Exhibit 10.6
*** Certain portions of this
Exhibit have been omitted based upon a request for confidential
treatment pursuant to 24b-2 of the Securities Exchange Act of 1934,
as amended. The omitted portions have been filed separately with
the Securities Exchange Commission.
PSS WORLD MEDICAL,
INC.
2009-2011 SHAREHOLDER VALUE
PLAN
ARTICLE 1
ESTABLISHMENT OF
PLAN
1.1 Background of Plan . The
Shareholder Value Plan is a sub-plan of the PSS World Medical, Inc.
2006 Incentive Plan (the “Plan”), consisting of a
program for the grant of performance awards under Article 9 of the
Plan. The Shareholder Value Plan has been established and approved,
and will be administered by, the Compensation Committee pursuant to
the terms of the Plan. To the extent applicable, it is intended
that Awards under the Shareholder Value Plan shall be fully
deductible by the Company without regard to the limitations of
Section 162(m) of the Internal Revenue Code. The Effective
Date of the Shareholder Value Plan is March 29,
2008.
1.2 Purpose . The purpose of
the Shareholder Value Plan is to increase participants’
economic interest in the long-term success of the Company, to
encourage participants to continue employment with the Company, and
to reward participants for achieving long-term goals. The
Shareholder Value Plan is intended to provide an incentive to
executives of the Company and/or its Subsidiaries to accelerate the
creation of shareholder value through the achievement of the
financial performance goals outlined in the Company’s
three-year strategic plan (the “Strategic
Plan”).
ARTICLE 2
ADMINISTRATION
2.1 Committee . The
Shareholder Value Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company.
2.2 Authority of Committee .
The Committee has the exclusive power, authority and discretion to:
(a) designate participants; (b) reduce , or if
permissible under applicable law increase, any SVP Award,
regardless of the achievement of designated Performance Goals;
(c) establish, adopt or revise any rules and regulations as it
may deem necessary or advisable to administer the Shareholder Value
Plan; (d) make all other decisions and determinations that may
be required under the Shareholder Value Plan or as the Committee
deems necessary or advisable to administer the Shareholder Value
Plan; and (e) amend the Shareholder Value Plan as provided
herein.
2.3. Decisions Binding . The
Committee’s interpretation of the Shareholder Value Plan and
all decisions and determinations by the Committee with respect to
the Shareholder Value Plan are final, binding, and conclusive on
all parties.
ARTICLE 3
ELIGIBILITY
3.1. General . Participation
in the Shareholder Value Plan is limited to officers of the Company
or any Subsidiary as shall be selected to participate in the
Shareholder Value Plan by the Committee.
- 1 -
3.2. Partial Term
Participation . When employees are chosen for participation in
the Shareholder Value Plan during the Performance Period or become
eligible for participation in a different long-term incentive
program, their SVP Award amounts shall be prorated, based on the
number of full months they participated in the Shareholder Value
Plan during the applicable Performance Period.
3.3. Promotions, Demotions and
Certain Position Changes .
|
|
(a)
|
If a
participant is promoted during a Performance Period the Committee
shall have the discretion to determine whether the original Award
Factor in place at the beginning of the Performance Period shall be
used or whether a different Award Factor shall be used.
|
|
|
(b)
|
If a
participant is demoted during a Performance Period or requests a
move to a position not eligible for participation in the
Shareholder Value Plan, the Committee will determine whether the
participant shall end participation in the Shareholder Value Plan
at that time, or shall continue as a participant, perhaps at a
reduced level. If participation ends, any SVP Award earned during
the time of participation will be prorated for the Performance
Period, and will be paid only if the participant is still an
employee at the time SVP Awards are paid. Any such proration shall
be based on the number of full months the participant participated
in the Shareholder Value Plan during the applicable Performance
Period.
|
ARTICLE 4
DEFINITIONS
4.1 Definitions . Capitalized
terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan. In addition, the following terms
shall have the following meanings for purposes of the Shareholder
Value Plan:
|
|
(a)
|
“Adjusted
EPS” means diluted earnings per common share as determined
under Generally Accepted Accounting Principles (GAAP) as reported
in the Company’s financial statements, except that it will
exclude the negative effect of all nonrecurring charges,
extraordinary items, discontinued operations, and cumulative
effects of accounting changes, unless the Committee in its sole
discretion determines otherwise.
|
|
|
(b)
|
“Beginning Base Salary” means a
participant’s annual base salary, excluding bonus and other
compensation, as in effect at the beginning of a Performance Period
(or such later time as the person first becomes a participant in
the Shareholder Value Plan).
|
|
|
(c)
|
“Cumulative Adjusted EPS” means
cumulative Adjusted EPS over a Performance Period.
|
|
|
(d)
|
“Payout
Matrix” means a matrix adopted by the Committee with respect
to a Performance Period equating a cash SVP Award to the attainment
of Performance Goals. The Payout Matrix for the current 36-month
Performance Period is set forth on Exhibit B
hereto.
|
|
|
(e)
|
“Performance Goals” are goals
established by the Committee with respect to a Performance Period
that determine whether and to what extent an SVP Award is earned
for such Performance Period. Performance Goals shall be determined
solely on the basis of, and in accordance with, one of the
Qualified Business Criteria specified in Section 11.2 of the
Plan. The Performance Goals for the current 36-month Performance
Period are based on Cumulative Adjusted EPS as set forth on
Exhibit A hereto.
|
- 2 -
|
|
(f)
|
“Performance Period” means a period
established by the Committee from time to time over which
performance will be measured to determine the payout of SVP Awards.
The current Performance Period under the Shareholder Value Plan is
the 36-month period beginning on March 29, 2008 and ending on
April 1, 2011. The Committee may determine and declare
subsequent Performance Periods from time to time. Performance
Periods may, but need not, overlap.
|
|
|
(g)
|
“Prorated
Cumulative Adjusted EPS” has the meaning set forth in
Section 5.8.
|
|
|
(g)
|
“SVP
Award” means a cash award payable to a participant in the
Shareholder Value Plan based on the achievement of threshold
performance or better during a Performance Period.
|
|
|
(h)
|
“Target
SVP Award” means an SVP Award established by the Committee
from time to time with respect to a Performance Period based on
“target” performance.
|
ARTICLE 5
OPERATION OF THE
PLAN
5.1 Target SVP Awards.
Subject to Section 3.3, the Target SVP Award for a participant
for the current 36-month Performance Period is three times the
participant’s Beginning Base Salary multiplied by an Award
Factor derived from the participant’s officer level at the
beginning of the Performance Period (or such later time as the
person first becomes a participant in the Shareholder Value Plan),
as set forth on Exhibit B hereto. The Committee may
establish different Target SVP Awards for future Performance
Periods.
5.2 Performance Goals and Payout
Matrix. The Performance Goals and Payout Matrix applicable to
the current 36-month Performance Period are based on Cumulative
Adjusted EPS, as set forth on Exhibit A and Exhibit B
hereto. The Committee may establish different Performance Goals and
Payout Matrices for future Performance Periods. The Committee shall
establish Performance Goals prior to the beginning of a Performance
Period for which such Performance Goals relate.
5.3 Determination of Performance
Results . As soon as reasonably possible after the close of the
fiscal quarter or year marking the end of a Performance Period, the
Committee will determine and certify in writing the degree to which
the Performance Goals have been attained and may, in its
discretion, exclude the effect of all nonrecurring charges,
extraordinary items, discontinued operations and cumulative effects
of accounting changes. The Committee shall have the sole authority
to determine to what the extent the Performance Goals have been
attained. Any payment of an SVP Award shall be condition
