applicable Employee Stock Option Plan under which an Option is
granted.
Normal Retirement. Termination of Employment after age 60, or after age 55
with ten years of prior service with the Company or any of its affiliates.
Officer. A person who has been designated by the Board as a Tier 1
Officer, Tier 2 Officer, Tier 3 Officer, Tier 4 Officer or Tier 5 Officer
of the Company.
Option. A right granted to a Participant pursuant to the Option Grant
Program to purchase Stock at a specified price during specified time
periods. Options granted pursuant to the Option Grant Program are granted
under, and pursuant to the terms and conditions of, the applicable
Employee Stock Option Plan.
Option Agreement. Any written agreement, contract, or other instrument or
document evidencing an Option.
Option Grant Program. The PSS World Medical, Inc. Officer Stock Option
Grant Program as set forth in this document, together with any subsequent
amendments hereto.
Participant. Any Officer who has been granted an Option pursuant to the
Option Grant Program.
Plan Year. A Plan Year under the Officer Deferred Compensation Plan, which
currently is the twelve-month period from July 1 of each year though June
30 of
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the following calendar year; provided, however, that Plan Year 2002 shall
mean the 15-month period from April 1, 2001 to June 30, 2002. Thereafter,
"Plan Year 2003" for example, shall mean the year ended June 30, 2003, and
so on.
Program Administrator. The Committee or its delegee of administrative
duties under the Option Grant Program pursuant to Section 3.02.
Stock. The $0.01 par value common stock of the Company and such other
securities of the Company as may be substituted for Stock pursuant to the
Employee Stock Option Plan.
Termination of Employment. A Termination of Employment occurs when a
Participant ceases for any reason to be an employee of the Company or any
of its affiliates.
ARTICLE 3
ADMINISTRATION OF THE OPTION GRANT PROGRAM
3.01 Administration. The Option Grant Program shall be administered by the
Committee that administers the Employee Stock Option Plan.
3.02 Authority of Committee. The Committee shall have the powers and authority
set forth in the Employee Stock Option Plan, including, without
limitation, full power and authority to: (i) interpret and construe the
Option Grant Program and adopt such rules and regulations as it shall deem
necessary and advisable to implement and administer the Option Grant
Program, (ii) decide all matters that must be determined in connection
with an Option (consistent with the provisions of the Employee Stock
Option Plan), and (iii) do all things necessary to operate and administer
the Option Grant Program in accordance with its provisions. The Committee
may delegate administrative duties under the Option Grant Program to one
or more agents as it shall deem necessary or advisable. Unless and until
revoked by the Committee, the Committee hereby designates the Plan
Administrator of the Deferred Compensation Plan to serve as the Program
Administrator to perform the Committee's administrative duties under the
Option Grant Program.
3.03 Effect of Committee Determinations. No member of the Committee or the
Board or the Program Administrator shall be personally liable for any
action or determination made in good faith with respect to the Option
Grant Program or to any settlement of any dispute between a Participant
and the Company. Any decision or action taken by the Committee or the
Board with respect to the administration or interpretation of the Option
Grant Program shall be conclusive and binding upon all persons.
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ARTICLE 4
ELIGIBILITY
4.01 Eligibility. Options may be granted pursuant to the Option Grant Program
only to individuals who are Tier 1, Tier 2, Tier 3, Tier 4 or Tier 5
Officers on the date of grant.
ARTICLE 5
STOCK OPTIONS
5.01 General. The Committee shall grant Options to Officers on the following
terms and conditions:
(a) Automatic Grant of Options. Subject to the availability of shares
under the Employee Stock Option Plan, and subject to the Annual
Option Limit for Plan Years 2004 and later, on the first day of each
Plan Year (or August 1, 1998 for the first Plan Year), each Officer
who elected to make a deferral into any of his or her Deferral
Accounts for such Plan Year, shall be granted an Option to purchase
that number of shares of Stock (rounded up to the nearest whole
share) equal to the quotient of (i) the amount elected to be deferred
by the Participant for such Plan Year under the Deferred Compensation
Plan (up to 15% of Compensation for Tier 1 and Tier 2 Officers and up
to 10% of Compensation for Tier 3 through Tier 5 Officers), divided
by (ii) the Fair Market Value as of such date. For example, if on
July 1, 2003 a Participant's deferral into his or her Deferral
Accounts for Plan Year 2004 eligible for a Company Matching
Contribution was $1,500 (annualized based on the Participant's rate
of Compensation as in effect on July 1, 2003), and the Fair Market
Value on July 1, 2003 was $20.00, then, the Participant would be
granted on July 1, 2003 an Option to purchase 75 shares of Stock
($1,500 / $20).
(b) Exercise Price. The exercise price per share under an Option on the
date of grant shall be the amount (rounded up to the nearest cent)
which is the product of (i) the Fair Market Value on the date of
grant, times (ii) one plus the Designated Interest Rate then in
effect, compounded annually over four years. For example, if the Fair
Market Value on the date of grant of an Option is $20.00 and the
Designated Interest Rate as of that date is 5.13%, the exercise price
of the Option on the date of grant would be $20.00 x 1.0513/4/, or
$24.43.
(c) Time and Conditions of Exercise. Options granted to a Participant
pursuant to the Option Grant Program (regardless of when granted)
shall become vested cumulatively at the rate of 20% of the shares
covered by such Option on the fourth, fifth, sixth, seventh and
eighth anniversaries of the date the Participant first made a
deferral under the Deferred
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Compensation Plan. For example, if a Participant first made a
deferral under the Deferred Compensation Plan with respect to any
part of Plan Year 2003, he or she will become vested in all Options
granted hereunder, based on the 4/th/ to 8/th/ anniversaries of the
first day of such 2003 Plan Year, which is July 1, 2002 (i.e., all
Options granted to such Participant, whenever made, will be 20%
vested on July 1, 2006, 40% vested on July 1, 2007, and so on.) For a
Participant who began participating in the Deferred Compensation Plan
prior April 1, 2002, his or her Option vesting dates will be based on
an April 1 plan year, which was in effect prior to April 1, 2002.
Notwithstanding the above, an Option granted to a Participant
pursuant to the Option Grant Program shall become vested and
exercisable in full (i) upon the death, Normal Retirement or
Disability of the Participant, (ii) upon such date as a successor to
the Company terminates the Deferred Compensation Plan, or (iii) if
within 24 months after a Change in Control (as defined in the
Deferred Compensation Plan), a successor to the Company terminates
the employment of the Participant without cause or the Participant
resigns for Good Reason, as defined in the Participant's Employment
Agreement, if any, with the Company. The Options shall not
automatically vest upon the occurrence of a Change in Control.
(d) Payment. Payment of the exercise price of an Option may be paid in
such manner as may be permitted under the Employee Stock Option Plan.
(e) Evidence of Grant. All Options shall be evidenced by a written Option
Agreement between the Company and the Participant. The Option
Agreement shall include such provisions, consistent with the Employee
Stock Option Plan, as may be specified by the Committee.
(f) Lapse of Option. An Option shall lapse under the earliest of the
following circumstances:
(1) The Option shall lapse as of the day following the tenth
anniversary of the date of grant.
(2) If the Participant terminates employment by reason of his
Normal Retirement or for any reason other than as provided in
paragraph (3) or (4) below, the Option shall lapse, unless it is
previously exercised, two years after the Participant's Termination
of Employment.
(3) If the Participant terminates employment by reason of his
Disability, the Option shall lapse, unless it is previously
exercised, 12 months after the Participant's Termination of
Employment.
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(4) If the Participant dies while employed, or during the
two-year period described in paragraph (2) or during the 12-month
period described in paragraph (3) and before the Option otherwise
lapses, the Option shall lapse 12 months after the Participant's
death. Upon the Participant's death, any exercisable Options may be
exercised by the Participant's Beneficiary.
Unless the exercisability of the Option is accelerated as provided
herein or in the Employee Stock Option Plan, if a Participant
exercises an Option after Termination of Employment, the Option may
be exercised only with respect to the shares that were otherwise
vested on the Participant's Termination of Employment.
ARTICLE 6
OTHER PROVISIONS APPLICABLE TO OPTIONS
6.01 Beneficiaries. A Participant may, in the manner determined by the
Committee, designate a Beneficiary to exercise the rights of the
Participant and to receive any distribution with respect to any Option
upon the Participant's death. A Beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Option Grant
Program is subject to all terms and conditions of the Option Grant
Program, the Employee Stock Option Plan and any Option Agreement
applicable to the Participant, except to the extent the Option Grant
Program, the Employee Stock Option Plan and the Option Agreement otherwise
provide, and to any additional restrictions deemed necessary or
appropriate by the Committee. Subject to the foregoing, a Beneficiary
designation may be changed or revoked by a Participant at any time
provided the change or revocation is filed with the Committee.
6.02 Stock Certificates. All Stock certificates delivered pursuant to the
Option Grant Program are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal or state securities laws, rules and regulations and the rules of
any national securities exchange or automated quotation system on which
the Stock is listed, quoted, or traded. The Committee may place legends on
any Stock certificate to reference restrictions applicable to the Stock.
ARTICLE 7
AMENDMENT, MODIFICATION AND TERMINATION
7.01 Amendment, Modification and Termination. The Committee may, at any time
and from time to time, amend, modify or terminate the Option Grant
Program.
7.02 Awards Previously Granted. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Option without
approval of the
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Participant; provided, however, that such amendment, modification or
termination shall not, without the Participant's consent, reduce or
diminish the value of such Option determined as if the Option had been
exercised on the date of such amendment or termination. No termination,
amendment, or modification of the Option Grant Program shall, without the
written consent of the Participant, adversely affect any Option previously
granted.
ARTICLE 8
MISCELLANEOUS
8.01 No Implied Rights. Nothing contained in the Option Grant Program shall be
deemed to give any Officer the right to continue in such status or to
remain as an employee of the Company.
8.02 Spendthrift Clause. None of the rights or benefits under the Option Grant
Program shall be subject to the claim of any creditor of any Participant
or Beneficiary, or to any legal process by any creditor of such
Participant or Beneficiary, and none of them shall have any right to
alienate, commute, anticipate or assign any of the rights or benefits
under the Option Grant Program except to the extent expressly provided
herein to the contrary.
8.03 Relationship to Other Benefits. No benefit under the Option Grant Program
shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or benefit
plan of the Company or its affiliates unless provided otherwise in such
other plan.
8.04 Expenses. The expenses of administering the Option Grant Program shall be
borne by the Company.
8.05 Titles and Headings. The headings and sub-headings in the Option Grant
Program have been inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof.
8.06 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.
8.07 Fractional Shares. No fractional shares of Stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given
in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
8.08 Effective Date. The Option Grant Program became effective as of August 1,
1998, and was amended and restated as of March 30, 1999, July 1, 2000,
April 1, 2002, and July 1, 2003.
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The foregoing is hereby acknowledged as being the PSS World Medical, Inc.
Amended and Restated Officer Stock Option Grant Program as adopted by the
Compensation Committee of the Board of Directors of the Company effective
as of August 1, 1998, and amended as of March 30, 1999, July 1, 2000,
April 1, 2002, and July 1, 2003.
PSS WORLD MEDICAL, INC.
By: /s/ David A. Smith
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David A. Smith
President and CEO
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