U.S. AUTO PARTS NETWORK,INC. (NASDAQ:PRTS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Lev Peker as Chief Executive Officer and Director
On November27, 2018, U.S. Auto Parts Network,Inc. (the “Company”) appointed Lev Peker as the Company’s Chief Executive Officer, effective January2, 2019 (the “Effective Date”), replacing Aaron Coleman, who is leaving the Company on January1, 2019. Mr.Peker was also appointed to serve on the Company’s Board of Directors (the “Board”) as a ClassIII Director, effective January2, 2019.
Mr.Peker, 36, previously served as the Chief Marketing Officer of Adorama Camera Inc., a leading online destination for photography, imaging and consumer electronics, from August2015 to December2018. Prior to that time, Mr.Peker served as the Senior Director and General Manager of eCommerce Strategy and Operations of Sears Holding Corporation, a leading integrated retailer providing merchandise and related services, from August2014 until July2015. From April2008 until July2014, Mr.Peker served in various roles at U.S. Auto Parts including as Vice President and General Manager of Online Marketplaces from June2013 to July2014, as Director and General Manager of Online Marketplaces from March2009 until June2013, and as Manager of Financial Planning and Analysis from April2008 until March2009. Mr.Peker’s prior experience also includes serving as a Senior Financial Analyst at Smart& Final,Inc., as a Senior Analyst at KPMG, and as a Senior Associate at Pricewaterhousecoopers LLP. Mr.Peker holds a B.A. degree in Accounting from the University of Southern California and an M.B.A. degree in Marketing and Strategy from University of California, Los Angeles. We believe Mr.Peker’s valuable business and leadership experience, particularly in the e-commerce industry, combined with his intimate knowledge of our financial and operational status gained through his various roles at the Company, qualifies Mr.Peker to serve as a director.
There are no arrangements or understandings between Mr.Peker and any other person to which he was appointed as the Company’s Chief Executive Officer. There is no family relationship between Mr.Peker and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company. The Company has not entered into any transactions with Mr.Peker that would require disclosure to Item 404(a)of Regulation S-K under the Securities Exchange Act of 1934.
In connection with Mr.Peker’s appointment as Chief Executive Officer, the Company entered into an employment agreement with Mr.Peker (the “Employment Agreement”). to the terms of the Employment Agreement, Mr.Peker will receive an initial annual base salary of $425,000, subject to annual performance review, and will also receive a lump sum signing bonus of $300,000 payable within thirty days of the Effective Date.The bonus must be repaid to the Company by Mr.Peker in the event his employment with the Company is terminated for Cause or if he voluntarily resigns from the Company prior to the one year anniversary of the Effective Date.Mr.Peker 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 Board.While Mr.Peker 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.Peker 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 order to assist with Mr.Peker’s move to Southern California, the Employment Agreement provides that the Company will reimburse Mr.Peker for his real estate sales commissions paid in connection with the sale of his current home and for closing costs for the purchase of a home in California, both up to an aggregate amount of $60,000. In addition, in the event Mr.Peker is not able to sell his New Jersey residence on a timely basis and has already purchased a home in Southern California, then the Company has agreed to reimburse Mr.Peker for the cost of his actual mortgage payment for his primary New Jersey residence up to $6,666 per month until the earlier of (i)the closing of Mr.Peker’s sale of such New Jersey residence or (ii)June30, 2019. Prior to Mr.Peker’s move to Southern California, he shall also be entitled to reimbursement for up to eight (8)weekly round trip coach airfares to Los Angeles from the New York area, provided that Mr.Peker furnishes the Company with receipts and other details of such expenses in the form reasonably required by the Company.