EXHIBIT 10.1

CONFIDENTIAL

SEVERANCE AGREEMENT

                This Severance Agreement (this “Agreement”) is entered into by
and between Ross Anker (“Anker”) and MSC Industrial Direct Co., Inc., on behalf
of itself and all of its subsidiaries, divisions, successors and assigns
(hereinafter collectively referred to as the “Corporation”).

RECITALS

                WHEREAS, Anker and Corporation wish to terminate Anker’s
employment by the Corporation on the terms and conditions set forth herein.

                NOW, THEREFORE, in consideration of the promises, releases,
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, it is hereby agreed as follows:

1.             RESIGNATION.  ANKER HEREBY RESIGNS HIS EMPLOYMENT WITH THE
CORPORATION, EFFECTIVE AS OF MARCH 16, 2006 (THE “EFFECTIVE DATE”), INCLUDING,
WITHOUT LIMITATION, HIS TITLE AS SENIOR VICE PRESIDENT OF PRODUCT MANAGEMENT AND
INFORMATION SYSTEMS.  ANKER FURTHER AGREES THAT SUBSEQUENT TO THE EFFECTIVE DATE
HE SHALL NOT REPRESENT OR HOLD HIMSELF OUT AS AN OFFICER OR EMPLOYEE OF THE
CORPORATION.

2.             SEVERANCE.

(A)           FROM AND AFTER THE EFFECTIVE DATE AND SUBJECT TO ADJUSTMENT
PURSUANT TO SECTION 9 HEREOF, THE CORPORATION AGREES TO PAY ANKER, SUBJECT TO
HIS STRICT ADHERENCE TO EACH OF HIS COVENANTS HEREUNDER AND/OR UNDER THE GENERAL
RELEASE ATTACHED AS EXHIBIT A HERETO AND THE CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETITION AGREEMENT ATTACHED AS EXHIBIT B HERETO (COLLECTIVELY, THE
“EXHIBITS”) AND AS CONSIDERATION THEREFOR, SEVERANCE PAYMENTS IN SEVEN (7)
INSTALLMENTS OTHERWISE IN ACCORDANCE WITH THE CORPORATION’S CUSTOMARY PAYROLL
POLICY AS FOLLOWS:  (X) A LUMP SUM OF $176,500 ON SEPTEMBER 21, 2006 AND (Y) AN
INSTALLMENT IN THE AMOUNT OF $29,416.66 PAYABLE ON EACH OF SEPTEMBER 21, 2006,
OCTOBER 19, 2006, NOVEMBER 16, 2006, DECEMBER 14, 2006, JANUARY 25, 2007 AND
FEBRUARY 22, 2007; IN EACH CASE LESS APPLICABLE WITHHOLDING (AS REQUIRED BY
FEDERAL AND NEW YORK STATE LAW) FOR INCOME AND OTHER TAXES (COLLECTIVELY, THE
“SEVERANCE PAYMENT”).  NOTHING HEREIN SHALL OBLIGATE ANKER TO SEEK EMPLOYMENT
WITH ANOTHER ENTITY.

(B)           IN ADDITION, SUBJECT TO HIS STRICT ADHERENCE TO EACH OF THE
COVENANTS MADE BY HIM HEREUNDER AND/OR UNDER THE EXHIBITS HERETO AND AS
CONSIDERATION THEREFOR, ANKER SHALL RECEIVE A LUMP SUM PAYMENT IN THE AMOUNT OF
$337,500 PAYABLE ON DECEMBER 10, 2007 AND A LUMP SUM PAYMENT OF $337,500 PAYABLE
ON JANUARY 30, 2008 (COLLECTIVELY, THE “BONUS”).

3.             OPTIONS; RESTRICTED STOCK.

(A)           CONCURRENTLY WITH THE EXECUTION HEREOF, ANKER HAS DELIVERED TO THE
COMPANY FOR CANCELLATION (AND THE COMPANY ACKNOWLEDGES RECEIPT OF) CERTIFICATE
NOS. 2839, 2840, 2841, 2842 AND 2843 REPRESENTING AN AGGREGATE OF 4,280 SHARES
(THE “SHARES”) OF THE

--------------------------------------------------------------------------------

COMPANY’S CLASS A COMMON STOCK, WHICH SHARES ARE BEING RETURNED TO THE COMPANY
PURSUANT TO SECTION 9 OF THE COMPANY’S 1995 RESTRICTED STOCK PLAN, AS AMENDED,
AND ANKER SHALL HAVE NO RIGHT, TITLE TO, OR INTEREST IN SUCH SHARES.

(B)           PURSUANT TO THE COMPANY’S 2001 STOCK OPTION PLAN AND AGREEMENTS
THEREUNDER, AND AS SET FORTH ON SCHEDULE A, ANKER HAS A LIMITED PERIOD FOLLOWING
THE EFFECTIVE DATE TO EXERCISE AN AGGREGATE OF 24,550 OPTIONS TO PURCHASE SHARES
OF THE COMPANY’S CLASS A COMMON STOCK, AFTER WHICH APPLICABLE DATE ALL REMAINING
UNEXERCISED OPTIONS SHALL TERMINATE.

(C)           ANKER ACKNOWLEDGES THAT HIS BENEFITS HEREUNDER, AND THE
CORPORATION’S OBLIGATIONS TO MAKE THE SEVERANCE PAYMENT AND BONUS PAYMENTS
HEREUNDER, SHALL BE TERMINATED UPON HIS BREACH OF ANY COVENANT OR OBLIGATION
CONTAINED IN THIS AGREEMENT AND/OR IN THE EXHIBITS HERETO.  THE FOREGOING SHALL
BE IN ADDITION TO, AND NOT IN LIMITATION OF, ANY OF THE CORPORATION’S RIGHTS AND
REMEDIES, INCLUDING, WITHOUT LIMITATION, THOSE OF SPECIFIC PERFORMANCE AND
EQUITABLE REMEDIES, AT LAW AND/OR PURSUANT TO THE EXHIBITS HERETO.

4.             CONTINUED MEDICAL COVERAGE.  SUBJECT TO SECTION 9 HEREOF, IF
ANKER’S TIMELY ELECTS UNDER THE PROVISIONS OF COBRA TO CONTINUE HIS GROUP HEALTH
PLAN COVERAGE THAT WAS IN EFFECT PRIOR TO THE EFFECTIVE DATE, ANKER WILL BE
ENTITLED TO CONTINUATION OF SUCH COVERAGE, AT THE CORPORATION’S EXPENSE, FOR A
PERIOD OF TWELVE (12) MONTHS, PROVIDED THAT ANKER CONTINUES TO BE ELIGIBLE FOR
COBRA COVERAGE.

5.             RELEASE; CONFIDENTIALITY.  AS A CONDITION TO RECEIVING THE
BENEFITS HEREUNDER, ANKER SHALL EXECUTE THE GENERAL RELEASE IN THE FORM ATTACHED
AS EXHIBIT A HERETO, WHICH IS HEREBY INCORPORATED BY REFERENCE HEREIN AND MADE A
PART HEREOF AS IF SET FORTH IN FULL HEREIN.

6.             CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT. 
AS A CONDITION TO THE CORPORATION ENTERING INTO THIS AGREEMENT AND PROVIDING THE
BENEFITS HEREUNDER INCLUDING, WITHOUT LIMITATION, THE CORPORATION’S AGREEMENT TO
PAY THE SEVERANCE PAYMENT AND THE BONUS PURSUANT TO THE TERMS HEREOF, AND
ENTRUSTING ANKER WITH CONFIDENTIAL INFORMATION (AS DEFINED IN EXHIBIT B HERETO),
THE PARTIES HAVE ENTERED INTO THE CONFIDENTIALITY, NON-SOLICITATION AND
NON-COMPETITION AGREEMENT ATTACHED AS EXHIBIT B HERETO, WHICH IS HEREBY
INCORPORATED BY REFERENCE HEREIN AND MADE A PART HEREOF AS IF SET FORTH IN FULL
HEREIN.

7.             REVOCATION PERIOD.

(A)           BY EXECUTING THIS AGREEMENT, ANKER ACKNOWLEDGES THAT (I) HE HAS
BEEN ADVISED BY THE CORPORATION TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING
THIS AGREEMENT, (II) HE HAS BEEN PROVIDED WITH AT LEAST A TWENTY-ONE (21) DAY
PERIOD TO REVIEW AND CONSIDER WHETHER TO SIGN THIS AGREEMENT AND THAT BY
EXECUTING AND DELIVERING THIS AGREEMENT TO THE CORPORATION, HE IS WAIVING ANY
REMAINING PORTION OF SUCH TWENTY-ONE (21) DAY PERIOD, AND (III) HE HAS BEEN
ADVISED THAT HE HAS SEVEN (7) DAYS FOLLOWING EXECUTION TO REVOKE THIS AGREEMENT
(THE “REVOCATION PERIOD”).

(B)           THIS AGREEMENT WILL NOT BE EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED.  SUCH REVOCATION SHALL ONLY BE EFFECTIVE IF AN
ORIGINALLY EXECUTED WRITTEN NOTICE THEREOF IS DELIVERED TO THE CORPORATION ON OR
BEFORE 5:00 P.M. ON THE SEVENTH DAY AFTER

2

--------------------------------------------------------------------------------

EXECUTION OF THIS AGREEMENT.  IF SO REVOKED, THIS AGREEMENT SHALL BE DEEMED TO
BE VOID AB INITIO AND OF NO FURTHER FORCE AND EFFECT.

8.             PAYMENT OF COMPENSATION DUE.  ANKER ACKNOWLEDGES AND AGREES THAT
ANY MONETARY OR OTHER BENEFITS WHICH ARE, WERE OR MAY HAVE BEEN CLAIMED TO BE
DUE TO ANKER AND WHICH HE MAY HAVE EARNED OR ACCRUED, OR TO WHICH HE MAY HAVE
BEEN ENTITLED, HAVE BEEN PAID OR SUCH PAYMENTS HAVE BEEN RELEASED, WAIVED OR
SETTLED BY ANKER PURSUANT TO THIS AGREEMENT.

9.             MITIGATION AND SET OFF.  IN THE EVENT THAT ANKER OBTAINS
EMPLOYMENT OR CONSULTING/ADVISORY WORK DURING THE PERIOD FROM THE DATE HEREOF
UNTIL MARCH 16, 2007 THE CORPORATION REMAINS OBLIGATED TO MAKE THE SEVERANCE
PAYMENT HEREUNDER, CORPORATION SHALL BE ENTITLED TO SET OFF AGAINST AND REDUCE
THE AMOUNT OF THE SEVERANCE PAYMENT SO REMAINING TO BE PAID (BUT NOT THE BONUS),
BY AN AMOUNT EQUAL TO ALL BASE SALARY AMOUNTS PAID OR PAYABLE TO ANKER IN
RESPECT OF SUCH PERIOD (WHENEVER PAID) FOR SUCH EMPLOYMENT OR
CONSULTANCY/ADVISORY WORK.

In the event that Anker obtains employment or consulting/advisory work during
the period the Corporation remains obligated to make payments pursuant to
Section 4 hereof, and such employment or consultancy/advisory work affords
Anker’s eligibility to participate in other group health plan coverage generally
comparable to that covered by Section 4, Anker shall obtain such other coverage,
provide the Corporation with at least 30 days notice of the effective date of
such other coverage, and the Corporation shall have no obligation to pay the
COBRA coverage expenses under Section 4 hereof for any period after such
effective date.

10.           MISCELLANEOUS.

(A)           ANKER COVENANTS AND AGREES THAT HE SHALL AT ALL TIMES COOPERATE
WITH AND ASSIST THE CORPORATION IN THE DEFENSE OF ANY AND ALL LEGAL PROCEEDINGS
ARISING FROM FACTS AND CIRCUMSTANCES OF WHICH HE HAD KNOWLEDGE WHILE EMPLOYED BY
THE CORPORATION.  THE CORPORATION SHALL REIMBURSE ANKER FOR ANY OUT-OF-POCKET
EXPENSES INCURRED BY HIM IN CONNECTION WITH SUCH COOPERATION AND ASSISTANCE.

(B)           THE PARTIES HERETO AGREE TO MAINTAIN THE TERMS OF THIS AGREEMENT
AS CONFIDENTIAL AND NEITHER PARTY, NOR ANY PERSON OR ENTITY ACTING ON SUCH
PARTY’S BEHALF, SHALL DISCLOSE SUCH TERMS TO ANY THIRD PARTY, EXCEPT TO SUCH
PARTY’S SPOUSE, ATTORNEY, ACCOUNTANT OR FINANCIAL ADVISOR OR AS MAY BE REQUIRED
BY LAW.

(C)           THIS AGREEMENT SHALL NOT IN ANY WAY BE CONSTRUED AS AN ADMISSION
BY THE CORPORATION THAT IT HAS ACTED WRONGFULLY WITH RESPECT TO ANKER OR THAT
ANKER HAS ANY RIGHTS WHATSOEVER AGAINST THE CORPORATION, AND THE CORPORATION
SPECIFICALLY DISCLAIMS ANY LIABILITY FOR ANY WRONGFUL ACTS AGAINST ANKER ON THE
PART OF ITSELF, ITS EMPLOYEES OR ITS AGENTS.

(D)           ANKER AGREES THAT NEITHER HE, NOR ANYONE ACTING ON HIS BEHALF,
SHALL HEREAFTER (I) MAKE ANY DEROGATORY, DISPARAGING OR CRITICAL STATEMENT ABOUT
THE CORPORATION OR THE BUSINESS OF THE CORPORATION OR ANY OF THE CORPORATION’S
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY PERSONS WHO WERE OFFICERS, DIRECTORS OR
EMPLOYEES OF THE CORPORATION OR (II) COMMUNICATE, DIRECTLY OR INDIRECTLY, WITH
THE PRESS OR OTHER MEDIA CONCERNING THE PAST OR PRESENT EMPLOYEES OR BUSINESS OF
THE CORPORATION.

3

--------------------------------------------------------------------------------

(E)           THE CORPORATION AGREES THAT NEITHER IT, NOR ANYONE ACTING ON THE
CORPORATION’S BEHALF, SHALL HEREAFTER MAKE ANY DEROGATORY, DISPARAGING OR
CRITICAL STATEMENT ABOUT ANKER.

(F)            IF NOT REVOKED IN ACCORDANCE WITH PARAGRAPH 7(A), THE COVENANTS,
REPRESENTATIONS AND ACKNOWLEDGMENTS CONTAINED HEREIN SHALL SURVIVE THE EXECUTION
AND DELIVERY OF THIS AGREEMENT.

(G)           THIS AGREEMENT, THE GENERAL RELEASE AND THE CONFIDENTIALITY,
NON-SOLICITATION AND NON-COMPETITION AGREEMENTS (I) CONSTITUTE THE SOLE AND
COMPLETE UNDERSTANDING AND AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO
THE MATTERS SET FORTH IN THIS AGREEMENT, THE GENERAL RELEASE AND THE
CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT AND THERE ARE NO
OTHER AGREEMENTS OR UNDERSTANDINGS, WHETHER WRITTEN OR ORAL AND WHETHER MADE
CONTEMPORANEOUSLY OR OTHERWISE, THAT ARE BINDING UPON THE PARTIES HERETO, (II)
MAY NOT BE AMENDED UNLESS IN A WRITING SIGNED BY THE PARTIES HERETO, (III) SHALL
BE SUBJECT TO, GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK AND (IV) SHALL INURE TO THE BENEFIT OF
AND BE BINDING UPON THE HEIRS, DEVISEES, LEGATEES, EXECUTORS, ADMINISTRATORS,
SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, AND AFFILIATES OF EACH OF THE PARTIES
HERETO.

(H)           ANKER REPRESENTS AND WARRANTS THAT HE IS ABLE TO AFFECT A KNOWING
AND VOLUNTARY WAIVER AND GENERAL RELEASE OF CLAIMS AND IS NOT AFFECTED OR
IMPAIRED BY ILLNESS, USE OF ALCOHOL, DRUGS OR OTHER SUBSTANCES OR OTHERWISE
IMPAIRED.  ANKER REPRESENTS AND WARRANTS THAT HE IS COMPETENT TO EXECUTE THIS
AGREEMENT, TO WAIVE ANY AND ALL CLAIMS HE HAS OR MAY HAVE AGAINST THE
CORPORATION AND CERTIFIES THAT HE IS NOT A PARTY TO ANY BANKRUPTCY OR OTHER
PROCEEDING WHICH WOULD IMPAIR HIS RIGHT TO WAIVE ANY AND ALL CLAIMS HE MAY HAVE
AGAINST CORPORATION.

(I)            THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF WHICH
WHEN SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL AND ALL OF WHICH TAKEN
TOGETHER SHALL CONSTITUTE ONE AGREEMENT.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

4

--------------------------------------------------------------------------------

                IN WITNESS WHEREOF, the parties hereto have executed this
Severance Agreement on the date set forth opposite their respective signatures.

 

Dated: March 16, 2006

/s/ Ross Anker

 

ROSS ANKER

 

 

 

 

Dated: March 16, 2006

MSC INDUSTRIAL DIRECT CO., INC.

 

 

 

 

 

By:

/s/ David Sandler

 

 

Name:

David Sandler

 

 

Title:

President and Chief Executive Officer

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

 

Option Grant
Date

 

Stock Option
Plan

 

No. of Shares
Exercisable

 

Grant
Price

 

Option Exercise
Expiration Date

 

10/20/03

 

2001

 

16,800

 

$23.41

 

April 16, 2006

 

10/26/04

 

2001

 

7,750

 

$32.40

 

April 16, 2006

 

 

None of the restricted shares granted (in 2004 and 2005) to Ross Anker will have
vested at the time of this agreement.

 

--------------------------------------------------------------------------------

Exhibit A

RELEASE

                WHEREAS, prior to the date hereof Ross Anker (“Anker”) served as
the Senior Vice President, Product Management/Information Systems of MSC
INDUSTRIAL DIRECT CO., INC., a New York corporation (the “Corporation), and the
employment of Anker with the Corporation has been terminated as reflected in the
Severance Agreement of even date herewith (the “Agreement”); and

                WHEREAS, it is a condition to the Corporation’s entering into
the Severance Agreement and undertaking the obligations to make the Severance
Payments and Bonus payments and other benefits available to Anker pursuant to
the Agreement that Anker execute and deliver this Release to the Corporation.

                NOW, THEREFORE, in consideration of the receipt by Anker of the
benefits under the Agreement, which constitute a material inducement to enter
into this Release, Anker intending to be legally bound hereby agrees as follows:

                Subject to the next succeeding paragraph, effective upon the
expiration of the 7-day revocation period following execution hereof as provided
below, Anker irrevocably and unconditionally releases the Corporation and its
owners, stockholders, predecessors, successors, assigns, affiliates, control
persons, agents, directors, officers, employees, representatives, divisions and
subdivisions (collectively, the “Related Persons”) from any and all causes of
action, charges, complaints, liabilities, obligations, promises, agreements,
controversies and claims (a) arising out of Anker’s employment with the
Corporation and the conclusion thereof, including, without limitation, any
federal, state, local or other statutes, orders, laws, ordinances, regulations
or the like that relate to the employment relationship and/or specifically that
prohibit discrimination based upon age, race, religion, sex, national origin,
disability, sexual orientation or any other unlawful bases, including, without
limitation, as amended, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Civil
Rights Acts of 1866 and 1871, the Americans With Disabilities Act of 1990, the
New York City and State Human Rights Laws, and any applicable rules and
regulations promulgated pursuant to or concerning any of the foregoing statutes;
(b) for tort, tortious or harassing conduct, infliction of emotional distress,
interference with contract, fraud, libel or slander; and (c) for breach of
contract or for damages, including, without limitation, punitive or compensatory
damages or for attorneys’ fees, expenses, costs, salary, severance pay,
vacation, injunctive or equitable relief, whether, known or unknown, suspected
or unsuspected, foreseen or unforeseen, matured or unmatured, which, from the
beginning of the world up to and including the date hereof, exists, have
existed, or may arise, which Anker, or any of his heirs, executors,
administrators, successors and assigns ever had, now has or at any time
hereafter may have, own or hold against the Corporation and/or any Related
Person.

                Notwithstanding anything contained herein to the contrary, Anker
is not releasing the Corporation from any of the Corporation’s obligations (a)
under the Agreement, (b) to provide Anker with insurance coverage defense and/or
indemnification as an officer of the Corporation to the extent generally made
available at the date of termination to the Corporation’s officers and

 

--------------------------------------------------------------------------------

 

directors, in respect of facts and circumstances existing or arising on or prior
to the date hereof, or (c) in respect of Anker’s rights under the Corporation’s
Associate Stock Purchase Plan, 1995 Stock Option Plan, 1998 Stock Option Plan or
2001 Stock Option Plan, as applicable.

                The Corporation has advised Anker in writing to consult with an
attorney of his choosing prior to the signing of this Release and Anker hereby
represents to the Corporation that he has in fact consulted with such an
attorney prior to the execution of this Release.  Anker acknowledges that he has
been provided at least twenty-one days to consider the waiver of his rights
under the ADEA and that by executing and delivering this Release to the
Corporation, he is waiving any remaining portion of such twenty-one (21) day
period. Upon execution of this Release, Anker shall have seven additional days
from such date of execution to revoke his consent to the waiver of his rights
under the ADEA.  If no such revocation occurs, Anker’s waiver of rights under
the ADEA shall become effective seven days from the date Anker executes this
Release.

                IN WITNESS WHEREOF, the undersigned has executed this Release on
the 16th day of March, 2006.

 

 

 

 

 

/s/ Ross Anker

 

 

 

 

ROSS ANKER

 

 

 

 

2

--------------------------------------------------------------------------------

 

 

Exhibit B

 

CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETITION AGREEMENT

 

CONFIDENTIALITY, NON-SOLICITATION AND NON- COMPETITION AGREEMENT dated as of
March 16, 2006 between MSC Industrial Direct Co., Inc., on behalf of itself and
its subsidiaries (the, “Corporation”), and Ross Anker (“Anker”).

In consideration of the Corporation entering into, and its agreement to the
benefits provided in the Severance Agreement between Corporation and Anker dated
as of even date herewith (the “Agreement”), the Corporation entrusting Anker
with Confidential Information (as defined below), and the Corporation’s
obligations for the Severance Payment and Bonus under the Agreement, it being
acknowledged and agreed by Anker that his receipt of such benefits is expressly
conditioned on, and constitutes consideration for, his continued compliance with
the terms hereof, the parties have entered into this Confidentiality,
Non-Solicitation and Non-Competition Agreement.

1.             CONFIDENTIALITY.

(A)                                        UNTIL MARCH 16, 2008, ANKER WILL NOT
USE OR DISCLOSE TO ANY INDIVIDUAL OR ENTITY ANY CONFIDENTIAL INFORMATION (AS
DEFINED BELOW) EXCEPT AS AUTHORIZED IN WRITING BY CORPORATION, OR AS REQUIRED BY
LAW OR LEGAL PROCESS, PROVIDED THAT, PRIOR WRITTEN NOTICE OF SUCH REQUIRED
DISCLOSURE IS PROVIDED TO CORPORATION AND, PROVIDED FURTHER THAT ALL REASONABLE
EFFORTS TO PRESERVE THE CONFIDENTIALITY OF SUCH INFORMATION SHALL BE MADE.

(B)                                       AS USED IN THIS AGREEMENT,
“CONFIDENTIAL INFORMATION” SHALL MEAN INFORMATION THAT (I) IS USED OR
POTENTIALLY USEFUL IN CORPORATION’S BUSINESS, (II) CORPORATION TREATS AS
PROPRIETARY, PRIVATE OR CONFIDENTIAL, AND (III) IS NOT GENERALLY KNOWN TO THE
PUBLIC. “CONFIDENTIAL INFORMATION” INCLUDES, WITHOUT LIMITATION, INFORMATION
RELATING TO CORPORATION’S PRODUCTS OR SERVICES, PROCESSING, MANUFACTURING,
MARKETING, SELLING, CUSTOMER LISTS, CALL LISTS, CUSTOMER DATA, MEMORANDA, NOTES,
RECORDS, TECHNICAL DATA, SKETCHES, PLANS, DRAWINGS, CHEMICAL FORMULAE, TRADE
SECRETS, COMPOSITION OF PRODUCTS, RESEARCH AND DEVELOPMENT DATA, SOURCES OF
SUPPLY AND MATERIAL, OPERATING AND COST DATA, FINANCIAL INFORMATION, PERSONAL
INFORMATION AND INFORMATION CONTAINED IN MANUALS OR MEMORANDA. “CONFIDENTIAL
INFORMATION” ALSO INCLUDES PROPRIETARY AND/OR CONFIDENTIAL INFORMATION OF
CORPORATION’S CUSTOMERS, SUPPLIERS AND TRADING PARTNERS WHO MAY SHARE SUCH
INFORMATION WITH CORPORATION PURSUANT TO A CONFIDENTIALITY AGREEMENT OR
OTHERWISE.  ANKER AGREES TO TREAT ALL SUCH CUSTOMER, SUPPLIER OR TRADING PARTNER
INFORMATION AS “CONFIDENTIAL INFORMATION” HEREUNDER. THE FOREGOING RESTRICTIONS
ON THE USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION SHALL TERMINATE WHEN THE
INFORMATION IS GENERALLY KNOWN TO

 

--------------------------------------------------------------------------------

 

                                                      THE PUBLIC, OTHER THAN BY
WAY OF UNAUTHORIZED DISCLOSURE BY ANKER IN BREACH OF THIS AGREEMENT.

2.               NON-COMPETITION.

(A)                                  ANKER RECOGNIZES THAT THE CORPORATION’S
RELATIONSHIP AND GOODWILL WITH ITS CUSTOMERS HAVE BEEN ESTABLISHED AT
SUBSTANTIAL COST AND EFFORT BY THE CORPORATION; AND

(B)                                 UNTIL MARCH 16, 2008, ANKER WILL NOT, IN ANY
CAPACITY, ACCEPT EMPLOYMENT WITH THE EMPLOYER WITH WHOM ANKER WAS EMPLOYED
IMMEDIATELY PRECEDING THE COMMENCEMENT OF ANKER’S PRIOR EMPLOYMENT WITH THE
CORPORATION, NOR UNTIL MARCH 16, 2008 WILL ANKER, IN ANY CAPACITY, ACCEPT
EMPLOYMENT WITH ANY OF THE FOLLOWING BUSINESS ENTITIES, INCLUDING ANY PARENT OR
SUBSIDIARY ENTITIES OR OTHER AFFILIATED ORGANIZATIONS: W.W. GRAINGER, INC.; J&L
INDUSTRIAL SUPPLY; FASTENAL CORPORATION; THE HOME DEPOT, INC.; AND MCMASTER CARR
SUPPLY.

3.               NON-SOLICITATION.

(A)                                  ANKER RECOGNIZES THAT THE CORPORATION’S
RELATIONSHIP AND GOODWILL WITH ITS CUSTOMERS HAVE BEEN ESTABLISHED AT
SUBSTANTIAL COST AND EFFORT BY THE CORPORATION.

(B)                                 UNTIL MARCH 16, 2008, ANKER SHALL NOT IN ANY
CAPACITY EMPLOY OR SOLICIT FOR EMPLOYMENT, OR RECOMMEND THAT ANOTHER PERSON
EMPLOY OR SOLICIT FOR EMPLOYMENT, ANY PERSON WHO IS THEN, OR WAS AT ANY TIME
DURING THE SIX (6) MONTHS IMMEDIATELY PRECEDING THE TERMINATION OF ANKER’S
EMPLOYMENT, AN ASSOCIATE, SALES REPRESENTATIVE OR AGENT OF CORPORATION OR ANY
PRESENT OR FUTURE SUBSIDIARY OR AFFILIATE OF CORPORATION.

(C)                                  FURTHER, UNTIL MARCH 16, 2008, ANKER WILL
NOT, ON BEHALF OF HIMSELF, OR ANY OTHER PERSON, FIRM OR CORPORATION, SOLICIT ANY
OF THE CORPORATION’S OR ITS AFFILIATE’S CUSTOMERS WITH WHOM HE HAS HAD CONTACT
WHILE WORKING FOR THE CORPORATION; NOR WILL ANKER IN ANY WAY, DIRECTLY OR
INDIRECTLY, FOR HIMSELF, OR ANY OTHER PERSON, FIRM, CORPORATION OR ENTITY,
DIVERT, OR TAKE AWAY ANY CUSTOMERS OF THE CORPORATION OR ITS AFFILIATES WITH
WHOM ANKER HAS HAD CONTACT. FOR PURPOSES OF THIS PARAGRAPH, THE TERM “CONTACT”
SHALL MEAN ENGAGING IN ANY COMMUNICATION, WHETHER WRITTEN OR ORAL, WITH THE
CUSTOMER OR A REPRESENTATIVE OF THE CUSTOMER, OR OBTAINING ANY INFORMATION WITH
RESPECT TO SUCH CUSTOMER OR CUSTOMER REPRESENTATIVE.

4.                           RETURN OF PROPERTY.  ANKER HAS DELIVERED TO
CORPORATION ALL PROPERTY BELONGING TO CORPORATION IN ANKER’S POSSESSION OR
CONTROL, INCLUDING ALL DOCUMENTS (AS DEFINED HEREIN) EMBODYING CONFIDENTIAL
INFORMATION. AS USED HEREIN, “DOCUMENTS” SHALL MEAN ORIGINALS OR COPIES OF
FILES, MEMORANDA, CORRESPONDENCE, NOTES, MANUALS, PHOTOGRAPHS, SLIDES,
OVERHEADS, AUDIO OR VIDEO TAPES, CASSETTES, OR DISKS, AND RECORDS MAINTAINED ON
COMPUTER OR OTHER ELECTRONIC MEDIA.

 

2

--------------------------------------------------------------------------------

 

 

5.                           NOTICE TO FUTURE EMPLOYERS.  UNTIL MARCH 16, 2008,
ANKER WILL INFORM EACH NEW EMPLOYER, IN WRITING, PRIOR TO ACCEPTING EMPLOYMENT,
OF THE EXISTENCE AND DETAILS OF THIS AGREEMENT AND WILL PROVIDE THAT EMPLOYER
WITH A COPY OF THIS AGREEMENT. ANKER WILL SEND A COPY OF EACH SUCH WRITING TO
THE CORPORATION AT THE TIME THE ANKER INFORMS EACH NEW EMPLOYER OF THE
AGREEMENT.

6.                           REMEDIES.  ANKER ACKNOWLEDGES THAT THIS AGREEMENT,
ITS TERMS AND HIS COMPLIANCE IS NECESSARY TO PROTECT THE CORPORATION’S
CONFIDENTIAL AND PROPRIETARY INFORMATION, ITS BUSINESS AND ITS GOODWILL; AND
THAT A BREACH OF ANY OF ANKER’S PROMISES CONTAINED IN THIS AGREEMENT WILL
IRREPARABLY AND CONTINUALLY DAMAGE THE CORPORATION TO AN EXTENT THAT MONEY
DAMAGES MAY NOT BE ADEQUATE. FOR THESE REASONS, ANKER AGREES THAT IN THE EVENT
OF A BREACH OR THREATENED BREACH BY THE ANKER OF THIS AGREEMENT, THE CORPORATION
SHALL BE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
RESTRAINING ANKER FROM SUCH BREACH IN ADDITION TO THE CORPORATION BEING RELIEVED
OF ITS SEVERANCE PAYMENT AND BONUS OBLIGATIONS UNDER THE SEVERANCE AGREEMENT. 
NOTHING CONTAINED IN THIS PROVISION SHALL BE CONSTRUED AS PROHIBITING THE
CORPORATION FROM PURSUING ANY OTHER REMEDIES AVAILABLE FOR SUCH BREACH OR
THREATENED BREACH OR ANY OTHER BREACH OF THIS AGREEMENT. IF ANKER VIOLATES THIS
AGREEMENT, THEN THE DURATION OF THE RESTRICTIONS CONTAINED IN PARAGRAPHS 2 AND 3
SHALL BE EXTENDED FOR AN AMOUNT OF TIME EQUAL TO THE PERIOD OF TIME DURING WHICH
ANKER WAS IN VIOLATION OF THE AGREEMENT.

7.                           ENTIRE AGREEMENT.  THIS AGREEMENT (TOGETHER WITH
THE SEVERANCE AGREEMENT AND RELEASE) EMBODIES THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES WITH REGARD TO THE SUBJECT MATTER OF THIS
AGREEMENT, IS BINDING UPON AND INURES TO THE BENEFIT OF THE PARTIES, AND IT
SUPERSEDES ANY AND ALL PRIOR AGREEMENTS OR UNDERSTANDINGS BETWEEN THE
CORPORATION AND ANKER.

8.                           MODIFICATION.  THIS AGREEMENT MAY BE MODIFIED OR
AMENDED ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO, OR IN
ACCORDANCE WITH PARAGRAPH 14 HEREIN.

9.                           GOVERNING LAW AND VENUE.  THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK, AND MAY BE ENFORCED IN ANY COURT OF COMPETENT JURISDICTION.

10.                     WAIVER.  IF IN ONE OR MORE INSTANCES EITHER PARTY FAILS
TO INSIST THAT THE OTHER PARTY PERFORM ANY OF THIS AGREEMENT’S TERMS, THIS
FAILURE SHALL NOT BE CONSTRUED AS A WAIVER BY THE PARTY OF ANY PAST, PRESENT, OR
FUTURE RIGHT GRANTED UNDER THIS AGREEMENT; THE OBLIGATIONS OF BOTH PARTIES UNDER
THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT.

11.                     ASSIGNMENT. THIS AGREEMENT MAY NOT BE ASSIGNED BY ANKER.
THE CORPORATION SHALL HAVE THE RIGHT TO ASSIGN ITS RIGHTS AND OBLIGATIONS
HEREUNDER WITHOUT THE CONSENT OF THE ANKER.

12.                     ARBITRATION.  EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, ANY CONTROVERSY OR CLAIM ARISING OUT OF ANKER’S EMPLOYMENT WITH
CORPORATION OR THE TERMINATION THEREOF, INCLUDING WITHOUT LIMITATION ANY CLAIM
RELATED TO THIS AGREEMENT OR THE BREACH THEREOF SHALL BE RESOLVED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE RULES THEN IN EFFECT OF THE AMERICAN
ARBITRATION ASSOCIATION, AT THE OFFICE OF THE AMERICAN ARBITRATION ASSOCIATION

 

 

3

--------------------------------------------------------------------------------

                                    NEAREST TO WHERE ANKER PERFORMED ANKER’S
PRINCIPAL DUTIES FOR THE CORPORATION. NOTHING IN THIS PARAGRAPH SHALL PREVENT
THE PARTIES FROM SEEKING INJUNCTIVE RELIEF FROM THE COURTS PENDING ARBITRATION.
EACH PARTY SHALL BE PERMITTED TO ENGAGE IN ARBITRAL DISCOVERY IN THE FORM OF
DOCUMENT PRODUCTION, INFORMATION REQUESTS, INTERROGATORIES, DEPOSITIONS AND
SUBPOENAS. THE PARTIES SHALL SHARE EQUALLY THE FEE OF THE ARBITRATION PANEL.

To the extent that an arbitrator or court shall find that any dispute between
the parties, including any claim made under or relating to this Agreement, is
not subject to arbitration, such claim shall be decided by the courts of the
State and the County, in which this agreement was executed, in a proceeding held
before a Judge of the Trial Court of the State and County in which this
agreement was executed or in the United States District Court in and for the
District Court of covering the County in which this agreement was executed. Any
trial of such a claim shall be heard by the Judge of such Court, sitting without
a jury at a bench trial, to ensure more rapid adjudication of that claim and
application of existing law.

13.                     ATTORNEYS’ FEES.  IF ANY PARTY TO THIS AGREEMENT
BREACHES ANY OF THIS AGREEMENT’S TERMS, THEN THAT PARTY SHALL PAY TO THE
NON-DEFAULTING PARTY ALL OF THE NON-DEFAULTING PARTY’S COSTS AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS’ FEES, INCURRED BY THAT PARTY IN ENFORCING THIS
AGREEMENT.

14.                     SEVERABILITY.  IF ANY ONE OR MORE OF THE PROVISIONS
CONTAINED IN THIS AGREEMENT IS HELD ILLEGAL OR UNENFORCEABLE BY AN ARBITRATOR OR
COURT AND CANNOT BE MODIFIED TO BE ENFORCEABLE (WHICH THE PARTIES EXPRESSLY
AUTHORIZE SUCH COURT, ARBITRATOR, OR OTHER FORUM TO DO), NO OTHER PROVISIONS
SHALL BE AFFECTED BY THIS HOLDING.

15.                     ACKNOWLEDGMENT.  I HAVE READ THIS AGREEMENT, HAVE HAD AN
OPPORTUNITY TO ASK CORPORATION’S REPRESENTATIVES QUESTIONS ABOUT IT, AND
UNDERSTAND THAT MY SIGNING THIS AGREEMENT IS A CONDITION OF EMPLOYMENT.

16.                     SECTION HEADINGS.  SECTION HEADINGS ARE USED HEREIN FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE MEANING OF ANY PROVISION
OF THIS AGREEMENT.

THUS, the parties knowingly and voluntarily execute this Agreement as of the
dates set forth below.

 

MSC INDUSTRIAL DIRECT CO., INC.:

 

 

 

 

 

By: /s/

David Sandler

 

/s/ Ross Anker

 

ROSS ANKER

Title:

President and Chief Executive Officer

 

 

 

 

4

--------------------------------------------------------------------------------