10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 2, 2009

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 0-23832

PSS WORLD MEDICAL, INC.

(Exact name of Registrant as specified in its charter)

Florida	59-2280364
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

4345 Southpoint Blvd.
Jacksonville, Florida	32216
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code (904) 332-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

The number of shares of common stock, par value $0.01 per share, of the registrant outstanding as of February 6, 2009 was 60,533,160 shares.

PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

JANUARY 2, 2009

TABLE OF CONTENTS

Item		Page
	Information Regarding Forward-Looking Statements	1
	Part I—Financial Information
1.	Financial Statements:
	Unaudited Condensed Consolidated Balance Sheets— January 2, 2009 and March 28, 2008	2
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 2, 2009 and December 28, 2007	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 2, 2009 and December 28, 2007	4
	Unaudited Notes to Condensed Consolidated Financial Statements	5
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
3.	Quantitative and Qualitative Disclosures About Market Risk	31
4.	Controls and Procedures	31
	Part II—Other Information
1A.	Risk Factors	31
2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
6.	Exhibits	34
	Signature	35

CAUTIONARY STATEMENTS

Forward-Looking Statements

Management may from time-to-time make written or oral statements with respect to the Company’s annual or long-term goals, including statements contained in this Quarterly Report on Form 10-Q, the Annual Report on Form 10-K for the fiscal year ended March 28, 2008, Reports on Form 8-K, and reports to shareholders that are “forward-looking statements” within the meaning, and subject to the protections of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical earnings and those currently anticipated or projected. Management cautions readers not to place undue reliance on any of the Company’s forward-looking statements, which speak only as of the date made.

Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” “assumes,” “should,” “indicates,” “projects,” “targets” and similar expressions identify forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q that involve risks and uncertainties include, without limitation:

• Management’s expectation that cash flows from operations, in conjunction with borrowings under the revolving line of credit, capital markets, and/or other financing arrangements will fund future working capital needs, capital expenditures, and the overall growth in the business; and its belief that the Company continues to be well positioned to weather the current crisis in the financial markets;

• Management’s expectation to use up to $150 million of the net proceeds from its August 4, 2008 debt issuance on or before March 15, 2024, when holders of the notes have the option to require the Company to redeem all or part of the outstanding 2.25% notes, with remaining proceeds used for general corporate purposes;

• Management’s belief that the outcome of legal proceedings or claims which are pending or known to be threatened will not have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations;

• Management’s expectation that remaining Federal and state net operating loss carryforwards will be utilized prior to their expiration date

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, management is identifying important factors that could affect the Company’s financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements about the Company’s goals or expectations. The Company’s future results could be adversely affected by a variety of factors, including those discussed in Item 1A-Risk Factors in the Company’s 2008 Form 10-K and this Form 10-Q. In addition, all forward-looking statements that are made by or attributable to the Company are qualified in their entirety by and should be read in conjunction with this cautionary notice and the risks described or referred to in Item 1A-Risk Factors of the Company’s 2008 Form 10-K and this Form 10-Q. The Company has no obligation to and does not undertake to update, revise, or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements are made.

PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

JANUARY 2, 2009 AND MARCH 28, 2008

(Dollars in Thousands)

	January 2,		March 28,
	2009		2008
ASSETS
Current Assets:
Cash and cash equivalents	$	214,709	$	21,122
Accounts receivable, net of allowance for doubtful accounts of $7,770 and $7,011 as of January 2, 2009 and March 28, 2008, respectively		232,894		237,248
Inventories		239,940		190,846
Prepaid expenses		3,420		3,146
Other current assets		19,815		56,086
Total current assets		710,778		508,448
Property and equipment, net of accumulated depreciation of $100,585 and $88,498 as of January 2, 2009 and March 28, 2008, respectively		96,088		90,680
Other Assets:
Goodwill		112,717		110,679
Intangibles, net of accumulated amortization of $19,034 and $17,834 as of January 2, 2009 and March 28, 2008, respectively		23,102		26,305
Investment in available for sale securities		15,333		11,318
Other		91,689		67,395
Total assets	$	1,049,707	$	814,825
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	155,133	$	135,930
Accrued expenses		43,170		46,056
Current portion of long-term debt		151,007		150,987
Revolving line of credit		50,000		70,000
Other		13,135		11,969
Total current liabilities		412,445		414,942
Long-term debt, excluding current portion		232,033		725
Other noncurrent liabilities		56,503		64,130
Total liabilities		700,981		479,797
Commitments and contingencies (Note 8)
Shareholders’ Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, no shares issued and outstanding		—		—
Common stock, $0.01 par value; 150,000,000 shares authorized, 60,527,861 and 61,847,679 shares issued and outstanding at as of January 2, 2009 and March 28, 2008, respectively		595		609
Additional paid in capital		164,551		195,657
Retained earnings		179,091		136,718
Accumulated other comprehensive income		4,489		2,044
Total shareholders’ equity		348,726		335,028
Total liabilities and shareholders’ equity	$	1,049,707	$	814,825

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JANUARY 2, 2009 AND DECEMBER 28, 2007

(In Thousands, Except Per Share Data)

	For the Three Months Ended						For the Nine Months Ended
	January 2,			December 28,			January 2,			December 28,
	2009			2007			2009			2007
Net sales	$	519,145		$	465,208		$	1,482,962		$	1,362,048
Cost of goods sold		364,282			330,215			1,041,912			966,831
Gross profit		154,863			134,993			441,050			395,217
General and administrative expenses		89,372			79,370			269,587			240,285
Selling expenses		33,721			31,508			97,148			91,823
Income from operations		31,770			24,115			74,315			63,109
Other (expense) income:
Interest expense		(3,964	)		(1,811	)		(8,576	)		(4,702	)
Interest and investment income		1,034			26			1,999			668
Other income, net		877			833			2,005			1,923
Other expense		(2,053	)		(952	)		(4,572	)		(2,111	)
Income before provision for income taxes		29,717			23,163			69,743			60,998
Provision for income taxes		11,559			9,001			27,370			23,666
Net income	$	18,158		$	14,162		$	42,373		$	37,332
Basic earnings per common share	$	0.31		$	0.22		$	0.70		$	0.57
Diluted earnings per common share	$	0.30		$	0.22		$	0.69		$	0.56
Weighted average common shares outstanding, Basic		59,481			63,999			60,125			65,533
Weighted average common shares outstanding, Diluted		60,322			65,756			60,971			67,195

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JANUARY 2, 2009 AND DECEMBER 28, 2007

(Dollars in Thousands)

	Nine Months Ended
	January 2, 2009			December 28, 2007
Cash Flows From Operating Activities:
Net income	$	42,373		$	37,332
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (benefit) for deferred income taxes		157			(1,391	)
Depreciation		14,695			14,029
Noncash compensation expense		5,032			3,051
Amortization of intangible assets		4,161			4,226
Provision for doubtful accounts		3,488			3,461
Provision for deferred compensation		797			1,197
Amortization of debt issuance costs		1,318			1,075
Loss on sales of property and equipment		78			24
Gain on sale of available for sale securities		(444	)		—
Changes in operating assets and liabilities, net of effects from business combinations:
Accounts receivable, net		1,618			(1,872	)
Inventories		(48,705	)		(37,939	)
Prepaid expenses and other current assets		2,177			(870	)
Other assets		(6,507	)		(8,408	)
Accounts payable		18,589			25,762
Accrued expenses and other liabilities		6,607			6,050
Net cash provided by operating activities		45,434			45,727
Cash Flows From Investing Activities:
Capital expenditures		(17,805	)		(13,760	)
Payments for business acquisitions, net of cash acquired		(2,994	)		(15,155	)
Proceeds from sale of available for sale securities		22,099			—
Payments for investment in available for sale securities		—			(24,064	)
Proceeds from note receivable		—			2,737
Other		(240	)		(111	)
Net cash provided by (used in) investing activities		1,060			(50,353	)
Cash Flows From Financing Activities:
Proceeds from issuance of convertible debt		230,000			—
Proceeds from issuance of warrants		25,368			—
Proceeds from exercise of stock options		5,992			2,316
Excess tax benefits from share-based compensation arrangements		1,664			1,270
Payment for purchase of hedge on convertible note		(54,096	)		—
Purchase of common stock		(35,709	)		(62,521	)
Net (payments) proceeds on the revolving line of credit		(20,000	)		32,550
Payment for debt issue costs		(5,147	)		—
Payments under capital lease obligations		(979	)		(616	)
Net cash provided by (used in) financing activities		147,093			(27,001	)
Net increase (decrease) in cash and cash equivalents		193,587			(31,627	)
Cash and cash equivalents, beginning of period		21,122			46,658
Cash and cash equivalents, end of period	$	214,709		$	15,031

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 2, 2009 AND DECEMBER 28, 2007

(In Thousands, Except Share and Per Share Data, Unless Otherwise Noted)

1. BACKGROUND AND BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been omitted pursuant to the SEC rules and regulations. The unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position and results of operations for the periods indicated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and include the consolidated accounts of PSS World Medical, Inc. and its wholly-owned subsidiaries as well as a variable interest entity for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company conducts business through two operating segments, the Physician Business and the Elder Care Business. These strategic segments serve a broad customer base. A third segment, Corporate Shared Services, includes allocated and unallocated costs of corporate departments which support the operating activities and various initiatives of the operating segments, and engage in certain other operating activities.

The consolidated balance sheet as of March 28, 2008 has been derived from the Company’s audited consolidated financial statements for the fiscal year ended March 28, 2008, except as noted in the Reclassification section, below. The financial statements and related notes included in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2008.

The Company reports its year-end and quarter-end financial position, results of operations, and cash flows as of the Friday closest to calendar month end, determined using the number of business days. Fiscal years 2009 and 2008 each consist of 52 weeks or 253 selling days, respectively. The three and nine months ended January 2, 2009 consisted of 66 and 193 selling days, respectively, while the three and nine months ended December 28, 2007 consisted of 62 and 189 selling days, respectively.

The results of operations for the interim periods covered by this report may not be indicative of operating results for the full fiscal year or any other interim periods.

Reclassification

During the first quarter of fiscal year 2009, the Company corrected the classification of it’s 2.25% $150.0 million convertible senior notes at March 28, 2008 from long-term debt to short-term debt, reflecting the one-day put option afforded to the holders of the notes on March 15, 2009 in accordance with the terms thereof. See Footnote 3, Debt, for additional information regarding the note holders’ put option. Under Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the quantitative and qualitative aspects of the adjustment and determined the correction was not material. There was no impact on the Company’s results of operations or cash flow statements for the fiscal year ended March 28, 2008.

Additionally, certain items previously reported in combined financial statement captions have been reclassified to conform to the current financial statement presentation. In particular, “Other current assets” and “Prepaid expenses” previously presented combined have been presented separate in the Unaudited condensed consolidated balance sheets.

5

PSS WORLD MEDICAL, INC. AND SUBSIDIARIES

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 2, 2009 AND DECEMBER 28, 2007

(In Thousands, Except Share and Per Share Data, Unless Otherwise Noted)

Marketable Securities

The Company reports marketable securities in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS 115”). The equity securities held by the Company at January 2, 2009 are classified as available-for-sale securities. Accordingly, amounts are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a component of shareholder’s equity. See Footnotes 2, 4 and 9, Equity Investment, Comprehensive Income, and Fair Value Measurements, respectively.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements by establishing a fair value hierarchy based on the quality of inputs used to measure fair value. SFAS 157 does not require any new fair value measurements, but applies to other accounting pronouncements that require or permit fair value measurements. SFAS 157 is effective for financial statements for fiscal years beginning after November 15, 2007. The Company adopted SFAS 157 on March 29, 2008 and adoption did not have a material impact on its financial position, results of operations or cash flows. FSP SFAS No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP SFAS 157-2”), delays the effective date of SFAS 157 with respect to nonfinancial assets and nonfinancial liabilities not remeasured at fair value on a recurring basis until fiscal years beginning after November 15, 2008, or the Company’s fiscal year 2010. Accordingly, the Company has not yet applied the requirements of SFAS 157 to certain such nonfinancial assets for which fair value measurements are determined only when there is an indication of potential impairment.

During February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB SFAS 115 (“SFAS 159”). SFAS 159 permits entities to choose to measure financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 mandates certain financial statement presentation and disclosure requirements when a company elects to report assets and liabilities at fair value under SFAS 159. SFAS 159 is effective for fiscal years beginning after November 15, 2007, or the Company’s fiscal year 2009. The Company adopted SFAS 159 on March 29, 2008 and adoption did not have an impact on its financial position, results of operations or cash flows.

In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset and the disclosure requirements under FASB Statement No. 142, Goodwill and Other Intangibles. FSP 142-3 requires that an entity consider its historical experience in renewing or extending similar arrangements in determining the useful life of a recognized intangible asset. Determining the useful life of a recognized intangible asset under FSP 142-3 applies prospectively to intangible assets acquired after the effective date. The disclosure requirements of FSP 142-3 will be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010, and interim periods within those fiscal years. Early adoption of FSP 142-3 is prohibited. The Company is currently assessing the effect, if any, the adoption of FSP 142-3 will have on its financial position, results of operations or cash flows.

In May 2008, the FASB issued FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1

6

requires entities with convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) to separately account for the liability and equity components in a manner that reflects an estimate of the entity’s nonconvertible debt borrowing rate when interest expense is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010. Entities are required to apply FSP APB 14-1 retrospectively for all periods presented. Upon adoption, the Company estimates FSP APB 14-1 will increase non-cash interest expense by $10.9 million (or approximately $6.7 million after-tax) and $7.7 million (or approximately $4.7 million after-tax) for fiscal year 2009 and fiscal year 2010, respectively.

In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-5”). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010. This pronouncement will not effect future reporting periods, as the Company currently accounts for their financial instruments under the guidance set forth by EITF 07-5.

Stock Repurchase Program

The Company repurchases its common stock under stock repurchase programs authorized by the Company’s Board of Directors. As of March 28, 2008, there were 0.4 million shares available for repurchase under existing stock repurchase programs. On April 2, 2008, the Company’s Board of Directors approved a stock repurchase program authorizing the Company, depending upon market conditions and other factors, to repurchase up to a maximum of 5% of its common stock, or approximately 3.1 million common shares, in the open market, in privately negotiated transactions, or otherwise. During the nine months ended January 2, 2009, primarily in connection with the debt offering, the Company repurchased approximately 2.1 million shares of common stock at an average price of $16.67 per common share for approximately $35.7 million. At January 2, 2009, approximately 1.4 million shares were available for repurchase under this program. The share repurchase program does not have an expiration date.

The following table summarizes the common stock repurchases and Board of Directors authorizations during the period from March 28, 2008 to January 2, 2009:

(in thousands)	Shares
Balance, March 28, 2008	403
Shares authorized for repurchase	3,093
Shares repurchased	(2,142	)
Balance, January 2, 2009	1,354

2. EQUITY INVESTMENT

On June 29, 2007, the Company invested $24,064 (including $1,564 of legal and other professional fees) in athenahealth, Inc. (“athena”), a leading provider of internet-based healthcare information technology and business services to physician practices. The Company classifies this investment as “available-for-sale” in accordance with SFAS 115. This investment was marked-to-market based on quoted market prices as of January 2, 2009. During the third quarter of fiscal year 2009, the Company sold a portion of its investment in athena, resulting in a gain of approximately $444, or $275 net of tax. Proceeds of $22,099 were received during the nine months ended January 2, 2009 related to the sale of athena stock during the third quarter of fiscal year 2009 and the fourth quarter of fiscal year 2008.

As of January 2, 2009, the aggregate fair value of the remaining investment is $15,333. During the three and nine months ended January 2, 2009, the Company recorded a net unrealized holding loss of $737, of which $457 was

7

recorded in other comprehensive income net of related income taxes of $280 and a net unrealized holding gain of $4,670, of which $2,898 was recorded in other comprehensive income net of related income taxes of $1,772, respectively.

3. DEBT

Debt consists of the following:

	As of
(in thousands)	January 2, 2009		March 28, 2008
Revolving line of credit	$	50,000	$	70,000
2.25% convertible senior notes		150,000		150,000
3.125% convertible senior notes		230,000		—
Capital lease obligations		3,040		1,712
Total debt		433,040		221,712
Less: Current portion of long-term debt(a)		201,007		220,987
Long-term debt	$	232,033	$	725

(a) During the first quarter of fiscal year 2009, the Company corrected the classification of its 2.25% $150.0 million convertible senior notes at March 28, 2008 from long-term debt to short-term debt. See Footnote 1, Background and Basis of Presentation, for additional information.

Revolving Line of Credit

The Company had $50.0 million in outstanding borrowings under the revolving line of credit at January 2, 2009. The Credit Agreement permits maximum borrowings of up to $200.0 million, which may be increased to $250.0 million at the Company’s discretion. After reducing availability for outstanding borrowings and letter of credit commitments, the Company had sufficient assets based on eligible accounts receivable and inventory to borrow up to $149.2 million (excluding the additional increase of $50.0 million) under the revolving line of credit. The average daily interest rate, excluding debt issuance costs and unused line fees, for the three months ended January 2, 2009 and December 28, 2007 was 4.30% and 6.51%. The average daily interest rate, excluding debt issuance costs and unused line fees, for the nine months ended January 2, 2009 and December 28, 2007 was 4.09% and 6.88%. This decrease in rates relates to the use of an interest rate swap agreement during fiscal year 2009, as discussed below.

On February 14, 2008, the Company entered into an interest rate swap agreement which matures on February 19, 2010. The purpose of this swap agreement was to hedge the variable interest rate of the revolving line of credit. The notional amount of the swap is $50.0 million. The interest rate swap effectively fixed the interest rate on a portion of the revolving line of credit to 2.70%, plus an applicable credit spread as determined by the Credit Agreement.

The interest rate swap has been designated as a cash flow hedge in accordance with the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133, and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. Therefore, changes in fair value are recognized in Accumulated other comprehensive income in the accompanying Consolidated balance sheets. Under the terms of the interest rate swap agreement, the Company makes monthly payments based on the fixed rate and receives interest payments based on 1-month LIBOR. The changes in market value of this financial instrument are highly correlated with changes in market value of the hedged item both at inception and over the life of the agreement. Amounts received or paid under the interest rate swap agreement are recorded as reductions or additions to interest expense. The unrealized holding loss on the interest rate swap for the three months ended January 2, 2009 represents the fair value adjustment of $1,363, of which $845 is recorded in other comprehensive income net of related income taxes of $518. The unrealized holding loss on the interest rate swap for the nine months ended January 2, 2009 represents the fair value adjustment of $731, of which $453 is recorded in other comprehensive income net of related income taxes of $278.

8

2.25% Convertible Senior Notes

During fiscal year 2004, the Company issued $150.0 million principal amount of 2.25% convertible senior notes, which mature on March 15, 2024. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year. Contingent interest is also payable during any six-month interest period, beginning with the six-month interest period commencing on March 15, 2009, if the average trading price of the notes for the five trading days ending on the second trading day immediately preceding such six-month interest period equals or exceeds 120% of the principal amount of the notes. The amount of contingent interest payable per note in respect of any six-month interest period is equal to 0.25% of the average trading price of a note for the trading period referenced above.

The notes may be converted into shares of the Company’s common stock under the following circumstances: (i) prior to March 15, 2019, during any calendar quarter that the closing sale price of the Company’s common stock for at least 20 of the 30 consecutive trading days ending the day prior to such quarter is greater than 120% of the applicable conversion price of $17.10 per share; (ii) if on any date after March 15, 2019, the closing sale price of the Company’s common stock is greater than 120% of the then applicable conversion price; (iii) during the five consecutive business day period following any five consecutive trading day period in which the trading price for a note for each day of that trading period is less than 98% of the closing sale price of the Company’s common stock on such corresponding trading day multiplied by the applicable conversion rate, provided that if the price of the Company’s common stock issuable upon conversion is between 100% and 120% of the applicable conversion price, then holders will be entitled to receive upon conversion only the value of the principal amount of the notes converted plus accrued and unpaid interest, including contingent interest, if any; (iv) if the Company has called the notes for redemption; (v) during any period in which the Company’s long-term issuer rating assigned by Moody’s Investor Services (“Moody’s”) is at or below Caa1 or the corporate credit rating assigned by Standard & Poor’s Ratings Services (“S&P”) is at or below B-, or if the Company is no longer rated by at least one of S&P or Moody’s; or (vi) upon the occurrence of specified corporate transactions described in the indenture governing the notes. The initial conversion rate is 58.4949 shares of common stock per each $1 (in thousands) principal amount of notes and is equivalent to an initial conversion price of $17.10 per share. The conversion rate is subject to adjustment if certain events occur, such as stock dividends or other distributions of cash, securities, indebtedness or assets; stock splits and combinations; issuances of rights or warrants; tender offers; or repurchases. Upon conversion, the Company has the right to deliver, in lieu of common stock, cash or a combination of cash and common stock. The Company’s stated policy is to satisfy the Company’s obligation upon a conversion of the notes first, in cash, in an amount equal to the principal amount of the notes converted and second, in shares of the Company’s common stock, to satisfy the remainder, if any, of the Company’s conversion obligation.

As of January 2, 2009, the fair value of the 2.25% $150.0 million convertible senior notes was approximately $167.9 million.

The ability of note holders to convert is assessed on a quarterly basis and is dependent on the trading price of the Company’s stock during the last 30 trading days of each quarter. The Contingent Conversion Trigger was not met during the three months ended January 2, 2009.

On each of March 15, 2009, March 15, 2014, and March 15, 2019, holders of the 2.25% $150.0 million convertible senior notes have the option to require the Company to purchase the notes at 100% of the principal amount of the notes plus accrued and unpaid interest, and other considerations, including contingent interest, if applicable (“put option”). As such, the 2.25% $150.0 million convertible senior notes have been classified as short-term debt on the Company’s Unaudited condensed consolidated balance sheet as of January 2, 2009. During the first quarter of fiscal year 2009, the Company corrected the classification of its 2.25% $150.0 million convertible senior notes at March 28, 2008 from long-term debt to short-term debt. See Footnote 1, Background and Basis of Presentation, for additional information.

On or after March 15, 2009, the Company has the right to redeem the notes in whole or in part at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, and other considerations, including contingent interest and liquidated damages, if any or applicable.

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As of January 2, 2009, the Company has a deferred income tax liability of $15,058 (tax effected) related to interest deductions taken for tax purposes on its 2.25% $150.0 million convertible senior notes. The ultimate tax liability will be dependent on the Company’s stock price at the time of settlement and will range from $0.00 to $17.0 million. Any such liability will be paid in the fiscal quarter following settlement and reflected in operating cash flows. Amounts paid, if any, would not have a material impact on the Company’s effective tax rate.

3.125% Convertible Senior Notes

In August 2008, the Company issued $230.0 million principal amount of 3.125% convertible senior notes, which mature on August 1, 2014. Interest on the notes is payable semiannually in arrears on February 1 and August 1 of each year. The notes will be convertible into cash up to the principal amount of the notes and shares of the Company’s common stock for any conversion value in excess of the principal amount under the following circumstances: (i) if the Company has called the notes for redemption; (ii) in the event of a fundamental change, as defined in the indenture, such as a merger, acquisition, or liquidation; (iii) on or after May 1, 2014 and prior to the close of business on the second scheduled trading day immediately preceding August 1, 2014; (iv) prior to May 1, 2014, during the five consecutive business day period following any five consecutive trading day period in which the trading price for a note for each day of that trading period is less than 98% of the closing sale price of the Company’s common stock on such corresponding trading day multiplied by the applicable conversion rate; (v) prior to May 1, 2014, during any calendar quarter after September 30, 2008 in which the closing sale price of the Company’s common stock for at least 20 of the 30 consecutive trading days ending the day prior to such quarter is greater than 130% of the applicable conversion price of $21.22 per share; or (vi) upon certain specified corporate events as discussed in the indenture governing the notes.

A note holder may not exercise its conversion right with respect to all or any portion of a note, if such conversion would cause the note holder to become a beneficial owner of more than 9.9% of the Company’s outstanding voting stock. The initial conversion rate is 47.1342 shares of common stock per each $1 (in thousands) principal amount of notes and is equivalent to an initial conversion price of $21.22 per share. The conversion rate is subject to adjustment upon the occurrence of certain events.

As of January 2, 2009, the fair value of the 3.125% $230.0 million convertible senior notes was approximately $237.1 million.

The ability of note holders to convert is assessed on a quarterly basis and is dependent on the trading price of the Company’s stock during the last 30 trading days of each quarter. The Contingent Conversion Trigger was not met during the three months ended January 2, 2009; therefore, the notes may not be converted during the Company’s fourth quarter of fiscal year 2009.

The Company used a portion of the net proceeds of the offering to repurchase approximately $35.0 million of its common stock in privately negotiated transactions with institutional investors concurrently with this offering. See Stock Repurchase Program in Footnote 1, Background and Basis of Presentation, for additional information. The Company anticipates using up to $150.0 million of the net proceeds on or before March 15, 2024, when holders of the notes have the option, as described above, to require the Company to redeem all or part of the outstanding 2.25% notes. Remaining proceeds will be used for general corporate purposes.

Convertible Note Hedge Transactions

In connection with the offering of the notes, the Company also entered into convertible note hedge transactions with respect to its common stock (the “purchased options”) with a major financial institution (the “counterparty”). The Company paid an aggregate amount of $54.1 million to the counterparty for the purchased options. The purchased options cover, subject to anti-dilution adjustments substantially identical to those in the notes, approximately 10.8 million shares of common stock at a strike price that corresponds to the initial conversion price of the notes, also subject to adjustment, and are exercisable at each conversion date of the notes. The purchased options will expire upon the earlier of (i) the last day the notes remain outstanding or (ii) the second scheduled trading day immediately preceding the maturity date of the notes.

The purchased options are intended to reduce the potential dilution upon conversion of the notes in the event that the market value per share of the common stock, as measured under the notes, at the time of exercise is greater than the

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conversion price of the notes. The options have been accounted for as an adjustment to the Company’s stockholders’ equity, net of deferred tax assets of $20,993, recorded in Other long term assets on the Unaudited condensed consolidate balance sheets.

The purchased options are separate transactions, entered into by the Company with the counterparty, and are not part of the terms of the notes. Holders of the notes will not have any rights with respect to the purchased options.

Warrant Transactions

The Company also entered into warrant transactions (the “warrants”), whereby the Company sold to the counterparty warrants in an aggregate amount of $25.4 million to acquire, subject to anti-dilution adjustments, up to 10.8 million shares of common stock at a strike price of $28.29 per share of common stock, also subject to adjustment. The warrants will expire after the purchased options in approximately ratable portions on a series of expiration dates commencing on November 3, 2015.

If the market value per share of the common stock, as measured under the warrants, exceeds the strike price of the warrants, the warrants will have a dilutive effect on the Company’s earnings per share. The warrants have been accounted for as an adjustment to the Company’s stockholders’ equity.

The warrants are separate transactions, entered into by the Company with the counterparties, and are not part of the terms of the notes. Holders of the notes do not have any rights with respect to the warrants.

4. COMPREHENSIVE INCOME

The following table includes the components of comprehensive income for the three and nine months ended January 2, 2009 and December 28, 2007:

	For the Three Months Ended					For the Nine Months Ended
	January 2,			December 28,		January 2,			December 28,
(in thousands)	2009			2007		2009			2007
Net income	$	18,158		$	14,162	$	42,373		$	37,332
Unrealized holding (losses) gains on available-for-sale investments, net of income taxes		(182	)		2,521		3,173			16,235
Reclassification adjustment for gains on available-for-sale investments included in net income		(275	)		—		(275	)		—
Unrealized holding losses on interest rate swap, net of income taxes		(845	)		—		(453	)		—
Comprehensive income	$	16,856		$	16,683	$	44,818		$	53,567

The unrealized holding gains and losses on available-for-sale investments relate to the Company’s investment in athena, as discussed in Footnote 2, Equity Investment.

The unrealized holding gains and losses on the interest rate swap relate to the Company’s revolving line of credit, as discussed in Footnote 3, Debt.

5. EARNINGS PER SHARE

Basic and diluted earnings per share are presented in accordance with SFAS No. 128, Earnings Per Share. Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period adjusted for the potential dilutive effect of stock options and restricted stock using the treasury stock method and the potential impact of outstanding convertible senior notes. Common equivalent shares are excluded from the computation in periods in which they have an antidilutive effect.

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The following table sets forth computational data for the denominator in the basic and diluted earnings per common share calculation for the three and nine months ended January 2, 2009 and December 28, 2007:

	For the Three Months Ended		For the Nine Months Ended
(in thousands)	January 2, 2009	December 28, 2007	January 2, 2009	December 28, 2007
Denominator-weighted average shares outstanding used in computing basic earnings per common share	59,481	63,999	60,125	65,533
Assumed exercise of stock options(a)	392	611	451	642
Assumed vesting of restricted stock	145	97	152	110
Assumed conversion of 2.25% convertible senior notes	304	1,049	243	910
Denominator-weighted average shares outstanding used in computing diluted earnings per common share(b)	60,322	65,756	60,971	67,195

(a) Options to purchase approximately 200,000 and 127 shares of outstanding common stock at January 2, 2009 and December 28, 2007, respectively, were not included in the computation of diluted earnings per share for each of the respective periods because the options’ inclusion would be antidilutive.

(b) The assumed conversion of the 3.125% convertible notes was not included in the computation of diluted earnings per share for the three and nine months ended January 2, 2009 as their inclusion would be antidilutive.

6. STOCK-BASED COMPENSATION

Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. The Company measures stock-based compensation at the grant date, based on the estimated fair value of the award, and recognizes the cost as compensation expense on a straight-line basis (net of estimated forfeitures) over the awards vesting period. The Company’s stock-based compensation expense is reflected in general and administrative expenses in the Unaudited condensed consolidated statements of operations.

Total stock-based compensation expense during the three months ended January 2, 2009 and December 28, 2007 was approximately $1,444 and $942, respectively, with related income tax benefits of $549 and $358, respectively. Total stock-based compensation expense during the nine months ended January 2, 2009 and December 28, 2007 was approximately $5,593 and $2,369, respectively, with related income tax benefits of $2,125 and $887, respectively.

The Company’s Unaudited condensed consolidated statements of cash flows present the stock-based compensation expense as an adjustment to reconcile net income to net cash used in operating activities for all periods presented. Income tax benefits of $1,664 and $1,270 associated with tax deductions in excess of recognized compensation expense are presented as a cash inflow from financing activities for the nine months ended January 2, 2009 and December 28, 2007, respectively.

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Outstanding stock-based awards granted under equity incentive plans as of January 2, 2009 and March 28, 2008 are as follows:

	Performance-Based Awards			Time-Based Awards			Stock Options
	Performance
	Shares	PARS
						Deferred
(in thousands)	Units	Shares		Shares		Units	Shares
Balance, March 28, 2008	99	610		344		9	1,774
Granted	122	191		79		—	200
Vested / Exercised	—	—		(154	)	—	(584	)
Forfeited	—	(34	)	(16	)	—	(63	)
Balance, January 2, 2009	221	767		253		9	1,327

Stock Option Awards

On June 6, 2008, the Compensation Committee of the Company’s Board of Directors approved a retention award of 200,000 stock options under the Company’s 2006 Incentive Stock Plan to the Company’s Chief Executive Officer. The stock options awarded will cliff-vest on the five-year anniversary of the grant date.

The fair value of stock options granted was estimated as of the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:

	2009
Expected dividend yield	—
Expected stock price volatility	29	%
Risk-free interest rate	1.75	%
Expected term of options (years)	10

Based on these assumptions, the estimated fair value of the options granted during the first quarter of fiscal year 2009 was approximately $1,481.

As of January 2, 2009, there was $1,308 of unrecognized compensation cost related to these options which is expected to be recognized over a weighted average period of 4.5 years.

Restricted Stock Awards

The Company issues (i) restricted stock which vests based on the recipient’s continued service over time (“Time-Based Awards”) and (ii) restricted stock or restricted stock units which vest based on the Company achieving specified performance measurements (“Performance-Based Awards”).

Time-Based Awards

The Company measures the fair value of Time-Based Awards on the date of grant based on the closing stock price. The related compensation expense is recognized on a straight-line basis net of estimated forfeitures over the vesting period, which normally ranges from 2 to 5 years.

Performance-Based Awards

During the first quarter of fiscal year 2009, the Company’s Compensation Committee of the Board of Directors (the “Committee”), approved awards of performance-based restricted stock units (“Performance Shares”) and performance-accelerated restricted stock (“PARS”) to the Company’s top six officers. These awards were granted under the Company’s 2006 Incentive Plan.

The Performance Shares will vest after three years and convert to shares of common stock based on the Company’s achievement of certain cumulative earnings per share growth targets, the calculation of

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which will not be impacted by any change in generally accepted accounting principles promulgated by standard setting bodies. These awards, which are denominated in terms of a target number of shares, will be forfeited if performance falls below a designated threshold level and may vest for up to 250% of the target number of shares for exceptional performance. The ultimate number of shares delivered to recipients and the related compensation cost recognized as expense will be based on actual performance.

The PARS awards will vest on the five-year anniversary of the grant date, subject to accelerated vesting after three years if the Company achieves a cumulative earnings per share growth target, the calculation of which will not be impacted by any change in generally accepted accounting principles promulgated by standard setting bodies. The Company measures stock-based compensation at the grant date, based on the estimated fair value of the award, and recognizes the cost as compensation expense on a straight-line basis (net of estimated forfeitures) over the awards’ vesting period of five years based on the Company’s estimate of its cumulative earnings per share growth rate. This estimate may be adjusted in future periods based on actual experience and changes in management assumptions.

As of January 2, 2009, there was $16,591 of unrecognized compensation cost related to non-vested restricted stock and restricted stock units granted under the stock incentive plans. The compensation cost related to these non-vested restricted stock grants is expected to be recognized over a weighted average period of 4.3 years.

7. SEGMENT INFORMATION

The Company’s reportable segments are strategic businesses that offer different products to different segments of the healthcare industry, and are the basis on which management regularly evaluates the Company. These segments are managed separately based on different customers and products. The Company evaluates the operating performance of its segments based primarily on net sales and income from operations. Corporate Shared Services allocates amounts to the two operating segments for shared operating costs and interest expense. The allocation of shared operating costs is generally proportional to the revenues of each operating segment. Interest expense is allocated based on internally calculated carrying value of historical capital used to acquire or develop the operating segments’ operations. The following tables present financial information about the Company’s business segments:

	For the Three Months Ended						For the Nine Months Ended
	January 2,			December 28,			January 2,			December 28,
	2009			2007			2009			2007
Net Sales:
Physician Business	$	357,269		$	326,520		$	1,030,416		$	952,936
Elder Care Business		161,874			138,688			451,765			409,112
Corporate Shared Services		2			—			781			—
Total net sales	$	519,145		$	465,208		$	1,482,962		$	1,362,048
Income from Operations:
Physician Business	$	32,156		$	23,804		$	80,529		$	63,230
Elder Care Business		8,717			6,491			22,569			18,041
Corporate Shared Services		(9,103	)		(6,180	)		(28,783	)		(18,162	)
Total income from operations	$	31,770		$	24,115		$	74,315		$	63,109
Income Before Provision for Income Taxes:
Physician Business	$	31,497		$	23,033		$	78,728		$	60,932
Elder Care Business		6,723			4,532			16,621			12,155
Corporate Shared Services		(8,503	)		(4,402	)		(25,606	)		(12,089	)
Total income before provision for income taxes	$	29,717		$	23,163		$	69,743		$	60,998

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	As of
	January 2,		March 28,
	2009		2008
Total Assets:
Physician Business	$	454,649	$	447,711
Elder Care Business		277,264		264,977
Corporate Shared Services		317,794		102,137
Total assets	$	1,049,707	$	814,825

8. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is party to various legal and administrative proceedings and claims arising in the normal course of business. While any litigation contains an element of uncertainty, the Company believes the outcome of proceedings or claims which are pending or known to be threatened will not have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations.

The Company has various insurance policies, including product liability insurance, covering risks and in amounts it considers adequate. In many cases in which the Company has been sued in connection with products manufactured by others, the Company is provided indemnification by the manufacturer. There can be no assurance that the insurance coverage maintained by the Company is sufficient or will be available in adequate amounts or at a reasonable cost, or that indemnification agreements will provide adequate protection for the Company, including agreements with foreign vendors.

Purchase Commitments

During fiscal year 2008, the Company entered into an agreement to purchase a minimum number of latex and vinyl gloves through February 2010. The pricing of the latex gloves may be periodically adjusted and is based on the price of raw latex as traded on the Malaysian Rubber Exchange. The pricing of the vinyl gloves may also be periodically adjusted and is based on the weighted price of two raw materials, Poly vinyl chloride (PVC) and Dioctylphthalate (DOP), as published on www.icis.com. These purchase commitments are valued at approximately $11,683 at January 2, 2009 based on management’s estimate of current pricing.

During October 2007, the Company entered into an exclusive distributor agreement with a supplier to purchase certain chemistry analyzers through September 2009. As of January 2, 2009, the purchase commitment was valued at approximately $1,492.

Commitments and Other Contingencies

The Company has employment agreements with certain executive officers which provide that in the event of their termination or resignation, under certain conditions, the Company may be required to pay severance to the executive officers in amounts ranging from one-fourth to two times their base salary and target annual bonus. In the event that a termination or resignation follows or is in connection with a change in control, the Company may be required to pay severance to the executive officers in amounts ranging from three-fourths to three times their base salary and target annual bonus. The Company may also be required to continue welfare benefit plan coverage for the executive officers following a termination or resignation for a period ranging from three months to three years.

If the Physician Business or the Elder Care Business were to terminate a contract with a vendor of its Select Medical Products brand (“Select”) for any reason, the Company may be required to purchase the remaining inventory of Select products from the vendor, provided that, in no event would the Company be required to purchase quantities of such products which exceed the aggregate amount of such products ordered by the Company in a negotiated time period immediately preceding the date of termination. As of January 2, 2009, the Company had no material obligations to purchase inventory from Select vendors due to contract terminations.

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9. FAIR VALUE MEASUREMENTS

As discussed in the Recent Accounting Pronouncements section of Footnote 1, Background and Basis of Presentation, the Company adopted SFAS 157 (as impacted by FSP 157-2) effective March 29, 2008, with respect to fair value measurements of (i) nonfinancial assets and liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis (at least annually) and (ii) all financial assets and liabilities.

SFAS 157 provides a framework for measuring fair value, expands disclosures about fair value measurements, and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:

Level 1: Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access.

Level 2: Financial assets and liabilities whose values are based on quoted prices in markets that are not active, or model inputs that are observable either directly or indirectly.

Level 3: Financial assets and liabilities whose values are based on prices or valuations that require inputs that are both significant to the fair value measurement and unobservable (i.e., an entity’s own data).

As of January 2, 2009, the Company’s financial assets and/or liabilities are categorized as Level 1 or Level 2. The following table presents the Company’s assets and liabilities which are measured at fair value on a recurring basis as of January 2, 2009, by level within the fair value hierarchy:

(in thousands)	Level 1		Level 2		Total
Assets:
Available-for-sale equity securities(a)	$	15,333	$	—	$	15,333
Total assets	$	15,333	$	—	$	15,333
Liabilities:
Interest rate swap(b)	$	—	$	1,056	$	1,056
Deferred compensation(c)		49,367		—		49,367
Total liabilities	$	49,367	$	1,056	$	50,423

(a) Relates to the Company’s investment in athenahealth, Inc., which is included in “Investment in available for sale securities” on the Company’s Unaudited condensed consolidated balance sheet. This investment is measured using quoted market prices.

(b) Relates to the Company’s interest rate swap on its revolving line of credit. See Footnote 3, Debt, for further information. The interest rate swap is valued using quoted market prices and significant observable inputs.

(c) Relates to the Company’s obligation to pay benefits under its non-qualified deferred compensation plans, which is included in “Other noncurrent liabilities” on the Company’s Unaudited condensed consolidated balance sheet. The obligation to pay benefits is based off of participants’ allocation percentages to plan investments. The investments are measured using quoted market prices.

As indicated in Footnote 1, Background and Basis of Presentation, FSP 157-2 delays the effective date of SFAS 157 with respect to nonfinancial assets and nonfinancial liabilities that are not remeasured at fair value on a recurring basis until fiscal years beginning after November 15, 2008. Accordingly, the Company has not yet applied the disclosure requirements of SFAS 157 to certain such nonfinancial assets for which fair value measurements are determined only when there is an indication of potential impairment.

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10. INCOME TAXES

The Company classifies interest and penalties related to income tax matters as a component of income tax expense. The total amount of accrued interest and penalties was approximately $93 as of March 28, 2008. There have been no material changes to this balance during the nine months ended January 2, 2009.

The tax years subject to examination by major tax jurisdictions include the fiscal year ended March 31, 2006 and forward by the U.S. Internal Revenue Service, and the fiscal year ended April 2, 2004 and forward for certain states.

The Company’s deferred tax asset and liability balances as of January 2, 2009 and March 28, 2008 are presented in the following table:

	As of
(in thousands)	January 2, 2009		March 28, 2008
Current deferred tax assets(a)	$	—	$	10,488
Noncurrent deferred tax assets(b)		30,376		—
Current deferred tax liabilities(c)	$	3,975	$	—

(a) Current deferred tax assets are included in Other current assets on the Unaudited condensed consolidated balance sheets

(b) Noncurrent deferred tax assets are included in Other assets on the Unaudited condensed consolidated balance sheets

(c) Current deferred tax liabilities are included in Other current liabilities on the Unaudited condensed consolidated balance sheets

The changes in the deferred tax account balances above resulted from the issuance of the 3.125% convertible senior notes and the reclassification of the 2.25% convertible senior notes as described in Footnote 3, Debt.

FIN 48 Disclosures

There were no significant changes to the Company’s uncertain tax positions in the nine months ended January 2, 2009. For a detail of the Company’s uncertain tax positions, please refer to Footnote 11, Income Taxes in the Company’s Annual Report Form 10-K for the fiscal year ended March 28, 2008, filed on May 23, 2008.

11. SUPPLEMENTAL CASH FLOW INFORMATION

The Company’s supplemental disclosures for the nine months ended January 2, 2009 and December 28, 2007 are as follows:

	Nine Months Ended
	January 2, 2009		December 28, 2007
Cash paid for:
Interest	$	3,787	$	2,789
Income taxes, net	$	20,930	$	23,513

During the nine months ended January 2, 2009, the Company had $2,306 in non-cash transactions relating to new capital lease obligations.

During the nine months ended December 28, 2007, the Company had $1,180 in non-cash transactions relating to new capital lease obligations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE COMPANY

PSS World Medical, Inc. (the “Company” or “PSSI”), a Florida corporation which began operations in 1983, is a national distributor of medical products, equipment, billing services and pharmaceutical related products to alternate-site healthcare providers including physician offices, long-term care and assisted living facilities, home health care and hospice providers through 39 full-service distribution centers, which serve all 50 states throughout the United States. The Company currently conducts business through two operating segments, the Physician Business and the Elder Care Business, which serve a diverse customer base.

PSSI is a market-leading company in the two alternate-site segments it serves as a result of value-added, solutions-based marketing programs; a differentiated customer distribution and service model; a consultative sales force with extensive product, disease state, reimbursement, and supply chain knowledge; unique arrangements with manufacturers; a full line of Select™ and specialty brand products; innovative information systems and technology that serve its core markets; innovative marketing programs; and a culture of performance.

EXECUTIVE OVERVIEW

During the third quarter of fiscal year 2009, the Company continued profitable growth despite the volatile economic environment. During the quarter, net sales grew 11.6% at the consolidated level and 9.4% and 16.7% in the Physician and Elder Care Businesses, respectively, when compared to the third quarter of fiscal year 2008. This was due to continued progress in the Company’s sales growth initiatives and four additional selling days during the current period. While there were four additional selling days during the current period, fiscal year 2008 and 2009 both consist of 253 selling days. Although average daily net sales grew during the three and nine months ended January 2, 2009 compared to prior year, sales per billing day growth has slowed during the three months ended January 2, 2009, attributable to a general downturn in the overall economy.

The Company recognized sales growth throughout all product lines within the Physician Business and across each customer segment within the Elder Care Business during the third quarter and year-to-date periods compared to the prior year. Select brand product sales grew 17.2% and 39.5% during the quarter and 18.1% and 30.1% during the year-to-date period in the Physician and Elder Care Businesses, respectively, which reflects the Company’s efforts to promote its globally-sourced brand through sales and marketing initiatives.

Income from operations of $31.8 million during the third quarter of fiscal year 2009 increased 31.7% or $7.7 million compared with the same period in prior year and increased 17.8% or $11.2 million to $74.3 million for the nine months ended January 2, 2009 compared to the prior year period. This was primarily the result of the net sales growth discussed above offset by increases in general and administrative expenses.

Cash flow from operations during the three and nine months ended January 2, 2009 was approximately $(6.9) and $45.4 million, respectively. Operating income growth offset by an investment in inventory and timing of an income tax payment resulted in negative operating cash flow during the current quarter.

With the tightening of business and consumer credit markets, the Company remains focused on credit management and the collection of its receivable balances, with additional investments in credit and collections training and continued focus on aged balances. During the third quarter of fiscal year 2009, days sales outstanding decreased from 42.4 days to 39.4 days in the Physician Business and from 50.2 days to 49.2 days in the Elder Care business, when compared to the same quarter in the prior year.

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The following significant event impacted the Company during the nine months ended January 2, 2009.

3.125% Convertible Senior Notes Offering

During the nine months ended January 2, 2009, the Company issued $230.0 million principal amount of 3.125% convertible senior notes. The Company used a portion of the net proceeds of the offering to repurchase approximately $35.0 million of its common stock in privately negotiated transactions with institutional investors concurrent with this offering. The Company also entered into convertible note hedge transactions with the initial purchaser and/or its affiliates and, separately, sold warrants to the initial purchaser and/or its affiliates. The Company used a portion of the net proceeds of the offering, and of the warrants it sold, to pay the costs of its hedge transactions. The Company anticipates using up to $150.0 million of the net proceeds on or before March 15, 2024, when holders of the notes have the option to require the Company to redeem all or part of the outstanding 2.25% notes. Remaining proceeds will be used for general corporate purposes. See Footnote 3, Debt, for additional information.

NET SALES

The following table summarizes net sales period over period.

	For the Three Months Ended						For the Nine Months Ended
	January 2, 2009		December 28, 2007				January 2, 2009		December 28, 2007
(dollars in millions)	Amount		Amount		Percent Change		Amount		Amount		Percent Change
Physician Business	$	357.2	$	326.5	9.4	%	$	1,030.4	$	952.9	8.1	%
Elder Care Business		161.9		138.7	16.7	%		451.8		409.1	10.4	%
Corporate Shared Services		—		—	0.0	%		0.8		—	100.0	%
Total Company	$	519.1	$	465.2	11.6	%	$	1,483.0	$	1,362.0	8.9	%

The comparability of net sales year over year was impacted by the number of selling days in each period. The three and nine months ended January 2, 2009 consisted of 66 and 193 selling days, respectively, while the three and nine months ended December 28, 2007 consisted of 62 and 189 selling days, respectively. Accordingly, although net sales increased 11.6% and 8.9% during the three and nine months ended January 2, 2009 compared to prior year, average daily net sales increased 4.8% and 6.6%, respectively, as shown in the following table.

	For the Three Months Ended						For the Nine Months Ended
	January 2, 2009		December 28, 2007				January 2, 2009		December 28, 2007
(dollars in millions)	Average Daily Net Sales		Average Daily Net Sales		Percent Change		Average Daily Net Sales		Average Daily Net Sales		Percent Change
Physician Business	$	5.4	$	5.3	2.8	%	$	5.3	$	5.0	5.9	%
Elder Care Business		2.5		2.2	9.6	%		2.3		2.2	8.1	%
Total Company	$	7.9	$	7.5	4.8	%	$	7.6	$	7.2	6.6	%

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Physician Business

Management evaluates the Physician Business by product category. The following table summarizes the growth rate by product category period over period.

	For the Three Months Ended						For the Nine Months Ended
(dollars in millions)	January 2, 2009		December 28, 2007		Percent Change		January 2, 2009		December 28, 2007		Percent Change
Branded(a)	$	184.6	$	170.1	8.5	%	$	532.2	$	501.1	6.2	%
Select(b)		44.1		37.6	17.2	%		125.8		106.5	18.1	%
Pharmaceuticals		80.4		72.0	11.6	%		236.4		213.5	10.7	%
Equipment		39.0		38.2	2.1	%		108.0		105.9	2.0	%
Immunoassay		6.6		6.4	3.4	%		20.5		19.7	3.7	%
Other		2.5		2.2	16.5	%		7.5		6.2	21.4	%
Total	$	357.2	$	326.5	9.4	%	$	1,030.4	$	952.9	8.1	%

(a) Branded products are comprised of disposables and lab diagnostics from branded manufacturers.

(b) Select products are comprised of the Company’s brand of disposables and lab diagnostics.

Net sales growth during the three and nine months ended January 2, 2009 was primarily driven by continued momentum in the consumable, equipment, pharmaceutical sales growth programs, in conjunction with extra selling days during the periods. Select product sales increased during the three and nine months ended January 2, 2009 due to the Company’s continued focus on promoting its globally-sourced Select products, which resulted in new customer sales as well as customer conversions from other manufacturer branded products to Select brand products. In spite of these conversions, branded product sales experienced an increase in volume resulting in period over period growth.

Pharmaceutical sales increased primarily as a result of growth in the Company’s non-controlled drugs product line and, in part, to the introduction of additional products to the Company’s offering during the first quarter of fiscal year 2009. The Company reentered the influenza vaccine market on an agency basis during fiscal year 2009. As such, the Company is relieved from inventory risk and recognizes fees received from its supplier on a net revenue recognition basis. Influenza vaccine sales contributed approximately $1.2 million and $2.4 million to revenue and gross profit during the three and nine months ended January 2, 2009.

Elder Care Business

Management evaluates the Elder Care business by customer segment. The following table summarizes the change in net sales by customer segment period over period.

	For the Three Months Ended						For the Nine Months Ended
(dollars in millions)	January 2, 2009		December 28, 2007		Percent Change		January 2, 2009		December 28, 2007		Percent Change
Nursing home and assisted living facilities	$	99.3	$	86.7	14.5	%	$	276.0	$	254.4	8.5	%
Hospice and home health care agencies		45.2		35.8	26.3	%		124.6		107.3	16.2	%
Billing services		3.7		3.3	12.7	%		11.5		9.7	18.1	%
Other		13.7		12.9	6.0	%		39.7		37.7	5.2	%
Total	$	161.9	$	138.7	16.7	%	$	451.8	$	409.1	10.4	%

Net sales during the three and nine months ended January 2, 2009 compared to the same periods in the prior year increased approximately $23.2 million and $42.7 million, respectively. The Company’s net sales growth in the hospice and home health care lines of business during the quarter benefited from an increase in independent home health agency sales and reflects the successful execution of its business growth strategies to diversify its customer base through expansion in the home health care

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market and other non-facilities based care and equipment providers. In addition, the nursing home and assisted living segment grew primarily from increased penetration into independent skilled nursing facilities, where sales grew 22.2% and 14.4% during the three and nine months ended January 2, 2009, when compared to the same periods in the prior year.

Across its Elder Care customer segments, Select product sales increased 39.5% and 30.1% during the three and nine months ended January 2, 2009, when compared to the same periods in the prior year due to the Company’s focus on promoting its globally sourced products.

GROSS PROFIT

Gross profit for the Physician and Elder Care Businesses increased $13.2 million and $6.7 million, respectively, from the same quarter in the prior year and $30.0 million and $15.7 million on a year to date basis. These increases were primarily due to the growth in net sales discussed above, as well as the Company’s continued focus on its sourcing strategies and margin enhancement initiatives. The Company’s sourcing strategies are designed to improve the Physician and Elder Care Business’ cost competitiveness and increase its gross margins on certain products.

GENERAL AND ADMINISTRATIVE EXPENSES

	For the Three Months Ended										For the Nine Months Ended
	January 2, 2009				December 28, 2007						January 2, 2009				December 28, 2007
(dollars in millions)	Amount		% of Net Sales		Amount		% of Net Sales		Increase		Amount		% of Net Sales		Amount		% of Net Sales		Increase
Physician Business(a)	$	49.4	13.8	%	$	46.3	14.2	%	$	3.1	$	151.0	14.7	%	$	142.6	15.0	%	$	8.4
Elder Care Business(a)		30.9	19.1	%		26.9	19.4	%		4.0		89.7	19.9	%		79.6	19.5	%		10.1
Corporate Shared Services(b)		9.1	1.8	%		6.2	1.3	%		2.9		28.9	1.9	%		18.1	1.3	%		10.8
Total Company(b)	$	89.4	17.2	%	$	79.4	17.1	%	$	10.0	$	269.6	18.2	%	$	240.3	17.6	%	$	29.3

^(a) General and administrative expenses as a percentage of net sales are calculated based on reportable segment net sales.

^(b) General and administrative expenses as a percentage of net sales are calculated based on consolidated net sales.

Physician Business

General and administrative expenses as a percentage of net sales decreased period over period due to leveraging of the Company’s assets over increased sales. Increases in general and administrative expenses are discussed below.

General and administrative expenses increased during the three months ended January 2, 2009, when compared to the same period in the prior year. This increase was attributable to (i) an increase of $1.5 million in payroll related expenses related to general merit increases and headcount increases in support of strategic growth initiatives and (ii) an increase of $1.3 million in bonus expense for the quarter, related to a combination of new incentive compensation plans introduced during fiscal year 2009 and operating performance.

General and administrative expenses increased during the nine months ended January 2, 2009, when compared to the same period in the prior year. This increase was primarily attributable to (i) an increase of $3.8 million in bonus expense for the year related to a combination of new incentive compensation plans introduced during fiscal year 2009 and operating performance; (ii) an increase of $3.3 million in payroll related charges; (iii) an increase of $1.3 million due to additional National Meeting expenses; and (iv) an increase of $1.0 million for relocation expenses due to the Company’s realignment of its organizational structure from four regions to six regions. Partially offsetting these increases are $1.3 million of costs incurred during the nine months ended December 28, 2007 related to the Company’s national launch of its Select and healthcare information technology marketing programs.

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Elder Care Business

General and administrative expenses increased during the three months ended January 2, 2009, when compared to the same period in the prior year. This increase was primarily attributable to (i) an increase of $1.8 million in payroll related charges and (ii) an increase of $1.1 million in freight costs due to increased sales and rising fuel prices.

General and administrative expenses increased during the nine months ended January 2, 2009, when compared to the same period in the prior year. This increase was primarily attributable to (i) an increase of $3.5 million in payroll related charges and (ii) an increase of $3.4 million in freight and net fuel costs due to increased sales and rising fuel prices.

Corporate Shared Services

General and administrative expenses for the three months ended January 2, 2009 increased $2.9 million when compared to the same period in the prior year. This increase is primarily attributable to an increase of $1.3 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009 and a $0.8 million increase in payroll related costs due to an increase in full-time employees and merit increases.

General and administrative expenses for the nine months ended January 2, 2009 increased $10.8 million when compared to the same period in the prior year. This increase is primarily attributable to (i) an increase of $7.0 million in bonus expense related to a combination of new incentive compensation plans introduced during fiscal year 2009, an increase in payout estimates based on management’s quarterly review of performance achievement and the reversal of $3.2 million in the first nine months of the prior year; (ii) a $3.0 million increase in payroll related costs due to an increase in full-time employees and merit increases; (iii) a $1.9 million increase in stock compensation expense related to new long-term incentive plans introduced during fiscal year 2008; and (iv) $1.8 million related to increases in medical insurance costs. Partially offsetting these increases is a $4.3 million decrease in settlement and legal costs related to the Florida Department of Health’s inspection of the Company’s operations for compliance with State Pedigree laws in fiscal year 2008.

SELLING EXPENSES

The following table summarizes selling expenses as a percentage of net sales period over period.

	For the Three Months Ended										For the Nine Months Ended
	January 2, 2009				December 28, 2007						January 2, 2009				December 28, 2007
(dollars in millions)	Amount		% of Net Sales		Amount		% of Net Sales		Increase		Amount		% of Net Sales		Amount		% of Net Sales		Increase
Physician Business	$	28.1	7.9	%	$	26.4	8.1	%	$	1.7	$	81.1	7.9	%	$	76.8	8.1	%	$	4.4
Elder Care Business		5.6	3.4	%		5.1	3.7	%		0.5		16.0	3.5	%		15.0	3.7	%		1.0
Total Company	$	33.7	6.5	%	$	31.5	6.8	%	$	2.2	$	97.1	6.6	%	$	91.8	6.7	%	$	5.4

Overall, the change in selling expenses is attributable to an increase in commission expense due to the growth in net sales discussed above. A majority of the Company’s sales representatives are fully commission-based. Commissions are generally paid to sales representatives based on gross profit dollars and gross profit as a percentage of net sales.

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PROVISION FOR INCOME TAXES

The following table summarizes the provision for income taxes period over period.

	For the Three Months Ended										For the Nine Months Ended
	January 2, 2009				December 28, 2007						January 2, 2009				December 28, 2007
(dollars in millions)	Amount		Effective Rate		Amount		Effective Rate		Increase		Amount		Effective Rate		Amount		Effective Rate		Increase
Total Company	$	11.6	38.9	%	$	9.0	38.9	%	$	2.6	$	27.4	39.2	%	$	23.7	38.8	%	$	3.7

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources Highlights

Cash flows from operations are primarily impacted by segment profitability and operational working capital. Management monitors operational working capital performance through the following:

	As of
	January 2, 2009	December 28, 2007
Days Sales Outstanding:(a)
Physician Business	39.6	42.4
Elder Care Business	49.2	50.2
Days On Hand:(b)
Physician Business	54.9	52.8
Elder Care Business	51.9	55.3
Days in Accounts Payable:(c)
Physician Business	41.2	46.2
Elder Care Business	25.7	28.0
Cash Conversion Days:(d)
Physician Business	53.3	49.0
Elder Care Business	75.4	77.5
Inventory Turnover:(e)
Physician Business	6.6x	6.8x
Elder Care Business	6.9x	6.5x

(a) Days sales outstanding (“DSO”) is average accounts receivable divided by average daily net sales. Average accounts receivable is the sum of accounts receivable, net of the allowance for doubtful accounts, at the beginning and end of the most recent four quarters divided by five. Average daily net sales are net sales for the most recent four quarters divided by 360.

(b) Days on hand (“DOH”) is average inventory divided by average daily cost of goods sold (“COGS”). Average inventory is the sum of inventory at the beginning and end of the most recent four quarters divided by five. Average daily COGS is COGS for the most recent four quarters divided by 360.

(c) Days in accounts payable (“DIP”) is average accounts payable divided by average daily COGS. Average accounts payable is the sum of accounts payable at the beginning and end of the most recent four quarters divided by five.

(d) Cash conversion days is the sum of DSO and DOH, less DIP.

(e) Inventory turnover is 360 divided by DOH.

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In addition to cash flow, the Company monitors other components of liquidity, including the following:

	As of
(dollars in millions)	January 2, 2009			March 28, 2009
Capital Structure:
Convertible senior notes	$	380.0		$	150.0
Revolving line of credit		50.0			70.0
Other debt		3.0			1.7
Cash and cash equivalents		(214.7	)		(21.1	)
Net debt		218.3			200.6
Shareholders’ equity		348.7			335.0
Total capital	$	567.0		$	535.6
Operational Working Capital:
Accounts receivable, net	$	232.9		$	237.2
Inventories		239.9			190.8
Accounts payable		(155.1	)		(135.9	)
	$	317.7		$	292.1

Cash Flows from Operating Activities

Net cash provided by operating activities during the nine months ended January 2, 2009 was primarily the result of overall operating profits partially offset by investments in operational working capital of approximately $28.5 million, which includes investments in inventory made during the quarter.

Cash flows from operating activities during the nine months ended January 2, 2009 and December 28, 2007 include the utilization of $1.0 million and $0.2 million (tax-effected), respectively, of net operating loss (“NOL”) carryforwards to offset cash payments due for Federal and state tax liabilities based on estimated taxable income. Cash flows from operating activities were also impacted by cash payments made and refunds received for Federal and state taxes.

As of January 2, 2009, the Company has $6.5 million (tax effected) of Federal and state NOL carryforwards and expects to utilize the remaining NOL carryforwards prior to their expiration date. Of the total NOL carryforwards, $4.6 relates to the acquisition of Activus Healthcare Solutions, Inc. and are expected to be utilized over the next 20 fiscal years.

As of January 2, 2009, the Company has a deferred income tax liability of $15.1 (tax effected) related to interest deductions taken for tax purposes on its 2.25% $150.0 million convertible senior notes. The ultimate tax liability will be dependent on the Company’s stock price at the time of settlement and will range from $0.0 to $17.0 million. Any such liability will be paid in the fiscal quarter following settlement and reflected in operating cash flows. Amounts paid, if any, will not impact the Company’s effective tax rate.

Cash Flows from Investing Activities

Net cash provided (used) by investing activities was $1.1 million and $(50.4) million during the nine months ended January 2, 2009 and December 28, 2007, respectively, and was primarily impacted by the following factors:

• On June 29, 2007, the Company acquired approximately a 5% equity ownership in athenahealth, Inc. for $24.1 million, including $1.6 million of legal and other professional fees, all of which was paid during the nine months ended December 28, 2007. During the third quarter of fiscal year 2009, the Company sold a portion of its investment in athena, resulting in a gain of approximately $0.4 million, $0.3 million net of tax. Proceeds of $22.1 million were received during the nine months ended January 2, 2009 related to the sale of athena stock during the third quarter of fiscal year 2009 and fourth quarter of fiscal year 2008.

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• Payments for business combinations, net of cash acquired, were $3.0 million and $15.2 million during the nine months ended January 2, 2009 and December 28, 2007, respectively, and consisted of the following:

During the nine months ended January 2, 2009, the Company acquired Cascade Medical Supply, a Washington-based distributor of Medicare Part B and Medicaid billing services and supplies to nursing and assisted living facilities. The maximum aggregate purchase price, after certain adjustments as set forth in the purchase agreement, was approximately $3.0 million (net of cash acquired of $0.1 million). Payments totaling $3.0 million were made during the nine months ended January 2, 2009 from cash on hand.

On May 31, 2007, the Company acquired the stock of Activus Healthcare Solutions, Inc. (“Activus”), a California-based distributor of medical supplies and pharmaceuticals to office-based physicians and surgery centers. The maximum aggregate purchase price, subject to certain adjustments as set forth in the purchase agreement, was approximately $13.2 million (net of cash acquired of $0.4 million). Payments totaling $13.2 million were made during the nine months ended December 28, 2007 from cash on hand.

On September 30, 2005, the Physician Business acquired Southern Anesthesia & Surgical, Inc. During the three months ended June 29, 2007, the Company made a final payment of $1.5 million, as outlined in the purchase agreement.

• Capital expenditures totaled $17.8 million and $13.8 million during the nine months ended January 2, 2009 and December 28, 2007, respectively, of which approximately $11.7 million and $8.5 million, respectively, related to development and enhancement of the Company’s ERP system, electronic commerce platforms, and supply chain integration. Capital expenditures related to distribution center expansions were approximately $3.4 million and $1.8 million during the nine months ended January 2, 2009 and December 28, 2007.

Cash Flows from Financing Activities

Net cash provided (used) by financing activities was $147.1 million and $(27.0) million during the nine months ended January 2, 2009 and December 28, 2007, respectively. Net cash provided or used by financing activities during the nine months ended January 2, 2009 and December 28, 2007, respectively, were mainly impacted by the following factors:

• The Company issued $230.0 million of 3.125% convertible senior notes during the nine months ended January 2, 2009. In conjunction with this offering the Company received $25.4 million from the issuance of warrants, paid $54.1 million for the purchase of a convertible note hedge, and paid debt issuance costs of approximately $5.1 million.

• The Company repurchased approximately 2.1 million shares of common stock at an average price of $16.67 per common share for approximately $35.7 million concurrently with the convertible debt offering. The Company repurchased approximately 3.5 million shares of common stock at an average price of $17.89 per common share for approximately $62.5 million during the nine months ended December 28, 2007.

• The Company received proceeds from the exercise of stock options of approximately $6.0 million and $2.3 million during the nine months ended January 2, 2009 and December 28, 2007, respectively. The Company recognized related excess tax benefits of $1.7 million and $1.3 million during the nine months ended January 2, 2009 and December 28, 2007, respectively.

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• The Company made net repayments of $20.0 million on its revolving line of credit during the nine months ended January 2, 2009. The Company borrowed approximately $32.6 million on its revolving line of credit during the nine months ended December 28, 2007.

Capital Resources

The capital and credit markets have recently experienced adverse conditions. The resulting restricted access to capital along with significant volatility within capital markets have increased the costs associated with issuing or refinancing debt because of increased risk spreads over relevant interest rate benchmarks. The Company continues to be well positioned to weather the current crisis in the financial markets, however, there can be no guarantee the recent disruptions in the overall economy and the financial markets will not adversely impact the business and results of operations.

The Company’s three main sources of capital are the proceeds from the 2.25% $150.0 million convertible senior notes offering, proceeds from the 3.125% $230.0 million convertible senior notes offering, and the $200.0 million revolving line of credit. These instruments provide the financial resources to support the business strategies of customer service and revenue growth. The revolving line of credit, which is an asset-based agreement, is primarily collateralized by the Company’s accounts receivable and inventory. The Company’s long-term priorities for use of capital are internal growth, acquisitions, and repurchase of the Company’s common stock.

2.25% $150 Million Convertible Senior Notes

The 2.25% $150.0 million convertible senior notes may be converted into shares of the Company’s common stock prior to March 15, 2019, during any calendar quarter that the closing sale price of the Company’s common stock for at least 20 of the 30 consecutive trading days ending the day prior to such quarter is greater than 120% of the applicable conversion price of $17.10 per share (or $20.51 per share) (“Contingent Conversion Trigger”). The ability of note holders to convert is assessed on a quarterly basis. The Contingent Conversion Trigger was not met during the three months ended January 2, 2009.

On each of March 15, 2009, March 15, 2014 and March 15, 2019, holders of the 2.25% $150.0 million convertible senior notes have the option to require the Company to purchase notes at 100% of the principal amount of the notes plus accrued and unpaid interest, and other considerations, including contingent interest, if applicable.

On or after March 15, 2009, the Company at any time has the right to redeem the notes in whole or in part at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, and other considerations, including contingent interest, if applicable.

As of January 2, 2009, the fair value of the 2.25% $150.0 million convertible senior notes was approximately $167.9 million.

As of January 2, 2009, the Company has a deferred income tax liability of $15.1 million (tax effected) related to interest deductions taken for tax purposes on its 2.25% $150.0 million convertible senior notes. The ultimate tax liability will be dependent on the Company’s stock price at the time of settlement and will range from $0.00 to $17.0 million. Any such liability will be paid in the fiscal quarter following settlement and reflected in operating cash flows. Amounts paid, if any, would not have a material impact on the Company’s effective tax rate.

During the first quarter of fiscal year 2009, the Company corrected the classification of the Company’s 2.25% $150.0 million convertible senior notes at March 28, 2008 from long-term debt to short-term debt, reflecting the one-day put option on March 15, 2009, afforded to the holders of the notes in accordance with the terms thereof. Under SAB 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the quantitative and qualitative aspects of the adjustment and determined the correction was not material. There was no impact on the Company’s results of operations or cash flow statements for the fiscal year ended March 28, 2008.

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3.125% $230 Million Convertible Senior Notes

In August 2008, the Company issued $230.0 million principal amount of 3.125% convertible senior notes, which mature on August 1, 2014. Interest on the notes is payable semiannually in arrears on February 1 and August 1 of each year. The notes will be convertible into cash up to the principal amount of the notes and shares of the Company’s common stock for any conversion value in excess of the principal amount under the following circumstances: (i) if the Company has called the notes for redemption; (ii )in the event of a Fundamental Change, such as a merger, acquisition, or liquidation; (iii) on or after May 1, 2014 and prior to the close of business on the second scheduled trading day immediately preceding August 1, 2014; (iv) prior to May 1, 2014, during the five consecutive business day period following any five consecutive trading day period in which the trading price for a note for each day of that trading period is less than 98% of the closing sale price of the Company’s common stock on such corresponding trading day multiplied by the applicable conversion rate; (v) prior to May 1, 2014, during any calendar quarter after September 30, 2008 in which the closing sale price of the Company’s common stock for at least 20 of the 30 consecutive trading days ending the day prior to such quarter is greater than 130% of the applicable conversion price of $21.22 per share; or (vi) upon specified corporate events as discussed in the indenture governing the notes.

A note holder may not exercise its conversion right with respect to all or any portion of a note, if such conversion would cause the note holder to become a beneficial owner of more than 9.9% of the Company’s outstanding voting stock. The initial conversion rate is 47.1342 shares of common stock per each $1 (in thousands) principal amount of notes and is equivalent to an initial conversion price of $21.22 per share. The conversion rate is subject to adjustment if certain events occur, such as stock dividends or other distributions of cash, securities, indebtedness or assets; stock splits and combinations; issuances of rights or warrants; tender offers; or repurchases.

As of January 2, 2009, the fair value of the 3.125% $230.0 million convertible senior notes was approximately $237.1 million.

The ability of note holders to convert is assessed on a quarterly basis and is dependent on the trading price of the Company’s stock during the last 30 trading days of each quarter. The Contingent Conversion Trigger was not met during the three months ended January 2, 2009; therefore, the notes may not be converted during the Company’s fourth quarter of fiscal year 2009.

The Company used a portion of the net proceeds of the offering to repurchase approximately $35.0 million of its common stock in privately negotiated transactions with institutional investors concurrently with this offering. See Stock Repurchase Program in Footnote 1, Background and Basis of Presentation, for additional information. The Company anticipates using up to $150.0 million of the net proceeds on or before March 15, 2024, when holders of the notes have the option, as described above, to require the Company to redeem all or part of the outstanding 2.25% notes. Remaining proceeds will be used for general corporate purposes.

Convertible Note Hedge Transactions

In connection with the offering of the notes, the Company also entered into convertible note hedge transactions with respect to its common stock (the “purchased options”) with a major financial institution, (the “counterparty”). The Company paid an aggregate amount of $54.1 million to the counterparty for the purchased options. The purchased options cover, subject to anti-dilution adjustments substantially identical to those in the notes, approximately 10.8 million shares of common stock at a strike price that corresponds to the initial conversion price of the notes, also subject to adjustment, and are exercisable at each conversion date of the notes. The purchased options will expire upon the earlier of (i) the last day the notes remain outstanding or (ii) the second scheduled trading day immediately preceding the maturity date of the notes.

The purchased options are intended to reduce the potential dilution upon conversion of the notes in the event that the market value per share of the common stock, as measured under the notes, at the time of exercise is greater than the conversion price of the notes.

The purchased options are separate transactions, entered into by the Company with the counterparty, and are not part of the terms of the notes. Holders of the notes will not have any rights with respect to the purchased options.

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Warrant Transactions

The Company also entered into warrant transactions (the “warrants”), whereby the Company sold to the counterparty warrants in an aggregate amount of $25.4 million to acquire, subject to anti-dilution adjustments, up to 10.8 million shares of common stock at a strike price of $28.29 per share of common stock, also subject to adjustment. The warrants will expire after the purchased options in approximately ratable portions on a series of expiration dates commencing on November 3, 2015.

If the market value per share of the common stock, as measured under the warrants, exceeds the strike price of the warrants, the warrants will have a dilutive effect on the Company’s earnings per share. The warrants have been accounted for as an adjustment to the Company’s stockholders’ equity.

The warrants are separate transactions, entered into by the Company with the counterparties, and are not part of the terms of the notes. Holders of the notes do not have any rights with respect to the warrants.

Revolving Line of Credit

The Company had $50.0 million in outstanding borrowings under the revolving line of credit at January 2, 2009. The Credit Agreement permits maximum borrowings of up to $200.0 million, which may be increased to $250.0 million at the Company’s discretion. After reducing availability for outstanding borrowings and letter of credit commitments, the Company had sufficient assets based on eligible accounts receivable and inventory to borrow up to $149.2 million (excluding the additional increase of $50.0 million) under the revolving line of credit. The average daily interest rate, excluding debt issuance costs and unused line fees, for the nine months ended January 2, 2009 and December 28, 2007 was 4.09% and 6.88%, respectively.

As the Company’s business grows, its cash and working capital requirements are expected to increase. The Company normally meets its operating requirements by maintaining appropriate levels of liquidity under its revolving line of credit and using cash flows from operating activities. The Company expects the overall growth in the business will be funded through a combination of cash flows from operating activities, borrowings under the revolving line of credit, capital markets, and/or other financing arrangements. During the nine months ended January 2, 2009 and December 28, 2007, the Company has not entered into any new material working capital commitments that require funding.

Debt Rating

The Company’s debt is rated by a nationally recognized rating agency, Standard and Poor’s Ratings Services (“S&P”). Companies that have assigned ratings at the top end of the range have, in the opinion of the rating agency, the strongest capacity for repayment of debt or payment of claims, while companies at the bottom end of the range have the weakest capability. On October 10, 2008, S&P revised its ratings outlook from stable to positive and reaffirmed the Company’s credit rating of “BB.” This revision was attributable to the Company’s solid operating performance and its ability to manage credit in the current environment. Agency ratings are always subject to change, and there can be no assurance that a ratings agency will continue to rate the Company or its debt, and/or maintain its current ratings. Management cannot predict the effect that a negative change in debt ratings will have on the Company’s liquidity or whether the Company will maintain adequate ratings as required by the 2.25% convertible notes indenture. Additionally, any decreases in the Company’s debt rating could impact the Company’s convertible notes, as holders may present the notes for redemption should the Company’s debt rating fall below a certain level.

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Future Contractual Obligations

In the normal course of business, the Company enters into obligations and commitments that require future contractual payments. The following table presents, in aggregate, scheduled payments under contractual obligations for the Physician Business, the Elder Care Business, and Corporate Shared Services:

	Fiscal Years
(in thousands)	2009		2010		2011		2012		2013		Thereafter		Total
Revolving line of credit(a), (b)	$	587	$	2,338	$	2,250	$	2,250	$	51,125	$	—	$	58,550
2.25% convertible senior notes(b), (c)		151,688		—		—		—		—		—		151,688
3.125 % convertible senior notes(b), (d)		3,534		7,188		7,188		7,188		7,188		240,781		273,067
Outstanding letters of credit		—		783		—		—		—		—		783
Operating lease obligations(e)		6,073		22,664		18,164		14,305		9,093		10,233		80,532
Capital lease obligations(b)		360		1,093		1,042		859		9		—		3,363
Purchase commitments(f), (g), (h)		3,243		10,169		—		—		—		—		13,412
Outstanding purchase price(i)		750		750		—		—		—		—		1,500
Total(j)	$	166,235	$	44,985	$	28,644	$	24,602	$	67,415	$	251,014	$	582,895

(a) The revolving line of credit is classified as a current liability in accordance with Emerging Issues Task Force No. 95-22, Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements That Include both a Subjective Acceleration Clause and a Lock-Box Arrangement; however, the credit facility does not expire until September 30, 2012. The Company is not obligated to repay or refinance amounts outstanding under the revolving line of credit until September 30, 2012. Interest expense has been estimated using current level borrowings outstanding at current effective interest rates. Actual interest expense may differ due to changes in interest rates or levels of borrowings.

(b) Amounts include interest expense.

(c) The 2.25% $150.0 million convertible debt due 2024 is classified as short term due to a one-day put option on March 15, 2009. See additional provisions relating to the Company’s debt in Footnote 3, Debt.

(d) The 3.125% $230.0 million convertible debt, due 2014 is discussed further in Footnote 3, Debt.

(e) Amounts represent contractual obligations for operating leases of the Company as of January 2, 2009. Currently, it is management’s intent to either renegotiate existing leases or execute new leases prior to or upon their expiration date of such agreements.

(f) If the Physician Business or the Elder Care Business were to terminate a contract with a vendor of its Select Medical Products brand (“Select”) for any reason, the Company may be required to purchase the remaining inventory of Select products from the vendor, provided that, in no event would the Company be required to purchase quantities of such products which exceed the aggregate amount of such products ordered by the Company in a negotiated time period immediately preceding the date of termination. As of January 2, 2009, the Company had no material obligations to purchase inventory from Select vendors due to contract terminations.

(g) During the fourth quarter of fiscal year 2008, the Company entered into an agreement to purchase a minimum number of latex and vinyl gloves through February 2010. The pricing of the latex gloves may be periodically adjusted and is based on the price of raw latex as traded on the Malaysian Rubber Exchange. The pricing of the vinyl gloves may also be periodically adjusted and is based on the weighted price of two raw materials, Poly vinyl chloride (PVC) and Dioctylphthalate (DOP), as published on www.icis.com. These purchase commitments are valued at approximately $11.7 million at January 2, 2009 and are based on management’s estimate of current pricing.

(h) During October 2007, the Company entered into an exclusive distributor agreement with a supplier to purchase certain chemistry analyzers through September 2009. As of January 2, 2009, the purchase commitment was valued at approximately $1,492.

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(i) Amounts represent estimated additional consideration, including interest, to be paid to the sellers of previously acquired businesses, net of any amounts payable to the Company for indemnity claims that arise under the purchase agreement.

(j) As of January 2, 2009, the Company had gross unrecognized tax benefits of $2.4 million. This amount is excluded from the table above as the Company cannot reasonably estimate the period of cash settlement with the respective taxing authorities.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

Critical Accounting Estimates are disclosed in the Annual Report on Form 10-K for the fiscal year ended March 28, 2008 filed on May 23, 2008 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes in the Company’s Critical Accounting Estimates, as disclosed in the Annual Report.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements by establishing a fair value hierarchy based on the quality of inputs used to measure fair value. SFAS 157 does not require any new fair value measurements, but applies to other accounting pronouncements that require or permit fair value measurements. SFAS 157 is effective for financial statements for fiscal years beginning after November 15, 2007. The Company adopted SFAS 157 on March 29, 2008 and adoption did not have a material impact on its financial position, results of operations or cash flows. FSP SFAS No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP SFAS 157-2”), delays the effective date of SFAS 157 with respect to nonfinancial assets and nonfinancial liabilities not remeasured at fair value on a recurring basis until fiscal years beginning after November 15, 2008, or the Company’s fiscal year 2010. Accordingly, the Company has not yet applied the requirements of SFAS 157 to certain such nonfinancial assets for which fair value measurements are determined only when there is an indication of potential impairment.

During February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB SFAS 115 (“SFAS 159”). SFAS 159 permits entities to choose to measure financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 mandates certain financial statement presentation and disclosure requirements when a company elects to report assets and liabilities at fair value under SFAS 159. SFAS 159 is effective for fiscal years beginning after November 15, 2007, or the Company’s fiscal year 2009. The Company adopted SFAS 159 on March 29, 2008 and adoption did not have an impact on its financial position, results of operations or cash flows.

In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset and the disclosure requirements under FASB Statement No. 142, Goodwill and Other Intangibles. FSP 142-3 requires that an entity consider its historical experience in renewing or extending similar arrangements in determining the useful life of a recognized intangible asset. Determining the useful life of a recognized intangible asset under FSP 142-3 applies prospectively to intangible assets acquired after the effective date. The disclosure requirements of FSP 142-3 will be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010, and interim periods within those fiscal years. Early adoption of FSP 142-3 is prohibited. The Company is currently assessing the effect, if any, the adoption of FSP 142-3 will have on its financial position, results of operations or cash flows.

In May 2008, the FASB issued FASB Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1 requires entities with convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) to separately account for the liability and equity components in a manner that reflects an estimate of the entity’s nonconvertible debt borrowing rate when interest expense is recognized in subsequent periods.

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FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010. Entities are required to apply FSP APB 14-1 retrospectively for all periods presented. Upon adoption, the Company estimates FSP APB 14-1 will increase non-cash interest expense by $10.9 million (or approximately $6.7 million after-tax) and $7.7 million (or approximately $4.7 million after-tax) for fiscal year 2009 and fiscal year 2010, respectively.

In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-5”). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008, or the Company’s fiscal year 2010. This pronouncement will not effect future reporting periods, as the Company currently accounts for their financial instruments under the guidance set forth by EITF 07-5.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes there has been no material change in its exposure to market risk from that discussed in Item 7A in the Annual Report on Form 10-K for the fiscal year ended March 28, 2008 filed on May 23, 2008.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 240.15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on the evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, is accumulated and communicated to the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the nine months ended January 2, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, investors should carefully consider the factors discussed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report Form 10-K for the fiscal year ended March 28, 2008, filed on May 23, 2008. Such factors could have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company has potential exposure to risks other than those described in the Company’s Annual Report on Form 10-K. Additional risks and uncertainties not currently known to management, or risks that management currently deem to be immaterial, could have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

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Except as set forth below, there have been no material changes from the risk factors disclosed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report Form 10-K for the fiscal year ended March 28, 2008.

Cost increases for the Company’s products may impact the Company’s results of operations.

Some of the Company’s suppliers have and may continue to accelerate cost increases for products distributed by the Company. While the Company is taking steps to mitigate the effect of these cost increases, there can be no assurance that these cost increases will not materially adversely impact the Company’s gross margins, financial condition, and results of operations.

General economic conditions, a decline in consumer spending or other conditions may materially adversely impact the Company’s sales in a disproportionate fashion.

Current and future economic conditions and other factors including consumer confidence, employment levels, interest rates, tax rates, consumer debt levels, the threat or outbreak of terrorism, fuel and energy costs and the availability of consumer credit, and the impact of state budget deficits on Medicare and Medicaid reimbursement could reduce consumer spending or change consumer purchasing habits. A general slowdown in the U.S. economy or in the global economy, or an uncertain economic outlook, could materially adversely affect consumer spending habits and our operating results.

President Barack Obama has identified health care reform as a key priority of his administration. Publicly disclosed initiatives include increased availability of insurance, funding for the use of health care information technology, promotion of patient safety, and efficiencies in Medicare and Medicaid. It is unclear at this time what laws and regulations may ultimately be enacted and what impact such laws and regulations will have on the purchasing pattern of the Company’s customers, and as a result, the Company’s financial condition, results of operations and cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Sales and Purchases of Equity Securities

The Company repurchases its common stock under stock repurchase programs authorized by the Company’s Board of Directors. As of March 28, 2008, there were 0.4 million shares available for repurchase under existing stock repurchase programs. On April 2, 2008, the Company’s Board of Directors approved a stock repurchase program authorizing the Company, depending upon market conditions and other factors, to repurchase up to a maximum of 5% of its common stock, or approximately 3.1 million common shares, in the open market, in privately negotiated transactions, or otherwise. The share repurchase program does not have an expiration date. During the second quarter of fiscal year 2009, the Company issued $230 million principal amount of 3.125% convertible senior notes and used a portion of the net proceeds to repurchase approximately 2.1 million shares of common stock at an average price of $16.64 per common share for approximately $35 million. Agreements relating to the issuance of the convertible senior notes were previously described in the Company’s Current Report on Form 8-K filed on August 12, 2008.

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The following table summarizes the Company’s repurchase activity during the three months ended January 2, 2009.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May yet be Purchased Under the Plans or Programs
September 27 - November 2	3,843	(a)	$	17.33	3,843	1,353,771
November 3 - December 2	—			—	—	1,353,771
December 3 - January 2	—			—	—	1,353,771
Total third quarter	3,843		$	17.33	3,843	1,353,771

(a) Includes shares repurchased for net share settlement of employee share-based awards.

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ITEM 6. EXHIBITS

(a) Exhibits required by Item 601 of Regulation S-K:

Exhibit Number	Description
3.1	Restatement of Amended and Restated Articles of Incorporation, dated December 12, 2008 (1)
3.2	Amended and Restated Bylaws, dated December 12, 2008 (1)
10.1	Eighth Amendment to the Amended and Restated Savings Plan
10.2	Amended and Restated Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 29, 2008, by and between the Company and David A. Smith
10.3	Amended and Restated Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 30, 2008, by and between the Company and David M. Bronson
10.4	Amended and Restated Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 30, 2008, by and between the Company and John F. Sasen Sr.
10.5	Amended and Restated Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 29, 2008, by and between the Company and Gary A. Corless
10.6	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 30, 2008, by and between the Company and Kevin P. English
10.7	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 30, 2008, by and between the Company and Bradley J. Hilton
10.8	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 28, 2008, by and between the Company and Jeffrey H. Anthony
10.9	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 31, 2008, by and between the Company and David D. Klarner
10.10	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 30, 2008, by and between the Company and Robert C. Weiner
10.11	Amendment to Employment Agreement related to Section 409A, of the Internal Revenue Code, dated as of December 28, 2008, by and between the Company and Joshua H. DeRienzis
10.12	PSS World Medical Inc. Amended and Restated Director’s Deferred Compensation Plan, as amended and restated effective January 1, 2009
10.13	PSS World Medical Inc. Amended and Restated Officer Deferred Compensation Plan, as amended and restated effective January 1, 2009
10.14	PSS World Medical Inc. Amended and Restated ELITe Deferred Compensation Plan, as amended and restated effective January 1, 2009
10.15	PSS World Medical Inc. Amended and Restated Leader’s Deferral Plan, as amended and restated effective January 1, 2009
10.16	Amendment to the PSS World Medical 2006 Incentive Plan
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer.
32.1	Section 1350 Certification of the Chief Executive Officer.
32.2	Section 1350 Certification of the Chief Financial Officer.

(1) Incorporated by Reference to the Company’s Current Report on Form 8-K filed December 17, 2008

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jacksonville, State of Florida, on February 11, 2009.

PSS WORLD MEDICAL, INC.
By:	/s/ David M. Bronson
	David M. Bronson
	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

EIGHTH AMENDMENT

TO THE

PSS WORLD MEDICAL, INC.

SAVINGS PLAN

FOR THE FINAL SECTION 415 REGULATIONS

This EIGHTH Amendment to the PSS World Medical, Inc. Savings Plan is made and entered into by PSS World Medical, Inc. (the “Company”) this      day of                     , 2008, and is effective as of April 1, 2008, except as otherwise expressly set forth herein.

WITNESSETH:

WHEREAS, the Company has previously adopted the PSS World Medical, Inc. Savings Plan (the “Plan”); and

WHEREAS, the Company is authorized and empowered to amend the Plan; and

WHEREAS, the Company desires to amend the Plan to make the changes required by the Final Treasury Regulations under Section 415 of the Internal Revenue Code.

NOW, THEREFORE, the Plan is hereby amended as follows:

I.

Section 1.10 of Article I of the Plan is hereby deleted in its entirety and the following is substituted in lieu thereof:

1.10 “Annual Additions” shall mean, with respect to a Participant for each Limitation Year, the sum of:

(a) the amount of employer contributions (including elective contributions) allocated to the Participant under any defined contribution plan maintained by an Employer or an Affiliate; provided, however, that catch-up contributions made pursuant to section 6.2 (and any other contribution subject to Section 414(v) of the Code and made to any defined contribution plan maintained by an Employer or an Affiliate) and restorative payments (where a restorative payment is a payment made to restore losses to the Plan resulting from actions by a fiduciary for which there is reasonable risk of liability for breach of a fiduciary duty under ERISA or under other applicable federal or state law) shall not be taken into account.

(b) the amount of the Participant’s contributions (other than rollover contributions, transfer contributions or Participant loan repayments, if any) to any contributory defined contribution plan maintained by an Employer or an Affiliate;

(c) any forfeitures separately allocated to the Participant under any defined contribution plan maintained by an Employer or an Affiliate; and

(d) amounts allocated to an individual medical account, as defined in Section 415(l)(2) of the Code, that is part of a pension or annuity plan maintained by an Employer or an Affiliate, and amounts derived from contributions that are attributable to post-retirement medical benefits allocated to the separate account of a Key Employee (as defined in Section 419A(d)(3) of the Code) under a welfare benefit plan (as defined in Section 419(e) of the Code) maintained by an Employer or an Affiliate; provided, however, the percentage limitation set forth in section 7.5(a) shall not apply to (1) any contribution for medical benefits (within the meaning of Section 419A(f)(2) of the Code) after severance from employment which is otherwise treated as an “Annual Addition,” or (2) any amount otherwise treated as an “Annual Addition” under Section 415(l)(1) of the Code.

II.

Subsection (a) of Section 1.16 of Article I of the Plan is hereby deleted in its entirety and the following is substituted in lieu thereof:

(a) The term “Compensation” shall mean the regular salaries and wages, overtime pay, bonuses, commissions and other amounts paid by an Employer and taxable to the Employee, as well as elective contributions made on behalf of the Employee to this Plan pursuant to Section 401(k) of the Code, elective contributions made on behalf of the Employee to any cafeteria plan maintained by an Employer pursuant to Section 125 of the Code, and elective amounts on behalf of the Employee that are not includable in his gross income by reason of Section 132(f)(4) of the Code. The term “Compensation” shall also include amounts that are paid within 2 ¹/2 months following severance from employment, if the amounts are (1) payments that, absent a severance from employment, would have been paid to the Employee while the Employee continued in employment with an Employer and that are regular compensation for service during the Employee’s regular working hours, compensation for services outside the Employee’s regular working hours (such as overtime or shift differential), commissions, bonuses or other similar compensation, and (2) payments for accrued bona fide sick, vacation, or other leave, but only if the Employee would have been able to use the leave if his employment had continued. The term “Compensation” shall not include third party disability payments, tax deferred stock options, deductible relocation expense payments, credits or benefits under this Plan, any amount contributed to any pension, employee welfare, life insurance or health insurance plan or arrangement (other than elective contributions to this Plan and any cafeteria plan), or any other tax-favored fringe benefits, and any amounts paid after the date of severance from employment, except as specifically provided for hereinabove.

III.

The following new section 1.57A is hereby added to Article I of the Plan:

1.57A “Post-Severance Compensation”

(a) The term “Post-Severance Compensation” shall mean, except as provided for under subsection (b), any amounts paid after severance from employment including amounts that are severance pay, unfunded nonqualified deferred compensation, or parachute payments within the meaning of Section 280G(b)(2) of the Code.

(b) The term “Post-Severance Compensation” shall not mean the following types of post-severance payments, which will be treated as Section 415 Compensation, but only if they are paid by the later of 2 ¹/2 months following the severance from employment or the end of the Limitation Year that includes the date of severance from employment:

(1) payments that, absent a severance from employment, would have been paid to the Employee while the Employee continued in employment with an Employer and that are regular compensation for service during the Employee’s regular working hours, compensation for services outside the Employee’s regular working hours (such as overtime or shift differential), commissions, bonuses or other similar compensation; and

(2) payments for accrued bona fide sick, vacation, or other leave, but only if the Employee would have been able to use the leave if his employment had continued.

IV.

Section 1.65 of Article I of the Plan is hereby modified by deleting sections 1.65(b)(2) and 1.65(b)(3), in their entireties, and by adding the following new provisions in lieu thereof:

(2) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

(3) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and

(4) Post-Severance Compensation.

(c) The annual Section 415 Compensation of each Participant for any Limitation Year shall not exceed $230,000.00 for the 2008 calendar year (or such amount as adjusted for cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code). The cost-of-living adjustment in effect for a calendar year applies to annual Section 415 Compensation for the Limitation Year that begins with or within such calendar year.

V.

The following sentence is added to the end of subsection (d) of Section 6.1 of Article VI of the Plan:

A salary reduction agreement shall not apply to a Participant’s Post-Severance Compensation.

VI.

The following sentence is added to the end of Section 6.8 of Article VI of the Plan:

In addition, except for occasional, bona fide administrative considerations, contributions made pursuant to a Participant’s salary reduction election cannot precede the earlier of (1) the performance of services relating to the contribution or (2) the date when the Compensation that is subject to the election would be currently available to the Employee in the absence of an election to defer.

VII.

Section 7.5 of Article VII of the Plan is hereby deleted in its entirety and the following is substituted in lieu thereof:

7.5 Limitation on Allocation of Contributions.

(a) Notwithstanding anything contained in this Plan to the contrary, the aggregate Annual Additions to a Participant’s Accounts under this Plan and under any other defined contribution plans maintained by an Employer or an Affiliate for any Limitation Year shall not exceed the lesser of (1) $46,000 for the 2008 Plan Year, (or such greater amount as the Secretary of the Treasury may prescribe) or (2) 100% of the Participant’s Section 415 Compensation. The compensation limit set forth in this subsection (a) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code), which is otherwise treated as an Annual Addition.

(b) In the event that the Annual Additions, under the normal administration of the Plan, would otherwise exceed the limits set forth above for any Participant, then the Plan Administrator shall take such actions, applied in a uniform and nondiscriminatory manner, as will keep the annual additions for such Participant from exceeding the applicable limits provided by law. Excess Annual Additions shall be disposed of as provided in section 6.5(c). Adjustments shall be made to this Plan, if necessary to comply with such limits, before any adjustments shall be required to any other plan; provided, however, that any excess Annual Additions attributable to voluntary contributions to other plans shall first be returned to the Participant from the plans to which such contributions were made.

(c) If as a result of the allocation of forfeitures, a reasonable error in estimating a Participant’s Section 415 Compensation, a reasonable error in determining the amount of Elective Contributions that may be made with respect to any Participant under the limits of Section 415 of the Code, or other circumstances permitted under Section 415 of the Code, Annual Additions for a Participant would cause the limitations set forth in this section 7.5 to be exceeded, the excess amount shall be allocated to one or more suspense accounts. Any excess amounts shall be deemed to consist of Elective Contributions, Qualified Matching Contributions, Matching Contributions, Employer Discretionary Contributions, and Qualified Non-Elective Contributions as required by Section 1.415(c) of the Treasury Regulations and as provided under the Employee Plans Compliance Resolution System described in Revenue Procedure 2006-27 (or in the manner described in subsequent Revenue Procedures, Revenue Rulings, Notices or other guidance published in the Internal Revenue Bulletin). Excess amounts deemed to consist of Qualified Matching Contributions, Matching Contributions, Employer Discretionary Contributions, and/or Qualified Non-Elective Contributions shall be used as Qualified Matching Contributions, Matching Contributions, Employer Discretionary Contributions, and/or Qualified Non-Elective Contributions, and excess amounts attributable to Elective Contributions shall be distributed to the Participant, in each case for such Limitation Years and in such manner as provided by Section 1.415(c) of the Treasury Regulations and Revenue Procedure 2006-27 (or any subsequently issued authority).

VIII.

The following new subsection (d) is added to Section 14.5 of Article XIV of the Plan:

(d) In the event the Plan is terminated on a date other than the last day of the Plan Year, the Limitation Year shall become a short Limitation Year beginning on the first day of the Plan Year immediately prior to the date of termination and ending on the date of termination. In addition, the applicable dollar limitation for Annual Additions in section 7.5(a) shall be equal to the applicable dollar limitation for that Limitation Year multiplied by a fraction, the numerator of which is the number of months (including any fractional parts of a month) in the short Limitation Year and the denominator of which is twelve (12).

IN WITNESS WHEREOF, this EIGHTH Amendment has been executed and is effective as of the dates set forth hereinabove.

PSS WORLD MEDICAL, INC.
By:	/s/ David D. Klarner
Title:	Vice President

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

David A. Smith

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 29^th day of December, 2008 by and between PSS World Medical, Inc., a Florida corporation (hereinafter, the “Company” which term shall include the Company’s other subsidiaries, affiliates and successors), and David A. Smith (hereinafter, “Executive”). This Agreement amends and restates the Employment Agreement between the parties dated as of July 10, 2003 (the “Original Employment Agreement”).

BACKGROUND

The Company employs Executive as its Chairman and Chief Executive Officer under terms and conditions as set forth in the Original Employment Agreement.

The Company and Executive desire to amend and restate the Original Employment Agreement for the purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and Internal Revenue Service guidance thereunder;

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

1. Effective Date. The Original Employment Agreement became effective as of July 10, 2003 (the “Effective Date”), and superseded that certain Employment Agreement dated as of January 1, 2002 between the parties (the “Prior Agreement”).

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

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

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

5. Compensation and Benefits.

(a) Base Salary. During the Employment Period, the Company will pay to Executive a base salary in an amount not less than that in effect for Executive on the Effective Date (“Base Salary”), less normal

withholdings, payable in equal monthly or more frequent installments as are customary under the Company’s payroll practices from time to time. The Compensation Committee of the Board shall review Executive’s Base Salary annually and in its sole discretion, subject to approval of the Board, may increase Executive’s Base Salary from year to year. The annual review of Executive’s salary by the Board will consider, among other things, Executive’s own performance and the Company’s performance.

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

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

(d) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to Peer Executives. Notwithstanding the foregoing, (i) the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights pursuant to this Section 5(d) shall not be subject to liquidation or exchange for another benefit.

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

(f) Special Change in Control Benefits.

A. Shareholder Value Plan. Upon the occurrence of a Change in Control (as defined in Section 6 below), (i) the Company’s Shareholder Value Plan (“SVP”), which is a subplan of the PSS World Medical, Inc. 1999 Long-Term Incentive Plan, may not, without Executive’s consent, thereafter be amended in any respect that is adverse to Executive except as necessary to comply with applicable laws, (ii) Executive’s “Award Factor” under the SVP shall immediately be converted to 90%, and (iii) Executive shall be entitled to the prorata Change in Control benefits described in Section 5.8 of the SVP as the SVP exists on the Effective Date (or as may thereafter be amended but only if such subsequent amendment to the SVP provides a greater benefit to Executive).

B. Officer Deferred Compensation Program. Upon the occurrence of a Change in Control (as defined in Section 6 below), (i) the PSS World Medical, Inc. Amended and Restated Officer Deferred Compensation Plan (“ODIP”) may not, without Executive’s consent, thereafter be amended in any respect that is adverse to Executive except as necessary to comply with applicable laws, and (ii) the Company will make a discretionary contribution to Executive’s “Termination Account” pursuant to Section 5.06 of the ODIP in an amount equal to the amount that the Company would have been required to make as a non-discretionary matching contribution under Section 5.05 of the ODIP calculated as if Executive had elected to defer $100,000 per year in each of the next three plan years and all of such deferrals qualified for the Company match (such discretionary Company contribution is referred to in this Agreement as the “ODIP CIC Contribution”). The ODIP CIC Contribution shall be made in one lump sum within 10 days after the occurrence of a Change in Control. Executive will not be required to actually defer any compensation under the ODIP to receive the ODIP CIC Contribution. The ODIP CIC Contribution will be in addition to any regular matching or other discretionary Company contributions to Executive’s account under the terms of the ODIP. For example, under the terms of the ODIP as in effect on the Effective Date, the ODIP CIC Contribution would be $375,000, which is 1.25% of $300,000.

C. Indemnification and Advancement of Expenses. From and after the occurrence of a Change in Control (as defined in Section 6 below), (i) Executive shall continue to have the full rights of an “Indemnified Person” as defined in Article IX of the PSS World Medical, Inc. Amended and Restated Bylaws (the “Bylaws”) as in effect on the Effective Date (or as may thereafter be amended but only if such subsequent amendment to the Bylaws provides a greater rights to indemnification and advancement of expenses to Executive), and (ii) any repeal or modification of the indemnification provisions of the Bylaws shall not in any way diminish any rights of Executive to indemnification or advancement of expenses, or the obligations of the Company arising under the Bylaws, as in effect on the Effective Date.

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

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

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

(c) Consummation of a reorganization, merger or consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a corporation controlled by the Company, or the sale or other disposition of all or substantially all of the Company’s assets, or the acquisition by the Company of assets or stock of another corporation (any of such transactions, a “Business Transaction”), unless immediately following such Business Transaction, all of the following are true: (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries, the “Surviving Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Transaction of the outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, and (ii) no Person (other than (x) the Company or any subsidiary of the Company, (y) the Surviving Corporation or its ultimate parent corporation, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) beneficially owns, directly or indirectly, 25% or more of the total common stock of the Surviving Corporation or 25% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Surviving Corporation, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majority of the members of the board of directors of the Surviving Corporation were members of the Incumbent Board at the time of the Board approval of the execution of the initial agreement providing for such Business Transaction (any Business Transaction which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”).

7. Termination of Employment.

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during the Employment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or if there is no such retirement plan, “Retirement” shall mean voluntary termination after age 65 with ten years of service. If the Company determines in good faith that Executive has become Disabled (as defined below) during the Employment Period, it may give Executive written notice in accordance with Section 16(f) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, Executive shall be Disabled if either of the following conditions is met: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.’

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

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

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

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

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

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

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area or the Company’s requiring Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

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

(v) any termination by Executive for any reason or no reason during the 30-day period beginning on the first anniversary of a Change in Control.

A termination of employment by Executive for Good Reason (other than a resignation by Executive pursuant to 7(c)(v)) shall be effectuated by giving the Company written notice of termination (“Notice of Termination for Good Reason”) within 30 days after the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies. The Company shall have 30 days from the receipt of such notice within which to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the Notice of Termination for Good Reason shall have no effect. In the case of resignation by Executive pursuant to 7(c)(v), the Good Reason Termination Date shall be the date of Executive’s resignation during the designated window period.

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 16(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.

8. Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below, only if, within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and the Release shall not have been revoked within such time period:

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination (or any later date required by Section 15) or, with respect to the prorata bonus described in clause A(2) below, within 30 days after the determination of the bonus amount, the aggregate of the following amounts:

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

B. the amount equal to two times the sum of (1) Executive’s annual Base Salary in effect as of the Date of Termination, and (2) Executive’s target annual bonus for the year in which the Date of Termination occurs (such amount is referred to as the “Severance Payment”); provided, however, that if the Date of Termination occurs after or in connection with the occurrence of a Change in Control, the Severance Payment shall be the amount equal to three times the sum of (1) Executive’s annual Base Salary in effect as of the Date of Termination, and (2) 150% of Executive’s target annual bonus for the year in which the Date of Termination occurs; and

(ii) for two years after Executive’s Date of Termination (or three years in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy (in any such case, the “Welfare Benefits Continuation Period”), the Company shall continue benefits to Executive and/or Executive’s eligible dependents any group health benefits to which Executive and/or such dependents would otherwise be entitled to continue under COBRA, or benefits substantially equivalent to those group health benefits that would have been provided to them in accordance with the welfare plans, programs, practices and policies described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generally at any time during the Welfare Benefits Continuation Period with respect to Peer Executives and their families (“Welfare Benefits”), provided, however, that if (a) Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the Welfare Benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility; (b) the Welfare Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (c) during the Welfare Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (d) the reimbursement of an eligible taxable expense shall be made no later than December 31 of the year following the year in which the expense was incurred; and (e) Executive’s rights pursuant to this Section 8(a)(ii) shall not be subject to liquidation or exchange for another benefit; and

(iii) the Company shall, within 30 days after receipt of reasonably documented invoices therefor, reimburse Executive’s actual cost (not to exceed $60,000) for outplacement expenses incurred within one year after the Date of Termination; provided, however, that such reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall in no event be later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement pursuant to this Section 8(a)(iii) shall not be subject to liquidation or exchange for another benefit; and

(iv) in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control, the Company shall continue to provide Executive with full time executive secretarial assistance for a period of one year after the Date of Termination; and

(v) in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control, all of Executive’s outstanding options to acquire Company common stock shall remain exercisable for the shorter of five years after the Date of Termination or the original expiration date of the options; and

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

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

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

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

(e) Cause or Voluntary Termination without Good Reason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the Employment Period without Good Reason, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to Section 16(d), shall anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

10. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then: Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that Executive is entitled to a Gross-Up Payment, but that Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.

(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the Company’s regular independent accounting firm at the expense of the Company or, at the election and expense of Executive, another nationally recognized independent accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations. Any determination by the Accounting Firm shall be binding upon the Company and Executive. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, but no later than December 31 of the year after the year in which the Underpayment is determined to exist.

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

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

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

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

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

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

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

11. Costs of Enforcement. In any action taken in good faith relating to the enforcement of this Agreement or any provision herein after the occurrence of a Change in Control, Executive shall be entitled to be paid, as incurred, any and all costs and expenses incurred by him in enforcing or establishing his rights thereunder, including, without limitation, reasonable attorneys’ fees, whether suit be brought or not, and whether or not incurred in trial, bankruptcy or appellate proceedings. In all other circumstances, each party in any such action shall pay his or its own such costs and expenses. The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.

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

13. Restrictions on Executive’s Conduct.

(a) General. Executive and the Company understand and agree that the purpose of the provisions of this Section 13 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company per se, nor is it intended to impair or infringe upon Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Executive hereby acknowledges that Executive has received good and valuable consideration for the post-employment restrictions set forth in this Section 13 in the form of the compensation and benefits provided for herein. Executive hereby further acknowledges that the post-employment restrictions set forth in this Section 13 are reasonable and that they do not, and will not, unduly impair Executive’s ability to earn a living after the Date of Termination. Therefore, subject to the limitations of reasonableness imposed by law, Executive shall be subject to the restrictions set forth in this Section 13.

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

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

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

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

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

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

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

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

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

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

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

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

“Trade Secret” means all information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory law of the State of Florida.

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

(d) Restrictive Covenants.

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

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

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

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

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

(e) Exceptions from Disclosure Restrictions. Anything herein to the contrary notwithstanding, Executive will not be restricted from disclosing or using Confidential Information that: (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by Executive or Executive’s agent; (ii) becomes available to Executive in a manner that is not in contravention of applicable law from a source (other than the Company or its affiliated entities or one of its or their officers, employees, agents or representatives) that is not bound by a confidential relationship with the Company or its affiliated entities or by a confidentiality or other similar agreement; (iii) was known to Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to Executive by the Company or its affiliated entities or one of its or their officers, employees, agents or representatives; or (iv) is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Executive will provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Executive.

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

(g) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the following rights and remedies, which shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity: (1) the right and remedy to enjoin, preliminarily and permanently, Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money

damages would not provide an adequate remedy to the Company; and (2) the right and remedy to cease any further Severance Payment or provision of Welfare Benefits to Executive under Section 8 of this Agreement and to require Executive to account for and pay over to the Company any Severance Payment previously paid to Executive under Section 8.

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

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

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

14. Assignment and Successors.

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

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

15. Code Section 409A.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however

defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 15(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

16. Miscellaneous.

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

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

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

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company and Executive with respect to the subject matter hereof, and it supersedes and invalidates any previous agreements or contracts between them which relate to the subject matter hereof, including without limitation the Prior Agreement. No representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein shall be of any force or effect.

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

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

To Company:	PSS World Medical, Inc.
	4345 Southpoint Boulevard
	Jacksonville, Florida 32216
	Facsimile No. (904) 332-3209
	Attention: Chairman of the Compensation Committee
To Executive:	David A. Smith
	2720 Forest Mill Lane
	Jacksonville, Florida 32257

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

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

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

PSS WORLD MEDICAL, INC.
By:	/s/ Alvin R. Carpenter
	Alvin R. Carpenter
	Chairman of the Compensation Committee of the Board of Directors
EXECUTIVE:
/s/ David A. Smith
David A. Smith

EXHIBIT A

Form of Release of Claims

THIS RELEASE (“Release”) is granted effective as of the      day of             , 20    , by David A. Smith (“Executive”) in favor of PSS World Medical, Inc. (the “Company”). This is the Release referred to that certain Amended and Restated Employment Agreement dated as of December     , 2008 by and between the Company and Executive (the “Employment Agreement”). Executive gives this Release in consideration of the Company’s promises and covenants as recited in the Employment Agreement, with respect to which this Release is an integral part.

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

2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the generality of the foregoing, Executive agrees that by executing this Release, he has released and waived any and all claims he has or may have as of the date of this Release for age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. It is understood that Executive is advised to consult with an attorney prior to executing this Release; that he in fact has consulted a knowledgeable, competent attorney regarding this Release; that he may, before executing this Release, consider this Release for a period of twenty-one (21) calendar days; and that the consideration he receives for this Release is in addition to amounts to which he was already entitled. It is further understood that this Release is not effective until seven (7) calendar days after the execution of this Release and that Executive may revoke this Release within seven (7) calendar days from the date of execution hereof.

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

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

David A. Smith

Date:

EX-10.3

Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

David Bronson

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 30^th day of December 2008 by and between PSS World Medical, Inc., a Florida corporation (hereinafter, the “Company” which term shall include the Company’s other subsidiaries, affiliates and successors), and David M. Bronson (hereinafter, “Executive”). This Agreement amends and restates the Employment Agreement between the parties dated as of April 1, 2003 (the “Original Employment Agreement”).

BACKGROUND

The Company employs Executive as its Chief Financial Officer under terms and conditions as set forth in the Original Employment Agreement.

The Company and Executive desire to amend and restate the Original Employment Agreement for the purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and Internal Revenue Service guidance thereunder;

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

1. Effective Date. The Original Employment Agreement became effective as of April 1, 2003 (the “Effective Date”).

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

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

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

5. Compensation and Benefits.

(a) Base Salary. During the Employment Period, the Company will pay to Executive a base

salary at the rate of $            per year (“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Company’s payroll practices from time to time. The Compensation Committee of the Board shall review Executive’s Base Salary annually and in its sole discretion, subject to approval of the Board, may increase Executive’s Base Salary from year to year. The annual review of Executive’s salary by the Board will consider, among other things, Executive’s own performance and the Company’s performance.

(b) Incentive, Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to level 2 officers of the Company and its affiliated companies (“Peer Executives”), and on the same basis as such Peer Executives.

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

(d) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to Peer Executives. Notwithstanding the foregoing, (i) the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights pursuant to this Section 5(d) shall not be subject to liquidation or exchange for another benefit.

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

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

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

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

(c) Consummation of a reorganization, merger or consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a corporation controlled by the Company, or the sale or other disposition of all or substantially all of the Company’s assets, or the acquisition by the Company of assets or stock of another corporation (any of such transactions, a “Business Transaction”), unless immediately following such Business Transaction, all of the following are true: (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries, the “Surviving Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Transaction of the outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, and (ii) no Person (other than (x) the Company or any subsidiary of the Company, (y) the Surviving Corporation or its ultimate parent corporation, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) beneficially owns, directly or indirectly, 25% or more of the total common stock of the Surviving Corporation or 25% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Surviving Corporation, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majority of the members of the board of directors of the Surviving Corporation were members of the Incumbent Board at the time of the Board approval of the execution of the initial agreement providing for such Business Transaction (any Business Transaction which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”).

7. Termination of Employment.

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during the Employment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or if there is no such retirement plan, “Retirement” shall mean voluntary termination after age 65 with ten years of service. If the Company determines in good faith that Executive has become Disabled (as defined below) during the Employment Period, it may give Executive written notice in accordance with Section 16(f) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, Executive shall be Disabled if either of the following conditions is met: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

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

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

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

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

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

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

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area or the Company’s requiring Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

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

(v) any termination by Executive for any reason or no reason during the 30-day period beginning on the first anniversary of a Change in Control.

A termination of employment by Executive for Good Reason (other than a resignation by Executive pursuant to 7(c)(v)) shall be effectuated by giving the Company written notice of termination (“Notice of Termination for Good Reason”) within 30 days after the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies. The Company shall have 30 days from the receipt of such notice within which to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the Notice of Termination for Good Reason shall have no effect. In the case of resignation by Executive pursuant to 7(c)(v), the Good Reason Termination Date shall be the date of Executive’s resignation during the designated window period.

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with

Section 16(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than for Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.

8. Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below, only if, within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and the Release shall not have been revoked within such time period:

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination (or any later date required by Section 15) or, with respect to the prorata bonus described in clause A(2) below, within 30 days after the determination of the bonus amount, the aggregate of the following amounts:

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

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

(ii) for one year after Executive’s Date of Termination (or two years in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy (in any such case, the “Welfare Benefits Continuation Period”), the Company shall continue benefits to Executive and/or Executive’s eligible dependents any group health benefits to which Executive and/or such dependents would otherwise be entitled to continue under COBRA, or benefits substantially equivalent to those group health benefits that would

have been provided to them in accordance with the welfare plans, programs, practices and policies described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generally at any time during the Welfare Benefits Continuation Period with respect to Peer Executives and their families (“Welfare Benefits”): provided, however, that (a) if Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the Welfare Benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility; (b) the Welfare Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (c) during the Welfare Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (d) the reimbursement of an eligible taxable expense shall be made no later than December 31 of the year following the year in which the expense was incurred; and (e) Executive’s rights pursuant to this Section 8(a)(ii) shall not be subject to liquidation or exchange for another benefit; and

(iii) the Company shall, within 30 days after receipt of reasonably documented invoices therefor, reimburse Executive’s actual cost (not to exceed $30,000) for outplacement expenses incurred within one year after the Date of Termination; provided, however, that such reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall in no event be later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement pursuant to this Section 8(a)(iii) shall not be subject to liquidation or exchange for another benefit; and

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

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

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

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

(e) Cause or Voluntary Termination without Good Reason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the Employment Period without Good Reason, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to Section 16(d), shall anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

10. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then: Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that Executive is entitled to a Gross-Up Payment, but that Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.

(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the Company’s regular independent accounting firm at the expense of the Company or, at the election and expense of Executive, another nationally recognized independent accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations. Any determination by the Accounting Firm shall be binding upon the Company and Executive. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter is required to make a payment of

any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, but no later than December 31 of the year after the year in which the Underpayment is determined to exist.

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

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

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

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

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

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

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

11. Costs of Enforcement. In any action taken in good faith relating to the enforcement of this Agreement or any provision herein after the occurrence of a Change in Control, Executive shall be entitled to be paid any and all costs and expenses incurred by him in enforcing or establishing his rights thereunder, including, without limitation, reasonable attorneys’ fees, whether suit be brought or not, and whether or not incurred in trial, bankruptcy or appellate proceedings. In all other circumstances, each party in any such action shall pay his or its own such costs and expenses. The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.

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

13. Restrictions on Executive’s Conduct.

(a) General. Executive and the Company understand and agree that the purpose of the provisions of this Section 13 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company per se, nor is it intended to impair or infringe upon Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Executive hereby acknowledges that Executive has received good and valuable consideration for the post-employment restrictions set forth in this Section 13 in the form of the compensation and benefits provided for herein. Executive hereby further acknowledges that the post-employment restrictions set forth in this Section 13 are reasonable and that they do not, and will not, unduly impair Executive’s ability to earn a living after the Date of Termination. Therefore, subject to the limitations of reasonableness imposed by law, Executive shall be subject to the restrictions set forth in this Section 13.

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

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

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

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

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

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

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

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

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

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

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

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

“Trade Secret” means all information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory law of the State of Florida.

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

(d) Restrictive Covenants.

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

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees that the relationship between the Company and each of its Protected Employees constitutes a valuable asset of the

Company and may not be converted through Executive’s solicitation to Executive’s own use. Accordingly, Executive hereby agrees that during the Restricted Period, Executive will not, directly or indirectly, on his own behalf or as a Principal or Representative of any Person or otherwise, solicit or induce any Protected Employee to terminate his or her employment relationship with the Company or to enter into any relationship of employment, agency or independent contractorship with any other Person. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change in Control.

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

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

(e) Exceptions from Disclosure Restrictions. Anything herein to the contrary notwithstanding, Executive will not be restricted from disclosing or using Confidential Information that: (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by Executive or Executive’s agent; (ii) becomes available to Executive in a manner that is not in contravention of applicable law from a source (other than the Company or its affiliated entities or one of its or their officers, employees, agents or representatives) that is not bound by a confidential relationship with the Company or its affiliated entities or by a confidentiality or other similar agreement; (iii) was known to Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to Executive by the Company or its affiliated entities or one of its or their officers, employees, agents or representatives; or (iv) is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Executive will provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Executive.

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

(g) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the following rights and remedies, which shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity: (1) the

right and remedy to enjoin, preliminarily and permanently, Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company; and (2) the right and remedy to cease any further Severance Payment or provision of Welfare Benefits to Executive under Section 8 of this Agreement and to require Executive to account for and pay over to the Company any Severance Payment previously paid to Executive under Section 8.

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

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

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

14. Assignment and Successors.

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

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

15. Code Section 409A.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the

Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 15(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

16. Miscellaneous.

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

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

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

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company and Executive with respect to the subject matter hereof, and it supersedes and invalidates any previous agreements or contracts between them which relate to the subject matter hereof. No representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein shall be of any force or effect.

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

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

To Company:	PSS World Medical, Inc.
	4345 Southpoint Boulevard
	Jacksonville, Florida 32216
	Facsimile No. (904) 332-3209
	Attention: Chief Executive Officer
To Executive:	David M. Bronson
	4404 McGirts Blvd.
	Jacksonville, Florida 32210

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

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

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ David M. Bronson
David M. Bronson

EXHIBIT A

Form of Release of Claims

THIS RELEASE (“Release”) is granted effective as of the              day of             , 20    , by David M. Bronson (“Executive”) in favor of PSS World Medical, Inc. (the “Company”). This is the Release referred to that certain Amended and Restated Employment Agreement dated as of December     , 2008 by and between the Company and Executive (the “Employment Agreement”). Executive gives this Release in consideration of the Company’s promises and covenants as recited in the Employment Agreement, with respect to which this Release is an integral part.

1. Release of the Company. Executive, for himself, his successors, assigns, attorneys, and all those entitled to assert his rights, now and forever hereby releases and discharges the Company and its respective officers, directors, stockholders, trustees, employees, agents, parent corporations, subsidiaries, affiliates, estates, successors, assigns and attorneys (the “Released Parties”), from any and all claims, actions, causes of action, sums of money due, suits, debts, liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements, promises, demands, claims for attorney’s fees and costs, or liabilities whatsoever, in law or in equity, which Executive ever had or now has against the Released Parties arising by reason of or in any way connected with any employment relationship which existed between the Company or any of its parents, subsidiaries, affiliates, or predecessors, and Executive. It is understood and agreed that this Release is intended to cover all actions, causes of action, claims or demands for any damage, loss or injury arising from the aforesaid employment relationship, or the termination of that relationship, that Executive has, had or purports to have, from the beginning of time to the date of this Release, whether known or unknown, that now exists related to the aforesaid employment relationship including but not limited to claims for employment discrimination under federal or state law, except as provided in Paragraph 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C. § 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq.; claims for statutory or common law wrongful discharge, including any claims arising under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.; claims for attorney’s fees, expenses and costs; claims for defamation; claims for wages or vacation pay; claims for benefits, including any claims arising under the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq.; and provided, however, that nothing herein shall release the Company of their obligations to Executive under the Employment Agreement or any other contractual obligations between the Company or its affiliates and Executive, or any indemnification obligations to Executive under the Company’s bylaws, articles of incorporation, Florida law or otherwise.

2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the generality of the foregoing, Executive agrees that by executing this Release, he has released and waived any and all claims he has or may have as of the date of this Release for age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. It is understood that Executive is advised to consult with an attorney prior to executing this Release; that he in fact has consulted a knowledgeable, competent attorney regarding this Release; that he may, before executing this Release, consider this Release for a period of twenty-one (21) calendar days; and that the consideration he receives for this Release is in addition to amounts to which he was already entitled. It is further understood that this Release is not effective until seven (7) calendar days after the execution of this Release and that Executive may revoke this Release within seven (7) calendar days from the date of execution hereof.

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

EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY AND ITS AFFILIATES UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN

ATTORNEY OR OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY AND ITS AFFILIATES FROM ALL SUCH CLAIMS.

David M. Bronson

Date:

EX-10.4

Exhibit 10.4

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

John Sasen

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 30^th day of December, 2008 by and between PSS WORLD MEDICAL, INC., a Florida corporation (hereinafter, the “Company” which term shall include the Company’s other subsidiaries, affiliates and successors), and JOHN F. SASEN, SR., (hereinafter, “Executive”). This Agreement amends and restates the Employment Agreement between the parties dated as of April 1, 1998 (the “Original Employment Agreement”).

BACKGROUND

The Company employs Executive as its Executive Vice President and Chief Marketing Officer under terms and conditions as set forth in the Original Employment Agreement.

The Company and Executive desire to amend and restate the Original Employment Agreement for the purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and Internal Revenue Service guidance thereunder;

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

1. Effective Date. The Original Agreement became effective as of April 1, 1998 (the “Effective Date”).

2. Employment. Executive is hereby employed on the Effective Date as the Executive Vice President and Chief Marketing Officer of the Company. Executive’s responsibilities under this Agreement shall be in accordance with the policies and objectives established by the President or the Board of Directors of the Company and shall be consistent with the responsibilities of similarly situated executives of comparable companies in similar lines of business.

3. Employment Period. Unless earlier terminated herein in accordance with Section 7 hereof, Executive’s employment shall be for a three-year term (the “Employment Period”), beginning on the Effective Date. The Employment Period shall, without further action by Executive or the Company, be extended by an additional one-year period on each anniversary of the Effective Date; provided, however, that either party may, by notice to the other, cause the Employment Period to cease to extend automatically. Upon such notice, the Employment Period shall terminate upon the expiration of the then-current term, including any prior extensions.

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

5. Compensation and Benefits.

(a) Base Salary. During the Employment Period, the Company will pay to Executive a base salary as previously agreed (“Base Salary”), less normal withholdings, payable in equal monthly or more frequent installments as are customary under the Company’s payroll practices from time to time. The Compensation Committee of the Board of Directors of the Company shall review Executive’s Base Salary

annually and in its sole discretion, subject to approval of the Board of Directors of the Company, may increase Executive’s Base Salary from year to year. The annual review of Executive’s salary by the Board will consider, among other things, Executive’s own performance and the Company’s performance.

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

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

(d) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to Peer Executives. Notwithstanding the foregoing, (i) the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights pursuant to this Section 5(d) shall not be subject to liquidation or exchange for another benefit.

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

6. Change of Control. Subject to the last sentence of this Section 6, for the purposes of this Agreement, a “Change of Control” shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (ii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 6; or

(b) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 80% of, respectively, the then outstanding shares of common stock and the combined voting power of the then

outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

Notwithstanding the above definition, a Change of Control will not be deemed to have occurred for purposes of this Agreement if, immediately after the event that otherwise would constitute a Change of Control, Patrick Kelly and at least a majority of the 12 next most highly compensated officers of the Company and its subsidiaries (as measured immediately prior to such transaction) shall have entered into employment agreements with the Company, the resulting or surviving company, or its or their subsidiaries.

7. Termination of Employment.

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during the Employment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or there is no such retirement plan, “Retirement” shall mean voluntary termination after age 65 with ten years of service. If the Company determines in good faith that Executive has become Disabled (as defined below) during the Employment Period, it may give to Executive written notice in accordance with Section 16(f) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, Executive shall be Disabled if either of the following conditions is met: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

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

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

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

(iii) Executive engages in any misconduct involving moral turpitude whether occurring in the performance of his duties or otherwise.

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

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

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

(ii) a reduction by the Company in Executive’s Base Salary and benefits as in effect on the Effective Date or as the came may be increased from time to time, unless a similar reduction is made in salary and benefits of Peer Executives, or the failure by the Company to increase Executive’s Base Salary each year during the Employment Period by an amount which at least equals, on a percentage basis, the mean average percentage increase in base salary for Peer Executives, unless such failure to increase is based on nonarbitrary criteria applied to Executive and Peer Executives;

(iii) after the occurrence of a Change of Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area or the Company’s requiring Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

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

(v) any termination by Executive for any reason or no reason during the 30-day period beginning on the first anniversary of a Change of Control.

A termination of employment by Executive for Good Reason (other than a resignation by Executive pursuant to 7(c)(v)) shall be effectuated by giving the Company written notice of termination (“Notice of Termination for Good Reason”) within 30 days after the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies. The Company shall have 30 days from the receipt of such notice within which to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the Notice of Termination for Good Reason shall have no effect. In the case of resignation by Executive pursuant to 7(c)(v), the Good Reason Termination Date shall be the date of Executive’s resignation during the designated window period.

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 16(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written

notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than for Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.

8. Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof:

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination (or any later date required by Section 15) or, with respect to the prorata bonus described in clause A(2) below, within 30 days after the determination of the bonus amount, the aggregate of the following amounts:

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

B. the amount equal to one times Executive’s Base Salary in effect as of the Date of Termination (the “Severance Payment”); provided, however, that if the Date of Termination occurs after or in connection with the occurrence of a Change of Control, the Severance Payment shall be the amount equal to two times Executive’s annual Base Salary in effect as of the Date of Termination; and

(ii) for one year after Executive’s Date of Termination (or two years in the event that the Date of Termination occurs after or in connection with the occurrence of a Change of Control), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy (in any such case, the “Welfare Benefits Continuation Period”), the Company shall continue benefits to Executive and/or Executive’s eligible dependents any group health benefits to which Executive and/or such dependents would otherwise be entitled to continue under COBRA, or benefits substantially equivalent to those group health benefits that would have been provided to them in accordance with the welfare plans, programs, practices and policies described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generally at any time during the Welfare Benefits Continuation Period with respect to other peer executives of the Company and its affiliated companies and their families (“Welfare Benefits”): provided, however, that (a) if Executive becomes re-employed with another employer and is eligible to receive Welfare Benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of

eligibility; (b) the Welfare Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (c) during the Welfare Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (d) the reimbursement of an eligible taxable expense shall be made no later than December 31 of the year following the year in which the expense was incurred; and (e) Executive’s rights pursuant to this Section 8(a)(ii) shall not be subject to liquidation or exchange for another benefit; and

(iii) the Company shall, within 30 days after receipt of reasonably documented invoices therefor, reimburse Executive’s actual cost (not to exceed $30,000) for outplacement expenses incurred within one year after the Date of Termination; provided, however, that such reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall in no event be later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement pursuant to this Section 8(a)(iii) shall not be subject to liquidation or exchange for another benefit; and

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

(b) Death. If Executive’s employment is terminated by reason of Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)), the timely payment or provision of Other Benefits, and an amount equal to two months’ salary, based on Executive’s Base Salary in effect as of the date of death. Accrued Obligations and the payment equal to two months’ salary shall be paid to Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 8(b) shall include, without limitation, and Executive’s estate and/or beneficiaries shall be entitled to receive, benefits under such plans, programs, practices and policies relating to death benefits, if any, as applicable generally to Peer Executives and their beneficiaries, and on the same basis as Peer Executives and their beneficiaries.

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

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

(e) Cause or Voluntary Termination without Good Reason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the

Employment Period without Good Reason, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)), the continuation of Welfare Benefits for a period of 30 days after the Date of Termination, the timely payment or provision of Other Benefits, and a payment equal to 30 days’ salary, based on Executive’s Base Salary in effect as of the Date of Termination. Accrued Obligations and the payment equal to 30 days’ salary shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive^’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to Section 16(d), shall anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

10. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then: Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that Executive is entitled to a Gross-Up Payment, but that Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change of Control using the discount rate required by Section 280G(d)(4) of the Code.

(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s regular independent accounting firm at the expense of the Company or, at the election and expense of Executive, another nationally recognized independent accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations. Any determination by the Accounting Firm shall be binding upon the Company and Executive. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of

the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, but no later than December 31 of the year after the year in which the Underpayment is determined to exist.

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

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

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

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

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

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

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

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

reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.

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

13. Restrictions on Conduct of Executive.

(a) General. Executive and the Company understand and agree that the purpose of the provisions of this Section 13 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company per se, nor is it intended to impair or infringe upon Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Executive hereby acknowledges that the post-employment restrictions set forth in this Section 13 are reasonable and that they do not, and will not, unduly impair his ability to earn a living after the termination of this Agreement. Therefore, subject to the limitations of reasonableness imposed by law upon the restrictions set forth herein, Executive shall be subject to the restrictions set forth in this Section 13.

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

“Competitive Services” means any services provided by Company at the Determination Date, including, but not limited to the marketing, sale and distribution of medical supplies, equipment and pharmaceuticals to primary care and other office-based physicians; the marketing, sale and distribution of medical diagnostic imaging supplies, chemicals, equipment and service to the acute care and alternate care market; and the provisions of special group purchasing contract pricing and periodic cost analyses to help manage the supply needs of individual physicians or practices.

“Confidential Information” means any confidential or proprietary information possessed by the Company or its affiliated entities or relating to its or their business, including without limitation, any confidential “know-how”, customer lists, details of client or consultant contracts, current and anticipated customer requirements, pricing policies price lists, market studies, business plans, operational methods, marketing plans or strategies, product development techniques or plans, computer software programs (including object code and source code), data and documentation, data base technologies, systems, structures and architectures, inventions and ideas, past, current and planned research and development, compilations, devices, methods, techniques, processes, financial information and data, business acquisition plans, new personnel acquisition plans and any other information that would constitute a Trade Secret (as defined herein).

“Determination Date” means the date of termination of Executive’s employment with the Company for any reason whatsoever or any earlier date (during the Employment Period) of an alleged breach of the Restrictive Covenants by Executive.

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

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

“Protected Clients” means any Person to whom the Company provided services or submitted a written proposal therefor, within eighteen (18) months prior to the Determination Date.

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

“Restricted Period” means the term of Executive’s employment hereunder and a period extending until eighteen (18) months from the Date of Termination; provided, however that such period shall be extended by any length of time during which Executive is in breach of the Restricted Covenants.

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

“Trade Secret” means any item of Confidential Information that constitutes a “trade secret(s)” under the common law or statutory law of the State of Florida.

(c) Restrictive Covenants.

(i) Restriction on Disclosure and Use of Confidential Information. Executive understands and agrees that the Confidential Information constitutes a valuable asset of the Company and its affiliated entities, and may not be converted to Executive’s own use. Accordingly, Executive hereby agrees that Executive shall not, directly or indirectly, at any time during the Restricted Period reveal, divulge, or disclose to any Person not expressly authorized by the Company any Confidential Information, and Executive shall not, directly or indirectly, at any time during the Restricted Period use or make use of any Confidential Information in connection with any business activity other than that of the Company; provided, however, in the event the Confidential Information constitutes a Trade Secret, the Restricted Period referred to above shall be five (5) years. Notwithstanding the above, this covenant shall expire (except with respect to Trade Secrets) upon the occurrence of a Change of Control.

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees that the relationship between the Company and each of its Protected Employees constitutes a valuable asset of the Company and may not be converted to Executive’s own use. Accordingly, Executive hereby agrees that during the Restricted Period Executive shall not directly or indirectly on Executive’s own behalf or as a Principal or Representative of any Person or otherwise solicit or induce any Protected Employee to terminate his or her employment relationship with the Company or to enter into any relationship of employment, agency or independent contractorship with any other Person. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change of Control.

(iii) Restriction on Relationships with Protected Clients. Executive understands and agrees that the relationship between the Company and each of its Protected Clients constitutes a valuable asset of the Company and may not be converted to Executive’s own use. Accordingly, Executive hereby agrees that during the Restricted Period Executive shall not, without the prior written consent of the Company, become a Principal or Representative of a Protected Client or otherwise provide services to a Protected Client as a consultant or independent contractor. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change of Control.

(iv) Noncompetition with the Company. During the Restricted Period Executive, unless acting in accordance with the Company’s prior written consent, will not directly provide any Competitive Services to, and will not, directly or indirectly, (i) own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or (ii) be connected as a Principal or Representative or otherwise with, or (iii) permit Executive’s name to be used by or in connection with, any Person engaged in providing Competitive Services to any Person conducting business activities within the territory in which the Company is or was engaged in the provision of the Competitive Services on the Determination Date; provided, however, that the provisions of this Agreement shall not be deemed to prohibit the ownership by Executive of any securities of the Company or its affiliated entities or not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change of Control.

(d) Exceptions from Disclosure Restrictions. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing or using Confidential Information that: (a) is or becomes generally available to the public other than as a result of an unauthorized disclosure by Executive or his agent; (b) becomes available to Executive in a manner that is not in contravention of applicable law from a source (other than the Company or its affiliated entities or one of its or their officers, employees, agents or representatives) that is not bound by a confidential relationship with the Company or its affiliated entities or by a confidentiality or other similar agreement; (c) was known to Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to Executive by the Company or its affiliated entities or one of its or their officers, employees, agents or representatives; or (d) is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Executive shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Executive.

(e) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company shall have the following rights and remedies, which shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity:

A. the right and remedy to enjoin, preliminarily and permanently, Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company; and

B. the right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of any transactions constituting a breach of the Restrictive Covenants.

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

14. Assignment and Successors.

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

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

15. Code Section 409A.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either

exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change of Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change of Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change of Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 15(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

16. Miscellaneous.

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

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

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

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company and Executive with respect to the subject matter hereof, and it supersedes and invalidates any previous agreements or contracts between them which relate to the subject matter hereof, including without limitation that certain Contract of Employment, dated as of May 30, 1992, by and between Executive and the Company. No representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein shall be of any force or effect.

(e) Governing Law. Except to the extent preempted by federal law, and without regard to conflict of laws principles, the laws of the State of Florida shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

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

To Company:	PSS World Medical, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 Facsimile No. (904) 332-3209 Attention: Senior Vice President, Corporate Development
To Executive:	John F. Sasen, Sr.

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

(g) Amendments and Modifications. This Agreement may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to this Agreement; provided, however, that if, in the opinion of the Corporation’s accountants, any provision of this Agreement would preclude the use of “pooling of interest” accounting treatment for a Change of Control transaction that (1) would otherwise qualify for such accounting treatment, and (2) is contingent upon qualifying for such accounting treatment, then Executive and the Company agree to negotiate in good faith to amend this Agreement so that it will not preclude the use of “pooling of interest” accounting treatment for such Change of Control transaction.

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

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ John F. Sasen, Sr.
John F. Sasen, Sr.

EX-10.5

Exhibit 10.5

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Gary Corless

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 29^th day of December, 2008 by and between PSS World Medical, Inc., a Florida corporation (hereinafter, the “Company” which term shall include the Company’s other subsidiaries, affiliates and successors), and Gary A. Corless (hereinafter, “Executive”). This Agreement amends and restates the Employment Agreement between the parties dated as of August 16, 2005 (the “Original Employment Agreement”).

BACKGROUND

The Company employs Executive as its Chief Operating Officer under terms and conditions as set forth in the Original Employment Agreement.

The Company and Executive desire to amend and restate the Original Employment Agreement for the purposes of complying with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and Internal Revenue Service guidance thereunder;

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

1. Effective Date. The Original Employment Agreement became effective as of August 16, 2005 (the “Effective Date”).

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

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

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

5. Compensation and Benefits.

(a) Base Salary. During the Employment Period, the Company will pay to Executive a base

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

(b) Incentive, Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to level 2 officers of the Company and its affiliated companies (“Peer Executives”), and on the same basis as such Peer Executives.

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

(d) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to Peer Executives. Notwithstanding the foregoing, (i) the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights pursuant to this Section 5(d) shall not be subject to liquidation or exchange for another benefit.

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

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

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

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

(c) Consummation of a reorganization, merger or consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a corporation controlled by the Company, or the sale or other disposition of all or substantially all of the Company’s assets, or the acquisition by the Company of assets or stock of another corporation (any of such transactions, a “Business Transaction”), unless immediately following such Business Transaction, all of the following are true: (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries, the “Surviving Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Transaction of the outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, and (ii) no Person (other than (x) the Company or any subsidiary of the Company, (y) the Surviving Corporation or its ultimate parent corporation, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) beneficially owns, directly or indirectly, 25% or more of the total common stock of the Surviving Corporation or 25% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Surviving Corporation, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majority of the members of the board of directors of the Surviving Corporation were members of the Incumbent Board at the time of the Board approval of the execution of the initial agreement providing for such Business Transaction (any Business Transaction which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”).

7. Termination of Employment.

(a) Death, Retirement or Disability. Executive’s employment shall terminate automatically upon Executive’s death or Retirement during the Employment Period. For purposes of this Agreement, “Retirement” shall mean normal retirement as defined in the Company’s then-current retirement plan, or if there is no such retirement plan, “Retirement” shall mean voluntary termination after age 65 with ten years of service. If the Company determines in good faith that Executive has become Disabled (as defined below) during the Employment Period, it may give Executive written notice in accordance with Section 16(f) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, Executive shall be Disabled if either of the following conditions is met: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

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

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

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

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

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

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

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area or the Company’s requiring Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

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

(v) any termination by Executive for any reason or no reason during the 30-day period beginning on the first anniversary of a Change in Control.

A termination of employment by Executive for Good Reason (other than a resignation by Executive pursuant to 7(c)(v)) shall be effectuated by giving the Company written notice of termination (“Notice of Termination for Good Reason”) within 30 days after the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies. The Company shall have 30 days from the receipt of such notice within which to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the Notice of Termination for Good Reason shall have no effect. In the case of resignation by Executive pursuant to 7(c)(v), the Good Reason Termination Date shall be the date of Executive’s resignation during the designated window period.

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with

Section 16(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than for Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.

8. Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below, only if, within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and the Release shall not have been revoked within such time period:

(i) the Company shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination (or any later date required by Section 15) or, with respect to the prorata bonus described in clause A(2) below, within 30 days after the determination of the bonus amount, the aggregate of the following amounts:

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

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

(ii) for one year after Executive’s Date of Termination (or two years in the event that the Date of Termination occurs after or in connection with the occurrence of a Change in Control), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy (in any such case, the “Welfare Benefits Continuation Period”), the Company shall continue benefits to Executive and/or Executive’s eligible dependents any group health benefits to which Executive and/or such dependents would otherwise be entitled to continue under COBRA, or benefits substantially equivalent to those group health benefits that would

have been provided to them in accordance with the welfare plans, programs, practices and policies described in Section 5(c) of this Agreement if Executive’s employment had not been terminated or, if more favorable to Executive, as in effect generally at any time during the Welfare Benefits Continuation Period with respect to Peer Executives and their families (“Welfare Benefits”): provided, however, that (a) if Executive becomes re-employed with another employer and is eligible to receive Welfare Benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility; (b) the Welfare Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (c) during the Welfare Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (d) the reimbursement of an eligible taxable expense shall be made no later than December 31 of the year following the year in which the expense was incurred; and (e) Executive’s rights pursuant to this Section 8(a)(ii) shall not be subject to liquidation or exchange for another benefit; and

(iii) the Company shall, within 30 days after receipt of reasonably documented invoices therefor, reimburse Executive’s actual cost (not to exceed $30,000) for outplacement expenses incurred within one year after the Date of Termination; provided, however, that such reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall in no event be later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement pursuant to this Section 8(a)(iii) shall not be subject to liquidation or exchange for another benefit; and

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

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

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

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

(e) Cause or Voluntary Termination without Good Reason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive voluntarily terminates employment during the Employment Period without Good Reason, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations (excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to Section 16(d), shall anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

10. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then: Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that Executive is entitled to a Gross-Up Payment, but that Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.

(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the Company’s regular independent accounting firm at the expense of the Company or, at the election and expense of Executive, another nationally recognized independent accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations. Any determination by the Accounting Firm shall be binding upon the Company and Executive. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter is required to make a payment of

any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, but no later than December 31 of the year after the year in which the Underpayment is determined to exist.

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

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

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

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

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

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

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

11. Costs of Enforcement. In any action taken in good faith relating to the enforcement of this Agreement or any provision herein after the occurrence of a Change in Control, Executive shall be entitled to be paid any and all costs and expenses incurred by him in enforcing or establishing his rights thereunder, including, without limitation, reasonable attorneys’ fees, whether suit be brought or not, and whether or not incurred in trial,

bankruptcy or appellate proceedings. In all other circumstances, each party in any such action shall pay his or its own such costs and expenses. The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.

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

13. Restrictions on Executive’s Conduct.

(a) General. Executive and the Company understand and agree that the purpose of the provisions of this Section 13 is to protect legitimate business interests of the Company, as more fully described below, and is not intended to eliminate Executive’s post-employment competition with the Company per se, nor is it intended to impair or infringe upon Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Executive hereby acknowledges that Executive has received good and valuable consideration for the post-employment restrictions set forth in this Section 13 in the form of the compensation and benefits provided for herein. Executive hereby further acknowledges that the post-employment restrictions set forth in this Section 13 are reasonable and that they do not, and will not, unduly impair Executive’s ability to earn a living after the Date of Termination. Therefore, subject to the limitations of reasonableness imposed by law, Executive shall be subject to the restrictions set forth in this Section 13.

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

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

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

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

“Confidential Information” means all information regarding the Company, its activities, business or clients that is the subject of reasonable efforts by the Company to maintain its confidentiality and that is not generally disclosed by practice or authority to persons not employed by the Company, but that does not rise to

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

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

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

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

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

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

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

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

“Trade Secret” means all information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory law of the State of Florida.

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

(d) Restrictive Covenants.

(i) Restriction on Disclosure and Use of Confidential Information and Trade Secrets.

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

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees that the relationship between the Company and each of its Protected Employees constitutes a valuable asset of the Company and may not be converted through Executive’s solicitation to Executive’s own use. Accordingly, Executive hereby agrees that during the Restricted Period, Executive will not, directly or indirectly, on his own behalf or as a Principal or Representative of any Person or otherwise, solicit or induce any Protected Employee to terminate his or her employment relationship with the Company or to enter into any relationship of employment, agency or independent contractorship with any other Person. Notwithstanding the above, this covenant shall expire upon the occurrence of a Change in Control.

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

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

(e) Exceptions from Disclosure Restrictions. Anything herein to the contrary notwithstanding, Executive will not be restricted from disclosing or using Confidential Information that: (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by Executive or Executive’s agent; (ii) becomes available to Executive in a manner that is not in contravention of applicable law from a source (other than the Company or its affiliated entities or one of its or their officers, employees, agents or representatives) that is not bound by a confidential relationship with the Company or its affiliated entities or by a confidentiality or other similar agreement; (iii) was known to Executive on a non-confidential basis and not in

contravention of applicable law or a confidentiality or other similar agreement before its disclosure to Executive by the Company or its affiliated entities or one of its or their officers, employees, agents or representatives; or (iv) is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Executive will provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Executive.

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

(g) Enforcement of Restrictive Covenants.

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

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

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

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

14. Assignment and Successors.

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

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

15. Code Section 409A.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 15(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

16. Miscellaneous.

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

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

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

(d) Entire Agreement. Except as provided herein, this Agreement contains the entire agreement between the Company and Executive with respect to the subject matter hereof, and it supersedes and invalidates any previous agreements or contracts between them which relate to the subject matter hereof. No representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein shall be of any force or effect.

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

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

To Company:	PSS World Medical, Inc.
	4345 Southpoint Boulevard
	Jacksonville, Florida 32216
	Facsimile No. (904) 332-3213
	Attention: Senior Vice President, Corporate Development
To Executive:	Gary A. Corless
	3741 Salt Meadow Court South
	Jacksonville, FL 32224

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

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

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Gary A. Corless
Gary A. Corless

EXHIBIT A

Form of Release of Claims

THIS RELEASE (“Release”) is granted effective as of the      day of                     , 200    , by Gary A. Corless (“Executive”) in favor of PSS World Medical, Inc. (the “Company”). This is the Release referred to that certain Amended and Restated Employment Agreement dated as of December     , 2008 by and between the Company and Executive (the “Employment Agreement”). Executive gives this Release in consideration of the Company’s promises and covenants as recited in the Employment Agreement, with respect to which this Release is an integral part.

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

2. Release of Claims Under Age Discrimination in Employment Act. Without limiting the generality of the foregoing, Executive agrees that by executing this Release, he has released and waived any and all claims he has or may have as of the date of this Release for age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. It is understood that Executive is advised to consult with an attorney prior to executing this Release; that he in fact has consulted a knowledgeable, competent attorney regarding this Release; that he may, before executing this Release, consider this Release for a period of twenty-one (21) calendar days; and that the consideration he receives for this Release is in addition to amounts to which he was already entitled. It is further understood that this Release is not effective until seven (7) calendar days after the execution of this Release and that Executive may revoke this Release within seven (7) calendar days from the date of execution hereof.

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

EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE COMPANY AND ITS AFFILIATES UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN

ATTORNEY OR OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY AND ITS AFFILIATES FROM ALL SUCH CLAIMS.

Gary A. Corless

Date:

EX-10.6

Exhibit 10.6

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and Kevin P. English (“Executive”), amends that certain Employment Agreement, dated as of April 1, 2004, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area; or

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed

to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and such release shall not have been revoked within such time period:”

3. The following sentence is hereby added to the end of Section 8(e):

“Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.”

4. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

5. The following sentence is added after the second sentence in Section 10(b):

“Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities.”

6. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

7. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

8. Section 13(d)(iii)(c) is hereby deleted.

9. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d) and Section 8(a)(iii), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

10. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

(signatures on following page)

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 30, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Kevin P. English
Kevin P. English

EX-10.7

Exhibit 10.7

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and Bradley J. Hilton (“Executive”), amends that certain Employment Agreement, dated as of January 1, 2002, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area; or

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed

to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and such release shall not have been revoked within such time period:”

3. The following sentence is hereby added to the end of Section 8(e):

“Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.”

4. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

5. The following sentence is added after the second sentence in Section 10(b):

“Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities.”

6. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

7. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

8. Section 13(d)(iii)(c) is hereby deleted.

9. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d) and Section 8(a)(iii), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

10. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

(signatures on following page)

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 30, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Bradley J. Hilton
Bradley J. Hilton

EX-10.8

Exhibit 10.8

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and Jeffrey H. Anthony (“Executive”), amends that certain Employment Agreement, dated as of April 17, 2000, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area; or

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed

to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and such release shall not have been revoked within such time period:”

3. The following sentence is hereby added to the end of Section 8(e):

“Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.”

4. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

5. The following sentence is added after the second sentence in Section 10(b):

“Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities.”

6. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

7. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

8. Section 13(d)(iii)(c) is hereby deleted.

9. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d) and Section 8(a)(iii), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

10. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 28, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
	/s/ Jeffrey H. Anthony
	Jeffrey H. Anthony

EX-10.9

Exhibit 10.9

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and David D. Klarner (“Executive”), amends that certain Employment Agreement, dated as of February 21, 2000 and effective as of October 1, 1999, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

(iii) after the occurrence of a Change in Control, the Company’s requiring Executive to be based at any office or location other than in the greater Jacksonville, Florida metropolitan area; or

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed

to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a release of employment-related claims in such form as shall be approved by the Company (the “Release”) and such release shall not have been revoked within such time period:”

3. Section 8(b) is hereby amended by deleting the words “and a lump sum amount equal to two (2) weeks’ salary, based on Executive’s Base Salary in effect as of the date of death” in the first sentence of such Section.

4. Section 8(e) is hereby amended by deleting the words “, payment of a lump sum amount equal to two (2) weeks’ salary, based on Executive’s Base Salary in effect as of the Date of Termination” in the first sentence of such Section.

5. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

6. The following sentence is hereby added after the second sentence of Section 10(b):

“Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to Executive within five days after the receipt of the Accounting Firm’s determination, but in no event later than December 31 of the year after the year in which Executive remits taxes to the applicable taxing authorities.”

7. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

8. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred.

Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

9. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

10. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

(signatures on following page)

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 31, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ David D. Klarner
David D. Klarner

EX-10.10

Exhibit 10.10

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and the officer of the Company whose signature appears below (“Executive”), amends that certain Employment Agreement, dated as of the date indicated below, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and such release shall not have been revoked within such time period:”

3. The following sentence is hereby added to the end of Section 8(e):

“Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.”

4. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

5. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

6. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

7. Section 13(d)(iii)(c) is hereby deleted.

8. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d) and Section 8(a)(iii), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

9. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

(signatures on following page)

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 30, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Robert C. Weiner
Robert C. Weiner

EX-10.11

Exhibit 10.11

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”), effective as of December 31, 2008, by and between PSS World Medical, Inc., a Florida corporation (the “Company”), and the officer of the Company whose signature appears below (“Executive”), amends that certain Employment Agreement, dated as of the date indicated below, by and between the Company and Executive, as heretofore amended (the “Agreement”).

The Compensation Committee of the Board of Directors of the Company and Executive have determined that it is in their best interests to amend the Agreement to include special provisions intended to ensure compliance with Internal Revenue Code Section 409A relating to deferred compensation.

In consideration of the mutual covenants contained herein, the Agreement is hereby amended as follows:

1. Sections 7(c), (d) and (e) are hereby deleted and replaced with the following:

“(c) Termination by Executive. Executive’s employment may be terminated by Executive for Good Reason or no reason. For purposes of this Agreement, “Good Reason” shall mean, without the written consent of Executive:

(i) any action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities as in effect on the Effective Date, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;

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

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

Notwithstanding anything in this Agreement to the contrary, a termination by Executive shall not constitute termination for Good Reason unless Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 30 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive. If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period (the “Good Reason Termination Date”). If the event of Good Reason is cured within such 30-day period, the notice of termination for Good Reason shall have no effect. The parties intend, believe and take the position that a resignation by Executive for Good Reason as defined herein effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Code and Treas. Reg §1.409A-1(n)(2).

(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(f) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive for Good Reason, the Good Reason Termination Date as specified in Section 7(c), (ii) if Executive’s employment is terminated by the Company other than by reason of Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination or any later date specified in the Notice of Termination, and (iii) if Executive’s employment is terminated by reason of death, Retirement or Disability, the Date of Termination shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be.”

2. The lead-in clause to Section 8(a) is hereby deleted and replaced with the following:

“If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause, death or Disability, or Executive shall terminate employment for Good Reason, then in consideration of Executive’s services rendered prior to such termination and as reasonable compensation for his compliance with the Restrictive Covenants in Section 13 hereof, and, with respect to the payments and benefits described in clauses (i)(B) and (ii) below only, if within 30 days after the Date of Termination, Executive shall have executed a Release in substantially the form of Exhibit A hereto (the “Release”) and such release shall not have been revoked within such time period:”

3. The following sentence is hereby added to the end of Section 8(e):

“Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.”

4. The last sentence of Section 10(a) is hereby deleted and replaced with the following sentence:

“The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Executive, determined by the Accounting Firm (as defined in Section 10(b) below) as of the date of the Change in Control using the discount rate required by Section 280G(d)(4) of the Code.”

5. The following phrase is hereby added to the end of the last sentence of Section 10(b):

“but no later than December 31 of the year after the year in which the Underpayment is determined to exist.”

6. The following sentence is hereby added to the end of Section 11:

“The amount reimbursable by the Company to Executive under this Section 11 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within 30 days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 11 shall expire at the end of five years after the Date of Termination and shall not be subject to liquidation or exchange for another benefit.”

7. Section 13(d)(iii)(c) is hereby deleted.

8. A new Section 16 is hereby added, which reads as follows:

“16. Special Provisions Relating to Section 409A of the Code.

(a) Interpretation and Administration. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code).

(b) Coordination of Certain Defined Terms. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder, or a different form of payment would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such amount or benefit will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless (i) the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case, may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of any amount upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event”, “disability” or “separation from service,” as the case, may be, or such later date as may be required by subsection (c) below.

(c) Six-Month Payment Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), such payments or benefits shall be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the first day of the seventh month following Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 16(c) shall be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement shall be paid as otherwise provided in the Agreement. If any amounts or benefits payable hereunder could qualify for one or more separation pay exemptions described in Treas. Reg. §1.409A-1(b)(9), but such payments in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through its head of human resources or any other designated officer) shall determine which portions thereof will be subject to such exemptions.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in the applicable final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(d) Reimbursements. To the extent that this Agreement provides for the reimbursement of expenses, including in Section 5(d) and Section 8(a)(iii), the reimbursements provided in any one calendar year shall not affect the amount of reimbursements provided in any other calendar year; (ii) the reimbursement of an eligible expense shall be made as soon as practicable after the documentation but no later than December 31 of the year following the year in which the expense was incurred; and (iii) Executive’s rights to such reimbursement shall not be subject to liquidation or exchange for another benefit.”

9. Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be entered into as of December 28, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Joshua H. DeRienzis
Joshua H. DeRienzis

EX-10.12

Exhibit 10.12

PSS WORLD MEDICAL, INC.

DIRECTORS’ DEFERRED COMPENSATION PLAN

Amended and Restated January 1, 2009

ARTICLE I
Establishment and Purpose	Page 1
ARTICLE II
Definitions	Page 1
ARTICLE III
Eligibility and Participation	Page 4
ARTICLE IV
Deferral Elections, Account Valuation	Page 5
ARTICLE V
Distributions and Withdrawals	Page 7
ARTICLE VI
Administration	Page 8
ARTICLE VII
Amendment and Termination	Page 9
ARTICLE VIII
Informal Funding	Page 9
ARTICLE IX
General Conditions	Page 10

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PSS WORLD MEDICAL, INC.

DIRECTORS’ DEFERRED COMPENSATION PLAN

Amended and Restated Effective January 1, 2009

ARTICLE I

ESTABLISHMENT AND PURPOSE

1.1 Background of Plan. PSS World Medical, Inc. (the “Company”) maintains the PSS World Medical, Inc. Directors’ Deferred Compensation Plan (the “Plan”), which became effective January 1, 2004 (the “Original Effective Date”). The Plan is hereby amended and restated to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), effective as of January 1, 2009.

1.2 Purpose. The purpose of the Plan is to provide non-employee Directors with an opportunity to defer receipt of their annual retainer, meeting fees, and other cash compensation. The Plan is not intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code, and will not be subject to ERISA because it will not be offered to employees of the Company. The Plan is intended to comply with, and shall be construed so as to provide for deferrals and benefits that are consistent with the requirements of, Code Section 409A.

ARTICLE II

DEFINITIONS

2.1 Account Balance. Account Balance means the total value of all the Investment Options in which Participant deferrals have been Deemed Invested as of a specific date, taking into account the value of all distributions from that Account to the specific date.

2.2 Allocation Election. Allocation Election means a choice by a Participant of one or more Investment Options, and the allocation among them, in which future Participant deferrals are Deemed Invested for purposes of determining earnings in the Deferred Compensation Account.

2.3 Allocation Election Form. Allocation Election Form means the form (or Website screen) approved by the Plan Administrator on which the Participant makes or modifies an Allocation Election.

2.4 Annual Valuation Date. Annual Valuation Date shall mean the anniversary of the Termination Valuation Date utilized to determine the amount of an annual installment payment.

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2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant on the form designated by the Plan Administrator to receive benefits to which a Beneficiary is entitled under and in accordance with provisions of the Plan. The Participant’s estate shall be the Beneficiary if:

(a) the Participant has not designated a natural person or trust as Beneficiary, or

(b) the designated Beneficiary has predeceased the Participant.

2.6 Change in Control. Change in Control means the occurrence of: (a) any merger or consolidation in which the Company is not the surviving corporation and which results in the holders of the outstanding voting securities of the Company (determined immediately prior to such merger or consolidation) owning less than a majority of the outstanding voting securities of the surviving corporation (determined immediately following such merger or consolidation), (b) any sale or transfer by the Company of all or substantially all of its assets, or (c) any tender offer or exchange offer for or the acquisition, directly or indirectly, by any person or group of all or a majority of the then-outstanding voting securities of the Company.

2.7 Chief Executive Officer. Chief Executive Officer means the individual who performs the functions of a Chief Executive Officer for the Company.

2.8 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

2.9 Code Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the underlying Treasury regulations and guidance under such Code Section.

2.10 Company. Company means PSS World Medical, Inc.

2.11 Compensation. Compensation shall mean, for purposes of this Plan, cash remuneration paid to a Director in connection with his or her services as an outside Director with the Company including, without limitation, annual retainers, meeting fees, and other Directors’ fees, and any equity based compensation (if any) approved by the Plan Administrator as Compensation for purposes of this Plan.

2.12 Compensation Deferral Agreement. Compensation Deferral Agreement shall mean the deferral election form, or such other forms furnished by the Plan Administrator (or screens on the Participant Website approved by the Plan Administrator), on which a Participant elects: (a) the amount of deferral and type of Compensation to be deferred beginning the first day of the following Plan Year; and (b) the Form of Payment elections for Termination Benefits. The Allocation Election Form may be part of the Compensation Deferral Agreement, in the discretion of the Plan Administrator.

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2.13 Death Benefit. Death Benefit shall mean a distribution of the total amount of the Participant’s Deferred Compensation Account Balance to the Participant’s Beneficiary(ies) in accordance with Article V of the Plan.

2.14 Deemed Investment. A Deemed Investment (or “Deemed Invested”) shall mean the notional conversion of a dollar amount of deferred Compensation credited to a Participant’s Deferred Compensation Account into shares or units (or a fraction of such measures of ownership, if applicable) of the underlying investment (e.g. mutual fund or other investment) which is referred to by the Investment Option(s) selected by the Participant. The conversion shall occur as if shares (or units) of the designated investment were being purchased (or sold, for a distribution) at the purchase price as of the close of business of the day on which the Deemed Investment occurs. At no time shall a Participant have any real or beneficial ownership in the actual investment to which the Investment Option refers, irrespective of whether such a Deemed Investment is mirrored by an actual identical investment by the Company or a trustee acting on behalf of the Company.

2.15 Deferred Compensation Account. A Participant’s Deferred Compensation Account (or “Account”) shall mean a record maintained by the Plan Administrator of all Participant deferrals and Deemed Investments thereof minus any withdrawals and distributions from said Account. The Account shall be a bookkeeping account utilized solely as a device for the measurement of amounts to be paid to the Participant under the Plan. The Account, and all Sub-Accounts, shall not constitute or be treated as an escrow, trust fund, or any other type of funded account for Code purposes and, moreover, amounts credited thereto shall not be considered “plan assets”.

2.16 Deferred Compensation Committee. Deferred Compensation Committee (or “Committee”) means a committee of at least three (3) officers of the Company appointed by the Compensation Committee of the Board or the Chief Executive Officer, who shall serve until the earlier of termination of service or appointment of a replacement by the Compensation Committee of the Board or the Chief Executive Officer.

2.17 Director. Director shall mean for purposes of this Plan a non-employee independent contractor serving as a member of the Board of Directors of the Company.

2.18 Effective Date. The Plan was originally effective January 1, 2004. This amended and restated Plan is effective January 1, 2009.

2.19 Investment Option. Investment Option shall mean a security or other investment such as a mutual fund, life insurance sub-account, or other investment approved by the Plan Administrator for use as part of an Investment Option menu, which a Participant may elect as a measuring device to determine Deemed Investment earnings (positive or negative) to be valued in the Participant’s Account or Sub-Account. The Participant has no real or beneficial ownership in the security or other investment represented by the Investment Option.

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2.20 Participant. Participant means a Director who has elected to defer Compensation in accordance with the Plan in any Plan Year.

2.21 Plan. Plan means the PSS World Medical, Inc. Directors’ Deferred Compensation Plan as documented herein and as may be amended from time to time hereafter.

2.22 Plan Administrator. Plan Administrator shall mean a person or persons appointed by the Deferred Compensation Committee who is responsible for the day-to-day decision making, record keeping, and administration of the Plan; provided, that the Plan Administrator may delegate duties of the Plan Administrator to employees or others to assist in the administration of the Plan.

2.23 Plan Year. Plan Year means January 1 through December 31 each year.

2.24 Separation from Service. A Separation from Service occurs when a Participant incurs a “separation of service” within the meaning of Code Section 409A.

2.25 Sub-Account. Sub-Account shall mean a portion of the Deferred Compensation Account maintained separately by the Plan Administrator in order to properly administer the Plan.

2.26 Termination Benefit. Termination Benefit shall mean the Participant’s Deferred Compensation Account Balance distributed in accordance with Article V of the Plan.

2.27 Termination Valuation Date. Termination Valuation Date shall mean the last day of the calendar month in which Separation from Service occurs.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1 Eligibility and Participation. Each Director shall be eligible to participate in this Plan upon his or her election or appointment as a Director.

3.2 Duration. Once a Director becomes a Participant, such Director shall continue to be a Participant so long as he or she is entitled to receive benefits hereunder, notwithstanding any subsequent Separation from Service.

3.3 Revocation of Future Participation. Notwithstanding the provisions of Section 3.2, the Committee may revoke such Participant’s eligibility to make future deferrals under this Plan to be effective as of the January 1^st following such revocation. Such revocation will not affect in any manner a Participant’s Deferred Compensation Account or other terms of this Plan.

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3.4 Notification. Each newly eligible Director shall be notified by the Plan Administrator, in writing, of his or her eligibility to participate in this Plan.

ARTICLE IV

DEFERRAL ELECTIONS, AND PARTICIPANT ACCOUNT VALUATION

4.1 Deferral Elections

(a) A Participant shall make deferral elections under the Plan by completing and submitting to the Plan Administrator a written Compensation Deferral Agreement provided by the Plan Administrator (or completing and electronically submitting the deferral election screen on the Participant website, when made available by the Plan Administrator). Deferral elections shall be made during an annual enrollment period which shall end no later than December 31 preceding the Plan Year to which the deferral election relates. Notwithstanding the foregoing, a Director who becomes eligible to be a Participant during any Plan Year may, in the initial year of eligibility only, make deferral elections with respect to Compensation which will be paid during the balance of such Plan Year but after such elections in such Plan Year, within 30 days of the date of his or her eligibility for participation in the Plan pursuant to Section 3.1 herein.

(b) Deferral elections shall be for a Plan Year, and shall remain in effect from Plan Year to Plan Year unless modified or revoked by the Participant in writing on such forms as may be prescribed by the Plan Administrator (or by following such procedures as are set by the Plan Administrator regarding using the Participant website, when available) during an enrollment period. Such modification or revocation shall become effective on the first day of the Plan Year following the date of the modification or revocation.

(c) A deferral election shall designate the amount of Compensation to be deferred in whole percentages. A Participant may defer up to 100% of his or her Compensation to be paid during the Plan Year to which the election refers.

(d) Deferrals shall be deducted from a Participant’s Compensation and the amount deferred shall be credited to the Participant’s Deferred Compensation Account and a Deemed Investment shall be made in the investment(s) represented by the Investment Option(s) elected by the Participant as of the close of business on the date it would otherwise have been paid as Compensation to the Participant.

(e) The Compensation Deferral Agreement shall indicate the Participant’s election of a payment schedule for his or her Termination Benefit. A Participant shall elect to have such Termination Benefit distributed subject

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to Section 5.3: (a) a portion, or all, in a single lump sum payable within 30 days following the Termination Valuation Date; and/or (b) the balance in up to ten (10) annual installment payments payable at the time described in Section 5.2. An election of a payment schedule for a Participant’s Termination Benefit shall pertain to the entire Deferred Compensation Account Balance. A Participant shall be permitted to change his or her payment schedule election at any time by filing a new Compensation Deferral Agreement (or by following such procedures as are set by the Plan Administrator regarding using the Participant website, when available), provided the payment commencement date under the new payment schedule election is at least five (5) years later than the payment commencement date under the prior payment schedule election; such election is made at least twelve (12) months prior to the Participant’s date of Separation from Service and may not be effective for twelve (12) months after the election is made. Any payment schedule election made within twelve (12) months of Separation from Service shall be null and void, and the most recent payment schedule election which is dated at least twelve (12) months prior to Separation from Service will be in effect.

4.2 Allocation Elections and Valuation of Accounts

(a) A Participant shall elect Investment Options from a menu provided by the Plan Administrator. The initial election shall be made on the Allocation Election form approved by the Plan Administrator (or Allocation Election Screen on the Participant website approved by the Plan Administrator) and shall specify the allocations among the Investment Options elected. A Participant’s Deferred Compensation Account shall be valued as the sum of the value of all Deemed Investments minus any withdrawals or distributions from said Account. Investment Options shall be utilized to determine the earnings attributable to the Account. Elections of Investment Options do not represent actual ownership of, or any ownership rights in or to, the securities or other investments to which the Investment Options refer, nor is the Company in any way bound or directed to make actual investments corresponding to Deemed Investments.

(b) The Committee, in its sole discretion, shall be permitted to add or remove Investment Options provided that any such additions or removals of Investment Options shall not be effective with respect to any period prior to the effective date of such change. Any unallocated portion of the Participant’s Account or any unallocated portion of new deferrals shall be Deemed Invested in an Investment Option referring to a money market based fund.

(c) A Participant may make a new Allocation Election with respect to future deferrals, and change the allocation of his or her Account, provided that such new allocations shall be in increments of one percent (1%). New

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Allocation Elections may be made on any business day, and will become effective on the same business day or, in the case of Allocation Elections received after a cut-off time established by the Plan Administrator, the following business day.

(d) Notwithstanding anything in this Section to the contrary, the Company shall have the sole and exclusive authority to invest any or all amounts deferred in any manner, regardless of any Allocation Elections by any Participant. A Participant’s Allocation Election shall be used solely for purposes of determining the value of such Participant’s Sub-Accounts and the amount of the corresponding liability of the Company in accordance with this Plan.

4.3 Prohibition Against Modifications to deferral elections. A Participant may not modify or revoke a deferral election during a Plan Year.

ARTICLE V

DISTRIBUTIONS AND WITHDRAWALS

5.1 Termination Benefit Distribution. The Termination Benefit will be paid (or the first payment will be made) in accordance with the Participant payment schedule election within 30 days of the Termination Valuation Date.

5.2 Installment Payments. If the Participant has elected installment payments for his or her Termination Benefit distribution, annual cash payments will be made beginning within 30 days of the Termination Valuation Date or, in the event of a partial lump sum election, following the first anniversary of the partial lump sum payment made following Separation from Service. Such payments shall continue annually on or about the anniversary of the previous installment payment until the number of installment payments elected has been paid. The installment payment amount shall be determined annually as the result of a calculation, performed on the Annual Valuation Date, where (i) is divided by (ii):

(i) equals the value of the applicable Sub-Account on the Annual Valuation Date; and

(ii) equals the remaining number of installment payments.

5.3 Small Account Balance Lump Sum Payment. In the event that a Participant’s Deferred Compensation Account Balance is less than $25,000 on the initial Termination Valuation Date, the Termination Benefit shall be paid in a lump sum and any form of payment election to the contrary shall be null and void.

5.4 Death Benefit. In the event of a Participant’s death either before Separation from Service or before complete distribution of the Termination Benefit, such Participant’s Beneficiary, named on the most recently filed Beneficiary Designation Form, shall be paid a Death Benefit in the amount of the remaining

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Deferred Compensation Account Balance in a single lump sum as soon as practicable following the end of the month in which the Participant’s death occurred. The Valuation Date for purposes of determining the Death Benefit shall be the last day of the month in which the Participant’s death occurs.

5.5 Domestic Relations Order. If necessary to comply with a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant’s Account under the Plan, the Plan Administrator shall have the right to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to such spouse or former spouse.

5.6 Change in Control. In the event a Participant shall have a Separation from Service within two (2) years following a Change in Control, such Participant shall receive his or her Deferred Compensation Account Balance in a single lump sum paid within 30 days following the Termination Valuation Date All payment schedule elections to the contrary shall be ignored.

5.7 Pro-rata subtraction from Investment Options. In the event a distribution under this Article V (e.g. an installment payment) is less than the entire Account Balance and the Account is allocated over more than one Investment Option, the distribution shall be subtracted from each Investment Option in a pro-rata manner determined in the sole discretion of the Plan Administrator.

ARTICLE VI

ADMINISTRATION

6.1 Plan Administration. This Plan shall be administered by the Plan Administrator, which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Plan Administrator and resolved in accordance with the claims procedures in Article IX.

6.2 Withholding. The Employer shall have the right to withhold from any payment made under the Plan (or any amount deferred into the Plan) any taxes required by law to be withheld in respect of such payment (or deferral).

6.3 Indemnification. The Company shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which is delegated duties, responsibilities, and authority with respect to administration of the Plan, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to

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act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Company. Notwithstanding the foregoing, the Company shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Company consents in writing to such settlement or compromise.

6.4 Expenses. The expenses of administering the Plan shall be paid by the Company.

6.5 Delegation of Authority. In the administration of this Plan, the Plan Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who may be legal counsel to the Company.

6.6 Binding Decisions or Actions. The decision or action of the Plan Administrator in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

ARTICLE VII

AMENDMENT AND TERMINATION

7.1 Amendment and Termination. The Plan is intended to be permanent, but the Committee may at any time modify, amend, or terminate the Plan, provided that such modification, amendment or termination shall not cancel, reduce, or otherwise adversely affect the amount of benefits of any Participant accrued (and any form of payment elected) as of the date of any such modification, amendment, or termination, without the consent of the Participant. Following a Plan termination, the Participants’ Account balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Committee may provide that upon termination of the Plan, all Participant Accounts shall be distributed, subject to and in accordance with any rules established by the Committee deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

ARTICLE VIII

INFORMAL FUNDING

8.1 General Assets. All benefits in respect of a Participant under this Plan shall be paid directly from the general funds of the Company, or a Rabbi Trust created by

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the Company and funded by the Company for the purpose of informally funding the Plan, and other than such Rabbi Trust, if created, no special or separate fund shall be established and no other segregation of assets shall be made to assure payment. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligation hereunder. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company or any if its subsidiaries or affiliated companies and any Director, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments from the Company hereunder, such rights are no greater than the right of an unsecured general creditor of the Company.

8.2 Rabbi Trust. The Company may, at its sole discretion, establish a grantor trust, commonly known as a Rabbi Trust, as a vehicle for accumulating the assets needed to pay the promised benefit, but the Company shall be under no obligation to establish any such trust or any other informal funding vehicle.

ARTICLE IX

GENERAL CONDITIONS

9.1 Anti-assignment Rule. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary.

9.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Company or any of its subsidiaries or affiliated companies. The right and power of the Company to dismiss or discharge a Director is expressly reserved.

9.3 Claims Procedures. Claims for payments under this Plan shall be governed by the procedures established under Department of Labor Regulations, §2560.503-1.

9.4 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between a Director and the Company.

9.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

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9.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Plan Administrator may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

9.7 Governing Law. The laws of the State of Florida shall govern the construction and administration of the Plan.

The foregoing is hereby acknowledged as being the PSS World Medical, Inc. Directors’ Deferred Compensation Plan as adopted by the Board of Directors of the Company on December 12, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer
Its:

ATTEST:

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EX-10.13

Exhibit 10.13

PSS WORLD MEDICAL, INC.

AMENDED AND RESTATED

OFFICER DEFERRED COMPENSATION PLAN

(as amended and restated effective January 1, 2009)

ARTICLE 1

ESTABLISHMENT OF PLAN

1.01 Background of Plan. PSS World Medical, Inc. maintains a non-qualified deferred compensation plan known as the PSS World Medical, Inc. Amended and Restated Officer Deferred Compensation Plan which became effective as of August 1, 1998 and was amended effective March 30, 1999, July 1, 2000, April 1, 2001, April 1, 2002, July 1, 2003, July 1, 2004 and December 2005 (the “Prior Plan”). Effective as of January 1, 2009, the Prior Plan is amended and restated as set forth in this document to comply with Section 409A and for certain other purposes. Amounts earned and vested as of December 31, 2004 under the Prior Plan shall remain subject to the terms and conditions of the Prior Plan. Amounts earned or vested under this Plan or the Prior Plan after December 31, 2004 shall be subject to the terms and conditions of this Plan.

1.02 Purpose. The Company desires to recognize the valuable contribution of its selected officers by providing a program for the voluntary deferral of compensation, which, together with a Company Matching Contribution on deferrals of up to a designated percentage of compensation and Discretionary Company Contributions, will earn a return based on the performance of one or more benchmark investments.

1.03 Status of Plan.

(a) The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and shall be interpreted and administered to the extent possible in a manner consistent with that intent. Although the plan is unfunded for tax purposes, the Company may establish a trust under Revenue Procedure 92-64 to provide benefits under the Plan. (See Section 1.04).

(b) The Plan is intended to comply with, and shall be construed so as to provide for deferrals and benefits that are consistent with the requirements of, Code Section 409A. The Plan Administrator may authorize changes to time and form of payment elections but only to the extent consistent with the transition rules, and during the transition relief period, provided under Section 409A, as described more fully in Appendix A of the Plan.

1.04 Establishment of Trust. As noted in Section 1.03, the Company may establish a trust to fund benefits provided under the terms of the Plan (“Trust”). It is intended that a transfer of assets into the Trust will not generate taxable income (for federal income tax purposes) to the Participants until such assets are actually distributed or otherwise made available to the Participants.

ARTICLE 2

DEFINITIONS

2.01 Definitions. Certain terms of the Plan have defined meanings set forth in this Article and which shall govern unless the context in which they are used clearly indicates that some other meaning is intended.

Accounts. The term “Accounts” means and includes all of a Participant’s In-Service Accounts and his or her Termination Account under the Plan. The performance and value of the Accounts shall be measured by reference to the performance of one or more third-party investment funds (investing in equities and fixed income instruments) designated from time to time by the Plan Administrator as being benchmark investments for Accounts. The maintenance of individual Accounts is for bookkeeping purposes only. The Participant is not an actual investor in the designated funds; rather the Participant is permitted to select any of the funds as a benchmark for the return on his or her Compensation deferred under the Plan.

Beneficiary. Any person or persons designated by a Participant, in accordance with procedures established by the Committee or Plan Administrator, to receive benefits hereunder in the event of the Participant’s death. If any Participant shall fail to designate a Beneficiary or shall designate a Beneficiary who shall fail to survive the Participant, the Beneficiary shall be the Participant’s surviving spouse, or, if none, the Participant’s surviving descendants (who shall take per stirpes) and if there are no surviving descendants, the Beneficiary shall be the Participant’s estate.

Board. The Board of Directors of the Company.

Change in Control. As defined in Section 9.03.

Code Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the underlying Treasury regulations and guidance under such Code Section.

Committee. The Compensation Committee of the Board.

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Company. PSS World Medical, Inc. and its successors.

Company Matching Contribution. The matching contributions made by the Company to Participants’ Accounts in accordance with Section 5.05.

Compensation. The total salary, commissions and cash bonus payable by the Company to a Participant in the relevant Plan Year for services to the Company or any of its affiliates, as such amount may be changed from time to time.

Deferral Election Form. A form, substantially in the form attached hereto as Exhibit A, pursuant to which a Participant elects (i) to defer Compensation under the Plan and (ii) the payment date and form of payment for his or her Accounts.

Deferral Termination Date. As defined in Section 5.03(c).

Disability or Disabled. Disability as defined in Code Section 409A, as amended from time to time. Subject to amendments to Code Section 409A after the Effective Date of the Plan, a Participant shall be considered Disabled if the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. In the event of a dispute, the determination whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.

Discretionary Company Contributions. The discretionary contributions, if any, made by the Company to Participants’ Accounts in accordance with Section 5.06.

Effective Date. The Prior Plan was originally effective August 1, 1998. The effective date of this amendment and restatement is January 1, 2009.

Election Date. The date established by the Plan as the date by which a Participant must submit a valid Deferral Election Form to the Plan Administrator (i) in order to participate in the Plan for a Plan Year or (ii) with respect to non-elective bonus deferrals, to designate a payment date and form of payment. For each Plan Year, the Election Date is December 31 of the preceding Plan Year, or March 15, 2005 in the case of Plan Year 2005 only; provided, however, that if a person first becomes eligible to participate in the Plan after the beginning of the Plan Year, the Election Date for such person for that Plan Year shall be the 30^th day after he or she first becomes eligible to participate in the Plan.

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In-Service Account. An In-Service Account established by the Company under Section 5.03 of the Plan for a Participant’s deferral of Compensation through a designated Deferral Termination Date. A Participant may have up to three In-Service Accounts under the Plan in addition to his or her Termination Account. A Participant is not required to have any In-Service Accounts.

Normal Retirement. Separation from Service after age 60, or after age 55 with ten years of prior service with the Company or any of its affiliates.

Officer. A person who has been designated by the Board as a Tier 1 Officer, Tier 2 Officer, Tier 3 Officer, Tier 4 Officer or Tier 5 Officer of the Company.

Participant. Any Officer who has elected to participate in the Plan or who has received a Discretionary Company Contribution under the Plan.

Plan. The PSS World Medical, Inc. Amended and Restated Officer Deferred Compensation Plan as set forth in this document together with any subsequent amendments hereto.

Plan Administrator. The Committee or its delegee of administrative duties under the Plan pursuant to Section 3.02.

Plan Year. The Plan Year shall be the calendar year.

Roll-Over Balance. The unpaid vested balance in a Participant’s In-Service Account that will automatically be rolled into the Participant’s Termination Account under the circumstances described in Section 5.08(c).

Separation from Service. A Separation from Service occurs when a Participant incurs a “separation of service” within the meaning of Code Section 409A.

Specified Employee. The term “Specified Employee” has the meaning assigned such term in Code Section 409A provided, however, that, the Company’s determination of its Specified Employees and the application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Committee, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company.

Termination Account. A Termination Account established by the Company under Section 5.03 of the Plan for a Participant for deferrals of Compensation pursuant to the Plan until the Participant’s Separation from Service, including any Company Matching Contributions and Discretionary Company Contributions.

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Termination Triggering Event. As defined in Section 5.08(a).

Unforeseeable Emergency. An “unforeseeable emergency” as defined in Treas. Reg. Section 1.409A-3(i)(3)(i). Generally, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary, or the Participant’s dependent; loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

Valuation Dates. The dates for valuing the balance in an Account as provided in Section 5.08.

ARTICLE 3

ADMINISTRATION OF THE PLAN

3.01 Administrator of the Plan. The Plan shall be administered by the Committee. The Committee may delegate certain administrative functions to the Plan Administrator as provided in Section 3.02.

3.02 Authority of Committee. The Committee shall have full power and authority to: (i) interpret and construe the Plan and adopt such rules and regulations as it shall deem necessary and advisable to implement and administer the Plan, (ii) determine the benefits of the Plan to which any Participant, Beneficiary or other person may be entitled, (iii) keep records of all acts and determinations of the Committee and Plan Administrator, and to keep all such records, books of accounts, data and other documents as may be necessary for the proper administration of the Plan, (iv) prepare and distribute to all Participants and Beneficiaries information concerning the Plan and their rights under the Plan, (v) do all things necessary to operate and administer the Plan in accordance with its provisions, and (iv) designate persons other than members of the Committee or the Board to carry out its responsibilities, subject to such limitations, restrictions and conditions as it may prescribe. Without limiting the foregoing, the Committee may from time to time delegate to one or more agents who may or may not be employees of the Company (the “Plan Administrator”) the authority to act on behalf of the Committee in all matters of Plan administration, but the Committee shall retain exclusive authority to determine eligible Participants, and to amend or terminate the Plan. Until later designated by the Committee, the Plan Administrator shall be a committee consisting of David Smith, Jeff Anthony and David Klarner.

3.03 Effect of Committee Determinations. No member of the Committee or the Board

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or the Plan Administrator shall be personally liable for any action or determination made in good faith with respect to the Plan or to any settlement of any dispute between a Participant and the Company. Any decision or action taken by the Committee or the Board with respect to the administration or interpretation of the Plan shall be conclusive and binding upon all persons.

ARTICLE 4

PARTICIPATION

4.01 Election to Participate. Each Tier 1, Tier 2, Tier 3, Tier 4 and Tier 5 Officer is automatically eligible to participate in the Plan. He or she may participate in the Plan for a Plan Year by delivering a properly completed and signed Deferral Election Form to the Plan Administrator on or before the Election Date for such Plan Year. The Participant’s participation in the Plan will be effective as of the following date, as applicable: (i) in the case of a Participant on the Effective Date, the effective date of the Participant’s participation under the Prior Plan, (ii) in the case of subsequent Plan Years, the first day of the Plan Year beginning after the Plan Administrator receives the Participant’s Deferral Election Form, or (iii) in the case of a person who first becomes eligible to participate in the Plan after the beginning of a Plan Year, the first day after the Plan Administrator receives the Deferral Election Form if filed within 30 days after such Participant first becomes eligible to participate in the Plan but only with respect to amounts earned after the date that the Deferral Election Form is filed. A Participant shall not be entitled to any benefit hereunder unless such Participant has properly completed a Deferral Election Form and (i) deferred the receipt of Compensation pursuant to the Plan, or (ii) has received a Discretionary Company Contribution under the Plan.

4.02 Continuation of Deferral Election Form. Prior to the commencement of each Plan Year, a Participant shall have the right, by executing and delivering to the Plan Administrator a new Deferral Election Form, to modify the percentage of his or her Compensation which is deferred to his or her Accounts under the Plan. Such new Deferral Election Form shall be effective only for Compensation applicable to the Participant’s service after the first day of the new Plan Year. If the Participant fails to deliver a new Deferral Election Form prior to the commencement of the new Plan Year, the Participant’s Deferral Election Form in effect during the previous Plan Year shall become irrevocable as of December 31 of such previous Plan Year and shall continue in effect during the new Plan Year.

4.03 Automatic Termination of Deferral Election Form. A Participant’s Deferral Election Form will automatically terminate at the earlier of (i) the Participant’s Separation from Service, or (ii) to the extent permitted under Section 409A, the termination of the Plan (in accordance with Section 7.01 herein).

4.04 No Implied Rights. Nothing contained in the Plan shall be deemed to give any Officer the right to continue in such status or to remain as an employee of the Company or its affiliates.

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ARTICLE 5

PLAN BENEFITS

5.01 Deferred Compensation. A Participant may elect to defer up to 100% of his or her Compensation in accordance with the terms of the Plan and the Deferral Election Form; provided, however, that the Company Matching Contribution shall apply only with respect to deferrals of up to 15% of Compensation for Tier 1 and Tier 2 Officers and up to 10% of Compensation for Tier 3 through Tier 5 Officers. For bookkeeping purposes, the amount of the Compensation which the Participant elects to defer pursuant to the Plan shall be transferred to and held in the Participant’s individual Accounts, as indicated in the Deferral Election Form, and subject to the terms of the Plan.

5.02 Time of Election of Deferral. Subject to Section 4.02, a Participant who wishes to defer Compensation for a Plan Year must irrevocably elect to do so on or prior to the Election Date for such Plan Year, by delivering a valid Deferral Election Form to the Plan Administrator.

5.03 Deferral Elections.

(a) Designation of Accounts. The Company will automatically designate a Termination Account for each Participant for the purpose of (i) crediting the Participant’s voluntary deferrals of Compensation, if any, into the Termination Account, (ii) crediting Roll-Over Balances, if applicable, from the Participant’s In-Service Accounts pursuant to Section 5.08(c), (iii) crediting any Discretionary Company Contributions and (iv) crediting Company Matching Contributions. In addition to the Termination Account, a Participant may designate up to three In-Service Accounts.

(b) Deferral Amounts. The Deferral Election Form shall indicate: (i) the aggregate dollar amount or percentage (in increments of 1%) of Compensation to be deferred, (ii) the components of Compensation from which such deferrals are to be made, such as from salary, bonus or commission, and (iii) of such aggregate amount to be deferred, the dollar amount or percentage (in increments of 1%) of Compensation to be credited to each Account, if more than one.

(c) Deferral Periods. A Participant shall designate for each In-Service Account a date (the “Deferral Termination Date”), after which payments from such Account will be payable pursuant to Section 5.08. The Deferral Termination Date must be at least three years after the first date that deferrals are made to the In-Service Account. Distribution of amounts held in a Participant’s Termination Account shall commence as provided in Section 5.08(a) following the earliest of (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability.

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(d) Limited Changes Permitted. Deferral elections shall be irrevocable, except with respect to:

(i) In-Service Account(s); Extension of Deferral Period and/or Change in Form of Payment. For each In-Service Account, the Participant may file a new Deferral Election Form to extend the Deferral Termination Date and/or change the form of payment for such Account; provided, however, that (A) the new Deferral Election Form must specify a Deferral Termination Date that is at least five (5) years later than the prior Deferral Termination Date for such Account; (B) such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the originally selected Deferral Termination Date for such Account: and (C) such changed election may not become effective for twelve (12) months after it has been filed with the Plan Administrator.

(ii) Termination Account; Change in Form of Payment. A Participant may file a new Deferral Election Form to change the form of payment of his or her Termination Account; provided, however, that following such election, payment of the Termination Account will commence five (5) years from the Participant’s Separation from Service and such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the Participant’s Separation from Service.

5.04 Return on Account Balances. Amounts in a Participant’s Account will be credited with a return (positive or negative) measured by reference to the performance of one or more benchmark investment funds selected by the Participant for such Account. A Participant may from time to time, in accordance with procedures established by the Plan Administrator: (i) indicate and change his or her investment allocation choices from among the offered benchmark investment funds, and (ii) indicate whether such investment allocation elections shall apply to new deferrals, existing Account balances, or both. Unless otherwise indicated by the Plan Administrator, a Participant may specify different investment allocations for each of his or her Accounts. Indications of investment allocation choices shall be made in such manner and with such frequency as may be approved from time to time by the Plan Administrator. Participants will be provided with quarterly reports as to the status of their various Accounts.

5.05 Company Matching Contributions. For each dollar ($1.00) that a Tier 1 Officer defers into an Account (up to 15% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of one dollar twenty-five cents ($1.25). For each dollar ($1.00) that a Tier 2 Officer defers into an Account (up to 15% of Compensation in the aggregate for all of the

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Participant’s Accounts), the Company will make a matching contribution of one dollar ($1.00). For each dollar ($1.00) that a Tier 3 Officer defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of seventy-five cents ($.75). For each dollar ($1.00) that a Tier 4 Officer defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of fifty cents ($.50). For each dollar ($1.00) that a Tier 5 Officer defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of thirty-five cents ($.35). Company Matching Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Account into which such Company Matching Contributions are credited. The Board may change the amount of the Company Matching Contributions for any future Plan Year by giving written notice to eligible Participants prior to the Election Date for such Plan Year. Any such change will be prospective only.

5.06 Discretionary Company Contributions. The Company may at any time make a discretionary contribution to a Participant’s Termination Account in any amount the Company deems advisable. Discretionary Company Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Participant’s Termination Account; provided that if the Participant has not indicated an investment allocation for his or her Termination Account, the most conservative investment allocation then available under the Plan will be applied to the Participant’s Termination Account unless and until changed by the Participant. The Company may discriminate among Participants in making Discretionary Company Contributions and may discriminate among those Participants receiving Discretionary Company Contributions as to the amount of such contributions.

5.07 Vesting. Vesting refers to a Participant’s ability to receive benefits at the end of the deferral period.

(a) Participant Deferrals. Participants are always 100% vested in their Account other than Company Matching Contributions or Discretionary Company Contributions and allocated return thereon.

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(b) Company Matching Contributions. Company Matching Contributions and allocated return thereon become vested in accordance with the following schedule:

Years elapsed since first deferral under the Plan or the Prior Plan	Vested % of Company Matching Contributions and allocated return thereon
Less than 4 Years	0	%
4 Years	20	%
5 Years	40	%
6 Years	60	%
7 Years	80	%
8 Years	100	%
Earlier death, Normal Retirement or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after a Change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

For example, if a Participant first made a deferral under the Plan with respect to any part of Plan Year 2005, he or she will become vested in all Company Matching Contributions in all of his or her Accounts, based on the anniversary of the first day of such 2005 Plan Year (i.e., all Company Matching Contributions to such Participant, whenever made, will be 20% vested on January 1, 2009, 40% vested on January 1, 2010, and so on).

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(c) Discretionary Company Contributions. Discretionary Company Contributions and allocated return thereon become vested as determined and communicated by the Company or, if not determined, then in accordance with the following schedule:

Years elapsed since the last day of the Plan Year in which the Discretionary Company Contribution was made	Vested % of Discretionary Company Contributions and allocated return thereon
Less than 1 Year	0	%
1 Year	20	%
2 Years	40	%
3 Years	60	%
4 Years	80	%
5 Years	100	%
Earlier death, Normal Retirement or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

For example, if a Discretionary Company Contribution was made for a Participant at any time during Plan Year 2005, the Participant would become vested in 20% of such contribution as of the last day of Plan Year 2006, and 40% of such contribution as of the last day of Plan Year 2007, and so on.

5.08 Payment of Accounts.

(a) Payment Dates for Termination Account. Subject to Section 5.08(g) below, payment of vested Plan benefits held in a Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) shall commence within sixty (60) days after the end of the month in which occurs the earliest of the following events (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability (each a “Termination Triggering Event”). Payments shall be based on the vested Account balance valued as of the applicable Valuation Dates. The first Valuation Date shall be the last day of the month in which the

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Termination Triggering Event occurs. A Participant’s Termination Account shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed twenty (20));

(iii) In a combination of partial lump sum payment, and remainder in annual installments;

(iv) Annual installment payments shall be for no less than two (2) and no more than twenty (20) annual installments (as indicated in the Participant’s most recent effective Deferral Election Form). Payments shall be annually on the anniversary of the first Valuation Date. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable Valuation Date divided by the number of remaining installments to be paid. (including the current installment);

(v) Regardless of the Participant’s election, if the aggregate vested balance in the Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is $25,000 or less on the first Valuation Date, the entire vested balance will be paid in a single lump sum.

(b) Payment Dates for In-Service Accounts. Except as provided in Section 5.08(c), payment of vested Plan benefits held in a Participant’s In-Service Account shall commence within 45 days after the end of the month in which the Deferral Termination Date occurs, as indicated in the Participant’s most recent effective Deferral Election Form for such Account. Except as set forth in Section 5.08(c), a Participant’s In-Service Accounts shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed five (5)). Payments shall be annually on the anniversary of the initial installment. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable valuation Date divided by the number of installments remaining (including the current installment). Payment from a Participant’s In-Service Account shall be based on the vested Account balance valued as of the last day of the month in which the Deferral Termination Date occurs (the “Valuation Date”).

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(c) Roll-Over of In-Service Accounts to Termination Account. If a Termination Triggering Event with respect to a Participant occurs prior to the total distribution of the In-Service Account of such Participant, the vested balance in such In-Service Account (the “Roll-Over Balance”) shall automatically be rolled into the Participant’s Termination Account and be paid as follows:

(i) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is a lump sum, any balance remaining in an In-Service Account as of such Termination Triggering Event shall be paid out as a lump sum;

(ii) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and installment payments have commenced with respect to an In-Service Account, any balance remaining in such In-Service Account shall continue to be paid in accordance with the Participant’s most recent effective Deferral Election Form relating to his or her In-Service Account;

(iii) If the form of payment for the Participant’ Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and payments have not commenced with respect to an In-Service Account, such In-Service Account shall be paid in accordance with the installment payment schedule set forth in the Participant’s most recent effective Deferral Election Form relating to his or her Termination Account.

(d) Payment Upon Death. Regardless of the form of payment elected on the Participant’s most recent effective Deferral Election Form, in the event of the Participant’s death, the entire unpaid vested balance in any of his or her Account(s) shall be paid to the Participant’s Beneficiary in a single lump sum within sixty (60) days after the last day of the month in which date of death occurs.

(e) Accruals During Payment Periods. The unpaid portion of a Participant’s Termination Account shall continue to receive allocated returns as provided in Section 5.04 until the last applicable Valuation Date for such Account, but no interest or other return will be paid on Account balances between the applicable Valuation Dates and payment dates as provided in Sections 5.08(a) and (b).

(f) Termination of Eligible Status. The termination of a Participant’s status as an Officer will not, absent Separation from Service, cause a payout of such Participant’s Accounts, and such person may continue to defer Compensation into the Plan, but no Company Matching Contributions will be made on Compensation deferred while he or she is not an Officer. Allocated returns will continue to accrue on such person’s Account as provided in Section 5.04 and 5.08(d).

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(g) Six Month Delay for Specified Employees. Any Participant who is a Specified Employee as of his or her Termination Triggering Event (other than death), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), payment under this Section 5.08 shall be delayed as follows:

(i) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is payable in a lump sum, such payment will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s Termination Triggering Event (other than death);

(ii) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is payable in installments, the amount of such installments that would otherwise be payable during the six-month period immediately following the Participant’s Termination Triggering Event (other than death) will be accumulated and payment of such accumulated amount will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s separation from service, whereupon the accumulated amount will be paid or distributed to the Participant and the normal payment schedule for any remaining installment payments will resume;

(iii) For purposes of calculating payments under this Section 5.08(g), the “first Valuation Date” referenced in Section 5.08(a) shall be the last day of the sixth month following the Participant’s Termination Triggering Event (other than death).

5.09 Unforeseeable Emergency. The Plan Administrator may, in its sole discretion, accelerate the payment to a Participant of an amount reasonably necessary to handle an Unforeseeable Emergency, and only in compliance with Section 409A. Amounts distributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). Such payment may be made even if the Participant has not incurred a Separation from Service and regardless of the number of years he or she has been a Participant. All financial hardship distributions shall be made in cash in a lump sum. Such payments will be made on a first-in, first-out basis so that the oldest Compensation deferred under the Plan shall be deemed distributed first in a financial hardship.

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5.10 Payment to Minors and Incapacitated Persons. In the event that any amount is payable to a minor or to any person who, in the judgment of the Plan Administrator, is incapable of making proper disposition thereof, such payment shall be made for the benefit of such minor or such person in any of the following ways as the Plan Administrator, in its sole discretion, shall determine:

(a) By payment to the legal representative of such minor or such person;

(b) By payment directly to such minor or such person;

(c) By payment in discharge of bills incurred by or for the benefit of such minor or such person. The Plan Administrator shall make such payments without the necessary intervention of any guardian or like fiduciary, and without any obligation to require bond or to see to the further application of such payment. Any payment so made shall be in complete discharge of the Plan’s obligation to the Participant and his or her Beneficiaries.

5.11 Application for Benefits. The Plan Administrator may require a Participant or Beneficiary to complete and file certain forms as a condition precedent to receiving the payment of benefits, including, without limitation, a consent to participating in any corporate owned life insurance program which the Company sponsors. The Plan Administrator may rely upon all such information given to it, including the Participant’s current mailing address. It is the responsibility of all persons interested in receiving a distribution pursuant to the Plan to keep the Plan Administrator informed of their current mailing addresses.

5.12 Designation of Beneficiary. Each Participant from time to time may designate any person or persons (who may be designated contingently or successively and who may be an entity other than a natural person) as his or her Beneficiary or Beneficiaries to whom the Participant’s Account is to be paid if the Participant dies before receipt of all such benefits. Each Beneficiary designation shall be on the form prescribed by the Plan Administrator and will be effective only when filed with the Plan Administrator during the Participant’s lifetime. Each Beneficiary designation filed with the Plan Administrator will cancel all Beneficiary designations previously filed with the Plan Administrator. The revocation of a Beneficiary designation, no matter how effected, shall not require the consent of any designated Beneficiary.

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ARTICLE 6

FUNDING OF PLAN

6.01 Funding. Plan benefits shall be paid from the general assets of the Company or as otherwise directed by the Company. To the extent that any Participant acquires the right to receive payments under the Plan (from whatever source), such right shall be no greater than that of an unsecured general creditor of the Company. Participants and their Beneficiaries shall not have any preference or security interest in the assets of the Company other than as a general unsecured creditor.

ARTICLE 7

AMENDMENT AND TERMINATION

7.01 Plan Amendment and Termination. The Committee reserves the right to modify, alter, amend, or terminate the Plan, at any time and from time to time, without notice, to any extent deemed advisable; provided, however, that no such amendment or termination shall (without the written consent of the Participant, if living, and if not, the Participant’s Beneficiary) adversely affect any benefit under the Plan which has accrued with respect to the Participant or Beneficiary as of the date of such amendment or termination regardless of whether such benefit is in pay status. Following a Plan termination, the Participants’ Account balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Committee may provide that upon termination of the Plan, all Participant Accounts shall be distributed, subject to and in accordance with any rules established by the Committee deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

ARTICLE 8

CLAIMS PROCEDURE

8.01 Claims Procedure. Accounts shall be paid in accordance with the provisions of this Plan. If the Participant or his or her Beneficiary requests payment of benefits, and such request is denied in whole or in part, the Participant or the designated Beneficiary may request a review of the Company’s denial of benefits within sixty days of the date the Participant or the Beneficiary receives written notice of such denial. If the Company again denies the Participant’s or the Beneficiary’s request for payment of benefits, the Company shall provide written notice of the denial of benefits to the Participant or the Beneficiary and shall include in such notice a claims appeal procedure, all in accordance with Section 503 of the ERISA and DOL Regulation §2560.503-1 and such procedures are incorporated in this Plan by reference.

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ARTICLE 9

MISCELLANEOUS

9.01 Headings. The headings and sub-headings in the Plan have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.

9.02 Spendthrift Clause. None of the benefits, payments, proceeds or distributions under the Plan shall be subject to the claim of any creditor of any Participant or Beneficiary, or to any legal process by any creditor of such Participant or Beneficiary, and none of them shall have any right to alienate, commute, anticipate or assign any of the benefits, payments, proceeds or distributions under the Plan except to the extent expressly provided herein to the contrary.

9.03 Change in Control. The Plan shall not be automatically terminated by the Company’s acquisition by, merger into, or sale of substantially all of its assets to any other organization (a “Change in Control”), but the Plan shall be continued thereafter by such successor organization. All rights to amend, modify, suspend or terminate the Plan shall be transferred to the successor organization, effective as of the date of the Change in Control. If the successor terminates the Plan, all Participants shall thereupon become 100% vested in their Accounts, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon. If within 24 months of the Change in Control a Participant incurs a Separation from Service other than for Cause (as determined by the Company) or the Participant resigns for Good Reason (as defined in the Participant’s Employment Agreement, if any), such Participant shall thereupon become 100% vested in his or her Account, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon.

9.04 Release. Any payment to Participant or Beneficiary, or to their legal representatives, in accordance with the provisions of the Plan, shall to the extent thereof be in full satisfaction of all claims hereunder against the Committee, the Plan Administrator and the Company, any of whom may require such Participant, Beneficiary, or legal representative, as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Plan Administrator, the Committee, or the Company, as the case may be.

9.05 Governing Law. To the extent not governed by federal law, the Plan shall be construed in accordance with and governed by the laws of the State of Florida.

9.06 Costs of Collection; Interest. In the event the Participant collects any part or all of the payments due under the Plan by or through a lawyer or lawyers, the Company will pay all costs of collection, including reasonable legal fees incurred by the Participant.

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9.07 Successors and Assigns. The Plan shall be binding upon the successors and assigns of the parties hereto.

The foregoing is hereby acknowledged as being the PSS World Medical, Inc. Amended and Restated Officer Deferred Compensation Plan, as adopted by the Compensation Committee of the Board of Directors of the Company on December 11, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer

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APPENDIX A

LIMITED TRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE

AVAILABLE IN ACCORDANCE WITH NOTICES 2001-1, 2006-79, 2007-86 AND

SUBSEQUENT GUIDANCE

Notice 2005-1 Transition Relief

(a) Deferral Election Timing. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 21 of Notice 2005-1, to permit Participants to make or modify deferral elections with respect to deferrals subject to Code Section 409A that relate all or in part to services performed on or before December 31, 2005, so long as: (i) a deferral election with respect to such compensation is properly filed with the Plan Administrator prior to March 15, 2005; and (ii) the amounts to which the deferral election relate have not been paid or become payable prior to the election.

(b) Termination and or Cancellation. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 20 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to: (a) elect to terminate, or partially terminate, participation in the Plan and receive payment of that portion of his or her vested Account balances payable under the Plan corresponding to the portion of the Plan to which the termination applies; or (b) elect to cancel or reduce a deferral election. An election by a Participant permitted in (a) or (b) hereinabove, shall be made no later than December 31, 2005.

(c) Payments Made to Specified Employees in 2005. Notwithstanding any provisions in the Plan concerning the prohibition of payments to Participants upon a termination of participation in the Plan or the cancellation of a deferral election during a Plan Year to the contrary, if there has been in calendar year 2005 any payments under the Plan to a Participant who qualifies as a Specified Employee that were made less than six (6) months after the Participant’s Separation from Service, then such payments shall be deemed to be a decision by the Participant to revoke his or her deferral pursuant to Q&A 20 of corrected Notice 2005-1 and in accordance with paragraph (b) above.

(d) Payment Elections. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 19 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), provided that the Participant makes the election on or before December 31, 2005.

Notice 2006-79 and 2007-86 Transition Relief

Opportunity to Make New (or Revise Existing) Payment Elections.

The Plan Administrator may, to the extent permitted by Notices 2006-79 and 2007-86, permit a Participants, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), in accordance with the :

(a) With respect to an election to change a time and form of payment made on or after January 1, 2006 and on or before December 31, 2006, the election shall apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006.

(b) With respect to an election to change the time and form of payment made on or after January 1, 2007 and on or before December 31, 2007, the election shall apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007.

(c) With respect to an election to change a time and form of payment made on or after January 1, 2008 and on or before December 31, 2008, the election shall apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

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EX-10.14

Exhibit 10.14

PSS WORLD MEDICAL, INC.

AMENDED AND RESTATED

ELITe DEFERRED COMPENSATION PLAN

(as amended and restated effective January 1, 2009)

ARTICLE 1

ESTABLISHMENT OF PLAN

1.01 Background of Plan. PSS World Medical, Inc. maintains a non-qualified deferred compensation plan known as the PSS World Medical, Inc. Amended and Restated ELITe Deferred Compensation Plan, which became effective as of July 1, 1997 and was amended July 1, 1998, March 30, 1999, July 1, 2000, April 1, 2001, April 1, 2002, July 1, 2003, July 1, 2004 and December 2005 (the “Prior Plan”). Effective as of January 1, 2009, the Prior Plan is amended and restated as set forth in this document to comply with Section 409A and for certain other purposes. Amounts earned and vested as of December 31, 2004 under the Prior Plan shall remain subject to the terms and conditions of the Prior Plan. Amounts earned or vested under this Plan or the Prior Plan after December 31, 2004 shall be subject to the terms and conditions of this Plan.

1.02 Purpose. The Company desires to recognize the valuable contribution of its CEO Roundtable and Challenger sales force and other selected executives by providing a program for the voluntary deferral of compensation, which, together with a Company Matching Contribution on deferrals of up to 10% of compensation and Discretionary Company Contributions, will earn a return based on the performance of one or more benchmark investments.

1.03 Status of Plan.

(a) The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and shall be interpreted and administered to the extent possible in a manner consistent with that intent. Although the plan is unfunded for tax purposes, the Company may establish a trust under Revenue Procedure 92-64 to provide benefits under the Plan. (See Section 1.04).

(b) The Plan is intended to comply with, and shall be construed so as to provide for deferrals and benefits that are consistent with the requirements of, Code Section 409A. The Plan Administrator may authorize changes to time and form of payment elections but only to the extent consistent with the transition rules, and during the transition relief period, provided under Section 409A, as described more fully in Appendix A of the Plan.

1.04 Establishment of Trust. As noted in Section 1.03, the Company may establish a trust to fund benefits provided under the terms of the Plan (“Trust”). It is intended that a transfer of assets into the Trust will not generate taxable income (for federal income tax purposes) to the Participants until such assets are actually distributed or otherwise made available to the Participants.

ARTICLE 2

DEFINITIONS

2.01 Definitions. Certain terms of the Plan have defined meanings set forth in this Article and which shall govern unless the context in which they are used clearly indicates that some other meaning is intended.

Accounts. The term “Accounts” means and includes all of a Participant’s In-Service Accounts and his or her Termination Account under the Plan. The performance and value of the Accounts shall be measured by reference to the performance of one or more third-party investment funds (investing in equities and fixed income instruments) designated from time to time by the Plan Administrator as being benchmark investments for Accounts. The maintenance of individual Accounts is for bookkeeping purposes only. The Participant is not an actual investor in the designated funds; rather the Participant is permitted to select any of the funds as a benchmark for the return on his or her Compensation deferred under the Plan.

Beneficiary. Any person or persons designated by a Participant, in accordance with procedures established by the Committee or Plan Administrator, to receive benefits hereunder in the event of the Participant’s death. If any Participant shall fail to designate a Beneficiary or shall designate a Beneficiary who shall fail to survive the Participant, the Beneficiary shall be the Participant’s surviving spouse, or, if none, the Participant’s surviving descendants (who shall take per stirpes) and if there are no surviving descendants, the Beneficiary shall be the Participant’s estate.

Board. The Board of Directors of the Company.

CEO Roundtable Member. A member of the CEO Roundtable sales force of the Company, as recognized from time to time by the Company’s management and the Board.

Challenger. A member of the Challenger sales force of the Company, as recognized from time to time by the Company’s management and the Board.

Change in Control. As defined in Section 9.03.

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Code Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the underlying Treasury regulations and guidance under such Code Section.

Committee. The Compensation Committee of the Board.

Company. PSS World Medical, Inc. and its successors.

Company Matching Contribution. The matching contributions made by the Company to Participants’ Accounts in accordance with Section 5.05.

Compensation. The total salary, commissions and cash bonus payable by the Company to a Participant in the relevant Plan Year for services to the Company or any of its affiliates, as such amount may be changed from time to time.

Deferral Election Form. A form, substantially in the form attached hereto as Exhibit A, pursuant to which a Participant elects (i) to defer Compensation under the Plan and (ii) the payment date and form of payment for his or her Accounts.

Deferral Termination Date. As defined in Section 5.03(c).

Disability or Disabled. Disability as defined in Code Section 409A, as amended from time to time. Subject to amendments to Code Section 409A after the Effective Date of the Plan, a Participant shall be considered Disabled if the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. In the event of a dispute, the determination whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.

Discretionary Company Contributions. The discretionary contributions, if any, made by the Company to Participants’ Accounts in accordance with Section 5.06.

Effective Date. The Prior Plan was originally effective July 1, 1997. The effective date of this amendment and restatement is January 1, 2009.

Election Date. The date established by the Plan as the date by which a Participant must submit a valid Deferral Election Form to the Plan Administrator (i) in order to participate in the Plan for a Plan Year, or (ii) with respect to non-elective bonus

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deferrals, to designate a payment date and form of payment. For each Plan Year, the Election Date is December 31 of the preceding Plan Year, or March 15, 2005 in the case of Plan Year 2005 only; provided, however, that if a person first becomes eligible to participate in the Plan after the beginning of the Plan Year, the Election Date for such person for that Plan Year shall be the 30 ^th day after he or she first becomes eligible to participate in the Plan.

In-Service Account. An In-Service Account established by the Company under Section 5.03 of the Plan for a Participant’s deferral of Compensation through a designated Deferral Termination Date. A Participant may have up to three In-Service Accounts under the Plan in addition to his or her Termination Account. A Participant is not required to have any In-Service Accounts.

Normal Retirement. Separation from Service after age 60, or after age 55 with ten years of prior service with the Company or any of its affiliates.

Participant. Any CEO Roundtable Member, Challenger or Selected Executive who has elected to participate in the Plan or who has received a Discretionary Company Contribution under the Plan.

Plan. The PSS World Medical, Inc. Amended and Restated ELITe Deferred Compensation Plan as set forth in this document, together with any subsequent amendments hereto.

Plan Administrator. The Committee or its delegee of administrative duties under the Plan pursuant to Section 3.02.

Plan Year. The Plan Year shall be the calendar year.

Roll-Over Balance. The unpaid vested balance in a Participant’s In-Service Account that will automatically be rolled into the Participant’s Termination Account under the circumstances described in Section 5.08(c).

Selected Executive. With respect to a Plan Year, an executive employee of the Company or any of its affiliates who has been selected by the Committee to be an eligible participant in the Plan for such Plan Year.

Separation from Service. A Separation from Service occurs when a Participant incurs a “separation of service” within the meaning of Code Section 409A.

Specified Employee. The term “Specified Employee” has the meaning assigned such term in Code Section 409A provided, however, that, the Company’s determination of its Specified Employees and the application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Committee, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company.

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Termination Account. A Termination Account established by the Company under Section 5.03 of the Plan for a Participant for deferrals of Compensation pursuant to the Plan until the Participant’s Separation from Service, including any Company Matching Contributions and Discretionary Company Contributions.

Termination Triggering Event. As defined in Section 5.08(a).

Unforeseeable Emergency. An “unforeseeable emergency” as defined in Treas. Reg. Section 1.409A-3(i)(3)(i). Generally, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary, or the Participant’s dependent; loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

Valuation Dates. The dates for valuing the balance in an Account as provided in Section 5.08.

ARTICLE 3

ADMINISTRATION OF THE PLAN

3.01 Administrator of the Plan. The Plan shall be administered by the Committee. The Committee may delegate certain administrative functions to the Plan Administrator as provided in Section 3.02.

3.02 Authority of Committee. The Committee shall have full power and authority to: (i) interpret and construe the Plan and adopt such rules and regulations as it shall deem necessary and advisable to implement and administer the Plan, (ii) determine the benefits of the Plan to which any Participant, Beneficiary or other person may be entitled, (iii) keep records of all acts and determinations of the Committee and Plan Administrator, and to keep all such records, books of accounts, data and other documents as may be necessary for the proper administration of the Plan, (iv) prepare and distribute to all Participants and Beneficiaries information concerning the Plan and their rights under the Plan, (v) do all things necessary to operate and administer the Plan in accordance with its provisions, and (iv) designate persons other than members of the Committee or the Board to carry out its responsibilities, subject to such limitations, restrictions and conditions as it may prescribe. Without limiting the foregoing, the Committee may from time to time delegate to one or more agents who may or may not be employees of the Company (the “Plan Administrator”) the authority to act on behalf of the Committee in all matters of Plan administration, but the Committee shall retain exclusive authority to determine eligible Participants and to amend or terminate the Plan. Until later designated by the Committee, the Plan Administrator shall be a committee consisting of David Smith, Jeff Anthony and David Klarner.

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3.03 Effect of Committee Determinations. No member of the Committee or the Board or the Plan Administrator shall be personally liable for any action or determination made in good faith with respect to the Plan or to any settlement of any dispute between a Participant and the Company. Any decision or action taken by the Committee or the Board with respect to the administration or interpretation of the Plan shall be conclusive and binding upon all persons.

ARTICLE 4

PARTICIPATION

4.01 Election to Participate. Each CEO Roundtable Member, Challenger and Selected Executive is automatically eligible to participate in the Plan. He or she may participate in the Plan for a Plan Year by delivering a properly completed and signed Deferral Election Form to the Plan Administrator on or before the Election Date for such Plan Year. The Participant’s participation in the Plan will be effective as of the following date, as applicable: (i) in the case of the first Plan Year, January 1, 2005, (ii) in the case of subsequent Plan Years, the first day of the Plan Year beginning after the Plan Administrator receives the Participant’s Deferral Election Form, or (iii) in the case of a person who first becomes eligible to participate in the Plan after the beginning of a Plan Year, the first day after the Plan Administrator receives the Deferral Election Form if filed within 30 days after such Participant first becomes eligible to participate in the Plan, but only with respect to amounts earned after the date that the Deferral Election Form is filed. A Participant shall not be entitled to any benefit hereunder unless such Participant has properly completed a Deferral Election Form and (i) deferred the receipt of Compensation pursuant to the Plan, or (ii) has received a Discretionary Company Contribution under the Plan.

4.02 Continuation of Deferral Election Form. Prior to the commencement of each Plan Year, a Participant shall have the right, by executing and delivering to the Plan Administrator a new Deferral Election Form, to modify the percentage of his or her Compensation which is deferred to his or her Accounts under the Plan. Such new Deferral Election Form shall be effective only for Compensation applicable to the Participant’s service after the first day of the new Plan Year. If the Participant fails to deliver a new Deferral Election Form prior to the commencement of the new Plan Year, the Participant’s Deferral Election Form in effect during the previous Plan Year shall become irrevocable as of December 31 of such previous Plan Year and shall continue in effect during the new Plan Year.

4.03 Automatic Termination of Deferral Election Form. A Participant’s Deferral Election Form will automatically terminate at the earlier of (i) the Participant’s Separation from Service, or (ii) to the extent permitted under Section 409A, the termination of the Plan (in accordance with Section 7.01 herein).

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4.04 No Implied Rights. Nothing contained in the Plan shall be deemed to give any CEO Roundtable Member, Challenger or Selected Executive the right to continue in such status or to remain as an employee of the Company or its affiliates.

ARTICLE 5

PLAN BENEFITS

5.01 Deferred Compensation. A Participant may elect to defer up to 100% of his or her Compensation in accordance with the terms of the Plan and the Deferral Election Form; provided, however, that the Company Matching Contribution shall apply only with respect to deferrals of up to 10% of Compensation. For bookkeeping purposes, the amount of the Compensation which the Participant elects to defer pursuant to the Plan shall be transferred to and held in the Participant’s individual Accounts, as indicated in the Deferral Election Form, and subject to the terms of the Plan.

5.02 Time of Election of Deferral. Subject to Section 4.02, a Participant who wishes to defer Compensation for a Plan Year must irrevocably elect to do so on or prior to the Election Date for such Plan Year, by delivering a valid Deferral Election Form to the Plan Administrator.

5.03 Deferral Elections.

(a) Designation of Accounts. The Company will automatically designate a Termination Account for each Participant for the purpose of (i) crediting the Participant’s voluntary deferrals of Compensation, if any, into the Termination Account, (ii) crediting Roll-Over Balances, if applicable, from the Participant’s In-Service Accounts pursuant to Section 5.08(c), (iii) crediting any Discretionary Company Contributions , and (iv) crediting Company Matching Contributions. In addition to the Termination Account, a Participant may designate up to three In-Service Accounts.

(b) Deferral Amounts. The Deferral Election Form shall indicate: (i) the aggregate dollar amount or percentage (in increments of 1%) of Compensation to be deferred, (ii) the components of Compensation from which such deferrals are to be made, such as from salary, bonus or commission, and (iii) of such aggregate amount to be deferred, the dollar amount or percentage (in increments of 1%) of Compensation to be credited to each Account, if more than one.

(c) Deferral Periods. A Participant shall designate for each In-Service Account a date (the “Deferral Termination Date”), after which payments from such Account will be payable pursuant to Section 5.08. The Deferral Termination Date must be at least three years after the first date that deferrals are made to the In-Service Account. Distribution of amounts held in a Participant’s Termination Account shall commence as provided in Section 5.08(a) following the earliest of (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability.

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(d) Limited Changes Permitted. Deferral elections shall be irrevocable, except with respect to:

(i) In-Service Account(s); Extension of Deferral Period and/or Change in Form of Payment. For each In-Service Account, the Participant may file a new Deferral Election Form to extend the Deferral Termination Date and/or change the form of payment for such Account; provided, however, that (A) the new Deferral Election Form must specify a Deferral Termination Date that is at least five (5) years later than the prior Deferral Termination Date for such Account; (B) such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the originally selected Deferral Termination Date for such Account; and (C) such changed election may not become effective for twelve (12) months after it has been filed with the Plan Administrator.

(ii) Termination Account; Change in Form of Payment. A Participant may file a new Deferral Election Form to change the form of payment of his or her Termination Account; provided, however, that following such election, payment of the Termination Account will commence five (5) years from the Participant’s Separation from Service and such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the Participant’s Separation from Service.

5.04 Return on Account Balances. Amounts in a Participant’s Account will be credited with a return (positive or negative) measured by reference to the performance of one or more benchmark investment funds selected by the Participant for such Account. A Participant may from time to time, in accordance with procedures established by the Plan Administrator: (i) indicate and change his or her investment allocation choices from among the offered benchmark investment funds, and (ii) indicate whether such investment allocation elections shall apply to new deferrals, existing Account balances, or both. Unless otherwise indicated by the Plan Administrator, a Participant may specify different investment allocations for each of his or her Accounts. Indications of investment allocation choices shall be made in such manner and with such frequency as may be approved from time to time by the Plan Administrator. Participants will be provided with quarterly reports as to the status of their various Accounts.

5.05 Company Matching Contributions. For each dollar ($1.00) that a CEO Roundtable Member defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of fifty cents ($.50). For each dollar that a Challenger defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of

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twenty-five cents ($.25). For each dollar that a Selected Executive defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of such amount as shall be communicated to the Selected Executive in advance of the Election Date. Company Matching Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Account into which such Company Matching Contributions are credited. The Board may change the amount of the Company Matching Contributions for any future Plan Year by giving written notice to eligible Participants prior to the Election Date for such Plan Year. Any such change will be prospective only.

5.06 Discretionary Company Contributions. The Company may at any time make a discretionary contribution to a Participant’s Termination Account in any amount the Company deems advisable. Discretionary Company Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Participant’s Termination Account; provided that if the Participant has not indicated an investment allocation for his or her Termination Account, the most conservative investment allocation then available under the Plan will be applied to the Participant’s Termination Account unless and until changed by the Participant. The Company may discriminate among Participants in making Discretionary Company Contributions and may discriminate among those Participants receiving Discretionary Company Contributions as to the amount of such contributions.

5.07 Vesting. Vesting refers to a Participant’s ability to receive benefits at the end of the deferral period.

(a) Participant Deferrals. Participants are always 100% vested in their Account other than Company Matching Contributions or Discretionary Company Contributions and allocated return thereon.

(b) Company Matching Contributions. Company Matching Contributions and allocated return thereon become vested in accordance with the following schedule:

Years elapsed since first deferral under the Plan or the Prior Plan	Vested % of Company Matching Contributions and allocated return thereon
Less than 4 Years	0	%
4 Years	20	%
5 Years	40	%
6 Years	60	%
7 Years	80	%
8 Years	100	%
Earlier death, Normal Retirement or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after a Change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

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For example, if a Participant first made a deferral under the Plan with respect to any part of Plan Year 2005, he or she will become vested in all Company Matching Contributions in all of his or her Accounts, based on the anniversary of the first day of such 2005 Plan Year (i.e., all Company Matching Contributions to such Participant, whenever made, will be 20% vested on January 1, 2009, 40% vested on January 1, 2010, and so on).

(c) Discretionary Company Contributions. Discretionary Company Contributions and allocated return thereon become vested as determined and communicated by the Company or, if not determined, then in accordance with the following schedule:

Years elapsed since the last day of the Plan Year in which the Discretionary Company Contribution was made	Vested % of Discretionary Company Contributions and allocated return thereon
Less than 1 Year	0	%
1 Year	20	%
2 Years	40	%
3 Years	60	%
4 Years	80	%
5 Years	100	%
Earlier death, Normal Retirement or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after a Change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

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For example, if a Discretionary Company Contribution was made for a Participant at any time during Plan Year 2005, the Participant would become vested in 20% of such contribution as of the last day of Plan Year 2006, and 40% of such contribution as of the last day of Plan Year 2007, and so on.

5.08 Payment of Accounts.

(a) Payment Dates for Termination Account. Subject to Section 5.08(g) below, payment of vested Plan benefits held in a Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) shall commence within sixty (60) days after the end of the month in which occurs the earliest of the following events (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability (each a “Termination Triggering Event”). Payments shall be based on the vested Account balance valued as of the applicable Valuation Dates. The first Valuation Date shall be the last day of the month in which the Termination Triggering Event occurs. A Participant’s Termination Account shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed twenty (20));

(iii) In a combination of partial lump sum payment, and remainder in annual installments;

(iv) Annual installment payments shall be for no less than two (2) and no more than twenty (20) annual installments (as indicated in the Participant’s most recent effective Deferral Election Form). Payments shall be annually on the anniversary of the first Valuation Date. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable Valuation Date divided by the number of remaining installments to be paid. (including the current installment);

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(v) Regardless of the Participant’s election, if the aggregate vested balance in the Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is $25,000 or less on the first Valuation Date, the entire vested balance will be paid in a single lump sum.

(b) Payment Dates for In-Service Accounts. Except as provided in Section 5.08(c), payment of vested Plan benefits held in a Participant’s In-Service Account shall commence within 45 days after the end of the month in which the Deferral Termination Date occurs, as indicated in the Participant’s most recent effective Deferral Election Form for such Account. Except as set forth in Section 5.08(c), a Participant’s In-Service Accounts shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed five (5)). Payments shall be annually on the anniversary of the initial installment. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable valuation Date divided by the number of installments remaining (including the current installment). Payment from a Participant’s In-Service Account shall be based on the vested Account balance valued as of the last day of the month in which the Deferral Termination Date occurs (the “Valuation Date”).

(c) Roll-Over of In-Service Accounts to Termination Account. If a Termination Triggering Event with respect to a Participant occurs prior to the total distribution of the In-Service Account of such Participant, the vested balance in such In-Service Account (the “Roll-Over Balance”) shall automatically be rolled into the Participant’s Termination Account and be paid as follows:

(i) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is a lump sum, any balance remaining in an In-Service Account as of such Termination Triggering Event shall be paid out as a lump sum;

(ii) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and installment payments have commenced with respect to an In-Service Account, any balance remaining in such In-Service Account shall continue to be paid in accordance with the Participant’s most recent effective Deferral Election Form relating to his or her In-Service Account;

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(iii) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and payments have not commenced with respect to an In-Service Account, such In-Service Account shall be paid in accordance with the installment payment schedule set forth in the Participant’s most recent effective Deferral Election Form relating to his or her Termination Account.

(d) Payment Upon Death. Regardless of the form of payment elected on the Participant’s most recent effective Deferral Election Form, in the event of the Participant’s death, the entire unpaid vested balance in any of his or her Account(s) shall be paid to the Participant’s Beneficiary in a single lump sum within sixty (60) days after the last day of the month in which date of death occurs.

(e) Accruals During Payment Periods. The unpaid portion of a Participant’s Termination Account shall continue to receive allocated returns as provided in Section 5.04 until the last applicable Valuation Date for such Account, but no interest or other return will be paid on Account balances between the applicable Valuation Dates and payment dates as provided in Sections 5.08(a) and (b).

(f) Termination of Eligible Status. The termination of a Participant’s status as CEO Roundtable Member, Challenger or Selected Executive will not, absent a Separation from Service, cause a payout of such Participant’s Accounts, and such person may continue to defer Compensation into the Plan, but no Company Matching Contributions will be made on Compensation deferred while he or she is not a CEO Roundtable Member, Challenger or Selected Executive. Allocated returns will continue to accrue on such person’s Account as provided in Section 5.04 and 5.08(d).

(g) Six Month Delay for Specified Employees. Any Participant who is a Specified Employee as of his or her Termination Triggering Event (other than death), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), payment under this Section 5.08 shall be delayed as follows:

(i) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is payable in a lump sum, such payment will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s Termination Triggering Event (other than death); and

(ii) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is payable in installments, the amount of such installments that would otherwise be

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payable during the six-month period immediately following the Participant’s Termination Triggering Event (other than death) will be accumulated and payment of such accumulated amount will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s separation from service, whereupon the accumulated amount will be paid or distributed to the Participant and the normal payment schedule for any remaining installment payments will resume.

(iii) For purposes of calculating payments under this Section 5.08(g), the “first Valuation Date” referenced in Section 5.08(a) shall be the last day of the sixth month following the Participant’s Termination Triggering Event (other than death).

5.09 Unforeseeable Emergency. The Plan Administrator may, in its sole discretion, accelerate the payment to a Participant of an amount reasonably necessary to handle an Unforeseeable Emergency, and only in compliance with Code Section 409A. Amounts distributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). Such payment may be made even if the Participant has not incurred a Separation from Service and regardless of the number of years he or she has been a Participant. All financial hardship distributions shall be made in cash in a lump sum. Such payments will be made on a first-in, first-out basis so that the oldest Compensation deferred under the Plan shall be deemed distributed first in a financial hardship.

5.10 Payment to Minors and Incapacitated Persons. In the event that any amount is payable to a minor or to any person who, in the judgment of the Plan Administrator, is incapable of making proper disposition thereof, such payment shall be made for the benefit of such minor or such person in any of the following ways as the Plan Administrator, in its sole discretion, shall determine:

(a) By payment to the legal representative of such minor or such person;

(b) By payment directly to such minor or such person;

(c) By payment in discharge of bills incurred by or for the benefit of such minor or such person. The Plan Administrator shall make such payments without the necessary intervention of any guardian or like fiduciary, and without any obligation to require bond or to see to the further application of such payment. Any payment so made shall be in complete discharge of the Plan’s obligation to the Participant and his or her Beneficiaries.

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5.11 Application for Benefits. The Plan Administrator may require a Participant or Beneficiary to complete and file certain forms as a condition precedent to receiving the payment of benefits, including, without limitation, a consent to participating in any corporate owned life insurance program which the Company sponsors. The Plan Administrator may rely upon all such information given to it, including the Participant’s current mailing address. It is the responsibility of all persons interested in receiving a distribution pursuant to the Plan to keep the Plan Administrator informed of their current mailing addresses.

5.12 Designation of Beneficiary. Each Participant from time to time may designate any person or persons (who may be designated contingently or successively and who may be an entity other than a natural person) as his or her Beneficiary or Beneficiaries to whom the Participant’s Account is to be paid if the Participant dies before receipt of all such benefits. Each Beneficiary designation shall be on the form prescribed by the Plan Administrator and will be effective only when filed with the Plan Administrator during the Participant’s lifetime. Each Beneficiary designation filed with the Plan Administrator will cancel all Beneficiary designations previously filed with the Plan Administrator. The revocation of a Beneficiary designation, no matter how effected, shall not require the consent of any designated Beneficiary.

ARTICLE 6

FUNDING OF PLAN

6.01 Funding. Plan benefits shall be paid from the general assets of the Company or as otherwise directed by the Company. To the extent that any Participant acquires the right to receive payments under the Plan (from whatever source), such right shall be no greater than that of an unsecured general creditor of the Company. Participants and their Beneficiaries shall not have any preference or security interest in the assets of the Company other than as a general unsecured creditor.

ARTICLE 7

AMENDMENT AND TERMINATION

7.01 Plan Amendment and Termination. The Committee reserves the right to modify, alter, amend, or terminate the Plan, at any time and from time to time, without notice, to any extent deemed advisable; provided, however, that no such amendment or termination shall (without the written consent of the Participant, if living, and if not, the Participant’s Beneficiary) adversely affect any benefit under the Plan which has accrued with respect to the Participant or Beneficiary as of the date of such amendment or termination regardless of whether such benefit is in pay status. Following a Plan termination, the Participants’ Account balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Committee may provide that upon termination of the

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Plan, all Participant Accounts shall be distributed, subject to and in accordance with any rules established by the Committee deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

ARTICLE 8

CLAIMS PROCEDURE

8.01 Claims Procedure. Accounts shall be paid in accordance with the provisions of this Plan. If the Participant or his or her Beneficiary requests payment of benefits, and such request is denied in whole or in part, the Participant or the designated Beneficiary may request a review of the Company’s denial of benefits within sixty days of the date the Participant or the Beneficiary receives written notice of such denial. If the Company again denies the Participant’s or the Beneficiary’s request for payment of benefits, the Company shall provide written notice of the denial of benefits to the Participant or the Beneficiary and shall include in such notice a claims appeal procedure, all in accordance with Section 503 of the ERISA and DOL Regulation §2560.503-1 and such procedures are incorporated in this Plan by reference.

ARTICLE 9

MISCELLANEOUS

9.01 Headings. The headings and sub-headings in the Plan have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.

9.02 Spendthrift Clause. None of the benefits, payments, proceeds or distributions under the Plan shall be subject to the claim of any creditor of any Participant or Beneficiary, or to any legal process by any creditor of such Participant or Beneficiary, and none of them shall have any right to alienate, commute, anticipate or assign any of the benefits, payments, proceeds or distributions under the Plan except to the extent expressly provided herein to the contrary.

9.03 Change in Control. The Plan shall not be automatically terminated by the Company’s acquisition by, merger into, or sale of substantially all of its assets to any other organization (a “Change in Control”), but the Plan shall be continued thereafter by such successor organization. All rights to amend, modify, suspend or terminate the Plan shall be transferred to the successor organization, effective as of the date of the Change in Control. If the successor terminates the Plan, all Participants shall thereupon become 100% vested in their Accounts, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon. If within 24 months of the Change in Control a Participant incurs a Separation from Service other than for Cause (as determined by the Company) or the Participant resigns for Good Reason (as defined in the Participant’s Employment Agreement, if any), such Participant shall thereupon become 100% vested in his or her Account, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon.

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9.04 Release. Any payment to Participant or Beneficiary, or to their legal representatives, in accordance with the provisions of the Plan, shall to the extent thereof be in full satisfaction of all claims hereunder against the Committee, the Plan Administrator and the Company, any of whom may require such Participant, Beneficiary, or legal representative, as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Plan Administrator, the Committee, or the Company, as the case may be.

9.05 Governing Law. To the extent not governed by federal law, the Plan shall be construed in accordance with and governed by the laws of the State of Florida.

9.06 Costs of Collection; Interest. In the event the Participant collects any part or all of the payments due under the Plan by or through a lawyer or lawyers, the Company will pay all costs of collection, including reasonable legal fees incurred by the Participant.

9.07 Successors and Assigns. The Plan shall be binding upon the successors and assigns of the parties hereto.

The foregoing is hereby acknowledged as being the PSS World Medical, Inc. Amended and Restated ELITe Deferred Compensation Plan, as adopted by the Compensation Committee of the Board of Directors of the Company on December 11, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer

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APPENDIX A

LIMITED TRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE

AVAILABLE IN ACCORDANCE WITH NOTICES 2001-1, 2006-79, 2007-86 AND

SUBSEQUENT GUIDANCE

Notice 2005-1 Transition Relief

(a) Deferral Election Timing. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 21 of Notice 2005-1, to permit Participants to make or modify deferral elections with respect to deferrals subject to Code Section 409A that relate all or in part to services performed on or before December 31, 2005, so long as: (i) a deferral election with respect to such compensation is properly filed with the Plan Administrator prior to March 15, 2005; and (ii) the amounts to which the deferral election relate have not been paid or become payable prior to the election.

(b) Termination and or Cancellation. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 20 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to: (a) elect to terminate, or partially terminate, participation in the Plan and receive payment of that portion of his or her vested Account balances payable under the Plan corresponding to the portion of the Plan to which the termination applies; or (b) elect to cancel or reduce a deferral election. An election by a Participant permitted in (a) or (b) hereinabove, shall be made no later than December 31, 2005.

(c) Payments Made to Specified Employees in 2005. Notwithstanding any provisions in the Plan concerning the prohibition of payments to Participants upon a termination of participation in the Plan or the cancellation of a deferral election during a Plan Year to the contrary, if there has been in calendar year 2005 any payments under the Plan to a Participant who qualifies as a Specified Employee that were made less than six (6) months after the Participant’s Separation from Service, then such payments shall be deemed to be a decision by the Participant to revoke his or her deferral pursuant to Q&A 20 of corrected Notice 2005-1 and in accordance with paragraph (b) above.

(d) Payment Elections. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 19 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), provided that the Participant makes the election on or before December 31, 2005.

Notice 2006-79 and 2007-86 Transition Relief

Opportunity to Make New (or Revise Existing) Payment Elections.

The Plan Administrator may, to the extent permitted by Notices 2006-79 and 2007-86, permit a Participants, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), in accordance with the :

(a) With respect to an election to change a time and form of payment made on or after January 1, 2006 and on or before December 31, 2006, the election shall apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006.

(b) With respect to an election to change the time and form of payment made on or after January 1, 2007 and on or before December 31, 2007, the election shall apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007.

(c) With respect to an election to change a time and form of payment made on or after January 1, 2008 and on or before December 31, 2008, the election shall apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

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EX-10.15

Exhibit 10.15

PSS WORLD MEDICAL, INC.

AMENDED AND RESTATED LEADER’S DEFERRAL PLAN

(as amended and restated effective January 1, 2009)

ARTICLE 1

ESTABLISHMENT OF PLAN

1.01 Background of Plan. PSS World Medical, Inc. maintains, a non-qualified deferred compensation plan known as the PSS World Medical, Inc. Amended and Restated Leader’s Deferral Plan which became effective as of July 1, 1999 and was amended March 30, 1999, July 1, 2000, April 1, 2001, April 1, 2002, July 1, 2003, July 1, 2004 and December 2005 (the “Prior Plan”). Effective as of January 1, 2009, the Prior Plan is amended and restated as set forth in this document to comply with Section 409A and for certain other purposes. Amounts earned and vested as of December 31, 2004 under the Prior Plan shall remain subject to the terms and conditions of the Prior Plan. Amounts earned or vested under this Plan or the Prior Plan after December 31, 2004 shall be subject to the terms and conditions of this Plan.

1.02 Purpose. The Company desires to recognize the valuable contribution of its leadership employees by providing a program for the voluntary deferral of compensation, which, together with a Company Matching Contribution on deferrals of up to 10% of compensation, will earn a return based on the performance of one or more benchmark investments.

1.03 Status of Plan.

(a) The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and shall be interpreted and administered to the extent possible in a manner consistent with that intent. Although the plan is unfunded for tax purposes, the Company may establish a trust under Revenue Procedure 92-64 to provide benefits under the Plan. (See Section 1.04).

(b) The Plan is intended to comply with, and shall be construed so as to provide for deferrals and benefits that are consistent with the requirements of, Code Section 409A. The Plan Administrator may authorize changes to time and form of payment elections but only to the extent consistent with the transition rules, and during the transition relief period, provided under Section 409A, as described more fully in Appendix A of the Plan.

1.04 Establishment of Trust. As noted in Section 1.03, the Company may establish a trust to fund benefits provided under the terms of the Plan (“Trust”). It is intended that a transfer of assets into the Trust will not generate taxable income (for federal income tax purposes) to the Participants until such assets are actually distributed or otherwise made available to the Participants.

ARTICLE 2

DEFINITIONS

2.01 Definitions. Certain terms of the Plan have defined meanings set forth in this Article and which shall govern unless the context in which they are used clearly indicates that some other meaning is intended.

Accounts. The term “Accounts” means and includes all of a Participant’s In-Service Accounts and his or her Termination Account under the Plan. The performance and value of the Accounts shall be measured by reference to the performance of one or more third-party investment funds (investing in equities and fixed income instruments) designated from time to time by the Plan Administrator as being benchmark investments for Accounts. The maintenance of individual Accounts is for bookkeeping purposes only. The Participant is not an actual investor in the designated funds; rather the Participant is permitted to select any of the funds as a benchmark for the return on his or her Compensation deferred under the Plan.

Beneficiary. Any person or persons designated by a Participant, in accordance with procedures established by the Committee or Plan Administrator, to receive benefits hereunder in the event of the Participant’s death. If any Participant shall fail to designate a Beneficiary or shall designate a Beneficiary who shall fail to survive the Participant, the Beneficiary shall be the Participant’s surviving spouse, or, if none, the Participant’s surviving descendants (who shall take per stirpes) and if there are no surviving descendants, the Beneficiary shall be the Participant’s estate.

Board. The Board of Directors of the Company.

Change in Control. As defined in Section 9.03.

Code Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the underlying Treasury regulations and guidance under such Code Section.

Committee. The Compensation Committee of the Board.

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Company. PSS World Medical, Inc. and its successors.

Company Matching Contribution. The matching contributions made by the Company to Participants’ Accounts in accordance with Section 5.05.

Compensation. The total salary, commissions and cash bonus payable by the Company to a Participant in the relevant Plan Year for services to the Company or any of its affiliates, as such amount may be changed from time to time.

Deferral Election Form. A form, substantially in the form attached hereto as Exhibit A, pursuant to which a Participant elects (i) to defer Compensation under the Plan and (ii) the payment date and form of payment for his or her Accounts.

Deferral Termination Date. As defined in Section 5.03(c).

Disability or Disabled. Disability as defined in Code Section 409A, as amended from time to time. Subject to amendments to Code Section 409A after the Effective Date of the Plan, a Participant shall be considered Disabled if the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. In the event of a dispute, the determination whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.

Discretionary Company Contributions. The discretionary contributions, if any, made by the Company to Participants’ Accounts in accordance with Section 5.06.

Effective Date. The Prior Plan was originally effective July 1, 1999. The effective date of this amendment and restatement is January 1, 2009.

Election Date. The date established by the Plan as the date by which a Participant must submit a valid Deferral Election Form to the Plan Administrator (i) in order to participate in the Plan for a Plan Year or (ii) with respect to non-elective bonus deferrals, to designate a payment date and form of payment. For each Plan Year, the Election Date is December 31 of the preceding Plan Year, or March 15, 2005 in the case of Plan Year 2005 only; provided, however, if a person first becomes a eligible to participate in the Plan after the beginning of the Plan Year, the Election Date for such person for that Plan Year shall be the 30^th day after he or she first becomes eligible to participate in the Plan.

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In-Service Account. An In-Service Account established by the Company under Section 5.03 of the Plan for a Participant’s deferral of Compensation through a designated Deferral Termination Date. A Participant may have up to three In-Service Accounts under the Plan in addition to his or her Termination Account. A Participant is not required to have any In-Service Accounts.

Leader. Any non-officer employee of the Company or its subsidiaries who has been designated a Sales Leader, Operational Leader, General Leader or Corporate Department Leader.

Participant. Any eligible Leader who has elected to participate in the Plan or who has received a Discretionary Company Contribution under the Plan.

Plan. The PSS World Medical, Inc. Amended and Restated Leader’s Deferral Plan as set forth in this document, together with any subsequent amendments hereto.

Plan Administrator. The Committee or its delegee of administrative duties under the Plan pursuant to Section 3.02.

Plan Year. The Plan Year shall be the calendar year.

Roll-Over Balance. The unpaid vested balance in a Participant’s In-Service Account that will automatically be rolled into the Participant’s Termination Account under the circumstances described in Section 5.08(c).

Separation from Service. A Separation from Service occurs when a Participant incurs a “separation of service” within the meaning of Code Section 409A.

Specified Employee. The term “Specified Employee” has the meaning assigned such term in Code Section 409A, provided, however, that, the Company’s determination of its Specified Employees and the application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Committee, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company.

Termination Account. A Termination Account established by the Company under Section 5.03 of the Plan for a Participant for deferrals of Compensation pursuant to the Plan until the Participant’s Separation from Service, including any Company Matching Contributions and Discretionary Company Contributions.

Termination Triggering Event. As defined in Section 5.08(a).

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Unforeseeable Emergency. An “unforeseeable emergency” as defined in Treas. Reg. Section 1.409A-3(i)(3)(i). Generally, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary, or the Participant’s dependent; loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

Valuation Dates. The dates for valuing the balance in an Account as provided in Section 5.08.

ARTICLE 3

ADMINISTRATION OF THE PLAN

3.01 Administrator of the Plan. The Plan shall be administered by the Committee. The Committee may delegate certain administrative functions to the Plan Administrator as provided in Section 3.02.

3.02 Authority of Committee. The Committee shall have full power and authority to: (i) interpret and construe the Plan and adopt such rules and regulations as it shall deem necessary and advisable to implement and administer the Plan, (ii) determine the benefits of the Plan to which any Participant, Beneficiary or other person may be entitled, (iii) keep records of all acts and determinations of the Committee and Plan Administrator, and to keep all such records, books of accounts, data and other documents as may be necessary for the proper administration of the Plan, (iv) prepare and distribute to all Participants and Beneficiaries information concerning the Plan and their rights under the Plan, (v) do all things necessary to operate and administer the Plan in accordance with its provisions, and (iv) designate persons other than members of the Committee or the Board to carry out its responsibilities, subject to such limitations, restrictions and conditions as it may prescribe. Without limiting the foregoing, the Committee may from time to time delegate to one or more agents who may or may not be employees of the Company (the “Plan Administrator”) the authority to act on behalf of the Committee in all matters of Plan administration, but the Committee shall retain exclusive authority to determine eligible Participants and to amend or terminate the Plan. Until later designated by the Committee, the Plan Administrator shall be a committee consisting of David Smith, Jeff Anthony and David Klarner.

3.03 Effect of Committee Determinations. No member of the Committee or the Board or the Plan Administrator shall be personally liable for any action or determination made in good faith with respect to the Plan or to any settlement of any dispute between a Participant and the Company. Any decision or action taken by the Committee or the Board with respect to the administration or interpretation of the Plan shall be conclusive and binding upon all persons.

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ARTICLE 4

PARTICIPATION

4.01 Election to Participate. Each Leader who has been a Leader for at least three years and whose Compensation for the preceding Plan Year was above the minimum level established and communicated by the Plan Administrator each year is automatically eligible to participate in the Plan; provided, however, that the Plan Administrator may in its discretion waive the three-year eligibility requirement for any person. An eligible Leader may participate in the Plan for a Plan Year by delivering a properly completed and signed Deferral Election Form to the Plan Administrator on or before the Election Date for such Plan Year. The Participant’s participation in the Plan will be effective as of the following date, as applicable: (i) in the case of a Participant on the Effective Date, the effective date of the Participant’s participation under the Prior Plan, (ii) in the case of subsequent Plan Years, the first day of the Plan Year beginning after the Plan Administrator receives the Participant’s Deferral Election Form, or (iii) in the case of a person who first becomes eligible to participate in the Plan after the beginning of a Plan Year, the first day after the Plan Administrator receives the Deferral Election Form if filed within 30 days after such Participant first becomes eligible to participate in the Plan but only with respect to amounts earned after the date that the Deferral Election Form is filed. A Participant shall not be entitled to any benefit hereunder unless such Participant has properly completed a Deferral Election Form and (i) deferred the receipt of Compensation pursuant to the Plan, or (ii) has received a Discretionary Company Contribution under the Plan.

4.02 Continuation of Deferral Election Form. Prior to the commencement of each Plan Year, a Participant shall have the right, by executing and delivering to the Plan Administrator a new Deferral Election Form, to modify the percentage of his or her Compensation which is deferred to his or her Accounts under the Plan. Such new Deferral Election Form shall be effective only for Compensation applicable to the Participant’s service after the first day of the new Plan Year. If the Participant fails to deliver a new Deferral Election Form prior to the commencement of the new Plan Year, the Participant’s Deferral Election Form in effect during the previous Plan Year shall become irrevocable as of December 31 of such previous Plan Year and shall continue in effect during the new Plan Year.

4.03 Automatic Termination of Deferral Election Form. A Participant’s Deferral Election Form will automatically terminate at the earlier of (i) the Participant’s Separation from Service, or (ii) to the extent permitted under Section 409A, the termination of the Plan (in accordance with Section 7.01 herein).

4.04 No Implied Rights. Nothing contained in the Plan shall be deemed to give any Leader the right to continue in such status or to remain as an employee of the Company or its affiliates.

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ARTICLE 5

PLAN BENEFITS

5.01 Deferred Compensation. A Participant may elect to defer up to 100% of his or her Compensation in accordance with the terms of the Plan and the Deferral Election Form; provided, however, that the Company Matching Contribution shall apply only with respect to deferrals of up to 10% of Compensation. For bookkeeping purposes, the amount of the Compensation which the Participant elects to defer pursuant to the Plan shall be transferred to and held in the Participant’s individual Accounts, as indicated in the Deferral Election Form, and subject to the terms of the Plan.

5.02 Time of Election of Deferral. Subject to Section 4.02, a Participant who wishes to defer Compensation for a Plan Year must irrevocably elect to do so on or prior to the Election Date for such Plan Year, by delivering a valid Deferral Election Form to the Plan Administrator.

5.03 Deferral Elections.

(a) Designation of Accounts. The Company will automatically designate a Termination Account for each Participant for the purpose of (i) crediting the Participant’s voluntary deferrals of Compensation, if any, into the Termination Account, (ii) crediting Roll-Over Balances, if applicable, from the Participant’s In-Service Accounts pursuant to Section 5.08(c), (iii) crediting any Discretionary Company Contributions and (iv) crediting Company Matching Contributions. In addition to the Termination Account, a Participant may designate up to three In-Service Accounts.

(b) Deferral Amounts. The Deferral Election Form shall indicate: (i) the aggregate dollar amount or percentage (in increments of 1%) of Compensation to be deferred, (ii) the components of Compensation from which such deferrals are to be made, such as from salary, bonus or commission, and (iii) of such aggregate amount to be deferred, the dollar amount or percentage (in increments of 1%) of Compensation to be credited to each Account, if more than one.

(c) Deferral Periods. A Participant shall designate for each In-Service Account a date (the “Deferral Termination Date”), after which payments from such Account will be payable pursuant to Section 5.08. The Deferral Termination Date must be at least three years after the first date that deferrals are made to the In-Service Account. Distribution of amounts held in a Participant’s Termination Account shall commence as provided in Section 5.08(a) following the earliest of (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability.

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(d) Limited Changes Permitted. Deferral elections shall be irrevocable, except with respect to:

(i) In-Service Account(s); Extension of Deferral Period and/or Change in Form of Payment. For each In-Service Account, the Participant may file a new Deferral Election Form to extend the Deferral Termination Date and/or change the form of payment for such Account; provided, however, that (A) the new Deferral Election Form must specify a Deferral Termination Date that is at least five (5) years later than the prior Deferral Termination Date for such Account; (B) such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the originally selected Deferral Termination Date for such Account; and (C) such changed election may not become effective for twelve (12) months after it has been filed with the Plan Administrator.

(ii) Termination Account; Change in Form of Payment. A Participant may file a new Deferral Election Form to change the form of payment of his or her Termination Account; provided, however, that following such election, payment of the Termination Account will commence five (5) years from the Participant’s Separation from Service and such changed election, to be effective, must be filed with the Plan Administrator no less than twelve (12) months prior to the Participant’s Separation from Service.

5.04 Return on Account Balances. Amounts in a Participant’s Account will be credited with a return (positive or negative) measured by reference to the performance of one or more benchmark investment funds selected by the Participant for such Account. A Participant may from time to time, in accordance with procedures established by the Plan Administrator: (i) indicate and change his or her investment allocation choices from among the offered benchmark investment funds, and (ii) indicate whether such investment allocation elections shall apply to new deferrals, existing Account balances, or both. Unless otherwise indicated by the Plan Administrator, a Participant may specify different investment allocations for each of his or her Accounts. Indications of investment allocation choices shall be made in such manner and with such frequency as may be approved from time to time by the Plan Administrator. Participants will be provided with quarterly reports as to the status of their various Accounts.

5.05 Company Matching Contributions. For each dollar ($1.00) that a Leader defers into an Account (up to 10% of Compensation in the aggregate for all of the Participant’s Accounts), the Company will make a matching contribution of (i) twenty cents ($.20), if the Participant met his or her forecasted goals for the preceding year, or (ii) ten cents ($.10) if the Participant did not meet his or her forecasted goals for the preceding year, (iii) thirty-five cents ($.35) if (A) the Participant has been a Leader for at least ten years, regardless of whether he or she met forecasted goals for the preceding year, or (B) the Participant has been

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designated by the Chief Executive Officer as one of the top 50 Leaders for the Plan Year, regardless of how long such person has been a Leader. Company Matching Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Account into which such Company Matching Contributions are credited. The Board may change the amount of the Company Matching Contributions for any future Plan Year by giving written notice to eligible Participants prior to the Election Date for such Plan Year. Any such change will be prospective only.

5.06 Discretionary Company Contributions. The Company may at any time make a discretionary contribution to a Participant’s Termination Account in any amount the Company deems advisable. Discretionary Company Contributions will earn a return based on the same investment allocations selected by the Participant with respect to the Participant’s Termination Account; provided that if the Participant has not indicated an investment allocation for his or her Termination Account, the most conservative investment allocation then available under the Plan will be applied to the Participant’s Termination Account unless and until changed by the Participant. The Company may discriminate among Participants in making Discretionary Company Contributions and may discriminate among those Participants receiving Discretionary Company Contributions as to the amount of such contributions.

5.07 Vesting. Vesting refers to a Participant’s ability to receive benefits at the end of the deferral period.

(a) Participant Deferrals. Participants are always 100% vested in their Account other than Company Matching Contributions or Discretionary Company Contributions and allocated return thereon.

(b) Company Matching Contributions. Company Matching Contributions and allocated return thereon become vested in accordance with the following schedule:

Years elapsed since first deferral under the Plan or the Prior Plan	Vested % of Company Matching Contributions and allocated return thereon
Less than 4 Years	0	%
4 Years	20	%
5 Years	40	%
6 Years	60	%
7 Years	80	%
8 Years	100	%
Earlier death or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after a Change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

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For example, if a Participant first made a deferral under the Plan with respect to any part of Plan Year 2005, he or she will become vested in all Company Matching Contributions in all of his or her Accounts, based on the anniversary of the first day of such 2005 Plan Year (i.e., all Company Matching Contributions to such Participant, whenever made, will be 20% vested on January 1, 2009, 40% vested on January 1, 2010, and so on).

(c) Discretionary Company Contributions. Discretionary Company Contributions and allocated return thereon become vested as determined and communicated by the Company or, if not determined, then in accordance with the following schedule:

Years elapsed since the last day of the Plan Year in which the Discretionary Company Contribution was made	Vested % of Discretionary Company Contributions and allocated return thereon
Less than 1 Year	0	%
1 Year	20	%
2 Years	40	%
3 Years	60	%
4 Years	80	%
5 Years	100	%
Earlier death or Disability of Participant	100	%
A successor to the Company terminates the Plan	100	%
Within 24 months after a Change in Control, a successor to the Company terminates the employment of Participant without Cause or Participant resigns for Good Reason, as defined in Participant’s Employment Agreement, if any, with the Company	100	%

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For example, if a Discretionary Company Contribution was made to a Participant at any time during Plan Year 2005, the Participant would become vested in 20% of such contribution as of the last day of Plan Year 2006, and 40% of such contribution as of the last day of Plan Year 2007, and so on.

5.08 Payment of Accounts.

(a) Payment Dates for Termination Account. Subject to Section 5.08(g) below, payment of vested Plan benefits held in a Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) shall commence within sixty (60) days after the end of the month in which occurs the earliest of the following events (i) the Participant’s Separation from Service, (ii) the Participant’s death, or (iii) the Participant’s Disability (each a “Termination Triggering Event”). Payments shall be based on the vested Account balance valued as of the applicable Valuation Dates. The first Valuation Date shall be the last day of the month in which the Termination Triggering Event occurs. The Participant’s Termination Account shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed twenty (20));

(iii) In a combination of partial lump sum payment, and remainder in annual installments;

(iv) Annual installment payments shall be for no less than two (2) and no more than twenty (20) annual installments (as indicated in the Participant’s most recent effective Deferral Election Form). Payments shall be annually on the anniversary of the first Valuation Date. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable Valuation Date divided by the number of remaining installments to be paid. (including the current installment);

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(v) Regardless of the Participant’s election, if the aggregate vested balance in the Participant’s Termination Account (including any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is $25,000 or less on the first Valuation Date, the entire vested balance will be paid in a single lump sum.

(b) Payment Dates for In-Service Accounts. Except as provided in Section 5.08(c), payment of vested Plan benefits held in a Participant’s In-Service Account shall commence within 45 days after the end of the month in which the Deferral Termination Date occurs, as indicated in the Participant’s most recent effective Deferral Election Form for such Account. Except as set forth in Section 5.08(c), the Participant’s In-Service Accounts shall be paid to the Participant under one of the following options, as elected by the Participant on his or her most recent effective Deferral Election Form:

(i) A single lump sum;

(ii) Annual installments elected by the Participant (between two (2) and not to exceed five (5)). Payments shall be annually on the anniversary of the initial installment. The payment to be made in a given year shall be equal to the value of the Participant’s Account on the applicable valuation Date divided by the number of installments remaining (including the current installment). Payment from a Participant’s In-Service Account shall be based on the vested Account balance valued as of the last day of the month in which the Deferral Termination Date occurs (the “Valuation Date”).

(c) Roll-Over of In-Service Accounts to Termination Account. If a Termination Triggering Event with respect to a Participant occurs prior to the total distribution of the In-Service Account of such Participant, the vested balance in such In-Service Account (the “Roll-Over Balance”) shall automatically be rolled into the Participant’s Termination Account and be paid as follows:

(i) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is a lump sum, any balance remaining in a In-Service Account as of such Termination Triggering Event shall be paid out as a lump sum;

(ii) If the form of payment for the Participant’s Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and installment payments have commenced with respect to an In-Service Account, any balance remaining in such In-Service Account shall continue to be paid in accordance with the Participant’s most recent effective Deferral Election Form relating to his or her In-Service Account;

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(iii) If the form of payment for the Participant’ Termination Account in accordance with his or her most recent effective Deferral Election Form is installments, and payments have not commenced with respect to an In-Service Account, such In-Service Account shall be paid in accordance with the installment payment schedule set forth in the Participant’s most recent effective Deferral Election Form relating to his or her Termination Account.

(d) Payment Upon Death. Regardless of the form of payment elected on the Participant’s most recent effective Deferral Election Form, in the event of the Participant’s death, the entire unpaid vested balance in any of his or her Account(s) shall be paid to the Participant’s Beneficiary in a single lump sum within sixty (60) days after the last day of the month in which date of death occurs.

(e) Accruals During Payment Periods. The unpaid portion of a Participant’s Termination Account shall continue to receive allocated returns as provided in Section 5.04 until the last applicable Valuation Date for such Account, but no interest or other return will be paid on Account balances between the applicable Valuation Dates and payment dates as provided in Sections 5.08(a) and (b).

(f) Termination of Eligible Status. The termination of a Participant’s status as a Leader will not, absent Separation from Service, cause a payout of such Participant’s Account, and such person may continue to defer Compensation into the Plan, but no Company Matching Contributions will be made on Compensation deferred while he or she is not a Leader. Allocated returns will continue to accrue on such person’s Account as provided in Section 5.04 and 5.08(d).

(g) Six Month Delay for Specified Employees. Any Participant who is a Specified Employee as of his or her Termination Triggering Event (other than death), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), payment under this Section 5.08 shall be delayed as follows:

(i) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s In-Service Accounts in accordance with Section 5.08(c)) is payable in a lump sum, such payment will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s Termination Triggering Event (other than death);

(ii) if the payment of vested Plan benefits held in a Participant’s Termination Account (together with any Roll-Over Balances from such Participant’s

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In-Service Accounts in accordance with Section 5.08(c)) is payable in installments, the amount of such installments that would otherwise be payable during the six-month period immediately following the Participant’s Termination Triggering Event (other than death) will be accumulated and payment of such accumulated amount will be delayed until the earlier of the Participant’s death or the first day of the seventh month following the Participant’s separation from service, whereupon the accumulated amount will be paid or distributed to the Participant and the normal payment schedule for any remaining installment payments will resume.

(iii) For purposes of calculating payments under this Section 5.08(g), the “first Valuation Date” referenced in Section 5.08(a) shall be the last day of the sixth month following the Participant’s Termination Triggering Event (other than death).

5.9 Unforeseeable Emergency. The Plan Administrator may, in its sole discretion, accelerate the payment to a Participant of an amount reasonably necessary to handle an Unforeseeable Emergency, and only in compliance with Code Section 409A. Amounts distributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) Such payment may be made even if the Participant has not incurred a Separation from Service and regardless of the number of years he or she has been a Participant. All financial hardship distributions shall be made in cash in a lump sum. Such payments will be made on a first-in, first-out basis so that the oldest Compensation deferred under the Plan shall be deemed distributed first in a financial hardship.

5.10 Payment to Minors and Incapacitated Persons. In the event that any amount is payable to a minor or to any person who, in the judgment of the Plan Administrator, is incapable of making proper disposition thereof, such payment shall be made for the benefit of such minor or such person in any of the following ways as the Plan Administrator, in its sole discretion, shall determine:

(a) By payment to the legal representative of such minor or such person;

(b) By payment directly to such minor or such person;

(c) By payment in discharge of bills incurred by or for the benefit of such minor or such person. The Plan Administrator shall make such payments without the necessary intervention of any guardian or like fiduciary, and without any obligation to require bond or to see to the further application of such payment. Any payment so made shall be in complete discharge of the Plan’s obligation to the Participant and his or her Beneficiaries.

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5.11 Application for Benefits. The Plan Administrator may require a Participant or Beneficiary to complete and file certain forms as a condition precedent to receiving the payment of benefits, including without limitation a consent to participating in any corporate owned life insurance program which the Company sponsors. The Plan Administrator may rely upon all such information given to it, including the Participant’s current mailing address. It is the responsibility of all persons interested in receiving a distribution pursuant to the Plan to keep the Plan Administrator informed of their current mailing addresses.

5.12 Designation of Beneficiary. Each Participant from time to time may designate any person or persons (who may be designated contingently or successively and who may be an entity other than a natural person) as his or her Beneficiary or Beneficiaries to whom the Participant’s Account is to be paid if the Participant dies before receipt of all such benefits. Each Beneficiary designation shall be on the form prescribed by the Plan Administrator and will be effective only when filed with the Plan Administrator during the Participant’s lifetime. Each Beneficiary designation filed with the Plan Administrator will cancel all Beneficiary designations previously filed with the Plan Administrator. The revocation of a Beneficiary designation, no matter how effected, shall not require the consent of any designated Beneficiary.

ARTICLE 6

FUNDING OF PLAN

6.01 Funding. Plan benefits shall be paid from the general assets of the Company or as otherwise directed by the Company. To the extent that any Participant acquires the right to receive payments under the Plan (from whatever source), such right shall be no greater than that of an unsecured general creditor of the Company. Participants and their Beneficiaries shall not have any preference or security interest in the assets of the Company other than as a general unsecured creditor.

ARTICLE 7

AMENDMENT AND TERMINATION

7.01 Plan Amendment and Termination. The Committee reserves the right to modify, alter, amend, or terminate the Plan, at any time and from time to time, without notice, to any extent deemed advisable; provided, however, that no such amendment or termination shall (without the written consent of the Participant, if living, and if not, the Participant’s Beneficiary) adversely affect any benefit under the Plan which has accrued with respect to the Participant or Beneficiary as of the date of such amendment or termination regardless of whether such benefit is in pay status. Following a Plan termination, the Participants’ Account balances shall remain in the Plan and shall not be distributed until such amounts become eligible

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for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Committee may provide that upon termination of the Plan, all Participant Accounts shall be distributed, subject to and in accordance with any rules established by the Committee deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

ARTICLE 8

CLAIMS PROCEDURE

8.01 Claims Procedure. Accounts shall be paid in accordance with the provisions of this Plan. If the Participant or his or her Beneficiary requests payment of benefits, and such request is denied in whole or in part, the Participant or the designated Beneficiary may request a review of the Company’s denial of benefits within sixty days of the date the Participant or the Beneficiary receives written notice of such denial. If the Company again denies the Participant’s or the Beneficiary’s request for payment of benefits, the Company shall provide written notice of the denial of benefits to the Participant or the Beneficiary and shall include in such notice a claims appeal procedure, all in accordance with Section 503 of the ERISA and DOL Regulation §2560.503-1 and such procedures are incorporated in this Plan by reference.

ARTICLE 9

MISCELLANEOUS

9.01 Headings. The headings and sub-headings in the Plan have been inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.

9.02 Spendthrift Clause. None of the benefits, payments, proceeds or distributions under the Plan shall be subject to the claim of any creditor of any Participant or Beneficiary, or to any legal process by any creditor of such Participant or Beneficiary, and none of them shall have any right to alienate, commute, anticipate or assign any of the benefits, payments, proceeds or distributions under the Plan except to the extent expressly provided herein to the contrary.

9.03 Change in Control. The Plan shall not be automatically terminated by the Company’s acquisition by, merger into, or sale of substantially all of its assets to any other organization (a “Change in Control”), but the Plan shall be continued thereafter by such successor organization. All rights to amend, modify, suspend or terminate the Plan shall be transferred to the successor organization, effective as of the date of the Change in Control. If the successor terminates the Plan, all Participants shall thereupon become 100% vested in their Accounts, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon. If within 24 months of the Change in Control a

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Participant incurs a Separation from Service other than for Cause (as determined by the employer), such Participant shall thereupon become 100% vested in his or her Account, including Company Matching Contributions, Discretionary Company Contributions and allocated return thereon.

9.04 Release. Any payment to Participant or Beneficiary, or to their legal representatives, in accordance with the provisions of the Plan, shall to the extent thereof be in full satisfaction of all claims hereunder against the Committee, the Plan Administrator and the Company, any of whom may require such Participant, Beneficiary, or legal representative, as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Plan Administrator, the Committee, or the Company, as the case may be.

9.05 Governing Law. To the extent not governed by federal law, the Plan shall be construed in accordance with and governed by the laws of the State of Florida.

9.06 Costs of Collection; Interest. In the event the Participant collects any part or all of the payments due under the Plan by or through a lawyer or lawyers, the Company will pay all costs of collection, including reasonable legal fees incurred by the Participant.

9.07 Successors and Assigns. The Plan shall be binding upon the successors and assigns of the parties hereto.

The foregoing is hereby acknowledged as being the PSS World Medical, Inc. Amended and Restated Leader’s Deferral Plan, as adopted by the Compensation Committee of the Board of Directors of the Company on December 11, 2008.

PSS WORLD MEDICAL, INC.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer

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APPENDIX A

LIMITED TRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE

AVAILABLE IN ACCORDANCE WITH NOTICES 2001-1, 2006-79, 2007-86 AND

SUBSEQUENT GUIDANCE

Notice 2005-1 Transition Relief

(a) Deferral Election Timing. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 21 of Notice 2005-1, to permit Participants to make or modify deferral elections with respect to deferrals subject to Code Section 409A that relate all or in part to services performed on or before December 31, 2005, so long as: (i) a deferral election with respect to such compensation is properly filed with the Plan Administrator prior to March 15, 2005; and (ii) the amounts to which the deferral election relate have not been paid or become payable prior to the election.

(b) Termination and or Cancellation. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 20 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to: (a) elect to terminate, or partially terminate, participation in the Plan and receive payment of that portion of his or her vested Account balances payable under the Plan corresponding to the portion of the Plan to which the termination applies; or (b) elect to cancel or reduce a deferral election. An election by a Participant permitted in (a) or (b) hereinabove, shall be made no later than December 31, 2005.

(c) Payments Made to Specified Employees in 2005. Notwithstanding any provisions in the Plan concerning the prohibition of payments to Participants upon a termination of participation in the Plan or the cancellation of a deferral election during a Plan Year to the contrary, if there has been in calendar year 2005 any payments under the Plan to a Participant who qualifies as a Specified Employee that were made less than six (6) months after the Participant’s Separation from Service, then such payments shall be deemed to be a decision by the Participant to revoke his or her deferral pursuant to Q&A 20 of corrected Notice 2005-1 and in accordance with paragraph (b) above.

(d) Payment Elections. The Plan Administrator has the authority, pursuant to transition relief provided in Q&A 19 of Notice 2005-1, to permit a Participant, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), provided that the Participant makes the election on or before December 31, 2005.

Notice 2006-79 and 2007-86 Transition Relief

Opportunity to Make New (or Revise Existing) Payment Elections.

The Plan Administrator may, to the extent permitted by Notices 2006-79 and 2007-86, permit a Participants, pursuant to procedures established by the Plan Administrator and with respect to amounts subject to Code Section 409A, to make new payment elections with respect to amounts deferred prior to the election and the election will not be treated as a change in the form and timing of a payment Section 409A(a)(4) or an acceleration of a payment under Section 409A(a)(3), in accordance with the:

(a) With respect to an election to change a time and form of payment made on or after January 1, 2006 and on or before December 31, 2006, the election shall apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006.

(b) With respect to an election to change the time and form of payment made on or after January 1, 2007 and on or before December 31, 2007, the election shall apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007.

(c) With respect to an election to change a time and form of payment made on or after January 1, 2008 and on or before December 31, 2008, the election shall apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

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EX-10.16

Exhibit 10.16

AMENDMENT TO THE PSS WORLD MEDICAL, INC.

2006 INCENTIVE PLAN

THIS AMENDMENT (this “Amendment”) to the PSS World Medical, Inc. 2006 Incentive Plan (the “Plan”) was approved and adopted by the Compensation Committee of the Board of Directors of PSS World Medical, Inc. on December 11, 2008.

1. Section 11.3 of the Plan is hereby amended by deleting the word “Retirement.”

2. The first sentence of Section 14.6 and the first sentence of Section 14.7 are hereby amended by deleting the words “(or, if later, the first date that such payment may be made without causing a violation of Section 409A of the Code)” and replacing them with the words “(unless a later date is required by Section 17.4 hereof).”

3. The Plan is hereby amended by deleting Section 17.4 in its entirety and replacing it with the following:

“17.4 SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

(a) It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Certificates shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.

(b) Notwithstanding anything in the Plan or in any Award Certificate to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) would be effected, under the Plan or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant’s Disability or separation from service, such amount or benefit will not be payable or distributable to the Participant, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability or separation from service meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Award upon a Change in Control, Disability or separation from service, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the next earliest payment or distribution date or

event specified in the Award Certificate that is permissible under Section 409A of the Code. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c) If any one or more Awards granted under the Plan to a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company shall determine which Awards or portions thereof will be subject to such exemptions.

(d) Notwithstanding anything in the Plan or in any Award Certificate to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the Participant’s death) (in either case, the “Required Delay Period”), and

(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Section 409A of the Code and the final regulations thereunder, provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of 409A(a)(2)(B)(i) of the Code shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.

(e) Eligible Participants who are service providers to an Affiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of §1.409A-1(b)(5)(iii)(E) of the final regulations under Section 409A of the Code.

(f) No Option or SAR granted under the Plan shall provide for any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the Option or SAR.”

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5. Except as expressly amended hereby, the terms of the Plan shall be and remain unchanged and the Plan as amended hereby shall remain in full force and effect.

IN WITNESS WHEREOF, the PSS World Medical, Inc. has caused this Amendment to be executed by its duly authorized representative as of the day and year first above written.

PSS World Medical, Inc., Inc.
By:	/s/ David A. Smith
	David A. Smith
	Chairman and Chief Executive Officer

- 3 -

EX-31.1

Exhibit 31.1

CERTIFICATION

I, David A. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PSS World Medical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 11, 2009

/s/ David A. Smith

David A. Smith

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, David M. Bronson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PSS World Medical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 11, 2009

/s/ David M. Bronson

David M. Bronson

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David A. Smith, Chairman and Chief Executive Officer of PSS World Medical, Inc. (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the three months ended January 2, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David A. Smith

David A. Smith

Chairman and Chief Executive Officer

February 11, 2009

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David M. Bronson, Executive Vice President and Chief Financial Officer of PSS World Medical, Inc. (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the three months ended January 2, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David M. Bronson

David M. Bronson

Executive Vice President and Chief Financial Officer

February 11, 2009