Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Michael Huffaker as Chief Operating Officer
On November 14, 2022, the Board of Directors (the “Board”) of CarParts.com, Inc. (the “Company”) appointed Michael Huffaker as Chief Operating Officer of the Company, effective December 5, 2022 (the “Effective Date”).
Mr. Huffaker, 43, previously served as Vice President, Category Leader, for Amazon Fresh Grocery from June 2014 to December 2022, where he eventually oversaw a portfolio of 57 purpose-built grocery fulfillment centers, five grocery distribution centers, forty grocery stores and a team of approximately six hundred staff. Prior to that, Mr. Huffaker was Senior Manager for Amazon Fresh from August 2011 to May 2014, and as Manager, Vendor Management, Wireless from March 2008 to July 2011. We believe Mr. Huffaker’s valuable business and leadership experience, particularly in the e-commerce and supply chain development, combined with his experience in building and overseeing successful teams in the areas of product and business management, qualifies Mr. Huffaker to serve as an officer of the Company.
In connection with his appointment, the Company and Huffaker entered into an employment agreement (the “COO Employment Agreement”), pursuant to which Mr. Huffaker will receive an annual base salary of $425,000. Beginning in 2023, Mr. Huffaker will also be eligible to receive an annual target incentive bonus of up to 50% of his annual salary, based on annual goals and other performance criteria established by the Compensation Committee of the Board. The target for such annual incentive bonus for the first calendar year of his service as Chief Operating Officer will be $212,500. He will also be eligible to receive an additional annual target incentive bonus in the form of shares of common stock or restricted stock unit awards as determined by the Compensation Committee. Mr. Huffaker will also be eligible to participate in the Company’s other employee benefits and incentive compensation programs.
The Company has also agreed to grant to Mr. Huffaker upon commencement of his service as Chief Operating Officer 110,000 time-vesting restricted stock units on the Company’s related standard form grant agreement, vesting in three equal installments on the first, second, and third anniversaries of the commencement of Mr. Huffaker’s service as Chief Operating Officer. Beginning in January 2023, the Company has also agreed to grant to Mr. Huffaker (i) 100,000 performance restricted stock units on the Company’s related standard form of grant agreement, vesting in accordance with the total shareholder return performance requirements therein, and (ii) 40,000 time-vesting restricted stock units on the Company’s related standard form of grant agreement, vesting in three equal installments on the first, second, and third anniversaries of the grant date.
While Mr. Huffaker will be employed on an at-will basis, the COO Employment Agreement provides that in the event of his termination for cause, Mr. Huffaker will be entitled to receive (i) any unpaid annual salary earned through the date of his termination, (ii) any accrued but unused vacation, (iii) any accrued reimbursable expenses, and (iv) any other payments required by law (collectively, the “Required Payments”). If Mr. Huffaker’s employment is terminated due to his death or disability, he will be eligible to receive the Required Payments, plus (i) any unpaid annual target bonus under for the year immediately prior to the year of such termination, (ii) continuation of his annual salary following such termination for a period of one year, (iii) a pro-rated share of his annual target bonus under for the year of such termination, and (iv) in the case of termination due to disability, reimbursement of his COBRA payments for his health insurance benefits for a period of one year. If Mr. Huffaker’s employment is terminated for any other reason or if he resigns for good reason, he will be eligible to receive the Required Payments, plus (i) any unpaid annual target bonus with respect to the prior year and a prorated share of his annual target bonus for the year in which such termination or resignation takes place, (ii) continuation of his annual salary for a period of twelve (12) months from his date of termination, and (iii) reimbursement of his COBRA payments for a period of twelve (12) months.
Mr. Huffaker has no family relationship (within the meaning of Item 401(d) of Regulation S-K) with any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. There has been no transaction since the beginning of the Company’s last fiscal year, and there is no currently proposed transaction, in excess of $120,000 in which the Company is or was a participant and in which Mr. Huffaker or any of his immediate family members (within the meaning of Item 404 of Regulation S-K) had or will have a direct or indirect material interest.
