UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported) February
16, 2009
U.S.
AUTO PARTS NETWORK, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-33264
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68-0623433
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(State or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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17150
South Margay Avenue, Carson, CA 90746
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(Address
of principal executive offices) (Zip
Code)
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Registrant’s
telephone number, including area code (310)
735-0553
N/A
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry
Into a Material Definitive Agreement.
On
February 16, 2009, U.S. Auto Parts Network, Inc. (the “Company”) entered into an
Employment Agreement (the “Employment Agreement”) with Theodore R. Sanders, Jr.,
pursuant to which Mr. Sanders will serve as the Company’s Chief Financial
Officer effective as of February 16, 2009.
Pursuant
to the terms of the Employment Agreement, Mr. Sanders will receive an initial
annual base salary of $300,000, subject to annual performance review, and will
also receive a lump sum signing and retention bonus of $25,000 in February
2009. This bonus must be repaid to the Company by Mr. Sanders in the
event his employment with the Company is terminated for Cause or if he resigns
without Good Reason (both as defined in the Employment Agreement), provided that
such repayment amount will be reduced by $2,083 for each month of employment
with the Company that Mr. Sanders completes. Mr. Sanders will also be
eligible to receive an annual target incentive bonus of up to 50% of his annual
base salary, depending on the achievement of certain performance goals to be
established by the Compensation Committee of the Company’s Board of
Directors. While Mr. Sanders will be employed on an at-will basis,
the Employment Agreement provides that in the event of his termination for any
reason other than for Cause or other than as a result of his own voluntary
resignation without Good Reason, Mr. Sanders will be entitled to severance
payments equal to one year’s base salary (payable over one year in accordance
with the Company’s regular pay practices), plus a pro-rated portion of his
annual performance bonus for the year in which he was terminated, and
reimbursement for the cost of COBRA coverage for a period of up to twelve months
following his termination of employment.
In
connection with the Employment Agreement, Mr. Sanders was granted two, ten year
stock options under the Company’s 2007 New Employee Incentive Plan (the “Plan”)
and Non-Qualified Stock Option Agreements, consisting of a performance-based
option to purchase up to an aggregate of 100,000 shares of the Company’s common
stock, which vests based upon the attainment of certain stock price metrics (the
“Performance Option”), and an option to purchase up to an aggregate of 400,000
shares of the Company’s common stock, which vests over a four year period (the
“Second Option”). The exercise price for both options is $1.15, which
was the closing sales price of the Company’s common stock as reported by Nasdaq
on the date of grant. Both options terminate on February 15, 2019,
unless earlier terminated in accordance with the Plan and the related stock
option agreements.
The
shares underlying the Performance Option will vest and become exercisable if the
monthly average closing sales price of the Company’s common stock as reported by
the NASDAQ (the “Average Closing Price”) equals or exceeds $5.00 per share in
any consecutive three month period during the term of employment. In
addition, if the Average Closing Price for the foregoing milestone has been
achieved during the one or two calendar months prior to his termination of
employment (other than for Cause or due to death or disability) or upon his
resignation for Good Reason, Mr. Sanders may have up to an additional two months
following his termination of employment to attain the stock price
milestones. The stock price milestones will be adjusted for any stock
dividends, splits, combinations or similar events with respect to the Company’s
common stock.
The
Second Option vests over a four year period, with 25% vesting and becoming
exercisable on February 16, 2010, and the remainder vests and becomes
exercisable in 36 equal monthly installments thereafter. In the event
that Mr. Sanders’s employment with the Company is terminated for any reason
other than for Cause or if he resigns without Good Reason following certain
changes in control of the Company, the Second Option will immediately vest and
become fully exercisable.
Item
5.02. Departure of Directors or Principal
Officers; Election of Directors; Appointment of Principal
Officers.
On
February 17, 2009, the Company announced that Mr. Sanders joined the Company as
its Chief Financial Officer effective February 16, 2009. The full text of the
press release is included as Exhibit 99.1 to this Report and is incorporated
herein by reference. The information disclosed in Item 1.01 of this
Current Report on Form 8-K is also incorporated by reference into this Item
5.02.
Item
9.01. Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit No.
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Description
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99.1
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Press
Release, dated February 17, 2009, of U.S. Auto Parts Network,
Inc.
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10.62
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Employment
Agreement dated February 16, 2009 between the Company and Ted
Sanders.
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10.63
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Non-Qualified
Stock Option Agreement dated February 16, 2009
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| 10.64 | Non-Qualified Stock Option Agreement dated February 16, 2009 (Performance) |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Dated:
February 17, 2009
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U.S.
AUTO PARTS NETWORK, INC.
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By:
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/s/ SHANE EVANGELIST | |||
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Shane
Evangelist
Chief
Executive Officer
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EXHIBIT
INDEX
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Exhibit No.
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Description
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99.1
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Press
Release, dated February 17, 2009, of U.S. Auto Parts Network,
Inc.
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10.62
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Employment
Agreement dated February 16, 2009 between the Company and Ted
Sanders.
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10.63
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Non-Qualified
Stock Option Agreement dated February 16, 2009
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| 10.64 | Non-Qualified Stock Option Agreement dated February 16, 2009 (Performance) |