Document:

Exhibit 10.9

 

FINAL VERSION

 

INTERLINE BRANDS, INC.

2012 STOCK OPTION PLAN

Effective September 7, 2012

 

1.                                      Purpose

 

The purpose of the Plan is to provide a means through which the Company and its Affiliates may attract able persons to enter and remain in the employ of the Company and its Affiliates and to provide a means whereby employees and directors of the Company and its Affiliates can be granted options to acquire and maintain Common Stock, thereby strengthening their commitment to the welfare of the Company and its Affiliates and promoting an identity of interest between stockholders and these persons.

 

2.                                      Definitions

 

The following definitions shall be applicable throughout the Plan.

 

(a)           “Affiliate” means (i) any entity that directly or indirectly is controlled by, controls or is under common control with the Company and (ii) to the extent provided by the Committee, any entity in which the Company has a significant equity interest.

 

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

 

(c)           “Cause” shall mean, (i) if a Participant is a party to an employment or a severance agreement with the Company or one of its Subsidiaries, the occurrence of any circumstances defined as “Cause” in such employment or severance agreement, or (ii) if a Participant is not a party to an employment or severance agreement with the Company or a Subsidiary, (A) the Participant’s indictment for, or conviction or entry of a plea of guilty or nolo contendere to (1) any felony or (2) any crime (whether or not a felony) involving moral turpitude, fraud, theft, breach of trust or other similar acts, whether of the United States or any state thereof or any similar foreign law to which the Participant may be subject, (B) the Participant’s being or having been engaged in conduct constituting breach of fiduciary duty, willful misconduct or negligence relating to the Company or any of its Subsidiaries or the performance of the Participant’s duties, (C) the Participant’s willful failure to (1) follow a reasonable and lawful directive of the Company, the Subsidiary at which he or she is employed or provides services, or the Board, or (2) comply with any written rules, regulations, policies or procedures of the Company or a Subsidiary at which he or he is employed or to which he or she provides services which, if not complied with, would reasonably be expected to have more than a de minimis adverse effect on the business or financial condition of the Company, or (D) the Participant’s deliberate and continued failure to perform his or her material duties to the Company or any of its Subsidiaries.  Notwithstanding the foregoing,

 

 

the events described in clauses (A) through (D) of this definition shall constitute Cause only if the Company or a Subsidiary provides the Participant with written notice within 30 days after the Company’s or such Subsidiary’s initial knowledge of the events or circumstances that the Company or Subsidiary believes constitute Cause and the Participant fails to cure such event or circumstance within 30 days after receipt from the Company or Subsidiary of such notice.  For purposes of this definition, no act, or failure to act, on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company.

 

(d)           “Change in Capitalization” means (i) the outstanding shares of Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or another corporation, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split, reverse stock split, combination or exchange of shares, change in corporate structure or any similar corporate event or transaction or (ii) an extraordinary dividend or distribution of cash or property, including the spin-off of the stock of a Subsidiary.

 

(e)            “Change in Control” means, in a single transaction or series of related transactions, the occurrence of any of the following events: (i) a majority of the outstanding voting power represented by the then outstanding common stock or other equity securities of the Company shall have been acquired or otherwise become beneficially owned, directly or indirectly, by any Person or Persons acting as a “group” within the meaning of the Exchange Act (other than any member of the Existing Owner Group), other than by reason of any underwritten public offering of the common stock of the Company, (ii) the sale, transfer, assignment or other disposition (including by merger, share purchase, recapitalization, redemption, reorganization, consolidation or otherwise, but excluding an underwritten public offering of the common stock of the Company) by stockholders of the Company of more than fifty percent (50%) of the voting power represented by the then outstanding common stock or other equity securities of the Company, or (iii) the sale of all or substantially all the assets of the Company and its Subsidiaries on a consolidated basis, in each case to one or more Persons (other than to any Person who is a member of the Existing Owner Group).  Notwithstanding the foregoing, a transaction will not constitute a “Change in Control” if, following the transaction, the Company will be beneficially owned directly or indirectly in substantially the same proportions (excluding beneficial ownership of the Company by any of the GSCP Parties or the P2 Parties by reason of their respective portfolio companies’ beneficial ownership of the Company) by the Persons who held the Company’s securities immediately before such transaction or any of their affiliates.

 

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(f)            “Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations under such section.

 

(g)            “Committee” means a committee of at least two members of the Board as the Board may appoint to administer the Plan or, if no such committee has been appointed by the Board, the Board.

 

(h)           “Common Stock” means the common stock, par value $0.01 per share, of the Company and any stock into which such common stock may be converted or into which it may be exchanged.

 

(i)             “Company” means Interline Brands, Inc., a Delaware corporation and any successor thereto.

 

(j)            “Corporate Transaction” means (a) a merger, consolidation, reorganization, recapitalization or other similar change in the Company’s capital stock or (b) a liquidation or dissolution of the Company.  For the avoidance of doubt, a Corporate Transaction may be a transaction that is also a Change in Control.

 

(k)           “Date of Grant” means the date on which the granting of an Option is authorized, or such other date as may be specified in such authorization or, if there is no such date, the date indicated on the applicable Option Agreement.

 

(l)             “Director” means a member of the Board.

 

(m)          “Disability” means, unless in the case of a particular Option, the applicable Option Agreement states otherwise, the Company or an Affiliate having cause to terminate a Participant’s employment or service on account of “disability,” as defined in any existing employment, consulting or other similar agreement between the Participant and the Company or an Affiliate, or in the absence of such an employment, consulting or other agreement, a condition entitling a person to receive benefits under the long-term disability plan of the Company or an Affiliate, as may be applicable to the Participant in question, or, in the absence of such a plan, the complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which a Participant was employed or served when such disability commenced, as determined by the Committee based upon medical evidence acceptable to it.

 

(n)           “Effective Date” means September 7, 2012.

 

(o)           “Eligible Person” means any Employee or Director.

 

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(p)           “Employee” means any individual performing services for the Company or a Subsidiary and designated as an employee of the Company or the Subsidiary on its payroll records.  An Employee shall not include any individual during any period he or she is classified or treated by the Company or Subsidiary as an independent contractor, a consultant or an employee of an employment, consulting or temporary agency or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified, as a common-law employee of the Company or Subsidiary during such period.  An individual shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or any Subsidiary, or between the Company and any Subsidiaries.

 

(q)           “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(r)            “Existing Owner Group” means (i) the GSCP Parties and (ii) the P2 Parties.

 

(s)            “Fair Market Value”, on a given date, means (i) if the Common Stock is listed on a national securities exchange, the closing sale price reported as having occurred on the primary exchange upon which the Common Stock is listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported; (ii) if the Common Stock is not listed on any national securities exchange but is quoted in an inter-dealer quotation system on a last sale basis, the final ask price reported on such date, or, if there is no such sale on such date, then on the last preceding date on which a sale was reported; or (iii) if the Common Stock is not listed on a national securities exchange nor quoted on an inter-dealer quotation system on a last sale basis, the amount determined by the Board to be the fair market value in good faith without discounts for lack-of-liquidity, marketability or minority ownership; provided, that, if there has been a valuation of the Common Stock by an independent appraiser as of a date within twelve (12) months prior to the date of the event requiring the determination of the Board hereunder, the methodology used in such valuation shall be used by the Board in determining Fair Market Value.

 

(t)            “Good Reason” shall mean, (i) if a Participant is a party to an employment agreement or a severance agreement with the Company or one of its Subsidiaries, the occurrence of any circumstances defined as “Good Reason” in such employment or severance agreement, or (ii) if such Participant is not a party to an employment agreement or severance agreement with the Company or one of its Subsidiaries, without the Participant’s written consent, (A) a material decrease in the Participant’s base salary, (B) the relocation of the Participant’s principal place of employment that would increase the Participant’s one-way commute by more than fifty (50) miles or the Participant’s commute immediately prior to the date of such change of location, whichever is greater, or (C) a material and adverse change in the Participant’s duties, authority or responsibilities.  In the event the Participant believes Good Reason to exist, then the Participant must provide the Company with written notice no later than thirty (30) days after the Participant’s

 

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initial knowledge of the occurrence of the event or condition the Participant claims constitutes Good Reason specifying the basis for the Participant’s belief that Good Reason exists, and must provide the Company with thirty (30) days to cure and must terminate his or her employment within thirty (30) days after the end of such thirty (30) day cure period if the Company has not cured such event or condition.

 

(u)           “GSCP Parties” means GS Capital Partners VI Fund, L.P., a Delaware limited partnership, GS Capital Partners VI Offshore Fund, L.P., a Cayman Islands exempted limited  partnership, GS Capital Partners VI GmbH & Co. KG, a limited partnership formed under the laws of the Federal Republic of Germany, GS Capital Partners VI Parallel, L.P., a Delaware limited partnership, MBD 2011 Holdings, L.P., a Cayman Islands exempted limited partnership, Bridge Street 2012 Holdings, L.P. a Cayman Islands exempted limited partnership and any Affiliates of the foregoing.

 

(v)           “Option” means an option granted by the Committee to a Participant under the Plan.

 

(w)           “Option Agreement” means any agreement between the Company and a Participant who has been granted an Option pursuant to Section 7 which defines the rights and obligations of the parties thereto.

 

(x)           “Option Period” means the period described in Section 7(c).

 

(y)           “Option Price” means the per share exercise price for an Option as described in Section 7(a) or 7(f), as applicable.

 

(z)            “P2 Parties” means P2 Capital Master Fund I, L.P., a Cayman Islands exempted limited partnership, P2 Capital Master Fund VII, L.P. and any Affiliates of the foregoing.

 

(aa)         “Parent” means any parent of the Company as defined in Section 424(e) of the Code.

 

(bb)         “Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Option pursuant to Section 6.

 

(cc)          “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) of the Exchange Act.

 

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(dd)                           “Plan” means this Interline Brands, Inc. 2012 Stock Option Plan, as amended from time to time.

 

(ee)                             “Restrictive Agreement” shall mean any agreement between the Company or a Subsidiary and a Participant that contains non-competition, non-solicitation or confidentiality restrictions on such Participant.

 

(ff)                               “Securities Act” means the Securities Act of 1933, as amended.

 

(gg)                             “Stockholders Agreement” means the Stockholders Agreement, dated as of September 7, 2012, by and among the Company, the GSCP Parties, the P2 Parties, and the Persons listed as management holders on the signature pages thereto.

 

(hh)                           “Subsidiary” means any subsidiary of the Company as defined in Section 424(f) of the Code.

 

(ii)                                   “Termination”, “Terminated” or “Terminates” shall mean (a) with respect to a Participant who is an Employee, the date such Participant ceases to be employed by the Company and its Subsidiaries or (b) with respect to a Participant who is a Director, the date such Participant ceases to be a Director, in each case, for any reason whatsoever (including by reason of death, Disability or adjudicated incompetency).  Unless otherwise set forth in an Option Agreement, (a) if a Participant is both an Employee and a Director and terminates as an Employee but remains as a Director, the Participant will be deemed to have continued in employment without interruption and shall be deemed to have Terminated upon ceasing to be a Director and (b) if a Participant who is an Employee or a Director ceases to provide services in such capacity and becomes a consultant, the Participant will be deemed to have been Terminated upon the cessation of such services as an Employee or Director, as applicable.

 

3.                                      Effective Date

 

The Plan is effective as of the Effective Date.

 

4.                                      Administration

 

(a)           The Committee shall administer the Plan. The majority of the members of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present or acts approved in writing by a majority of the Committee shall be deemed the acts of the Committee.

 

(b)           Subject to the provisions of the Plan and applicable law, the Committee shall have the power, and in addition to other express powers and authorizations conferred on the Committee

 

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by the Plan, to:  (i) designate Participants; (ii) determine the number of shares of Common Stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Options; (iii) determine the terms and conditions of any Option, including the exercise price per share of Common Stock, the vesting schedule and duration of each Option and make any amendment or modification to any Option Agreement consistent with the terms of the Plan and any Option Agreement; (iv) determine whether, to what extent, and under what circumstances Options may be settled or exercised in cash, shares of Common Stock or other property, or canceled, forfeited, or suspended and the method or methods by which Options may be settled, exercised, canceled, forfeited, or suspended; (v) determine whether, to what extent, and under what circumstances the delivery of cash, Common Stock or other property and other amounts payable with respect to an Option shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vi) determine the duration and purposes for leaves of absence which may be granted to a Participant on an individual basis without constituting a Termination for purposes of the Plan, (vii) interpret, administer, reconcile any inconsistency, correct any defect and/or supply any omission in the Plan and any instrument or agreement relating to, or Option granted under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations, (ix) appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

 

(c)           Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Option or any documents evidencing Options granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall, consistent with the Plan and any Option Agreement granted pursuant to the Plan, be final, conclusive and binding upon all parties, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Option, and any shareholder.

 

(d)           The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among Persons who receive, or are eligible to receive, Options (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Committee shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Option Agreements, as to the Eligible Persons to receive Options under the Plan and the terms and provision of Options under the Plan.  All decisions and determinations by the Committee in the exercise of the above powers shall be final, binding and conclusive upon the Company, its Subsidiaries, the Participants and all other persons having any interest therein.

 

(e)           The Committee may delegate to one or more officers of the Company or any Affiliate the authority to act on behalf of the Committee with respect to any matter, right, obligation,

 

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or election which is the responsibility of or which is allocated to the Committee herein, and which may be so delegated as a matter of law.

 

5.                                      Shares Subject to the Plan

 

The Committee may, from time to time, grant Options to one or more Eligible Persons; provided, however, that:

 

(a)           Subject to Section 9 and the other provisions of this Section 5, the total aggregate number of shares of Common Stock in respect of which Options may be granted under the Plan is 168,845.2708.

 

(b)           If and to the extent an Option under the Plan expires, terminates or is canceled for any reason whatsoever without the Participant having received any benefit therefrom, or any such Option is settled in cash, the shares of Common Stock covered by such Option shall again become available for future Options under the Plan. Notwithstanding anything to the contrary contained herein, the following shares of Common Stock shall not be added back to the shares of Common Stock authorized under Section 5(a): (i) shares of Common Stock tendered by the Participant or withheld by the Company in payment of the Option Price and (ii) shares of Common Stock tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Option.

 

(c)            Common Stock delivered by the Company in settlement of Options may be authorized and unissued Common Stock or Common Stock held in the treasury of the Company, or a combination of the foregoing.

 

6.                                      Eligibility

 

Participation shall be limited to Eligible Persons selected by the Committee (or a person designated by the Committee) who have entered into an Option Agreement.

 

7.                                      Options

 

The Committee is authorized to grant one or more Options to any Eligible Person.  Each Option so granted shall be subject to the conditions set forth under this Section 7, and to such other conditions as may be reflected in the applicable Option Agreement.

 

(a)           Option Price. The Option Price per share of Common Stock for each Option shall be set by the Committee at the time of grant but shall not be less than the Fair Market Value of a share of Common Stock on the Date of Grant.

 

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(b)           Manner of Exercise and Form of Payment. Options which have become exercisable may be exercised by delivery of written notice of exercise to the Committee in the form required by the Committee accompanied by payment of the Option Price and otherwise in accordance with the Option Agreement pursuant to which the Option was granted; provided, that, the Company may require that a Participant provide notice of intent to exercise an Option prior to such exercise. The Option Price for any Common Stock purchased pursuant to the exercise of an Option shall be paid in any or any combination of the following forms:  (a) cash or its equivalent (e.g., a check) or (b) if permitted by the Committee, the transfer, either actually or by attestation, to the Company of Common Stock that has been held by the Participant for at least six (6) months (or such lesser period as may be permitted by the Committee) prior to the exercise of the Option, such transfer to be upon such terms and conditions as determined by the Committee or (c) in the form of other property as determined by the Committee.  Any Common Stock transferred to the Company as payment of the exercise price under an Option shall be valued at their Fair Market Value on  the last business day preceding the date of exercise of such Option.  In addition, the Committee may provide for the payment of the Option Price through Common Stock withholding as a result of which the number of shares of Common Stock issued upon exercise of an Option would be reduced by a number of shares of Common Stock having a Fair Market Value equal to the Option Price.  If requested by the Committee, the Participant shall deliver the Option Agreement evidencing the Option to the Company, which shall endorse thereon a notation of such exercise and return such Option Agreement to the Participant.

 

(c)            Vesting, Option Period and Expiration. Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee and shall expire after such period, not to exceed ten years, as may be determined by the Committee; provided, however, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms and conditions of such Option other than with respect to exercisability. If an Option is exercisable in installments, such installments or portions thereof which become exercisable shall remain exercisable until the Option expires.

 

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(d)           Rights of Participants.  No Participant shall be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised in accordance with the terms of this Agreement and the Participant shall have paid the full Option Price for the number of shares of Common Stock in respect of which the Option was exercised and any withholding taxes due, (ii) the Participant shall have delivered to the Company a fully executed Stockholders Agreement, (iii) the Company shall have issued the shares of Common Stock to the Participant and (iv) the Participant’s name shall have been entered as a holder of record on the books of the Company.  Upon the occurrence of all of the foregoing events, the Participant shall have full ownership rights with respect to such shares of Common Stock, subject to the provisions of the Stockholders Agreement.

 

(e)            Option Agreement - Other Terms and Conditions. Each Option granted under the Plan shall be evidenced by an Option Agreement.  Except as specifically provided otherwise in such Option Agreement, each Option granted under the Plan shall be subject to the following terms and conditions:

 

(i)             Each Option or portion thereof that is exercisable shall be exercisable for the full amount or for any part thereof.

 

(ii)            Each share of Common Stock purchased through the exercise of an Option shall be paid for in full at the time of the exercise. Each Option shall cease to be exercisable, as to any share of Common Stock, when the Participant purchases the share or when the Option expires.

 

(iii)           Each Option shall vest and become exercisable by the Participant in accordance with the vesting schedule established by the Committee and set forth in the Option Agreement.

 

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(iv)          At the time of any exercise of an Option, the Committee may, in its sole discretion, require a Participant to deliver to the Committee a written representation that the shares of Common Stock to be acquired upon such exercise are to be acquired for investment and not for resale or with a view to the distribution thereof and any other representation deemed necessary by the Committee to ensure compliance with all applicable federal and state securities laws. Upon such a request by the Committee, delivery of such representation prior to the delivery of any shares issued upon exercise of an Option shall be a condition precedent to the right of the Participant or such other person to purchase any shares. In the event certificates for Common Stock are delivered under the Plan with respect to which such investment representation has been obtained, the Committee may cause a legend or legends to be placed on such certificates to make appropriate reference to such representation and to restrict transfer in the absence of compliance with applicable federal or state securities laws.

 

8.                                      General

 

(a)           Government and Other Regulations. The obligation of the Company to settle Options in Common Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Option to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any shares of Common Stock pursuant to an Option unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission and any applicable state or foreign law or unless the Company has determined that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act or any other applicable state or foreign law any of the shares of Common Stock to be offered or sold under the Plan. If the shares of Common Stock offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act or any other applicable state or foreign law, the Company may restrict the transfer of such shares and may legend the Common Stock certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.

 

(b)                                  Tax Withholding.

 

(i)             A Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any shares of Common Stock or other property deliverable under any Option or from any compensation or other amounts owing to a Participant, the amount (in cash, Common Stock or other property) of any required tax withholding and payroll taxes in

 

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respect of an Option, its exercise, or any payment or transfer under an Option or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.

 

(ii)            Without limiting the generality of clause (i) above, the Committee may, in its sole discretion, permit a Participant to satisfy, in whole or in part, the foregoing withholding liability (but no more than the minimum required withholding liability) by (A) the delivery of shares of Common Stock owned by the Participant having a Fair Market Value equal to such withholding liability or (B) having the Company withhold from the number of shares of Common Stock otherwise issuable pursuant to the exercise or settlement of the Option a number of shares with a Fair Market Value equal to such withholding liability.

 

(c)            Claim to Options and Employment Rights. No Employee or other Person shall have any claim or right to be granted an Option under the Plan or, having been selected for the grant of an Option, to be selected for a grant of any other Option. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate.

 

(d)            Designation and Change of Beneficiary. Each Participant shall file with the Committee a written designation of one or more persons as the beneficiary who shall be entitled to exercise any rights of a Participant with respect to an Option, if any, following the Participant’s death. A Participant may, from time to time, revoke or change his beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or her estate.

 

(e)            Payments to Persons Other Than Participants.  If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any right exercisable by such person (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be exercised by his spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper representative to act on behalf of such person.  Any such exercise of rights shall be a complete discharge of the liability of the Committee and the Company therefor.

 

(f)             No Liability of Committee Members. No member of the Committee shall be liable for any action, failure to act, determination or interpretation made in good faith with respect

 

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to the Plan or any transaction hereunder.  The Company hereby agrees to indemnify each member of the Committee for all costs and expenses and, to the extent permitted by applicable law, any liability incurred in connection with defending against, responding to, negotiating for the settlement of or otherwise dealing with any claim, cause of action or dispute of any kind arising in connection with any actions in administering the Plan or in authorizing or denying authorization to any transaction hereunder..

 

(g)            Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware.

 

(h)            Funding. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.

 

(i)             Nontransferability.  Each Option shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative. Except as set forth in this Section 8(i), no Option may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance; provided, however, that (i) any transferred Option will be subject to all of the same terms and conditions as provided in the Plan and the applicable Option Agreement; and (ii) the Participant’s estate or beneficiary appointed in accordance with this Section 8(i) will remain liable for any withholding tax that may be imposed by any federal, state or local tax authority.

 

(j)             Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of the Company and its Affiliates and/or upon any other information furnished in connection with the Plan by any person or persons other than himself.

 

(k)            Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance

 

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or other benefit plan of the Company except as otherwise specifically provided in such other plan.

 

(l)             Expenses. The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

(m)           Pronouns. Masculine pronouns and other words of masculine gender shall refer to both men and women.

 

(n)            Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.

 

(o)            Severability. If any provision of the Plan or any Option Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Option, or would disqualify the Plan or any Option under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, person or Option and the remainder of the Plan and any such Option shall remain in full force and effect.

 

(p)            International Participants. With respect to Participants who reside or work outside of the United States of America, the Committee may in its sole discretion amend the terms of the Plan or outstanding Options with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.

 

(q)            Section 409A of the Code. To the extent applicable, notwithstanding anything herein to the contrary, this Plan and Options issued hereunder shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder will be taxable to a Participant under Section 409A of the Code and related Department of Treasury guidance prior to payment to such Participant of such amount, the Company may (i) adopt such amendments to the Plan and Options and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Options hereunder and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid or limit the imposition of an additional tax under Section 409A of the Code. In the event

 

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that it is reasonably determined by the Committee that, as a result of Section 409A of the Code, payments in respect of any Option under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Option Agreement, as the case may be, without causing the Participant holding such Options to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code. The Participant shall be solely responsible for, and nothing herein shall obligate the Company to pay for or on behalf of any Participant, any taxes imposed on such Participant under Section 409A of the Code in respect of any Option granted under the Plan.

 

(r)            Cancellation of Options; Forfeiture of Gain. Notwithstanding anything to the contrary contained herein, an Option Agreement may provide that the Option shall be canceled if the Participant, without the consent of the Company, while employed by the Company or any Subsidiary or after termination of such employment or service, violates the terms of any Restrictive Agreement (as determined under the terms and conditions thereof) or engages in fraudulent conduct contributing to any financial restatements. The Committee may provide in the applicable Option Agreement that if within the time period specified in the Option Agreement the Participant engages in an activity referred to in the preceding sentence, the Participant will forfeit any gain realized on the vesting or exercise of the Option and must repay such gain to the Company.

 

9.                                      Adjustment upon Changes in Capitalization.

 

(a)           In the event of a Change in Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to (i) the maximum number and class of shares of Common Stock or other stock or securities with respect to which Options may be granted under the Plan and (ii) the number and class of shares of Common Stock or other stock or securities, cash or other property which are subject to outstanding Options granted under the Plan and the exercise price therefore.

 

(b)           Any such adjustment in the shares of Common Stock or other securities with respect to any Option that is not subject to Section 409A of the Code shall be made in a manner that would not subject the Options to Section 409A of the Code and, with respect to any Option that is subject to Section 409A of the Code, shall be made in a manner that complies with Section 409A of the Code and all regulations and other guidance issued thereunder.

 

(c)           If, by reason of a Change in Capitalization, pursuant to an Option, a Participant shall be entitled to, or shall be entitled to exercise an Option with respect to, new, additional or different shares of stock or securities of the Company or any other corporation, such new, additional or different shares shall (to the extent reasonably practicable, and taking into account

 

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whether such new, additional or different shares of stock or securities of the Company or any other corporation are publicly traded) thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the Shares subject to the Option, prior to such Change in Capitalization.

 

10.                               Effect of Certain Transactions.

 

(a)           Except as otherwise provided in the applicable Option Agreement, in connection with a Corporate Transaction, either:

 

(i)            outstanding Options shall, unless otherwise provided in connection with the Corporate Transaction, continue following the Corporate Transaction and shall be adjusted if and as provided for in the agreement or plan (in the case of a liquidation or dissolution) entered into or adopted in connection with the Corporate Transaction (the “Transaction Agreement”), which may include, in the sole discretion of the Committee or the parties to the Corporate Transaction, the assumption or continuation of such Options by, or the substitution for such Options of new awards of, the surviving, successor or resulting entity, or a parent or subsidiary thereof, with such adjustments as to the number and kind of shares or other securities or property subject to such new awards, exercise prices and other terms of such new awards as the Committee or the parties to the Corporate Transaction shall agree, or

 

(ii)           outstanding Options shall terminate upon the consummation of the Corporate Transaction; provided, however, that vested Options (including those Options that would become vested upon the consummation of the Corporate Transaction) shall not be terminated without: (1) providing the holders of affected Options a period of at least fifteen (15) calendar days prior to the date of the consummation of the Corporate Transaction to exercise the Options or (2) providing the holders of affected Options payment (in cash or other consideration upon or immediately following the consummation of the Corporate Transaction, or, to the extent permitted by Section 409A of the Code, on a deferred basis) in respect of each share of Common Stock covered by the Option being cancelled an amount equal to the excess, if any, of the per share price to be paid or distributed to stockholders in the Corporate Transaction (the value of any non-cash consideration to be determined by the Committee in good faith) over the Option Price of the Option.

 

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(iii)          For the avoidance of doubt, if the amount determined pursuant to clause (a)(ii)(2) above is zero or less, the affected Option may be cancelled without any payment therefor.

 

(b)           Without limiting the generality of the foregoing or being construed as requiring any such action, in connection with any such Corporate Transaction the Committee may, in its sole and absolute discretion, cause any of the following actions to be taken effective upon or at any time prior to any Corporate Transaction (and any such action may be made contingent upon the occurrence of the Corporate Transaction):

 

(i)          cause any or all unvested Options to become fully vested and immediately exercisable (as applicable) and/or provide the holders of such Options a reasonable period of time prior to the date of the consummation of the Corporate Transaction to exercise the Options Rights;

 

(ii)         with respect to unvested Options that are terminated in connection with the Corporate Transaction, provide to the holders thereof a payment (in cash and/or other consideration) in respect of each Share covered by the Option being terminated in an amount equal to all or a portion of the excess, if any, of the per share price to be paid or distributed to holders of Common Stock in the Corporate Transaction (the value of any non-cash consideration to be determined by the Committee in good faith) over the exercise price of the Option, which may be paid upon the consummation of the Corporate Transaction.

 

(c)         Notwithstanding anything to the contrary, the Committee may, in its sole discretion, provide in the Transaction Agreement or otherwise for different treatment for different Options or Options held by different Participants and, where alternative treatment is available for a Participant’s Options, may allow the Participant to choose which treatment shall apply to such Participant’s Options.

 

(d)         Any action permitted under this Section 10 may be taken without the need for the consent of any Participant.  To the extent a Corporate Transaction also constitutes a Change in Capitalization and action is taken pursuant to this Section 10 with respect to an outstanding Option, such action shall conclusively determine the treatment of such Option in connection with such Corporate Transaction notwithstanding any provision of the Plan to the contrary (including Section 9).

 

(e)         To the extent the Committee chooses to make payments to affected Participants pursuant to Section 10(a) or Section 10(b), any Participant who has not returned any letter of transmittal or similar acknowledgment delivered to the Participant that the Committee requires be signed in connection with such payment within the time period established by the Committee for returning any such letter or similar acknowledgement shall forfeit his or her right

 

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to any payment and his or her associated Options may be cancelled without any payment therefor.

 

11.                               Nonexclusivity of the Plan

 

Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.

 

12.                               Amendments and Termination

 

(a)            Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided, that any such amendment, alteration, suspension, discontinuance or termination that would impair the rights of any Participant or any holder or beneficiary of any Option theretofore granted shall not to that extent be effective without the prior written consent of the affected Participant, holder or beneficiary.  The termination date of the Plan, following which no Options may be granted hereunder, is the tenth anniversary of the Effective Date; provided, that such termination shall not affect Options then outstanding, and the terms and conditions of the Plan shall continue to apply to such Options.

 

(b)            Amendment of Option Agreements. The Committee may, to the extent consistent with the terms of any applicable Option Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Option theretofore granted or the associated Option Agreement, prospectively or retroactively; provided, that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would impair the rights of any Participant or any holder or beneficiary of any Option theretofore granted shall not to that extent be effective without the prior written consent of the affected Participant, holder or beneficiary.

 

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ANNEX A

 

(Provisions Applicable to Options Granted in California)

 

To the extent not in accordance with the foregoing plan, the following shall govern all Options and other Awards granted and securities sold to residents of California:

 

1.             Options shall be exercisable for not more than 120 months from the date the Option is granted.

 

2.             Options granted pursuant to the plan shall not be transferred other than by will, by the laws of descent and distribution, to a revocable trust, or as permitted by Rule 701 of the Securities Act of 1933, as amended (17 C.F.R. 230.701).

 

3.             The number of securities purchasable pursuant to any Option and the exercise price thereof shall be proportionately adjusted in the event of a stock split, reverse stock split, stock dividend, recapitalization, combination, reclassification or other distribution of the issuer’s equity securities without the receipt of consideration by the issuer, of or on the issuer’s class or series of securities underlying the Option.

 

4.             Unless the Participant’s employment is terminated for cause as defined by applicable law, the right to exercise the Option in the event of termination of employment, to the extent that the Participant is entitled to exercise on the date employment terminates, shall continue until the earlier of (1) the Option expiration date, (2) at least 6 months from the date of termination if termination was caused by death or disability, or (3) at least 30 days from the date of termination if termination was caused other than by reason of death or disability.

 

5.             The Plan must be approved by a majority of the outstanding securities entitled to vote by the later of (1) within twelve (12) months before or after the date the Plan is adopted, or (2) prior to or within twelve (12) months of the granting of any option under the Plan in California.

 

6.             No Options may be granted more than 10 years from the date the Plan is adopted or the date the Plan is approved by the issuer’s security holders, whichever is earlier.

 

19Exhibit 10.10

 

INTERLINE BRANDS, INC.

 

2012 STOCK OPTION PLAN

 

TIME-VESTING NONQUALIFIED STOCK OPTION AGREEMENT

 

THIS TIME-VESTING NONQUALIFIED STOCK OPTION AGREEMENT (the “Agreement”), effective as of the date of grant set forth on the signature page hereto (the “Date of Grant”), is between Interline Brands Inc., a Delaware corporation (the “Company”), and the individual whose name is set forth on the signature page hereto (the “Optionee”).

 

W I T N E S S E T H:

 

1.                                      Grant of Option.

 

(a)                                 The Option.  The Company hereby grants to the Optionee an option (the “Option”) to purchase all or any part of an aggregate of such number of shares of Common Stock as is set forth on the signature page hereto (subject to adjustment as provided in Section 9 of the Interline Brands, Inc. 2012 Stock Option Plan (the “Plan”) on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.  This Option is not intended to be treated as an “incentive stock option,” as such term is defined in Section 422 of the Internal Revenue Code of 1986, as amended.

 

(b)                                 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 meaning set forth in the Plan.

 

2.                                      Terms and Conditions.

 

(a)                                 Purchase Price.  The price at which the Optionee shall be entitled to purchase shares of Common Stock upon the exercise of all or any portion of this Option shall be the price per share of Common Stock set forth on the signature page hereto (subject to adjustment as provided in Section 9 of the Plan).  Shares of Common Stock acquired upon the exercise of the Option shall hereinafter be referred to as “Option Shares.”

 

(b)                                 Expiration Date.  The Option shall expire at 11:59 p.m. Eastern Standard Time on the tenth anniversary of the Date of Grant (the “Expiration Date”); provided, however, that the Option may be earlier terminated as provided in Section 2(f), Section 4 or Section 5 of this Agreement.

 

 

(c)                                  Exercisability of Option.  Subject to the earlier termination or cancellation of the Option as set forth herein or in the Plan, the Option shall become vested and exercisable as to twenty percent (20%) of the Option Shares subject thereto on each of the first, second, third, fourth and fifth anniversaries of the Date of Grant.  Unless the Optionee has Terminated prior to a Change in Control, the Option shall become fully vested and exercisable upon the occurrence of the Change in Control.

 

(d)                                 Notice of Exercise.  Subject to the terms and conditions of this Agreement and the Plan, the Option may be exercised by delivery of written notice in such form as the Committee may require from time to time (the “Exercise Notice”), from the Optionee, to the Company; provided, however, that if the Committee determines it is necessary or desirable to deliver to the Optionee any documents or other disclosure materials prior to the exercise of the Option by the Optionee, the Committee may require the Optionee to confirm in writing his Exercise Notice after the delivery by the Company of such documents or other disclosure materials (which documents shall be delivered by the Company as promptly as reasonably practicable), in which case the Exercise Notice will not be deemed to have been delivered by the Optionee until it has been so confirmed.  The Exercise Notice shall state that the Optionee is electing to exercise the Option, shall set forth the number of shares of Common Stock in respect of which the Option is being exercised (the “Purchased Shares”) and shall be signed by the Optionee or, where applicable, by the Optionee’s beneficiary or legal representative.

 

(e)                                  Payment of Option Price.  The Option Price shall be payable (i) in cash or its equivalent (e.g., a check), (ii) by the transfer, either actually or by attestation, to the Company of Common Stock that has been held by the Participant for at least six (6) months (or such lesser period as may be permitted by the Committee) prior to the exercise of the Option and that has a Fair Market Value as of the date of exercise equal to the aggregate Option Price in respect of the Purchased Shares or (iii) by a reduction in the number of Purchased Shares to be issued upon such exercise by that number of shares of Common Stock having a fair Market Value on the date of exercise equal to the aggregate Option Price in respect of the Purchased Shares, provided, that, in either case, the Company is not then prohibited from purchasing or acquiring such shares of Common Stock pursuant to the terms of any credit agreement to which the Company or its Affiliates is a party or pursuant to applicable law.

 

(f)                                   Exercise Upon Termination of Employment.  In the event that the Optionee Terminates, the Option (to the extent then outstanding) shall terminate as follows:

 

(i)                                     Without Cause or by the Optionee.  If the Company or an Affiliate Terminates the Optionee without Cause (other than due to Disability) or the Optionee resigns for any reason, then the unvested portion of the Option shall expire on the date of Termination and the vested portion of the Option shall remain exercisable by the Optionee through the earlier of (x) the Expiration Date or (y) a period of ninety (90) days following such Termination, and shall thereafter terminate without further consideration to the Optionee.

 

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(ii)                                  For Cause.  If the Optionee’s employment with the Company or its Affiliates is terminated by the Company or its Affiliates for Cause, then both the unvested and the unexercised vested portions of the Option shall terminate and expire on the date of such Termination without further consideration to the Optionee.

 

(iii)                               Death or Disability.  If the Optionee is Terminated due to the Optionee’s death or Disability, then the unvested portion of the Option shall expire on the date of Termination and the vested portion of the Option shall remain exercisable by the Optionee (or the Optionee’s estate or beneficiary, as applicable) through the earlier of (x) the Expiration Date or (y) the one hundred eighty (180) day period immediately following such Termination, and shall thereafter terminate without further consideration to the Optionee.

 

(g)                                  Transferability.  The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Optionee other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company; provided, that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer of the Option to heirs or legatees of the Optionee shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.  During the Optionee’s lifetime, the Option is exercisable only by the Optionee or Optionee’s legal representative.

 

(h)                                 Rights as Stockholder.  The Optionee shall not be deemed for any purpose to be the owner of any of the Option Shares subject to this Option unless, until and to the extent that (i) the Option shall have been exercised in accordance with the terms of this Agreement and the Optionee shall have paid the full Option Price for the number of shares of Common Stock in respect of which the Option was exercised and all withholding taxes due, (ii) the Optionee shall have delivered to the Company a fully executed Stockholders Agreement, (iii) the Company shall have issued the shares of Common Stock to the Optionee and (iv) the Optionee’s name shall have been entered as a holder of record on the books of the Company.  Upon the occurrence of all of the foregoing events, the Optionee shall have full ownership rights with respect to such shares of Common Stock, subject to the provisions of the Stockholders Agreement.

 

3.                                      Withholding Taxes.  As a condition of the exercise of the Option, the Optionee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of the Option and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Optionee, federal, state and local taxes of any kind required by law to withheld upon the exercise of the Option.

 

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4.                                      Prohibited Activities.  In consideration of and as a condition to the grant of the Option, the Optionee agrees to the following covenants:

 

(a)                                 No Sale or Transfer.  The Optionee shall not sell, transfer, assign, grant a participation in, gift, hypothecate, encumber, mortgage, create any lien, pledge, exchange or otherwise dispose of the Option or any portion thereof other than by the laws of descent or distribution.

 

(b)                                 Prohibition against Certain Activities.  The Optionee agrees that the Optionee will not at any time disclose or furnish to any other Person or use for the Optionee’s own or any other Person’s account any Confidential or Proprietary Information (other than in the course of the Optionee’s service to the Company or any Affiliate, if the Optionee is an employee or director of, or consultant to the Company or any Affiliate) except for Permitted Disclosures (a “Prohibited Disclosure or Use”).  In addition, the Optionee agrees that the Optionee will not during the time the Optionee provides services to the Company or any of its Subsidiaries as an employee, director or consultant and until the second anniversary of the date of the Optionee’s Termination (the “Restricted Period”): (A) engage in any Prohibited Solicitation (as defined below), or (B) engage in any Competitive Activity (as defined below).

 

(c)                                  Return of Property.  All written materials, records, and documents made by the Optionee or coming into the Optionee’s possession during the Optionee’s service with the Company or any Subsidiary concerning any products, processes or equipment, manufactured, used, developed, investigated or considered by the Company or otherwise concerning the business or affairs of the Company (excluding the Optionee’s personal financial information furnished to the Optionee by the Company, such as the Optionee’s compensation records or personal tax information), shall be the sole property of the Company, and upon the Optionee’s Termination, or upon request of the Company prior to the Optionee’s Termination, the Optionee shall promptly deliver same to the Company.  In addition, upon the Optionee’s Termination, or upon request of the Company prior to the Optionee’s Termination, the Optionee will deliver to the Company all other Company property in the Optionee’s possession or under the Optionee’s control, including but not limited to, financial statements, marketing and sales data, patent applications, drawings and other documents, and all Company credit cards, automobiles, computers and cellular telephones.

 

(d)                                 Right to Terminate Option.  The Optionee understands and agrees that the Company has granted this Option to the Optionee to reward the Optionee for the Optionee’s future efforts and loyalty to the Company and its Affiliates by giving the Optionee the opportunity to participate in the potential future appreciation of the Company.  Accordingly, if the Company commences an action in a court of competent jurisdiction alleging that (i) the Optionee has engaged in any Prohibited Disclosure or Use or breached or violated the Optionee’s obligations relating to the non-disclosure or non-use of confidential or proprietary information under any Restrictive Agreement to which the Optionee is a party, or (ii) the Optionee engaged in any Prohibited Solicitation during the Restricted Period or breached or violated any non-solicitation obligations under any Restrictive Agreement to which the Optionee is a party, or (iii) the Optionee

 

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engaged in any Competitive Activity during the Restricted Period or breached or violated any non-competition obligations under any Restrictive Agreement to which the Optionee is a party, then the Option shall remain outstanding but the Optionee may not exercise the Option until there has been a “Final Disposition” (as defined below) with respect to such allegation.  If it is determined as a result of such Final Disposition that a violation described in this Section 4(d) has occurred and the violation has materially damaged the Company, the Option will terminate upon such Final Disposition.  If it is determined as a result of a Final Disposition that a violation described in this Section 4(d) has not occurred or that a violation has occurred but that the Company was not materially damaged as a result thereof, the Option will immediately become exercisable (to the extent otherwise exercisable in accordance with the terms of this Agreement (disregarding the effect of this Section 4(d))) and, in the event that prior to such Final Disposition the Optionee has been Terminated, the Option will remain outstanding and exercisable to the extent such Option would otherwise remain outstanding and exercisable in accordance with the terms of this Agreement (disregarding the effect of this Section 4(d)), with the post-Final Disposition period during which the Option remains outstanding and exercisable no shorter than the post-Termination period during which such Option otherwise would have remained outstanding and exercisable under the terms of this Agreement (disregarding the effect of this Section 4(d)).  “Final Disposition” means that a judgment has been rendered by a court of competent jurisdiction that has become final and non-appealable, that the matter has been dismissed with prejudice or settled by mutual agreement of the parties or that the Company has sought but failed to obtain an injunction.  Any reference to “Affiliate,” “affiliate,” “Affiliated Companies” or such similar term in any non-competition, non-solicitation or confidentiality covenant in any Restrictive Agreement shall not, for purposes of clause (i), (ii) or (iii) above or for purposes of determining whether there has been a breach or violation of any non-competition, non-solicitation or confidentiality covenant in any such Restrictive Agreement, include the GSCP Parties, the P2 Parties or any of their respective Affiliates (other than the Company and its Subsidiaries).

 

(e)                                  Certain Defined Terms.

 

(i)                                     “Competing Business” shall mean any business that competes with any business in which the Company or any of its Subsidiaries is engaged at the time of the Optionee’s Termination.

 

(ii)                                  “Competitive Activity” shall mean, directly or indirectly, (i) owning, managing, operating, joining, controlling, being employed by, or participating in the ownership, management, operation or control of, or holding any position as a shareholder, director, officer, consultant, independent contractor, employee or partner of, spokesman for, or investor in, any Competitor, or (ii) acting as a Competitor in an individual capacity; provided, that, with respect to any Optionee, in no event shall ownership by the Optionee of two percent (2%) or less of the outstanding securities of any class of any issuer whose securities are registered under the Securities Exchange Act of 1934, as amended, standing alone, be considered Competitive Activity, so long as the Optionee does not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a shareholder thereof.

 

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(iii)                               “Competitor” shall mean any Person that is engaged, directly or indirectly, in (or intends or proposes to engage in, or has been organized for the purpose of engaging in) a Competing Business in any market area in which Company or any of its Subsidiaries is engaged in such business at the time of the Optionee’s Termination.

 

(iv)                              “Confidential or Proprietary Information” shall mean information relating to the affairs of the Company and its Subsidiaries, including, without limitation, technical information, intellectual property, business and marketing plans or proposals, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company and its Subsidiaries and other forms of information which are confidential or in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, and pricing and cost information).  Confidential or Proprietary Information shall not include information that is or becomes generally known to the public or within the relevant trade or industry, other than as a result of a breach by the Optionee of any Restrictive Agreement to which the Optionee is a party or disclosure by a third party who is known by the Optionee to owe the Company an obligation of confidentiality with respect to such information.

 

(v)                                 “Permitted Disclosures” shall mean the disclosure of Confidential or Proprietary Information (A) made with the prior written consent by the Board, (B) required to be made by law or legal process, or (C) made by the Executive consistent with his duties under applicable law to the Company or any of its Affiliates (including to the Executive’s or the Company’s (or any such Affiliate’s) legal advisers).

 

(vi)                              “Prohibited Solicitation” shall mean (A) directly or indirectly hiring, contacting, inducing or soliciting (or assisting any Person to hire, contact, induce or solicit) for employment any person who is, or within six (6) months prior to the date of such hiring, contacting, inducing or soliciting was, an employee of the Company or any of its Subsidiaries, or (B) directly or indirectly soliciting (or assisting any Person to solicit) any customer, client, vendor or data supplier of the Company or any of its Subsidiaries, or directly or indirectly interfering with (or assist any Person to interfere with) any material relationship between the Company or any of its Subsidiaries and any of its or their customers, clients or vendors, provided that in no event shall a general advertisement or solicitation not targeted at employees of the Company or its Subsidiaries or customers, clients or vendors of the Company or its Subsidiaries be considered a Prohibited Solicitation.

 

(f)                                   Remedies.  The Optionee specifically acknowledges and agrees that the remedy at law for any breach of this Section 4 will be inadequate and that the Company, in addition to any other relief available to it, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damage or posting any bond whatsoever.  In the event that the provisions of this Section 4 should ever be deemed to exceed the limitation provided by applicable law, then the Optionee and the

 

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Company agree that such provisions shall be reformed to set forth the maximum limitations permitted.

 

5.                                      Corporate Transaction.  The provisions of Section 10 of the Plan shall apply to this Option in the event of a Corporate Transaction.

 

6.                                      Miscellaneous.

 

(a)                                 Notices.  Any and all notices, designations, consents, offers, acceptances and any other communications provided for herein shall be given in writing and shall be delivered either personally or by registered or certified mail, postage prepaid, which shall be addressed, in the case of the Company to the Secretary of the Company at the principal office of the Company and, in the case of the Optionee, to Optionee’s address appearing on the books of the Company or to Optionee’s residence or to such other address as may be designated in writing by the Optionee.

 

(b)                                 No Right to Continued Employment.  Nothing in the Plan or in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or its Affiliates 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 Optionee at any time for any reason whatsoever.

 

(c)                                  Bound by Plan.  By signing this Agreement, the Optionee acknowledges that Optionee 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.

 

(d)                                 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 Optionee and the beneficiaries, executors, administrators, heirs and successors of the Optionee.

 

(e)                                  Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

 

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

 

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

 

(h)                                 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(i)                                     This Agreement, including the validity hereof and the rights and obligations of the parties hereunder, all amendments and supplements hereto and the transactions contemplated hereby, and all actions or proceedings arising out of or relating to this Agreement, of any nature whatsoever, shall be construed in accordance with and governed by the domestic substantive laws of the State of Delaware without giving effect to any choice of law or conflicts of law provision or rule that might otherwise cause the application of the domestic substantive laws of any other jurisdiction.  The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, any state or federal court located within the State of Delaware) in connection with any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum or lack of personal jurisdiction in respect of such dispute.  Each of the parties hereto agrees that a judgment rendered in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(ii)                                  Each party hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury in respect of any legal proceeding directly or indirectly arising out of, under or in connection with this Agreement or any transaction contemplated hereby.  Each party hereto (A) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6(h).

 

(i)                                     Specific Performance.  Each of the parties agrees that any breach of the terms of this Agreement will result in irreparable injury and damage to the other parties, for which there is no adequate remedy at law.  Each of the parties therefore agrees that in the event of a breach or any threat of breach, the other parties shall be entitled to an immediate injunction and restraining order to prevent such breach, threatened breach or continued breach, and/or compelling specific performance of the Agreement, without having to prove the inadequacy of money damages as a remedy or balancing the equities between the parties.  Such remedies shall be in addition to any other remedies (including monetary damages) to which the other parties may be entitled

 

8

 

at law or in equity.  Each party hereby waives any requirement for the securing or posting of any bond in connection with any such equitable remedy.

 

(j)                                    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.

 

(k)                                 Counterparts.  This Agreement may be executed by .pdf or facsimile signatures and in any number of counterparts with the same effect as if all signatory parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

 

[Signature page follows]

 

9

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Date of Grant.

 

 

	
 
    	
INTERLINE   BRANDS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Agreed   and acknowledged as of the Date of Grant:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[Optionee]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date of   Grant:
    	
 
    
	
 
    	
 
    
	
Option   Price:
    	
 
    
	
 
    	
 
    
	
Number   of Shares
    	
 
    
	
Subject   to the Option:

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