Document:

ex_10-1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      EMPLOYMENT AGREEMENT (the “Agreement”) is
      made effective April 3, 2008. (the “Effective Date”)
      by and among between U.S. Auto Parts Network, Inc., a Delaware corporation
      (the
“Company”), and Aaron Coleman, an individual (the
“Executive”).

     

    WHEREAS,
      the parties hereto desire to enter into a written agreement to document
      the terms of Executive’s employment with the Company.

     

    1.  Duties
      and Responsibilities.

     

    A.           Executive
      shall serve as the Company’s CIO and Executive Vice President of Operations,
      reporting directly to the Company’s Chief Executive
      Officer.  Executive shall have the duties and powers at the Company
      that are customary for an individual holding such positions.

     

    B.           Executive
      agrees to use his best efforts to advance the business and welfare of the
      Company, to render his services under this Agreement faithfully, diligently
      and
      to the best of his ability.

     

    C.           Executive
      shall be based at the Company’s office located at Carson, California, or at such
      other offices of the Company located within 30 miles of such
      offices.

     

    2.  Employment
      Period.  Following the Effective Date, Executive’s
      employment with the Company shall be governed by the provisions of this
      Agreement for the period commencing as of the date hereof and continuing until
      the earlier of (i) Executive’s termination of employment with the Company for
      any reason, or (ii) the fifth anniversary of the Effective Date (the
“Employment Period”).  Provided that
      Executive’s employment has not been or is not being terminated for any reason,
      Executive and the Company agree to negotiate in good faith prior to the end
      of
      the Employment Period to enter into a new Employment Agreement to take effect
      after the Employment Period. 

     

    3.  Cash
      Compensation.

     

    A.           Annual
      Salary.  Executive’s initial base salary
      shall be $250,000 per year (the “Annual Salary”),
      which shall be payable in accordance with the Company’s standard payroll
      schedule (but in no event less frequent than on a monthly basis), and may be
      increased from time to time at the discretion of the Compensation Committee
      of
      the Company’s Board of Directors (the “Compensation
      Committee”).  The Compensation Committee shall review
      Executive’s Annual Salary at least annually and may increase the Annual Salary
      from time to time at its sole discretion.  Any increased Annual Salary
      shall thereupon be the “Annual Salary” for the purposes
      hereof.  Executive’s Annual Salary shall not be decreased without his
      prior written consent at any time during the Employment Period.

     

    B.           Bonus.

     

    (1)           Signing
      and Retention Bonus.  The Company shall pay to Executive
      a bonus of $50,000, which shall be payable in a lump sum as soon as reasonably
      practicable following the Effective Date.  In the event that
      Executive’s employment is terminated for Cause (as defined below) or if
      Executive resigns from the Company without Good Reason (as defined below) prior
      to the first anniversary of the Effective Date, Executive agrees to reimburse
      the Company for such bonus; provided however, that the amount of the reimbursed
      bonus to the Company shall be reduced by $4,167 (1/12th of the
      total
      bonus) for each complete month of Executive’s employment with the Company,
      calculated from the Effective Date.  Executive hereby agrees that the
      Company may deduct such bonus reimbursement from any or all payments due to
      Executive from the Company, including from his last paycheck (to the extent
      legally permissible), and Executive agrees to provide the Company with any
      further written authorization of the deduction as may be reasonably requested
      by
      the Company to authorize, facilitate or substantiate such
      deduction.

     

    (2)           Annual
      Target Bonus.  Executive shall also be entitled to
      receive an annual target incentive bonus of up to 40% of the Executive’s current
      salary, which for the first calendar year shall be an amount up to $100,000
      per
      year, pro rated based upon the Executive’s length of employment during such
      year.  The annual bonus shall be based upon the Company achieving its
      revenue and EBITDA goals, and Executive meeting the annual goals determined
      by
      the Compensation Committee.  The amount of the annual target bonus
      payable to Executive in any given year shall be determined by the Compensation
      Committee.  The annual bonus shall be paid no later than the end of
      February following the year for which such bonus is being paid.

     

    C.           Applicable
      Withholdings.  The Company shall deduct
      and withhold from the compensation payable to Executive hereunder any and all
      applicable federal, state and local income and employment withholding taxes
      and
      any other amounts required to be deducted or withheld by the Company under
      applicable statutes, regulations, ordinances or orders governing or requiring
      the withholding or deduction of amounts otherwise payable as compensation or
      wages to employees.

     

    4.  Equity
      Compensation. 

     

                          A.           Initial
      Grants.  As of the close of business on
      the date of the Executive’s first day of employment with the Company, the
      Company’s Compensation Committee shall grant you a non-statutory stock
      option.  The stock option shall be an option to purchase up to 250,000
      shares of the Company’s common stock and shall vest over four years; 25% of the
      shares shall vest on the first anniversary of the grant date and the balance
      shall vest in 36 equal monthly installments thereafter.

    

    The
      foregoing option will be granted
      pursuant to the Company’s 2007 Omnibus Incentive Plan (the
“Plan”), and will be subject to the terms and
      conditions of the Plan in effect as of the grant date and the related stock
      option agreement.  The exercise price for the option shall be equal to
      the closing sales price of the Company’s common stock as reported by the NASDAQ
      Stock Market or the primary exchange on which the Company’s common stock is then
      listed or quoted (the “Exchange”) on the date of grant
      of the option.  The option shall have provisions to accelerate the
      vesting in the event either Executive’s employment is terminated without Cause
      or Executive resigns for Good Reason within twelve months following a Change
      in
      Control as defined in the Plan.  The option shall contain provisions
      that will restrict the sale of the common stock issuable upon exercise of such
      option for 18 months following the grant date, except to the extent necessary
      to
      cover any current tax liabilities of Executive associated with such
      option.

    

                          B.           Other
      Equity Compensation.  Executive shall also be entitled to
      participate in any other equity incentive plans of the Company.  All
      such other options or other equity awards will be made at the discretion of
      the
      Company’s Compensation Committee of the Board of Directors pursuant and subject
      to the terms and conditions of the applicable equity incentive plan, including
      any provisions for repurchase thereof.  The option exercise price or
      value of any equity award granted to Executive will be established by the
      Company’s Board of Directors as of the date such interests are granted but shall
      not be less than the fair market value of the class of equity underlying such
      award.  

    

    5.  Expense
      Reimbursement.  In addition to the
      compensation specified in Section 3, Executive shall be entitled to receive
      reimbursement from the Company for all reasonable business expenses incurred
      by
      Executive in the performance of Executive’s duties hereunder, provided that
      Executive furnishes the Company with vouchers, receipts and other details of
      such expenses in the form reasonably required by the Company to substantiate
      a
      deduction for such business expenses under all applicable rules and regulations
      of federal and state taxing authorities.

     

    6.  Fringe
      Benefits.

     

    A.           Group
      Plans.  Executive shall, throughout the
      Employment Period, be eligible to participate in all of the group term life
      insurance plans, group health plans, accidental death and dismemberment plans,
      short-term disability programs, retirement plans, profit sharing plans or other
      plans (for which Executive qualifies) that are available to the executive
      officers of the Company.  During the Employment Period, the Company
      will pay for coverage for Executive and his spouse and dependents residing
      in
      Executive’s household (collectively, the “Dependents”)
      under the Company’s health plan, and coverage for Executive under the Company’s
      accidental death and dismemberment plan and for short-term
      disability.  In the event Executive elects not to participate in the
      Company’s health plan, the Company shall reimburse Executive for the cost of
      alternative health care coverage of his choosing for Executive and his
      Dependents in an amount up to $1,500 per month.  Payment for all other
      benefit plans will be paid in accordance with the Company’s policy in effect for
      similar executive positions.

     

    B.           Vacation.  Executive
      shall be entitled to at least four weeks paid vacation per
      year.  Vacation shall accrue pursuant to the Company’s vacation
      benefit policies.

     

    C.           Auto
      Allowance. Executive shall be entitled to an
      auto allowance for one vehicle for Executive’s use up to $1,000 per
      month.

     

    D.           Housing
      Benefits.  Executive shall be reimbursed for all
      out-of-pocket, direct expenses incurred in connection with the relocation of
      Executive’s family from Dallas, Texas to Southern California including moving
      costs and travel expenses; provided that Executive furnishes the Company with
      vouchers, receipts and other details of such expenses in the form reasonably
      required by the Company.  The Company will also reimburse Executive
      for the actual real estate commissions paid by Executive on the sale of
      Executive’s primary residence and for closing costs for purchase of Executive’s
      home in California, both of which collectively shall not exceed
      $35,000.

     

    E.           Indemnification.  As
      of the Effective Date, the Company and Executive shall enter into the Company’s
      standard indemnification agreement for its key executives.

     

    7.  Termination
      of Employment.  Executive’s employment with the Company
      is “at-will.”  This means that it is not for any specified period of
      time and can be terminated by Executive or the Company at any time, with or
      without advance notice, and for any or no particular reason or
      cause.  Upon such termination, Executive (or, in the case of
      Executive’s death, Executive’s estate and beneficiaries) shall have no further
      rights to any other compensation or benefits from the Company on or after the
      termination of employment except as follows:

     

    A.  Termination
      For Cause.  In the event the Company terminates
      Executive’s employment with the Company prior to expiration of the Employment
      Period for Cause (as defined below), the Company shall pay to Executive the
      following: (i) Executive’s unpaid Annual Salary that has been earned through the
      termination date of his employment; (ii) Executive’s accrued but unused
      vacation; (iii) any accrued expenses pursuant to Section 5 above, and (iv)
      any
      other payments as may be required under applicable law (subsections (i) through
      (iv) above shall collectively be referred to herein as the “Required
      Payments”).  For purposes of this Agreement,
“Cause” shall mean that Executive has engaged
      in any
      one of the following:  (i) misconduct involving the Company or its
      assets, including, without limitation, misappropriation of the Company’s funds
      or property; (ii) reckless or willful misconduct in the performance of
      Executive’s duties in the event such conduct continues after the Company has
      provided 30 days written notice to Executive and a reasonable opportunity to
      cure; (iii) conviction of, or plea of nolo contendre to, any felony or
      misdemeanor involving dishonesty or fraud; (iv) the violation of any of the
      Company’s policies, including without limitation, the Company’s policies on
      equal employment opportunity and the prohibition against unlawful harassment;
      (v) the material breach of any provision of this Agreement after 30 days written
      notice to Executive of such breach and a reasonable opportunity to cure such
      breach; or (vi) any other misconduct that has a material adverse effect on
      the
      business or reputation of the Company.

     

    B.  Termination
      Upon Death or Disability.  If Executive dies during the
      Employment Period, the Executive’s employment with the Company shall be deemed
      terminated as of the date of death, and the obligations of the Company to or
      with respect to Executive shall terminate in their entirety upon such date
      except as otherwise provided under this Section 7B.  If Executive
      becomes Disabled (as defined below), then the Company shall have the right,
      to
      the extent permitted by law, to terminate the employment of Executive upon
      30
      days prior written notice in writing to Executive.  Upon termination
      of employment due to the death or Disability of Executive, Executive (or
      Executive’s estate or beneficiaries in the case of the death of Executive) shall
      be entitled to receive the Required Payments; and  Executive shall
      also be entitled to the following:  (i) Executive’s annual bonus for
      the year of termination in accordance with Section 3B above (pro rated up to
      the
      termination date), which bonus shall be paid at the earlier of (A) such time as
      the Company regularly pays bonuses, or (B) 2 1⁄2 months following the calendar
      year in which the termination occurs; and (ii) continuation of his Annual Salary
      following such termination for a period of one year, which shall be payable
      in
      accordance with the Company’s standard pay schedules; and (iii) in the case of
      termination due to Disability, the Company shall reimburse Executive’s COBRA
      payments for Executive’s health insurance benefits for a period of one
      year.  Notwithstanding the foregoing, the aggregate amount of
      continuation payments under (ii) above made during the first six months
      following Executive’s termination of employment shall not exceed the applicable
      dollar limit provided under Treasury Regulations Section
      1.409A-1(b)(9)(iii)(A).  The amount, if any, that exceeds the
      applicable dollar limit shall be paid on the first day of the seventh month
      following Executive’s termination of employment.  For the purposes of
      this Agreement, “Disability” shall mean a physical or
      mental impairment which, the Board of Directors determines, after consideration
      and implementation of reasonable accommodations, precludes the Executive from
      performing his essential job functions for a period longer than three
      consecutive months or a total of one hundred twenty (120) days in any twelve
      month period.

     

    C.           Termination
      for Any Other Reason; Resignation for Good
      Reason.  Should the Company terminate Executive’s
      employment (other than for Cause or as a result of Executive’s Death or
      Disability), or in the event Executive resigns for Good Reason (as defined
      below), then the Company shall pay Executive the Required Payments; and
      Executive shall also be entitled to the following:  (i) a pro rated
      share of Executive’s bonus (pro rated up to the termination or resignation date,
      as the case may be), which bonus shall be paid at the earlier of (A) such time
      as the Company regularly pays bonuses; or (B) no later than 2 1⁄2 months following
      the calendar year in which the termination or resignation occurs; (iii)
      continuation of Executive’s Annual Salary, which shall be payable in accordance
      with the Company’s standard pay schedules for a period of one year (provided
      however that if Executive obtains other employment, then his severance payments
      shall be reduced after the first six months of the foregoing one year severance
      period by any amounts received by Executive from his new employer for the
      balance of the one year severance period); and (iv) the Company shall also
      reimburse Executive’s actual COBRA payments for Executive’s health insurance
      benefits for a period of one year.  This Section 7C is intended to
      qualify as an involuntary separation pay arrangement that is exempt from
      application of Section 409A of the Internal Revenue Code of 1986, as amended
      (the “Code”) because certain severance payments are
      treated as paid on account of an involuntary separation (including a separation
      for Good Reason) and paid in a lump sum within the “short-term deferral” period
      following the time the Executive obtains a vested right to such
      payments.  Notwithstanding the foregoing, the aggregate amount of
      continuation payments under (iii) above made during the first six months
      following Executive’s termination of employment shall not exceed the applicable
      dollar limit provided under Treasury Regulations Section
      1.409A-1(b)(9)(iii)(A).  The amount, if any, that exceeds the
      applicable dollar limit shall be paid on the first day of the seventh month
      following Executive’s termination of employment.  For the purposes of
      this Agreement, “Good Reason” shall mean Executive’s
      voluntary resignation for any of the following events that results in a material
      negative change to the Executive; (i)  a reduction without Executive’s
      prior written consent in either his level of Annual Salary or his target annual
      bonus as a percentage of Annual Salary; (iii) a relocation of Executive more
      than thirty (30) miles from the Company’s current corporate headquarters as of
      the date hereof, (iv) a material breach of any provision of this Agreement
      by
      the Company or (v) the failure of the Company to have a successor entity
      specifically assume this Agreement.  Notwithstanding the foregoing,
“Good Reason” shall only be found to exist if prior to Executive’s resignation
      for Good Reason, the Executive has provided 30 days written notice to the
      Company of such Good Reason event indicating and describing the event resulting
      in such Good Reason, and the Company does not cure such event within 90 days
      following the receipt of such notice from Executive.

     

    8.  Non-Competition
      During the Employment Period.  Executive acknowledges and
      agrees that given the extent and nature of the confidential and proprietary
      information he will obtain during the course of his employment with the Company,
      it would be inevitable that such confidential information would be disclosed
      or
      utilized by the Executive should he obtain employment from, or otherwise become
      associated with, an entity or person that is engaged in a business or enterprise
      that directly competes with the Company.  Consequently, during any
      period for which Executive is receiving payments from the Company, either as
      wages or as a severance benefit, Executive shall not, without
      prior written consent of the Chief Executive Officer, directly or indirectly
      own, manage, operate, control or participate in the ownership, management,
      operation or control of, or be employed by or provide advice to, any enterprise
      that is engaged in any business directly competitive to that of the Company
      in
      the aftermarket auto parts market in the United States; provided, however,
      that
      such restriction shall not apply to any passive investment representing an
      interest of less than 1% of an outstanding class of publicly-traded securities
      of any company or other enterprise where Executive does not provide any
      management, consulting or other services to such company or
      enterprise.

     

    9.  Proprietary
      Information.  Executive has executed or
      is concurrently executing the Company’s standard Confidential Information and
      Assignment of Inventions Agreement (the “Confidentiality
      Agreement”), which is hereby incorporated by this reference as if
      set forth fully herein.  Executive’s obligations pursuant to the
      Confidentiality Agreement will survive termination of Executive’s employment
      with the Company.  Executive agrees that he will not use or disclose
      to the Company any confidential or proprietary information from any of his
      prior
      employers.

     

    10.  Successors
      and Assigns.  This Agreement is personal
      in its nature and the Executive shall not assign or transfer his rights under
      this Agreement.  The provisions of this Agreement shall inure to the
      benefit of, and shall be binding on, each successor of the Company whether
      by
      merger, consolidation, transfer of all or substantially all assets, or
      otherwise, and the heirs and legal representatives of Executive.

     

    11.  Notices.  Any
      notices, demands or other communications required or desired to be given by
      any
      party shall be in writing and shall be validly given to another party if served
      either personally or via overnight delivery service such as Federal Express,
      postage prepaid, return receipt requested.  If such notice, demand or
      other communication shall be served personally, service shall be conclusively
      deemed made at the time of such personal service.  If such notice,
      demand or other communication is given by overnight delivery, such notice shall
      be conclusively deemed given two business days after the deposit thereof
      addressed to the party to whom such notice, demand or other communication is
      to
      be given as hereinafter set forth:

     

    
      	
               

            	
                             To
                the Company:

            	
              U.S.
                Auto Parts Network, Inc.

            

    

    
      	
               

            	
              17150
                South Margay Avenue

            

    

    
      	
               

            	 	
              Carson,
                California 90746

            

    

    
      	
               

            	
              Attn:  Chief
                Executive Officer

            

    

    

    
      	
               

            	
              To
                Executive:

            	
              At
                Executive’s last residence as provided
                by

            

    

    
      	
               

            	
              Executive
                to the Company for payroll records.

            

    

    
      	
               

            	 

    

    Any
      party
      may change such party’s address for the purpose of receiving notices, demands
      and other communications by providing written notice to the other party in
      the
      manner described in this Section 11.

     

    12.  Governing
      Documents.  This Agreement, along with
      the documents expressly referenced in this Agreement, constitute the entire
      agreement and understanding of the Company and Executive with respect to the
      terms and conditions of Executive’s employment with the Company and the payment
      of severance benefits, and supersedes all prior and contemporaneous written
      or
      verbal agreements and understandings between Executive and the Company relating
      to such subject matter.  This Agreement may only be amended by written
      instrument signed by Executive and an authorized officer of the
      Company.  Any and all prior agreements, understandings or
      representations relating to the Executive’s employment with the Company are
      terminated and cancelled in their entirety and are of no further force or
      effect.

     

    13.  Governing
      Law.  The provisions of this letter
      agreement will be construed and interpreted under the laws of the State of
      California.  If any provision of this Agreement as applied to any
      party or to any circumstance should be adjudged by a court of competent
      jurisdiction to be void or unenforceable for any reason, the invalidity of
      that
      provision shall in no way affect (to the maximum extent permissible by law)
      the
      application of such provision under circumstances different from those
      adjudicated by the court, the application of any other provision of this
      Agreement, or the enforceability or invalidity of this Agreement as a
      whole.  Should any provision of this Agreement become or be deemed
      invalid, illegal or unenforceable in any jurisdiction by reason of the scope,
      extent or duration of its coverage, then such provision shall be deemed amended
      to the extent necessary to conform to applicable law so as to be valid and
      enforceable or, if such provision cannot be so amended without materially
      altering the intention of the parties, then such provision will be stricken
      and
      the remainder of this Agreement shall continue in full force and
      effect.

     

    14.  Remedies.  All
      rights and remedies provided pursuant to this Agreement or by law shall be
      cumulative, and no such right or remedy shall be exclusive of any
      other.  A party may pursue any one or more rights or remedies
      hereunder, or may seek damages or specific performance in the event of another
      party’s breach hereunder, or may pursue any other remedy by law or equity,
      whether or not stated in this Agreement.

     

    15.  No
      Waiver.  The waiver by either party of a
      breach of any provision of this Agreement shall not operate as, or be construed
      as, a waiver of any later breach of that provision.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first above written.

     

    U.S.
      AUTO
      PARTS NETWORK, INC.

     

    

     

    By:                           /s/
      Shane Evangelist

     

    Print
      Name:            Shane
      Evangelist

     

    Title:                       Chief
      Executive
      Officer                                                      

     

                                                                          Address:         
              17150 South Margay
      Avenue

    Carson,
      CA 90746

    

    

    

    

    /s/
      Aaron Coleman

     

    AARON
      COLEMAN, Executivespecimanstockcert.htm

    Exhibit 4.1

      See
Transfer Restrictions On Reverse Side

      

      

      

      

      

      

      

                    -
0
-                                                                                                                                              -
00,000 -

      

      

      

      NASUS
CONSULTING, INC.

      Incorporated
under the Laws of the Commonwealth of Massachusetts

      Common
Stock, Par Value $.001

      

      

      

                                                                -
Name of Owner -

      

                                                                                 -
Number of Shares (00,000) -

      

      

      

      

      

      

      

                                           Date

      

      

      

           Treasurer                                                                                                       President

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW.  NO TRANSFER, SALE OR OTHER
DISPOSITION OF THESE SHARES MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH
RESPECT TO THESE SHARES HAS BECOME EFFECTIVE UNDER SAID ACT, OR NASUS
CONSULTING, INC. IS FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY IN FORM
AND SUBSTANCE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

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