Document:

EXHIBIT
10.31

 

FIRST
AMENDMENT TO CHANGE IN CONTROL 

SEVERANCE AGREEMENT

 

THIS AGREEMENT (“Agreement”) is made and
entered into this 20th day of October, 2008 (the “Effective Date”),
by and between INTERLINE BRANDS, INC., a Delaware corporation (“Company”),
and Kenneth D. Sweder (“Executive”).

 

WHEREAS, the Company and the Executive desire
to amend the Change in Control Severance Agreement entered into by, and between
the parties, dated as of April 30, 2007 (the “Change in Control
Agreement”).

 

NOW,
THEREFORE, in
consideration of the premises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive agree as follows:

 

1.                                       Section 3(a)(ii) of
the Change in Control Agreement is hereby amended by deleting each reference to
“one and one-half (1.5)” and replacing it with “one and three-quarters (1.75)”.

 

2.                                       Section 3(b) of
the Change in Control Agreement is hereby amended by deleting the reference to “eighteen
(18)” and replacing it with “twenty-one (21)”.

 

3.                                       Section 8(a)(i) of
the Change in Control Agreement is hereby amended to read in its entirety as
follows:

 

“(i)                               For
a period ending on the expiration of two years 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 as of the date of
termination of the Executive’s employment, (B) enter the employ of, or render
any services to, any person engaged in any business that competes with the
business of the Company as of the date of termination of the Executive’s
employment, (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 as of the date of termination of the Executive’s
employment, 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 as of the date of termination
of the Executive’s employment (the “Company Affiliates”) and customers or
suppliers of the Company or the Company Affiliates.”

 

4.                                       Sections
16 and 17 of the Change in Control Agreement are hereby renumbered as Sections
17 and 18.  A new Section 16 of the
Change in Control is hereby added to read in its entirety as follows:

 

 

“16.                           Consent
to Jurisdiction.  Except as otherwise
specifically provided herein, Executive and the Company each hereby irrevocably
submits to the exclusive jurisdiction of any state or federal court serving
Duval County, Florida over any dispute arising out of or relating to this
Agreement.”

 

5.                                       Except
as modified or amended herein, the Change in Control Agreement remains in full
force and effect.  Nothing contained
herein invalidates or shall impair or release any covenant, condition or
stipulation in the Change in Control Agreement, and the same, except as herein
modified and amended, shall continue in full force and effect.

 

6.                                       This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which taken together shall constitute one
Agreement.  The parties specifically
agree that facsimile signatures are acceptable and permitted and shall be
considered original and authentic.  Each
party executing this Agreement represents that such party has the full
authority and legal power to do so.

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

 

 

	
   

  	
  INTERLINE
  BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael J. Grebe

  
	
   

  	
   

  	
  Name:

  	
  Michael
  Grebe

  
	
   

  	
   

  	
  Title:

  	
  Chairman &
  Chief Executive

  
	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth D. Sweder

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  D. Sweder

  

 

2EXHIBIT
10.32

 

Performance-Based
Restricted Share Units

EXHIBIT A

 

INTERLINE
BRANDS, INC.

2004 EQUITY INCENTIVE
PLAN

 

RESTRICTED SHARE
UNIT AGREEMENT

 

THIS RESTRICTED SHARE UNIT AGREEMENT (the “Agreement”),
is made and entered into effective as of the 20th day
of October, 2008 (hereinafter the “Date of Grant”), between Interline
Brands, Inc., a New Jersey corporation (the “Company”), and Kenneth
D. Sweder (the “Participant”).

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the Interline Brands, Inc.
2004 Equity Incentive Plan (the “Plan”), pursuant to which awards of
Restricted Share Units may be granted; and

 

WHEREAS, the Compensation Committee of the Board of
Directors of the Company (the “Committee”) has determined that it is in
the best interests of the Company and its stockholders to grant to the
Participant an award of Restricted Share Units as provided herein and subject
to the terms set forth herein.

 

NOW, THEREFORE, for and in consideration of the
premises and the covenants of the parties contained in this Agreement, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto, for themselves, their successors and assigns,
hereby agree as follows:

 

1.     Grant
of Restricted Share Units.  The
Company hereby grants on the Date of Grant, to the Participant a total of 40,551
Restricted Share Units (the “Award”), on the terms and conditions set
forth in this Agreement and as otherwise provided in the Plan.  Such Restricted Share Units shall be credited
to a separate account maintained for the Participant on the books of the
Company (the “Account”).  On any
given date, the value of each Restricted Share Unit comprising the Award shall
equal the Fair Market Value of one share of Common Stock.  The Award shall vest and settle in accordance
with Section 3 hereof.

 

2.     Incorporation
by Reference, Etc.  The provisions of
the Plan are hereby incorporated herein by reference.  Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement
shall have the definitions set forth in the Plan.  The Committee shall have final authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations under them, and its decision shall be binding and conclusive
upon the Participant and his legal representative in respect of any questions
arising under the Plan or this Agreement.

 

 

3.     Terms
and Conditions.

 

(a)           Vesting, Settlement and Forfeiture.  Except as otherwise provided in the Plan and
this Agreement, and contingent upon the Participant’s continued service to the
Company, the Award shall vest and become non-forfeitable as follows:

 

(i)            Performance-Based Vesting.  The Award shall become vested on the date
(the “Performance-Based Vesting Date”) that is the earliest to occur of
the following:

 

(A)          the fourth anniversary of the Date of
Grant, provided that (1) the average daily closing price of a share of
Common Stock during any 20-consecutive-trading-day period commencing on or
after the Date of Grant (“Average Closing Price”) equals or exceeds
$32.50 prior to the fourth anniversary of the Date of Grant; and (2) the
Participant’s employment has not terminated prior to the fourth anniversary of
the Date of Grant; or

 

(B)           the date (the “Residual Vesting
Date”) that is the later of (1) the date on which the Average Closing
Price equals or exceeds $35.00 and (2) the fifth anniversary of the Date
of Grant, provided that the Participant’s employment has not yet terminated as
of the Residual Vesting Date, and provided further that the Residual Vesting
Date occurs not later than the seventh anniversary of the Date of Grant.  For the avoidance of doubt, the Award shall
not vest under this Section 3(a)(i)(B), unless and until the conditions
described in both clause (1) and clause (2) hereof are satisfied.

 

(ii)           As soon as is administratively
practicable (but in no event later than 14 days) following the
Performance-Based Vesting Date,  the
Company shall (i) issue and deliver to the Participant one share of Common
Stock for each Restricted Share Unit subject to the Award (the “RSU Shares”)
(and, upon such settlement, the Restricted Share Units shall cease to be
credited to the Account) and (ii) enter the Participant’s name as a
stockholder of record with respect to the RSU Shares on the books of the
Company.

 

(iii)          Forfeiture of Unvested Award.  If the Award does not vest on or before the
seventh anniversary of the Date of Grant, the Restricted Share Units shall be
irrevocably forfeited without consideration and the shares of Common Stock
representing such unvested amount may be used for other Awards under the Plan.

 

(b)           Restrictions.  The Award granted hereunder may not be sold,
pledged or otherwise transferred (other than by will or the laws of decent and
distribution) and may not be subject to lien, garnishment, attachment or other
legal process.  The Participant
acknowledges and agrees that, with respect to each Restricted Share Unit credited
to his 

 

2

 

Account, he has no
voting rights with respect to the Company unless and until each such Restricted
Share Unit is settled in RSU Shares pursuant to Section 3(a) hereof.

 

(c)           Effect of Termination of
Employment or Change in Control.

 

(i)              Except
as otherwise provided in this Section 3(c), if the Participant’s
employment with the Company terminates prior to the Performance-Based Vesting
Date for any reason, any unvested Restricted Share Units shall be forfeited
without consideration to the Participant.

 

(ii)           Upon the termination of Participant’s
employment with the Company due to his death or by the Company due to his
Disability, all unvested Restricted Share Units shall vest and be settled in
shares of Common Stock as soon as reasonably practicable (but in no event later
than 14 days) following the date of termination.

 

(iii)          Upon (x) the termination of the
Participant’s employment without Cause or (y) the Participant’s voluntary
termination for “Good Reason” (as that term is defined in a written employment
agreement between the Participant and the Company in effect at the date of
termination, it being understood that if there is no such employment agreement,
or if the employment agreement does not contain a definition of Good Reason,
then Good Reason shall be inapplicable for purposes of this Agreement), in
either case provided that the Applicable Target has been achieved, all unvested
Restricted Share Units shall vest and be settled in shares of Common Stock as
soon as reasonably practicable (but in no event later than 14 days) following
the date of termination.  The “Applicable
Target” means:  (1) if termination
of employment occurs on or prior to the fourth anniversary of the Date of
Grant, the Average Closing Price equals or exceeds $32.50 prior to the date of
termination; or (2) if termination occurs after the fourth anniversary and
on or prior to the seventh anniversary of the Date of Grant, the Average
Closing Price equals or exceeds $35.00 prior to the date of termination.

 

(iv)          Upon the termination of the
Participant’s employment for Retirement (as defined below), any unvested
Restricted Share Units shall vest on the applicable date on which they would
otherwise have vested (if at all) in accordance with Section 3(a) had
the Participant’s employment not so terminated, and such Restricted Share Units
shall be settled in shares of Common Stock as soon as reasonably practicable
(but in no event later than 14 days) following such applicable date.

 

For purposes of this Agreement, Retirement shall mean the voluntary termination of a
Participant’s employment by the Company after the Participant is fifty-five
(55) years of age and has at least ten (10) years of service with the
Company.

 

Notwithstanding anything in the Plan to the contrary, if a Change in
Control occurs prior to the Participant’s termination of employment, then any
unvested Restricted Share 

 

3

 

Units outstanding
immediately prior to the Change in Control shall vest and be settled in shares
of Common Stock (or the cash equivalent thereof) as soon as reasonably
practicable (but in no event later than 14 days) following the Change in
Control.

 

(d)           Dividends.  If on any date dividends are paid on shares
of Common Stock (“Shares”) underlying the Award (the “Dividend
Payment Date”), then the number of Restricted Share Units credited to the
Account shall, as of the Dividend Payment Date, be increased by that number of
Restricted Share Units equal to: (a) the product of (i) the number of
Restricted Share Units in the Account as of the Dividend Payment Date and (ii) the
per Share cash amount of such dividend (or, in the case of a dividend payable
in Shares or other property, the per Share equivalent cash value of such
dividend as determined in good faith by the Committee) divided by (b) the
Fair Market Value of a Share on the Dividend Payment Date.  Such additional Restricted Share Units shall
also be subject to the restrictions in Section 3(b) and the other
terms and conditions of this Agreement.

 

(e)           Taxes and Withholding.  Upon the settlement of the Award in
accordance with Section 3(a) or Section 3(c) hereof, the
Participant shall recognize taxable income in respect of the Award and the
Company shall report such taxable income to the appropriate taxing authorities
in respect of the Award as it determines to be necessary and appropriate.  Upon the settlement of the Award in RSU
Shares, the Participant shall be required as a condition of such settlement to
pay to the Company by check or wire transfer the amount of any income, payroll,
or social tax withholding that the Company determines is required; provided
that the Participant may elect to satisfy such tax withholding obligation by
having the Company withhold from the settlement that number of RSU Shares
having a Fair Market Value equal to the amount of such withholding; provided,
further, that the number of RSU Shares that may be so withheld by the
Company shall be limited to that number of RSU Shares having an aggregate Fair
Market Value on the date of such withholding equal to the aggregate amount of
the Participant’s income, payroll and social tax liabilities based upon the
applicable minimum withholding rates.

 

(f)            Rights as a Stockholder.  Upon and following the Performance-Based
Vesting Date (or the vesting date under Section 3(c), if applicable), the
Participant shall be the record owner of the RSU Shares settled upon such date
unless and until such shares are sold or otherwise disposed of, and as record
owner shall be entitled to all rights of a common stockholder of the Company,
including, without limitation, voting rights, if any, with respect to the
shares.  Prior to the Performance-Based
Vesting Date (or the vesting date under Section 3(c), if applicable), the
Participant shall not be deemed for any purpose to be the owner of shares of
Common Stock underlying the Restricted Share Units.

 

4.     Miscellaneous.

 

(a)           General Assets.  All amounts credited to the Account under
this Agreement shall continue for all purposes to be part of the general assets
of the Company, Participant’s interest in the Account shall make the
Participant only a general, unsecured creditor of the Company.

 

4

 

(b)           Notices.  All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:

 

if to the Company:

 

Interline Brands, Inc.

200 East Park Drive, Suite

Mt. Laurel, NJ 08054

Attention: Annette Ricciuti

 

if to the Participant, at
the Participant’s last known address on file with the Company.

 

All such notices, demands
and other communications shall be deemed to have been duly given when delivered
by hand, if personally delivered; when delivered by courier, if delivered by
commercial courier service; five business days after being deposited in the
mail, postage prepaid, if mailed; and when receipt is mechanically
acknowledged, if telecopied.

 

(c)           Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.

 

(d)           No Rights to Service.  Nothing contained in this Agreement shall be
construed as giving the Participant any right to be retained, in any position,
as a consultant or director of the Company or its Affiliates or shall interfere
with or restrict in any way the right of the Company or its Affiliates, which
are hereby expressly reserved, to remove, terminate or discharge the
Participant at any time for any reason whatsoever.

 

(e)           Bound by Plan.  By signing this Agreement, the Participant
acknowledges that he has received a copy of the Plan and has had an opportunity
to review the Plan and agrees to be bound by all the terms and provisions of
the Plan.

 

(f)            Beneficiary.  The Participant may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation.  If no designated beneficiary survives the
Participant, the executor or administrator of the Participant’s estate shall be
deemed to be the Participant’s beneficiary.

 

(g)           Successors.  The terms of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and
of the Participant and the beneficiaries, executors, administrators, heirs and
successors of the Participant.

 

(h)           Entire Agreement.  This Agreement and the Plan contain the
entire agreement and understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior communications,
representations and negotiations in respect 

 

5

 

thereto.  No
change, modification or waiver of any provision of this Agreement shall be
valid unless the same be in writing and signed by the parties hereto.

 

(i)            Governing Law.  This
Agreement shall be construed and interpreted in accordance with the laws of the
State of New York without regard to principles of conflicts of law thereof, or
principles of conflicts of laws of any other jurisdiction which could cause the
application of the laws of any jurisdiction other than the State of New York.

 

(j)            Consent to Jurisdiction.  Except as otherwise specifically provided
herein, Executive and the Company each hereby irrevocably submits to the
exclusive jurisdiction of any state or federal court serving Duval County,
Florida over any dispute arising out of or relating to this Agreement.

 

(k)           Headings.  The headings of the Sections hereof are
provided for convenience only and are not to serve as a basis for
interpretation or construction, and shall not constitute a part, of this
Agreement.

 

(l)            Signature in Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement.

 

 

	
   

  	
  INTERLINE BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Grebe

  
	
   

  	
  Name: Michael J. Grebe

  
	
   

  	
  Title: Chairman & Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth D. Sweder

  
	
   

  	
  Kenneth D. Sweder

  

 

6

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