Exhibit 10.1

 

AMENDED AND RESTATED AGREEMENT made and entered into as of this 27th day of
December, 2005 by and between MSC INDUSTRIAL DIRECT CO., INC., a New York
corporation (the “Corporation”), and DAVID SANDLER having an address at
                                                                                                          ,
(the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Executive has been employed by the Corporation in a senior
executive capacity and desires to remain in the employ of the Corporation in
such capacity; and

 

WHEREAS, the Executive and the Corporation are parties to an Agreement dated
January 8, 1999 (the “Prior Agreement”), providing the Executive with certain
benefits on and in connection with a “Change in Control” as defined therein; and

 

WHEREAS, due to certain recent legislation known as the American Job Creations
Act of 2004 and certain regulations promulgated or proposed thereunder,
including regulations under Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), regarding deferred compensation plans and other
arrangements (the “Regulations”), the benefits under the Prior Agreement are in
certain respects not in compliance with the Regulations, and such lack of
compliance could have a material adverse affect on the tax treatment of such
benefits to the Executive; and

 

WHEREAS, the Corporation desires to induce the Executive to remain in the employ
of the Corporation and the Executive desires the Corporation to effect certain
changes to the Prior Agreement so that such benefits are in compliance with the
Regulations.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

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FIRST:  Inducement Payments:

 

A.  Subject to the provisions of paragraph G of this Article FIRST, if a “Change
in Control” (as hereinafter defined) shall occur, the Corporation shall pay to
the Executive, in cash, the amount of $1,200,000, which amount shall be due and
payable thirty (30) days after the occurrence of a Change in Control.

 

B.  If, within five (5) years after a Change in Control, the Executive’s
“Circumstances of Employment” (as hereinafter defined) shall have changed, the
Executive may terminate his employment by written notice to the Corporation
given no later than ninety (90) days following such change in the Executive’s
Circumstances of Employment.  In the event of such termination by the Executive
of his employment or if, within five (5) years after a Change in Control, the
Corporation shall terminate the Executive’s employment other than for “Cause”
(as hereinafter defined), the Corporation shall pay to the Executive, subject to
the provisions of paragraph G of this Article FIRST, on the fifth (5th) business
day following the six months’ anniversary of the date of such termination (or
the date of Executive’s death, if earlier), in cash, the “Special Severance
Payment” (as hereinafter defined).

 

C.  A Change in Control shall be deemed to occur upon:

 

(a)  a change in ownership of the Corporation, which shall occur on the date
that any one person, or more than one person acting as a “Group” (as defined
under the Regulations), other than Mitchell Jacobson or Marjorie Gershwind or a
member of the Jacobson or Gershwind families or any trust established
principally for members of the Jacobson or Gershwind families or an executor,
administrator or personal representative of an estate of a member of the
Jacobson or Gershwind families and/or their respective

 

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affiliates, acquires ownership of stock of the Corporation that, together with
stock held by such person or Group, constitutes more than 50% of the total fair
market value or total voting power of the stock of the Corporation; provided,
however, that, if any one person or more than one person acting as a Group, is
considered to own more than 50% of the total fair market value or total voting
power of the stock of the Corporation, the acquisition of additional stock by
the same person or persons is not considered to cause a change in the ownership
of the Corporation;

 

(b)  a change in the effective control of the Corporation, which shall occur on
the date that (1) any one person, or more than one person acting as a Group,
other than Mitchell Jacobson or Marjorie Gershwind or a member of the Jacobson
or Gershwind families or any trust established principally for members of the
Jacobson or Gershwind families or an executor, administrator or personal
representative of an estate of a member of the Jacobson or Gershwind
familiesand/or their respective affiliates, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of the Corporation possessing 50% or more of the
total voting power of the stock of the Corporation; or (2) a majority of the
members of the Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election; provided, however, that,
if one person, or more than one person acting as a Group, is considered to
effectively control the Corporation, the acquisition of additional control of
the Corporation by the same person or persons is not considered a change in the
effective control of the Corporation;  or

 

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(c)  a change in the ownership of a substantial portion of the Corporation’s
assets, which shall occur on the date that any one person, or more than one
person acting as a Group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Corporation that have a total Gross Fair Market Value (as
defined below) equal to or more than 80% of the total Gross Fair Market Value of
all of the assets of the Corporation immediately prior to such acquisition or
acquisitions; provided, however, that, a transfer of assets by the Corporation
is not treated as a change in the ownership of such assets if the assets are
transferred to (1) a shareholder of the Corporation (immediately before the
asset transfer) in exchange for or with respect to its stock; (2) an entity, 50%
or more of the total value or voting power of which is owned, directly or
indirectly, by the Corporation; (3) a person, or more than one person acting as
a Group, that owns, directly or indirectly, 50% or more of the total value or
voting power of all the outstanding stock of the Corporation; or (4) an entity,
at least 50% of the total value or voting power of which is owned, directly or
indirectly, by a person described in Article FIRST C.(c)(3).

 

FOR PURPOSES OF THIS ARTICLE FIRST C., “GROSS FAIR MARKET VALUE” MEANS THE VALUE
OF THE ASSETS OF THE CORPORATION, OR THE VALUE OF THE ASSETS BEING DISPOSED OF,
DETERMINED WITHOUT REGARD TO ANY LIABILITIES ASSOCIATED WITH SUCH ASSETS. FOR
PURPOSES OF THIS ARTICLE FIRST C., STOCK OWNERSHIP IS DETERMINED UNDER THE
REGULATIONS.

 

D.  The Executive’s “Circumstances of Employment” shall have changed if there
shall have occurred any of the following events: (a) a material reduction or
change in the Executive’s employment duties or reporting responsibilities; (b) a
reduction in the annual base salary made available by the Corporation to the
Executive from the annual base salary in effect

 

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immediately prior to a Change in Control; or (c) a material diminution in the
Executive’s status, working conditions or other economic benefits from those in
effect immediately prior to a Change in Control.

 

E.  “Cause” shall mean (i) the commission by the Executive of any act or
omission that would constitute a felony or any crime of moral turpitude under
Federal law or the law of the state or foreign law in which such action
occurred, (ii) dishonesty, disloyalty, fraud, embezzlement, theft, disclosure of
trade secrets or confidential information or other acts or omissions that result
in a breach of fiduciary or other material duty to the Corporation and/or a
subsidiary; or (iii) continued reporting to work or working under the influence
of alcohol, an illegal drug, an intoxicant or a controlled substance which
renders the Executive incapable of performing his or her material duties to the
satisfaction of the Corporation and/or its subsidiaries.

 

F.  The “Special Severance Payment” shall mean a lump sum payment equal to the
difference between (a) the sum of (i) the product of five and the annual base
salary in effect immediately prior to a change in the Executive’s Circumstances
of Employment or the termination other than for Cause of the Executive’s
employment by the Corporation, as the case may be, and (ii) the product of five
and the largest annual bonus paid to or accrued with respect to the Executive by
the Corporation during the three fiscal years immediately preceding the
termination of the Executive’s employment and (b) the aggregate of all base
salary and bonus amounts paid to the Executive by the Corporation during the
period commencing upon a Change in Control and ending on the date of termination
of the Executive’s employment.

 

G.  As a condition to receiving the Special Severance Payment, the Executive
shall execute the General Release in the form attached as Exhibit A hereto.

 

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H.  For purposes of this Agreement, “affiliate” shall have the meaning ascribed
thereto under the Securities Act of 1933.

 

I.  For purposes of this Agreement, “termination of employment” means cessation
of full or part time employment with the Company and any of its subsidiaries.

 

SECOND:    Tax Indemnification.

 

A.  In the event that, as a result of any of the payments or other consideration
provided for or contemplated by Article FIRST of this Agreement or otherwise, a
tax (an “Excise Tax”) shall be imposed upon the Executive or threatened to be
imposed upon the Executive by virtue of the application of Section 4999(a) of
the Code, as now in effect or as the same may at any time or from time to time
be amended, or the application of any similar provisions of state or local tax
law, the Corporation shall indemnify and hold the Executive harmless from and
against all such taxes (including additions to tax, penalties and interest and
additional Excise Taxes, whether applicable to payments pursuant to the
provisions of this Agreement or otherwise) incurred by, or imposed upon, the
Executive and all expenses arising therefrom.

 

B.  Each indemnity payment to be made by the Corporation pursuant to part A of
this Article SECOND shall be increased by the amount of all Federal, state and
local tax liabilities (including additions to tax, payroll taxes, penalties and
interest and Excise Tax) incurred by, or imposed upon, the Executive so that the
effect of receiving all such indemnity payments will be that the Executive shall
be held harmless on an after-tax basis from the amount of all Excise Taxes
imposed upon payments made to the Executive by the Corporation pursuant to this
Agreement, it being the intent of the parties that the Executive shall not incur
any out-of-pocket

 

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costs or expenses of any kind or nature on account of the Excise Tax and the
receipt of the indemnity payments to be made by the Corporation pursuant hereto.

 

C.  Each indemnity payment to be made to the Executive pursuant to this
Article SECOND shall be payable within fifteen (15) business days of delivery of
a written request (a ”Request”) for such payment to the Corporation (which
request may be made prior to the time the Executive is required to file a tax
return showing a liability for an Excise Tax or other tax).  A Request shall set
forth the amount of the indemnity payment due to the Executive and the manner in
which such amount was calculated, and the Executive shall thereafter submit such
other evidence of the indemnity to which the Executive is entitled as the
Corporation shall reasonably request.  All such information shall, if the
Corporation shall request, be set forth in a statement signed by a nationally
recognized accounting firm or a partner thereof and the Corporation shall pay
all fees and expenses of such accounting firm incurred in the preparation
thereof.

 

D.  The Executive agrees to notify the Corporation (a) within fifteen (15)
business days of being informed by a representative of the Internal Revenue
Service (the “Service”) or any state or local taxing authority that the Service
or such authority intends to assert that an Excise Tax is or may be payable,
(b) within fifteen (15) business days of the Executive’s receipt of a revenue
agent’s report (or similar document) notifying the Executive that an Excise Tax
may be imposed and (c) within fifteen (15) business days of the Executive’s
receipt of a Notice of Deficiency under Section 6212 of the Code or similar
provision under state or local law which is based in whole or in part upon an
Excise Tax and/or a payment made to the Executive pursuant to this
Article SECOND.

 

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E.  After receiving any of the aforementioned notices, and subject to the
Executive’s right to control any and all administrative and judicial proceedings
with respect to, or arising out of, the examination or the Executive’s tax
returns, except as such proceedings relate to an Excise Tax, the Corporation
shall have the right (a) to examine all records, files and other information and
documentation in the Executive’s possession or under the Executive’s control,
(b) to be present and to participate, to the extent desired, in all
administrative and judicial proceedings with respect to an Excise Tax, including
the right to appear and act for the Executive at such proceedings in resisting
any contentions made by the Service or a state or local taxing authority with
respect to an Excise Tax and to file any and all written responses in connection
therewith, (c) to forego any and all administrative appeals, proceedings,
hearings and conferences with the Service or a state or local taxing authority
with respect to an Excise Tax on the Executive’s behalf, and (d) to pay any tax
increase on the Executive’s behalf and to control all administrative and
judicial proceedings with respect to a claim for refund from the Service or
state or local taxing authority with respect to such tax increase.

 

F.  The Corporation shall be solely responsible for all reasonable legal and
accounting or other expenses (whether of the Executive’s representative or the
representative of the Corporation) incurred in connection with any such
administrative or judicial proceedings insofar as they relate to an Excise Tax
or other tax increases resulting therefrom and the Executive agrees to execute
and file, or cause to be executed and filed, such instruments and documents,
including, without limitation, waivers, consents and Powers of Attorneys, as the
Corporation shall reasonably deem necessary or desirable in order to enable it
to exercise the rights granted to it pursuant to part E of this Article SECOND.

 

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G.  The liability of the Corporation shall not be affected by the Executive’s
failure to give any notice provided for in this Article SECOND unless such
failure materially prejudices the Corporation’s ability to effectively resist
any contentions made by the Service or a state or local taxing authority.  The
Executive may not compromise or settle a claim which he is indemnified against
hereunder without the consent of the Corporation, unless the Executive can
establish by a preponderance of the evidence that the decision of the
Corporation was not made in the good faith belief that a materially more
favorable result could be obtained by continuing to defend against the claim (or
prosecute a claim for refund).

 

THIRD:    Associate Confidentiality, Non-Solicitation and Non-Competition
Agreement.  In consideration of the Executive’s employment and continued
employment, the payment of the Executive’s compensation by the Corporation, and
the Corporation entrusting the Executive with Confidential Information (as
defined below), the parties have entered into the Associate 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.

 

FOURTH:  At Will Employment.  Nothing in this Agreement shall confer upon the
Executive the right to remain in the employ of the Corporation, it being
understood and agreed that (a) the Executive is an employee at will and serves
at the pleasure of the Corporation at such compensation as the Corporation shall
determine from time to time and (b) the Corporation shall have the right to
terminate the Executive’s employment at any time, with or without Cause.  In the
event of any such termination prior to the occurrence of a Change in Control, no
amount shall be payable by the Corporation to the Executive pursuant to
Article FIRST hereof.

 

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FIFTH:   Costs of Enforcement.  In the event that the Executive incurs any costs
or expenses, including attorneys’ fees, in the enforcement of his rights under
this Agreement then, unless the Corporation is wholly successful in defending
against the enforcement of such rights, the Corporation shall promptly pay to
the Executive all such costs and expenses.  In the event that the Corporation
incurs any costs or expenses, including attorneys’ fees, in the enforcement of
its rights under Article THIRD then, unless the Executive is wholly successful
in defending against the enforcement of such rights, the Executive shall
promptly pay to the Corporation all such costs and expenses.

 

SIXTH:  Notices.  All notices hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, if intended for the
Corporation shall be addressed to it, attention of its President, 75 Maxess
Road, Melville, New York 11747 or at such other address of which the Corporation
shall have given notice to the Executive in the manner herein provided; and if
intended for the Executive, shall be mailed to him at the address of the
Executive first set forth above or at such other address of which the Executive
shall have given notice to the Corporation in the manner herein provided.

 

SEVENTH:  Entire Agreement.  This Agreement constitutes the entire understanding
between the parties with respect to the matters referred to herein, and no
waiver of or modification to the terms hereof shall be valid unless in writing
signed by the party to be charged and only to the extent therein set forth.  All
prior and contemporaneous agreements and understandings with respect to the
subject matter of this Agreement, including without limitation the Prior
Agreement, are hereby terminated and superseded by this Agreement.

 

EIGHTH:  Withholding.  The Corporation shall be entitled to withhold from
amounts payable to the Executive hereunder such amounts as may be required by
applicable law.

 

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NINTH:  Binding Nature.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, administrators,
executors, personal representatives, successors and assigns.

 

TENTH:  Governing Law.  This Agreement shall be governed by and construed and
enforced in accordance with the law of the State of New York.

 

IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE DAY AND
YEAR FIRST ABOVE WRITTEN.

 

 

MSC INDUSTRIAL DIRECT CO., INC.

 

 

 

 

 

 

 

By:

/s/ Charles Boehlke

 

 

  Name: Charles Boehlke

 

 

  Title: Executive Vice President

 

 

 

 

 

 

 

 

  /s/ David Sandler

 

 

  DAVID SANDLER

 

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Exhibit A

 

RELEASE

 

WHEREAS, David Sandler (the “Executive”) was a party to an Amended and Restated
Agreement dated as of December    , 2005 (the “Agreement”) by and between the
Executive and MSC INDUSTRIAL DIRECT CO., INC., a New York corporation (the
“Corporation”), pursuant to which the Executive served as the
                                 of the Corporation, and the employment of the
Executive with the Corporation has been terminated; and

 

WHEREAS, it is a condition to the Corporation’s obligations to make the
severance payments and benefits available to the Executive pursuant to the
Agreement that the Executive execute and deliver this Release to the
Corporation.

 

NOW, THEREFORE, in consideration of the receipt by the Executive the benefits
under the Agreement, which constitute a material inducement to enter into this
Release, the Executive 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, the
Executive 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 the Executive’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

 

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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 the Executive, 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, the Executive is not
releasing the Corporation from any of the Corporation’s obligations (a) under
the Agreement, (b) to provide the Executive with insurance coverage defense
and/or indemnification as an officer or director 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 the Executive’s rights
under the Corporation’s Associate Stock Purchase Plan, 1995 Stock Option Plan,
1998 Stock Option Plan, 2001 Stock Option Plan, 1995 Restricted Stock Plan or
the 2005 Omnibus Equity Plan, as applicable.

 

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The Corporation has advised the Executive in writing to consult with an attorney
of his choosing prior to the signing of this Release and the Executive hereby
represents to the Corporation that he has in fact consulted with such an
attorney prior to the execution of this Release.  The Executive acknowledges
that he has had at least twenty-one days to consider the waiver of his rights
under the ADEA. Upon execution of this Release, the Executive 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, the Executive’s
waiver of rights under the ADEA shall become effective seven days from the date
the Executive executes this Release.

 

IN WITNESS WHEREOF, the undersigned has executed this Release on the       day
of December, 2005.

 

 

 

 

 

 

DAVID SANDLER

 

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Exhibit B

 

ASSOCIATE CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETITION AGREEMENT

 

ASSOCIATE CONFIDENTIALITY, NON-SOLICITATION AND NON- COMPETITION AGREEMENT dated
as of December 27, 2005, between MSC Industrial Direct Co., Inc., on behalf of
itself and its subsidiaries (collectively, “Employer” or “Corporation”), and
David Sandler (“Associate”).

 

In consideration of the Associate’s employment and continued employment, the
payment of the Associate’s compensation by Employer, and Employer entrusting the
Associate with Confidential Information (as defined below), the parties have
entered into this Associate Confidentiality, Non-Solicitation and
Non-Competition Agreement.

 

1.                    CONFIDENTIALITY.

 

A.               DURING THE TERM OF ASSOCIATE’S EMPLOYMENT WITH EMPLOYER,
ASSOCIATE WILL NOT USE OR DISCLOSE TO ANY INDIVIDUAL OR ENTITY ANY CONFIDENTIAL
INFORMATION (AS DEFINED BELOW) EXCEPT (I) IN THE PERFORMANCE OF ASSOCIATE’S
DUTIES FOR EMPLOYER, (II) AS AUTHORIZED IN WRITING BY EMPLOYER, OR (III) AS
REQUIRED BY LAW OR LEGAL PROCESS, PROVIDED THAT, PRIOR WRITTEN NOTICE OF SUCH
REQUIRED DISCLOSURE IS PROVIDED TO EMPLOYER 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 EMPLOYER’S BUSINESS,
(II) EMPLOYER TREATS AS PROPRIETARY, PRIVATE OR CONFIDENTIAL, AND (III) IS NOT
GENERALLY KNOWN TO THE PUBLIC. “CONFIDENTIAL INFORMATION” INCLUDES, WITHOUT
LIMITATION, INFORMATION RELATING TO EMPLOYER’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 EMPLOYER’S CUSTOMERS, SUPPLIERS AND TRADING PARTNERS WHO MAY
SHARE SUCH INFORMATION WITH EMPLOYER PURSUANT TO A CONFIDENTIALITY AGREEMENT OR
OTHERWISE. THE ASSOCIATE 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 CONTINUE
AFTER ASSOCIATE’S EMPLOYMENT TERMINATES FOR ANY REASON FOR SO LONG AS THE
INFORMATION IS NOT GENERALLY KNOWN TO THE PUBLIC.

 

2.          NON-COMPETITION.

 

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

 

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B.              THEREFORE, ASSOCIATE SHALL NOT ENTER INTO COMPETITION (AS
DEFINED BELOW) WITH EMPLOYER DURING THE TERM OF ASSOCIATE’S EMPLOYMENT WITH
EMPLOYER, AND

 

C.               FOR A PERIOD OF TWO (2) YEARS FOLLOWING CESSATION OF
ASSOCIATE’S EMPLOYMENT WITH THE CORPORATION FOR ANY REASON, ASSOCIATE WILL NOT,
IN ANY CAPACITY, ACCEPT EMPLOYMENT WITH THE EMPLOYER WITH WHOM ASSOCIATE WAS
EMPLOYED IMMEDIATELY PRECEDING THE COMMENCEMENT OF ASSOCIATE’S EMPLOYMENT WITH
THE CORPORATION, NOR WILL ASSOCIATE, IN ANY CAPACITY, ACCEPT EMPLOYMENT WITH 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.               ASSOCIATE RECOGNIZES THAT THE CORPORATION’S RELATIONSHIP AND
GOODWILL WITH ITS CUSTOMERS HAVE BEEN ESTABLISHED AT SUBSTANTIAL COST AND EFFORT
BY THE CORPORATION.

 

B.              THEREFORE, WHILE EMPLOYED BY THE CORPORATION, AND FOR AN
ADDITIONAL PERIOD OF TWO (2) YEARS AFTER THE TERMINATION OF EMPLOYMENT,
ASSOCIATE 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 ASSOCIATE’S EMPLOYMENT, AN ASSOCIATE, SALES REPRESENTATIVE OR
AGENT OF EMPLOYER OR ANY PRESENT OR FUTURE SUBSIDIARY OR AFFILIATE OF EMPLOYER.

 

C.               FURTHER, ASSOCIATE AGREES THAT WHILE EMPLOYED BY THE
CORPORATION, AND FOR A PERIOD OF TWO (2) YEARS AFTER HIS/HER EMPLOYMENT WITH THE
CORPORATION ENDS, S/HE WILL NOT, ON BEHALF OF HIMSELF/HERSELF, OR ANY OTHER
PERSON, FIRM OR CORPORATION, SOLICIT ANY OF THE CORPORATION’S OR ITS AFFILIATE’S
CUSTOMERS WITH WHOM S/HE HAS HAD CONTACT WHILE WORKING FOR THE CORPORATION; NOR
WILL ASSOCIATE IN ANY WAY, DIRECTLY OR INDIRECTLY, FOR HIMSELF/HERSELF, OR ANY
OTHER PERSON, FIRM, CORPORATION OR ENTITY, DIVERT, OR TAKE AWAY ANY CUSTOMERS OF
THE CORPORATION OR ITS AFFILIATES WITH WHOM ASSOCIATE 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.          EMPLOYMENT AT-WILL.  ASSOCIATE ACKNOWLEDGES THAT HIS OR HER
EMPLOYMENT BY EMPLOYER IS NOT FOR ANY SPECIFIED PERIOD OF TIME AND THAT IT CAN
BE TERMINATED BY EITHER ASSOCIATE OR EMPLOYER AT ANY TIME FOR ANY LAWFUL REASON.
THIS IS AN “EMPLOYMENT AT WILL.”

 

5.          TERMINATION OF EMPLOYMENT.  IN THE EVENT OF TERMINATION OF
EMPLOYMENT BY EITHER PARTY, THIS AGREEMENT WILL REMAIN IN EFFECT. UPON
TERMINATION, ASSOCIATE WILL IMMEDIATELY DELIVER TO EMPLOYER ALL PROPERTY
BELONGING TO EMPLOYER THEN IN THE ASSOCIATE’S POSSESSION OR CONTROL, INCLUDING
ALL DOCUMENTS (AS DEFINED HEREIN) EMBODYING CONFIDENTIAL INFORMATION. AS USED
HEREIN, “DOCUMENTS” SHALL MEAN ORIGINALS OR COPIES OF

 

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FILES, MEMORANDA, CORRESPONDENCE, NOTES, MANUALS, PHOTOGRAPHS, SLIDES,
OVERHEADS, AUDIO OR VIDEO TAPES, CASSETTES, OR DISKS, AND RECORDS MAINTAINED ON
COMPUTER OR OTHER ELECTRONIC MEDIA.

 

6.          NOTICE TO FUTURE EMPLOYERS. FOR THE PERIOD OF TWO (2) YEARS
IMMEDIATELY FOLLOWING THE END OF ASSOCIATE’S EMPLOYMENT WITH THE CORPORATION,
ASSOCIATE 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. ASSOCIATE WILL SEND A COPY OF EACH SUCH
WRITING TO THE CORPORATION AT THE TIME THE ASSOCIATE INFORMS EACH NEW EMPLOYER
OF THE AGREEMENT.

 

7.                    REMEDIES.  ASSOCIATE ACKNOWLEDGES THAT THIS AGREEMENT, ITS
TERMS AND HIS/HER COMPLIANCE IS NECESSARY TO PROTECT THE CORPORATION’S
CONFIDENTIAL AND PROPRIETARY INFORMATION, ITS BUSINESS AND ITS GOODWILL; AND
THAT A BREACH OF ANY OF ASSOCIATE’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, ASSOCIATE AGREES THAT IN THE
EVENT OF A BREACH OR THREATENED BREACH BY THE ASSOCIATE OF THIS AGREEMENT, THE
CORPORATION SHALL BE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND PRELIMINARY
INJUNCTION RESTRAINING ASSOCIATE FROM SUCH BREACH. 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 ASSOCIATE 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 ASSOCIATE WAS IN
VIOLATION OF THE AGREEMENT.

 

8.                    ENTIRE AGREEMENT.  THIS AGREEMENT 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 ASSOCIATE.

 

9.                    MODIFICATION.  THIS AGREEMENT MAY BE MODIFIED OR AMENDED
ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO, OR IN
ACCORDANCE WITH PARAGRAPH 15 HEREIN.

 

10.              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.

 

11.              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.

 

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

 

13.              ARBITRATION.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT,
ANY CONTROVERSY OR CLAIM ARISING OUT OF ASSOCIATE’S EMPLOYMENT WITH EMPLOYER OR
THE TERMINATION THEREOF,

 

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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 NEAREST TO WHERE THE ASSOCIATE PERFORMED
THE ASSOCIATE’S PRINCIPAL DUTIES FOR THE EMPLOYER. 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.

 

14.              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.

 

15.              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.

 

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

 

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

 

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

 

MSC INDUSTRIAL DIRECT CO., INC.:

 

 

ASSOCIATE:

 

 

 

 

 

 

 

By:

  /s/ Charles Boehlke

 

 

By:

  /s/ David Sandler

 

 

 

 

 

 

 

 

Title:

  EVP/CFO

 

 

Printed Name: DAVID SANDLER

 

 

 

 

 

Date:

  December 27, 2005

 

 

Date:  December 27, 2005

 

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