-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gh80K3IvtqvLvF4TBNQtiFHDjrOFbQ9BFuHPBfrq0LN4vXhe9H7o2Y/013vM7s5B r2jBjgMbDGPutqRomKIw3w== 0000931763-97-002220.txt : 19971229 0000931763-97-002220.hdr.sgml : 19971229 ACCESSION NUMBER: 0000931763-97-002220 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971224 SROS: NONE GROUP MEMBERS: DAVID L. BOGETZ GROUP MEMBERS: DONNA C. E. WILLIAMSON GROUP MEMBERS: EDWARD SHULMAN GROUP MEMBERS: GUY W. EDWARDS GROUP MEMBERS: JOHN L. VAUGHAN, JR. GROUP MEMBERS: MELVIN L. HECKTMAN GROUP MEMBERS: PHYSICIAN SALES & SERVICE INC /FL/ GROUP MEMBERS: STANTON KEITH PRITCHARD GROUP MEMBERS: STEVEN L. RICHARDSON GROUP MEMBERS: THOMAS G. HIXON GROUP MEMBERS: WILLIAM W. MCINNES SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GULF SOUTH MEDICAL SUPPLY INC CENTRAL INDEX KEY: 0000889885 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MEDICAL, DENTAL & HOSPITAL EQUIPMENT & SUPPLIES [5047] IRS NUMBER: 640831411 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-44963 FILM NUMBER: 97744038 BUSINESS ADDRESS: STREET 1: ONE WOODGREEN PLACE CITY: MADISON STATE: MS ZIP: 39110 BUSINESS PHONE: 6018565900 MAIL ADDRESS: STREET 1: 426 CHRISTINE DR CITY: RIDGELAND STATE: MS ZIP: 39157 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PHYSICIAN SALES & SERVICE INC /FL/ CENTRAL INDEX KEY: 0000920527 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MEDICAL, DENTAL & HOSPITAL EQUIPMENT & SUPPLIES [5047] IRS NUMBER: 592280364 STATE OF INCORPORATION: FL FISCAL YEAR END: 0329 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 4345 SOUTHPOINT BLVD STREET 2: STE 250 CITY: JACKSONVILLE STATE: FL ZIP: 32216 BUSINESS PHONE: 9043323000 MAIL ADDRESS: STREET 1: 7800 BELFORT PARKWAY STREET 2: STE 250 CITY: JACKSONVILLE STATE: FL ZIP: 32256 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ________)* Gulf South Medical Supply, Inc.. -------------------------------- (Name of Issuer) Common Stock, $.01 par value per share -------------------------------------- (Title of Class of Securities) 4025-2G-105 ----------------------- (CUSIP Number) David A. Smith Executive Vice President and Chief Financial Officer Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 (904) 332-3000 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 14, 1997 ----------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. (continued on following pages) CUSIP No. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON PHYSICIAN SALES & SERVICE, INC. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 59-2280364 - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION FLORIDA - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 2,047,473 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING -0- PERSON ------------------------------------------------------------ WITH 10 SHARED DISPOSITIVE POWER* 2,047,473 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 2,047,473 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** 12.5% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------- CUSIP No. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON DAVID L. BOGETZ S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 37,900 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING 37,900 (subject to the restrictions set forth in the PERSON Affiliate Agreement dated as of December 14, 1997 WITH and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 37,900 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP No. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON GUY W. EDWARDS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 85,112 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING 85,112 (subject to the restrictions set forth in the PERSON Affiliate Agreement dated as of December 14, 1997 WITH and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 85,112 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP No. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON Melvin L. Hecktman S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 18,500 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING 18,500 (subject to the restrictions set forth in the PERSON Affiliate Agreement dated as of December 14, 1997 WITH and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 18,500 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP No. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON THOMAS G. HIXON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- ------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER* SHARES 1,736,546 BENEFICIALLY ------------------------------------------------------------ OWNED BY 9 SOLE DISPOSITIVE POWER* EACH 1,736,546 (subject to the restrictions set forth REPORTING in the Affiliate Agreement dated as of PERSON December 14, 1997 and attached hereto as WITH Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 1,736,546 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** 10.5% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP NO. 4025-2G-105 13D - --------------------------------------- 1 NAME OF REPORTING PERSON WILLIAM W. MCINNES S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 12,502 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING 12,502 (subject to the restrictions set forth in the PERSON Affiliate Agreement dated as of December 14, 1997 WITH and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 12,502 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP No. 4025-2G-105 13D - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Stanton Keith Pritchard S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ----------------------------------------------------------- SHARES 8 SHARED VOTING POWER* BENEFICIALLY 23,600 OWNED BY ----------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER* REPORTING 23,600 (subject to the restrictions set forth in the PERSON Affiliate Agreement dated as of December 14, 1997 WITH and attached hereto as Exhibit 4) ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 23,600 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** Less than 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP NO. 4025-2G-105 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Steven L. Richardson S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 119,513 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER* REPORTING 119,513 (subject to the restrictions in the PERSON Affiliate Agreement dated as of December 14, WITH 1997 and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 119,513 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP NO. 4025-2G-105 13D - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Edward Shulman S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 6,000 OWNED BY EACH ------------------------------------------------------------ REPORTING 9 SOLE DISPOSITIVE POWER* PERSON 6,000 (subject to the restrictions set forth in the WITH affiliate agreement dated as of December 14, 1997 and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 6,000 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP NO. 4025-2G-105 13D - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON John L. Vaughan, Jr. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 6,800 OWNED BY EACH ------------------------------------------------------------ REPORTING 9 SOLE DISPOSITIVE POWER* PERSON 6,800 (subject to the restrictions set forth in the WITH Affiliated Agreement dated as of December 14,1997 and attached hereto as Exhibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 6,800 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- CUSIP NO. 4025-2G-105 13D - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Donna C.E. Williamson S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER* -0- NUMBER OF ------------------------------------------------------------ SHARES 8 SHARED VOTING POWER* BENEFICIALLY 1,000 OWNED BY EACH ------------------------------------------------------------ REPORTING 9 SOLE DISPOSITIVE POWER* PERSON 1,000 (subject to the restrictions set forth in the WITH Affiliate Agreement dated as of December 14, 1997 and attached hereto as Exibit 4) ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER* -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 1,000 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)** LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- *The shares indicated are subject to voting agreements which Physician Sales & Service, Inc. ("PSS"), Thomas G. Hixon, Stanton Keith Pritchard, Steven L. Richardson, Edward Shulman, John L. Vaughan, Jr., Melvin L. Hecktman, William W. McInnes, Donna C.E. Williamson, Guy W. Edwards, and David L. Bogetz, (individually, a "Reporting Person" and collectively, "Reporting Persons"), entered into on December 14, 1997, and described in Item 4 of this statement. The Reporting Persons expressly disclaim beneficial ownership of any of the shares of common stock of Gulf South Medical Supply, Inc. ("GSMS"), $.01 par value per share ("GSMS Common Stock"), as to which it shares voting or dispositive power. **The percentage indicated represents the percentage of the total outstanding shares of GSMS Common Stock as of December 14, 1997. The Reporting Persons deny that he is the beneficial owner of any of the GSMS Common Stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, and such beneficial ownership is expressly disclaimed. Any information contained herein as to any Reporting Person has been provided by such Reporting Person. ITEM 1. SECURITY AND ISSUER This statement relates to the GSMS Common Stock. GSMS is a Delaware corporation whose principal executive offices are located at One Woodgreen Place, Madison, Mississippi 39110. ITEM 2. IDENTITY AND BACKGROUND (i) This statement is being filed by the following persons: PSS, Thomas G. Hixon, Stanton Keith Pritchard, Steven L. Richardson, Edward Shulman, John L. Vaughan, Jr., Melvin L. Hecktman, William W. McInnes, Donna C.E. Williamson, Guy W. Edwards, and David L. Bogetz. (ii) The address of the principal executive office of PSS is 4345 Southpoint Boulevard, Jacksonville, Florida 32216. Schedule I lists the name of each director and executive officer of PSS, as of the date hereof, along with each such director's or officer's position with PSS and principal employment and business address. Schedule II lists the name of each Reporting Person along with each such Reporting Person's residence or business address, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted. (iii) PSS is a Florida corporation which is principally engaged in the marketing and distribution of medical products to physicians, other alternate-site providers and hospitals. To the best of PSS' knowledge, during the last five years, neither PSS, nor any Reporting Person, nor any of PSS' directors or executive officers has been (a) convicted in any criminal proceedings (excluding traffic violations or similar misdemeanors) or (b) a party to any civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Pursuant to an Agreement and Plan of Merger dated as of December 14, 1997 (the "Merger Agreement") between PSS, PSS Merger Corp. ("Merger Corp."), and GSMS and subject to the conditions set forth therein (including approval by stockholders of both PSS and GSMS, regulatory approvals and the satisfaction or waiver of various other terms and conditions), Merger Corp. will be merged with and into GSMS (the "Merger"). At the effective time of the Merger (the "Effective Time"), GSMS will survive as a wholly owned subsidiary of PSS, with each share of GSMS Common Stock (excluding treasury shares) being converted into the right to receive 1.75 shares of common stock of PSS, $.01 par value per share ("PSS Common Stock"), as adjusted pursuant to anti- dilution provisions. The foregoing summary of the Merger is qualified in its entirety by reference to the Merger Agreement incorporated by reference herein as Exhibit 1. ITEM 4. PURPOSE OF TRANSACTION As described more fully in Item 3 above, this statement relates to the Merger of Merger Corp. with and into GSMS, with GSMS surviving as a wholly owned subsidiary of PSS. In consideration thereof, PSS, GSMS and ten GSMS stockholders (the "Stockholders") have entered into a Voting Agreement dated as of December 14, 1997 (the "Voting Agreement"). The Voting Agreement provides, among other things, that the Stockholders will vote their shares of GSMS Common Stock, an aggregate of 1,857,605 shares, in favor of the Merger and the Merger Agreement, and the approval of the terms thereof and each of the other transactions contemplated by the Merger Agreement. The Voting Agreement will terminate upon the earlier of the Effective Time or the date upon which the Merger Agreement is terminated in accordance with its terms. A copy of the Voting Agreement is incorporated by reference herein as Exhibit 2, and the foregoing summary is qualified in its entirety by reference thereto. Immediately following the Effective Time, PSS shall take, or cause to be taken, such action as may be required in order to (i) increase the size of its Board of Directors from nine persons to ten persons, with four Class I directors, three Class II directors and three Class III directors, (ii) accept the resignations of four current PSS directors, (iii) appoint or cause to be elected Thomas G. Hixon and two additional Persons who are currently directors of GSMS to be selected by the Board of Directors of GSMS as directors of PSS to serve in Class I, Class II and Class III, respectively, and (iv) appoint a Nominating Committee composed of Thomas G. Hixon and such other persons as the PSS Board of Directors shall determine for the purpose of designating two independent persons to fill the two vacancies on the PSS Board of Directors as soon as reasonably practicable. In addition, immediately following the Effective Time, the GSMS shall take, or cause to be taken, such action as may be necessary to cause each of the Audit Committee and Compensation Committee of the Board of Directors of the GSMS to include at least one member who shall have served on the Board of Directors of GSMS immediately prior to the Effective Time. In connection with the Merger Agreement, GSMS issued an option to PSS on December 14, 1997 (the "Option") pursuant to a Stock Option Agreement dated as of December 14, 1997 (the "Option Agreement") to purchase under certain conditions, up to 3,253,066 shares of GSMS Common Stock at a purchase price of $29.06 per share, subject to adjustment pursuant to anti-dilution provisions. A copy of the Stock Option Agreement is incorporated by reference as Exhibit 3, and the foregoing summary is qualified in its entirety by reference thereto. Also in connection with the Merger Agreement, the Stockholders of the GSMS who have executed the Voting Agreement in favor of GSMS (each a "GSMS Affiliate") have each entered into an Affiliate Agreement dated as of December 14, 1997 with PSS (collectively, the "Affiliate Agreements") pursuant to which each GSMS Affiliate has agreed not to sell, transfer or otherwise dispose of his interests in, or otherwise reduce his risk relative to any shares of GSMS Common Stock or other equity securities of GSMS owned by him from 30 days prior to the Effective Time until such time as GSMS notifies the GSMS Affiliate that the requirements of the Securities and Exchange Commission Accounting Release Series Nos. 130 and 135 have been met. A copy of the Affiliate Agreements are incorporated by reference as Exhibit 4, and the foregoing summary is qualified in its entirety by reference thereto. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER The 2,047,473 shares of GSMS Common Stock, taking into consideration the 287,818 GSMS options held by Reporting Persons listed on Schedule III, subject to the Voting Agreement are equal to approximately 12.5% of the GSMS Common Stock, based on the 16,347,064 shares of GSMS Common Stock issued and outstanding on December 14, 1997, as represented by GSMS in the Merger Agreement, and taking into consideration the 287,818 GSMS options held by the Reporting Persons listed on Schedule III. The 3,253,066 shares of GSMS Common Stock which are purchasable by PSS upon exercise of the Option are equal to approximately 16.6% of GSMS Common Stock, based on the 16,347,064 shares of GSMS Common Stock issued and outstanding on December 14, 1997, and taking into consideration the 3,253,066 shares of GSMS Common Stock that would be issued pursuant to the option. PSS expressly disclaims any beneficial ownership of GSMS Common Stock subject to the Voting and Option Agreements. Set forth on Schedule III, opposite each Reporting Person's name is (i) that number of shares of GSMS Common Stock beneficially owned by such Reporting Person as of the date hereof (identifying those shares which there is a right to purchase) and (ii) the percentage of issued and outstanding GSMS Common Stock that such shares represent (based on the number of shares of GSMS Common Stock outstanding as of December 14, 1997). As a result of and subject to the Voting Agreement, each of the Reporting Persons, other than PSS, share voting power with PSS to vote that number of shares of GSMS Common Stock as is set forth on Schedule III opposite such Reporting Person's name (excluding those shares which there is a right to acquire) for the limited purposes described in Item 4 above. Other than as set forth in this Item 5, to the best of PSS' knowledge (i) neither PSS nor any subsidiary or affiliate of PSS or any of its or their executive officers or directors, beneficially owns any shares of GSMS Common Stock, and (ii) there have been no transactions in the shares of GSMS Common Stock effected during the past 60 days by PSS, nor to the best of PSS' knowledge, by any subsidiary or affiliate of PSS or any of its or their executive officers or directors. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Other than the Merger Agreement (excluding certain exhibits), the Voting Agreement, the Option Agreement and the Affiliate Agreements, copies of which are incorporated by reference herein, to the best of PSS' knowledge there are at present no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 above and between such persons and any person with respect to any securities of GSMS. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The agreements filed as exhibits to this statement are as follows: 1. Agreement and Plan of Merger dated as of December 14, 1997 by and among Physician Sales & Service, Inc., PSS Merger Corp. and Gulf South Medical Supply, Inc. (incorporated by reference to Exhibit 2.1 to Physician Sales & Service, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 1997) 2. Voting Agreement dated as of December 14, 1997 by and among Physician Sales & Service, Inc., Gulf South Medical Supply, Inc. and certain stockholders of Gulf South Medical Supply, Inc. 3. Stock Option Agreement dated as of December 14, 1997 by and between Gulf South Medical Supply, Inc. and Physician Sales & Service, Inc. 4. Affiliate Agreements dated as of December 14, 1997 by and between Physician Sales & Service, Inc. and certain stockholders of Gulf South Medical Supply, Inc. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. PHYSICIAN SALES & SERVICE, INC. BY: /s/ David A. Smith ---------------------------------------- NAME: David A. Smith TITLE: Executive Vice President and Chief Financial Officer /s/ David L. Bogetz - ----------------------------------- /s/ Guy W. Edwards - ----------------------------------- /s/ Melvin L. Hecktman - ----------------------------------- /s/ Thomas G. Hixon - ----------------------------------- /s/ William W. McInnes - ----------------------------------- /s/ Stanton Keith Pritchard - ----------------------------------- /s/ Steven L. Richardson - ------------------------------------ /s/ Edward Shulman - ------------------------------------ /s/ John L. Vaughan - ------------------------------------ /s/ Donna C.E. Williamson - ------------------------------------ DATED: DECEMBER 14, 1997 SCHEDULE I The following is a list of the executive officers and directors of PSS as of December 14, 1997.
PRINCIPAL EMPLOYMENT AND NAME POSITION WITH PSS BUSINESS ADDRESS - ------------------------------------------------------------------------------------------------------------------------------ Patrick C. Kelly Chairman of the Board, Chief Executive Physician Sales & Service, Inc. Officer and Director 4345 Southpoint Boulevard Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ John F. Sasen, Sr. President and Director Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ David A. Smith Executive Vice President, Physician Sales & Service, Inc. Chief Financial Officer and Director 4345 Southpoint Boulevard Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ James B. Stallings, Jr. Chief Operating Officer Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ Frederick E. Dell Executive Vice President Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ Delmer W. Dallas Director Acosta Sales Co., Inc. P.O. Box 19309 Jacksonville, Florida 32216 - ------------------------------------------------------------------------------------------------------------------------------ T. O'Neal Douglas Director American Heritage Life Insurance Company 1776 American Heritage Life Drive Jacksonville, Florida 32224 - ------------------------------------------------------------------------------------------------------------------------------ Fred Elefant General Counsel, Secretary Mahoney Adams & Criser, P.A. and Director Dupont Center, Suite 250 1650 Prudential Drive Jacksonville, Florida 32224 - ------------------------------------------------------------------------------------------------------------------------------ Delores Kessler Director Kesler, Pass & Associates 10407 Centurian Parkway North, Suite 101 Jacksonville, Florida 32256 - ------------------------------------------------------------------------------------------------------------------------------ William C. Mason Director Baptist/St. Vincent Health Systems, Inc. 800 Prudential Drive Jacksonville, Florida 32207 - ------------------------------------------------------------------------------------------------------------------------------ James L.L. Tullis Director Tullis-Dickerson & Company, Inc. One Greenwich Plaza Greenwich, Connecticut 06830 - ------------------------------------------------------------------------------------------------------------------------------
SCHEDULE II
NAME (AND RESIDENCE ADDRESS IF PRINCIPAL EMPLOYMENT AND NO BUSINESS ADDRESS) PRINCIPAL OCCUPATION OR EMPLOYMENT BUSINESS ADDRESS - ------------------------------------------------------------------------------------------------------------------------------ David L. Bogetz Senior Vice President, Private Equity ABN Amro Chicago Corporation Management 208 South LaSalle, 10th Floor Chicago, IL 60604 - ------------------------------------------------------------------------------------------------------------------------------ Guy W. Edwards Consultant N/A 567 Arbor Drive Madison, MS 39110 - ------------------------------------------------------------------------------------------------------------------------------ Melvin L. Hecktman President Hecktman Management 104 Wilmot Road, Suite 300 Deerfield, IL 60015 - ------------------------------------------------------------------------------------------------------------------------------ Thomas G. Hixon President, Chief Executive Officer and Gulf South Medical Supply, Inc. Chairman of the Board One Woodgreen Place Madison, MS 39110 - ------------------------------------------------------------------------------------------------------------------------------ William W. McInnes Retired N/A 116 30th Avenue S. Nashville, TN 37212 - ------------------------------------------------------------------------------------------------------------------------------ Stanton Keith Pritchard Senior Vice President, Business Gulf South Medical Supply, Inc. Development and Administration, Secretary One Woodgreen Place and General Counsel Madison, MS 39110 - ------------------------------------------------------------------------------------------------------------------------------ Steven L. Richardson Senior Vice President, Operations Gulf South Medical Supply, Inc. One Woodgreen Place Madison, MS 39110 - ------------------------------------------------------------------------------------------------------------------------------ Edward Schulman Senior Vice President, Sales Gateway Healthcare Corporation and Marketing 2900 Hungary Road, Suite 200 Richmond, VA 23228 - ------------------------------------------------------------------------------------------------------------------------------ John L. Vaughan, Jr. Vice President, Finance Gulf South Medical Supply, Inc. One Woodgreen Place Madison, MS 39110 - ------------------------------------------------------------------------------------------------------------------------------ Donna C.E. Williamson N/A N/A 345 Birch Street Winnetka, IL 60093 - ------------------------------------------------------------------------------------------------------------------------------
SCHEDULE III
BENEFICIALLY OWNED PERCENTAGE OF SHARES OF GSMS NAME SHARES OF GSMS COMMON STOCK AS OF 12/14/97 - ------------------------------------------------------------------------------------------------- Physician Sales & Service, Inc. 2,047,473 12.5% - ------------------------------------------------------------------------------------------------- Thomas G. Hixon 1,736,546 (1) 10.5% - ------------------------------------------------------------------------------------------------- Stanton Keith Pritchard 23,600 (2) less than 1% - ------------------------------------------------------------------------------------------------- Steven L. Richardson 119,513 (3) less than 1% - ------------------------------------------------------------------------------------------------- Edward Shulman 6,000 (4) less than 1% - ------------------------------------------------------------------------------------------------- John L. Vaughn, Jr. 6,800 (5) less than 1% - ------------------------------------------------------------------------------------------------- Melvin L. Hecktman 18,500 (6) less than 1% - ------------------------------------------------------------------------------------------------- William W. McInnes 12,502 (7) less than 1% - ------------------------------------------------------------------------------------------------- Donna Williamson 1,000 (8) less than 1% - ------------------------------------------------------------------------------------------------- Guy W. Edwards 85,112 (9) less than 1% - ------------------------------------------------------------------------------------------------- David L. Bogetz 37,900 (10) less than 1% - -------------------------------------------------------------------------------------------------
(1) includes 94,950 options (6) includes 12,500 options (2) includes 22,600 options (7) includes 12,502 options (3) includes 95,016 options (8) includes 1,000 options (4) includes 6,000 options (9) includes 1,000 options (5) includes 6,800 options (10) includes 37,500 options EXHIBIT INDEX Exhibit Description Page No. - ------------------- -------- 1. Agreement and Plan of Merger dated as of December 14, 1997 by and among Physician Sales & Service, Inc., PSS Merger Corp. and Gulf South Medical Supply, Inc. (incorporated by reference to Exhibit 2.1 to Physician Sales & Service, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 1997) 2. Voting Agreement dated as of December 14, 1997 by and among Physician Sales & Service, Inc., Gulf South Medical Supply, Inc. and certain stockholders of Gulf South Medical Supply, Inc. 3. Stock Option Agreement dated as of December 14, 1997 by and between Gulf South Medical Supply, Inc. and Physician Sales & Service, Inc. 4. Affiliate Agreements dated as of December 14, 1997 by and between Physician Sales & Service, Inc. and certain stockholders of Gulf South Medical Supply, Inc. EX-2 2 VOTING AGREEMENT EXHIBIT 2 VOTING AGREEMENT ---------------- THIS VOTING AGREEMENT, dated as of December 14, 1997 (this "Agreement"), is made and entered into by and among Physician Sales & Service, Inc., a Florida corporation ("PSS") and the other parties signatory hereto (each a "Stockholder"). Preamble -------- The Stockholder is a stockholder of Gulf South Medical Supply, Inc. ("GSMS") and desires that PSS, PSS Merger Corp., a wholly owned subsidiary of PSS ("Merger Corp."), and GSMS enter into an Agreement and Plan of Merger dated the date hereof (as the same may be amended or supplemented, the "Merger Agreement") with respect to the merger of Merger Corp. with and into GSMS (the "Merger"), with the result that GSMS becomes a wholly owned subsidiary of PSS. The Stockholder is executing this Agreement as an inducement to PSS to enter into and execute, and to cause Merger Corp. to enter into and execute, the Merger Agreement. All capitalized terms used herein which are not defined herein shall have the same meanings as ascribed to them in the Merger Agreement. NOW, THEREFORE, in consideration of the execution and delivery by PSS and Merger Corp. of the Merger Agreement and the mutual covenants, conditions and agreements contained herein and therein, the parties agree as follows: 1. Representations and Warranties. (a) The Stockholder severally and not jointly represents and warrants to PSS as follows: (i) As of the date hereof, the Stockholder is the record owner of the GSMS Common Stock set forth on Schedule 1 to this Agreement (such ---------- Stockholder's "Shares"). Except for the Stockholder's Shares, the Stockholder is not the record owner of any shares of GSMS Common Stock (except to the extent the Stockholder disclaims beneficial ownership in accordance with applicable law). This Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, the Stockholder, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors rights generally or the availability of equitable remedies, and the execution and delivery of this Agreement will not violate or result in a default under any agreement to which Stockholder is a party. (ii) Such Stockholder's Shares and the certificates representing such Shares are now and at all times during the term hereof will be held by such Stockholder, free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, understandings or arrangements or any other encumbrances whatsoever that would interfere with the voting of the Shares or the granting of any proxy, except for any such encumbrances or proxies arising hereunder. (iii) The Stockholder understands and acknowledges that PSS and Merger Corp. are entering the Merger Agreement in reliance upon the Stockholder's execution and delivery of this Agreement. The Stockholder acknowledges that the irrevocable proxy set forth in Section 4 is granted in consideration for the execution and delivery of the Merger Agreement by PSS and Merger Corp. -1- (b) PSS represents and warrants to Stockholder that this Agreement has been duly authorized, executed and delivered by and constitutes a valid and binding agreement of, PSS, enforceable in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors rights generally or the availability of equitable remedies, and the execution and delivery of this Agreement will not violate or result in a default under any agreement to which PSS is a party. 2. Voting Agreement. (a) The Stockholder severally agrees with, and covenants to, PSS that at any meeting of stockholders of GSMS called to vote upon the Merger, the Merger Agreement, and any other matters related thereto, or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval with respect to the Merger and the Merger Agreement is sought, the Stockholder shall vote (or cause to be voted) the Stockholder's Shares in favor of the Merger and the approval of the terms thereof and each of the other transactions contemplated by the Merger Agreement, provided that the terms of the Merger Agreement shall not have been amended to reduce the Exchange Ratio payable in the Merger to a lesser amount of PSS Common Stock or otherwise to materially and adversely impair the Stockholder's rights or increase the Stockholder's obligations thereunder. Stockholder, as a holder of GSMS Common Stock, shall be present in person or by proxy at all meetings of stockholders of GSMS so that all Shares are counted for purposes of determining the presence of a quorum at such meetings. (b) This Agreement is intended to bind Stockholder only with respect to the specific matters set forth herein and solely in his or her capacity as stockholder, and shall not prohibit, limit or restrict in any manner Stockholder from acting in Stockholder's capacity as an officer or director of GSMS or exercising or observing Stockholder's fiduciary duties and responsibilities as an officer or director of GSMS. 3. Covenants. The Stockholder severally agrees with, and covenants to, PSS as follows: (a) Prior the termination of this Agreement, the Stockholder shall not (i) transfer (which term shall include, without limitation, for the purposes of this Agreement, any sale, gift, pledge, or consent to any transfer of), any or all of the Stockholder's Shares or any interest therein, except pursuant to the Merger; (ii) enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Shares or any interest therein, (iii) grant any proxy, power of attorney or other authorization in or with respect to such Shares, except for this Agreement or (iv) deposit such Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Shares. (b) The Stockholder hereby < any rights of appraisal, or rights to dissent from the Merger, that such Stockholder may have. 4. Grant of Irrevocable Proxy; Appointment of Proxy. (a) The Stockholder hereby irrevocably grants to, and appoints, Patrick C. Kelly, Chief Executive Officer of PSS, and David A. Smith, Chief Financial Officer of PSS, in their respective capacities as officers of PSS, and any individual who shall hereafter succeed to any such office of PSS, and each of them individually, the Stockholder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of the Stockholder, to vote the Stockholder's Shares or grant a consent or approval in respect of such Shares in favor of the Merger, the execution and delivery of the Merger Agreement and approval of the terms thereof, and each of the other transactions contemplated by the Merger Agreement, provided that the terms of the Merger Agreement shall not have been amended to reduce the Exchange Ratio payable in the Merger to a lesser amount of PSS Common Stock or otherwise to adversely impair -2- the Stockholder's rights or increase the Stockholder's obligations thereunder, whether in his capacity as a stockholder or in any other capacity. (b) The Stockholder represents that any proxies heretofore given in respect of the Stockholder's Shares are not irrevocable, and that any such proxies are hereby revoked. (c) The Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked. The Stockholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. 5. Certain Events. The Stockholder agrees that this Agreement and the obligations hereunder shall attach to the Stockholder's Shares and shall be binding upon any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including without limitation the Stockholder's successors or assigns. In the event of any stock split, stock dividend, merger, reorganization, recapitalization or other change in the capital structure of GSMS, or the acquisition of additional shares of GSMS Common Stock or other voting securities of GSMS by any Stockholder, the number of Shares subject to the terms of this Agreement shall be adjusted appropriately and this Agreement and the obligations hereunder shall attach to any additional shares of GSMS Common Stock or other voting securities of GSMS issued to or acquired by the Stockholder. 6. Further Assurances. The Stockholder shall, upon request of PSS, execute and deliver any additional documents and take such further actions as may reasonably be deemed by PSS to be necessary or desirable to carry out the provisions hereof and to vest the power to vote such Stockholder's Shares as contemplated by Section 4 in PSS and the other irrevocable proxies described therein at the expense of PSS. 7. Termination. This Agreement, and all rights and obligations of the parties hereunder; including without limitation, the proxy set forth in Section 4, shall terminate upon the first to occur of (i) the Effective Time of the Merger or (ii) the date upon which the Merger Agreement is terminated in accordance with its terms. 8. Miscellaneous. (a) This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement. (b) This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. (c) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. (d) Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by any of the parties without the prior written consent of the other parties, except as expressly contemplated by Section 3(a). Any assignment in violation of the foregoing shall be void. (e) The Stockholder agrees that irreparable damage would occur and that PSS would not have any adequate remedy at law in the event that any of the provisions of this -3- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ William W. McInnes ------------------------------- Print Name: William W. McInnes -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Edward Shulman ------------------------------- Print Name: Edward Shulman -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Donna C.E. Williamson --------------------------------- Print Name: Donna C.E. Williamson -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ David L. Bogetz ------------------------------- Print Name: David L. Bogetz -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Melvin L. Hecktman ------------------------------- Print Name: Melvin L. Hecktman -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Thomas G. Hixon ------------------------------- Print Name: Thomas G. Hixon -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Steve Richardson ------------------------------- Print Name: Steve Richardson -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Guy W. Edwards ------------------------------- Print Name: Guy W. Edwards -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Stanton Keith Pritchard ----------------------------------- Print Name: Stanton Keith Pritchard -4- Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that PSS shall be entitled to an injunction or injunctions to prevent breaches by the Stockholder of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. (f) If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, (i) be held by a court of competent jurisdiction to be invalid, void or unenforceable or (ii) would preclude the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or prevent PSS or GSMS from accounting for the Merger as a pooling of interests, such term, provision, covenant or restriction shall be modified or voided, as may be necessary to achieve the intent of the parties to the extent possible, and the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances, shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law. (g) No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by such party. IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Voting Agreement as of the day and year first above written. PHYSICIAN SALES & SERVICE, INC. By: /s/ David A. Smith --------------------------- Title: Executive Vice President and Chief Financial Officer "STOCKHOLDER" /s/ Louie Vaughan ------------------------------- Print Name: Louie Vaughan -4- EX-3 3 STOCK OPTION AGREEMENT EXHIBIT 3 STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as of December 14, 1997, by and between Gulf South Medical Supply, Inc., a Delaware corporation ("Issuer"), and Physician Sales & Service, Inc., a Florida corporation ("Grantee"). WHEREAS, Grantee and Issuer have entered into that certain Agreement and Plan of Merger, dated as of December 14, 1997 (the "Merger Agreement"), providing for, among other things, the merger of a wholly owned Subsidiary of Grantee with and into Issuer, with Issuer as the surviving entity; and WHEREAS, as a condition and inducement to Grantee's execution of the Merger Agreement, Grantee has required that Issuer agree, and Issuer has agreed, to grant Grantee the Option (as defined below); NOW, THEREFORE, in consideration of the respective representations, warranties, covenants and agreements set forth herein and in the Merger Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as follows: 1. Defined Terms. Capitalized terms which are used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement. 2. Grant of Option. Subject to the terms and conditions set forth herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase up to 3,253,066 shares (as adjusted as set forth herein, the "Option Shares," which shall include the Option Shares before and after any transfer of such Option Shares) of common stock, $.01 par value per share ("Issuer Common Stock"), of Issuer at a purchase price per Option Share (subject to adjustment as set forth herein, the "Purchase Price") equal to $29.06 per share of Issuer Common Stock. 3. Exercise of Option. (a) Provided that (i) Grantee or Holder (as hereinafter defined), as applicable, shall not be in material breach of its agreements or covenants contained in this Agreement or the Merger Agreement, and (ii) no preliminary or permanent injunction or other order against the delivery of shares covered by the Option issued by any court of competent jurisdiction in the United States shall be in effect, Holder may exercise the Option, in whole or in part, at any time and from time to time following the occurrence of a Purchase Event; provided that the Option shall terminate and be of no further force and effect upon the earliest to occur of (A) the Effective Time, (B) termination of the Merger Agreement in accordance with the terms thereof prior to the occurrence of a Purchase Event or a Preliminary Purchase Event (other than a termination of the Merger Agreement by Grantee pursuant to Section 10.1(b) (but only if such termination was a result of a willful breach by Issuer) or Section 10.1(c) thereof (each a "Default Termination")), (C) 120 days after a Default Termination (provided, that if, within 120 days after such termination of the Merger Agreement, a Purchase Event or a Preliminary Purchase Event shall occur, then notwithstanding anything to the contrary contained herein (including clause (D) of this sentence), this Option shall terminate 120 days after the first occurrence of such an event), and (D) 120 days after any termination of the Merger Agreement (other than a Default Termination) following the occurrence of a Purchase Event or a Preliminary Purchase Event. The term "Holder" shall mean the holder or holders of the Option from time to time, and which initially is the Grantee. The rights set forth in Section 8 shall terminate when the right to exercise the Option terminates (other than as a result of a complete exercise of the Option) as set forth herein. (b) As used herein, a "Purchase Event" means any of the following events subsequent to the date of this Agreement: (i) without Grantee's prior written consent, Issuer shall have authorized, recommended, publicly proposed or publicly announced an intention to authorize, recommend or propose, or entered into an agreement with any person (other than Grantee or any Subsidiary of Grantee) to effect an Acquisition Transaction (as defined below). As used herein, the term Acquisition Transaction shall mean (A) a merger, consolidation or similar transaction involving Issuer or any of its Subsidiaries (other than transactions solely between Issuer's Subsidiaries), (B) except as permitted pursuant to Section 7.1 of the Merger Agreement, the disposition, by sale, lease, exchange or otherwise, of Assets of Issuer or any of its Subsidiaries representing in either case 15% or more of the consolidated assets of Issuer and its Subsidiaries, or (C) the issuance, sale or other disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities representing 25% or more of the voting power of Issuer or any of its Subsidiaries (any of the foregoing, an "Acquisition Transaction"); or (ii) any person (other than Grantee or any Subsidiary of Grantee) shall have acquired beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of or the right to acquire beneficial ownership of, or any "group" (as such term is defined under the Exchange Act), other than a group of which Grantee or any of its Subsidiaries of Grantee is a member, shall have been formed which beneficially owns or has the right to acquire beneficial ownership of, 25% or more of the then- outstanding shares of Issuer Common Stock. (c) As used herein, a "Preliminary Purchase Event" means any of the following events: (i) any person (other than Grantee or any Subsidiary of Grantee) shall have commenced (as such term is defined in Rule 14d-2 under the Exchange Act), or shall have filed a registration statement under the Securities Act with respect to, a tender offer or exchange offer to purchase any shares of Issuer Common Stock such that, upon consummation of such offer, such person would own or control 25% or more of the then-outstanding shares of Issuer Common Stock (such an offer being referred to herein as a "Tender Offer" or an "Exchange Offer," respectively); or (ii) the holders of Issuer Common Stock shall not have approved the Merger Agreement at the meeting of such stockholders held for the purpose of voting on the Merger Agreement, such meeting shall not have been held or shall have been canceled prior to termination of the Merger Agreement, or Issuer's Board of Directors shall have withdrawn or modified in a manner adverse to Grantee the recommendation of Issuer's Board of Directors with respect to the Merger Agreement, in each case after it shall have been publicly announced that any person (other than Grantee or any Subsidiary of Grantee) shall have (A) made, or disclosed an intention to make, a proposal to engage in an Acquisition Transaction, (B) commenced a Tender Offer or filed a registration statement under the Securities Act with respect to an Exchange Offer, or (C) filed an application (or given a notice), whether in draft or final form, under any federal or state statute or regulation (including a notice filed under the HSR Act) seeking the Consent to an Acquisition Transaction from any federal or state governmental or regulatory authority or agency. As used in this Agreement, "person" shall have the meaning specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act. (d) In the event Holder wishes to exercise the Option, it shall send to Issuer a written notice (the date of which being herein referred to as the "Notice Date") specifying (i) the total number of Option Shares it intends to purchase pursuant to such exercise and (ii) a place and date not earlier than three business days nor later than 15 business days from the Notice Date for the closing (the "Closing") of such purchase (the "Closing Date"). If prior Consent of any governmental or regulatory agency or authority is required in connection with such purchase, Issuer shall cooperate with Holder in the filing of the required notice or application for such Consent and the obtaining of such Consent and the Closing shall occur immediately following receipt of such Consents (and expiration of any mandatory waiting periods). (e) Notwithstanding any other provision of this Agreement to the contrary, in no event shall Holders (in the aggregate) purchase under the terms of this Agreement that number of Option Shares which have a "Spread Value" in excess of the remainder obtained by subtracting (A) all payments under Section 11.2(b) of the Merger Agreement from (B) $24,000,000 (the "Maximum Amount"). For purposes of this Agreement, "Spread -2- Value" shall mean the difference between (i) the product of (1) the sum of the total number of Option Shares Holder(x) intends to purchase at the Closing Date pursuant to the exercise of the Option and (y) previously purchased pursuant to the prior exercise of the Option, and (2) the closing bid price of Issuer Common Stock as quoted on the Nasdaq National Market on the last trading day immediately preceding the Closing Date, and (ii) the product of (1) the total number of Option Shares that Holder (x) intends to purchase at the Closing Date pursuant to the exercise of the Option and (y) previously purchased pursuant to the prior exercise of the Option and (2) the applicable Purchase Price of such Option Shares. In the event the Spread Value exceeds the Maximum Amount, the number of Option Shares which Holder is entitled to purchase at the Closing Date shall be reduced to that number of shares necessary such that the Spread Value equals or is less than the Maximum Amount. 4. Payment and Delivery of Certificates. (a) On each Closing Date, Holder shall (i) pay to Issuer, in immediately available funds by wire transfer to a bank account designated by Issuer, an amount equal to the Purchase Price multiplied by the number of Option Shares to be purchased on such Closing Date, and (ii) present and surrender this Agreement to the Issuer at the address of the Issuer specified in Section 13(f) hereof. (b) At each Closing, simultaneously with the delivery of immediately available funds and surrender of this Agreement as provided in Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or certificates representing the Option Shares to be purchased at such Closing, which Option Shares shall be free and clear of all liens, claims, charges and encumbrances of any kind whatsoever and subject to no pre-emptive rights, and (B) if the Option is exercised in part only, an executed new agreement with the same terms as this Agreement evidencing the right to purchase the balance of the shares of Issuer Common Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a letter agreeing that Holder shall not offer to sell or otherwise dispose of such Option Shares in violation of applicable federal and state law or of the provisions of this Agreement. (c) In addition to any other legend that is required by applicable law, certificates for the Option Shares delivered at each Closing shall be endorsed with a restrictive legend which shall read substantially as follows: THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 14, 1997. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR. It is understood and agreed that the above legend shall be removed by delivery of substitute certificate(s) without such legend if Holder shall have delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel in form and substance reasonably satisfactory to Issuer and its counsel, to the effect that such legend is not required for purposes of the Securities Act. 5. Representations and Warranties of Issuer. Issuer hereby represents and warrants to Grantee as follows: (a) Issuer has all requisite corporate power and authority to enter into this Agreement and, subject to any approvals or consents referred to herein, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Issuer. This Agreement has been duly executed and delivered by Issuer. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance by Issuer with any of the provisions hereof will not (i) conflict with or result in a breach of any provision of its Certificate of Incorporation or Bylaws or a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, -3- condition or provisions of any note, bond, debenture, mortgage, indenture, license, material agreement or other material instrument or obligation to which Issuer is bound, or (ii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Issuer or any of its properties or assets. No Consent by any governmental or regulatory agency or authority, other than compliance with applicable federal and state securities laws or the filing of a notification under the HSR Act, is required of Issuer in connection with the execution and delivery by Issuer of this Agreement or the consummation by Issuer of the transactions contemplated hereby. (b) Issuer has taken all necessary corporate and other action to authorize and reserve and to permit it to issue, and, at all times from the date hereof until the obligation to deliver Issuer Common Stock upon the exercise of the Option terminates, will have reserved for issuance, upon exercise of the Option, the number of shares of Issuer Common Stock necessary for Holder to exercise the Option, and Issuer will take all necessary corporate action to authorize and reserve for issuance all additional shares of Issuer Common Stock or other securities which may be issued pursuant to Section 7 upon exercise of the Option. The shares of Issuer Common Stock to be issued upon due exercise of the Option, including all additional shares of Issuer Common Stock or other securities which may be issuable pursuant to Section 7, upon issuance pursuant hereto, shall be duly and validly issued, fully paid, and nonassessable, and shall be delivered free and clear of all liens, claims, charges, and encumbrances of any kind or nature whatsoever, including any preemptive rights of any stockholder of Issuer. (c) The authorized capital stock of Issuer consists of (i) 30,000,000 shares of Gazelle Common Stock, of which 16,347,064 shares are issued and outstanding at this date, and (ii) 1,000,000 shares of preferred stock, $.01 par value per share, none of which are issued and outstanding. Except as disclosed in Section 5.3(b) of the Gazelle Disclosure Memorandum, there are no other equity securities of Gazelle outstanding and no outstanding Equity Rights relating to the capital stock of Gazelle. 6. Representations and Warrants of Grantee. Grantee hereby represents and warrants to Issuer that: (a) Grantee has all requisite corporate power and authority to enter into this Agreement and, subject to any approvals or Consents referred to herein, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Grantee. This Agreement has been duly executed and delivered by Grantee. (b) This Option is not being, and any Option Shares or other securities acquired by Grantee upon exercise of the Option will not be, acquired with a view to the public distribution thereof and will not be transferred or otherwise disposed of except in a transaction registered or exempt from registration under the Securities Laws. 7. Adjustment upon Changes in Capitalization, etc. (a) In the event of any change in Issuer Common Stock by reason of a stock dividend, stock split, split-up, recapitalization, combination, exchange of shares or similar transaction, the type and number of shares or securities subject to the Option, and the Purchase Price therefor, shall be adjusted appropriately, and proper provision shall be made in the agreements governing such transaction so that Holder shall receive, upon exercise of the Option, the number and class of shares or other securities or property that Holder would have received in respect of Issuer Common Stock if the Option had been exercised immediately prior to such event, or the record date therefor, as applicable. If any additional shares of Issuer Common Stock are issued after the date of this Agreement (other than pursuant to an event described in the first sentence of this Section 7(a)), the number of shares of Issuer Common Stock subject to the Option shall be adjusted, without any further action by or on behalf of the Issuer or Holder, so that, after such issuance, it, together with any shares of Issuer Common Stock previously issued pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock then issued and outstanding, without giving effect to any shares subject to or issued pursuant to the Option. -4- (b) In the event that Issuer shall enter into an agreement: (i) to consolidate with or merge into any person, other than Grantee or one of its Subsidiaries, and shall not be the continuing or surviving corporation of such consolidation or merger; (ii) to permit any person, other than Grantee or one of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or surviving corporation, but, in connection with such merger, the then outstanding shares of Issuer Common Stock shall be changed into or exchanged for stock or other securities of Issuer or any other person or cash or any other property or the outstanding shares of Issuer Common Stock immediately prior to such merger shall after such merger represent less than 50% of the outstanding shares and share equivalents of the merged company; or (iii) to sell or otherwise transfer all or substantially all of its Assets to any person, other than Grantee or one of its Subsidiaries, then, and in each such case, the agreement governing such transaction shall make proper provisions so that the Option shall, upon the consummation of any such transaction and upon the terms and conditions set forth herein, be converted into, or exchanged for, an option (the "Substitute Option"), at the election of Holder, of either (x) the Acquiring Corporation (as defined below), (y) any person that controls the Acquiring Corporation, or (z) in the case of a merger described in clause (ii), the Issuer (in each case, such person being referred to as the "Substitute Option Issuer"). (c) The Substitute Option shall have the same terms as the Option, provided that, if the terms of the Substitute Option cannot, for legal reasons, be the same as the Option, such terms shall be as similar as possible and in no event less advantageous to Holder. The Substitute Option Issuer shall also enter into an agreement with each Holder of the Substitute Option in substantially the same form as this Agreement, which shall be applicable to the Substitute Option. (d) The Substitute Option shall be exercisable for such number of shares of the Substitute Common Stock (as hereinafter defined) as is equal to the Assigned Value (as hereinafter defined) multiplied by the number of shares of the Issuer Common Stock for which the Option was theretofore exercisable, divided by the Average Price (as hereinafter defined). The exercise price of the Substitute Option per share of the Substitute Common Stock (the "Substitute Purchase Price") shall then be equal to the Purchase Price multiplied by a fraction in which the numerator is the number of shares of the Issuer Common Stock for which the Option was theretofore exercisable and the denominator is the number of shares for which the Substitute Option is exercisable. (e) The following terms have the meanings indicated: (i) "Acquiring Corporation" shall mean (x) the continuing or surviving corporation of a consolidation or merger with Issuer (if other than Issuer), (y) Issuer in a merger in which Issuer is the continuing or surviving person, and (z) the transferee of all or any substantial part of the Issuer's assets (or the Assets of its Subsidiaries). (ii) "Substitute Common Stock" shall mean the common stock having the greatest voting rights to be issued by the Substitute Option Issuer upon exercise of the Substitute Option. (iii) "Assigned Value" shall mean the highest of (x) the price per share of the Issuer Common Stock at which a Tender Offer or Exchange Offer therefor has been made by any person (other than Grantee or any Subsidiary of Grantee), (y) the price per share of the Issuer Common Stock to be paid by any person (other than Grantee or any Subsidiary of Grantee) pursuant to an agreement with Issuer, and (z) the highest closing sales price per share of Issuer Common Stock quoted on the Nasdaq National Market (or if Issuer Common Stock is not quoted on the Nasdaq National Market, the highest bid price per share on any day as quoted on the principal trading market or securities exchange on which such shares are traded as reported by a recognized source chosen by Holder) within the 30-day period immediately preceding the agreement; provided, that in the event of a sale of less than all of Issuer's assets, the Assigned Value shall be the sum of the price paid in such sale for such assets and the current market value of the remaining assets of Issuer as determined by a nationally recognized investment banking firm selected by Holder (or by a majority in interest of the Holders if there shall be more than one Holder (a "Holder Majority")), divided by the number of shares of the Issuer Common Stock outstanding at the time of such sale. In the event that an exchange offer is made for the Issuer Common Stock or an agreement is entered into for a merger or -5- consolidation involving consideration other than cash, the value of the securities or other property issuable or deliverable in exchange for the Issuer Common Stock shall be determined by a nationally recognized investment banking firm mutually selected by Holder and Issuer (or if applicable, Acquiring Corporation), provided that if a mutual selection cannot be made as to such investment banking firm, it shall be selected by Holder. (If there shall be more than one Holder, any such selection shall be made by a Holder Majority.) (iv) "Average Price" shall mean the average closing price of a share of the Substitute Common Stock for the one year immediately preceding the consolidation, merger or sale in question, but in no event higher than the closing price of the shares of the Substitute Common Stock on the day preceding such consolidation, merger or sale; provided that if Issuer is the issuer of the Substitute Option, the Average Price shall be computed with respect to a share of common stock issued by Issuer, the person merging into Issuer or by any company which controls or is controlled by such merger person, as Holder may elect. (f) In no event pursuant to any of the foregoing paragraphs shall the Substitute Option be exercisable for more than 19.9% of the aggregate of the shares of the Substitute Common Stock outstanding prior to exercise of the Substitute Option. In the event that the Substitute Option would be exercisable for more than 19.9% of the aggregate of the shares of Substitute Common Stock but for this clause (f), the Substitute Option Issuer shall make a cash payment to Holder equal to the excess of (i) the value of the Substitute Option without giving effect to the limitation in this clause (f) over (ii) the value of the Substitute Option after giving effect to the limitation in this clause (f). This difference in value shall be determined by a nationally recognized investment banking firm selected by Holder (or a Holder Majority). (g) Issuer shall not enter into any transaction described in subsection (b) of this Section 7 unless the Acquiring Corporation and any person that controls the Acquiring Corporation assume in writing all the obligations of Issuer hereunder and take all other actions that may be necessary so that the provisions of this Section 7 are given full force and effect (including, without limitation, any action that may be necessary so that the shares of Substitute Common Stock are in no way distinguishable from or have lesser economic value than other shares of common stock issued by the Substitute Option Issuer). (h) The provisions of Sections 8, 9 and 10 shall apply, with appropriate adjustments, to any securities for which the Option becomes exercisable pursuant to this Section 7 and, as applicable, references in such sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock" shall be deemed to be references to "Substitute Option Issuer," "Substitute Option," "Substitute Purchase Price" and "Substitute Common Stock," respectively. 8. Repurchase at the Option of Holder. (a) Subject to the last sentence of Section 3(a), at the request of Holder at any time commencing upon the first occurrence of a Repurchase Event (as defined in Section 8(d)) and ending 12 months immediately thereafter, Issuer shall repurchase from Holder the Option and all shares of Issuer Common Stock purchased by Holder pursuant hereto with respect to which Holder then has beneficial ownership. The date on which Holder exercises its rights under this Section 8 is referred to as the "Request Date." Such repurchase shall be at an aggregate price (the "Section 8 Repurchase Consideration") equal to the sum of: (i) the aggregate Purchase Price paid by Holder for any shares of Issuer Common Stock acquired by Holder pursuant to the Option with respect to which Holder then has beneficial ownership; (ii) the excess, if any, of (x) the Applicable Price (as defined below) for each share of Issuer Common Stock over (y) the Purchase Price (subject to adjustment pursuant to Section 7), multiplied by the number of shares of Issuer Common Stock with respect to which the Option has not been exercised; and (iii) the excess, if any, of the Applicable Price over the Purchase Price (subject to adjustment pursuant to Section 7) paid (or, in the case of Option Shares with respect to which the Option has been exercised but the Closing Date has not occurred, payable) by Holder for each share of Issuer Common Stock -6- with respect to which the Option has been exercised and with respect to which Holder then has beneficial ownership, multiplied by the number of such shares. Notwithstanding the foregoing, in no event shall the sum of (A) the remainder obtained by subtracting (1) the aggregate Purchase Price paid from (2) the Section 8 Repurchase Consideration plus (B) all payments received by Gator, if any, under Section 11.2(b) of the Merger Agreement, exceed $24,000,000. (b) If Holder exercises its rights under this Section 8, Issuer shall, within ten business days after the Request Date, pay the Section 8 Repurchase Consideration to Holder in immediately available funds, and contemporaneously with such payment Holder shall surrender to Issuer the Option and the certificates evidencing the shares of Issuer Common Stock purchased thereunder with respect to which Holder then has beneficial ownership, and Holder shall warrant that it has sole record and beneficial ownership of such shares and that the same are then free and clear of all liens, claims, charges and encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the extent that prior notification to or Consent of any governmental or regulatory agency or authority is required in connection with the payment of all or any portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing option to revoke its request for repurchase pursuant to Section 8, in whole or in part, or to require that Issuer deliver from time to time that portion of the Section 8 Repurchase Consideration that it is not then so prohibited from paying and promptly file the required notice or application for Consent and expeditiously process the same (and each party shall cooperate with the other in the filing of any such notice or application and the obtaining of any such Consent). If any governmental or regulatory agency or authority disapproves of any part of Issuer's proposed repurchase pursuant to this Section 8, Issuer shall promptly give notice of such fact to Holder. If any governmental or regulatory agency or authority prohibits the repurchase in part but not in whole, then Holder shall have the right (i) to revoke the repurchase request or (ii) to the extent permitted by such agency or authority, determine whether the repurchase should apply to the Option and/or Option Shares and to what extent to each, and Holder shall thereupon have the right to exercise the Option as to the number of Option Shares for which the Option was exercisable at the Request Date less the sum of the number of shares covered by the Option in respect of which payment has been made pursuant to Section 8(a)(ii) and the number of shares covered by the portion of the Option (if any) that has been repurchased. Holder shall notify Issuer of its determination under the preceding sentence within five business days of receipt of notice of disapproval of the repurchase. (c) For purposes of this Agreement, the "Applicable Price" means the highest of (i) the highest price per share of Issuer Common Stock paid for any such share by the person or groups described in Section 8(d)(i), (ii) the price per share of Issuer Common Stock received by holders of Issuer Common Stock in connection with any merger or other business combination transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii) the highest closing sales price per share of Issuer Common Stock quoted on the Nasdaq National Market (or if Issuer Common Stock is not quoted on the Nasdaq National Market, the highest bid price per share as quoted on the principal trading market or securities exchange on which such shares are traded as reported by a recognized source chosen by Holder) during the 60 business days preceding the Request Date; provided, however, that in the event of a sale of less than all of Issuer's Assets, the Applicable Price shall be the sum of the price paid in such sale for such assets and the current market value of the remaining assets of Issuer as determined by an independent nationally recognized investment banking firm selected by Holder and reasonably acceptable to Issuer (which determination shall be conclusive for all purposes of this Agreement), divided by the number of shares of the Issuer Common Stock outstanding at the time of such sale. If the consideration to be offered, paid or received pursuant to either of the foregoing clauses (i) or (ii) shall be other than in cash, the value of such consideration shall be determined in good faith by an independent nationally recognized investment banking firm selected by Holder and reasonably acceptable to Issuer, which determination shall be conclusive for all purposes of this Agreement. (d) As used herein, "Repurchase Event" shall occur if (i) any person (other than Grantee or any Subsidiary of Grantee) shall have acquired beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), or the right to acquire beneficial ownership, or any "group" (as such term is defined under the Exchange Act) shall have been formed which beneficially owns or has the right to acquire beneficial ownership of 50% or more of the then-outstanding shares of Issuer Common Stock, or (ii) any of the transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) shall be consummated. -7- 9. Registration Rights. (a) Following termination of the Merger Agreement, Issuer shall, subject to the conditions of subparagraph (c) below, if requested by any Holder, including Grantee and any permitted transferee ("Selling Holder"), as expeditiously as possible prepare and file a registration statement under the Securities Laws if necessary in order to permit the sale or other disposition of any or all shares of Issuer Common Stock or other securities that have been acquired by or are issuable to Selling Holder upon exercise of the Option in accordance with the intended method of sale or other disposition stated by Holder in such request, including, without limitation, a "shelf" registration statement under Rule 415 under the Securities Act or any successor provision, and Issuer shall use its best efforts to qualify such shares or other securities for sale under any applicable state securities laws. (b) If Issuer at any time after the exercise of the Option proposes to register any shares of Issuer Common Stock under the Securities Laws in connection with an underwritten public offering of such Issuer Common Stock, Issuer will promptly give written notice to Holder of its intention to do so and, upon the written request of Holder given within 30 days after receipt of any such notice (which request shall specify the number of shares of Issuer Common Stock intended to be included in such underwritten public offering by Selling Holder), Issuer will cause all such shares, the holders of which shall have requested participation in such registration, to be so registered and included in such underwritten public offering; provided, that Issuer may elect to not cause any such shares to be so registered (i) if the underwriters in good faith object for valid business reasons, or (ii) in the case of a registration solely to implement a dividend reinvestment or similar plan, an employee benefit plan or a registration filed on Form S-4 or any successor form, or a registration filed on a form which does not permit registrations of resales; provided, further, that such election pursuant to clause (i) may only be made two times. If some but not all the shares of Issuer Common Stock, with respect to which Issuer shall have received requests for registration pursuant to this subparagraph (b), shall be excluded from such registration, Issuer shall make appropriate allocation of shares to be registered among Selling Holders and any other person (other than Issuer or any person exercising demand registration rights in connection with such registration) who or which is permitted to register their shares of Issuer Common Stock in connection with such registration pro rata in the proportion that the number of shares requested to be registered by each Selling Holder bears to the total number of shares requested to be registered by all persons then desiring to have Issuer Common Stock registered for sale. (c) Issuer shall use all reasonable efforts to cause each registration statement referred to in subparagraph (a) above to become effective and to obtain all consents or waivers of other parties which are required therefor and to keep such registration statement effective, provided, that Issuer may delay any registration of Option Shares required pursuant to subparagraph (a) above for a period not exceeding 90 days provided Issuer shall in good faith determine that any such registration would adversely affect an offering or contemplated offering of other securities by Issuer, and Issuer shall not be required to register Option Shares under the Securities Laws pursuant to subparagraph (a) above: (i) prior to the earliest of (a) termination of the Merger Agreement pursuant to Section 10.1 thereof, (b) failure to obtain the requisite stockholder approval pursuant to Section 9.1(a) of the Merger Agreement, and (c) a Purchase Event or a Preliminary Purchase Event; (ii) on more than two occasions; (iii) more than once during any calendar year; (iv) within 90 days after the effective date of a registration referred to in subparagraph (b) above pursuant to which the Selling Holders concerned were afforded the opportunity to register such shares under the Securities Laws and such shares were registered as requested; and (v) unless a request therefor is made to Issuer by Selling Holders holding at least 25% or more of the aggregate number of Option Shares then outstanding. -8- In addition to the foregoing, Issuer shall not be required to maintain the effectiveness of any registration statement after the expiration of 120 days from the effective date of such registration statement. Issuer shall use all reasonable efforts to make any filings, and take all steps, under all applicable state securities laws to the extent necessary to permit the sale or other disposition of the Option Shares so registered in accordance with the intended method of distribution for such shares, provided, that Issuer shall not be required to consent to general jurisdiction or qualify to do business in any state where it is not otherwise required to so consent to such jurisdiction or to so qualify to do business. (d) Except where applicable state law prohibits such payments, Issuer will pay all expenses (including without limitation registration fees, qualification fees, blue sky fees and expenses (including the fees and expenses of counsel), accounting expenses, legal expenses including the reasonable fees and expenses of one counsel to the Selling Holders, printing expenses, expenses of underwriters, excluding discounts and commissions but including liability insurance if Issuer so desires or the underwriters so require, and the reasonable fees and expenses of any necessary special experts) in connection with each registration pursuant to subparagraph (a) or (b) above (including the related offerings and sales by Selling Holders) and all other qualifications, notifications or exemptions pursuant to subparagraph (a) or (b) above. Underwriting discounts and commissions relating to Option Shares and any other expenses incurred by such Selling Holders in connection with any such registration shall be borne by such Selling Holders. (e) In connection with any registration under subparagraph (a) or (b) above Issuer hereby indemnifies the Selling Holders, and each underwriter thereof, including each person, if any, who controls such holder or underwriter within the meaning of Section 15 of the Securities Act, against all expenses, losses, claims, damages and liabilities caused by any untrue, or alleged untrue, statement of a material fact contained in any registration statement or prospectus or notification or offering circular (including any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such expenses, losses, claims, damages or liabilities of such indemnified party are caused by any untrue statement or alleged untrue statement that was included by Issuer in any such registration statement or prospectus or notification or offering circular (including any amendments or supplements thereto) in reliance upon and in conformity with, information furnished in writing to Issuer by such indemnified party expressly for use therein, and Issuer and each officer, director and controlling person of Issuer shall be indemnified by such Selling Holder, or by such underwriter, as the case may be, for all such expenses, losses, claims, damages and liabilities caused by any untrue, or alleged untrue, statement, that was included by Issuer in any such registration statement or prospectus or notification or offering circular (including any amendments or supplements thereto) in reliance upon, and in conformity with, information furnished in writing to Issuer by such holder or such underwriter, as the case may be, expressly for such use. Promptly upon receipt by a party indemnified under this subparagraph (e) of notice of the commencement of any action against such indemnified party in respect of which indemnity or reimbursement may be sought against any indemnifying party under this subparagraph (e), such indemnified party shall notify the indemnifying party in writing of the commencement of such action, but the failure so to notify the indemnifying party shall not relieve it of any liability which it may otherwise have to any indemnified party under this subparagraph (e). In case notice of commencement of any such action shall be given to the indemnifying party as above provided, the indemnifying party shall be entitled to participate in and, to the extent it may wish, jointly with any other indemnifying party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and satisfactory to such indemnified party. The indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel (other than reasonable costs of investigation) shall be paid by the indemnified party unless (i) the indemnifying party either agrees to pay the same, (ii) the indemnifying party falls to assume the defense of such action with counsel' satisfactory to the indemnified party, or (iii) the indemnified party has been advised by counsel that one or more legal defenses may be available to the indemnifying party that may be contrary to the interest of the indemnified party, in which case the indemnifying party shall be entitled to assume the defense of such action -9- notwithstanding its obligation to bear fees and expenses of such counsel. No indemnifying party shall be liable for any settlement entered into without its consent, which consent may not be unreasonably withheld. If the indemnification provided for in this subparagraph (e) is unavailable to a party otherwise entitled to be indemnified in respect of any expenses, losses, claims, damages or liabilities referred to herein, then the indemnifying party, in lieu of indemnifying such party otherwise entitled to be indemnified, shall contribute to the amount paid or payable by such party to be indemnified as a result of such expenses, losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative benefits received by Issuer, all selling stockholders and the underwriters from the offering of the securities and also the relative fault of Issuer, all selling stockholders and the underwriters in connection with the statements or omissions which resulted in such expenses, losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The amount paid or payable by a party as a result of the expenses, losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim; provided, that in no case shall any Selling Holder be responsible, in the aggregate, for any amount in excess of the net offering proceeds attributable to its Option Shares included in the offering. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Any obligation by any holder to indemnify shall be several and not joint with other holders. In connection with any registration pursuant to subparagraph (a) or (b) above, Issuer and each Selling Holder (other than Grantee) shall enter into an agreement containing the indemnification provisions of this subparagraph (e). (f) Issuer shall comply with all reporting requirements and will do all such other things as may be necessary to permit the expeditious sale at any time of any Option Shares by Holder in accordance with and to the extent permitted by any rule or regulation promulgated by the SEC from time to time, including, without limitation, Rules 144 and 144A. Issuer shall at its expense provide Holder with any information necessary in connection with the completion and filing of any reports or forms required to be filed by them under the Securities Laws, or required pursuant to any state securities laws or the rules of any stock exchange. (g) Issuer will pay all stamp taxes in connection with the issuance and the sale of the Option Shares and in connection with the exercise of the Option, and will save Holder harmless, without limitation as to time, against any and all liabilities, with respect to all such taxes. 10. Quotation; Listing. If Issuer Common Stock or any other securities to be acquired upon exercise of the Option are then authorized for quotation or trading or listing on the Nasdaq National Marketor any other securities exchange, Issuer, upon the request of Holder, will promptly file an application, if required, to authorize for quotation or trading or listing the shares of Issuer Common Stock or other securities to be acquired upon exercise of the Option on the Nasdaq National Market or any other securities exchange and will use its best efforts to obtain approval, if required, of such quotation or listing as soon as practicable. 11. Division of Option. This Agreement (and the Option granted hereby) are exchangeable, without expense, at the option of Holder, upon presentation and surrender of this Agreement at the principal office of Issuer for other Agreements providing for Options of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein include any other Agreements and related Options for which this Agreement (and the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like tenor and date. Any such new Agreement executed and delivered shall constitute an additional contractual obligation on the part of Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated shall at any time be enforceable by anyone. -10- 12. Miscellaneous. (a) Expenses. Except as otherwise provided in Section 9, each of the parties hereto shall bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including fees and expenses of its own financial consultants, investment bankers, accountants and counsel. (b) Waiver and Amendment. Any provision of this Agreement may be waived at any time by the party that is entitled to the benefits of such provision. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto. (c) Entire Agreement; No Third-Party Beneficiary; Severability. This Agreement, together with the Merger Agreement and the other documents and instruments referred to herein and therein, between Grantee and Issuer (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and (b) is not intended to confer upon any person other than the parties hereto (other than any transferees of the Option Shares or any permitted transferee of this Agreement pursuant to Section 12(h)) any rights or remedies hereunder. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or a federal or state governmental or regulatory agency or authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. If for any reason such court or regulatory agency determines that the Option does not permit Holder to acquire, or does not require Issuer to repurchase, the full number of shares of Issuer Common Stock as provided in Sections 3 and 8 (as adjusted pursuant to Section 7), it is the express intention of Issuer to allow Holder to acquire or to require Issuer to repurchase such lesser number of shares as may be permissible without any amendment or modification hereof. (d) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without regard to any applicable conflicts of law rules. (e) Descriptive Headings. The descriptive headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (f) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (with confirmation) or mailed by registered or certified mail (return receipt requested) to the parties at the addresses set forth in the Merger Agreement (or at such other address for a party as shall be specified by like notice). (g) Counterparts. This Agreement and any amendments hereto may be executed in two counterparts, each of which shall be considered one and the same agreement and shall become effective when both counterparts have been signed, it being understood that both parties need not sign the same counterpart. (h) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder or under the Option shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party, except that Grantee may assign this Agreement to a wholly owned Subsidiary of Grantee and Grantee may assign its rights hereunder in whole or in part after the occurrence of a Purchase Event. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. (i) Further Assurances. In the event of any exercise of the Option by Holder, Issuer and Holder shall execute and deliver all other documents and instruments and take all other action that may be reasonably necessary in order to consummate the transactions provided for by such exercise. -11- (j) Specific Performance. The parties hereto agree that this Agreement may be enforced by either party through specific performance, injunctive relief and other equitable relief. Both parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such equitable relief and that this provision is without prejudice to any other rights that the parties hereto may have for any failure to perform this Agreement. IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option Agreement to be signed by their respective officers thereunto duly authorized, all as of the day and year first written above. ATTEST: GULF SOUTH MEDICAL SUPPLY, INC. /s/ Thomas G. Hixon By:.____________________ By: ___________________________ [CORPORATE SEAL] ATTEST: PHYSICIAN SALES & SERVICE, INC. /s/ Patrick C. Kelley By:.____________________ By: ___________________________ [CORPORATE SEAL] -12- EX-4 4 AFFILIATE AGREEMENT EXHIBIT 4 AFFILIATE AGREEMENT ------------------- Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 Attention: Patrick C. Kelly David A. Smith Gentlemen: The undersigned is a shareholder of Gulf South Medical Supply, Inc. ("GSMS"), a corporation organized and existing under the laws of the State of Delaware, and will become a shareholder of Physician Sales & Service, Inc. ("PSS"), a corporation organized and existing under the laws of the State of Florida, pursuant to the transactions described in the Agreement and Plan of Merger, dated as of December 14, 1997 (the "Agreement"), by and among PSS, PSS Merger Corp. ("Merger Corp.") and GSMS. Under the terms of the Agreement, Merger Corp. will be merged into and with GSMS (the "Merger"), and the shares of the $.01 par value common stock of GSMS ("GSMS Common Stock") will be converted into and exchanged for shares of the $.01 par value common stock of PSS ("PSS Common Stock"). This Affiliate Agreement represents an agreement between the undersigned and PSS regarding certain rights and obligations of the undersigned in connection with the shares of PSS to be received by the undersigned as a result of the Merger. In consideration of the Merger and the mutual covenants contained herein, the undersigned and PSS hereby agree as follows: 1. Affiliate Status. The undersigned understands and agrees that as to ---------------- GSMS he is an "affiliate" under Rule 145(c) as defined in Rule 405 of the Rules and Regulations of the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended ("1933 Act"), and the undersigned anticipates that he will be such an "affiliate" at the time of the Merger. 2. Initial Restriction on Disposition. The undersigned agrees that he ---------------------------------- will not sell, transfer, or otherwise dispose of his interests in, or reduce his risk relative to, any of the shares of PSS Common Stock into which his shares of GSMS Common Stock are converted upon consummation of the Merger until such time as PSS notifies the undersigned that the requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met. The undersigned understands that ASR 130 and 135 relate to publication of financial results of post-Merger combined operations of PSS and GSMS. PSS agrees that it will publish such results as promptly as practicable following the Merger in the sole discretion of PSS, but in any event within 45 days after the end of the first fiscal quarter of PSS containing the required period of post-Merger combined operations and that it will notify the undersigned promptly following such publication. 3. Covenants and Warranties of Undersigned. The undersigned represents, --------------------------------------- warrants and agrees that: (a) The PSS Common Stock received by the undersigned as a result of the Merger will be taken for his own account and not for others, directly or indirectly, in whole or in part. (b) PSS has informed the undersigned that any distribution by the undersigned of PSS Common Stock has not been registered under the 1933 Act and that shares of PSS Common Stock received pursuant to the Merger can only be sold by the undersigned (1) following registration under the 1933 Act, or (2) in conformity with the volume and other requirements of Rule 145(d) promulgated by the SEC as the same now exist or may hereafter be amended, or (3) to the extent some other exemption from registration under the 1933 Act might be available. The undersigned understands that PSS is under no ------------------------------------------------ obligation to file a registration statement with the SEC covering the --------------------------------------------------------------------- disposition of the undersigned's shares of PSS Common ----------------------------------------------------- Stock or to take any other action necessary to make compliance with an ---------------------------------------------------------------------- exemption from such registration available. ------------------------------------------ (c) During the 30 days immediately preceding the Effective Time of the Merger, the undersigned has not sold, transfered, or otherwise disposed of his interests in, or reduced his risk relative to, any of the shares of GSMS Common Stock beneficially owned by the undersigned as of the record date for determination of shareholders entitled to vote at the Shareholders' Meeting of GSMS held to approve the Merger. (d) The undersigned is aware that PSS intends to treat the Merger as a tax- free reorganization under Section 368 of the Internal Revenue Code ("Code") for federal income tax purposes. The undersigned agrees to treat the transaction in the same manner as PSS for federal income tax purposes. The undersigned acknowledges that Section 1.368-1(b) of the Income Tax Regulations requires "continuity of interest" in order for the Merger to be treated as tax-free under Section 368 of the Code. This requirement is satisfied if, taking into account those GSMS shareholders who receive cash in exchange for their stock, who receive cash in lieu of fractional shares, or who dissent from the Merger, there is no plan or intention on the part of the GSMS shareholders to sell or otherwise dispose of the PSS Common Stock to be received in the Merger that will reduce such shareholders' ownership to a number of shares having, in the aggregate, a value at the time of the Merger of less than 50% of the total fair market value of the GSMS Common Stock outstanding immediately prior to the Merger. The undersigned has no prearrangement, plan or intention to sell or otherwise dispose of an amount of his PSS Common Stock to be received in the Merger which would cause the foregoing requirement not to be satisfied. 4. Restrictions on Transfer. The undersigned understands and agrees that ------------------------ stop transfer instructions with respect to the shares of PSS Common Stock received by the undersigned pursuant to the Merger will be given to PSS's transfer agent and that there will be placed on the certificates for such shares, or shares issued in substitution thereof, a legend stating in substance: "The shares represented by this certificate were issued pursuant to a business combination which is accounted for as a "pooling of interests" and may not be sold, nor may the owner thereof reduce his risks relative thereto in any way, until such time as PSS, Inc. ("PSS") has published the financial results covering at least 30 days of combined operations after the effective date of the merger through which the business combination was effected. In addition, the shares represented by this certificate may not be sold, transferred or otherwise disposed of except or unless (1) covered by an effective registration statement under the Securities Act of 1933, as amended, (2) in accordance with (i) Rule 145(d) (in the case of shares issued to an individual who is not an affiliate of PSS) or (ii) Rule 144 (in the --- case of shares issued to an individual who is an affiliate of PSS) of the Rules and Regulations of such Act, or (3) in accordance with a legal opinion satisfactory to counsel for PSS that such sale or transfer is otherwise exempt from the registration requirements of such Act." Such legend will also be placed on any certificate representing PSS securities issued subsequent to the original issuance of the PSS Common Stock pursuant to the Merger as a result of any transfer of such shares or any stock dividend, stock split, or other recapitalization as long as the PSS Common Stock issued to the undersigned pursuant to the Merger has not been transferred in such manner to justify the removal of the legend therefrom. Upon the request of the undersigned, PSS shall cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable after the requirements of ASR 130 and 135 have been met. In addition, if the provisions of Rules 144 and 145 are amended to eliminate restrictions applicable to the PSS Common Stock received by the undersigned pursuant to the Merger, or at the expiration of the restrictive period set forth in Rule 145(d), PSS, upon the request of the undersigned, will cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to the restrictions set forth in Rules 144 and 145(d) upon receipt by PSS of an opinion of its counsel to the effect that such legend may be removed. - 2 - 5. Understanding of Restrictions on Dispositions. The undersigned has --------------------------------------------- carefully read the Agreement and this Affiliate Agreement and discussed their requirements and impact upon his ability to sell, transfer, or otherwise dispose of the shares of PSS Common Stock received by the undersigned, to the extent he believes necessary, with his counsel or counsel for GSMS. 6. Filing of Reports by PSS. PSS agrees, for a period of three years ------------------------ after the effective date of the Merger, to file on a timely basis all reports required to be filed by it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, so that the public information provisions of Rule 145(d) promulgated by the SEC as the same are presently in effect will be available to the undersigned in the event the undersigned desires to transfer any shares of PSS Common Stock issued to the undersigned pursuant to the Merger. 7. Transfer Under Rule 145(d). If the undersigned desires to sell or -------------------------- otherwise transfer the shares of PSS Common Stock received by him in connection with the Merger at any time during the restrictive period set forth in Rule 145(d), the undersigned will provide the necessary representation letter to the transfer agent for PSS Common Stock together with such additional information as the transfer agent may reasonably request. If PSS's counsel concludes that such proposed sale or transfer complies with the requirements of Rule 145(d), PSS shall cause such counsel to provide such opinions as may be necessary to PSS's Transfer Agent so that the undersigned may complete the proposed sale or transfer. 8. Acknowledgments. The undersigned recognizes and agrees that the --------------- foregoing provisions also apply to all shares of the capital stock of GSMS and PSS that are deemed to be beneficially owned by the undersigned pursuant to applicable federal securities laws, which the undersigned agrees may include, without limitation, shares owned or held in the name of (i) the undersigned's spouse, (ii) any relative of the undersigned or of the undersigned's spouse who has the same home as the undersigned, (iii) any trust or estate in which the undersigned, the undersigned's spouse, and any such relative collectively own at least a 10% beneficial interest or of which any of the foregoing serves as trustee, executor, or in any similar capacity, and (iv) any corporation or other organization in which the undersigned, the undersigned's spouse and any such relative collectively own at least 10% of any class of equity securities or of the equity interest. The undersigned further recognizes that, in the event that the undersigned is a director or officer of PSS or becomes a director or officer of PSS upon consummation of the Merger, among other things, any sale of PSS Common Stock by the undersigned within a period of less than six months following the effective time of the Merger may subject the undersigned to liability pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended. 9. Miscellaneous. This Affiliate Agreement is the complete agreement ------------- between PSS and the undersigned concerning the subject matter hereof. Any notice required to be sent to any party hereunder shall be sent by registered or certified mail, return receipt requested, using the addresses set forth herein or such other address as shall be furnished in writing by the parties. This Affiliate Agreement shall be governed by the laws of the State of Delaware. - 3 - This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ William W. McInnes ___________________________ Signature William W. McInnes ___________________________ Print Name 116 30th Avenue S ____________________________ Nashville, TN 37212 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Edward Shulman ___________________________ Signature Edward Shulman ___________________________ Print Name 5909 Dalecross CT ____________________________ Glen Allen, VA 23060 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Donna C.E. Williamson ___________________________ Signature Donna C.E. Williamson ___________________________ Print Name ____________________________ ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ - 4 - This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ David L. Bogetz ___________________________ Signature David L. Bogetz ___________________________ Print Name ____________________________ ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Melvin L. Hecktman ___________________________ Signature Melvin L. Hecktman ___________________________ Print Name 530 Waters Edge Ct ____________________________ Northbrook, IL 60062 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Thomas G. Hixon ___________________________ Signature Thomas G. Hixon ___________________________ Print Name 165 Butler Drive ____________________________ Ridgeland, MS 39154 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Steve Richardson ___________________________ Signature Steve Richardson ___________________________ Print Name 194 Sunsan Road ____________________________ Madison, MS 39116 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Guy W. Edwards ___________________________ Signature Guy W. Edwards ___________________________ Print Name 567 Arbor Drive ____________________________ Madison, MS 39110 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Stanton Keith Pritchard ___________________________ Signature Stanton Keith Pritchard ___________________________ Print Name #3 Abbey Nord ____________________________ Jackson, MS 39216 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- This Affiliate Agreement is executed as of the 14th day of December, 1997. Very truly yours, /s/ Louie Vaughan ___________________________ Signature Louie Vaughan ___________________________ Print Name 318 Woodrun Drive ____________________________ Ridgeland, MS 39157 ____________________________ Address [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] ___________________________ Name: ___________________________ Name: ___________________________ Name: AGREED TO AND ACCEPTED as of December 14, 1997 PHYSICIAN SALES & SERVICE, INC. /s/ David A. Smith BY:_________________________ -4- -----END PRIVACY-ENHANCED MESSAGE-----