Exhibit 10.3


 


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 JAMES SCHROEDER 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:


 





















 


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 $2,000,000, 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 affiliates, acquires 


 


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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 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 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 


 


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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 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.


 


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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.


 


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


 


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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 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.


 


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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.


 


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 


 


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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.


 


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 


 


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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.


 


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 


 


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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.


 


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.


 


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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/ David Sandler

  
	
   

  	
   

  	
    Name: David Sandler 

  
	
   

  	
   

  	
    Title: President 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/ James Schroeder

  
	
   

  	
   

  	
    JAMES SCHROEDER

  



 


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Exhibit A


 


RELEASE


 


WHEREAS, James Schroeder
(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 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) under the agreement, dated April 1, 1996 by and
between the Corporation and James Schroeder, (c) 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 (d) in
respect of the Executive’s rights under the Corporation’s 


 


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Associate Stock Purchase Agreement, 1995 Stock Option
Plan, 1998 Stock Option Plan, 2001 Stock Option Plan, 1995 Restricted Stock
Plan or the 2005 Omnibus Equity Plan, as applicable.


 


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.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  JAMES SCHROEDER

  	
   

  



 


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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 James Schroeder (“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.


 


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.


 


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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, 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/ James Schroeder

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Printed
  Name:  James Schroeder

  
	
   

  	
   

  	
   

  
	
  Date:    December 27, 2005

  	
   

  	
  Date:  December 27, 2005

  
								



 


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