Document:

Exhibit 10.8

 

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 Eileen
McGuire, 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

 

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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.

 

9

 

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.

 

11

 

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/
  Eileen McGuire

  
	
   

  	
   

  	
    Eileen
  McGuire

  
				

 

12

 

Exhibit A

 

RELEASE 

 

WHEREAS,
Eileen McGuire (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, Human Resources 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.

 

2

 

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  .

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Eileen McGuire

  	
   

  

 

3

 

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 Eileen McGuire (“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.

 

2

 

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

 

3

 

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.

 

4

 

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/ Eileen
  McGuire

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Printed Name:

  	
  Eileen McGuire

  
	
   

  	
   

  	
   

  
	
  Date:

  	
    December 27,
  2005

  	
   

  	
   

  	
  Date:

  	
    December 27,
  2005

  	
   

  
										

 

5Exhibit 10.9

 

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 Douglas
E. Jones, 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

 

2

 

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

 

3

 

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

 

4

 

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.

 

6

 

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

 

7

 

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

 

8

 

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.

 

9

 

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.

 

11

 

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/ Douglas
  E. Jones

  	
   

  
	
   

  	
   

  	
    Douglas
  E. Jones

  
						

 

12

 

Exhibit A

 

RELEASE 

 

WHEREAS,
Douglas E. Jones (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, Logistics 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.

 

2

 

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  .

 

	
   

  	
   

  	
   

  
	
   

  	
  Douglas E. Jones

  	
   

  

 

3

 

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 Douglas E. Jones
(“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/ Douglas E.
  Jones

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Printed Name:

  	
  Douglas E. Jones

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
    December 27,
  2005

  	
   

  	
   

  	
  Date:

  	
    December 27,
  2005

  	
   

  
									

 

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