SUPPORT CONTINUITY AGREEMENT
EXHIBIT
10.1
This
Support Continuity Agreement (the “Agreement”) is
between Alexander Adegan (“Executive”) and U.S. Auto
Parts Network, Inc., its foreign and domestic subsidiaries (whether or not
wholly-owned), parent corporations, brother-sister corporations, benefit
plans
and plan administrators, affiliated entities, joint ventures, successors
and/or
assigns (collectively referred to as
“Company”).
RECITALS
A. Executive
has resigned as the Company’s Chief Information Officer as of April 3, 2008,
which resignation is attached hereto as Exhibit A. Executive’s
employment with the Company shall terminate effective April 18, 2008
(“Termination Date”). Executive and the
Company (each individually, a “Party” or collectively,
the “Parties”) mutually desire to end their existing
relationship as amicably as possible and eliminate any future
disputes.
B. The
Company has elected to offer Executive compensation and benefits to which
he may
not otherwise be entitled. The Company expressly disclaims any
wrongdoing or any liability to Executive. This Agreement and
compliance with it shall not be construed as an admission by the Company
of any
liability or violation to the rights of the Executive or any other person
or as
a violation of any order, law, statute duty or contract whatsoever as to
Executive or any person.
C. Executive
holds the following options to purchase an aggregate of 336,000 shares of
the
Company’s Common Stock (collectively the
“Options”): (i) options to purchase up to
186,000 shares granted under the Company’s 2006 Equity Incentive Plan (the
“2006 Plan”), of which 85,250 shares have vested as of
the Termination Date; and (ii) options to purchase up to 150,000 shares under
the Company’s 2007 Omnibus Incentive Plan (the “2007
Plan”), 37,500 shares of which have vested as of the Termination
Date.
AGREEMENTS
Based
upon the foregoing, and in consideration of the mutual promises contained
in
this Agreement, Executive and the Company (for its benefit and the benefit
of
the other Company Parties as defined below) agree, effective upon the date
of
execution by Executive, as follows:
1. Acknowledgment.
(a) Salary;
Accrued Vacation. On the Termination Date, the Company will
provide a payment to Executive for his salary through the Termination Date
and
all accrued vacation, less all applicable state and federal withholdings
and any
other lawful deductions (the
“Withholdings”). Executive is entitled to
said payments regardless of whether he signs this Agreement.
(b) Other
than the accrued vacation and salary set forth in Paragraph 1(a) above,
Executive acknowledges that he has been paid all regular salary, accrued
vacation, expenses, commissions, distributions, bonuses and Company benefits
due
and owing as of the Termination Date, less any applicable Withholdings, and
is
not owed any monies allowed, including but not limited to those amounts required
under the California Labor Code, as of the Termination Date which are not
consideration for this Agreement. Information regarding the transfer
or distribution of Executive’s 401(k) Retirement Plan Account, while employed
with the Company, will be or has been provided to Executive under a separate
cover by the Principal Financial Group.
(c) The
date
of cessation of Service as defined in the Options shall be the Termination
Date,
and Executive agrees that no further vesting of any of the Options will take
place after the Termination Date pursuant to the terms of the Options, the
2006
Plan, the 2007 Plan or any other agreement. Executive acknowledges
and agrees that except as indicated above, Executive does not own any securities
of the Company or any rights to acquire any securities of the
Company.
2. Consideration. The
Parties recognize that, apart from this Agreement, the Company is not obligated
to provide Executive with any of the benefits set forth
hereunder. Provided that Executive has not revoked this Agreement by
the date when the seven (7) day revocation period described in Paragraph 6
below has expired (“Effective Date”), the Company
agrees to provide Executive the following additional consideration on the
dates
specified below:
(a) COBRA.
Upon Executive’s timely election of COBRA continuation coverage under the
Company’s health plan and proof provided by Executive of his timely payment of
monthly COBRA premiums, the Company will reimburse Executive for the amount
of
such premiums paid within five (5) business days after timely receipt by
the
Company of said proof of each payment from Executive. Such premium
reimbursements will be paid for coverage for 18 months following the Termination
Date. Executive agrees to notify the Company immediately if he
becomes eligible for or covered by another group health plan.
(b) Bonus. The
Company will pay Executive half of his target bonus for 2008, which the Parties
acknowledge he would not otherwise be entitled to as a result of his termination
of employment. Such bonus shall be based on the Company’s percentage bonus
payout and be payable at the time the Company pays its 2008 management bonuses,
which shall not be later than March 15, 2009. Such bonus payment
shall be less all applicable Withholdings.
(c) Additional
Payments. Executive understands he has been paid all expenses and
has received all reimbursements owed to him and that such sum is not
consideration of this Agreement.
(d) Consulting
Agreement. The Parties agree to enter into the Consulting
Agreement attached hereto as Exhibit B.
3. Taxes. Notwithstanding
the tax deductions set forth in Paragraph 2 above, Executive shall pay in
full when due, and shall be solely responsible for, any and all federal,
state
or local income taxes or other taxes that are or may be assessed against
him
relating to the consideration provided under this Agreement, including all
amounts paid pursuant to Paragraph 2, as well as all interest or penalties
that may be owed in connection with such taxes. Executive is not
relying on any representations or conduct of the Company with respect to
the
adequacy of the Withholdings.
4. Release.
(a) Executive,
on behalf of himself, his successors, heirs, and assigns, hereby forever
relieves, releases, and discharges the Company as well as its past, present
and
future officers, directors, administrators, stockholders, employees, agents,
attorneys, insurers, divisions, successors, subsidiaries, parents, assigns,
representatives, brother/sister corporations, and all other affiliated or
related corporations, all benefit plans sponsored by the Company, and entities,
and each of their respective present and former agents, employees,
representatives, insurers, partners, attorneys, associates, successors, and
assigns, and any entity owned by or affiliated with any of the above (all
of the
foregoing are collectively referred to as the “Company
Parties”), from any and all claims, debts, liabilities, demands,
obligations, liens, promises, acts, agreements, costs and
expenses (including but not limited to attorneys’ fees), damages,
actions, and causes of action, of whatever kind or nature, including but
not
limited to any statutory, civil, administrative, or common law claims, whether
known or unknown, suspected or unsuspected, fixed or contingent, apparent
or
concealed, arising out of any act or omission occurring before Executive’s
execution of this Agreement, including but not limited to any claims based
on,
arising out of, or related to Executive’s employment with, or the ending of
Executive’s employment with the Company, any claims arising from rights under
federal, state, and local laws relating to the regulation of federal or state
tax payments or accounting; federal, state or local laws that prohibit
harassment or discrimination on the basis of race, national origin, religion,
sex, gender, age, marital status, bankruptcy status, disability, perceived
disability, ancestry, sexual orientation, family and medical leave, or any
other
form of harassment or discrimination or related cause of action (including
but
not limited to failure to maintain an environment free from harassment and
retaliation, inappropriate comments or touching and/or “off-duty” conduct of
other Company employees); statutory or common law claims of any kind, including
but not limited to, any alleged violation of Title VII of the Civil Rights
Act of 1964, The Civil Rights Act of 1991, Sections 1981 through 1988 of
Title 42 of the United States Code, as amended; The Employee Retirement
Income Security Act of 1971, as amended, The Americans with Disability Act
of
1990, as amended, the Workers Adjustment and Retraining Notification Act,
as
amended; the Occupational Safety and Health Act, as amended, the Age
Discrimination in Employment Act (the “ADEA”), the
Xxxxxxxx-Xxxxx Act of 2002, the California Family Rights Act (Cal. Govt.
Code
§ 12945.2 et seq.), the California Fair Employment and Housing Act (Cal.
Govt. Code § 12900 et. seq.), statutory provision regarding
retaliation/discrimination for filing a workers’ compensation claim under Cal.
Labor Code § 132a, California Xxxxx Civil Rights Act, California Sexual
Orientation Bias Law (Cal. Lab. Code § 1101 et. seq.), California AIDS
Testing and Confidentiality Law, California Confidentiality of Medical
Information (Cal. Civ. Code § 56 et. seq.), contract, tort, and property
rights, breach of contract, breach of implied-in-fact contract, breach of
the
implied covenant of good faith and fair dealing, tortious interference with
contract or current or prospective economic advantage, fraud, deceit, invasion
of privacy, unfair competition, misrepresentation, defamation, wrongful
termination, tortious infliction of emotional distress (whether intentional
or
negligent), breach of fiduciary duty, violation of public policy, or any
other
common law claim of any kind whatsoever; any claims for severance pay, sick
leave, family leave, liability pay, overtime pay, vacation, life insurance,
health insurance, continuation of health benefits, disability or medical
insurance, or Executive’s 401(k) rights or any other fringe benefit or
compensation, including but not limited to stock options; any claim for damages
or declaratory or injunctive relief of any kind. The Parties agree
and acknowledge that the release contained in this Paragraph 4 does not
apply to any vested rights Executive may have under any 401(k) Savings Plan
with
the Company. Executive represents that at the time of the execution
of this Agreement, he suffers from no work-related injuries and has no
disability or medical condition as defined by the Family Medical Leave
Act. Executive represents that he has no workers’ compensation claims
that he intends to bring against the Company. Executive understands
that nothing contained in this Agreement, including, but not limited to,
this
Paragraph 4, will be interpreted to prevent him from filing a charge with
a
governmental agency or participating in or cooperating with an investigation
conducted by a governmental agency. However, Executive agrees that he
is waiving the right to monetary damages or other individual legal or equitable
relief awarded as a result of any such proceeding. Executive further
acknowledges that he has been paid all wages, vacation, bonuses or other
income
owed to his and thus this release also releases the Company for all claims
of
unpaid wages, including unpaid overtime wages, related to his employment
with
the Company and subject to the terms specified in Paragraph 2 of this
Agreement.
(b) Mistakes
in Fact; Voluntary Consent. Executive expressly and knowingly
acknowledges that, after the execution of this Agreement, Executive may discover
facts different from or in addition to those that he now knows or believes
to be
true with respect to the claims released in this
Agreement. Nonetheless, this Agreement shall be and remain in full
force and effect in all respects, notwithstanding such different or additional
facts and Executive intends to fully, finally, and forever settle and release
those claims released in this Agreement. In furtherance of such
intention, the release given in this Agreement shall be and remain in effect
as
a full and complete release of such claims, notwithstanding the discovery
and
existence of any additional or different claims and Executive assumes the
risk
of misrepresentations, concealments, or mistakes, and if Executive should
subsequently discover that any fact relied upon in entering into this Agreement
was untrue, that any fact was concealed, or that his understanding of the
facts
or law was incorrect, Executive shall not be entitled to set aside this
Agreement or the settlement reflected in this Agreement or be entitled to
recover any damages on that account.
(c) Section 1542
of the California Civil Code. Executive expressly waive any and
all rights and benefits conferred upon Executive by Section 1542 of the
California Civil Code, which states as follows:
A
GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
(d) No
Lawsuits. Executive represents that he has not filed any claims,
charges, complaints or actions against the Company or any Company Parties,
or
assigned to anyone any charges, complaints, claims or actions against the
Company or any Company Parties. Executive agrees to take any and all
steps reasonably necessary to insure that no lawsuit arising out of any claim
released herein shall ever be prosecuted by Executive or on his behalf in
any
forum, and hereby warrants and covenants that no such action has been filed
or
shall ever be filed or prosecuted. Executive also agrees that if any
claim released hereunder is prosecuted in his name before any court or
administrative agency that he waives and agrees not to take any award or
other
damages from such suit to the extent permissible under applicable
law. Executive further agrees to cooperate fully with the Company in
the event of a lawsuit or threat of lawsuit arising out of acts and events
occurred during Executive’s employment with the Company, and the Company’s duty
to indemnify Executive shall continue in accordance with the Indemnification
Agreement previously executed by Company and Executive.
5. Proprietary
Information and Return of Company Property. During the term of
the Consulting Agreement, Executive agrees to continue to abide by the terms
and
provisions of the U.S. Auto Parts Network, Inc.’s Confidentiality Information
and Invention Assignment Agreement, which he executed on May 22, 2006 and
is
attached hereto and incorporated by reference as Exhibit C to this
Agreement. Executive further agrees to immediately return all Company
property in his possession, including but not limited to all materials,
documents, photographs, handbooks, manuals, electronic records, files, laptop
computer, blackberry, cellular telephones, keys and access cards, no later
than
two business days after his execution of this Agreement.
6. Revocation
Period. Executive may revoke his release of claims, but only
insofar as it extends to potential claims under the ADEA (the “ADEA
claims”), by informing the Company of his intent to revoke this
release within seven (7) calendar days following his execution of this
Agreement. Executive understands that any such revocation must be in
writing and delivered by hand or by certified mail - return receipt requested
-
within the applicable period to Xxxxxxx XxXxxxx, Chief Financial Officer,
U.S.
Auto Parts Network, Inc., at 00000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
00000. Executive understands that if Executive exercises his right to
revoke his ADEA claims, as specified in this Paragraph 6, then the Company
will have no obligations under this Agreement to Executive or to others whose
rights derive from the Executive, and the Company can seek enforcement of
the
remaining provisions of this Agreement. Executive acknowledges and
agrees he was initially provided with a copy of the Agreement on April 4,
2008. Executive further acknowledges that the Agreement has been open
for acceptance by the Executive and that he shall have twenty-one (21) calendar
days to carefully review, understand, consider and evaluate the
Agreement. The Agreement shall not become effective or enforceable as
against the Company until the seven (7) day revocation period identified
above
has expired. Executive acknowledges that he has had the opportunity
to consult with legal counsel of his choice regarding the releases contained
herein and to consider whether to accept the Company’s offer and sign the
Agreement.
7. Remedies. Executive
understands and agrees that in the event he violates any provision of this
Agreement, including the provisions set forth in Paragraphs 4 or 5,
then: (a) the Company shall have the right to apply for and
receive an injunction to restrain any violation of this Agreement; (b) the
Company shall have the right to immediately discontinue any enhanced benefits
or
Consideration provided to his under this Agreement; (c) Executive will be
obligated to reimburse the Company its cost and expenses incurred in defending
his lawsuit and enforcing this Agreement, including the Company’s court costs
and reasonable attorneys fees; and (d) as an alternative to (c), at the
Company’s option, Executive shall be obligated upon written demand by the
Company, to repay the Company the cost of all but $500 of the enhanced benefits
paid under this Agreement, including the Consideration. Executive
acknowledges and agrees that the covenants contained in this Paragraph 7
shall not affect the validity of this Agreement and shall not be deemed to
be a
penalty or forfeiture. The remedies available to the Company pursuant
to this Paragraph 7 are in addition to, and not in lieu of, any remedies
which may be available under statutory and/or common law relating to trade
secrets and the protection of the Company’s business interest
generally
8. Nonassignment. Executive
represents and warrants that he has not assigned or transferred any portion
of
any claim or rights he has or may have to any other person, firm, corporation
or
any other entity, and that no other person, firm, corporation, or other entity
has any lien or interest in any such claim.
9. Miscellaneous
Provisions
(a) Integration. This
Agreement constitutes a single, integrated written contract expressing the
entire Agreement of the parties concerning the subject matter referred to
in
this Agreement. No covenants, agreements, representations, or
warranties of any kind whatsoever, whether express or implied in law or fact,
have been made by any party to this Agreement, except as specifically set
forth
in this Agreement. All prior and contemporaneous discussions,
negotiations, and agreements have been and are merged and integrated into,
and
are superseded by, this Agreement.
(b) Modifications. No
modification, amendment, or waiver of any of the provisions contained in
this
Agreement shall be binding upon the Parties to this Agreement unless made
in
writing and signed by both Parties.
(c) Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such a
manner
as to be effective and valid under applicable law and to carry out each
provision herein to the greatest extent possible, but if any provision of
this
Agreement is held to be void, voidable, invalid, illegal or for any other
reason
unenforceable, the validity, legality and enforceability of the other provisions
of this Agreement will not be affected or impaired thereby.
(d) Non-Reliance
on Other Parties. Except for statements expressly set forth in
this Agreement, neither of the Parties has made any statement or representation
to any other Party regarding a fact relied on by the other Party in entering
into this Agreement, and no Party has relied on any statement, representation,
or promise of any other party, or of any representative or attorney for any
other Party, in executing this Agreement or in making the settlement provided
for in this Agreement.
(e) Negotiated
Agreement. The terms of this Agreement are contractual, not a
mere recital, and are the result of negotiations between the
Parties. Accordingly, neither of the Parties shall be deemed to be
the drafter of this Agreement.
(f) Successors
and Assigns. This Agreement shall inure to the benefit of and
shall be binding upon the heirs, successors, and assigns of the Parties hereto
and each of them. In the case of the Company, this Agreement is
intended to release and inure to the benefit of the Company and the Company
Parties.
(g) Applicable
Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California without taking into account
conflict of law principles.
(h) Counterparts. This
Agreement may be executed via facsimile and in one or more counterparts,
each of
which shall be deemed an original, but all of which together constitute one
and
the same instrument, binding on the parties.
[SIGNATURES
ON NEXT PAGE]
/s/
AA
Initial
Here
EXECUTIVE
ACKNOWLEDGES AND AGREES THAT EXECUTIVE HAS CAREFULLY READ AND VOLUNTARILY
SIGNED
THIS AGREEMENT, THAT EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OF EXECUTIVE’S CHOICE, AND THAT EXECUTIVE SIGNS THIS AGREEMENT WITH THE
INTENT OF RELEASING THE COMPANY AND THE COMPANY PARTIES FROM ANY AND ALL
CLAIMS.
|
|
ACCEPTED
AND AGREED TO:
|
|
April
28, 2008
|
April
28, 2008
|
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EXECUTIVE
|
|
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By:
/s/ XXXXXXX XxXXXXX
|
By:
/s/ ALEXANDER ADEGAN
|
|
Name:
Xxxxxxx XxXxxxx
|
Name:
Alexander Adegan
|
|
Its:
Chief Financial Officer
|
Address:
**************
|
/s/
AA
Initial
Here
EXHIBIT
A
Resignation
The
undersigned, Alexander Adegan, hereby resigns from his position as the Chief
Information Officer at U.S. Auto Parts Network, Inc. effective as of April
3,
2008.
/s/
ALEXANDER ADEGAN
Alexander
Adegan
/s/
AA
Initial
Here
EXHIBIT
B
