Document:

Exhibit 109

		

			Exhibit 10.9

		

		
			EMPLOYMENT AGREEMENT 
		

		
			This Employment Agreement (the “Agreement”) is made effective as of January 1, 2018 (the “Effective Date”), by and between The First of Long Island Corporation (the “Company”), The First National Bank of Long Island (the “Bank”; and together with the Company, “FLIC”) and Christopher J. Hilton (“Executive”).    
		

		
			WHEREAS,  FLIC wishes to assure itself of the continued services of Executive for the period and in accordance with the terms provided in this Agreement; and
		

		
			WHEREAS, in order to induce Executive to remain in the employ of FLIC and to provide further incentive for Executive to achieve the financial and performance objectives of FLIC, the parties desire to enter into this Agreement; and
		

		
			NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:
		

			
	
			
				 1.
			

			
	
			
			TERM.

		
			(a) Term.  The term of this Agreement and the period of Executive’s employment hereunder shall begin as of the Effective Date and shall continue for twenty-four (24) full calendar months thereafter (the “Employment Period,” which shall include any periods covered by renewals hereunder).  Subject to Section 4(d), commencing on January 1, 2019, and continuing on January 1 of each year thereafter (the “Anniversary Date”), this Agreement shall renew for an additional twelve months such that the remaining term shall be twenty-four months (24) months unless written notice of non-renewal is provided to Executive at least thirty (30) days prior to any such Anniversary Date.       
		

		
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				 2.
			

			
	
			
			EMPLOYMENT; CAPACITY; DUTIES.

		
			(a) Employment.  During the Employment Period Executive shall be employed in the capacity of Executive Vice President of FLIC (the “Executive Position”) and shall have such other senior executive title as may from time to time be determined by the Boards of Directors.  Executive shall have such duties and responsibilities as usually appertain to the Executive Position, as well as those as shall be assigned by the Chief Executive Officer or by the Board of Directors.  The Executive shall report to the Chief Executive Officer.  
		

		
			(b)  Service on Other Boards.  Executive agrees to devote his full time and attention and best efforts to the faithful and diligent performance of Executive’s duties to FLIC, and Executive shall serve and further the best interests and enhance the reputation of FLIC to the best of Executive’s ability. Nothing herein shall be construed as preventing Executive from serving as a member of the board of directors of any non-profit organization (of which the Board shall be notified prior to the commencement of service) or, with the consent of the Board of Directors, of any for-profit organization, in either case subject to and consistent with applicable laws. Executive’s service on boards of non-profits and for-profit organizations in effect as of the date of this Agreement and as to which the Board has been previously notified, may be continued.
		

		 

		

			 

		

		

			 

		

 

			
	
			
				 3.
			

			
	
			
			COMPENSATION, BENEFITS AND REIMBURSEMENT.

		
			(a)Base Salary.  In consideration of Executive’s performance of the responsibilities and duties set forth in this Agreement, Executive shall receive an annual base salary of $260,000 per year (“Base Salary”).  Such Base Salary will be payable in accordance with the customary payroll practices of the Bank.  During the term of this Agreement, the Board may increase, but not decrease, Executive’s Base Salary.  Any increase in Base Salary will become the “Base Salary” for purposes of this Agreement. 
		

		
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			(b)Bonus.  Executive shall be entitled to participate in any bonus plan or arrangement of FLIC (including both any short-term and long-term incentive program) in which senior management is eligible to participate.  Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of the other compensation to which Executive is entitled under this Agreement.  The terms of FLIC’s short-term and long-term incentive plans or programs shall determine the bonuses payable thereunder, if any, to Executive following Executive’s termination of employment.  
		

		
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			(c) Benefit Plans.  Executive will be entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of FLIC, on the same terms and conditions as such plans are available to other employees and officers of FLIC.  Without limiting the generality of the foregoing provisions of this Section 3(c), Executive also will be entitled to participate in any employee benefit plans including but not limited to retirement plans, pension plans, profit-sharing plans, health-and-accident plans, or any other employee benefit plan or arrangement made available by the Bank in the future to management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements as applicable to other management employees.  Except as otherwise provided herein, the terms of FLIC’s benefit plans or arrangements shall determine the benefits payable thereunder, if any, to Executive following Executive’s termination of employment or retirement.  
		

		
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			(d)Vacation.  Executive will be entitled to paid vacation, as well as sick leave, holidays and other paid absences, in accordance with the Bank’s policies and procedures for officers.  Any unused paid time off during an annual period will be treated in accordance with the Bank’s personnel policies as in effect from time to time.  
		

		
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			(e)Expense Reimbursements.  FLIC will reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing Executive’s obligations under this Agreement, including, without limitation, fees for memberships in such organizations as Executive and the Board mutually agree are necessary and appropriate in connection with the performance of Executive’s duties under this Agreement.  Furthermore, the Bank shall pay or reimburse Executive for the full cost of the use of an automobile that is mutually agreeable to the Bank and Executive.  Executive shall comply with the reasonable reporting and expense limitations on the use of such automobile as the Bank may establish from time to time.  All reimbursements shall be made as soon as practicable upon substantiation of such expenses by Executive in accordance with the applicable policies and procedures of the Bank.  
		

		
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				 4.
			

			
	
			
			TERMINATION AND COMPENSATION PAYABLE FOLLOWING TERMINATION.    

		
			Executive’s employment under this Agreement may be terminated in the following circumstances:
		

		
			(a) Death.  This Agreement shall terminate upon Executive’s death, in which event Executive’s estate or beneficiary shall be entitled to receive the compensation and vested benefits due Executive as of the date of Executive’s death, and neither Executive, nor Executive’s estate or beneficiary, shall have a right to receive any compensation or benefits under this Agreement thereafter.
		

		
			(b) Disability.  FLIC may terminate Executive’s employment upon his becoming “Totally Disabled,” in which event Executive shall be entitled to receive the compensation and vested benefits due Executive as of the date of Executive’s termination, and Executive shall have no right to receive any other compensation or benefits under this Agreement.  For purposes of this Agreement, Executive shall be “Totally Disabled” if Executive is physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of his position under this Agreement even with reasonable accommodation. Executive’s receipt of disability benefits under the Bank’s long-term disability plan, if any, or receipt of Social Security disability benefits shall be deemed conclusive evidence of Total Disability for purpose of this Agreement; provided, however, that in the absence of Executive’s receipt of such long-term disability benefits or Social Security benefits, the Board may, in its reasonable discretion but based upon appropriate medical evidence, determine that Executive is Totally Disabled.  
		

		
			(c) Termination for Cause.  The Board may immediately terminate Executive’s employment for “Cause” at any time upon written notice to Executive.  Executive shall have no right to receive compensation or other benefits under this Agreement or otherwise from FLIC for any period after termination for Cause, except for compensation or benefits that have already been earned or vested as of the date of termination.  For purposes of this Agreement, “Termination for Cause” shall mean termination because of, in the good faith determination of the Board: (i) Executive’s conviction (including conviction on a nolo contendere plea) of a felony or of any lesser criminal offense involving moral turpitude, fraud or dishonesty; (ii) the willful commission by Executive of a criminal or other act that, in the reasonable judgment of the Board will likely cause substantial economic damage to the Company or the Bank or substantial injury to the business reputation of the Company or Bank; (iii) the commission by Executive of an act of fraud in the performance of his duties on behalf of the Company or Bank; (iv) the continuing willful failure of Executive to perform his employment duties to the Company or Bank after thirty (30) days’ written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to Executive by the Board; (v) an order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of Executive’s employment by the Company or the Bank; or (vi) a material breach by Executive of any provision of this Agreement.
		

		
			(d) Retirement.  This Agreement and the obligations hereunder shall expire on December 31 of the calendar year in which Executive attains Normal Retirement Age (“Retirement Age Termination Date”). For purposes of this Agreement,  “Normal Retirement Age” shall mean 
		
		
 

		

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		age 65.  Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s employment following the Retirement Age Termination Date, provided that Executive shall not be entitled to any benefits or payments under this Agreement upon termination of Executive’s employment following Retirement Age Termination Date (unless the Extended Employment Period is in effect ).  Notwithstanding the foregoing, upon written notice to Executive, FLIC may extend the term of this Agreement for an additional two year period beyond the Retirement Age Termination Date (the “Extended Employment Period”).

		
		
			(e) Voluntary Termination by Executive.  Executive may voluntarily terminate employment during the term of this Agreement upon 30 days’ prior written notice to the Board.  FLIC may accelerate the date of termination upon receipt of written notice of Executive’s voluntary termination.
		

		
			(f) Termination Without Cause or With Good Reason.
		

		
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				 (A)
			

			
	
			
			The Board may terminate Executive’s employment at any time for any reason upon no less than 30 days’ written notice (a termination “Without Cause”), and Executive may, by written notice to the Board, terminate his employment at any time within 90 days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”); provided, however, that FLIC shall have 30 days to cure the “Good Reason” condition, but FLIC may waive its right to cure.  Executive’s notice of termination With Good Reason shall notify the Company of the event that constitutes Good Reason.

			
	
			
				 (B)
			

			
	
			
			“Good Reason” exists if, without Executive’s express written consent, any of the following occurs:

			
	
			
				 (A)
			

			
	
			
			the failure to appoint Executive during the Employment Period to the Executive Position;

			
	
			
				 (B)
			

			
	
			
			a reduction in Executive’s Base Salary;   

			
	
			
				 (C)
			

			
	
			
			the failure of the Bank to maintain Executive’s participation under the Bank’s employee benefit, retirement, or material fringe benefit plans, policies, practices, or arrangements in which Executive participates. For this purpose, the Bank may eliminate and/or modify existing employee benefit, retirement, or fringe benefit plans and coverage levels on a consistent and non-discriminatory basis applicable to all such executives; or

			
	
			
				 (D)
			

			
	
			
			a relocation of Executive’s principal place of employment by more than 50 miles from Executive’s principal place of employment as of the initial Effective Date of this Agreement.

		
			(g)Compensation Payable Following Termination of Employment.  Upon termination of Executive’s employment under this Agreement, Executive (or, if applicable, his beneficiary) shall be entitled to receive the following compensation:
		

		
			(i)Earned but Unpaid Compensation.  FLIC shall pay Executive any accrued 
		

		 

		

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		but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, and any vacation accrued to the date of termination in accordance with the Bank’s personnel policies.
		

		
			(ii)Other Compensation and Benefits.  Except as may be provided under this Agreement,
		

			
	
			
				 (A)
			

			
	
			
			any benefits to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 3(b) and (c) above shall be determined and paid in accordance with the terms of such plans, policies and arrangements, and

			
	
			
				 (B)
			

			
	
			
			Executive shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit, with respect to future periods after such termination or resignation.

		
			(h)Additional Compensation Payable Following Termination Without Cause or Termination with Good Reason.  
		

		
			(i)In addition to the compensation set forth in Section 4(g) above, Executive will receive the additional compensation and benefits set forth in this paragraph (h), if the following requirements are met:
		

			
	
			
				 (A)
			

			
	
			
			Executive’s employment is terminated pursuant to Section 4(f) above (Termination Without Cause or Termination for Good Reason), including a termination following a Change in Control; and

			
	
			
				 (B)
			

			
	
			
			Executive executes a release of his claims against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns (the “Release”), the form of which release is attached to this Agreement. The Release must be executed and become irrevocable by the 60th day following the date of Executive’s termination of employment; provided that if the 60 day period spans two (2) calendar years, then, to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the payments and benefits described in this Section 4(h) will be paid, or commence, in the second calendar year.

		
			(ii)If Executive meets the requirements described in clause (i) above,
		

			
	
			
				 (A)
			

			
	
			
			FLIC shall pay Executive, or in the event of Executive’s subsequent death, Executive’s beneficiary or estate, a cash lump sum payment equal to the sum of:

		
			(i)two times Base Salary at the rate in effect immediately prior to his date of termination, plus 
		

		
			(ii)an amount equal to the product of: (I) the reasonably estimated monthly cost of the medical, dental and vision insurance coverage maintained by the Bank for Executive immediately prior to Executive’s date of termination; multiplied by (II) twenty-four (24). 
		

		

		

		 

		

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		Such amount shall be paid to Executive in a lump sum within ten (10) days following Executive’s date of termination, or if later, following the seventh (7th) day after Executive’s execution of the Release required under Section 4(h)(i)(B) hereof.
		

			
	
			
				 5.
			

			
	
			
			CHANGE IN CONTROL.

		
			(a)Change in Control Defined.  For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:
		

			
	
			
				 (A)
			

			
	
			
			Merger:  The Bank or the Company merges into or consolidates with another entity whereby the Bank or the Company is not the surviving entity, or the Bank or the Company merges another bank or corporation into the Bank or the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

			
	
			
				 (B)
			

			
	
			
			Acquisition of Significant Share Ownership:  There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 50% or more of a class of the Company’s or the Bank’s voting securities; provided, however, this clause (B) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

			
	
			
				 (C)
			

			
	
			
			Change in Board Composition:  During any period of two (2) consecutive years, individuals who constitute the Company’s or the Bank’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s or the Bank’s Board of Directors; provided, however, that for purposes of this clause (C), each director who is first elected by the board (or first nominated by the board for election by the stockholders) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period or who is appointed to the Board as the result of a directive, supervisory agreement or order issued by the primary federal regulator of the Company or the Bank or by the Federal Deposit Insurance Corporation (“FDIC”) shall be deemed to have also been a director at the beginning of such period; or

			
	
			
				 (D)
			

			
	
			
			Sale of Assets:  The Company or the Bank sells to a third party all or substantially all of its assets.

		
			(b)280G  Net-Best Benefit.  Notwithstanding the preceding Sections of this Agreement, if the payments and benefits to be afforded to Executive under Section 4(h) hereof (the “Severance Benefits”) either alone or together with other payments and benefits which 
		

		 

		

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		Executive has the right to receive from FLIC (or any affiliate) would constitute a “parachute payment” under Section 280G of the Code, and but for this Section 5(b), would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Severance Benefits shall be reduced (the “Benefit Reduction”) by the minimum amount necessary to result in no portion of the Severance Benefits being subject to the Excise Tax, provided, however, that the Benefit Reduction shall only occur if such reduction would result in Executive’s “Net After-Tax Amount” attributable to the Severance Benefits being greater than it would be if no Benefit Reduction was effected.  For this purpose, “Net After-Tax Amount” shall mean the net amount of Severance Benefits Executive is entitled to under this Agreement after giving effect to all federal, state and local taxes which would be applicable to such payments and benefits, including but not limited to, the Excise Tax.  Nothing contained herein shall result in the reduction of any payments or benefits to which Executive may be entitled upon termination of employment and/or a change in control other than as specified in this Section 5(b), or a reduction in the Severance Benefits below zero.
		

		
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			(c)Extension of Employment Period.  In the event FLIC has entered into an agreement to effect a transaction that would be considered a Change in Control during the Employment Period, the Employment Period shall be extended automatically for a period ending on, and including, the 30th day following the effective date of the Change in Control (to the extent the Employment Period would otherwise expire, without regard to the foregoing, prior to the completion of such period).
		

			
	
			
				 6.
			

			
	
			
			COVENANTS OF EXECUTIVE.

		
			(a)Non-Solicitation/Non-Compete.  
		

		
			(i)Executive hereby covenants and agrees that, during the “Restricted Period” and except as provided in clause (ii) below, Executive shall not, without the written consent of FLIC, either directly or indirectly:
		

			
	
			
				 (A)
			

			
	
			
			solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of FLIC, or any of its respective subsidiaries or affiliates, to terminate his or her employment with FLIC and/or accept employment with another employer; or

			
	
			
				 (B)
			

			
	
			
			become an officer, employee, consultant, director, independent contractor, agent, joint venturer, partner or trustee of any savings bank, savings and loan association, savings and loan holding company, commercial bank, credit union, bank or bank holding company, any mortgage or loan broker or any other entity (excluding not-for-profit entities other than credit unions) that competes with the business of FLIC or any of their direct or indirect subsidiaries or affiliates, or that has a headquarters, or one or more offices, within New York City or in the Counties of Nassau or Suffolk, New York (the “Restricted Territory”); or

		 

		

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				 (C)
			

			
	
			
			solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of FLIC to terminate an existing business or commercial relationship with FLIC.

		
			 (ii)The restrictions contained in Section 6(a)(i)(B) above shall not apply in the event of a Termination for Cause, or in the event of a termination of employment following a Change in Control.
		

		
			(iii)For purposes of this paragraph (a), the “Restricted Period” shall be a period of one  (1) year following Executive’s termination of employment with FLIC.
		

		
			(b)Confidentiality.  Executive recognizes and acknowledges that the knowledge of the business activities, plans for business activities, and all other proprietary information of FLIC, as it may exist from time to time, is valuable, special and unique assets of the business of FLIC.  Executive will not, during or after the term of Executive’s employment, disclose any knowledge of the past, present, planned or considered business activities or any other similar proprietary information of FLIC to any person, firm, corporation, or other entity for any reason or purpose whatsoever unless expressly authorized by the Board or required by law.  Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of FLIC.  Further, Executive may disclose information regarding the business activities of FLIC to any bank regulator having regulatory jurisdiction over the activities of FLIC pursuant to a formal regulatory request.  In the event of a breach or threatened breach by Executive of the provisions of this Section, FLIC will be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of FLIC or any other similar proprietary information, or from rendering any services to any person, firm, corporation, or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing herein will be construed as prohibiting FLIC from pursuing any other remedies available to FLIC for such breach or threatened breach, including the recovery of damages from Executive.
		

		
			(c)Information/Cooperation.  Executive shall, upon reasonable notice, furnish such information and assistance to FLIC as may be reasonably required by FLIC, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party, and he shall be reimbursed for any expenses incurred in providing such information and assistance; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between Executive and FLIC or any other subsidiaries or affiliates.
		

		
			(d)Reliance.  Except as otherwise provided, all payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 6, to the extent applicable.
		

		
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				 7.
			

			
	
			
			EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

		
			This Agreement contains the entire understanding between the parties hereto relating to and supersedes any prior employment or similar agreement between FLIC or any predecessor of 
		

		 

		

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		FLIC and Executive, including the Change in Control Agreement dated June 5, 2017 between Executive and the Company,  except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind expressly provided elsewhere.  
		

			
	
			
				 8.
			

			
	
			
			NO ATTACHMENT; BINDING ON SUCCESSORS.

		
			(a)Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.
		

		
			(b)FLIC’s obligations under this Agreement shall be binding on any and all successors or assigns, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of FLIC, in the same manner and to the same extent that FLIC would be required to perform if no such succession or assignment had taken place.
		

			
	
			
				 9.
			

			
	
			
			MODIFICATION AND WAIVER.

		
			(a)This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.    
		

		
			(b)No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.
		

			
	
			
				 10.
			

			
	
			
			MISCELLANEOUS PROVISIONS.

		
			Notwithstanding anything herein contained to the contrary, the following provisions shall apply:
		

		
			(a)FLIC may terminate Executive’s employment at any time, but any termination by the Board other than termination for Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after Executive’s termination for Cause. 
		

		
			(b)Notwithstanding anything herein contained to the contrary, any payments to Executive pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.
		

		
			(c)In the event that FLIC provides written notice of non-renewal of the Agreement to the Executive in accordance with Section 1 hereof, and Executive’s employment is terminated subsequent to the expiration of the Employment Period, the provisions and obligations of the 
		

		 

		

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		parties under this Agreement shall have expired and be of no force and effect, and therefore FLIC shall have no obligations to make payments to Executive under Section 4 of this Agreement.
		

		
			(d)The parties intend that this Agreement and any payments and benefits payable hereunder shall either comply with, or be exempt from, the requirements of Code Section 409A, and this Agreement shall be maintained, administered, and interpreted consistent with that intention.  Notwithstanding any provision herein to the contrary, FLIC makes no representations concerning Executive’s tax consequences under this Agreement under Code Section 409A, or any other federal, state, or local tax law.  Executive’s tax consequences will depend, in part, upon the application of relevant tax law, including Code Section 409A, to the relevant facts and circumstances.  Notwithstanding anything else in this Agreement to the contrary (with the exception of Section 4(c)), Executive’s employment shall not be deemed to have been terminated unless and until Executive has a Separation from Service within the meaning of Code Section 409A.  For purposes of this Agreement, a “Separation from Service” shall have occurred if FLIC and Executive reasonably anticipate that either no further services will be performed by Executive after the date of termination (whether as an employee or as an independent contractor) or the level of further services performed is less than 50 percent of the average level of bona fide services in the 36 months immediately preceding the termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). Each payment under this Agreement is intended to be a “separate payment” and not of a series of payments for purposes of Code Section 409A.  
		

		
			(e)Notwithstanding the foregoing, if Executive is a “specified employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the final regulations issued thereunder) and any payment under this Agreement is triggered due to Executive’s Separation from Service (other than due to disability or death), then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6) months following Executive’s Separation from Service.  Rather, any payment which would otherwise be paid to Executive during such period shall be accumulated and paid to Executive in a lump sum on the first day of the seventh month following such Separation from Service.  All subsequent payments shall be paid in the manner specified in this Agreement.    
		

		
			(f)Notwithstanding anything in this Agreement to the contrary, Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”) about a possible securities law violation without approval of FLIC.   Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to FLIC related to the possible securities law violation.  This Agreement does not limit Executive’s right to receive any resulting monetary award for information provided to any Government Agency.
		

		
			(g)In the event of Executive’s death, his beneficiary shall be his surviving spouse.  Alternatively, Executive may designate other beneficiaries.  If Executive’s spouse does not survive 
		

		 

		

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		him, or if no beneficiary designation is in effect at the time of Executive’s death, then payments due thereafter shall be made to the Executive’s estate.
		

			
	
			
				 11.
			

			
	
			
			SEVERABILITY.

		
			If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.
		

			
	
			
				 12.
			

			
	
			
			GOVERNING LAW.

		
			This Agreement shall be governed by the laws of State of New York, but only to the extent not superseded by federal law.
		

			
	
			
				 13.
			

			
	
			
			ARBITRATION.

		
			(a)Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator mutually acceptable to FLIC and Executive, sitting in a location selected by the Bank within 50 miles from the main office of the Bank, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes then in effect.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  The cost of the arbitrator shall be paid by FLIC; all other costs  of arbitration shall be borne by the respective parties.
		

		
			(b)If Termination For Cause is disputed by Executive, and if it is determined in arbitration that Executive is entitled to compensation and benefits under Section 4(h) of this Agreement, the payment of such compensation and benefits by the Bank shall commence immediately following the date of resolution by arbitration, with interest due Executive on the cash amount that was not paid pending arbitration (at the prime rate as published in The Wall Street Journal from time to time).
		

		

		

		 

		

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				 14.
			

			
	
			
			NOTICE.  

		
			For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:
		

		
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						To FLIC:

					
					
						The First of Long Island Corporation

					
						10 Glen Head Road

					
						Glen Head, New York 11545

					
						Attn: Chairman of the Board

					
						 

					
						 

				
	
					
						To Executive:

					
					
						To the most recent address on file with the Bank.  

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

		
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						THE FIRST OF LONG ISLAND 

				
	
					
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						CORPORATION 

				
	
					
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						By: /s/ Michael N. Vittorio

				
	
					
						﻿

					
					
						Name: Michael N. Vittorio

				
	
					
						﻿

					
					
						Title: President

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						THE FIRST NATIONAL BANK OF 

				
	
					
						﻿

					
					
						LONG ISLAND

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						By: /s/ Michael N. Vittorio

				
	
					
						﻿

					
					
						Name: Michael N. Vittorio

				
	
					
						﻿

					
					
						Title: President

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						EXECUTIVE

				
	
					
						﻿

					
					
						By: /s/ Christopher J. Hilton

					
						Christopher J. Hilton

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						 

				

		
			Executed: October, 2018
		

		

		

		 

		

			 

		

		

			 

		

 

		
		

		
			RELEASE
		

		
			Pursuant to Section 4(h)(ii) of the Employment Agreement between The First of Long Island Corporation (the “Company”), The First National Bank of Long Island (the “Bank”) and Christopher J. Hilton (“Executive”), effective January 1, 2018 (herein after, the “Agreement”), Executive is entitled to a cash lump sum severance payment (the “Severance Payment”) in connection with his termination of employment. As a condition to receiving the Severance Payment, Executive shall have executed and not timely revoked this release (this “Release”) in accordance with the terms and conditions below by no later than the 60th day following Executive’s termination of employment.
		

		
			Intending to be legally bound, Executive hereby, on behalf of Executive and Executive’s heirs, executors, administrators, successors and assigns, fully, finally and forever releases and discharges the Company, the Bank,  as well as their predecessors, successors and assigns, and all of their respective parent, subsidiary, related and affiliated companies, officers, owners, directors, agents, representatives, attorneys, and employees (all of whom are referred to throughout this Release as the “Parties”), of and from all claims, charges, demands, actions, causes of action, complaints, suits, controversies, proceedings, promises, agreements, liabilities, debts, obligations, judgments, rights, fees, damages, losses, and expenses, of any and every nature whatsoever, in law or in equity, known or unknown, suspected or unsuspected (collectively, “Claims”), as a result of: (i) actions or omissions occurring through the execution date of this Release; or (ii) any agreement, arrangement or promise between Executive and any Party. Specifically included in this waiver and release are, among other things, any and all Claims related to the Agreement, Claims of alleged employment discrimination, either as a result of the separation of Executive’s employment or otherwise, under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, as amended by applicable New York law and all of their respective implementing regulations and/or any other federal, state or local statute, rule, ordinance, or regulation, as well as any Claims for compensation of any type whatsoever, alleged wrongful discharge, negligent or intentional infliction of emotional distress, breach of express or implied contract, quasi- contract, promissory estoppel, detrimental reliance, fraud, defamation, or any other unlawful behavior, the existence of which is specifically denied by the Parties. The foregoing list is intended to be illustrative rather than inclusive. Executive waives the rights and Claims to the extent set forth above, and Executive also agrees not to institute, or have instituted, a lawsuit against the Parties based on any such waived Claims or rights.
		

		
			Nothing in this Release, however, shall be construed to prohibit Executive from filing a charge or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or other federal, state or local agency. Notwithstanding the foregoing, Executive waives Executive’s right to recover monetary or other damages as a result of any Claim filed by Executive or by anyone else on Executive’s behalf, including a class or collective action, whether or not Executive is named in such proceeding.
		

		
			Further, nothing in this Release is intended to waive Executive’s entitlement to: (i) any earned but unpaid compensation or benefits from the Bank or any affiliate of the Bank; (ii) the Severance Payment; (iii) vested or accrued benefits under any tax-qualified or nonqualified employee benefit plan sponsored by the Company or the Bank; (iv) equity awards under the Company’s stock plans, but subject to the treatment thereof set forth in the plans and underlying award agreements; (v) Executive’s right to elect health care continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) at Executive’s expense (if Executive is eligible for COBRA coverage); and (vi) indemnification and directors’ and officers’ insurance coverage applicable to the fullest extent 
		

		 

		

			 

		

		

			 

		

 

		permitted under applicable law and as provided in the Bank’s or the Company’s charter, bylaws and directors’ and officers’ liability insurance policy. Moreover, this Release does not waive claims that Executive could make, if available, for unemployment or workers’ compensation.
		

		
			Finally, this Release does not limit Executive’s ability to file a charge or complaint with the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”) about a possible securities law violation without approval of the Company or the Bank. Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company or the Bank related to the possible securities law violation. This Agreement does not limit the Executive’s right to receive any resulting monetary award for information provided to any Government Agency.
		

		
			Executive affirms that, absent Executive’s execution of this Release, Executive would not be entitled to the Severance Payment and is therefore receiving consideration to which Executive would not otherwise be entitled to receive. Executive also affirms that the only consideration for Executive signing this Release is that set forth in Section 4(h) of the Agreement, that no other promise or agreement of any kind has been made to or with Executive by any person or entity to cause Executive to execute this Release, and that Executive fully understands the meaning and intent of this Release, including but not limited to, its final and binding effect.
		

		
			Executive also affirms that Executive shall be subject to the covenants set forth in Section 6 of the Agreement.
		

		
			Executive acknowledges that Executive has carefully read and reviewed this Release and has been advised to seek the advice of an attorney, and Executive has had an opportunity to consult with and receive counsel from an attorney concerning the terms of this Release.
		

		
			Executive understands and is satisfied with the terms and contents of this Release and voluntarily has signed Executive’s name to the same as a free act and deed. Executive agrees that this Release shall be binding upon Executive and Executive’s agents, attorneys, personal representatives, heirs, and assigns. Executive acknowledges that Executive has been given a period of at least 45 days from date of receipt within which to consider and sign this Release, which shall not be signed by Executive before Executive’s last day of employment. To the extent Executive has executed this Release less than 45 days after its delivery to Executive, Executive hereby acknowledges that Executive’s decision to execute this Release prior to the expiration of such 45-day period was entirely voluntary.
		

		
			Executive acknowledges that Executive will be given seven (7) days from the date Executive signs this Release to change Executive’s mind and revoke this Release. If Executive does not revoke this Release within seven (7) days of Executive’s signing, this Release will become final and binding on the day following such seven (7) day period.
		

		
			In the event that any one or more of the provisions of this Release shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Release shall not in any way be affected or impaired thereby. This Release shall inure to the benefit of and be binding upon the Company, the Bank, their affiliates, any successor organization which shall succeed the Company or the Bank by merger, acquisition or consolidation or operation of law and their assigns. This Release shall be binding upon the Executive and his assigns, heirs and legal representatives. This Release shall be governed by the law of the State of New York without reference to its choice of law rules.
		

		
			2 
		

		 

		

			 

		

		

			 

		

 

		
		

		
			Any notice to revoke this Release will be deemed properly given or made if personally delivered or, if mailed, when mailed by registered or certified mail, postage prepaid to The First of Long Island Corporation at its principal business office, to the attention of____________________. The principal business office of The First of Long Island Corporation is located at 10 Glen Head Road, Glen Head, New York 11545.
		

		
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			By executing this Release, Executive acknowledges that Executive has had the opportunity to consult with an attorney of Executive’s choice; that Executive has carefully reviewed and considered this Release; that Executive understands the terms of this Release; and that Executive voluntarily agrees to them.
		

		
			﻿
		

		
			EXECUTIVE
		

		
			﻿
		

		
			____________________________________________
		

		
			﻿
		

		
			﻿
		

		
			Date:
		

		
			(On or after Executive’s last day of employment)
		

		
			﻿
		

		
			THE FIRST OF LONG ISLAND CORPORATION
		

		
			﻿
		

		
			_____________________________________________
		

		
			By: 
		

		
			Title:
		

		
			Date:
		

		
			﻿
		

		
			THE FIRST NATIONAL BANK OF LONG ISLAND
		

		
			﻿
		

		
			﻿
		

		
			_____________________________________________
		

		
			By: 
		

		
			Title:
		

		
			Date:
		

		
			﻿
		

		
			﻿
		

		
			4
		

		
			﻿PRTS_03.14.19_Ex_10.1

		

			Exhibit 10.1

		

		
			EMPLOYMENT AGREEMENT
		

		
			THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into March 14, 2019 (the “Effective Date”) by and between U.S. Auto Parts Network, Inc., a Delaware corporation (the “Company”), and David Meniane, an individual (the “Executive”).  
		

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

		
			1. Duties and Responsibilities.
		

		
			A. Executive shall serve as the Company’s Chief Operating Officer and Chief Financial Officer commencing on March 15, 2019 (the “Start Date”), 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 position.
		

		
			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 Start 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 Executive’s termination of employment with the Company for any reason (the “Employment Period”).  
		

		
			3. Cash Compensation.
		

		
			A. Annual Salary. Executive’s base salary shall be $350,000 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. Annual Target Bonus. Executive shall also be entitled to receive an annual target incentive bonus of up to 60% of the Executive’s current salary. The annual bonus shall be based upon the Company achieving the annual goals determined by the Compensation Committee.  The amount of the annual target bonus payable to Executive with respect to any given year shall be determined by the Compensation Committee.  The annual bonus shall be paid no later than the end of March following the year for which such bonus is being paid.
		

		
			

		 

		

			1

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

		

		
			C.  Signing Bonus. Executive shall receive a signing bonus (the “Signing Bonus”) of $150,000, less applicable withholding taxes, payable in a lump sum within thirty (30) days after the Start Date.  If, prior to the one year anniversary of the Start Date, Executive voluntarily terminates his employment or the Company terminates him for Cause, Executive shall repay the Company the gross amount of the Signing Bonus, within thirty (30) days of such termination date.  In such event, to the extent permissible under applicable law, the Company may offset the amount of the Signing Bonus owed by Executive from any compensation due to the Executive upon his termination of employment.
		

		
			D. 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 Grant.  As of the close of business on the date of the Executive’s first day of employment with the Company or promptly thereafter, the Company’s Compensation Committee shall grant Executive stock options (the “Initial Option”) to purchase up to 500,000 shares of the Company’s common stock which shall vest over four years as follows: 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 Initial Option will be granted pursuant to the Company’s 2016 Equity 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 agreements. The exercise price for the options shall be equal to the closing sales price of the Company’s common stock as reported by NASDAQ on the date of grant of the options. 
		

		
			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. Except with respect to any restricted stock unit awards granted to Executive (the “RSUs”) (the terms of which shall be governed by the applicable award agreements), within the period beginning three months before and ending twelve months following a Change in Control (as defined in the Company’s 2016 Equity Incentive Plan (the “Plan”)) the vesting of all stock options and other equity compensation awards (both time-based vesting and performance-based vesting at target level) granted to Executive shall accelerate in full in the event that the Executive’s employment is terminated without Cause (as defined herein) or Executive resigns for Good Reason (as defined herein). Within the period beginning three months before and ending twelve months following a Change in Control (as defined in the Plan) 

		 

		

			2

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

all stock options shall remain exercisable until the earlier of (i) the expiration date set forth in the applicable stock option agreement or (ii) the expiration of one (1) year measured from the date that Executive’s employment is terminated without Cause (as defined herein) or Executive resigns for Good Reason (as defined herein) and this provision shall supersede any provisions to the contrary contained in any of Executive’s stock option agreements. For the purposes of this Agreement, “Good Reason” shall mean Executive’s voluntary resignation following a Change in Control (as defined the Plan), 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; (ii) a relocation of Executive more than thirty (30) miles from the Company’s current corporate headquarters as of the date hereof, (iii) a material breach of any provision of this Agreement by the Company, (iv) the failure of the Company to have a successor entity specifically assume this Agreement,  (v) a material negative change in authority, duties or responsibilities resulting from the Executive no longer being an executive officer of a publicly-traded company, and (vi) the Company’s chief executive officer (immediately prior the Change in Control) no longer being the chief executive officer of the successor publicly-traded company. Notwithstanding the foregoing, the Executive shall be entitled to benefits described in this Section 4 due to a resignation resulting from (v) or (vi) of the preceding sentence only if such resignation occurs more than six months after the Change in Control. Notwithstanding the foregoing, “Good Reason” shall only be found to exist if prior to Executive’s resignation for Good Reason, the Executive has provided, not more than 90 days following the initial occurrence thereof, 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. 
		

		
			C. Bonus Eligibility.  Executive shall also be eligible to receive an annual target incentive bonus, additionally or in the alternative to the annual cash target incentive bonus described in Section 3B of this Agreement, in the form of stock or restricted stock unit awards as determined by the Compensation Committee. 
		

		
			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, not later than the August 31 of the year following the year in which the expense was incurred, 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 

		 

		

			3

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

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. 
		

		
			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. Indemnification. The Company and Executive shall enter into the Company’s standard indemnification agreement for its key executives.
		

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

		
			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 contendere 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 

		 

		

			4

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

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.  Additionally, upon termination of employment due to the Executive’s death, or due to the Company’s involuntary termination of Executive’s employment due to the Executive’s Disability, Executive (or Executive’s estate or beneficiaries in the case of the death of Executive) shall also be entitled to the following: (i)  any unpaid annual target bonus under Section 3B for the year immediately prior to the year of such termination (in an amount equal to the bonus percentage accrued by the Company, pursuant to GAAP, through the last closed accounting month prior to the time of such termination)  and a pro-rated share of Executive’s annual target bonus under Section 3B for the year of such termination (in an amount equal to the bonus percentage accrued by the Company, pursuant to GAAP, through the last closed accounting month prior to the time of such termination), which bonus amounts 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 occurs; and (ii) continuation of his Annual Salary following such termination for a period of six months, 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 six months.   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. Should the Company terminate Executive’s employment (other than for Cause or as a result of Executive’s Death or Disability) then Executive shall also be entitled to the following upon the execution of a general release by the Executive in the form reasonably requested by the Company: (i) the Company shall pay Executive the Required Payments; (ii)  any unpaid annual target bonus under Section 3B for the year immediately prior to the year of such termination or expiration (in an amount equal to the bonus percentage accrued by the Company, pursuant to GAAP, through the last closed accounting month prior to the time of such termination or expiration)  and a pro-rated share of Executive’s annual target bonus under Section 3B for the year of such termination or expiration (in an amount equal to the bonus percentage accrued by the Company, pursuant to GAAP, through the last closed accounting month prior to the time of such termination or expiration),  which bonus amounts shall be paid at such time as the Company regularly pays bonuses and solely to the extent that such bonuses are paid to a majority of the Company’s other bonus eligible employees; (iii) continuation of Executive’s Annual Salary, which shall be payable in accordance with the Company’s standard pay schedules for a period of six months; and (iv) the Company shall also reimburse Executive’s actual COBRA payments for Executive’s health insurance benefits for a period of six months. 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 

		 

		

			5

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

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.  
		

		
			In the event Executive resigns for Good Reason (as defined in Section 4) within the period beginning three months before and ending twelve months following a Change in Control (as defined in the Plan) then the Company shall pay Executive the Required Payments.
		

		
			D. Health Care Reform Compliance.  Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the Company cannot provide the health insurance premium reimbursement benefits under this Section 7 without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof pay Executive a taxable cash amount, which payment shall be made regardless of whether Executive elects or pays for health insurance benefits following termination (the “Health Care Benefit Payment”).  The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the health insurance premium reimbursement amounts would otherwise have been paid.  The Health Care Benefit Payment shall be equal to the amount that the Executive would have otherwise paid for health insurance premiums (which amount shall be calculated based on the premium for the first month of coverage), and shall be paid until the expiration of twelve months following Executive’s termination.  
		

		
			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 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. On the Start Date, Executive shall execute 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 

		 

		

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			Exhibit 10.1

		

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.

					
						16941 Keegan Avenue

				
	
					
						 

					
					
						    

					
					
						Carson, California 90746

				
	
					
						 

					
					
						    

					
					
						Attn: General Counsel

				
	
					
						 

					
					
						 

				
	
					
						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 

		 

		

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			Exhibit 10.1

		

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.
		

		
			17. Section 409A.
		

		
			(a) Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”).  Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. Each installment of severance benefits is a separate “payment” for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(5) to the maximum extent such exemptions are available.   However, to the extent such exemptions are not available and Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death.  The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption.
		

		
			(b) It is intended that this Agreement shall comply with the requirements of Section 409A, and any ambiguity contained herein shall be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A.  Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify the Executive for any taxes or interest that may be assessed by the IRS pursuant to Section 409A of the Code to payments made pursuant to this Agreement.  To the extent that any severance benefit payments are delayed as required by this Agreement due to the application of Section 409A, all suspended payments shall earn and accrue interest at the prevailing “Prime Rate” of interest as published by The Wall 

		 

		

			8

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			Exhibit 10.1

		

Street Journal at the time the payment is made, and any suspended payment when so made, shall be made as a lump sum payment, including accrued interest.
		

		
			18. Section 280G.  
		

		
			(a) If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment pursuant to this Agreement (a “Payment”) shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).
		

		
			 
		

		
			(b) Notwithstanding any provision of Section 18(a) to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows:  (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest  economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A of the Code.
		

		
			 
		

		
			(c) Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder.  The Company shall use commercially reasonable 

		 

		

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			Exhibit 10.1

		

efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
		

		
			 
		

		
			(d) If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 18(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive shall promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 18(a)) so that no portion of the remaining Payment is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 18(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
		

		
			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/ Lev Peker

				
	
					
						Print Name:

					
					
						 

					
					
						Lev Peker

				
	
					
						Title:

					
					
						 

					
					
						Chief Executive Officer

				
	
					
						Address:

					
					
						 

					
					
						16941 Keegan Avenue

				
	
					
						 

					
					
						 

					
					
						Carson, CA 90746

				
	
					
						 

					
						EXECUTIVE

				
	
					
						 

				
	
					
						/s/ David Meniane

				
	
					
						DAVID MENIANE 

				

		
			 
		

		 

		

			10

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