EXHIBIT 10.26
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EMPLOYMENT AGREEMENT
THIS IS AN EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of 7
January 2004, by and between Interline Brands, Inc., a New Jersey corporation
(f/k/a Wilmar Industries, Inc.) (the "COMPANY"), and Xxxxxx X. Xxxxxxx (the
"EXECUTIVE").
WHEREAS, the Executive is currently an employee of the Company;
WHEREAS, the Company considers it essential to its best interests and
the best interests of its stockholders to provide for the continued employment
of the Executive by the Company; and
WHEREAS, the Executive is willing to accept and continue his employment
on the terms hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration and intending to be legally
bound hereby, the parties agree as follows:
1. TERM OF EMPLOYMENT. The Executive's term of employment with
the Company under this Agreement shall begin on the date hereof, and unless
sooner terminated as hereafter provided, shall continue for one (1) year (the
"EMPLOYMENT TERM"); PROVIDED that the Employment Term shall automatically be
extended for successive one-year periods; PROVIDED FURTHER that the Agreement
may be terminable by either party upon sixty (60) days written notice of such
party's intention to terminate.
2. POSITION.
(a) The Executive shall serve as a Vice President of the
Company. In such position, the Executive shall have such duties and authority as
are customarily associated with such position and agrees to perform such duties
and functions as shall from time to time be assigned or delegated to him by the
President of the Company or his designee.
(b) During the Employment Term, the Executive will devote
substantially all of his business time and best efforts to the performance of
his duties hereunder and will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict with the rendition
of such services, either directly or indirectly, without the prior written
consent of the President of the Company.
3. BASE SALARY. During the Employment Term, the Company shall pay
the Executive an annual base salary (the "BASE SALARY") at the annual rate of
$161,737, payable in regular installments in accordance with the Company's usual
payroll practices. Such base salary may, at the sole discretion of the President
of the Company, be upwardly adjusted.
4. BONUS. With respect to each calendar year during the
Employment Term, the Executive shall be eligible to earn an annual bonus award
of up to 50% percent of the Base
Salary (the "MAXIMUM BONUS"), based upon bonus plans to be established and
determined by the Board of Directors of the Company (the "Board") from time to
time.
5. EMPLOYEE BENEFITS AND PERQUISITES. During the Employment Term,
the Executive shall be eligible to participate in the Company's employee benefit
plans (including, without limitation, its health insurance and short term and
long term disability insurance plans) on the same basis as those benefits are
generally made available to other executives of the Company. All of the benefits
and perquisites described in this Section 5 shall hereafter be referred to
collectively as the "BENEFITS".
6. BUSINESS EXPENSES. During the Employment Term, reasonable
business expenses incurred by Executive in the performance of his duties
hereunder shall be reimbursed by the Company in accordance with the Company's
policies on expense reimbursement, in effect from time to time.
7. TERMINATION. Notwithstanding any other provision of this
Agreement:
(a) FOR CAUSE BY THE COMPANY. The Employment Term and the
Executive's employment hereunder may be terminated by the Company for "Cause."
For purposes of this Agreement, "CAUSE" shall mean (i) the Executive's gross
neglect of, or willful and continued failure to substantially perform, his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness); (ii) a willful act by the Executive against the
interests of the Company or which causes or is intended to cause harm to the
Company or its stockholders; (iii) the Executive's conviction, or plea of no
contest or guilty, to a felony under the laws of the United States or any state
thereof or of a lesser offense involving dishonesty, the theft of Company
property or moral turpitude; or (iv) a material breach of the Agreement by the
Executive which is not cured by the Executive within twenty (20) days (where the
breach is curable) following written notice to the Executive by the Company of
the nature of the breach. Upon termination of the Executive's employment for
Cause pursuant to this Section 7(a), the Executive shall be paid any accrued and
unpaid Base Salary and Benefits through the date of termination and shall have
no additional rights to any compensation or any other benefits under the
Agreement or otherwise.
(b) DISABILITY OR DEATH. The Employment Term and the
Executive's employment hereunder shall terminate upon his death or if the
Executive is unable for an aggregate of six (6) months in any twelve (12)
consecutive month period to perform his duties due to the Executive's physical
or mental incapacity, as reasonably determined by the Board (such incapacity is
hereinafter referred to as "DISABILITY"). Upon termination of the Executive's
employment hereunder for either Disability or death, the Executive or his estate
(as the case may be) shall be entitled to receive (i) any accrued and unpaid
Base Salary and Benefits and (ii) a bonus for the calendar year in which
termination occurs, equal to the bonus which the Executive would have been
entitled to if he had remained employed by the Company at the end of such
calendar year, multiplied by a fraction, the numerator of which is the number of
days in such calendar year preceding the date of death or termination of
employment and the denominator of which is 365 (a "PRO RATA BONUS"). Upon
termination of the Executive's employment due to Disability or death pursuant to
this Section 7(b), the Executive shall have no additional rights to
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any compensation or any other benefits under this Agreement. All other benefits,
if any, due the Executive following his termination for Disability or death
shall be determined in accordance with the plans, policies and practices of the
Company.
(c) WITHOUT CAUSE BY THE COMPANY. The Employment Term and
the Executive's employment hereunder may be terminated by the Company without
"Cause." If the Executive's employment is terminated by the Company without
"Cause" (other than by reason of Disability or death), the Executive shall be
entitled to receive (i) any accrued and unpaid Base Salary and Benefits, (ii)
continuation of the Executive's Base Salary for a period of twelve (12) months
from the date of termination (the "SEVERANCE PAYMENT"), (iii) continuation of
the Executive's health and dental insurance coverage on the same basis as those
benefits are generally made available to other executives of the Company and
(iv) a Pro Rata Bonus. Upon termination of Executive's employment by the Company
without Cause pursuant to this Section 7(c), Executive shall have no additional
rights to any compensation or any other benefits under this Agreement. All other
benefits, if any, due Executive following Executive's termination of employment
by the Company without Cause shall be determined in accordance with the plans,
policies and practices of the Company.
(d) VOLUNTARY TERMINATION BY EXECUTIVE. The Executive
shall provide the Company thirty (30) days' advance written notice in the event
the Executive terminates his employment, other than for Good Reason (as
hereinafter defined); PROVIDED that the President may, in his sole discretion,
terminate the Executive's employment with the Company prior to the expiration of
the thirty-day notice period. In such event and upon the expiration of such
thirty-day period (or such shorter time as the President in his sole discretion
may determine), the Executive's employment under this Agreement shall
immediately and automatically terminate, and the Executive shall be limited to
receiving any Base Salary earned and unpaid as of the Executive's termination
date.
(e) TERMINATION FOR GOOD REASON. The Executive may
terminate his employment hereunder for "Good Reason" at any time during the
Employment Term. For purposes of the Agreement, "GOOD REASON" shall mean (i) a
material breach of the terms of this Agreement by the Company, (ii) the Company
requiring the Executive to move his primary place of employment more than
thirty-five (35) miles from the then current place of employment, if such move
materially increases his commute, or (iii) a material diminution of the
Executive's responsibilities, PROVIDED that any of the foregoing is not cured by
the Company within twenty (20) days following receipt of written notice by the
Executive to the Company of the specific nature of the breach. No termination
for Good Reason shall be permitted unless the Company shall have first received
written notice from the Executive describing the basis of such termination for
Good Reason. A termination of the Executive's employment for Good Reason
pursuant to this Section 7(e) shall be treated for purposes of this Agreement as
a termination by the Company without Cause and the provisions of Section 7(c)
relating to the payment of compensation and benefits shall apply.
(f) BENEFITS/RELEASE. In addition to any amounts which
may be payable following a termination of employment pursuant to one of the
paragraphs of this Section 7, the Executive or his beneficiaries shall be
entitled to receive any benefits that may be provided
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for under the terms of an employee benefit plan in which the Executive is
participating at the time of termination. Notwithstanding any other provision of
this Agreement to the contrary, the Executive acknowledges and agrees that any
and all payments, other than the payment of any accrued and unpaid Base Salary
and Benefits, to which the Executive is entitled under this Section 7 are
conditioned upon and subject to the Executive's execution of a general waiver
and release, in such form as may be prepared by the Company's attorneys, of all
claims and issues arising under the Employment Agreement, except for such
matters covered by provisions of this Agreement which expressly survive the
termination of this Agreement.
(g) Except as provided in this Section 7, the Company
shall have no further obligation or liability under this Agreement following a
termination of employment by the Executive.
(h) NOTICE OF TERMINATION. Any purported termination of
employment by the Company or by the Executive shall be communicated by written
notice of termination to the other party hereto in accordance with Section 12(h)
hereof.
8. NON-COMPETITION.
(a) The Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates, the
valuable confidential business information in such Executive's possession and
the customer goodwill associated with the ongoing business practice of the
Company, and accordingly agrees as follows:
(i) During the Employment Term and, for a period
ending on the expiration of one year following the termination of the
Executive's employment (the "RESTRICTED PERIOD"), the Executive will not
directly or indirectly, (i) engage in any business for the Executive's own
account that competes with the business of the Company, (ii) enter the employ
of, or render any services to, any person engaged in any business that competes
with the business of the Company, (iii) acquire a financial interest in, or
otherwise become actively involved with, any person engaged in any business that
competes with the business of the Company, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant, or (iv) interfere with business relationships (whether formed
before or after the date of this Agreement) between the Company or any of its
affiliates that are engaged in a business similar to the business of the Company
(the "COMPANY AFFILIATES") and customers or suppliers of the Company or the
Company Affiliates.
(ii) Notwithstanding anything to the contrary in
this Agreement, the Executive may directly or indirectly own, solely as a
passive investment, securities of any person engaged in the business of the
Company which are publicly traded on a national or regional stock exchange or on
the over-the-counter market if the Executive (i) is not a controlling person of,
or a member of a group which controls, such person and (ii) does not, directly
or indirectly, own one percent (1%) or more of any class of securities of such
person.
(iii) During the Restricted Period, and for an
additional one year after the end of the Restricted Period, the Executive will
not, directly or indirectly, (i) without the written consent of the Company,
solicit or encourage any employee of the Company or the
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Company Affiliates to leave the employment of the Company or the Company
Affiliates, or (ii) without the written consent of the Company (which shall not
be unreasonably withheld), hire any such employee who has left the employment of
the Company or the Company Affiliates (other than as a result of the termination
of such employment by the Company or the Company Affiliates) within one year
after the termination of such employee's employment with the Company or the
Company Affiliates.
(iv) During the Restricted Period, the Executive
will not, directly or indirectly, solicit or encourage to cease to work with the
Company or the Company Affiliates any consultant then under contract with the
Company or the Company Affiliates.
(b) It is expressly understood and agreed that although
the Executive and the Company consider the restrictions contained in this
Section 8 to be reasonable, if a final judicial determination is made by a court
of competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against the
Executive, the provisions of this Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.
9. CONFIDENTIALITY. The Executive will not at any time (whether
during or after his employment with the company) disclose or use for his own
benefit or purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its
subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans, or the
business and affairs of the Company generally, or of any subsidiary or affiliate
of the Company, PROVIDED that the foregoing shall not apply to information which
is generally known to the industry or the public other than as a result of the
Executive's breach of this covenant. The Executive agrees that upon termination
of his employment with the Company for any reason, he will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to the business
of the Company and its affiliates, except that he may retain personal notes,
notebooks and diaries. The Executive further agrees that he will not retain or
use for his account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of the
Company or its affiliates.
10. SPECIFIC PERFORMANCE. The Executive acknowledges and agrees
that the Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 8 or Section 9 would be inadequate and, in recognition
of this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
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specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
11. INDEPENDENCE, SEVERABILITY AND NON-EXCLUSIVITY. Each of the
rights and remedies set forth in this Agreement shall be independent of the
others and shall be severally enforceable and all of such rights and remedies
shall be in addition to and not in lieu of any other rights and remedies
available to the Company or its affiliates under the law or in equity. If any of
the provisions contained in this Agreement, including without limitation, the
rights and remedies enumerated herein, is hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, or rights or remedies, which shall be given full effect without
regard to the invalid portions.
12. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without regard
to its conflicts of law doctrine.
(b) ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains
the entire understanding of the parties with respect to the employment of the
Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
(c) NO WAIVER. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
(d) SEVERABILITY. In the event that any one or more of
the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
(e) ASSIGNMENT. This Agreement shall not be assignable by
the Executive. This Agreement may be assigned by the Company to a company which
is a successor in interest to substantially all of the business operations of
the Company or to the financial institution(s) providing the Company's senior
credit facility. Such assignment shall become effective when the Company
notifies the Executive of such assignment or at such later date as may be
specified in such notice. Upon such assignment, the rights and obligations of
the Company hereunder shall become the rights and obligations of such successor
company, PROVIDED that any assignee expressly assumes the obligations, rights
and privileges of this Agreement.
(f) NO MITIGATION. The Executive shall not be required to
mitigate the amount of any payment provided for pursuant to this Agreement by
seeking other employment
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and, to the extent that the Executive obtains or undertakes other employment,
the payment will not be reduced by the earnings of the Executive from the other
employment.
(g) SUCCESSORS; BINDING AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees.
(h) NOTICE. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed, in
the case of the Executive, to the Executive's address on file with the Company;
all notices to the Company shall be directed to the attention of the President
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
(i) WITHHOLDING TAXES. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
(j) 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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
INTERLINE BRANDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President and CEO
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