Attached files
| file | filename |
|---|---|
| 10-Q - MSC INDUSTRIAL DIRECT CO INC | v170401_10q.htm |
| EX-31.2 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex31-2.htm |
| EX-31.1 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex31-1.htm |
| EX-32.2 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex32-2.htm |
| EX-32.1 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex32-1.htm |
| EX-10.5 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex10-5.htm |
| EX-10.2 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex10-2.htm |
| EX-10.1 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex10-1.htm |
| EX-10.4 - MSC INDUSTRIAL DIRECT CO INC | v170401_ex10-4.htm |
EXHIBIT
10.3
EXECUTIVE
INCENTIVE COMPENSATION RECOUPMENT POLICY
(Adopted
October 13, 2009)
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I.
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INTRODUCTION
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The Board
of Directors of MSC Industrial Direct Co., Inc. (the “Company”) has determined
that it is in the best interests of the Company to adopt a policy (the “Policy”)
providing for the Company’s recoupment of certain incentive compensation paid to
senior executives under certain circumstances. In cases of a
significant financial statement restatement, the Board may determine to recoup
incentive compensation which was paid or vested based upon the achievement of
certain financial results to the extent that the amount of such compensation
would have been lower if the financial results had been properly
reported. In cases of a significant financial restatement where a
senior executive’s misconduct has caused or partially caused the restatement,
the Board may determine to recoup all such incentive compensation and the
benefits and proceeds of all equity-based compensation from such senior
executive. The Board also has determined that it is in the best
interests of the Company to provide for the cancellation and/or recoupment of
equity awards and/or gains realized from the exercise of stock options where a
senior executive violates certain restrictive covenants following the
termination of the senior executive's employment.
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II.
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EFFECTIVE
DATE
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This
Policy shall apply to all Incentive Compensation paid or awarded on or after the
adoption of this Policy.
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III.
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DEFINITIONS
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For
purposes of this Policy, the following terms shall have the meanings set forth
below:
“Senior
Executives” shall mean executive officers designated by the Board as officers
for purposes of Section 16 (“Section 16 Officers”) of the Securities Exchange
Act of 1934, as amended, as well as the Company’s corporate
controller.
“Incentive
Compensation” shall mean bonuses or awards under the Company’s Annual Incentive
Compensation Plan for Executives or grants and awards under the Company’s 2005
Omnibus Equity Plan, as well as under any successor plans.
“Misconduct”
shall mean a knowing violation of SEC rules and regulations or Company
policy. Determinations of Misconduct for purposes of this Policy
shall be made by the Board in its sole and absolute discretion (or, if the Board
has delegated such authority to the Compensation Committee, by the Compensation
Committee in its sole and absolute discretion) independently of, and the Board
(or the Compensation Committee) shall not be bound by determinations by
management that a Senior Executive has or has not met any particular standard of
conduct under law or Company policy.
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IV.
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RECOUPMENT
OF INCENTIVE COMPENSATION
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In the
event of a significant restatement of financial results, other than as a result
of a change in accounting principles (a “Restatement”), the Board will review
all Incentive Compensation paid (or, in the case of equity-based compensation,
which vested) to Senior Executives on the basis of having met or exceeded
specific performance targets for performance periods during the Restatement
period. To the extent permitted by applicable law, the Board will
seek to recoup Incentive Compensation, in all appropriate cases (taking into
account all relevant factors, including whether the assertion of a recoupment
claim may prejudice the interests of the Company in any related proceeding or
investigation), paid (or in the case of equity-based compensation, which vested)
to any Senior Executive on or after the Effective Date of this
Policy, if and to the extent that (i) the amount (or vesting) of Incentive
Compensation was calculated based upon the achievement of certain financial
results that were subsequently reduced due to a Restatement, and (ii) the amount
(or vesting) of Incentive Compensation that would have been paid (or, in the
case of equity-based compensation, vested) to the Senior Executive had the
financial results been properly reported would have been lower than the amount
actually paid (or, in the case of equity-based compensation,
vested).
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V.
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RECOUPMENT
OF INCENTIVE COMPENSATION IN CASES OF
MISCONDUCT
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In
addition to the recoupment provided under Section IV (but without duplication),
in the event of a Restatement where a Senior Executive engaged in Misconduct
that caused or partially caused the need for the Restatement, the Board will
seek to require any or all of the following actions in all appropriate cases
(taking into account all relevant factors, including whether the assertion of a
recoupment claim may prejudice the interests of the Company in any related
proceeding or investigation) to the extent the Board deems appropriate with
respect to Incentive Compensation paid or awarded to such Senior Executive on or
after the Effective Date: (i) repayment by the Senior Executive of all Incentive
Compensation that was paid or vested based upon the achievement of financial
results that were subsequently reduced due to a Restatement; (ii) cancellation
of outstanding equity awards, including restricted share awards, restricted
stock unit awards and stock options; (iii) payment by the Senior Executive of
net proceeds resulting from the sale or other disposition of shares issued upon
the exercise of stock options; (iv) payment by the Senior Executive of net
proceeds resulting from the sale or other disposition of shares underlying any
restricted share awards or restricted stock unit awards upon or following the
vesting of such awards; (v) recoupment of any shares held by the Senior
Executive issued upon or with respect to which the restrictions have lapsed upon
the vesting of restricted share awards or restricted stock unit awards; and (vi)
recoupment of any shares held by the Senior Executive issued upon the exercise
of stock options.
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VI.
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ACKNOWLEDGEMENT
BY SENIOR EXECUTIVES
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Senior
Executives shall acknowledge this Policy and agree to the terms and provisions
of this Policy.
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VII.
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BINDING
EFFECT OF DETERMINATIONS BY BOARD;
DELEGATION
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The Board
may delegate to the Compensation Committee all determinations to be made and
actions to be taken by the Board under this Policy. Any determination
made by the Board or the Compensation Committee under this Policy shall be
final, binding and conclusive on all parties.
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VIII.
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LIMITATION
ON PERIOD FOR RECOUPMENT
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The Board
may only seek recoupment under Sections IV and V of this Policy if either (i)
the Restatement shall have occurred within 36 months of the publication of the
audited financial statements that have been restated, or (ii) the Audit
Committee of the Board shall have taken steps to consider a Restatement prior to
the end of 36 months after the publication of the audited financial statements
that are the subject of the Restatement and the Restatement occurs within 48
months of the publication of the audited financial statements that have been
restated.
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IX.
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SOURCES
OF RECOUPMENT
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The Board
may seek recoupment from the Senior Executives from any of the following
sources: prior incentive compensation payments; future payments of
incentive compensation; cancellation of outstanding equity awards; future equity
awards; and direct repayment.
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X.
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SEVERABILITY
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If any
provision of this Policy or the application of any such provision to any Senior
Executive shall be adjudicated to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Policy, and the invalid, illegal or unenforceable
provisions shall be deemed amended to the minimum extent necessary to render any
such provision or application enforceable.
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XI.
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NO
IMPAIRMENT OF OTHER REMEDIES
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This
Policy does not preclude the Company from taking any other action to enforce a
Senior Executive's obligations to the Company, including termination of
employment or institution of civil or criminal proceedings.
This
Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley
Act of 2002 that are applicable to the Company's Chief Executive Officer and
Chief Financial Officer.
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XII.
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RECOUPMENT
FOLLOWING TERMINATION OF EMPLOYMENT
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In the
event that following a Senior Executive’s termination of employment with the
Company (i) the Senior Executive discloses confidential information of the
Company, (ii) within two (2) years of such termination, the Senior Executive
directly or indirectly competes with the Company (including through employment
by any company which the Company has identified as a competitive company), or
(iii) within two (2) years of such termination, the Senior Executive solicits
any of the Company's customers or employees, the Board may take any one or more
of the following actions, to the extent permitted by applicable
law: (a) cancel any outstanding equity awards, including restricted
share awards, restricted stock unit awards and stock options; (b) recover any
net proceeds resulting from the sale or other disposition of shares issued upon
the exercise of stock options; (c) recover any net proceeds resulting from the
sale or other disposition of shares underlying any restricted share awards or
restricted stock unit awards upon or following the vesting of such awards; (d)
recoup any shares held by the Senior Executive issued upon or with respect to
which the restrictions have lapsed upon the vesting of restricted share awards
or restricted stock unit awards; and (e) recoup any shares held by the Senior
Executive issued upon the exercise of stock options, in the cases of clauses (b)
through (e) with respect to stock options that were exercised during the period
beginning two years before and ending two years after the Senior Executive’s
termination of employment and with respect to restricted share or restricted
stock unit awards that vested during the period beginning two years before and
ending two years after the Senior Executive’s termination of
employment.
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XIII.
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CHANGE
IN CONTROL
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In the
event of a Change in Control, as defined in the Company's 2005 Omnibus Equity
Plan (or any successor equity incentive plan), the Company's right to seek
recoupment of Incentive Compensation or to take any of the other actions
provided in Sections IV, V and XII of this Policy shall terminate, without
prejudice to any rights that the Company otherwise may have under applicable
law.
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