Exhibit 10.01

 

March 9, 2011

Jeffrey Kaczka

6031 Corwin Drive

Glenn Allen, VA 23059

Dear Jeff,

We are pleased to welcome you to MSC.  You will join the company on March 29, 2011 and will be appointed to the position of Executive Vice President, CFO & Executive Officer effective April 8, 2011.  The offer of employment made in this letter is subject to the approval of MSC’s Board of Director’s, which we expect to obtain on March 29, 2011.

As an exempt associate, your annualized base salary will be $400,000. This will be earned and paid, every other Thursday, at the bi-weekly rate of $15,384.62.  You will also receive a signing bonus of $200,000 payable in two installments.  The first installment of $100,000 shall be payable three months after your start date, which is in June, 2011.  The final installment of $100,000 will be payable in November 2011.  You will be eligible for a company bonus in November, 2012.  Although future bonuses are not guaranteed, your projected annual company bonus target will be $198,000.  These bonus targets vary each year and are based on company and individual performance, as well as Board approval.

Regarding the equity portion of your compensation package, you will receive a signing grant of $300,000 worth of restricted stock value pending Board approval at our next Board meeting.

For future equity, beginning October, 2011, you will be eligible for a total annual equity grant of $550,000 of which $200,000 will be in restricted stock value and $350,000 will be in stock option value.  The equity grant is not guaranteed, but based on company and individual performance, as well as Board approval.  The vesting schedule for restricted shares is 50% at the end of three years, and an additional 25% at the end of the fourth and fifth year.  The vesting schedule for stock options is 25% over a four-year period.

MSC will provide you with a leased, four-door sedan automobile valued at $47,500.  MSC will pay for the insurance, maintenance and gas for the vehicle.  In the alternative, you may opt for a car allowance of $1,100 per month.  Please be advised that either the lease or the allowance benefit is considered income and may have tax implications.  You should consult a tax expert for advice on this issue.

To help with the transition to your new location, the company will assist with relocation expenses as covered in MSC’s Relocation Policy, a copy of which is enclosed.  Relocation assistance is provided by Relocation Solutions, a service vendor doing business with MSC.  A representative from Relocation Solutions will contact you to begin the process.  You must work with this vendor to be eligible for this benefit.  As stated in the policy, if you leave MSC before two full years from your date of hire for this position, you will be responsible for repaying relocation expenses incurred on your behalf, subject to state and federal law.  As a condition of your relocation benefit, you are required to sign the enclosed Relocation Reimbursement Agreement & Policy Acknowledgement Form.

 

As a full-time associate of MSC, you may elect to participate in all of our benefits when eligible.  Our standard benefit package includes major medical/dental insurance, 401(k) savings plan and tuition reimbursement.  Based upon a start date within the month of March 2011, you will be eligible to enroll in our medical/dental insurance & 401(k) savings plans on May 1, 2011.

Enclosed is our new associate orientation packet that contains paperwork to be reviewed and completed prior to your start date.  Included in the packet is MSC’s “Associate Confidentiality, Non-Solicitation And Non-Competition Agreement,” as well as the “Prior Employment Compliance Agreement,” execution of which is a condition of your employment.  Neither this condition, nor this offer letter should be construed as a contract of employment.  If you have any questions about these agreements, please feel free to contact me at 516-812-1342.

Jeff, on behalf of everyone at MSC, I would like to welcome you to our team and wish you much success.

Sincerely,

/s/ Donna Lap

Donna Lap

VP, Employment & Associate Relations

 

Your signature below indicates that you have read and understand the contents of this letter.

 

Exhibit 10.02

 

General:

 

This policy explains the relocation and financial support available to Associates who are relocating.  Human Resources must initiate and approve in writing all relocation plans.  It is the intent of MSC Industrial Direct Co., Inc. to share the burden of reasonable expenses incurred in the relocation of an Associate and their family.  All reimbursable relocation expenses are charged to the hiring department budget.

·	All relocation activities must be coordinated through MSC’s relocation vendor.   Relocation expenses will not be reimbursed if the Associate does not use this vendor.

·	Relocation expenses must be incurred within one year from the Associate’s start or transfer date , unless otherwise discussed and approved by Human Resources.

·	All reimbursements must be accompanied by receipts and submitted via the MSC reimbursement process and be in accordance with the MSC Travel and Entertainment Expense Reimbursement and MSC Travel policies.  Human Resources must approve all relocation expenses.

·	You must either have accepted an offer of employment or be a current MSC Associate at the time an expense is submitted in order to receive these benefits.

·	Unused relocation benefits will be forfeited.

Relocation Vendor:

 

The relocation vendor coordinates market analyses, sale and purchase of housing or rental and move activities.  They will assist the Associate with referrals to third party vendors (real estate agents and movers, etc.) and manage the process on behalf of the Associate and MSC.  The relocation vendor will assign a real estate agent to you or you may request a particular agent.  This agent must be willing to work cooperatively with the relocation vendor.   Do not contact or engage any agent on your own.   Once selected, you must work with this agent on all sale, purchase or rental activities prior to, during, and after commitment until the process is complete.  If you are not pleased with the agent’s services, contact the relocation vendor and the agent will be changed.  If you sell, buy or rent a property without the use of the assigned agent or relocation vendor, your relocation benefits may be negatively impacted.

Commission on Sale of Property:

 

MSC will pay up to a 6% commission on the sale of the Associate’s current primary residence.

Closing Costs:

 

MSC will pay the normal, non-recurring closing costs on the sale and purchase of primary residences.  Reimbursable closing costs do not include buyer incentives or buyer closing costs.  Mortgage origination fees associated with the new residence will be reimbursed up to a maximum of 1 point, but may not be used to reduce the rate of the mortgage.

 

Moving of Household Goods:

 

MSC will pay for the shipment of goods including two vehicles, cartons and packing.  The movement of recreational vehicles or equipment (jet-ski’s, boats, playground equipment, etc.) or set up of electronic/stereo equipment is not covered.

 

Moving of Cats & Dogs:

 

Expenses related to moving cats and dogs will be reimbursed.

 

 

Storage:

 

If you have closed on the sale of your home and cannot move into your new home, MSC will pay for storage of household goods for up to 4 months.

Temporary Housing:

 

MSC protects the Associate from incurring two living expenses at the same time.  In the event the Associate moves to his/her new MSC job in advance of the sale of their current primary home and before finding permanent housing in their new location, temporary housing is offered for up to 4 months and arranged by the relocation vendor.  MSC will pay the rent directly to the rental property owner.  However, the lease must be in the Associate’s name.  In order to make such payment arrangements, a copy of the lease must be provided to MSC.  Additionally, MSC will pay for furniture rental and basic utilities (including heat/electric, basic cable but excluding telephone) for up to 4 months.

If the Associate closes on the purchase of his/her new home before the closing on the sale of their current home, MSC will cover the expense of duplicate housing in the amount of the original mortgage payment for up to four months.  Once the current home closes, the Associate becomes responsible for living expenses, whether temporary or permanent.

Interim Housing:

 

Interim housing is meant to provide short-term (up to one month) lodging (ex: residence inn or hotel) in the event that there is a brief gap between the closing on the sale of the current home and the imminent scheduled closing on the purchase of the new home.  MSC will arrange for interim housing either through our Travel Department or the relocation vendor.  MSC will pay the difference between the cost of the interim housing and the previous mortgage.  Laundry service, room service and movie expenses are not covered under this policy.

Refund of Security Deposits:

 

MSC will extend money for the security deposit on temporary housing.  These funds belong to MSC and are a temporary extension as an accommodation to the Associate.  It is the responsibility of the Associate to be sure that this deposit is returned to MSC by either the landlord or the Associate at the end of the short term lease.  If the Associate converts the lease to a long term lease at his/her own personal cost, the Associate will be liable to repay MSC for the security deposit.

Grossing-Up:

 

Certain monies paid for relocation are considered by the IRS as income to the Associate.  MSC will gross-up allowable relocation expenses so that the move is tax-neutral for the Associate and no out-of-pocket expenses are incurred.

The gross-up will come in the form of a tax assistance payment made at year end in the form of additional tax withholding paid by MSC and remitted directly to the taxing authority.  It will be reported as income tax withheld, along with normal withholding on your W-2 form.  The tax assistance payment will be determined by using a prescribed percentage (based on expected marginal tax rates) applied to the total non-deductible moving expense.  This payment is considered additional income and is also grossed-up.  Income tax resulting from the gain on the sale of the Associate’s home is not reimbursable under this payment.

Associates are advised to obtain personal tax advice regarding the effect the relocation assistance program will have on their taxes and financial situation.

 

 

Travel:

 

Travel for the purpose of relocation must be arranged & approved via the Human Resources Recruitment Department through MSC’s Travel Department and adhere to MSC’s travel policy.  Air travel purchases should be made at least 14 days in advance, unless approved otherwise by the Human Resources Recruitment Department. Travel is permitted for the following reasons:

House Hunting:   MSC will pay for up to two, 3-day house hunting trips for the Associate and family including flight, lodging, meals and car rental.

Family Visits: In the event an Associate is living separately from his/her immediate family, MSC will pay for flights home every other weekend for up to four months.

Final Relocation Trip: MSC will pay flight expenses for the Associate’s immediate family for the final trip to their new home.

Rental Assistance:

 

Breaking the Present Lease Commitment : If it is necessary to break a lease and a fee must be paid, MSC will reimburse the Associate the “break-lease” penalty to a maximum amount equal to 2 month’s rent. A copy of the current lease and appropriate documentation from the landlord or leaseholder will be required as proof for reimbursement.

Realtor Fee for New Residence : If the services of a real estate agent are used in the location of an apartment, MSC will reimburse the Associate up to a maximum amount equal to 1 ½ month’s rent for the rental fee.

Relocation Reimbursement:

 

If a relocated Associate elects to voluntarily transfer from the position for which they were relocated or leaves MSC before two full years from their date of transfer or date of hire for this position, the Associate must reimburse MSC as follows for relocation expenses incurred on his/her behalf, subject to state and federal law:

 
 

·	100% reimbursement to MSC if Associate leaves voluntarily or is terminated for cause within the first year of transfer or from date of hire

·	50% reimbursement to MSC if Associate leaves voluntarily or is terminated for cause within the second year of transfer or from date of hire

This condition should not be construed as a contract of employment.

Associates receiving relocation benefits will be provided with a copy of the MSC Relocation Policy.  Associates are required to acknowledge their understanding of this Relocation Policy and the reimbursement terms by signing the Relocation Reimbursement Agreement & Policy Acknowledgement Form.

MSC reserves the right to revise this policy at any time.  This policy is neither intended nor should be construed as a contract of employment.

Should Associates have questions or encounter circumstances that are not addressed in this policy, they should contact the Senior Recruitment Manager via the Human Resources Hotline at 516-812-1220 or 888-552-7752.

 

Exhibit 10.03

 

 

I have been provided a copy of MSC’s Relocation Policy.  Relocation assistance is provided by Relocation Solutions, a service vendor doing business with MSC.  I understand that I must work with this vendor to be eligible for relocation benefits.

I understand that I have up to one year from my date of transfer or hire (defined as the first day in my new position) to use this relocation benefit, after which it will expire.  Unused benefits will be forfeited.

I understand that if I elect to voluntarily transfer from the position for which I was relocated or leave MSC before two full years from my date of transfer or date of hire for this position, I will reimburse MSC as follows for relocation expenses incurred on my behalf, subject to state and federal law:

·	100% reimbursement to MSC if I leave voluntarily or are terminated for cause within the first year of transfer or from my date of hire

·	50% reimbursement to MSC if I leave voluntarily or are terminated for cause within the second year of transfer or from my date of hire

Furthermore, I understand that all travel and expense reimbursement requests pertaining to relocation must be accompanied by receipts and submitted for authorization in accordance with the MSC Travel and Entertainment Expense Reimbursement and MSC Travel policies.  Expenses must be submitted within one month from the time the expense is incurred.

Nothing in this Agreement is to be construed as an express or implied contract of employment.

By signing this document, I acknowledge that I have read, understand, and will comply with the Relocation Policy, and I accept the terms of this Reimbursement Agreement.

 

Return an original, signed document to the Senior Recruitment Manager at:

75 Maxess Road, Melville, NY  11747