Document:

Exhibit 10.1

SEPARATION AGREEMENT

 

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

 

1.          Resignations;
Retirement From Employment; Transition Period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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3.          General
Release of Claims; No Admission.

 

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

 

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

 

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

 

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

 

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4.          Affirmations.

 

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

 

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

 

5.          Restrictive
Covenants.

 

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

 

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

 

(c)          Non-solicitation.
Executive agrees that for a period of three years from the Separation Date, Executive will not (a) in any capacity, directly
or indirectly (including through another person), employ or solicit for employment any person who is then, or was at any time during
the six (6) months immediately preceding the Separation Date, an Associate, sales representative or agent of the Company or any
present or future subsidiary or affiliate of the Company; or (b) on behalf of himself, or any other person, firm or corporation,
solicit any customer of the Company or any of its affiliates with whom Executive had contact while working for the Company; nor
will Executive in any way, directly or indirectly, for himself, or for any other person, firm, corporation or entity, divert, or
take away any customer of the Company or its affiliates with whom Executive has had contact. For purposes of this paragraph, the
term “contact” shall mean engaging in any communication, whether written or oral, with the customer or a representative
of the customer, or obtaining any information with respect to such customer or customer representative.

 

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

 

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

 

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

 

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

 

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

 

To the Company:

 

MSC Industrial Direct Co., Inc.

75 Maxess Road

Melville, New York 11747-3151

Attention: General Counsel

Facsimile: (516) 812-1175

 

To Executive:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16.         Section
409A.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	-11-

    	 

    

 

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

    	-12-

    	 

    

 

Schedule A 

 

	Option Awards
	 	 	Number of 

Securities
 Underlying

 Unexercised

 Options
 (#)	 	 	Number of
 Securities
 Underlying
 Unexercised
 Options
 (#)	 	 	Option

 Exercise

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

 

	Restricted Stock Awards
	Grant Date	 	Number of 

    Shares of

 Restricted Stock
  that Have Not

Vested	 	 	Vesting Schedule
	10/19/2010	 	 	1,192	 	 	100% on October 19, 2015
	10/21/2011	 	 	1,949	 	 	50% on October 21, 2015 and 50% on October 21, 2016
	10/24/2012	 	 	3,743	 	 	50% on October 24, 2015 and 25% on October 24, 2016 and October 24, 2017
	10/23/2013	 	 	2,446	 	 	50% on October 23, 2016 and 25% on October 23, 2017 and November 14, 2017
	 	 	 	 	 	 	 

 

    	 

    	 

    

 

Schedule B

 

Tom Cox

Vesting Schedule for Restricted Shares (Net of Tax Withholding)

Assumed 37.12% (Federal, NY and Medicare)

 

	Restricted Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant

    Date	 	# shares

    granted	 	 	# vested	 	 	# newly

    vested as
 of
 10/24/14	 	 	# left to

    vest	 	 	Required

    Tax
 Withholding
 (Shares)	 	 	Net Shares

    Remaining
 (after tax)	 	 	 	 	2015 Vest	 	 	2016 Vest	 	 	2017 Vest	 	 	2017 Vest	 	 	Total

    Future
 Vest	 	 
	10/19/10	 	 	4,768	 	 	 	2,384	 	 	 	1,192	 	 	 	1,192	 	 	 	443	 	 	 	749	 	 	October 19th	 	 	749	 	 	 	 	 	 	 	 	 	 	 	 	 	 	749	 	 
	10/21/11	 	 	3,898	 	 	 	0	 	 	 	1,949	 	 	 	1,949	 	 	 	724	 	 	 	1,225	 	 	October 21st	 	 	613	 	 	 	612	 	 	 	 	 	 	 	 	 	 	1,225	 	 
	10/24/12	 	 	3,743	 	 	 	0	 	 	 	0	 	 	 	3,743	 	 	 	1390	 	 	 	2,353	 	 	October 24th	 	 	1,177	 	 	 	588	 	 	 	588	 	 	 	 	 	 	2,353	 	 
	10/23/13	 	 	2,446	 	 	 	0	 	 	 	0	 	 	 	2,446	 	 	 	908	 	 	 	1,538	 	 	October 23rd	 	 	-	 	 	 	769	 	 	 	385	 	 	 	 	 	 	1,154	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9,330	 	 	 	3,465	 	 	 	5,865	 	 	November 14th	 	 	 	 	 	 	 	 	 	 	 	 	 	 	384	 	 	384	 	Based on

 signing date

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,539	 	 	 	1,969	 	 	 	973	 	 	 	384	 	 	5,865Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is executed as of this 27th day of October, 2014 (“the Effective Date”), by and between Ryan Bohr (“Executive”) and School Specialty, Inc. (the “Company”).

RECITALS

WHEREAS, the Company desires to employ Executive as its Executive Vice President and Chief Financial Officer, and Executive desires to be employed by the Company in such capacity, on the terms and conditions set forth herein;

WHEREAS, as a result of Executive’s employment with the Company, Executive will have access to and be entrusted with valuable information about the Company’s business and customers, including trade secrets and confidential information; and

WHEREAS, the parties believe it is in their best interests to make provision for certain aspects of their relationship during and after the period in which Executive is employed by the Company.

NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Company and Executive (jointly, the “Parties”), the Parties agree as follows:

ARTICLE I

EMPLOYMENT

1.1

Position and Duties. Executive shall be employed in the position of Executive Vice President and Chief Financial Officer of the Company and shall be subject to the authority of, and shall report to, the Company’s Chief Executive Officer.  Executive’s duties and responsibilities shall include all those customarily attendant to the position of Executive Vice President and Chief Financial Officer, and such other duties and responsibilities as may be assigned from time to time by Chief Executive Officer.  Executive shall devote Executive’s entire business time, attention, energies, and best efforts exclusively to the business interests of the Company and those entities which, directly or indirectly, control, are controlled by, or are under common control with, the Company, with control measured by the ability to vote a majority of the stock or other ownership interests in such entities (each, a “Related Company” and jointly, the “Related Companies”); provided, however, that to the extent that the following does not impair Executive’s ability to perform Executive’s duties pursuant to this Agreement, Executive, with written approval of the Company’s Board of Directors (the “Board”) (which approval shall not be unreasonably withheld), may serve on the board, advisory board or committee of (i) one for-profit organization and (ii) any non-profit, charitable or similar organization, in addition to all boards, advisory boards and committees that Executive serves on as of the first day of Executive’s employment with the Company and that have been previously disclosed to the Board.

1.2

Term of Employment.  The Company employs Executive, and Executive accepts employment by the Company, for the period commencing on the Effective Date. Executive’s employment shall continue until terminated by Company or Executive, in accordance with and subject to the termination provisions set forth in Article III, below (the “Employment Term”).  Upon the termination of Executive’s employment for any reason, he will be deemed to have resigned all of his positions with the Company and any Related Company.  Although the foregoing resignations are effective without any further action by Executive, Executive agrees to execute any documents reasonably requested by the Company to document such actions.

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1

Base Salary.  During the Employment Term, the Company shall pay Executive in substantially equal monthly or more frequent installments, an annual salary of Three Hundred Thirty Thousand Dollars ($330,000) (“Base Salary”), payable in accordance with the normal payroll practices and schedule of the Company.  Executive’s Base Salary shall be reviewed annually and may be increased at any time and from time to time as the Board and/or Compensation Committee of the Board (the “Compensation Committee”), as applicable, shall deem appropriate in its sole discretion. The term “Base Salary,” as utilized in this Agreement, shall refer to Base Salary as may be increased.  Base Salary shall not be reduced at any time during the Employment Term, except with the consent of Executive.  All amounts in this Agreement are stated prior to deductions for federal and state income and employment tax withholding.

2.2

Incentive Compensation.

(a)

In General.  During the Employment Term, Executive shall participate in annual incentive bonus plans (the “Bonus Plan”) offered by the Company to its senior executives from time to time.  Executive will commence participation in the Bonus Plan for fiscal year 2015, and Executive’s annual target cash bonus opportunity shall be equal to 60% of his Base Salary, prorated for partial years of service (based on the number of days employed in the fiscal year) (the “Target Opportunity”).  Executive’s Target Opportunity shall be reviewed annually and may be increased as the Board and/or Compensation Committee, as applicable, shall deem appropriate in its sole discretion.  The performance metrics for the Bonus Plan and the extent to which such metrics are met, as well as any other material terms, including threshold and maximum levels for annual cash incentive bonuses, shall be determined in the sole discretion of the Board and/or Compensation Committee, as applicable.  During the Employment Term, Executive will be eligible for grants of equity compensation awards offered to the Company’s management employees, in the sole discretion of the Board and/or Compensation Committee, as applicable.

(b)

Initial Award.  Subject to Board approval, Executive shall receive the long-term incentive award set out in Exhibit A hereto.  

2

2.3

Other Benefits.

(a)

In General.  During the Employment Term and subject to any limitation on participation provided by applicable law: (i) Executive shall be entitled to participate in all applicable qualified and nonqualified retirement plans, practices, policies and programs of the Company to the same extent as other senior executives of the Company, and (ii) Executive and/or Executive’s family, as the case may be, shall be eligible for all applicable welfare benefit plans, practices, policies and programs provided by the Company and its Related Companies, other than severance plans, practices, policies and programs, to the same extent as other senior executives of the Company.  Nothing herein shall be deemed to limit the Company’s ability to amend, terminate or otherwise change any of the referenced plans, practices, policies and programs at any time, and from time to time.

(b)

Paid Time Off.  During the Employment Term, Executive shall be entitled to 20 days of Paid Time Off per calendar year (pro-rated for partial years), which shall accrue in accordance with, and be otherwise subject to the provisions of the Company’s policy, as in effect from time to time. As used herein, “Paid Time Off” means sick days, personal days and vacation days.  

(c)

Transportation/Lodging.  During the Employment Term, in addition to the Base Salary and any other benefits described within this Agreement, the Company shall provide Executive with a fixed allowance for (i) transportation expenses associated with Executive’s travel to and from the Company’s corporate headquarters from Executive’s home in Illinois and (ii) Executive’s lodging and living expenses in Greenville, Wisconsin, in the total amount of Twenty-Two Thousand Dollars ($22,000) per year (the “Commuting Expenses Allowance”), payable in equal bi-weekly increments in accordance with the Company’s normal payroll practices and schedule.  The Company reserves the right, in its sole discretion, to adjust the amount and/or terms of this allowance at any time during Executive’s employment, provided that any such adjustment shall be made solely to reflect a material change in actual expenses incurred by Executive.  In addition, the Company shall pay to Executive (or the relevant taxing authorities by means of tax withholding), a gross up payment (the “Gross Up Payment”), such that, after payment of all applicable federal and state income and employment taxes owed by Executive on the Commuting Expenses Allowance, Executive shall retain, on an after-tax basis, an amount equal to the Commuting Expenses Allowance.  

(d)

Legal Fees.  Executive shall be entitled to reimbursement of all reasonable legal fees associated with the negotiation and drafting of this Agreement, provided that reimbursement of amounts under this Section 2.3(d) shall not exceed Five Thousand Dollars ($5,000.00) in the aggregate.  Any reimbursement of such legal fees shall be paid within sixty (60) days after Executive submits invoices therefor to the Company which comply with the Company’s reimbursement policy. 

2.4

Expense Reimbursement.  The Company shall pay or reimburse Executive for all reasonable out-of-pocket expenses actually incurred by Executive in the course of performing Executive’s duties for the Company in accordance with the Company’s reimbursement policies for senior executives as in effect from time to time; provided, however, Executive shall be ineligible for reimbursement of expenses associated with his transportation and lodging as 

3

described in Section 2.3(c), above. Executive shall keep accurate records and receipts of such expenditures and shall submit such accounts and proof thereof as may from time to time be required in accordance with such expense account or reimbursement policies that the Company may establish for its senior executives generally.  The Company’s obligation to pay or reimburse Executive for certain expenses will comply with the requirements set forth in Section 1.409A-3(i)(1)(iv) of the regulations (the “409A Regulations”), promulgated under Section 409A of the Code, including the requirement that the amount of expenses eligible for reimbursement during any calendar year may not affect the expenses eligible for reimbursement in any other taxable year.  Further, reimbursement of eligible expenses shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, as required by Section 1.409A-3(i)(1)(iv) of the 409A Regulations.

ARTICLE III

TERMINATION

3.1

Right to Terminate; Automatic Termination.  During the Employment Term, Executive’s employment may terminate for any of the reasons set out in paragraphs (a) through (d) hereof.

(a)

Termination by Death or Disability.  Executive’s employment and the Company’s obligations under this Agreement (except as provided in Section 3.2(a), below), shall terminate automatically, effective immediately and without any notice being necessary, upon Executive’s death or a determination of Disability of Executive.  For purposes of this Agreement, “Disability” means the inability of Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined by a physician selected by the Company and Executive.  If the Company and Executive cannot agree on a physician, each party shall select a physician and the two physicians shall select a third who shall make the determination as to whether Executive has a condition that meets the definition of Disability. Executive shall cooperate with any reasonable efforts to make such determination.  In the event Executive is unable to select a physician, such selection shall be made by his spouse, and if she is unable to select a physician, such selection shall be made by Executive’s legal representative.  Any such determination shall be conclusive and binding on the Parties.  Any determination of Disability under this Section 3.1(a) is not intended to alter any benefits any person and/or beneficiary may be entitled to receive under any long-term disability insurance policy carried by either the Company or Executive with respect to Executive, which benefits shall be governed solely by the terms of any such insurance policy.

(b)

Termination For Cause.  The Company may terminate Executive’s employment and all of the Company’s obligations under this Agreement (except as provided in Section 3.2(b), below), at any time for Cause (as defined below) by giving written notice to Executive stating the basis for such termination, effective immediately upon giving such notice or at such other time thereafter as the Company may designate. “Cause” shall mean any of the following: (1) Executive has materially breached this Agreement, any other agreement to which Executive and the Company are parties, or any 

4

Company policy (including the Company’s policy against unlawful harassment), or has materially breached any other obligation or duty owed to the Company pursuant to law or the Company’s policies and procedures manual, including, but not limited to, Executive’s substantial failure or willful refusal to perform his duties and responsibilities to the Company (other than as a result of his death or Disability); (2) Executive has committed an act of gross negligence, willful misconduct or any violation of law in the performance of Executive’s duties for the Company; (3) Executive has taken any action substantially likely to result in material discredit to or material loss of business, reputation or goodwill of the Company; (4) Executive has failed to follow resolutions that have been approved by a majority of the Board concerning the operations or business of the Company; (5) Executive has been convicted of or plead nolo contendere to a felony or other crime, the circumstances of which substantially relate to Executive’s employment duties with the Company; provided however, that upon indictment in any such case, the Executive may at the Company’s sole discretion, be suspended without pay pending final resolution of the matter; (6) Executive has misappropriated funds or property of the Company or engaged in any material act of dishonesty; or (7) Executive has attempted to obtain a personal profit from any transaction in which the Company has an interest, and which constitutes a corporate opportunity of the Company, or which is adverse to the interests of the Company, unless the transaction was approved in writing by the Board after full disclosure of all details relating to such transaction.  For purposes of this Section 3.1(b), no act, or failure to act, on Executive’s part will be deemed “willful” unless done, or omitted to be done, by Executive in bad faith.

(c)

Termination by Resignation.  Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically (except as provided in Section 3.2(b), below), when Executive voluntarily terminates his employment with the Company, with ninety (90) days’ prior notice, or at such other earlier time as may be mutually agreed between the Parties following the provision of such notice.

(d)

Termination Without Cause.  The Company may terminate Executive’s employment and all of the Company’s obligations under this Agreement (except as provided in Section 3.2(c), below), at any time and for any reason.  Such termination shall be effective immediately upon the Company providing notice to Executive that he is terminated without Cause, or such other time thereafter as the Company shall designate.    

3.2

Obligations Upon Termination. 

(a)

Termination by Death or Disability.  If Executive’s employment is terminated pursuant to Section 3.1(a), above, Executive or Executive’s estate shall have no further rights against the Company hereunder, except for the right to receive (i) any unpaid Base Salary with respect to the period prior to the effective date of termination of employment, (ii) payment of the transportation/lodging allowance as set forth in Section 2.3(c)  through the effective date of termination of employment, (iii) payment of any accrued but unused Paid Time Off, consistent with the Company’s policy related to carryovers of unused time and applicable law, (iv) all vested benefits to which Executive is entitled under any benefit plans set forth in Section 2.3(a) hereof in accordance with the terms of such plans through the date employment terminates, (v) reimbursement of 

5

expenses to which Executive may be entitled under Section 2.4 hereof (clauses (i) through (v) collectively, the “Accrued Obligations”), and (vi) provided that Executive, or a representative of his estate, as the case may be, executes and delivers to the Company an irrevocable release of all employment-related claims against the Company as further described in Section 3.2(c)(ii), a pro-rated annual incentive bonus payment (based on the number of days worked in that fiscal year) for the fiscal year in which termination occurs based on actual performance-based bonus attainments for such fiscal year in a lump sum.  Any pro-rated annual incentive bonus to which Executive is entitled shall be made in accordance with Section 3.2(c)(iii).  The treatment of Executive’s incentive compensation provided under Section 2.2 hereof shall be governed by the terms of the applicable plans or grant agreements, except as explicitly provided to the contrary pursuant to this Agreement.

(b)

Section 3.1(b)-(c) Terminations.  If Executive’s employment is terminated pursuant to Section 3.1(b) or (c), above, Executive shall have no further rights against the Company hereunder, except for the right to receive the Accrued Obligations.  The treatment of Executive’s incentive compensation provided under Section 2.2 hereof shall be governed by the terms of the applicable plans or grant agreements, except as explicitly provided to the contrary pursuant to this Agreement.

(c)

Termination Without Cause. 

(i)

Company Obligations.  If Executive’s employment is terminated pursuant to Section 3.1(d), above, Executive shall have no further rights against the Company hereunder, except for the right to receive (i) the Accrued Obligations and (ii) Severance Payments, as defined below, but only for so long as Executive complies with the requirements of Articles IV, V, VI, VII, VIII, IX and X, below.  For purposes of this Agreement, “Severance Payments” means (A) twelve (12) months of Base Salary continuation, (B) a pro-rated annual incentive bonus payment (based on the number of days worked in that fiscal year) for the fiscal year in which termination of employment occurs based on actual performance-based bonus attainments for such fiscal year in a lump sum, and (C) to the extent it does not result in a tax or penalty on the Company, reimbursement for that portion of the premiums paid by Executive to obtain COBRA continuation health coverage that equals the Company’s subsidy for health coverage for active employees with family coverage (if applicable) (“COBRA Continuation Payments”) for twelve (12) months following the date employment terminates (provided that Executive has not obtained health coverage from any other source and is not eligible to receive health coverage from any other employer, in which event Executive shall no longer be entitled to reimbursement), at the times provided in subsection (iii), below.  The treatment of Executive’s equity awards, whether granted under Section 2.2(b) hereof or otherwise shall be governed by the terms of the Company’s applicable plans or grant agreements, except as explicitly provided to the contrary pursuant to this Agreement.

(ii)

Release Requirement.  Notwithstanding the foregoing, the Company shall not pay to Executive, and Executive shall not have any right to 

6

receive, the Severance Payments unless, on or before the sixtieth (60th) day following the date of termination of employment, (1) Executive has executed and delivered to the Company a release of all employment-related claims against the Company, its Affiliates, successor companies, and their past and current directors, officers, employees and agents, in a form provided to Executive by the Company, and (2) the statutory revocation period for such release has expired.  For purposes of this Agreement, “Affiliate” means an entity which, directly or indirectly, controls, is controlled by, or is under common control with, the Company, with control measured by the ability to vote a majority of the stock or other ownership interests in such entity.

(iii)

Timing of Payment of Severance Payments.  Base Salary continuation shall commence on the first payroll date after the sixtieth (60th) day following the date of Executive’s termination of employment, provided that (1) and (2) of Section 3.2(c)(ii) have been satisfied by such date, and shall be paid over a twelve (12) month period in accordance with the normal payroll practices and schedule of the Company.  The pro-rated annual incentive bonus payment shall be made at such time as other participants in the plan receive their payment, or, if later, on the sixtieth (60th) day following the date of Executive’s termination of employment, provided that (1) and (2) of Section 3.2(c)(ii) have been satisfied by such date.  COBRA Continuation Payments shall be paid on a monthly basis after Executive has paid the applicable COBRA premium payment, provided that (1) and (2) of Section 3.2(c)(ii) have been satisfied by such date, over the lesser of a 12-month period or the period in which Executive is entitled to COBRA continuation coverage.  Notwithstanding anything to the contrary contained in this Agreement, if (1) Employee is a “specified employee” within the meaning of Section 1.409A-1(i) of the 409A Regulations, and (2) the Severance Payments do not qualify for exemption from Section 409A under the short-term deferral exception to deferred compensation of Section 1.409A-1(b)(4) of the 409A Regulations, the separation pay plan exception to deferred compensation of  Section 1.409A-1(b)(9) of the 409A Regulations, or any other exception under the 409A Regulations, that portion of the Severance Payments not exempt from Section 409A of the Code shall be made in accordance with the terms of this Agreement, but in no event earlier than the first to occur of (a) the day after the six-month anniversary of Employee’s termination of employment, or (b) Employee’s death.  Any payments delayed pursuant to the prior sentence shall be made in a lump sum, on the first business day after the six-month anniversary of Employee’s termination of employment along with interest thereon payable at the short-term applicable federal rate for monthly payments, as determined under Section 1274(d) of the Code, for the month in which Employee’s employment terminated.

(iv)

Treatment of Severance Payments for Tax and Benefit Purposes.  The Severance Payments shall be treated as ordinary income and shall be reduced by any applicable income or employment taxes which are required to be withheld under applicable law, and all amounts are stated before any such deduction. Furthermore, the Severance Payments shall not be included as compensation for 

7

purposes of any qualified or nonqualified retirement or welfare benefit plan, program or policy of the Company.

(d)

Parachute Payments.  Notwithstanding anything contained in this Agreement to the contrary, the Company, based on the advice of its legal or tax counsel, shall compute whether there would be any “excess parachute payments” payable to Executive, within the meaning of Section 280G of the Code, taking into account the total ‘‘parachute payments,” within the meaning of Section 280G of the Code, payable to Executive by the Company under this Agreement and any other plan, agreement or otherwise.  If there would be any excess parachute payments, the Company, based on the advice of its legal or tax counsel, shall compute the net after-tax proceeds related to such parachute payments, taking into account the excise tax imposed by Section 4999 of the Code, as if (i) such parachute payments were reduced, but not below zero, such that the total parachute payments payable to Executive would not exceed three (3) times the “base amount” as defined in Section 280G of the Code, less One Dollar ($1.00), or (ii) the full amount of such parachute payments were not reduced.  If reducing the amount of such parachute payments otherwise payable would result in a greater after-tax amount to Executive, such reduced amount shall be paid to Executive and the remainder shall be forfeited.  If not reducing such parachute payments otherwise payable would result in a greater after-tax amount to Executive, then such parachute payments shall not be reduced.  If such parachute payments are reduced pursuant to the foregoing, they will be reduced in the following order:  first, by reducing any cash severance payments, then by reducing any fringe or other severance benefits, and finally by reducing any payments or benefits otherwise payable with respect to, or measured by, the Company’s common stock (including without limitation by eliminating accelerated vesting, in each case starting with the installment or tranche last eligible to become vested absent the occurrence of the Change in Control (as defined in the Company’s 2014 Incentive Plan)).  Notwithstanding the foregoing, to the extent the parties agree that any of the foregoing amounts are not parachute payments, such amounts shall not be reduced.  To the extent the parties cannot agree as to whether any of the payments are in fact parachute payments, the parties will designate, by mutual agreement, an unrelated third-party with tax expertise to make the determination.  Notwithstanding any provision of this Section 3.2(d) to the contrary, no amount shall be subject to reduction pursuant to this Section 3.2(d) to the extent the reduction would result in a violation of any applicable law.

ARTICLE IV

CONFIDENTIALITY

4.1

Confidentiality Obligations. 

(a)

During Employment.  Executive will not, during Executive’s employment with the Company, directly or indirectly use or disclose any Confidential Information or Trade Secrets except in the interest and for the benefit of the Company. 

(b)

Trade Secrets Post-Employment.  After the end, for any reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Trade Secrets.

8

(c)

Confidential Information Post-Employment.  For a period of twenty-four (24) months following the end, for any reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Confidential Information.  

(d)

Third Party Information.  Executive further agrees not to use or disclose at any time information received by the Company from others except in accordance with the Company’s contractual or other legal obligations; the Company’s Customers are third party beneficiaries of this obligation.

4.2

Definitions.

(a)

Trade Secret.  The term “Trade Secret” has that meaning set forth under the Uniform Trade Secrets Act or, if the definition in Wisconsin law varies from that in the Uniform Trade Secrets Act at the time of such determination, Wisconsin law.  The term includes, but is not limited to, all computer source code and/or related data created by or for the Company or a Related Company.

(b)

Confidential Information.  The term “Confidential Information” means all non-Trade Secret or proprietary information of the Company which has value to the Company and which is not known to the public or the Company’s competitors, generally. Confidential Information includes, but is not limited to: (i) inventions, product specifications, information about products under development, research, development or business plans, production know-how and processes, manufacturing techniques, operational methods, equipment design and layout, test results, financial information, customer lists, information about orders and transactions with customers, sales and marketing strategies, plans and techniques, pricing strategies, information relating to sources of materials and production costs, purchasing and accounting information, personnel information (except for Executive’s own personal information) and all business records; (ii) information which is marked or otherwise designated as confidential or proprietary by the Company; and (iii) information received by the Company from others which the Company has an obligation to treat as confidential.

(c)

Exclusions.  Notwithstanding the foregoing, the terms “Trade Secret” and “Confidential Information” shall not include, and the obligations set forth in this Agreement shall not apply to, any information which: (i) can be demonstrated by Executive to have been known by Executive prior to Executive’s employment by the Company; (ii) is or becomes generally available to the public through no act or omission of Executive; or (iii) is obtained by Executive in good faith from a third party who discloses such information to Executive on a non-confidential basis outside the scope of Executive’s employment without violating any obligation of confidentiality or secrecy relating to the information disclosed.

(d)

Company.  For all purposes of this Article IV, references to the Company also refer to all Related Companies.

9

ARTICLE V

NON-COMPETITION

5.1

Restrictions on Competition During Employment.  During the term of Executive’s employment with the Company, Executive shall not directly or indirectly compete against the Company, or directly or indirectly divert or attempt to divert any Customer’s business from the Company anywhere the Company does or is taking steps to do business.

5.2

Post-Employment Non-Solicitation of Restricted Customers.  For twelve (12) months following termination of Executive’s employment with the Company for any reason, Executive agrees not to directly or indirectly solicit or attempt to solicit any business from any Restricted Customer in any manner which competes with the services or products offered by the Company in the twelve (12) months preceding termination of Executive’s employment with the Company, or to directly or indirectly divert or attempt to divert any Restricted Customer’s business from the Company.

5.3

Post-Employment Restricted Services Obligation.  For twelve (12) months following termination of Executive’s employment with the Company, for any reason, Executive agrees not to provide Restricted Services to any Competitor in any geographic area in which the Company sold pre-kindergarten through 12th grade educational products and services during the twelve (12) month period preceding termination of Executive’s employment. During such twelve (12) month period, Executive also will not provide any Competitor with any advice or counsel concerning the provision of Restricted Services anywhere in such geographic area.

5.4

Definitions.

(a)

Customer.  The term “Customer” means any individual or entity for whom/which the Company has provided services or products or made a proposal to perform services or provide products.

(b)

Restricted Customer.  The term “Restricted Customer” means any individual or entity (i) for whom/which the Company provided services or products and (ii) with whom/which Executive had direct contact on behalf of the Company or about whom/which Executive acquired non-public information in connection with Executive’s employment by the Company during the twenty-four (24) months preceding the end, for any reason, of Executive’s employment with the Company; provided, however, that the term “Restricted Customer” shall not include any individual or entity who/which, through no direct or indirect act or omission of Executive, has terminated its business relationship with the Company.

(c)

Restricted Services.  The term “Restricted Services” means services of any kind or character comparable to those Executive provided to the Company during the twelve (12) months preceding the termination of Executive’s employment with the Company relating to pre-kindergarten through 12th grade educational products and services of the type sold by the Company within any geographic area in which the Company engaged in the sale of such products or services within the last twelve (12) month period preceding termination of Executive’s employment.

10

(d)

Competitor.  The term “Competitor” means any business which is engaged in the sale of pre-kindergarten through 12th grade educational products and services of the type sold by the Company within any geographic area in which the Company engaged in the sale of such products or services within the twelve (12) month period preceding termination of Executive’s employment.

(e)

Company.  For all purposes of this Article V, references to the Company also refer to all Related Companies.

ARTICLE VI

BUSINESS IDEA RIGHTS

6.1

Assignment.  The Company will own, and Executive hereby assigns to the Company and agrees to assign to the Company, all rights in all Business Ideas which Executive originates or develops whether alone or working with others while Executive is employed by the Company.  All Business Ideas which are or form the basis for copyrightable works are hereby assigned to the Company and/or shall be assigned to the Company or shall be considered “works for hire” as that term is defined by United States Copyright Law.

6.2

Definition of Business Ideas.  The term “Business Ideas” means all ideas, designs, modifications, formulations, specifications, concepts, know-how, trade secrets, discoveries, inventions, data, software, developments and copyrightable works, whether or not patentable or registrable, which Executive originates or develops, either alone or jointly with others while Executive is employed by the Company and which are (i) related to any business known to Executive to be engaged in or contemplated by the Company; (ii) originated or developed during Executive’s working hours; or (iii) originated or developed in whole or in part using materials, labor, facilities or equipment furnished by the Company.

6.3

Disclosure.  While employed by the Company, Executive will promptly disclose all Business Ideas to the Company.

6.4

Execution of Documentation.  Executive, at any time during or after the Employment Term, will promptly execute all documents which the Company may reasonably require to perfect its patent, copyright and other rights to such Business Ideas throughout the world.

6.5

Definition of Company.  For all purposes of this Article VI, references to the Company also refer to all Related Companies.

ARTICLE VII

NON-SOLICITATION OF EMPLOYEES

During the term of Executive’s employment with the Company and for twelve (12) months thereafter, Executive shall not directly or indirectly encourage any Company employee to terminate employment with the Company or solicit such an individual for employment outside the Company in any manner which would end or diminish that employee’s services to the Company.  For all purposes of this Article VII, references to the Company also refer to all Related Companies.

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ARTICLE VIII

EMPLOYEE DISCLOSURES AND ACKNOWLEDGMENTS

8.1

Confidential Information of Others.  Executive warrants and represents to the Company that Executive is not subject to any employment, consulting or services agreement, or any restrictive covenants or agreements of any type, which would conflict or prohibit Executive from fully carrying out Executive’s duties as described under the terms of this Agreement. Further, Executive warrants and represents to the Company that Executive has not and will not retain or use, for the benefit of the Company, any confidential information, records, trade secrets, or other property of a former employer.

8.2

Scope of Restrictions.  Executive acknowledges that during the course of Executive’s employment with the Company, Executive will gain knowledge of Confidential Information and Trade Secrets of the Company and Related Companies.  Executive acknowledges that the Confidential Information and Trade Secrets of the Company and Related Companies are necessarily shared with Executive on a routine basis in the course of performing Executive’s job duties and that the Company and Related Companies have a legitimate protectable interest in such Confidential Information and Trade Secrets, and in the goodwill and business prospects associated therewith.  Executive acknowledges that the Company and Related Companies sell pre-kindergarten through 12th grade educational products and services to all states in the United States and in Canada.  Accordingly, Executive acknowledges that the scope of the restrictions contained in this Agreement are appropriate, necessary and reasonable for the protection of the business, goodwill and property rights of the Company and Related Companies, and that the restrictions imposed will not prevent Executive from earning a living in the event of, and after, the end, for any reason, of Executive’s employment with the Company.

8.3

Prospective Employers. Executive agrees, during the term of any restriction contained in Articles IV, V, VI, VII, VIII, IX and X of this Agreement, to disclose this Agreement to any entity which offers employment or engagement to Executive.  Executive further agrees that, during the term of any restriction contained in Articles IV, V, VI, VII, VIII, IX and X, the Company may send a copy of this Agreement to, or otherwise make the provisions hereof known to, any person or entity with which Executive seeks to establish a business relationship, including, without limitation, potential employers, joint-venturers, or persons or entities to whom Executive seeks to provide consulting services as an independent contractor.

8.4

Third Party Beneficiaries. All Related Companies are third party beneficiaries with respect to Executive’s performance of Executive’s duties under this Agreement and the undertakings and covenants contained in this Agreement, and the Company and any 

Related Company, enjoying the benefits thereof, may enforce this Agreement directly against Executive.

8.5

Survival. The Covenants set forth in Articles IV, V, VI, VII, VIII, IX and X of this Agreement shall survive the termination of this Agreement.

8.6

Injunctive Relief.  Executive acknowledges that the services to be rendered by Executive hereunder are of a special, unique, and extraordinary character and, in connection with such services, Executive will have access to Confidential Information and Trade Secrets that are 

12

vital to the Company’s and the Related Companies’ business.  Executive consents and agrees that, in the event of the breach or a threatened breach by Executive of any of the provisions of this Agreement, the Company and the Related Companies would sustain irreparable harm and that damages at law would not be an adequate remedy for a violation of this Agreement, and, in addition to any other rights or remedies that the Company and the Related Companies may have under this Agreement, common or statutory law or otherwise, the Company and Related Companies shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction enforcing this Agreement and/or restraining Executive from committing, threatening to commit, or continuing any violation of this Agreement (in each case without posting a bond or other security), including, but not limited to, restraining Executive from disclosing, using for any purpose, selling, transferring, or otherwise disposing of, in whole or in part, any Confidential Information and/or Trade Secrets.  Nothing contained herein shall be construed as prohibiting the Company or the Related Companies from pursuing any other remedies available to it for any breach or threatened breach of any provision of this Agreement, including, but not limited to, the recovery of damages, costs, and fees, including the recovery of any prior Severance Payments made to Executive.

ARTICLE IX

RETURN OF RECORDS

Upon the end, for any reason, of Executive’s employment with the Company, or upon request by the Company at any time, Executive, within five (5) days after the termination of his employment or earlier upon the Company’s written request, shall return to the Company all documents, records, equipment (including computers, laptops, tablet computers, cell phones and other such equipment (“Electronic Equipment”)) and materials belonging and/or relating to the Company (except Executive’s own personnel and wage and benefit materials relating solely to Executive and Executive’s personal Electronic Equipment which is not owned by the Company), all passwords and/or access codes related to such equipment and/or materials, and all copies of all such materials. Upon the end, for any reason, of Executive’s employment with the Company, or upon request of the Company at any time, Executive further agrees to destroy such records maintained by Executive on Executive’s personally-owned Electronic Equipment, which destruction Company may reasonably confirm.

ARTICLE X

NONDISPARAGEMENT

Executive agrees that Executive will not, at any time (whether during or after the Employment Term), publish or communicate to any person or entity any Disparaging (as defined below) remarks, comments or statements concerning the Company and any Related Company and their respective present and former members, partners, directors, officers, stockholders, employees, agents, attorneys, successors and assigns, except as required by law, rule or regulation.  The Company agrees to instruct its executive officers and directors to refrain from publishing or communicating to any person or entity any Disparaging remarks, comments or statements concerning Executive during or after the Employment Term, except as required by law, rule or regulation.  “Disparaging” remarks, comments or statements are those that impugn the character, honesty, integrity or morality or business acumen or abilities in connection with any aspect of the operation of business of the individual or entity being disparaged.

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ARTICLE XI

MISCELLANEOUS

11.1

Notice.  Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile, electronic mail or prepaid overnight courier to the parties at the addresses set forth below (or such other address as shall be specified by the parties by like notice pursuant to this Section 11.1):

To the Company: 

School Specialty, Inc.

W6316 Design Drive

P.O. Box 1579

Appleton WI 54912-1579

Attention:  Chief Legal Officer

Fax: 1-920-725-0998

Email:  jffiv@franzoi.com

With a copy to: 

Godfrey & Kahn, S.C.

780 N. Water St.

Milwaukee, WI  53202

Attention: 

Dennis F. Connolly

Margaret R. Kurlinski

Fax:  1-414-273-5198

Email:

dconnoll@gklaw.com

mkurlinski@gklaw.com

And :

Franzoi & Franzoi, S.C.

514 Racine Street

Menasha, WI  54952

Attention:  Joseph F. Franzoi IV

Fax:  1-920-725-0998

Email:  jffiv@franzoi.com

To Executive: 

Ryan Bohr

431 Locust Street

Batavia, IL  60510

Email:  rmbohr@yahoo.com

Such notices and communications shall be deemed given upon personal delivery or receipt at the address, facsimile or email account of the party stated above or at any other address specified by such party to the other party in writing, except that if delivery is refused or cannot be made for any reason, then such notice shall be deemed given on the third day after it is sent.

11.2

Entire Agreement; Amendment; Waiver.  This Agreement (including any documents referred to herein) sets forth the entire understanding of the parties hereto with respect to the subject matter contemplated hereby.  Any and all previous agreements and 

14

understandings between or among the Parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement. This Agreement shall not be amended or modified except by a written instrument duly executed by each of the parties hereto. Any extension or waiver by any party of any provision hereto shall be valid only if set forth in an instrument in writing signed on behalf of such party.

11.3

Headings.  The headings of sections and paragraphs of this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of its provisions.

11.4

Attorneys’ Fees; Expenses.  Except as provided in Section 2.3(d), above, each party hereto shall bear and pay all of the respective fees, expenses and disbursements of their agents, representatives, accountants and counsel incurred in connection with and relating to this Agreement.  

11.5

Waiver of Breach.  The waiver by either party of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either party.

11.6

Severability.  If any court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then such invalidity or unenforceability shall have no effect on the other provisions hereof, which shall remain valid, binding and enforceable and in full force and effect, and, to the extent allowed by law, such invalid or unenforceable provision shall be construed in a manner so as to give the maximum valid and enforceable effect to the intent of the Parties expressed therein.

11.7

Governing Law.  This Agreement shall in all respects be construed according to the laws of the State of Wisconsin, without regard to its conflict of laws principles.

11.8

Future Cooperation.  Executive agrees that, during his employment and following the termination of Executive’s employment for any reason, Executive will cooperate with requests by the Company to assist in the defense or prosecution of any lawsuits or claims in which the Company, any Related Company or its officers, directors or employees may be or become involved and in connection with any internal investigation or administrative, regulatory or judicial proceeding, in each case which relates to matters occurring while Executive was employed by the Company, at such times and at such places as shall be mutually convenient for Executive and the Company, taking into account any employment commitments which Executive then has.  Executive shall be compensated by the Company at a rate comparable to that which he earned while an employee of the Company or that which he is currently earning, whichever is greater; provided, however, that during such time as Executive is receiving Severance Payments pursuant to Section 3.2(c) of this Agreement, such Severance Payments shall be the sole compensation provided to Executive for services reasonably requested under this Section 11.8.

11.9

Compliance with Section 409A of the Code and the 409A Regulations.  This Agreement, and any ambiguity hereunder, shall be interpreted and administered so that any payments or benefits are either exempt from or avoid taxation under Section 409A of the Code, 

15

the 409A Regulations and any authority promulgated thereunder.  Executive acknowledges that the Company has made no representations as to the treatment of the compensation and benefits provided hereunder and the Executive has been advised to obtain his own tax advice.  Any term used in this Agreement which is defined in Code Section 409A or the 409A Regulations shall have the meaning set forth therein unless otherwise specifically defined herein.  Any obligations under this Agreement that arise in connection with Executive’s “termination of employment,” “termination” or other similar references shall only be triggered if the termination of employment or termination qualifies as a “separation from service” within the meaning of Section 1.409A-1(h) of the 409A Regulations.  Each amount or benefit payable pursuant to this Agreement shall be deemed a separate payment for purposes of Section 409A and the 409A Regulations.

11.1

Successors. 

(a)

This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(b)

This Agreement shall be assignable by the Company without the written consent of Executive and shall inure to the benefit of and be binding upon the Company and its respective successors and assigns.  Upon assignment of this Agreement by the Company, all references herein to “Company” shall be deemed to refer to the party to which this Agreement is assigned.

11.2

Acknowledgement of Representation.  Executive and the Company acknowledge that they have had the opportunity to be represented by counsel of their own choosing, and, therefore, in the event of a dispute over the meaning of this Agreement or any provisions thereof, neither party shall be entitled to any presumption of correctness in favor of the interpretation advanced by such party or against the interpretation advanced by the other party.

16

[Signatures on following page.]

17

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date first written above.

EXECUTIVE:

/s/ Ryan Bohr                                               

Ryan Bohr

SCHOOL SPECIALTY, INC.:

By:  /s/ Joseph M. Yorio                              

Title:  President and Chief Executive Officer

EXHIBIT A

SCHOOL SPECIALTY, INC.

2014 INCENTIVE PLAN

STOCK OPTION AGREEMENT

School Specialty, Inc. (the “Company”) hereby grants you an option (the “Option”) under the 2014 Incentive Plan of School Specialty, Inc. (the “Plan”).  The Option lets you purchase a specified number of shares of the Common Stock (the “Option Shares”), at price per share specified in Schedule I hereto (the “Exercise Price”). 

Schedule I to this Agreement provides the details for your grant, including the number of Option Shares, the Exercise Price, the latest date the Option will expire (the “Term Expiration Date”), and any special rules that apply to your Option.  As specified in Schedule I, the Company intends this Option to be a nonqualified stock option (“NQSO”), not subject to the rules contained in Code Section 422.

The Option is subject in all respects to the applicable provisions of the Plan.  This Agreement does not cover all of the rules that apply to the Option under the Plan, and the Plan defines any terms in this Agreement that this Agreement does not.

In addition to the terms and restrictions in the Plan, the following terms and restrictions apply to each Option:

			
	Option

Exercisability

	While your Option remains in effect under the Expiration section below,

you may exercise any exercisable portions of that Option (and buy the Option Shares) under the timing rules Schedule I specified under “Option Exercisability Provisions.”

	 
	 

	Method of

Exercise and

Payment for

Shares

	Subject to this Agreement and the Plan, you may exercise the Option (and only to the extent such Option is vested and exercisable) by providing a written notice (or notice through another previously approved method, which could include a voice- or e-mail system) to the Secretary of the Company, an Assistant Secretary of the Company designated by the Administrator or to whomever the Administrator designates, on or before the date the Option expires.  Each such notice must satisfy whatever procedures then apply to the Option and must contain such representations (statements from you about your situation) as the Company requires.  You must, at the same time, pay the Exercise Price using one or more of the methods described below.  Please note that until the Company notifies you otherwise, or unless you indicate otherwise on your notice of option exercise, all exercises of the Option will be done on a “Net Exercise” basis, which is the preferred method under the Plan.

	 
	 

	 
	Net Exercise

	The Company delivers the number of shares to you that equals the number of Option Shares for which the Option was exercised, reduced by the number of whole shares of common stock with a Fair Market Value on the date of exercise equal to the Exercise Price and the minimum tax withholding required by law; to the extent the combined value of the whole shares of common stock, valued at their Fair Market Value on the date of exercise, is not sufficient to equal the Exercise Price and minimum tax withholding obligation, the Company will withhold the additional amount from your next pay check, or if you are not employed by the Company, you must pay the 

			
	 
	 
	additional amount in cash to the Company before delivery of the shares will be made to you.

	 
	 
	 

	 
	Cashless

Exercise

	an approved cashless exercise method, including directing the Company to send the stock certificates (or other acceptable evidence of ownership) to be issued under the Option to a licensed broker acceptable to the Company as your agent in exchange for the broker’s tendering to the Company cash (or acceptable cash equivalents) equal to the Exercise Price and any required tax withholdings (at the minimum required level); or

	 
	 
	 

	 
	Cash/Check

	cash, a cashier’s or certified check in the amount of the Exercise Price, and any required tax withholdings, payable to the order of the Company.

	 
	 

	Expiration

	You cannot exercise the Option after it has expired.  The Option will expire no later than the close of business on the Term Expiration Date shown on Schedule I. The “Option Expiration Rules” in Schedule I provide the circumstances under which the Option will terminate before the Term Expiration Date because of, for example, your termination of employment.  The Administrator can override the expiration provisions of Schedule I.

	 
	 

	Compliance

with Law

	You may not exercise the Option if the Company’s issuing stock upon such exercise would violate any applicable federal or state securities laws or other laws or regulations.  You may not sell or otherwise dispose of the Option Shares in violation of applicable law.  As part of this prohibition, you may not use the Cashless Exercise method if the Company’s insider trading policy then prohibits you from selling to the market.

	 
	 

	Additional

Conditions

to Exercise

	The Company may postpone issuing and delivering any Option Shares for so long as the Company determines to be advisable to satisfy the following:

·

its completing or amending any securities registration or qualification of the Option Shares or its or your satisfying any exemption from registration under any Federal or state law, rule, or regulation;

·

its receiving proof it considers satisfactory that a person seeking to exercise the Option after your death or Disability (as defined in Schedule I) is authorized and entitled to do so;

·

your complying with any requests for representations under the Plan; and

·

your complying with any federal or state tax withholding obligations.

		
	Additional

Representations

from You

	If you exercise the Option at a time when the Company does not have a current registration statement (generally on Form S-8) under the Securities Act of 1933 (the “Act”) that covers issuances of shares to you, you must comply with the following before the Company will issue the Option Shares to you.  You must —

·

represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the Option Shares for your own account and not with a view to reselling or distributing the Option Shares; and

2

·

agree that you will not sell, transfer, or otherwise dispose of the Option Shares unless:

—

a registration statement under the Act is effective at the time of disposition with respect to the Option Shares you propose to sell, transfer, or otherwise dispose of; or

—

Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under the Act is required.

		
	No Effect on

Employment

or Other

Relationship

	Nothing in this Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time, with or without cause.  The termination of employment or other relationship, whether by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under the Plan and any applicable employment or severance agreement or plan.

	 
	 

	Not a Stockholder

	You understand and agree that the Company will not consider you a stockholder, and you do not have any rights or privileges of a stockholder for any purpose with respect to any of the Option Shares unless and until you have exercised the Option, paid for the shares, and received evidence of ownership.

	 
	 

	Governing Law

	The laws of the State of Delaware will govern all matters relating to this Agreement, without regard to the principles of conflict of laws, except to the extent superseded by the laws of the United States of America.

	 
	 

	Notices

	Any notice you give to the Company must follow the procedures then in effect under the Plan and this Agreement.  If no other procedures apply, you must deliver your notice in writing by hand or by mail to the office of the Assistant Secretary designated by this Administrator.  If mailed, you should address it to such Assistant Secretary at the Company’s then corporate headquarters, unless the Company directs optionees to send notices to another corporate department or to a third party administrator or specifies another method of transmitting notice.  The Company will address any notices to you at your office or home address as reflected on the Company’s personnel or other business records.  You and the Company may change the address for notice by like notice to the other, and the Company can also change the address for notice by general announcements to optionees.

	 
	 

	Plan Governs

	Wherever a conflict may arise between the terms of this Agreement and the terms of the Plan, the terms of the Plan will control; provided, however, that this Agreement may impose greater restrictions on, or grant lesser rights, than the Plan.

3

SCHOOL SPECIALTY, INC.

2014 INCENTIVE PLAN 

STOCK OPTION AGREEMENT

OPTIONEE ACKNOWLEDGMENT

I acknowledge that I have received a copy of the Plan and this Agreement (including Schedule I).  I represent that I have read and am familiar with the terms of the Plan and this Agreement (including Schedule I).  By signing where indicated below, I accept the Option subject to all of the terms and provisions of this Agreement (including Schedule I) and the Plan, as may be amended in accordance with its terms.  I agree to accept as binding, conclusive, and final all decisions or interpretations of the Administrator concerning any questions arising under the Plan and this Agreement with respect to the Option.

NO ONE MAY SELL, TRANSFER, OR DISTRIBUTE THE OPTION OR THE SECURITIES THAT MAY 

BE PURCHASED UPON EXERCISE OF THE OPTION WITHOUT AN EFFECTIVE REGISTRATION 

STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO SCHOOL 

SPECIALTY, INC. OR OTHER INFORMATION AND REPRESENTATIONS SATISFACTORY TO 

SCHOOL SPECIALTY, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

		
	Employee

By:                                                                   

       Ryan Bohr

Date:  October 27, 2014

	SCHOOL SPECIALTY, INC.

By:                                                                        

Title:  President and Chief Executive Officer

Date:  October 27, 2014

4

Grant No. 20

SCHOOL SPECIALTY, INC.

2014 INCENTIVE PLAN

STOCK OPTION AGREEMENT

SCHEDULE I

Optionee Information:

Name:

Ryan Bohr

Option Information:

		
	Option:  11,500 Option Shares

	Exercise Price per Share: $130.00

	 
	 

	Date of Grant:  October 27, 2014

	Term Expiration Date:  October 27, 2024

Type of Option:  Nonqualified Stock Options

		
	Option Vesting Provisions

	Except as otherwise provided in the Plan and this Agreement, the Option will vest as to one-half of the Option Shares on the second anniversary of the Date of Grant and as to one-fourth of the Option Shares on each of the third and fourth anniversaries of the Date of Grant.

	 
	 

	Option Exercisability Provisions

	No portion of this Option may be exercised until such portion vests, and then only in accordance with the Plan and this Agreement.  Any unvested portions of the Option will vest and become exercisable upon a Change in Control.

	 
	 

	Option Expiration Rules

	Any unvested portions of the Option will expire immediately after you cease to be employed by the Company, after taking into account any accelerated vesting as provided above. Any vested and exercisable portions of the Option will remain exercisable until the earliest of the following to occur, and then immediately expire:

	 
	 

	 
	·

termination of your employment by the Company for Cause or upon your voluntary termination of employment

·

on the 90th day after termination of employment by the Company without Cause or your resignation with Good Reason

·

the earlier of (i) 180 days after your termination of employment due to a Disability and (ii) 30 days after you cease to have a Disability that resulted in the termination of your employment

·

180 days after termination of your employment due to your death 

·

the Term Expiration Date

5

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