Exhibit 10.7


 


CHANGE IN CONTROL


 


AGREEMENT


 


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 Erik David Gershwind, having an
address at                                              ,
(the “Associate”).


 


W  I
T  N  E  S  S  E  T  H:


 


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


 


WHEREAS, the Corporation desires to induce the Associate
to so remain in the employ of the Corporation.


 


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


 


FIRST:  Inducement
Payments.


 


A.                                   If,
within two (2) years after a Change in Control, the Associate’s “Circumstances
of Employment” (as hereinafter defined) shall have changed, the Associate may
terminate his employment by written notice to the Corporation given no later
than ninety (90) days following such change in the Associate’s Circumstances of
Employment.  In the event of such
termination by the Associate of his employment or if, within two (2) years
after a Change in Control, the Corporation shall terminate the Associate’s
employment other than for “Cause” (as hereinafter defined), the Corporation
shall pay to the Associate, subject to the provisions of paragraph F of this Article FIRST
and compliance by Associate with Article THIRD hereof,


 





















 


starting no earlier than on the fifth (5th) business day following
the six (6) months’ anniversary of such termination (or death of Associate,
if sooner), in cash, the “Special Severance Payment” (as hereinafter defined)
as provided in Section E below.


 


B.                                     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 Section 409A
of the Code (as defined hereunder)), 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 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


 


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representative of an estate of a member of the
Jacobson or Gershwind families and/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


 


(c)                                  a
change in the ownership of a substantial portion of the Corporation’s assets,
which shall occurs 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
hereunder) 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


 


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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 B(c)(3).


 


For purposes of this Article FIRST B, “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 B, stock ownership is determined under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”).


 


C.                                     The
Associate’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 Associate’s employment duties or reporting responsibilities; (b) a
reduction in the annual base salary made available by the Corporation to the Associate
from the annual base salary in effect immediately prior to a Change in Control;
or (c) a material diminution in the Associate’s status, working conditions
or other economic benefits from those in effect immediately prior to a Change
in Control.


 


D.                                    “Cause”
shall mean (i) the commission by the Associate 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


 


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illegal drug, an intoxicant or a controlled substance which renders the
Associate incapable of performing his or her material duties to the
satisfaction of the Corporation and/or its subsidiaries.


 


E.                                      The
“Special Severance Payment” shall mean: (X) payment equal to the sum of (i) the
product of two (2) and the annual base salary in effect immediately prior
to a change in the Associate’s Circumstances of Employment or the termination
other than for Cause of the Associate’s employment by the Corporation, as the
case may be, and (ii) the product of two (2) and the targeted bonus
for the Associate in effect immediately prior to a change in Associate
Circumstances of Employment or termination other than for Cause, as the case
may be, such payment to be made in installments in accordance with the Corporation’s
regular payroll policies (but not less than frequently than biweekly), and the
first installment being made on the fifth (5th) business day following
the six (6) months’ anniversary of termination of employment, and then the
balance being paid in equal installments over the remainder of the two-year
period contemplated by the Associate Confidentiality, Non-Solicitation and
Non-Competition Agreement referred in Article THIRD hereof and attached as
Exhibit B hereto; (Y) payment of a pro rata portion of the Associate’s targeted
bonus in effect immediately prior to the date such change in Associate’s
Circumstances of Employment or termination of employment other than for Cause occurs
(the “In Year Bonus”), calculated as the product of (a) the In Year
Bonus multiplied by (b) a fraction the numerator of which is the
number of whole months elapsed in the fiscal year up to the date such change in
Associate’s Circumstances of Employment or termination occurs, and the
denominator of which is twelve (12), such payment to be made on the fifth (5th)
business day following the six (6) months’ anniversary of termination of
employment; and (Z) for the two (2) year period or the remaining term of
the automobile lease at issue, whichever is less following
Associate’s date of termination of employment (other than termination for
Cause), the Corporation shall, at Associate’s option, (a) pay Associate a
monthly


 


5





















 


automobile allowance in amounts equal to those in effect immediately
prior to such termination, if applicable, or (b) continue to make the monthly
lease payments under the automobile lease in effect for the benefit of Associate
immediately prior to such termination.


 


F.                                      As
a condition to receiving the Special Severance Payment, Associate shall execute
the General Release in the form attached as Exhibit A hereto and the
Associate Confidentiality, Non-Solicitation and Non-Competition Agreement
referred in Article THIRD hereof and attached as Exhibit B hereto and
shall at all times be in compliance therewith.


 


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


 


H.                                    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 Associate or
threatened to be imposed upon the Associate 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 Associate 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 Associate and all expenses arising therefrom.


 


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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 Associate so that
the effect of receiving all such indemnity payments will be that the Associate
shall be held harmless on an after-tax basis from the amount of all Excise
Taxes imposed upon payments made to the Associate by the Corporation pursuant
to this Agreement, it being the intent of the parties that the Associate shall
not incur any out-of-pocket 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 Associate 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 Associate 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 Associate and the manner in which such amount was
calculated, and the Associate shall thereafter submit such other evidence of
the indemnity to which the Associate 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
Associate 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


 


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assert that an Excise Tax is or may be payable, (b) within fifteen
(15) business days of the Associate’s receipt of a revenue agent’s report (or
similar document) notifying the Associate that an Excise Tax may be imposed and
(c) within fifteen (15) business days of the Associate’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 Associate pursuant to this Article SECOND.


 


E.                                      After
receiving any of the aforementioned notices, and subject to the Associate’s
right to control any and all administrative and judicial proceedings with
respect to, or arising out of, the examination or the Associate’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 Associate’s possession or under the Associate’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 Associate 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 Associate’s behalf, and (d) to
pay any tax increase on the Associate’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 Associate’s
representative or the representative of the Corporation) incurred in connection
with any such administrative or judicial proceedings


 


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insofar as they relate to an Excise Tax or other tax increases
resulting therefrom and the Associate 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.


 


G.                                     The
liability of the Corporation shall not be affected by the Associate’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 Associate may not
compromise or settle a claim which he is indemnified against hereunder without
the consent of the Corporation, unless the Associate 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 Associate’s
employment and continued employment, the payment of Associate’s compensation by
the Corporation, the Corporation entrusting Associate with Confidential
Information (as defined below), and the benefits provided hereunder, including
without limitation the Special Severance Payment, 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
make a part hereof as if set forth in full herein.


 


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FOURTH:  Continued
Medical Coverage.  If Associate’s
employment is terminated in either of the circumstances described in Article FIRST,
Part A hereof, in the event Associate timely elects under the provisions
of COBRA to continue his group health plan coverage that was in effect prior to
the date of the termination of Associate’s employment with the Corporation, Associate
will be entitled to continuation of such coverage, at the Corporation’s
expense, for a period of eighteen (18) months from the date of termination,
provided that Associate continues to be eligible for COBRA coverage.


 


FIFTH:  Outplacement.  If Associate’s employment is terminated in
either of the circumstances described in Article FIRST, Part A
hereof, Associate shall be eligible for outplacement services, at the Corporation’s
expense and with a service selected by the Corporation in its reasonable
discretion, for up to six (6) months from the date of the termination of Associate’s
employment with the Corporation.


 


SIXTH:  At
Will Employment.  Nothing in this
Agreement shall confer upon the Associate the right to remain in the employ of
the Corporation, it being understood and agreed that (a) the Associate 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 Associate’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 Associate pursuant to Article FIRST
hereof.


 


SEVENTH:  Costs
of Enforcement.  In the event that
the Associate 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 Associate all such costs


 


10





















 


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 Associate
is wholly successful in defending against the enforcement of such rights, the
Associate shall promptly pay to the Corporation all such costs and expenses.


 


EIGHTH:  Term.  The initial term of this Agreement shall be
for three (3) years from the date hereof, and this Agreement shall
automatically renew for successive three (3) year terms unless terminated
by the Corporation, in its sole discretion, by delivering to Associate written
notice thereof provided to Associate at least 18 months prior to the end of the
initial term or such successive terms, as applicable.


 


NINTH:  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 Associate in the manner
herein provided; and if intended for the Associate, shall be mailed to him at
the address of the Associate first set forth above or at such other address of
which the Associate shall have given notice to the Corporation in the manner
herein provided.


 


TENTH:  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 are hereby terminated and superseded by this
Agreement.


 


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


 


TWELFTH:  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.


 


THIRTEENTH:  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/ David
  Sandler

  
	
   

  	
   

  	
    Name: David
  Sandler

  
	
   

  	
   

  	
    Title:President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Erik David
  Gershwind

  
	
   

  	
   

  	
    Erik
  David Gershwind

  



 


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Exhibit A


 


RELEASE


 


WHEREAS, Erik David Gershwind (the “Associate”) was a
party to an Agreement dated as of                   ,
200   (the “Agreement”) by and between the Associate and MSC INDUSTRIAL DIRECT CO., INC., a New
York corporation (the “Corporation”), pursuant to which the Associate served as
the Senior Vice President, Product Management & Marketing of the
Corporation, and the employment of the Associate 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
Associate pursuant to the Agreement that the Associate execute and deliver this
Release to the Corporation.


 


NOW, THEREFORE, in consideration of the receipt by the
Associate of the benefits under the Agreement, which constitute a material
inducement to enter into this Release, the Associate 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 Associate 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 Associate’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 the Associate, 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 Associate is not releasing the Corporation from any of the
Corporation’s obligations (a) under the Agreement, (b) to provide the
Associate with insurance coverage defense and/or indemnification as an officer
or director of the Corporation, if applicable to Associate, 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 Associate’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 Associate in writing
to consult with an attorney of his choosing prior to the signing of this
Release and the Associate hereby represents to the Corporation that he has in
fact consulted with such an attorney prior to the execution of this
Release.  The Associate 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 Associate 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 Associate’s waiver of rights under the ADEA shall become
effective seven days from the date the Associate executes this Release.


 


IN WITNESS WHEREOF, the undersigned has executed this
Release on the       day of                     ,
200  .


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Erik David Gershwind

  	
   

  



 


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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 27th, 2005, between MSC
Industrial Direct Co., Inc., on behalf of itself and its subsidiaries
(collectively, “Employer” or “Corporation”), and Erik David Gershwind (“Associate”).


 


In consideration of Associate’s employment and
continued employment, the payment of Associate’s compensation by Employer, and
Employer entrusting Associate with Confidential Information (as defined below),
and the benefits provided in the Agreement between Employer and Associate dated
as of even date herewith (the “Agreement”), it being acknowledged and agreed by
Associate that his receipt of such benefits is expressly conditioned on his
continued compliance with the terms hereof, 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.


 


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.


 


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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 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


 


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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, 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/ David
  Sandler

  	
   

  	
   

  	
  By:

  	
  /s/ Erik David
  Gershwind

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Printed Name:   Erik
  David Gershwind

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  December 27,
  2005

  	
   

  	
   

  	
  Date:

  	
  December 27,
  2005

  	
   

  
											



 


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