EXHIBIT
10.3
U.S. AUTO PARTS NETWORK, INC.
 
NON-INCENTIVE STOCK OPTION AGREEMENT
 
This NON-INCENTIVE STOCK OPTION AGREEMENT (the “Agreement”) is made this April
28, 2008, by and between U.S. Auto Parts Network, Inc., a Delaware corporation
(the “Company”), and Alexander Adegan, an individual resident of California
(“Optionee”).  Capitalized terms used but not otherwise defined herein shall
have the meaning ascribed to such terms in the U.S. Auto Parts Network, Inc.
2007 Omnibus Incentive Plan (the “Plan”).
 
1.  Grant of Option.
 
The Company hereby grants Optionee the option (the “Option”) to purchase all or
any part of an aggregate of 120,000 shares (the “Shares”) of common stock,
$0.001 par value (“Common Stock”), of the Company at the exercise price of $3.16
per share according to the terms and conditions set forth in this Agreement and
in the Plan.  The Option will not be treated as an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).  The Option is issued under the Plan and is subject to its terms and
conditions.  A copy of the Plan will be furnished upon request of Optionee.
 
2.  Vesting of Option Rights.
 
 
(a)  The Option shall have a vesting commencement date of April 28, 2008, (the
“Vesting Commencement Date”), and except as otherwise provided in this
Agreement, the Option shall be exercisable for vested Shares only.  The Option
shall initially be for unvested Shares.  The Shares shall become vested Shares
in a series of twenty-two (22) successive equal monthly installments upon
Optionee’s completion of each additional month of Service over the twenty-one
(21) month period measured from the Vesting Commencement Date.  In no event
shall any additional Shares vest after Optionee’s Service ceases.
 
(b)  During the lifetime of Optionee, the Option shall be exercisable only by
Optionee and shall not be assignable or transferable by Optionee, other than by
will or the laws of descent and distribution.  Notwithstanding the foregoing,
Optionee may transfer the Option to any Family Member (as such term is defined
in the General Instructions to Form S-8 (or successor to such Instructions or
such Form)); provided, however, that (i) Optionee may not receive any
consideration for such transfer, (ii) the Family Member must agree in writing
not to make any subsequent transfers of the Option other than by will or the
laws of the descent and distribution and (iii) the Company receives prior
written notice of such transfer.
 
3.  Exercise of Option after Death or Termination of Employment or Service.
 
The Option shall terminate and may no longer be exercised if Optionee ceases to
be employed by or provide Service to the Company or its Affiliates, except that:
 
(a)  If Optionee’s employment or Service shall be terminated for any reason,
voluntary or involuntary, other than for “Misconduct” (as defined in Section
3(e)) or Optionee’s death or Permanent Disability, Optionee may at any time
within a period of one (1) month after such termination exercise the Option to
the extent the Option was exercisable by Optionee on the date of the termination
of Optionee’s employment or Service.
 
(b)  If Optionee’s employment or Service is terminated for Misconduct, the
Option shall be terminated as of the date of the act giving rise to such
termination.
 
(c)  If Optionee shall die while the Option is still exercisable according to
its terms, or if employment or Service is terminated because of Optionee’s
Permanent Disability while in the employ of the Company, and Optionee shall not
have fully exercised the Option, such Option may be exercised, at any time
within twelve (12) months after Optionee’s death or date of termination of
employment or Service for Permanent Disability, by Optionee, personal
representatives or administrators or guardians of Optionee, as applicable, or by
any person or persons to whom the Option is transferred by will or the
applicable laws of descent and distribution, to the extent of the full number of
Shares Optionee was entitled to purchase under the Option on (i) the earlier of
the date of death or termination of employment or Service or (ii) the date of
termination for such Permanent Disability, as applicable.
 
(d)  Notwithstanding the above, in no case may the Option be exercised to any
extent by anyone after the termination date of the Option.
 
(e)  “Misconduct” shall have the same meaning as “Cause”, as such term is
defined in the Consulting Agreement dated April 28, 2008 by and between the
Company and Optionee.  The foregoing definition shall not in any way preclude or
restrict the right of the Company (or any Affiliate) to discharge or dismiss any
Optionee or other person in the Service of the Company (or any Affiliate) for
any other acts or omissions but such other acts or omissions shall not be
deemed, for purposes of the Agreement, to constitute grounds for termination for
Misconduct.
 
4.  Method of Exercise of Option.
 
Subject to the foregoing, the Option may be exercised in whole or in part from
time to time by serving written notice of exercise on the Company at its
principal office within the Option period.  The notice shall state the number of
Shares as to which the Option is being exercised and shall be accompanied by
payment of the exercise price.  Payment of the exercise price shall be made (i)
in cash (including bank check, personal check or money order payable to the
Company), (ii) with the approval of the Company (which may be given in its sole
discretion), by delivering to the Company for cancellation shares of the
Company’s Common Stock already owned by Optionee having a Fair Market Value
equal to the full exercise price of the Shares being acquired, (iii) with the
approval of the Company (which may be given in its sole discretion) and subject
to Section 402 of the Sarbanes-Oxley Act of 2002, by delivering to the Company
the full exercise price of the Shares being acquired in a combination of cash
and Optionee’s full recourse liability promissory note with a principal amount
not to exceed eighty percent (80%) of the exercise price and a term not to
exceed five (5) years, which promissory note shall provide for interest on the
unpaid balance thereof which at all times is not less than the minimum rate
required to avoid the imputation of income, original issue discount or a
below-market rate loan pursuant to Sections 483, 1274 or 7872 of the Code or any
successor provisions thereto, (iv) subject to Section 402 of the Sarbanes-Oxley
Act of 2002, to the extent this Option is exercised for vested shares, through a
special sale and remittance procedure pursuant to which Optionee shall
concurrently provide irrevocable instructions (1) to Optionee’s brokerage firm
to effect the immediate sale of the purchased Shares and remit to the Company,
out of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased Shares plus all
applicable income and employment taxes required to be withheld by the Company by
reason of such exercise and (2) to the Company to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale, or (v) with the approval of the Company (which may be given in its sole
discretion) and subject to Section 402 of the Sarbanes-Oxley Act of 2002, by
delivering to the Company a combination of any of the forms of payment described
above.  This Option may be exercised only with respect to full shares and no
fractional share of stock shall be issued.
 
5.  Change in Control.
 
 
(a)  Immediately prior to the specified effective date of a Change in Control,
the unvested Shares subject to this Option shall automatically become vested
Shares, and this Options shall be exercisable for all or any portion of such
Shares.
 
(b)  Immediately following the consummation of the Change in Control, this
Option shall terminate, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in effect pursuant to the
terms of the Change in Control transaction.  If this Option is assumed in
connection with a Change in Control or otherwise continued in effect,  then this
Option shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Change in Control had the Option
been exercised immediately prior to such Change in Control, and appropriate
adjustments shall also be made to the exercise price, provided the aggregate
exercise price shall remain the same.  To the extent that the actual holders of
the Company’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption of this Option, substitute one or more
shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in Control.
 
(c)  This Agreement shall not in any way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
 
(d)  For purposes of this Agreement, “Change in Control” shall mean a change in
ownership or control of the Company effected through any of the following
transactions: (i) a merger, consolidation or other reorganization unless
securities representing more than 50% of the total combined voting power of the
voting securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Company’s outstanding
voting securities immediately prior to such transaction; (ii) the sale, transfer
or other disposition of all or substantially all of the Company’s assets; or
(iii) the acquisition, directly or indirectly by any person or related group of
persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company), of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders.
 
6.  Capital Adjustments and Reorganization.
 
.  Should any change be made to the Common Stock by reason of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Company’s receipt of consideration, appropriate adjustments
shall be made to (a) the number and/or class of securities subject to this
Option and (b) the exercise price in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder.
 
7.  Miscellaneous.
 
(a)  Entire Agreement; Plan Provisions Control.  This Agreement (and any
addendum hereto) and the Plan constitute the entire agreement between the
parties hereto with regard to the subject matter hereof.  In the event that any
provision of the Agreement conflicts with or is inconsistent in any respect with
the terms of the Plan, the terms of the Plan shall control.  All decisions of
the Committee with respect to any question or issue arising under the Plan or
this Agreement shall be and binding on all persons having an interest in this
Option.  All capitalized terms used in this Agreement and not otherwise defined
in this Agreement shall have the meaning assigned to them in the Plan.
 
(b)  No Rights of Stockholders.  Neither Optionee, Optionee’s legal
representative nor a permissible assignee of this Option shall have any of the
rights and privileges of a stockholder of the Company with respect to the
Shares, unless and until such Shares have been issued in the name of Optionee,
Optionee’s legal representative or permissible assignee, as applicable, without
restrictions thereto.
 
(c)  No Right to Employment.  The grant of the Option shall not be construed as
giving Optionee the right to be retained in the employ of, or if Optionee is a
director of the Company or an Affiliate as giving the Optionee the right to
continue as a director of, the Company or an Affiliate, nor will it affect in
any way the right of the Company or an Affiliate to terminate such employment or
position at any time, with or without cause.  In addition, the Company or an
Affiliate may at any time dismiss Optionee from employment, or terminate the
term of a director of the Company or an Affiliate, free from any liability or
any claim under the Plan or the Agreement.  Nothing in the Agreement shall
confer on any person any legal or equitable right against the Company or any
Affiliate, directly or indirectly, or give rise to any cause of action at law or
in equity against the Company or an Affiliate.  The Option granted hereunder
shall not form any part of the wages or salary of Optionee for purposes of
severance pay or termination indemnities, irrespective of the reason for
termination of employment.  Under no circumstances shall any person ceasing to
be an employee of the Company or any Affiliate be entitled to any compensation
for any loss of any right or benefit under the Agreement or Plan which such
employee might otherwise have enjoyed but for termination of employment, whether
such compensation is claimed by way of damages for wrongful or unfair dismissal,
breach of contract or otherwise.  By participating in the Plan, Optionee shall
be deemed to have accepted all the conditions of the Plan and the Agreement and
the terms and conditions of any rules and regulations adopted by the Committee
and shall be fully bound thereby.
 
(d)  Governing Law.  The validity, construction and effect of the Plan and the
Agreement, and any rules and regulations relating to the Plan and the Agreement,
shall be determined in accordance with the internal laws, and not the law of
conflicts, of the State of Delaware.
 
(e)  Severability.  If any provision of the Agreement is or becomes or is deemed
to be invalid, illegal or unenforceable in any jurisdiction or would disqualify
the Agreement under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the purpose or intent of the Plan or the
Agreement, such provision shall be stricken as to such jurisdiction or the
Agreement, and the remainder of the Agreement shall remain in full force and
effect.
 
(f)  No Trust or Fund Created.  Neither the Plan nor the Agreement shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and Optionee or any other
person.
 
(g)  Headings.  Headings are given to the Sections and subsections of the
Agreement solely as a convenience to facilitate reference.  Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Agreement or any provision thereof.
 
(h)  Notices.  Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be addressed to the Company at its principal
corporate offices.  Any notice required to be given or delivered to Optionee
shall be addressed to Optionee at the address of record provided to the Company
by Optionee in connection with Optionee’s employment with or Services provided
to the Company or such other address as Optionee may designate by ten (10) days’
advance written notice to the Company.  Any notice required to be given under
this Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon the third (3rd) day following deposit in the U.S. mail,
registered or certified, postage prepaid and properly addressed to the party
entitled to such notice.
 
(i)  Conditions Precedent to Issuance of Shares.  Shares shall not be issued
pursuant to the exercise of the Option unless such exercise and the issuance and
delivery of the applicable Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, state blue sky laws, the requirements of any
applicable Stock Exchange or the Nasdaq Stock Market and the Delaware General
Corporation Law.  As a condition to the exercise of the purchase price relating
to the Option, the Company may require that the person exercising or paying the
purchase price represent and warrant that the Shares are being purchased only
for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation and
warranty is required by law.
 
(j)  Withholding.  In order to provide the Company with the opportunity to claim
the benefit of any income tax deduction which may be available to it upon the
exercise of the Option and in order to comply with all applicable federal or
state income tax laws or regulations, the Company may take such action as it
deems appropriate to insure that, if necessary, all applicable federal or state
payroll, withholding, income or other taxes are withheld or collected from
Optionee.
 
(k)  Consultation With Professional Tax and Investment Advisors.  Optionee
acknowledges that the grant, exercise and vesting with respect to this Option,
and the sale or other taxable disposition of the Shares, may have tax
consequences pursuant to the Code or under local, state or international tax
laws.  Optionee further acknowledges that Optionee is relying solely and
exclusively on Optionee’s own professional tax and investment advisors with
respect to any and all such matters (and is not relying, in any manner, on the
Company or any of its employees or representatives).  Optionee understands and
agrees that any and all tax consequences resulting from the Option and its
grant, exercise and vesting, and the sale or other taxable disposition of the
Shares, is solely and exclusively the responsibility of Optionee without any
expectation or understanding that the Company or any of its employees or
representatives will pay or reimburse Optionee for such taxes or other items.
 
(l)  Acceptance of Option.  By accepting receipt of this Agreement, Optionee
hereby agrees to the terms and conditions set forth in this Agreement and the
Plan with respect to the Option and any Shares issued as a result of the
exercise of the Option, in whole or in part.
 
IN WITNESS WHEREOF, the Company has executed this Agreement and caused this
Option to be issued to Optionee on the date set forth in the first paragraph
above.
 
U.S. AUTO PARTS NETWORK, INC.
 
 
By:       /s/ MICHAEL McCLANE
Name:  Michael McClane
Title:    Chief Financial Officer