Contract
EXHIBIT
10.1
SEPARATION AGREEMENT AND RELEASE
OF ALL CLAIMS
This
Separation Agreement and Release of All Claims (the “Agreement”)
is between Xxxxxxx X. XxXxxxx (“Employee”) and U.S. Auto Parts Network, Inc.,
its officers, directors, employees, foreign and domestic subsidiaries, benefit
plans and plan administrators, affiliates, agents, joint ventures, attorneys,
successors and/or assigns (collectively referred to as “Company”).
RECITALS
Employee
is employed by the Company as its Executive Vice President, Chief Financial
Officer, Secretary and Treasurer, as an officer of Company subsidiaries and
serves as a trustee for the Company 401(k) plan. Employee has
resigned without Good Reason as defined in that employment agreement dated
January 17, 2007 (“Employment Agreement”) and his employment with the Company
shall terminate December 11, 2008 (“Termination
Date”). Employee and the Company mutually desire to eliminate
any future disputes. As a demonstration of that desire, the Company
has elected to offer Employee compensation and benefits to which he would not
otherwise be entitled. The Company expressly disclaims any wrongdoing
or any liability to Employee. 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 Employee or any other person or as a violation of any
order, law, statute duty or contract whatsoever as to Employee or any
person.
AGREEMENTS
Based
upon the foregoing, and in consideration of the mutual promises contained in
this Agreement, Employee and the Company agree, effective upon the date of
execution by Employee, as follows:
1. Acknowledgment. Employee
acknowledges that he has been paid all regular salary, expenses, commissions,
distributions, bonuses and Company benefits due and owing as of the Termination
Date, less appropriate withholdings and is not owed any monies allowed,
including but not limited to those required under the California Labor Code, as
of the Termination Date. This sum is not consideration for this
Agreement.
The Company will pay Employee
$37,106.66 (275.64 hours X $134.62) for vacation days and $3,230.88 (24 X
$134.62) for sick days. This sum is likewise not consideration for
this Agreement. Information regarding the transfer or
distribution of his USAP 401(k) Retirement Plan account will be provided to
Employee under separate cover by Principal Financial Group. Company
confirms that employee will be 100% vested in all employer contributions made by
the Company for the benefit of the employee which would otherwise occur on
December 31, 2008.
2. Consideration. The
Parties recognize and affirm that, except as stated in Section 1 of this
Agreement, the Company is not obligated to provide Employee with any of the
benefits set forth herein. The Company agrees to provide Employee the
following consideration (the “Payment”)
four (4) business days after the expiration of the seven (7) day revocation
period described in Paragraph 7 below (“Effective
Date”) which Effective Date, assuming Employee waives the 21-day
consideration period, would be December 19, 2008, provided Employee has not
revoked this Agreement as described in that Paragraph:
(a) Payment
of $280,000, which is equivalent to twelve (12) months of Employee’s current
base salary, less standard employee withholding taxes, payable ratably every two
(2) weeks or otherwise in accordance with the regular payroll practices of
the Company. Payments to commence on the Effective Date.
(b) Should
the Company’s Compensation Committee or Board of Directors offer the CEO a bonus
in cash, equity or a combination thereof, for services provided in 2008, then
such percentage of target bonus shall also be provided to Employee whether or
not the CEO accepts such bonus payment. Payment to be made to
Employee at the time in 2009 that such bonus would ordinarily be
paid.
(c) Employee
waives any claim for entitlement to any Company payment or reimbursement of
health insurance benefits under COBRA that he might have had under the
Employment Agreement.
Employee
understands and acknowledges that he is not entitled to and would not receive
the aforementioned consideration, including the Payment, but for compliance with
the terms and conditions of this Agreement. Employee further acknowledges that
said consideration does not include any wages, accrued but unused vacation or
any other money or income to which the Employee is otherwise
entitled.
3. Taxes. Not
withstanding the tax deductions set forth in Paragraph 2 above, Employee shall
pay in full when due, and shall be solely responsible for, any and all federal,
state, or local income taxes that are or may be assessed against him relating to
the consideration provided including the Payment received pursuant to this
Agreement, as well as all interest or penalties that may be owed in connection
with such taxes. Employee is not relying on any representations or
conduct of the Company with respect to the adequacy of the
withholdings.
4. Non-Admission of
Liability. The Company hereby disclaims any wrongdoing against Employee.
Company expressly denies that it engaged in any unlawful conduct of any
kind. Employee agrees that neither this Agreement, nor the furnishing
of the consideration for the release contained herein shall be deemed or
construed at any time for any purpose as an admission by Company of any
liability or unlawful conduct of any kind.
5. Release.
(a) Employee,
on behalf of himself, his fiancée successors, heirs, and assigns,
hereby forever relieves, releases, and discharges the Company as well as its
past, present and future officers, directors, administrators, shareholders,
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,
or representatives, insurers, partners, associates, successors, and assigns, and
any entity owned by or affiliated with any of the above, 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 Employee’s execution of this Agreement, including but not limited to any
claims based on, arising out of, or related to Employee’s employment with, or
the ending of Employee’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 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 Employee’s unvested 401(k) rights or, except as stated in
Section 2, any other fringe benefit or compensation, including but not limited
to unvested stock options; any claim for damages or declaratory or injunctive
relief of any kind arising from the foregoing items. The Parties
agree and acknowledge that the release contained in this Paragraph 4 does not
apply to any vested rights Employee may have under any 401(k) Savings Plan with
the Company or to any rights under any Indemnification Agreements into which
Employee and Company have entered. Employee 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. Employee represents that he has no workers’
compensation claims that he intends to bring against the
Company. Employee understands that nothing contained in this
Agreement, including, but not limited to, this Paragraph 5, 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,
including the Equal Employment Opportunity Commission. However,
Employee 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. Employee further acknowledges that 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) Company,
except as provided in paragraph 5(c) below, hereby forever relieves, releases,
and discharges Employee 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 Employee’s
execution of this Agreement, including but not limited to any claims based on,
arising out of, or related to Employee’s employment with, or the ending of
Employee’s employment with the Company and also include 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, 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.
(c) Mistakes in Fact; Voluntary
Consent. Each of the Parties expressly and knowingly
acknowledges that, after the execution of this Agreement, the Parties may
discover facts different from or in addition to those that they now know or
believe 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 Employee and Company intend 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 the Parties
assume the risk of misrepresentations, concealments, or mistakes, and if any of
the Parties should subsequently discover that any fact relied upon in entering
into this Agreement was untrue, that any fact was concealed, or that his or its
understanding of the facts or law was incorrect, other than facts that would
give effect to paragraph 7(a) of the Employment Agreement, which would void any
future obligation for the Payment, and require the repayment of any of the
Payment already made, they 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. Company and Employee each represents and warrants
that, as of the Termination Date, it has no knowledge of any act or
circumstances that would give effect to paragraph 7(a) of the Employment
Agreement
(d) Section 1542 of the
California Civil Code. Employee expressly waives any and all
rights and benefits conferred upon him 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 FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Accordingly,
Employee knowingly, voluntarily and expressly waives any rights and benefits
arising under Section 1542 of the California Civil Code and any other statute or
principle of similar effect.
(e) Nothing
in this Agreement is intended or shall be a waiver of the indemnification
provided in that Indemnification Agreement dated September 19, 2005 or any
amendments or subsequent indemnification agreements entered into between Company
and Employee.
(f) No
Lawsuits. Employee and Company agree to take any and all steps
necessary to insure that no lawsuit arising out of any claim released herein
shall ever be prosecuted by Employee or Company or on his or its behalf in any
forum, and hereby warrants and covenants that no such action has been filed or
shall ever be filed or prosecuted. Employee and Company also agrees
that if any claim is prosecuted in his or its name before any court or
administrative agency that party waives and agrees not to take any award or
other damages from such suit to the extent permissible under applicable
law.
6. Confidentiality /
Non-disparagement.
(a) Employee
agrees to direct all requests for references to Xxxxxx Virtue
000-000-0000. The confidentiality obligations contained in this
paragraph shall be in addition to any other confidentiality agreements between
the Parties, which shall remain in full force and effect. Notwithstanding the
foregoing, nothing in
this Agreement shall be construed as precluding disclosure where such disclosure
is required and compelled by law. In the event that Employee is
required and compelled by law to disclose any such matters, he will first give
fifteen (15) days advance written notice (or, in the event that it is not
possible to provide fifteen (15) days written notice, as much written notice as
is possible under the circumstances) to the Company so that the Company may
present and preserve any objections that it may have to such disclosure and/or
seek an appropriate protective order. Employee acknowledges and
agrees that this paragraph is a material inducement to the Company’s entering
into this Agreement, and further acknowledges and agrees that any breach of this
paragraph shall be subject to a claim for damages or equitable relief (or both),
including but not limited to injunctive relief and Employee agrees to return any
of the Payment that had been made at the time of the breach. Additionally,
Employee agrees that he shall refrain from making any negative, disparaging or
derogatory comments about the Company, including but not limited to, any public
or private remarks or statements that would injure the business or reputation of
the Company, or its officers, managers, members, directors, partners, agents or
employees. Nothing contained in this Paragraph shall preclude
Employee from revealing or describing his employment with the Company to his
prospective employers; provided however, such disclosure shall be limited to the
fact that he was employed by the company, the dates of his employment, his job
title and position with the Company, the fact that he voluntarily resigned from
the Company and the nature and depth of his duties and responsibilities with the
Company as well as the level of his accomplishments at the
Company. The Company agrees that its officers or directors will not
make any negative, derogatory or disparaging statements or comments, or
statements that slander or libel Employee, to any third party about Employee,
his service time with the Company or his separation from the Company unless
otherwise required by law or subpoena, and Company shall respond accurately and
fully to any question, inquiry, or request for information required by legal or
employment verification process. Company confirms that Employee shall receive a
positive verbal reference from the Chief Executive Officer, the Chairman of the
Board and the Chairman of the Audit Committee. Company and Employee shall
mutually agree on language describing Employee’s employment, resignation and/or
consulting status with the Company should any press release be issued now or in
the future. If such disclosure is required of Company, then Company agrees to
provide notice to Employee as early as practicable.
(b) Confidential and Proprietary
Information / Return of Company Property. Employee
acknowledges that as a result of his employment with the Company, he has had
access to the Company’s confidential and proprietary business information,
including, but not limited to, product information, pricing strategies, vendor
and supplier information, business plans, research and development activities,
manufacturing and marketing techniques, technological and engineering data,
processes and inventions, legal matters affecting the Company and its business,
customer and prospective customers information, trade secrets, bid prices,
contractual terms and arrangements, prospective business transactions, and
financial and business forecasts (“Confidential
Information”). Confidential Information also includes information,
knowledge or data of any third party doing business with the Company that the
third party has identified as being confidential. Employee also
acknowledges and reaffirms his compliance and ongoing obligation to comply with
that Confidential Information and Invention Assignment Agreement that he
executed on 2/24/06 and that Confidentiality and Non-Disclosure Agreement that
he executed on 2/14/06. Employee agrees not to use or to disclose to
anyone any Confidential Information at any time in the future without the prior
written authorization of the Company, unless ordered to do so by a court of
competent jurisdiction. In the event of any such court order,
Employee agrees to promptly notify the Company and to afford the Company the
opportunity to take appropriate legal action prior to your disclosure of any
Confidential Information.
Employee
understands and acknowledges that whether or not he signs this Agreement, he has
both a contractual and common law obligation to protect the confidentiality of
the Company’s trade secret information after the termination of his employment
for so long as the information remains confidential. The parties
agree that Employee may retain his laptop computer, blackberry and cellular
telephones, but that all Company information, including documents and emails,
must be returned to the Company and deleted from the retained
equipment. Notwithstanding the prior sentence, Employee further
agrees to immediately return any other Company property in his possession,
including but not limited to documents, all materials, photographs, handbooks,
manuals, electronic records, files, any backup device, keys and access cards, no
later than the end of the period that Employee provides Consulting Services
provided for in the Consulting Agreement.
7. Remedies. Each
of Employee and Company understands and agrees that in the event either party
violates any provision of this Agreement, including the provisions set forth in
Paragraphs 5 or 6, then (a) the non-violating party shall have the right to
apply for and receive an injunction to restrain such violation of this
Agreement; (b) the Company shall have the right to immediately discontinue any
enhanced benefit provided under this Agreement. “Enhanced Benefits”
are any benefit the Employee is receiving under this contract that the employee
would not otherwise be entitled to receive; (c) the non-prevailing party will be
obligated to reimburse the prevailing party its costs and expenses incurred in
prosecuting the lawsuit and enforcing this Agreement, including court costs and
reasonable attorneys fees; and (d) as an alternative to (c), at the Company’s
option, Employee shall be obligated upon demand to repay the Company the cost of
all but $500 of the enhanced benefits paid under this Agreement. Employee and
Company acknowledges and agrees that the covenants contained in this Paragraph 7
shall not affect the validity of this Agreement and the parties have mutually
negotiated and agreed upon the terms of this Paragraph 7. The
remedies available to the Employee and 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 or Employee’s business interest generally.
8. Consideration and Revocation
Period. Employee may revoke his release of claims, insofar as
it extends to potential claims under the Age Discrimination in Employment Act,
by informing the Company of his intent to revoke his release within seven (7)
calendar days following his execution of this Agreement. Employee
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
Vice President, Legal Affairs, 00000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
00000. Employee understands that if Employee exercises his right to
revoke, then the Company will have no obligations under this Agreement to
Employee or to others whose rights derive from his.
The Agreement shall not become
effective or enforceable, until the revocation period identified above has
expired. The terms of this Agreement shall be open for acceptance by
Employee for a period of twenty-one (21) calendar days, Employee understands
that he should, and the Company hereby advises him to, consult with legal
counsel regarding the releases contained herein and to consider whether to
accept the Company’s offer and sign the Agreement. Employee acknowledges that it
has been his decision alone whether or not to consult with counsel regarding
this Agreement. Employee acknowledges that no proposal or actual change that he
or his counsel makes with respect to this Agreement will restart the 21-day
period.
Employee
acknowledges that he was permitted to use as much of the 21-day consideration
period as he wished prior to signing, but by his signature below Employee
acknowledges that he has chosen to voluntarily execute this Agreement earlier
and to waive the remaining days of such 21-day period.
9. Nonassignment. Employee
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.
10. Miscellaneous
Provisions
(a) Integration. This
Agreement, the Consulting Agreement, the Indemnification Agreement(s), the
Confidential Information and Invention Assignment Agreement, the Confidentiality
and Non-Disclosure Agreement and other agreements that are referenced therein
constitute 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 any party 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, no party 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, no party 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 any affiliated corporations,
parent corporations, brother-sister corporations, subsidiaries (whether or not
wholly owned), divisions, shareholders, officers, directors, agents,
representatives, principals, and employees.
(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. The Company and Employee agree to submit
to personal jurisdiction in the State of California and to venue in its
courts.
(h) 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.
EMPLOYEE
ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS CAREFULLY READ AND VOLUNTARILY SIGNED
THIS AGREEMENT, THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY
OF EMPLOYEE’S CHOICE, THAT BY SIGNING THIS AGREEMENT, EMPLOYEE HAS UTILIZED OR
WAIVES THE 21-DAY CONSULTING PERIOD, AND THAT EMPLOYEE SIGNS THIS AGREEMENT WITH
THE INTENT OF RELEASING THE COMPANY AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS FROM ANY AND ALL CLAIMS.
ACCEPTED
AND AGREED TO:
Employee: USAP:
/s/ XXXXXXX X.
XXXXXXX /s/ XXXXX XXXXXXXXXX
Signature Signature
December 9,
2008 December 9, 2008
Date Date
