Exhibit 10.1

SEPARATION AGREEMENT

 

MSC Industrial Direct Co. Inc., a New York corporation (the “Company”), and
Thomas Cox, an individual (“Executive”), have entered into this Separation
Agreement (this “Separation Agreement”) this 30th day of October, 2014, which is
the date of the last signature hereto. In consideration of the mutual promises
contained in this Separation Agreement, the parties agree as follows:

 

1.          Resignations; Retirement From Employment; Transition Period.

 

(a)        The Company and Executive hereby agree that Executive’s employment
with the Company shall terminate effective November 14, 2014 (the “Separation
Date”). Executive hereby resigns from his position as Executive Vice President,
Sales of the Company, as well as all other positions that Executive may hold as
an officer and/or director of any of the Company's subsidiaries or affiliates or
as a fiduciary of any benefit plans of the Company and its subsidiaries,
effective as of the Separation Date. Executive will promptly execute such
documents and take such actions as may be necessary or reasonably requested by
the Company to effectuate or memorialize the resignation of such positions. In
accordance with its regular payroll practices, after the Separation Date (but in
any case not later than the end of the Second Revocation Period), the Company
will pay Executive all earned but unpaid salary earned by Executive through the
Separation Date, and compensation for all accrued but unused vacation days. In
addition, the Company will reimburse Executive for all business expenses
incurred on behalf of the Company through the Separation Date, in accordance
with the Company’s policies with respect to the reimbursement of expenses.

 

(b)        During the period commencing on the date hereof through the
Separation Date (the “Transition Period”) (i) Executive shall be entitled to
continue to receive a base salary at a rate equal to his current base salary
rate of $359,192.26, payable in accordance with the Company’s regular payroll
practices, and (ii) Executive (and his eligible beneficiaries) shall be entitled
to continue to participate in all retirement savings, medical, dental, life
insurance and other employee welfare plans in which he (and/or his eligible
beneficiaries) currently participates, all to the extent Executive remains
eligible under the terms of such plans and subject to the terms and conditions
of such plans as may be in effect from time to time. During the Transition
Period, Executive shall continue to be an “at will” employee and will continue
to be subject to all Company policies and other agreements binding on Executive.

 

2.          Payments and Other Consideration. If Executive executes and does not
revoke this Separation Agreement during the revocation period described in
Section 19 hereof, and if Executive re-signs this Separation Agreement on, or
within twenty-one (21) days following, the Separation Date and does not revoke
this Separation Agreement during the second revocation period described in
Section 19 hereof (i.e., running from the re-signing date) (the “Second
Revocation Period”), Executive will be entitled to the following payments and
benefits, subject to compliance by Executive with the terms and conditions of
this Separation Agreement, including without limitation, the terms and
conditions set forth in Sections 5 and 6 hereof, as well as all Company policies
and other agreements binding on Executive, including the Company’s Executive
Incentive Compensation Recoupment Policy (which shall remain applicable to
Executive in accordance with its terms), the Incentive Plan (as hereinafter
defined) and the stock options and restricted stock awards granted under the
Incentive Plan. Executive acknowledges and agrees that, under the terms of this
Separation Agreement, he is receiving consideration beyond that which he would
otherwise be entitled and which, but for the mutual covenants set forth in this
Separation Agreement, the Company would not otherwise be obligated to provide.
It is expressly acknowledged and agreed that if Executive revokes this
Separation Agreement during either of the revocation periods described in
Section 19 hereof, all provisions of this Separation Agreement shall be null and
void ab initio, and Executive shall not be entitled to any of the payments or
other benefits provided in this Separation Agreement:

 

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(a)          During the three years beginning on the day after the Separation
Date, the Company will pay Executive a total of $1,146,770.52, in seventy-eight
(78) equal biweekly installments in accordance with the Company’s normal payroll
practices. The first of these payments (which will include any installments that
otherwise would have been made prior to the end of the Second Revocation Period)
shall be made on the Company’s first regular payroll date after the Second
Revocation Period.

 

(b)          During the three years beginning on the day after the Separation
Date, the Company will pay Executive a Board of Directors special recognition
payment of $500,000.00 in recognition of Executive’s long-standing tenure with
and contribution to the Company. This special payment shall be made in
seventy-eight (78) equal biweekly installments in accordance with the Company’s
normal payroll practices. The first of these payments (which will include any
installments that otherwise would have been made prior to the end of the Second
Revocation Period) shall be made on the Company’s first regular payroll date
after the Second Revocation Period.

 

(c)          The Company will pay Executive an annual incentive bonus in respect
of the Company’s fiscal year 2014 in the amount of $167,927, to be paid on the
same basis and at the same time as for other executives of the Company.
Executive will have no right to receive any annual incentive bonus in respect of
the Company’s fiscal year 2015.

 

(d)          If Executive timely elects under the provisions of COBRA to
continue his group health plan coverage that was in effect on the date of this
Separation Agreement, Executive will receive continuation of such coverage, with
such continuation coverage to be at the Company’s expense for a period of
18 months from the Separation Date, provided that Executive continues to be
eligible for COBRA coverage. In addition, if Executive remains eligible for
COBRA coverage and has not become eligible for coverage under a new employer’s
group health plan on or prior to the date that is 18 months following the
Separation Date, the Company shall pay Executive a lump sum amount equal to 18
times the COBRA monthly premium rate (less the 2% COBRA administrative charge)
in effect for Executive at such time; provided, however, that Executive will
notify the Company within two weeks of becoming eligible for group health
coverage with another employer.

 

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(e)          Executive has been granted stock options and restricted stock
awards under the Company’s 2005 Omnibus Incentive Plan (the “Incentive Plan”).
Attached as Schedule A to this Separation Agreement is a summary of Executive’s
outstanding stock options and restricted stock awards. All of the Executive’s
unvested stock options shall be accelerated as of the end of the Second
Revocation Period, and all vested stock options will be exercisable in
accordance with the Incentive Plan for a period of 30 days following the
Separation Date (subject to tolling for any period during which the Company’s
trading window is closed). All of the Executive’s restricted stock (“Restricted
Stock”) will continue to vest as provided in Schedule A. Any stock options that
are vested and exercisable as of the Separation Date which are not exercised
prior to the close of the first trading window ending after the Separation Date
(i.e., November 18, 2014) and any stock options accelerated as of the end of the
Second Revocation Period may not be exercised prior to the Company’s first open
trading window following release of fiscal 2015 first quarter earnings (which is
scheduled to begin on January 8, 2015) and may be exercised for twenty-six days
commencing from such date.

 

(f)          During the three years beginning on the day after the Separation
Date, Executive will have the right to continue using the vehicle leased by the
Company for use by Executive and the Company shall continue to (i) make the
monthly lease payments under the automobile lease for the benefit of Executive
and (ii) pay for or reimburse, as applicable, the automobile insurance, fuel and
repairs and maintenance on such vehicle, to the extent and subject to the terms
and conditions in effect immediately prior to Executive’s termination of
employment; provided that Executive shall continue to be bound by and shall
observe all agreements and conditions relating to the use of such vehicle as in
effect immediately prior to his termination of employment; provided further that
any payments for or reimbursements of any lease payments, automobile insurance,
fuel and repairs and maintenance incurred with respect to such vehicle in 2014
will be made no later than March 15, 2015. At the end of the aforesaid
three-year period, Executive may purchase the vehicle from the Company at the
vehicle’s then current “blue book” value.

 

(g)          The Company shall provide Executive with outplacement services, at
the Company’s expense and by a service selected by the Company in its reasonable
discretion, for up to six months from the Separation Date.

 

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3.          General Release of Claims; No Admission.

 

(a)        In consideration for the payments and benefits set forth in Sections
1(b) and 2 above, Executive on his own behalf and on behalf of his heirs,
personal representatives, successors and assigns, does hereby forever release,
remise and discharge the Company and its subsidiaries and affiliates, and each
of their past, present, and future officers, directors, shareholders, members,
employees, trustees, agents, representatives, affiliates, successors and assigns
(collectively referenced herein as “Releasees”) from any and all claims, claims
for relief, demands, actions, causes of action, fees and liabilities of any kind
or description whatsoever, known or unknown, suspected or unsuspected, whether
arising out of contract, tort, statute, treaty or otherwise, in law or in
equity, which Executive now has, has had, or may hereafter have against any of
the Releasees (i) from the beginning of time through the date upon which
Executive signs this Separation Agreement, and/or (ii) arising from, connected
with, or in any way growing out of, or related to, directly or indirectly,
(A) Executive’s employment by the Company and its subsidiaries and affiliates,
(B) Executive’s service as an officer or key employee, as the case may be, of
the Company and its subsidiaries and affiliates, (C) any transaction prior to
the date upon which Executive signs this Separation Agreement and all effects,
consequences, losses and damages relating thereto, (D) the services provided by
Executive to the Company and its subsidiaries and affiliates, or (E) Executive’s
termination of employment with the Company under the common law or any federal
or state statute, including, but not limited to, all claims arising under Title
VII of the Civil Rights Act of 1964, as amended; The Civil Rights Act of 1991,
as amended; the False Claims Act, 31 U.S.C.A. § 3730, as amended, including, but
not limited to, any right to personal gain with respect to any claim asserted
under its “qui tam” provisions; Sections 1981 through 1988 of Title 42 of the
United States Code, as amended; The Employee Retirement Income Security Act of
1974, as amended; The Immigration Reform and Control Act, as amended; The
Americans with Disabilities Act of 1990, as amended; The Age Discrimination in
Employment Act of 1967, as amended; The Older Workers’ Benefit Protection Act of
1990, as amended; The Workers Adjustment and Retraining Notification Act, as
amended; The Occupational Safety and Health Act, as amended; The Lilly Ledbetter
Fair Pay Act; The Genetic Information Nondiscrimination Act; The National Labor
Relations Act; The Family and Medical Leave Act of 1993, as amended; The Civil
Rights Act of 1866, as amended; any other federal, state or local civil or human
rights law or any other local, state or federal law, regulation, ordinance or
executive order; any public policy, contract, tort, or common law; or any
allegation for costs, fees, or other expenses including attorneys’ fees incurred
in these matters.

 

(b)          Notwithstanding the foregoing, nothing in this Separation Agreement
shall release or waive any rights or claims Executive may have: (i) under this
Separation Agreement; (ii) for indemnification under any written indemnification
agreement by and between Executive and the Company and/or under applicable law
or the Company’s charter or bylaws; (iii) under any applicable insurance
coverage(s); (iv) with respect to any accrued and vested benefits under any
tax-qualified retirement plans applicable to Executive; or (v) for unemployment
or state disability insurance benefits or participation in group benefit plans
under COBRA. In addition, nothing in this Separation Agreement shall preclude
Executive from filing a charge or complaint with or participating in any
investigation or proceeding before the Equal Employment Opportunity Commission
or the equivalent state agency or otherwise complying with any legal
requirements. However, while Executive may file a charge and participate in any
proceeding conducted by the Equal Employment Opportunity Commission or the
equivalent state agency, by signing this Separation Agreement, Executive waives
any right to bring a lawsuit against the Company or any of the Releasees and
waives any right to any individual monetary recovery in any action or lawsuit
initiated by the Equal Employment Opportunity Commission or equivalent state
agency.

 

(c)          In addition, for the purpose of implementing a full and complete
release and discharge of each and all of the Releasees, Executive expressly
acknowledges that this Separation Agreement is intended to include and does
include in its effect, without limitation, all claims which Executive does not
know or suspect to exist in Executive’s favor at the time Executive signed this
Separation Agreement and this Separation Agreement contemplates the
extinguishment of all such claims.

 

(d)          Executive represents that Executive has not assigned or otherwise
transferred any interest in any claim that is the subject of this Separation
Agreement.

 

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4.          Affirmations.

 

(a)        Executive affirms that he has not filed or caused to be filed, and is
not presently a party to any claim, complaint, or action against the Company or
any of its subsidiaries or affiliates in any forum. Executive furthermore
affirms that Executive has no known workplace injuries or occupational diseases,
and has been provided and has not been denied any leave requested under the
Family and Medical Leave Act. Executive disclaims and waives any right of
reinstatement with the Company.

 

(b)        Executive represents that he is not aware, to the best of Executive’s
knowledge, of any conduct on Executive’s part or on the part of the Company, any
subsidiary or affiliate of the Company, or any other director, officer or
employee of the Company or any of its subsidiaries or affiliates that violated
any law or otherwise exposed the Company or any of its subsidiaries or
affiliates to any liability, whether criminal or civil, whether to any
government, individual or other entity.

 

5.          Restrictive Covenants.

 

(a)        Confidentiality. Executive will not, at any time, use or disclose to
any individual or entity any Confidential Information (as defined below) except
(i) in the performance of Executive’s duties for the Company, (ii) as authorized
in writing by the Company, or (iii) as required by law or legal process,
provided that, prior written notice of such required disclosure is provided to
the Company and, provided further that all reasonable efforts to preserve the
confidentiality of such information shall be made. As used in this Separation
Agreement, “Confidential Information” shall mean information that (i) is used or
potentially useful in the Company’s business (but specifically excluding
Executive’s cell phone number), (ii) the Company treats as proprietary, private
or confidential, and (iii) is not generally known to the public. Confidential
Information includes, without limitation, information relating to the Company’s
products or services, processing, manufacturing, marketing, selling, customer
lists, call lists, customer data, memoranda, notes, records, technical data,
sketches, plans, drawings, chemical formulas, 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 the Company’s customers,
suppliers and trading partners who may share such information with the Company
pursuant to a confidentiality agreement or otherwise. Executive agrees to treat
all such customer, supplier or trading partner information as Confidential
Information hereunder.

 

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(b)          Non-competition. Executive agrees that for a period of three years
after the Separation Date, Executive will not directly or indirectly, whether as
an executive, officer, director, owner, shareholder, partner, associate,
employee, consultant, advisor, contractor, joint venturer, manager, agent,
representative or otherwise, work for a Competitor (as defined below) in any
capacity that would involve: (a) the same or substantially similar functions or
responsibilities to those Executive performed for the Company within two years
before the Separation Date; or (b) supervision over the same or substantially
similar responsibilities to those Executive performed for the Company within two
years before the Separation Date; or (c) assisting a Competitor in decisions
that involve or affect the same or a substantially similar area of operations to
those Executive was involved in with the Company within two years before the
Separation Date. For purposes of this Separation Agreement, a “Competitor” is
any person (or branch, office or operation thereof) that engages in business
that is competitive with the business activities of the Company through, but not
limited to: (i) selling maintenance, repair and operating (MRO) supplies to
North American businesses; (ii) selling metalworking supplies to North American
businesses; (iii) providing MRO or metalworking supplies management services to
North American businesses; (iv) aggregating information regarding MRO or
metalworking supplies for the purpose of conducting business-to-business
Internet commerce with North American businesses; or (v) MRO or metalworking
supplies procurement services to North American businesses. The Competitors for
purposes of this Separation Agreement include, but are not limited to, the
following companies and all their affiliates: Amazon.com, Inc., Applied
Industrial Technologies, BlackHawk Industrial Distribution, Inc., Fastenal
Company, The Hagemeyer Group, including Hagemeyer North America, Inc. and all
Hagemeyer operating companies, Industrial Distribution Group, Inc., and all
affiliated specialty distributors, Lawson Products, Inc., McMaster-Carr Supply
Company, Motion Industries, Inc., W.W. Grainger, Inc., and Wesco International,
Inc.

 

(c)          Non-solicitation. Executive agrees that for a period of three years
from the Separation Date, Executive will not (a) in any capacity, directly or
indirectly (including through 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 Separation Date, an Associate, sales representative or agent of
the Company or any present or future subsidiary or affiliate of the Company; or
(b) on behalf of himself, or any other person, firm or corporation, solicit any
customer of the Company or any of its affiliates with whom Executive had contact
while working for the Company; nor will Executive in any way, directly or
indirectly, for himself, or for any other person, firm, corporation or entity,
divert, or take away any customer of the Company or its affiliates with whom
Executive 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.

 

(d)          Non-disparagement. Neither party will, at any time, take any action
or make any public statement, including, without limitation, statements to
individuals, subsequent employers, vendors, clients, customers, suppliers or
licensors or the news media, that would disparage, defame or place in a negative
light, the other party, any of its subsidiaries or affiliates, or any of their
respective officers, directors, shareholders, employees, successors, business
services or products; provided that nothing herein shall restrict either party
from making statements in good faith that are required by applicable law
(including a Form 8-K to be filed by the Company reporting Executive’s
resignation and this Separation Agreement) or by order of any court of competent
jurisdiction.

 

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(e)          Cooperation. Executive agrees to make himself reasonably available
to the Company to respond to requests for information concerning litigation,
regulatory inquiry or investigation, involving facts or events relating to the
Company that may be within Executive’s knowledge, and with respect to transition
matters. Executive will cooperate fully with the Company in connection with any
pending or future litigation or investigatory matter brought by or against the
Company to the extent that the Company reasonably deems Executive’s cooperation
necessary or advisable. Executive acknowledges that such cooperation may
include, but shall in no way be limited to, Executive being available for an
interview with the Company or any of the other Releasees, or any of their
attorneys or agents, providing to any of them upon their request any documents
in Executive’s possession or under Executive’s control that may relate to the
litigation or investigatory matter, and upon their request providing truthful
sworn statements in connection with the litigation or investigatory matter. The
Company will reimburse Executive for his reasonable out-of-pocket expenses
incurred in connection with fulfilling Executive’s obligations under this
Section 5(e).

 

(f)          For purposes of paragraphs 5(a) through (e) of this Separation
Agreement, “the Company” includes MSC Industrial Direct Co., Inc., and all of
its subsidiaries and affiliates.

 

6.          Return of Personal Property. Executive will return to the Company no
later than the Separation Date all items of Company property in Executive’s
possession or control, including any items containing Confidential Information
and any tangible property including all automobiles, laptops, computers, PDAs,
Blackberries, Smartphones, credit cards, entry cards, identification badges and
keys, provided that Executive shall be permitted to port his cell phone number
to another cell phone contract for which Executive is responsible.

 

7.          Notices. All notices, demands, consents or communications required
or permitted hereunder shall be in writing. Any notice, demand or other
communication given under this Separation Agreement shall be deemed to be given
if given in writing (including facsimile or similar transmission) addressed as
provided below (or at such other address as the addressee shall have specified
by notice actually received by the sender) and if either (a) actually delivered
in fully legible form to such address or (b) in the case of a letter, five (5)
days shall have elapsed after the same shall have been deposited in the United
States mail, with first-class postage prepaid and registered or certified:

 

To the Company:

 

MSC Industrial Direct Co., Inc.

75 Maxess Road

Melville, New York 11747-3151

Attention: General Counsel

Facsimile: (516) 812-1175

 

To Executive:

 

At the address contained in the Company’s personnel records provided that
Executive may change his address at any time by giving the Company notice of
such change in accordance with the notice provision of this Separation
Agreement.

 

8.          Governing Law; Arbitration. This Separation Agreement shall be
governed by and construed and enforced according to the laws of the State of New
York, without regard to conflicts of laws principles thereof, unless preempted
by federal law. Subject to the arbitration provisions in the following
paragraph, the parties agree that the state and federal courts located in the
State of New York, County of Suffolk, shall have exclusive jurisdiction in any
action, suit or proceeding based on or arising out of this Separation Agreement
and the parties hereby: (a) submit to the personal jurisdiction of such courts;
(b) consent to service of process in connection with any action, suit or
proceeding; (c) agree that venue is proper and convenient in such forum; (d)
waive any other requirement (whether imposed by statute, rule of court or
otherwise) with respect to personal jurisdiction, subject matter jurisdiction,
venue, or service of process; and (e) waive the right, if any, to a jury trial. 

 

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Any claims arising under or related to the Separation Agreement shall be settled
by binding arbitration pursuant to the rules of the American Arbitration
Association under its Employment Arbitration Rules or such other rules as to
which the parties may agree.  The arbitration shall take place in in the Borough
of Manhattan in the City of New York, within 30 days following service of notice
of such dispute by one party on the other.  The arbitration shall be conducted
before a panel of three arbitrators, one to be selected by each of the parties
and the third to be selected by the other two.  The panel of arbitrators shall
have no authority to order a modification or amendment of the Separation
Agreement.  Except as provided below, Executive and the Company agree that this
arbitration procedure will be the exclusive means of redress for any disputes
relating to or arising under the Separation Agreement.  The parties expressly
waive the right to a jury trial, and agree that the arbitrators’ award shall be
final and binding on both parties, and shall not be appealable and may be filed
with the clerk of one or more courts, state or federal, having jurisdiction over
the party against whom such award is rendered or such party’s property as a
basis of judgment and of the issuance of execution for its collection.  The
Company and Executive agree that the sole disputes that are excepted from this
paragraph are any actions seeking injunctive relief from a court of competent
jurisdiction regarding enforcement and application of Sections 5 and 6 of this
Separation Agreement, which actions may be brought in addition to, or in place
of, an arbitration proceeding in accordance with the first paragraph of this
Section 8.

 

9.          Nonadmission of Wrongdoing. The parties agree that neither this
Separation Agreement nor the furnishing of the consideration set forth herein
shall be deemed or construed at any time for any purpose as an admission by any
party of any liability, wrongdoing or unlawful conduct of any kind, or any
obligation by the Company to make any payments referenced herein.

 

10.         Amendment; Waiver. This Separation Agreement may not be modified,
altered or changed except upon express written consent of both of the parties.
The failure of any party to insist upon the performance of any of the terms and
conditions in this Separation Agreement, or the failure to prosecute any breach
of any of the terms and conditions of this Separation Agreement, shall not be
construed thereafter as a waiver of any such terms or conditions. This entire
Separation Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.

 

11.         Entire Agreement; No Representations. This Separation Agreement sets
forth the entire agreement between the parties hereto and supersedes any prior
agreements or understandings between the parties concerning the subject matter
of this Separation Agreement, except as otherwise provided in this Separation
Agreement. Each party acknowledges that such party has not relied on any
representations, promises, or agreements of any kind made to such party in
connection with the other party’s decision to enter into this Separation
Agreement, except for those set forth in this Separation Agreement.

 

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12.         Severability. The parties agree that if any provision of this
Separation Agreement is declared or determined by any court of competent
jurisdiction to be illegal, invalid, or unenforceable, the legality, validity,
and enforceability of the remaining parts, terms, or provisions shall not be
affected thereby, and said illegal, unenforceable or invalid part, term, or
provision shall be deemed not to be part of this Separation Agreement.

 

13.         Withholding for Taxes. The Company may withhold from any amounts
payable hereunder all federal, state, city or other taxes as shall be required
to be withheld pursuant to any applicable law or government regulation or
ruling. Upon execution of this Separation Agreement, Executive shall be
responsible to remit to the Company all applicable withholding taxes in respect
of the Restricted Stock and the Company shall withhold shares from the
Restricted Stock upon execution of this Separation Agreement as provided in
Schedule B hereto.

 

14.         Binding Effect; Assignment. This Separation Agreement will inure to
the benefit of and be binding upon the heirs, executors, administrators,
successors, and assigns of the parties, including, without limitation, any
successor to the Company (and, with the exception of the benefits provided in
Sections 2(f) and (g), any payments and benefits provided in Section 2 to which
Executive is entitled shall be automatically assigned to Executive’s estate in
the event of Executive’s death). The parties represent and warrant that they
have not transferred or assigned to any person or entity any rights or
obligations herein. This Separation Agreement is not assignable by either party
without the prior written consent of the other, except that the Company may
assign this Separation Agreement to any assignee of or successor to
substantially all of the business or assets of the Company or any direct or
indirect subsidiary thereof without prior written consent of Executive.

 

15.         Counterparts. This Separation Agreement may be executed in
counterparts, and each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on the part of
each of the undersigned. The exchange of signed copies of this Separation
Agreement by any electronic means intended to preserve the original graphic and
pictorial appearance of a document shall constitute effective execution and
delivery of this Separation Agreement as to the parties and may be used in lieu
of an original Separation Agreement for all purposes. Signatures of the parties
transmitted by any electronic means referenced in the preceding sentence shall
be deemed to be original signatures for all purposes.

 

16.         Section 409A.

 

(a)          To the extent applicable, amounts and other benefits payable under
this Separation Agreement are intended to be exempt from the definition of
“nonqualified deferred compensation” under Section 409A, including the rulings,
notices and other guidance issued by the Internal Revenue Service interpreting
the same (collectively, “Section 409A”) in accordance with one or more of the
exemptions available under Section 409A. In this regard, each such payment
hereunder that may be treated as payable in the form of “a series of installment
payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii) shall be deemed a
separate payment for purposes of Section 409A.

 

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(b)          To the extent applicable, it is intended that this Separation
Agreement comply with the provisions of Section 409A. This Separation Agreement
shall be administered and interpreted in a manner consistent with this intent.

 

(c)          Executive is a “specified employee,” determined pursuant to
procedures adopted by the Company in compliance with Section 409A, on the date
of his separation from service and therefore to the extent necessary to comply
with Section 409A, amounts payable to Executive hereunder are to be paid or made
available on the earlier of (a) the first business day after the expiration of
six (6) months from the date of Executive’s separation from service and (b)
Executive’s death.

 

(d)          For purposes of Section 409A, any payments or benefits provided
under this Separation Agreement shall be separate payments and not one of a
series of payments. Additionally, the following rules shall apply to any
obligation to reimburse an expense or provide an in-kind benefit that is
nonqualified deferred compensation within the meaning of Section 409A: (i) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other taxable year; (ii) the
reimbursement of an eligible expense must be made on or before the last day of
the calendar year following the calendar year in which the expense was incurred;
and (iii) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

(e)          The Company neither represents nor warrants the tax treatment under
any federal, state, local or foreign laws or regulations thereunder
(collectively, the “Tax Laws”) of any payments or benefits provided by this
Separation Agreement including, but not limited to, when and to what extent such
payments or benefits may be subject to tax, penalties and interest under the Tax
Laws.

 

17.         Captions; Drafter Protection. This Separation Agreement’s headings
and captions are provided for reference and convenience only, and will not be
employed in the construction of this Separation Agreement. It is agreed and
understood that the general rule pertaining to construction of contracts, that
ambiguities are to be construed against the drafter, shall not apply to this
Separation Agreement.

 

18.         Consultation with Attorney; Voluntary Agreement. Executive
acknowledges that (a) the Company has advised Executive of Executive’s right to
consult with an attorney of Executive’s own choosing prior to executing this
Separation Agreement, and Executive has had an opportunity to consult with an
attorney, (b) Executive has carefully read and fully understands all of the
provisions of this Separation Agreement, (c) Executive is entering into this
Separation Agreement, including the releases set forth in Section 3, knowingly,
freely and voluntarily in exchange for good and valuable consideration and (d)
Executive would not be entitled to any of the benefits described in Sections
1(b) and 2 in the absence of this Separation Agreement.

 

-10-

 

 

19.         Revocation. Executive acknowledges that (i) Executive has been given
twenty-one (21) calendar days to consider the terms of this Separation
Agreement, although Executive may sign it sooner and (ii) Executive will have
twenty-one (21) calendar days to consider re-signing this Separation Agreement
following the Separation date, although Executive may re-sign it sooner. In the
event the Executive elects to sign or re-sign this Separation Agreement prior to
the end of either or both of these twenty-one (21) calendar day periods,
Executive agrees that it is a knowing and voluntary waiver of his right to wait
the full twenty-one (21) days. Executive will have seven (7) calendar days from
the date on which Executive signs this Separation Agreement to revoke
Executive’s consent to the terms of this Separation Agreement and seven (7)
calendar days from the date on which Executive re-signs this Separation
Agreement to revoke Executive’s consent to his reaffirmation that the releases
and waivers encompass all conduct during the Transition Period. Such revocation
must be in writing and sent by hand delivery or facsimile to MSC Industrial
Direct Co., Inc., 75 Maxess Road, Melville, New York 11747-3151, Attention:
General Counsel, Fax: 516-812-1175. Notice of such revocation must be received
within the seven (7) calendar day periods referenced above. In the event of such
revocation by Executive, Executive will not have any rights under Sections 1(b)
and 2 of this Separation Agreement, provided further that in the event Executive
revokes this Separation Agreement within seven (7) calendar days from the date
on which Executive first signs this Separation Agreement, this Separation
Agreement will not become effective.

 

IN WITNESS WHEREOF, the parties have executed this Separation Agreement on the
respective dates set forth below.

 

  COMPANY:       MSC INDUSTRIAL DIRECT CO., INC.       Dated: October 30, 2014
By: /s/ Erik Gershwind   Name: Erik Gershwind   Title: President and Chief
Executive Officer         EXECUTIVE:       /s/ Thomas Cox Dated:  October 30,
2014 Thomas Cox, an individual    

-11-

 

 

BY SIGNING THIS SEPARATION AGREEMENT (SECOND SIGNING), THE UNDERSIGNED AGREES
THAT THE GENERAL RELEASE OF CLAIMS IN SECTION 3 HEREOF ENCOMPASSES ALL CONDUCT
DURING THE TRANSITION PERIOD AND THE COMPLETION OF EXECUTIVE’S EMPLOYMENT WITH
THE COMPANY.       EXECUTIVE:       Thomas Cox, an individual    
Dated:  _____________ __, 2014  

-12-

 

 

Schedule A 

 

Option Awards    Number of
Securities
Underlying
Unexercised
Options
(#)   Number of
Securities
Underlying
Unexercised
Options
(#)   Option
Exercise
Price     Grant Date  Exercisable   Unexercisable   ($)   Vesting Schedule
10/19/2010   22,743         54.52   100% as of end of Second Revocation Period
10/21/2011   20,068    6,690    66.69   100% as of end of Second Revocation
Period 10/24/2012   15,441    15,442    69.46   100% as of end of Second
Revocation Period 10/23/2013   5,006    15,020    81.76   100% as of end of
Second Revocation Period

 

Restricted Stock Awards Grant Date  Number of 
Shares of
 Restricted Stock
 that Have Not
Vested   Vesting Schedule 10/19/2010   1,192   100% on October 19, 2015
10/21/2011   1,949   50% on October 21, 2015 and 50% on October 21, 2016
10/24/2012   3,743   50% on October 24, 2015 and 25% on October 24, 2016 and
October 24, 2017 10/23/2013   2,446   50% on October 23, 2016 and 25% on October
23, 2017 and November 14, 2017          

 

 

 

 

Schedule B

 

Tom Cox

Vesting Schedule for Restricted Shares (Net of Tax Withholding)

Assumed 37.12% (Federal, NY and Medicare)

 

Restricted Shares                                    Grant
Date  # shares
granted   # vested   # newly
vested as
of
10/24/14   # left to
vest   Required
Tax
Withholding
(Shares)   Net Shares
Remaining
(after tax)      2015 Vest   2016 Vest   2017 Vest   2017 Vest   Total
Future
Vest     10/19/10   4,768    2,384    1,192    1,192    443    749   October
19th   749                  749     10/21/11   3,898    0    1,949    1,949  
 724    1,225   October 21st   613    612             1,225     10/24/12 
 3,743    0    0    3,743    1390    2,353   October 24th   1,177    588  
 588        2,353     10/23/13   2,446    0    0    2,446    908    1,538  
October 23rd   -    769    385        1,154                        9,330  
 3,465    5,865   November 14th                  384   384  

Based on
signing date

                                     2,539    1,969    973    384   5,865