NON-INCENTIVE STOCK OPTION AGREEMENT
EXHIBIT 10.3
This
NON-INCENTIVE STOCK OPTION AGREEMENT (the “Agreement”) is made this
April 28, 2008, by and between U.S. Auto Parts Network, Inc., a Delaware
corporation (the “Company”), and Alexander Adegan, an individual
resident of California (“Optionee”). Capitalized
terms used but not otherwise defined herein shall have the meaning ascribed
to
such terms in the U.S. Auto Parts Network, Inc. 2007 Omnibus Incentive Plan
(the
“Plan”).
1. Grant
of Option.
2. Vesting
of Option Rights.
(a) The
Option shall have a vesting commencement date of April 28, 2008, (the
“Vesting Commencement Date”), and except as otherwise provided in this
Agreement, the Option shall be exercisable for vested Shares
only. The Option shall initially be for unvested
Shares. The Shares shall become vested Shares in a series of
twenty-two (22) successive equal monthly installments upon Optionee’s completion
of each additional month of Service over the twenty-one (21) month period
measured from the Vesting Commencement Date. In no event shall any
additional Shares vest after Optionee’s Service ceases.
3. Exercise
of Option after Death or Termination of Employment or Service.
The
Option shall terminate and may no longer be exercised if Optionee ceases to
be
employed by or provide Service to the Company or its Affiliates, except
that:
(a) If
Optionee’s employment or Service shall be terminated for any reason, voluntary
or involuntary, other than for “Misconduct” (as defined in Section
3(e)) or Optionee’s death or Permanent Disability, Optionee may at any time
within a period of one (1) month after such termination exercise the Option
to
the extent the Option was exercisable by Optionee on the date of the termination
of Optionee’s employment or Service.
(b) If
Optionee’s employment or Service is terminated for Misconduct, the Option shall
be terminated as of the date of the act giving rise to such
termination.
(c) If
Optionee shall die while the Option is still exercisable according to its terms,
or if employment or Service is terminated because of Optionee’s Permanent
Disability while in the employ of the Company, and Optionee shall not have
fully
exercised the Option, such Option may be exercised, at any time within twelve
(12) months after Optionee’s death or date of termination of employment or
Service for Permanent Disability, by Optionee, personal representatives or
administrators or guardians of Optionee, as applicable, or by any person or
persons to whom the Option is transferred by will or the applicable laws of
descent and distribution, to the extent of the full number of Shares Optionee
was entitled to purchase under the Option on (i) the earlier of the date of
death or termination of employment or Service or (ii) the date of termination
for such Permanent Disability, as applicable.
(d) Notwithstanding
the above, in no case may the Option be exercised to any extent by anyone after
the termination date of the Option.
4. Method
of Exercise of Option.
5. Change
in Control.
(a) Immediately
prior to the specified effective date of a Change in Control, the unvested
Shares subject to this Option shall automatically become vested Shares, and
this
Options shall be exercisable for all or any portion of such Shares.
(b) Immediately
following the consummation of the Change in Control, this Option shall
terminate, except to the extent assumed by the successor corporation (or parent
thereof) or otherwise continued in effect pursuant to the terms of the Change
in
Control transaction. If this Option is assumed in connection with a
Change in Control or otherwise continued in effect, then this Option
shall be appropriately adjusted, immediately after such Change in Control,
to
apply to the number and class of securities which would have been issuable
to
Optionee in consummation of such Change in Control had the Option been exercised
immediately prior to such Change in Control, and appropriate adjustments shall
also be made to the exercise price, provided the aggregate exercise
price shall remain the same. To the extent that the actual holders of
the Company’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation
may, in connection with the assumption of this Option, substitute one or more
shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in
Control.
(c) This
Agreement shall not in any way affect the right of the Company to adjust,
reclassify, reorganize or otherwise change its capital or business structure
or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
6. Capital
Adjustments and Reorganization.
7. Miscellaneous.
(d) Governing
Law. The validity, construction and effect of the Plan and the
Agreement, and any rules and regulations relating to the Plan and the Agreement,
shall be determined in accordance with the internal laws, and not the law of
conflicts, of the State of Delaware.
(i) Conditions
Precedent to Issuance of Shares. Shares shall not be issued
pursuant to the exercise of the Option unless such exercise and the issuance
and
delivery of the applicable Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of
1933, as amended, the Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, state blue sky laws, the requirements of
any
applicable Stock Exchange or the Nasdaq Stock Market and the Delaware General
Corporation Law. As a condition to the exercise of the purchase price
relating to the Option, the Company may require that the person exercising
or
paying the purchase price represent and warrant that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such
a
representation and warranty is required by law.
IN
WITNESS WHEREOF, the Company has executed this Agreement and caused
this Option to be issued to Optionee on the date set forth in the first
paragraph above.
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By: /s/
XXXXXXX XxXXXXX
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Name: Xxxxxxx
XxXxxxx
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Title: Chief
Financial Officer
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