EXHIBIT 10.30


 


INTERLINE BRANDS, INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT


 


THIS AGREEMENT is entered into as of the 30th day of April, 2007 (the “Effective Date”) by
and between INTERLINE BRANDS, INC., a Delaware corporation (the “Company”), and
Kenneth D. Sweder (“Executive”).


 


W I T N E S S E T H


 


WHEREAS, the Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders; and


 


WHEREAS, the Company recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control
may arise and that such possibility may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders;
and


 


WHEREAS, the Compensation Committee of the “Board” (as
defined in Section 1) has determined that it is in the best interests of
the Company and its stockholders to secure Executive’s continued services and
to ensure Executive’s continued and undivided dedication to Executive’s duties
in the event of any threat or occurrence of a “Change in Control” (as defined
in Section 1) of the Company; and


 


WHEREAS, the Compensation Committee, at a meeting held
on March 1, 2007, has authorized the Company to enter into this Agreement.


 


NOW, THEREFORE, for and in consideration of the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:


 


1.                                     Definitions.  As used in this Agreement, the following terms
shall have the respective meanings set forth below:


 


(a)           “Affiliate”
means, with  respect to a specified
person, a person  that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the person specified.


 


(b)           “Board”
means the Board of Directors of the Company.


 


(c)           “Bonus
Amount” means (i) the average of the annual bonus earned by Executive from
the Company (or its Affiliates) in respect of the last three (3) completed
fiscal years of the Company or such lesser number of fiscal years for which
Executive was employed by the Company and eligible to earn an annual bonus from
the Company immediately preceding Executive’s Date of Termination (annualized
in the event Executive was not employed by the Company (or its Affiliates) for
the whole of any such fiscal year), or (ii) if the Date of Termination
occurs before Executive has been employed for a full fiscal year, and before
the date Company pays Executive Executive’s annual bonus for the fiscal year in
which Executive’s employment commenced,


 

















 


Executive’s target annual bonus for the fiscal year of the Company
which includes Executive’s Date of Termination.


 


(d)           “Cause”
means (i) Executive’s conviction of, or pleading nolo contendere to, a felony,
(ii) Executive’s gross neglect of Executive’s duties to the Company, (iii) Executive’s
willful misconduct in connection with the performance of Executive’s duties to
the Company, which results in material and demonstrable damage to the Company
or (iv) Executive’s failure to follow the lawful directions of the Board,
consistent with Executive’s position with the Company; provided, however that
Executive shall not be deemed to have been terminated for Cause unless (A) written
notice has been delivered to Executive setting forth the reasons for the
Company’s intention to terminate Executive for Cause and (B) a period of
14 days has elapsed since delivery of such notice and, in the case of clauses (ii) and
(iv) above, Executive has failed to cure the circumstances claimed to
constitute Cause within such 14-day period. 
For purpose of the preceding sentence, no act or failure to act by
Executive shall be considered “willful” unless done or omitted to be done by
Executive in bad faith and without reasonable belief that Executive’s action or
omission was in the best interests of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board, based upon
the advice of counsel for the Company (or upon the instructions of any other
officer of the Company senior to Executive) shall be conclusively presumed to
be done, or omitted to be done, by Executive in good faith and in the best
interests of the Company.  Cause shall
not exist unless and until the Company has delivered to Executive a copy of a
resolution duly adopted by three-quarters (3/4) of the entire Board (excluding
Executive if Executive is a Board member) at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an opportunity
for Executive, together with counsel, to be heard before the Board), finding
that in the good faith opinion of the Board an event set forth in clauses (i),
(ii), (iii), or (iv) has occurred and specifying the particulars thereof
in detail.  The Company must notify
Executive of any event constituting Cause within ninety (90) days following
knowledge of any member of the Board other than Executive (if applicable) of
its existence or such event shall not constitute Cause under this Agreement.


 


(e)           “Change
in Control” means any of the following:  (i) any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (other than an Affiliate or any employee benefit plan (or any related
trust) of the Company or an Affiliate of the Company), (a “Person”) becomes
after the date hereof the beneficial owner of 50% or more of either the then
outstanding Stock or the combined voting power of the then outstanding voting
securities of the Company entitled to vote in the election of directors; (ii) during
any 24-month period individuals who, as of the Effective Date, constitute the
Board (the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided that any individual who becomes a director
after the Effective Date whose election, or nomination for election by the
Company’s shareholders, was approved by a vote or written consent of at least two-thirds
of the directors then comprising the Incumbent Directors shall be considered as
though such individual were an Incumbent Director, but excluding, for this
purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened 


 


2

















 


election contest relating to the election of the directors of the
Company (as such terms are used in Rule 14a-11 under the Exchange Act); (iii) the
consummation of a merger, reorganization or consolidation with respect to which
the individuals and entities who were the respective beneficial owners of the
Stock and voting securities of the Company immediately before such merger,
reorganization or consolidation do not, after such merger, reorganization or
consolidation, beneficially own, in substantially the same proportion as their
ownership, immediately before such merger, reorganization or consolidation,
directly or indirectly, more than 50% of, respectively, the then outstanding
common shares and the combined voting power of the then outstanding voting
securities entitled to vote in the election of directors; or (iv) the
approval by shareholders of the Company of 
(A) the sale or other disposition of all or substantially all of
the assets of the Company (other than to an Affiliate of the Company), or (B) the
liquidation or dissolution of the Company.


 


Notwithstanding the foregoing, a Change in Control of
the Company shall not be deemed to occur solely because any Person acquires
beneficial ownership of more than 50% of the then outstanding Stock as a result
of the acquisition of the Stock by the Company which reduces the number of
shares of Stock outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Stock that increases the percentage of outstanding Stock
beneficially owned by such person, a Change in Control of the Company shall
then occur.


 


(f)                                 “Code”
means the Internal Revenue Code of 1986, as amended, and regulations and
rulings thereunder.  References to a
particular section of the Code shall include references to successor
provisions.


 


(g)                              “Date
of Termination” means (1) the effective date on which Executive’s
employment by the Company terminates as specified in a prior written notice by
the Company or Executive, as the case may be, to the other, delivered pursuant
to Section 13 or (2) if Executive’s employment by the Company
terminates by reason of death, the date of death of Executive.


 


(h)                              “Disability”
means termination of Executive’s employment by the Company due to Executive’s
absence from Executive’s duties with the Company on a full-time basis for at
least one hundred eighty (180) consecutive days as a result of Executive’s
incapacity due to physical or mental illness.


 


(i)                                  “Exchange
Act” means the Securities Exchange Act of 1934, as amended.  References to a particular section of, or rule under,
the Exchange Act shall include references to successor provisions.


 


(j)                                  “Good
Reason” means, without Executive’s express written consent, the occurrence of
any of the following events after a Change in Control:


 


(i)            any (A) change in the duties or
responsibilities (including reporting responsibilities) of Executive that is
inconsistent in any material and adverse respect with Executive’s position(s),
duties or 


 


3

















 


responsibilities with the
Company immediately prior to such Change in Control (including any material and
adverse diminution of such duties or responsibilities); provided, however,
that Good Reason shall not be deemed to occur upon a change in duties or
responsibilities (other than reporting responsibilities) that is solely and
directly a result of the Company no longer being a publicly traded entity and
does not involve any other event set forth in this paragraph (j) or (B) material
and adverse change in Executive’s titles or offices (including, if applicable,
membership on the Board) with the Company as in effect immediately prior to
such Change in Control;


 


(ii)           a material breach of an employment
agreement to which Executive and the Company are parties;


 


(iii)          a reduction by the Company in
Executive’s rate of annual base salary or target annual bonus opportunity as in
effect immediately prior to such Change in Control or as the same may be increased
from time to time thereafter;


 


(iv)          any requirement of the Company that
Executive (A) be based anywhere more than thirty-five (35) miles from the
office where Executive is located at the time of the Change in Control, if such
relocation increases Executive’s commute by more than twenty (20) miles, or (B) travel
on Company business to an extent substantially greater than the travel
obligations of Executive immediately prior to such Change in Control;


 


(v)           a reduction by the Company of more
than 5% in Executive’s aggregate benefits under employee benefit plans, welfare
benefit plans and fringe benefit plans in which Executive is participating
immediately prior to such Change in Control, unless Executive is permitted to
participate in other plans providing Executive with substantially equivalent
benefits in the aggregate (at substantially equivalent cost with respect to
welfare benefit plans);


 


(vi)          the failure of the Company to provide
Executive with paid vacation in accordance with the most favorable vacation
policies of the Company and its Affiliates as in effect for Executive
immediately prior to such Change in Control, including the crediting of all
service for which Executive had been credited under such vacation policies
prior to the Change in Control;


 


(vii)         any refusal by the Company to continue
to permit Executive to engage in activities not directly related to the
business of the Company in which Executive was permitted to engage prior to the
Change in Control;


 


(viii)        any purported termination of Executive’s
employment which is not effectuated pursuant to Section 14 (and which will
not constitute a termination hereunder); or


 


4

















 


(ix)           the failure of the Company to obtain
the assumption and, if applicable, guarantee, agreement from any successor (and
parent corporation) as contemplated in Section 12(b).


 


An isolated,
insubstantial and inadvertent action taken in good faith and which is remedied
by the Company within ten (10) days after receipt of notice thereof given
by Executive shall not constitute Good Reason. 
Executive’s right to terminate employment for Good Reason shall not be
affected by Executive’s incapacity due to mental or physical illness and
Executive’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any event or condition constituting Good Reason; provided,
however, that Executive must provide notice of termination of employment
for Good Reason within ninety (90) days following Executive’s knowledge of an
event constituting Good Reason or such event shall not constitute a termination
for Good Reason under this Agreement.


 


(k)                                “Qualifying
Termination” means a termination of Executive’s employment (i) by the
Company other than for Cause or (ii) by Executive for Good Reason.  Termination of Executive’s employment on
account of death or Disability shall not be treated as a Qualifying
Termination.


 


(l)                                   “Safe
Harbor Amount” means the greatest pre-tax amount of “Payments” (as defined in Section 4(a))
that could be paid to Executive without causing Executive to become liable for
any “Excise Tax” (as defined in Section 4(a)) in connection therewith.


 


(m)                             “SEC”
means the Securities and Exchange Commission.


 


(n)                               “Stock”
means the Common Stock of the Company.


 


(o)                               “Termination
Period” means the period of time beginning with a Change in Control and ending
two (2) years following such Change in Control.  Notwithstanding anything in this Agreement to
the contrary, if (i) Executive’s employment is terminated prior to a
Change in Control for reasons that would have constituted a Qualifying
Termination if they had occurred following a Change in Control and (ii) (A) such
termination (or Good Reason event) was at the request of a third party who had
indicated an intention or taken steps reasonably calculated to effect a Change
in Control and a Change in Control involving such third party (or a party
competing with such third party to effectuate a Change in Control) does occur,
or (B) such termination (or Good Reason event) otherwise occurs in
connection with a potential Change in Control and such Change in Control does
occur, then for purposes of this Agreement, the date immediately prior to the
date of such termination of employment or event constituting Good Reason shall
be treated as the date of a Change in Control. 
For purposes of determining the timing of payments and benefits to
Executive under Section 3, the date of the actual Change in Control shall
be treated as Executive’s Date of Termination under Section 1(g).


 


5

















 


2.                                     Term
of Agreement.  This Agreement shall
be effective on the date hereof and shall continue in effect until and unless
the Company shall have given one (1) years’ written notice of
cancellation; provided, that, notwithstanding the delivery of any
such notice, this Agreement shall continue in effect for a period of two (2) years
after a Change in Control, if such Change in Control shall have occurred during
the term of this Agreement. 
Notwithstanding anything in this Section to the contrary, this
Agreement shall terminate if Executive or the Company terminates Executive’s
employment prior to a Change in Control except as provided in the second
sentence of Section 1(o).


 


3.                                     Payments
Upon Termination of Employment.


 


(a)                                 Qualifying
Termination - Severance.  If during
the Termination Period the employment of Executive shall terminate pursuant to
a Qualifying Termination, then the Company shall provide to Executive, subject
to the proviso to the first sentence of Section 10:


 


(i)            within ten (10) days following
the Date of Termination, a lump-sum cash amount equal to the sum of (A) Executive’s
base salary through the Date of Termination and any bonus amounts which have
become payable, to the extent not theretofore paid or deferred, (B) a pro
rata portion of Executive’s annual bonus for the fiscal year in which Executive’s
Date of Termination occurs in an amount equal to (1) Executive’s target
annual bonus, multiplied by (2) a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred
sixty-five (365), and (C) any accrued vacation pay, in each case to the
extent not theretofore paid; plus


 


(ii)           within ten (10) days following
the Date of Termination, a lump-sum cash amount equal to (i) one and
one-half (1.5) times Executive’s highest annual rate of base salary during the
12-month period immediately prior to Executive’s Date of Termination plus (ii) one
and one-half (1.5) times Executive’s Bonus Amount, paid within ten (10) days
following the Date of Termination; provided that, if necessary to avoid tax
penalties under Section 409A of the Code, the payment shall be delayed,
without interest, until the first day which is at least six months following
the Date of Termination.


 


(b)                                Qualifying
Termination - Benefits.  If during
the Termination Period the employment of Executive shall terminate pursuant to
a Qualifying Termination, the Company shall, subject to the proviso to the
first sentence of Section 10, continue to provide, for a period of
eighteen (18) months following Executive’s Date of Termination, Executive (and
Executive’s dependents, if applicable) with the same level of medical and
dental benefits upon substantially the same terms and conditions (including
contributions required by Executive for such benefits) as existed immediately
prior to Executive’s Date of Termination (or, if more favorable to Executive,
as such benefits and terms and conditions existed immediately prior to the
Change in Control); provided, that, if Executive cannot continue
to participate in the Company plans providing such benefits, the Company shall
otherwise provide such benefits on the same 


 


6

















 


after-tax basis as if continued participation had been permitted.  Notwithstanding the foregoing, in the event
Executive becomes reemployed with another employer and becomes eligible to
receive medical and/or dental benefits from such employer, the Company’s
obligation to provide such medical and/or dental benefits described herein
shall cease.


 


(c)           Execution
of Release.  Any payments or benefits
that would otherwise be payable or provided to Executive under Sections 4(a)(i)(B),
4(a)(ii) and 4(b) shall not be payable or provided unless and until
the Company has received from Executive a signed release of employment-related
claims against the Company, its Subsidiaries and their respective employees,
officers and directors, in a form prepared by the Company and reasonably
acceptable to Executive.


 


(d)           Nonqualifying
Termination.  If during the
Termination Period the employment of Executive shall terminate other than by
reason of a Qualifying Termination, then the Company shall pay to Executive
within thirty (30) days following the Date of Termination, a lump-sum cash
amount equal to the sum of Executive’s base salary through the Date of
Termination and any bonus amounts which have become payable, to the extent not
theretofore paid or deferred, and any accrued vacation pay, to the extent not
theretofore paid.  The Company may make
such additional payments, and provide such additional benefits, to Executive as
the Company and Executive may agree in writing, or to which Executive may be
entitled under the compensation and benefit plans, policies, and arrangements
of the Company.


 


4.                                      Certain
Additional Payments by the Company.


 


(a)           If
it is determined (as hereafter provided) that any payment or distribution by
the Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (each a
“Payment”), would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision thereto) or to any similar tax imposed by
state or local law, or any interest or penalties with respect to such excise
tax (such tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the “Excise Tax”), then Executive will be
entitled to receive an additional payment or payments (a “Gross-Up Payment”) in
an amount such that, after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the previous sentence, if the aggregate value of the Payments
for purposes of Sections 280G and 4099 of the Code equals or exceeds 100%, but
is not greater than 110%, of the Safe Harbor Amount, then no Gross-Up Payment
shall be payable to Executive and the aggregate amount of Payments payable to
Executive shall be reduced in the manner selected by Executive to the Safe
Harbor Amount.


 


7

















 


(b)           Subject
to the provisions of Section 4(f) hereof, all determinations required
to be made under this Section 4, including whether an Excise Tax is
payable by Executive and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, will be made by
the public accounting firm that is retained by the Company as of the date
immediately prior to the Change in Control (the “Accounting Firm”).  Executive will direct the Accounting Firm to
submit its determination and detailed supporting calculations to both the
Company and Executive within 15 calendar days after the date of Executive’s
termination of employment, if applicable, and any other such time or times as
may be requested by the Company or Executive. 
If the Accounting Firm determines that any Excise Tax is payable by
Executive, the Company will pay the required Gross-Up Payment to Executive within
five business days after receipt of such determination and calculations.  If the Accounting Firm determines that no
Excise Tax is payable by Executive, it will, at the same time as it makes such
determination, furnish Executive with an opinion that Executive has substantial
authority not to report any Excise Tax on Executive’s federal, state, local
income or other tax return.  Subject to
the provisions of this Section, any determination by the Accounting Firm as to
the amount of the Gross-Up Payment will be binding upon the Company and
Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (an “Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that an Underpayment is made and
the Company exhausts or fails to pursue its remedies pursuant to Section 4(f) hereof
and Executive thereafter is required to make a payment of any Excise Tax,
Executive will direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and Executive as promptly as
possible.  Any such Underpayment will be
promptly paid by the Company to, or for the benefit of, Executive within five
business days after receipt of such determination and calculations.


 


(c)           The
Company and Executive will each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determination contemplated by Section 4(b) hereof.


 


(d)           The
federal, state and local income or other tax returns filed by Executive will be
prepared and filed on a consistent basis with the determination of the
Accounting Firm with respect to the Excise Tax payable by Executive.  Executive will make proper payment of the
amount of any Excise Tax and, at the request of the Company, provide to the
Company true and correct copies (with any amendments) of Executive’s federal
income tax return as filed with the Internal Revenue Service and corresponding
state and local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company,
evidencing such payment.  If prior to the
filing of Executive’s federal income tax return, or 


 


8

















 


corresponding state or local tax return, if relevant, the Accounting
Firm determines that the amount of the Gross-Up Payment should be reduced,
Executive will within five business days pay to the Company the amount of such
reduction.


 


(e)                                The
fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by Sections 4(b) and
(d) hereof will be borne by the Company. 
If such fees and expenses are initially advanced by Executive, the Company
will reimburse Executive the full amount of such fees and expenses within five
business days after receipt from Executive of a statement therefor and
reasonable evidence of Executive’s payment thereof.


 


(f)                                  Executive
will notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of a Gross-Up
Payment.  Such notification will be given
as promptly as practicable but no later than 10 business days after Executive
actually receives notice of such claim and Executive will further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by Executive).  Executive will not pay such claim prior to
the earlier of (i) the expiration of the 30-calendar-day period following
the date on which Executive gives such notice to the Company and (ii) the
date that any payment of amount with respect to such claim is due.  If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive will:


 


(i)            provide the Company with any written
records or documents in Executive’s possession relating to such claim
reasonably requested by the Company;


 


(ii)           take such action in connection with
contesting such claim as the Company will reasonably request in writing from
time to time, including without limitation accepting legal representation with
respect to such claim by an attorney competent in respect of the subject matter
and reasonably selected by the Company;


 


(iii)          cooperate with the Company in good
faith in order effectively to contest such claim; and


 


(iv)          permit the Company to participate in
any proceedings relating to such claim;


 


provided, however, that the
Company will bear and pay directly all costs and expenses (including interest
and penalties) incurred in connection with such contest and will indemnify and
hold harmless Executive, on an after-tax basis, for and against any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed
as a result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of
this Section 4(f), the Company will control all proceedings taken in
connection with the contest of any claim contemplated by this Section 4(f) and,
at its sole option, may pursue or forego any and all administrative appeals,
proceedings, 


 


9

















 


hearings and conferences
with the taxing authority in respect of such claim (provided that Executive may
participate therein at Executive’s own cost and expense) and may, at its
option, either direct Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company
will determine; provided, however, that if the Company directs Executive to pay
the tax claimed and sue for a refund, the Company will advance the amount of
such payment to Executive on an interest-free basis and will indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax,
including interest or penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any extension of the statute
of limitations relating to payment of taxes for the taxable year of Executive
with respect to which the contested amount is claimed to be due is limited
solely to such contested amount. 
Furthermore, the Company’s control of any such contested claim will be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive will be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.


 


(g)           If,
after the receipt by Executive of an amount advanced by the Company pursuant to
Section 4(f) hereof, Executive receives any refund with respect to
such claim, Executive will (subject to the Company’s complying with the
requirements of Section 4(f) hereof) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto).  If,
after the receipt by Executive of an amount advanced by the Company pursuant to
Section 4(f) hereof, a determination is made that Executive will not
be entitled to any refund with respect to such claim and the Company does not
notify Executive in writing of its intent to contest such denial or refund
prior to the expiration of 30 calendar days after such determination, then such
advance will be forgiven and will not be required to be repaid and the amount
of such advance will offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid pursuant to this Section 4.


 


5.                                     Withholding
Taxes.  The Company may withhold from
all payments due to Executive (or Executive’s beneficiary or estate) hereunder
all taxes which, by applicable federal, state, local or other law, the Company
is required to withhold therefrom.  In
the case of the withholding of an Excise Tax, such withholding shall be
consistent with any determination made under Section 4.


 


6.                                     Reimbursement
of Expenses.  If any contest or
dispute shall arise under this Agreement involving termination of Executive’s
employment with the Company or involving the failure or refusal of the Company
to perform fully in accordance with the terms hereof, the Company shall
reimburse Executive, on a current basis, for all reasonable legal fees and
expenses, if any, incurred by Executive in connection with such contest or
dispute (regardless of the result thereof); provided, however,
Executive shall be required to repay any such amounts to the Company to the
extent that a court or an arbitration panel issues a final order from which no
appeal can be taken, or with respect to which the time period to appeal has
expired, setting forth that Executive has not substantially prevailed on at
least one material issue in dispute.


 


10














 


7.                                     Employment
by Subsidiaries.  Employment by the
Company for purposes of this Agreement shall include employment by any
Affiliate.


 


8.                                     Restrictive
Covenants.


 


(a)                                  Non-Competition
and Non-Solicitation.  Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its Affiliates, the valuable confidential business information
in Executive’s possession and the customer goodwill associated with the ongoing
business practice of the Company, and accordingly agrees as follows:


 


(i)            For a period ending on the
expiration of one year following the termination of Executive’s employment (the
“Restricted Period”), Executive will not directly or indirectly, (A) engage
in any business for Executive’s own account that competes with the business of
the Company, (B) enter the employ of, or render any services to, any
person engaged in any business that competes with the business of the Company, (C) acquire
a financial interest in, or otherwise become actively involved with, any person
engaged in any business that competes with the business of the Company,
directly or indirectly, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant, or (D) interfere with
business relationships (whether formed before or after the date of this
Agreement) between the Company or any of its Affiliates that are engaged in a
business similar to the business of the Company (the “Company Affiliates”) and
customers or suppliers of the Company or the Company Affiliates.


 


(ii)           Notwithstanding anything to the
contrary in this Agreement, Executive may directly or indirectly own, solely as
a passive investment, securities of any person engaged in the business of the
Company which are publicly traded on a national or regional stock exchange or
on the over-the-counter market if Executive (A) is not a controlling
person of, or a member of a group which controls, such person and (B) does
not, directly or indirectly, own one percent (1%) or more of any class of
securities of such  person.


 


(iii)          During the Restricted Period, and for
an additional one year after the end of the Restricted Period, Executive shall
not, directly or indirectly, (A) without the written consent of the
Company, solicit or encourage any employee of the Company or the Company
Affiliates to leave the employment of the Company or the Company Affiliates, or
(B) without the written consent of the Company (which shall not be
unreasonably withheld), hire any such employee who has left the employment of
the Company or the Company Affiliates (other than as a result of the
termination of such employment by the Company or the Company Affiliates) within
one year after the termination of such employee’s employment with the Company
or the Company Affiliates.


 


11

















 


(iv)          During the Restricted Period,
Executive will not, directly or indirectly, solicit or encourage to cease to
work with the Company or the Company Affiliates any consultant then under
contract with the Company or the Company Affiliates.


 


(b)                               Non-Disclosure
of Confidential Information. 
Executive will not at any time (whether during or after Executive’s
employment with the Company) disclose or use for Executive’s own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company and any of its Subsidiaries or Affiliates,
any trade secrets, information, data, or other confidential information
relating to customers, development programs, costs, marketing, trading,
investment, sales activities, promotion, credit and financial data,
manufacturing processes, financing methods, plans, or the business and affairs
of the Company generally, or of any Subsidiary or Affiliate of the Company, provided,
however, that the foregoing shall not apply to information which is
generally known to the industry or the public other than as a result of
Executive’s breach of this covenant. Executive agrees that upon termination of
Executive’s employment with the Company for any reason, Executive will return
to the Company immediately all memoranda, books, papers, plans, information,
letters and other data, and all copies thereof or therefrom, in any way relating
to the business of the Company and its Affiliates, except that Executive may
retain personal notes, notebooks and diaries. Executive further agrees that
Executive will not retain or use for Executive’s account at any time any trade
names, trademark or other proprietary business designation used or owned in
connection with the business of the Company or its Affiliates.


 


(c)                                Non-disparagement.  Executive agrees (whether during or after
Executive’s employment with the Company) not to issue, circulate, publish or
utter any false or disparaging statements, remarks or rumors about the Company
or the officers or directors of the Company other than to the extent reasonably
necessary in order to (i) assert a bona fide claim against the Company
arising out of Executive’s employment with the Company, or (ii) respond in
a truthful and appropriate manner to any legal process or give truthful and
appropriate testimony in a legal or regulatory proceeding.


 


(d)                               Mutual
Dependence of Covenants and Condition Subsequent.  Executive covenants and agrees to be bound by
the restrictive covenants and agreements contained in this Section 8 to
the maximum extent permitted by Florida law, it being the intent and spirit of
the parties that the restrictive covenants and agreements contained in this
Agreement shall be valid and enforceable in all respects, and, subject to the
terms and conditions of this Agreement, Executive’s compliance with the
covenants contained in Section 8(a) is mutually dependent upon and a
condition subsequent to the Company’s obligation to make the payments described
in Section 3 of this Agreement and such payments shall immediately cease
upon any breach of Section 8(a). 
Likewise, if Executive commences any action in court or in arbitration
challenging the validity of, seeking to invalidate or otherwise seeking some
sort of declaration that the covenants and agreements in Section 8(a) are
void, voidable or invalid, the Company’s obligations to make the payments
described in Section 3 of this Agreement shall immediately cease as of the
time of the commencement of such action or proceeding.  If the Company does not 


 


12

















 


discover Executive’s breach of Section 8(a) or the
commencement of any such action or arbitration proceedings until after one or
more payments under Section 3 have been made to Executive, Executive shall
be obligated to immediately return all such payments to the Company that were
paid and received after the breach of Section 8(a).


 


(e)           Remedies
Upon Breach.  If Executive breaches
the provisions of Sections 8 (a), (b) or (c), the Company shall have the
right to have such restrictive covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach of such restrictive
covenants would cause irreparable injury to the Company and that money damages
would not provide an adequate remedy for such injury.  Accordingly, the Company shall be entitled to
injunctive relief to enforce the terms of such restrictive covenants and to
restrain Executive from any violation thereof. 
The rights and remedies set forth in this Section 8(e) shall
be independent of all other others rights and remedies available to the Company
for a breach of such restrictive covenants, and shall be severally enforceable
from, in addition to, and not in lieu of, any other rights and remedies
available at law or in equity.


 


9.                                     Survival.  The respective obligations and benefits
afforded to the Company and Executive as provided in Sections 3 (to the extent that
payments or benefits are owed as a result of a termination of employment that
occurs during the term of this Agreement), 4 (to the extent that Payments are
made to Executive as a result of a Change in Control that occurs during the
term of this Agreement), 5, 6, 12(c) and 10 shall survive the termination
of this Agreement.


 


10.                               Full
Settlement; Resolution of Disputes. 
The Company’s obligation to make any payments and provide any benefits
pursuant to this Agreement and otherwise to perform its obligations hereunder
shall be in lieu and in full settlement of all other severance payments to
Executive under any other severance or employment agreement between Executive
and the Company, and any severance plan of the Company; provided, however,
that if any such other agreement or plan would provide Executive with a greater
payment or more or longer benefits in respect of any particular item described
hereunder (e.g., severance, welfare benefits), then Executive shall receive
such particular item of payment and/or benefit pursuant to such other agreement
or plan, in lieu of receiving that particular item pursuant to this
Agreement.  The Company’s obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others.  In no event shall
Executive be obligated to seek other employment or take other action by way of
mitigation of the amounts payable and benefits provided to Executive under any
of the provisions of this Agreement and, except as provided in Section 3(b),
such amounts shall not be reduced whether or not Executive obtains other
employment.  The parties agree that any
controversy or claim of either party hereto arising out of or in any way
relating to this Agreement, or breach thereof, shall be settled by final and
binding arbitration in Jacksonville, Florida by three arbitrators in accordance
with the rules of the American Arbitration Association applicable to the
resolution of employment disputes, and that judgment upon any award rendered
may be entered by the prevailing party in any court having jurisdiction
thereof.  The Company shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section.


 


13

















 


11.                               Scope
of Agreement.  Nothing in this
Agreement shall be deemed to entitle Executive to continued employment with the
Company or its Subsidiaries, and if Executive’s employment with the Company or
its Subsidiaries shall terminate prior to a Change in Control, Executive shall
have no further rights under this Agreement (except as otherwise provided
hereunder); provided, however, that any termination of Executive’s
employment with the Company or its Subsidiaries during the Termination Period
shall be subject to all of the provisions of this Agreement.


 


12.                               Successors;
Binding Agreement.


 


(a)           This
Agreement shall not be terminated by any Change in Control or other merger,
consolidation, statutory share exchange, sale of substantially all the assets
or similar form of corporate transaction involving the Company (a “Business
Combination”).  In the event of any
Business Combination, the provisions of this Agreement shall be binding upon
the surviving corporation, and such surviving corporation shall be treated as
the Company hereunder.


 


(b)           The
Company agrees that in connection with any Business Combination, it will cause
any successor entity to the Company unconditionally to assume (and for any
parent entity in such Business Combination to guarantee), by written instrument
delivered to Executive (or Executive’s beneficiary or estate), all of the
obligations of the Company hereunder.


 


(c)           This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. 
If Executive shall die while any amounts would be payable to Executive
hereunder had Executive continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to such person or persons appointed in writing by Executive to receive such
amounts or, if no person is so appointed, to Executive’s estate.


 


13.                               Notice.  (a)  For
purposes of this Agreement, all notices and other communications required or
permitted hereunder shall be in writing and shall be by hand delivery or by
registered or certified mail, return receipt requested, postage prepaid, or by
nationally recognized overnight courier service, addressed as follows:


 


If to Executive, to Executive’s principal residence as
reflected in the records of the Company.


 


If to the Company:


 


Interline Brands, Inc.

801 West Bay Street

Jacksonville, Florida 32204

Attn.:  Chief Executive Officer


 


14

















 


or to
such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.


 


14.           A
written notice of Executive’s Date of Termination by the Company or Executive,
as the case may be, to the other, shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the
provision so indicated and (iii) specify the termination date (which date
shall be not less than fifteen (15) (thirty (30), if termination is by the
Company for Disability) nor more than sixty (60) days after the giving of such
notice).  The failure by Executive or the
Company to set forth in such notice any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of Executive or
the Company hereunder or preclude Executive or the Company from asserting such
fact or circumstance in enforcing Executive’s or the Company’s rights
hereunder.


 


15.           GOVERNING
LAW; VALIDITY.  THE INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
FLORIDA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, OF SUCH
PRINCIPLES OF ANY OTHER JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF FLORIDA.  THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT.


 


16.           Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.


 


17.           Miscellaneous.  No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. 
Failure by Executive or the Company to insist upon strict compliance
with any provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including, without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.  Except as otherwise
specifically provided herein, the rights of, and benefits payable to,
Executive, Executive’s estate or Executive’s beneficiaries pursuant to this
Agreement are in addition to any rights of, or benefits payable to, Executive,
Executive’s estate or Executive’s 


 


15

















 


beneficiaries under any other employee benefit plan or compensation
program of the Company.


 


IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by a duly authorized officer of the Company and
Executive has executed this Agreement as of the day and year first above
written.


 


 


	
   

  	
  INTERLINE BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michael J. Grebe

  
	
   

  	
  Name: Michael j. Grebe

  
	
   

  	
  Title: Chairman and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kenneth D. Sweder

  
	
   

  	
  Kenneth D. Sweder

  



 


16