SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Separation Agreement and Release of Claims (the “Agreement”) is made effective October 5, 2018 (the “Effective Date”), by and between Aaron Coleman (“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”).
WHEREAS, Employee currently serves as the Chief Executive Officer and a Director of the Company, and Employee and Company have mutually agreed that Employee resign from the Company, contingent upon the Company treating the separation as a termination without cause under the terms of his Employment Agreement dated March 30, 2017, by and between the Company and Employee and the terms of his equity grants previously entered into with the Company.
WHEREAS, the Company has initiated a search for a new Chief Executive Officer, and as a condition to the terms herein, Employee has agreed to stay on as Chief Executive Officer and a Director until the earlier of (i) such date as the Company’s Board of Directors appoints a Chief Executive Officer as a successor to Employee, (ii) March 31, 2019, (iii) Employee’s death, or (iv) the occurrence of a physical or mental impairment which, the Board of Directors determines, after consideration and implementation of reasonable accommodations, precludes the Employee 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 (such earliest date, the “Separation Date”).
WHEREAS, the parties desire to settle all claims and issues that have, or could have been raised by Employee in relation to Employee’s employment with Company and arising out of or in any way related to the acts, transactions or occurrences between Employee and Company to date, including, but not limited to, Employee’s employment with Company or the termination of that employment, on the terms set forth below.
THEREFORE, in consideration of the promises and mutual agreements hereinafter set forth, it is agreed by and between the undersigned as follows:
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.Severance Package. In exchange for the promises set forth herein, Company agrees to provide Employee with the following payments and benefits (“Severance Package”), to which Employee is not otherwise entitled. Employee
acknowledges and agrees that this Severance Package constitutes adequate legal consideration for the promises and representations made by Employee in this Separation Agreement.
(a)Severance Payment. Company agrees to provide Employee with a severance payment equal to twelve (12) months of Employee’s base salary, Four Hundred Ten Thousand Dollars ($410,000), less all applicable federal and state income and employment taxes (“Severance Payment”). The Severance Payment will be paid out on a bi-weekly basis over the twelve (12) month period following the Separation Date in accordance with the Company’s payroll practices for its employees.
(b)Continuation of Group Health Benefits. Provided that Employee elects to continue his group health care coverage pursuant to the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and remains eligible for these benefits, Company agrees to reimburse Employee for the COBRA premiums required to continue the group health care coverage for Employee and those dependents of Employee who were enrolled as participants in Company’s group health care coverage as of the Separation Date, for COBRA coverage through the twelve (12) month period following the Separation Date.
(c)Acceleration of Vesting; Extension of Option Exercise Period. Company shall cause the vesting of each of Employee’s outstanding restricted stock unit awards and performance-based restricted stock unit awards that are specifically identified in Exhibit A hereto (“Stock Awards”) to be automatically accelerated on the Separation Date. In addition, all of Employee’s vested stock options shall remain exercisable by Employee until the earlier of (i) twelve (12) months following the Separation Date, (ii) the lapse of the maximum term of the stock option, or (iii) the lapse of the term of the stock option resulting from a change of control of the Company. Company shall be entitled to withhold applicable federal and state income and employment taxes related to the vesting contemplated by this Section 1(c) from amounts payable hereunder.
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