The Company has equity incentive plans for the benefit of certain officers, directors, and employees. The Compensation Committee of the Board of Directors has the discretion to make grants under these plans in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, performance units, dividend equivalents, other stock-based awards, or other rights or interests relating to common stock or cash.

On June 7, 2006, the Board of Directors approved the PSS World Medical, Inc. 2006 Incentive Plan (the “2006 Plan”), a stock incentive plan under which equity may be granted to the Company's officers, directors, and employees. The 2006 Plan became effective as of August 24, 2006, the date on which shareholders approved the plan. Grants under the 2006 Plan may be made in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents, performance-based cash awards, and other stock-based awards. Subject to adjustment as provided in the plan, the aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the 2006 Plan is approximately 1,906 as of March 30, 2012.

In addition to the 2006 Plan, the Company maintains the 2004 Non-Employee Directors Compensation Plan (the “2004 Directors Plan”), which permits the grant of restricted stock to the Company's non-employee directors. Subject to adjustment as provided in the plan, the aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the 2004 Directors Plan is approximately 230 as of March 30, 2012. It is the Company's policy to issue shares of common stock upon exercise of stock options or the grant of restricted stock from those shares reserved for issuance under the stock incentive plans.

Outstanding stock-based awards granted under equity incentive plans are as follows:

(in thousands)		March 30, 2012		April 1, 2011		April 2, 2010
Stock options^(a)			49		220		558
Restricted stock^(b)			773		830		969
Restricted stock units^(a)			575		670		593
Deferred stock units^(a)			8		15		11
	Total outstanding stock based awards		1,405		1,735		2,131

ASC 718 requires companies to recognize the cost of employee services received in exchange for awards of equity instruments in the financial statements based on the grant date fair value of those awards, net of estimated forfeitures over the awards' vesting period. ASC 718 requires forfeitures to be estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. When estimating forfeitures, the Company considers voluntary termination behaviors as well as trends of actual equity based awards forfeited.

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

During the fiscal year ended 2010, the shares were forfeited due to the departure of the Company's former Chairman and Chief Executive Officer. As a result, $580 ($358, net of tax) was recognized as an adjustment to reduce stock-based compensation during fiscal year 2010.

The following table summarizes the number of common shares to be issued upon exercise of outstanding options and the number of common shares remaining available for future issuance under the existing stock incentive plans as of March 30, 2012:

(in thousands)		Number of securities to be issued upon exercise of outstanding options	Number of securities remaining available for future issuance
Equity compensation plans approved by shareholders:
	1999 Long-term Incentive Plan^(a)	10	-
	Amended and Restated Directors' Stock Plan^(a)	28	-
	PSS World Medical, Inc. 2006 Incentive Plan^(b)	-	1,906
	2004 Non-Employee Directors Compensation Plan^(c)	-	230
		38	2,136
Equity compensation plan not approved by shareholders:
	1999 Broad Based Employee Stock Plan^(a)	11	-
	Total	49	2,136

The following table summarizes the stock option activity during the period from March 27, 2009 to March 30, 2012:

(share amounts in thousands)		Shares	Weighted Average Exercise Price			Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at, March 27, 2009		1,306		$	9.20	3.4		$	7,909
	Exercised	(548)			8.15
	Expired	(200)			17.98
Outstanding at, April 2, 2010		558		$	7.05	1.9		$	9,252
	Exercised	(338)			6.15
Outstanding at, April 1, 2011		220		$	8.44	1.7		$	4,115
	Exercised	(171)			8.09
Outstanding and Exercisable at, March 30, 2012		49		$	9.63	1.5		$	789

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company's closing stock price of $25.34 on the last trading day of the Company's fiscal year end and the exercise price, multiplied by the number of outstanding stock options) that would have been received by the option holders had all option holders exercised their options on March 30, 2012. This amount changes over time based on changes in the fair market value of the Company's stock.

The total intrinsic value of stock options exercised during fiscal years ended March 30, 2012 and April 1, 2011 was $2,926 and $5,684, respectively. Cash received from stock option exercises during the fiscal year ended March 30, 2012 and April 1, 2011 was approximately $1,383 and $2,079, respectively. The actual tax benefit realized for the tax deductions from stock option exercises totaled approximately $1,115 and $2,161 during the fiscal years ended March 30, 2012 and April 1, 2011, respectively.

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”).

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 over the vesting period, net of estimated forfeitures.

The Company issues (i) performance-based restricted stock units (“Performance Shares”), (ii) performance-accelerated restricted stock (“PARS”), which were issued in fiscal years 2011 and 2010, and (iii) performance-accelerated restricted stock units (“PARS Units”), which were issued in fiscal years 2012 and 2011, under the Company's 2006 Incentive Plan.

The Performance Shares cliff-vest three years from the date of grant and convert to shares of common stock based on the Company's achievement of certain cumulative earnings per share growth targets. 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 increase 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 Company recognizes compensation expense on a straight-line basis (net of estimated forfeitures) over the awards vesting period based on the Company's estimate of what will ultimately vest. This estimate may be adjusted in future periods based on actual experience and changes in management assumptions.

The PARS and PARS Units awards vest on the five-year anniversary of the grant date, subject to accelerated vesting after three years if the Company achieves an earnings per share growth target. 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.

During the fiscal year ended March 30, 2012, the Company changed its estimate of the number of shares to be delivered on its performance based awards. This change reflected a decrease in estimated achievement of performance conditions based on actual and expected future financial performance. The change in estimate decreased Performance Share Units outstanding by approximately 98,000 shares.

As a result of the change in performance estimate, stock based compensation expenses decreased $1,464 ($908, net of tax), or $0.02 per diluted share during the year ended March 30, 2012.

During the fiscal year ended April 2, 2010, the Company changed its estimate of the number of shares to be delivered on its performance based awards. This change reflected an increase in estimated achievement of performance conditions based on actual and expected future financial performance. The change in estimate increased Performance Share Units outstanding by approximately 303,000 shares. Additionally, the expected vest date of PARS awards issued during fiscal year 2010 was accelerated to vest on the three-year anniversary of the grant date. As such, the Company adjusted the forfeiture rate related to certain PARS awards to reflect a reduction in expected forfeitures over the remaining vesting period.

As a result of the change in performance estimate, stock based compensation expenses increased $9,133 ($5,640, net of tax), or $0.10 per diluted share during the year ended April 2, 2010.

These estimates may be adjusted in future periods based on actual experience and changes in management assumptions.

During the fiscal year ended April 2, 2010, restricted stock awards were forfeited due to the departure of the Company's former Chairman and Chief Executive Officer. As a result, $3,837 ($2,370, net of tax) was recognized as an adjustment to reduce stock-based compensation related to restricted stock during the year ended April 2, 2010.

The following table summarizes the activity of restricted stock and restricted stock units during the period from March 27, 2009 to March 30, 2012:

		Performance-Based Awards												Time-Based Awards
		Performance Shares				PARS
(share amounts in thousands)		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Balance, March 27, 2009			221	$	18.49		-	$	-		767	$	18.38		248	$	19.23
	Granted		241		17.00		132		17.00		7		21.84		171		20.06
	Addition from change in estimate		303		18.39		-		-		-		-		-		-
	Vested		-		-		-		-		-		-		(90)		19.42
	Forfeited		(250)		17.97		(44)		17.00		(122)		18.50		(12)		19.50
Balance, April 2, 2010			515	$	17.98		88	$	17.00		652	$	18.40		317	$	19.68
	Granted		94		22.23		103		22.23		460		21.85		87		20.00
	Addition from change in estimate		34		23.41		-		-		-		-		-		-
	Vested		(164)		18.52		-		-		(547)		18.40		(91)		19.55
	Forfeited		-		-		-		-		(33)		19.11		(15)		18.42
Balance, April 1, 2011			479	$	19.01		191	$	19.82		532	$	21.34		298	$	19.88
	Granted		87		27.29		87		27.29		47		22.55		72		23.61
	Reduction from change in estimate		(98)		19.34		-		-		-		-		-		-
	Vested		(162)		18.47		-		-		(81)		18.47		(58)		19.37
	Forfeited		(5)		25.19		(4)		25.19		(27)		21.85		(10)		22.10
Balance, March 30, 2012			301	$	21.48		274	$	22.11		471	$	21.93		302	$	20.79

Total compensation expense for restricted stock grants during the fiscal years ended March 30, 2012, April 1, 2011, and April 2, 2010, was $6,430, $9,198, and $12,164, respectively, with related income tax benefits of $2,443, $3,495, and $4,618, respectively. The total fair value of shares vested during the fiscal years ended March 30, 2012, April 1, 2011, and April 2, 2010, was $8,102, $17,581, and $1,897, respectively.

Scheduled vesting for outstanding restricted stock and restricted stock units is as follows:

As of March 30, 2012, there was $16,535 of unrecognized compensation cost related to non-vested restricted stock and restricted stock units granted under the stock incentive plans. The estimated stock-based compensation expense for the next five fiscal years is expected to be recognized over a weighted average period of 1.7 years as follows:

During fiscal year 2012, the Compensation Committee approved the 2011 Shareholder Value Plan (“2011 SVP”), a cash based performance award program for certain officers and management under the 2006 Incentive Plan. The performance period under the 2011 SVP is the 36-month period from April 1, 2011 to March 28, 2014. Target awards under the 2011 SVP were calculated as three times the participant's base salary times an award factor ranging from 15% to 40% and performance goals were based on planned cumulative earnings per share. Due to a reduction in payout estimates based on performance, the Company has no accrued compensation cost related to the 2011 SVP recorded as of March 30, 2012.

During fiscal year 2009, the Compensation Committee approved the 2008 Shareholder Value Plan (“2008 SVP”) for non-executive officers and leaders. The performance period under the 2008 SVP was the 36-month period from March 31, 2008 to April 1, 2011. Target awards under the 2008 SVP were calculated as three times the participant's base salary times an award factor ranging from 10% to 38% and performance goals were based on planned cumulative earnings per share. As a result of an increase in accounting estimate related to expected achievement of long-term performance measures related to the 2008 SVP, long-term incentive based compensation increased $2,276 ($1,405, net of tax), or $0.02 per diluted share during fiscal year 2010. The Company accrued approximately $10,697 of compensation cost related to the 2008 SVP, recorded in Other current liabilities in the accompanying Consolidated Balance Sheets as of April 1, 2011, which was paid in June 2011.