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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the


Securities Exchange Act of 1934

(Amendment (Amendment No. )

Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨

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Check the appropriate box:

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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rulerule 14a-6(e)(2))
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Definitive Proxy Statement
 ☐
¨​​
Definitive Additional Materials
 ☐
¨​​
Soliciting Material Pursuant to §240.14a-12

U.S. AUTO PARTS NETWORK, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

CARPARTS.COM, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Checkfiling fee (check the appropriate box):

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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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PRELIMINARY PROXY STATEMENT - SUBJECT TO COMPLETION

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2050 W. 190th Street, Suite 400,
Torrance, California 90504
Notice of Annual Meeting of Stockholders

​​

​​

 
DATE & TIME
​​
PLACE
​​
RECORD DATE
Thursday, May 23, 2024
​(1)​
CarParts.com, Inc., a Delaware Corporation

Title of each class of securities to which transaction applies:

​		​
April 4, 2024
9:00 a.m. Pacific Time
​(2)​
2050 W. 190th Street,
Suite 400, Torrance, California 90504

Aggregate number ​

​
You can vote if you were a shareholder
of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amountrecord on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

¨Fee paid previously with preliminary materials.
¨Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

April 4, 2024

LOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD                     , 2013

To the Stockholders of U.S. Auto Parts Network,CarParts.com, Inc.:

NOTICE IS HEREBY GIVEN that the 20132024 Annual Meeting of Stockholders (the(together with any postponements, adjournments or other delays thereof, the “Annual Meeting”) of U.S. Auto Parts Network,CarParts.com, Inc., a Delaware corporation (the “Company”), will be held on , 2013May 23, 2024 at 9:00 a.m. Pacific Time at the offices of the Company located at 16941 Keegan Avenue, Carson, CA 90746, for2050 W. 190th Street, Suite 400, Torrance, California 90504, to consider and vote on the following purposes:

proposals:
1.
1.​to elect Shane Evangelist for​
election of the following Class I directorIII directors to hold office for a term of three years orand until histheir respective successor issuccessors are elected and qualified;qualified: David Meniane, Warren “Barry” Phelps III and Dr. Lisa Costa;

2.
2.​to ratify​
ratification of our Tax Benefits Preservation Plan;
3.
​​
ratification of the appointment of Deloitte & ToucheRSM US LLP, an independent registered public accounting firm, as independent auditors of ourthe Company for fiscal year 2013;2024; and
4.
​​
approval of an advisory (non-binding) resolution regarding the compensation of our named executive officers, or the Say-on-Pay Proposal.

3.to approve a proposed stock exchange program, pursuant to which eligible employees will be given the opportunity to exchange their stock options that have an exercise price greater than $4.00 per share for new stock options to purchase a fewer number of shares and an extended vesting period.

4.such other business, if any, as may properly come before the Annual Meeting, or any adjournment, postponement or extension thereof.

At the Annual Meeting, we will also transact such other business, if any, as may properly come before the Annual Meeting.
Only stockholders of record at the close of business on April 4, 2024 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.Meeting. A list of stockholders entitled to vote at the Annual Meeting will be available for inspection at our principal executive offices and at the Annual Meeting.

All stockholders are cordially invited to attend the meeting in person. Whether or notIf you planwish to attend please sign, datethe meeting in person, you will need to RSVP and returnprint your admission ticket at www.proxyvote.com. An admission ticket together with photo identification must be presented in order to be admitted to the enclosed proxy card in the enclosed postage-paid and addressed envelope.meeting. If you hold your shares are held in “street name” (i.e., your shares are held in thestreet name of a brokerage firm, bank or other nominee), you should receive from that institution an instruction form for voting in lieu of a proxy card. Should you receive more than one proxy card or voting instruction form because your shares are held in multiple accounts or registered in different names or addresses, please sign, date and return each proxy card or voting instruction formwish to ensure that all of your shares are voted. You may revoke your proxyvote by ballot at any time prior to the Annual Meeting. If you attend the Annual Meeting, you will also need to obtain and vote by ballot, yourpresent a legal proxy will be revoked automatically and only yourentitling you to vote at the Annual Meeting willfrom the broker, bank or other nominee that holds your shares. Please refer to page 4 of the accompanying proxy statement for further details.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be counted.

Held on May 23, 2024: This proxy statement and our annual report on Form 10-K for the year ended December 30, 2023 are available at http://carparts.com/investor.
By Order of the Board of Directors

 
By Order of the Board of Directors

                    , 2013

Shane Evangelist

David Meniane
Chief Executive Officer

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April  , 2024

YOUR VOTE IS VERY IMPORTANT REGARDLESSTABLE OF CONTENTS

CarParts.com, Inc.
2050 W. 190th Street, Suite 400
Torrance, California 90504
YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. ALL STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON BY REGISTERING AT PROXYVOTE.COM. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ENCOURAGE YOU TO READ THIS PROXY STATEMENT AND SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING. PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD OR VOTING INSTRUCTION FORM AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE PREVIOUSLY SUBMITTED YOUR PROXY OR VOTING INSTRUCTIONS.

TABLE OF SHARES YOU OWN. PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.CONTENTS


Table of Contents
Proxy Statement
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4
Proposal One: Election of Directors
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7
Corporate Governance
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13
Proposal Two: Ratification of Tax Benefits Preservation Plan
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19
Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm
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22
Fees Paid to Independent Registered Public Accounting Firm
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23
Audit Committee Report
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24
Executive Officers
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25
Compensation Committee Report
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26
Compensation Discussion and Analysis
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27
Executive Compensation and Other Information
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37
Ownership of Securities by Certain Beneficial Owners and Management
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54
Certain Relationships and Related Transactions
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56
Proposal Four: Advisory Vote on Executive Compensation
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57
Annual Report
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59
Additional Information
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59
Other Business
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60
Appendix A: Supplemental Financial Information Non-GAAP Measures
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61
Appendix B: Tax Benefits Preservation Plan
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62

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U.S. AUTO PARTS NETWORK,

CARPARTS.COM, INC.

16941 Keegan Avenue

Carson,

2050 W. 190th Street, Suite 400,
Torrance, California 90746

PROXY STATEMENT

90504

Proxy Statement
These proxy materials and the enclosed proxy card or voting instruction form are being furnished to holders of the common stock, par value $0.001 per share, and Series A Convertible Preferred Stock (“Series A Convertible Preferred”), par value $0.001 per share, of U.S. Auto Parts Network,CarParts.com, Inc., a Delaware Corporationcorporation (the “Company”), in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”), to be voted at the 20132024 Annual Meeting of Stockholders of the Company to be held on , 2013 and atMay 23, 2024 (together with any adjournmentpostponements, adjournments or postponement ofother delays thereof, the meeting (the “Annual Meeting”). The Annual Meeting will be held at 9:00 a.m. Pacific Time at the offices of the Company located at 16941 Keegan Avenue, Carson CA 90746.2050 W. 190th Street, Suite 400, Torrance, California 90504. These proxy solicitation materials are expected to be mailed on or about , 2013May 2, 2024, to all stockholders entitled to vote at the Annual Meeting.

Purpose of Meeting

The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the accompanying Notice of the Annual Meeting of Stockholders (the “Notice”) and are described in more detail in this proxy statement.

Meeting Admission
To attend the Annual Meeting, you will need to bring an admission ticket and photo identification. You will need to print an admission ticket in advance by visiting www.proxyvote.com and following the instructions there. You will need the 16-digit control number to access www.proxyvote.com. You can find your control number on:
•
Your proxy card available at www.proxyvote.com or included with this proxy statement; or
Your voting instruction form if you hold your shares in street name through a broker, bank or other nominee.
If you wish to vote by ballot at the Annual Meeting and you hold your shares in street name, you will also need to obtain a legal proxy from the broker, bank or other nominee that holds your shares giving you the right to vote your shares at the Annual Meeting. You must present this legal proxy, as well as an admission ticket and valid photo identification at the entrance to the meeting.
For questions about admission to the Annual Meeting, please contact our Corporate Secretary at (424) 205-5512.
Voting; Quorum

The record date for determining those stockholders who are entitled to notice of, and to vote at, the Annual Meeting has been fixed as , 2013.April 4, 2024. Only stockholders of record at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting. Each share of our common stock and Series A Convertible Preferredoutstanding on the record date entitles its record holder to one vote on all matters subject topresented for a stockholder vote. vote at the Annual Meeting.
As of the record date, 56,644,740 shares of our common stock were outstanding and 4,149,997 shares of our Series A Convertible Preferred were outstanding.

The presence at the Annual Meeting, eitherof holders of record of a majority of the voting power of our common stock issued and outstanding and entitled to vote, present in person or by proxy, of holders of a majority of the outstanding shares of our common stock and Series A Convertible Preferred entitled to vote will constitute a quorum for the transaction of business at the Annual Meeting. Shares represented by proxies that reflect abstentions or “broker non-votes” will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. If a quorum is not present, the chairperson of the Annual Meeting will be adjourned untilor holders of a quorum is obtained.

majority of the voting power of the stockholders present in person or by proxy may adjourn the Annual Meeting.

In the election of directordirectors under Proposal One, the nomineethree nominees receiving the mosthighest number of “For” votes from the holders of shares present in person or represented by proxywill be elected as Class III directors. “Withhold” votes will not be counted as votes cast, and, entitled to votetherefore, will have no effect on the election of director will be elected. Only votes “For” or “Withheld” will affect the outcome.directors. With regard to ProposalProposals Two, Three, and Proposal Three,Four, to be approved, the Company must receive the affirmative vote of the holders of a majority of the shares
CarParts.com, Inc.  4  2024 Proxy Statement

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voting power of the stockholders present in person or represented by proxy and entitled to vote at the Annual Meeting.Meeting and on the proposal. If you “Abstain” from voting, it will have the same effect as an “Against” vote.
Most of our stockholders hold their shares as a beneficial owner through a broker, bank or other nominee rather than directly in their own name. This is often referred to as holding shares in “street name.” If you hold your shares in street name and you do not give instructions to your broker, bank or other nominee, your shares may constitute broker non-votes.
Under applicable stock exchange rules, a broker, bank or other nominee is entitled to vote shares held for a beneficial owner on “routine” matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker, bank or other nominee is not entitled to vote shares held for a beneficial owner on “non-routine” matters. Proposals One, Two, and Four are each considered non-routine matters. Proposal Three is considered a routine matter. Broker non-votes will have no effect.

effect on the outcome of any of the proposals being considered at the Annual Meeting. We encourage you to vote your shares in connection with the Annual Meeting.

All votes will be tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes (i.e.,Meeting.
Revoking Proxies; Changing Voting Instructions
If you have shares for which you are the stockholder of record, you may vote those shares by proxy. You may vote by mail, internet or telephone pursuant to instructions provided on the proxy card. Additionally, shares held in your name as the stockholder of record may be voted by a broker or nominee that are representedyou by ballot at the Annual Meeting, but with respectMeeting.
If you are the beneficial owner of shares held in street name, you may vote by following the voting instruction form provided to which suchyou by your broker or nominee is not instructed to vote on a particular proposal and does not have discretionary voting power). Under Delaware law, abstentions and broker “non-votes” will be counted for purposes of establishing a quorum at the Annual Meeting, but will not be counted towards the vote total for the election of director.

1

Proxies

Please use the enclosed proxy card to vote by mail.other nominee. If your shares are held in street name, thenyou may not vote your shares in lieuperson at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank or nominee that holds the shares giving you the right to vote the shares at the Annual Meeting.

If you are a stockholder of record, you may revoke a proxy card you should receive from that institution an instruction form for voting. Should you receive more than one proxy card or voting instruction form because your shares are held in multiple accounts or registered in different names or addresses, please be sure to complete, sign, date and return each proxy card or voting instruction form to ensure that all of your shares will be voted. Only proxy cards that have been signed, dated and timely returned will be counted in the quorum and voted.Please note that if you hold your shares held in “street name” they can only be voted by your broker on routine matters, unless you provide instructions on how to vote forat any non-routine matters. Accordingly, you should provide voting instructions to your broker.

If the enclosed proxy cardtime before it is properly signed and returned to us, the shares represented thereby will be voted at the Annual Meeting by: (a) delivering a proxy revocation or another duly executed proxy bearing a later date to our Corporate Secretary at 2050 W. 190th Street, Suite 400, Torrance, California 90504; (b) voting again by telephone or over the internet at a later time (only your latest dated proxy will be counted); or (c) attending the Annual Meeting and voting by ballot. Attendance at the Annual Meeting will not revoke a proxy unless you actually vote by ballot at the meeting. For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker or other nominee in accordance with the instructions specified thereon. Ifthey provided, or, if you have obtained a legal proxy from your broker or other nominee giving you the proxy does not specify howright to vote your shares, by attending the shares represented thereby are to be voted, the proxy will be voted FOR the election of the nominee for director proposedAnnual Meeting and voting by the Board under Proposal One, FOR Proposal Two and FOR Proposal Three.

ballot.

The enclosed proxy also grants the named proxy holders discretionary authority to vote on any other business that may properly come before the Annual Meeting. We have not been notified by any stockholder of his or her intent to present a stockholder proposal at the 2013 Annual Meeting. As indicated in the 2012 proxy statement, the notification deadline was December 3, 2012.

If your shares are held in your name, you may revoke or change your vote at any time before the Annual Meeting by filing a notice of revocation or another signed proxy card with a later date with our corporate Secretary at our principal executive offices at 16941Keegan Avenue, Carson, California 90746. If your shares are held in street name, you should contact the record holder to obtain instructions if you wish to revoke or change your vote before the Annual Meeting. If you attend the Annual Meeting and vote by ballot, any proxy that you submitted previously to vote the same shares will be revoked automatically and only your voteother business at the Annual Meeting will be counted. Please note, however, that if your shares are held in street name, your vote in person at the Annual Meeting will not be effective unless you have obtained and present a proxy issued in your name from the record holder. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

Voting by Telephone or through the Internet

If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares by telephone or through the Internet. A large number of banks and brokerage firms provide eligible stockholders the opportunity to vote in this manner. If your bank or brokerage firm allows for this, your voting form will provide instructions for such alternative method of voting.

Meeting.

Solicitation

We will bear the entire cost of proxy solicitation, including the costs of preparing, assembling, printing and mailing this proxy statement, the Notice, the proxy card and any additional solicitation material furnished to the stockholders. Copies of the solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. In addition, although there is no formal agreement to do so, we may reimburse such persons for their reasonable expenses in forwarding the solicitation materials to the beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by personal contact, telephone, facsimile, email or any other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services. In the discretion of management, we reserve the right to retain a proxy solicitation firm to assist in the solicitation of proxies. Although we do not currently expect to retain such a firm, we estimate that the fees of such firm would range from $5,000 to $10,000 plus out-of-pocket expenses, all of which would be paid by us.
CarParts.com, Inc.  5  2024 Proxy Statement

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2

Note with Respect to Forward-Looking Statements

We have made certain forward-looking statements in this proxy statement that relate to expectations concerning matters that are not historical or current facts. These statements are forward looking statements for the purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933 as amended (the “Securities Act”). In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements. We cannot assure you that such expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such expectations, and you should not place undue reliance on these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by such language. Important risk factors that could contributemay cause such a difference include, but are not limited to, such differences areuncertainties regarding our business, and the economy generally, competitive pressures, our dependence on search engines to attract customers, demand for the Company’s products, the online market and channel mix for aftermarket auto parts, increases in transportation, labor and commodity and component pricing that would increase the Company’s costs, the operating restrictions in our credit agreement, the weather, the impact of customs issues or delays, supply chain disruptions and any other factors discussed in our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and otherthe Company’s filings with the Securities and Exchange Commission.Commission (the “SEC”), including the Risk Factors contained in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at www.carparts.com and the SEC’s website at www.sec.gov. The forward-looking statements contained herein speak only as of the date of this proxy statement. Except as required by law, we do not undertake any obligation to update any forward-looking statements contained herein, whether as a result of new information, future events or otherwise.
CarParts.com, Inc.  6  2024 Proxy Statement

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3

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

Matters to be Considered at the Annual Meeting
PROPOSAL ONE:

ELECTION OF DIRECTOR

Election of Directors
Our certificateSecond Amended and Restated Certificate of incorporationIncorporation provides for a classified board of directors consisting of three classes of directors, each serving staggered three-year terms and each as nearly equal in number as possible as determined by our Board of Directors. As a result, a portion of our Board of Directors will be elected at each year. Our Boardannual meeting of Directors currently consistsstockholders. Ms. Liu and Mr. Maier are Class II directors whose terms expire at the 2026 Annual Meeting of seven persons. Mr. EvangelistStockholders. Messrs. Greyson and Barnes and Ms. Siminoff have been designatedDutra are Class I directors whose terms expire at the 20132025 Annual Meeting of Stockholders. Messrs. Berman, Khazani and Majteles have been designated Class II directors whose terms expire at the 2014 Annual Meeting. Messrs. HarmanMeniane and Phelps have been designatedand Dr. Costa are Class III directors whose terms expire at the 2015 Annual Meeting of Stockholders.

Meeting.

The class whose term of office expires at the Annual Meeting currently consists of twothree directors. However, in February 2013, Ms. Siminoff informed us that she does not intend to stand for re-election when her term as a Class I director expires at our Annual Meeting. Ms. Siminoff’s decision not to stand for re-election does not involve any disagreement with us, our management or our Board of Directors. We are currently conducting a director search in the exercise of due care for a new candidate as soon as practicable. This new director will not only satisfy the independence requirements under the listing requirements, but will have no material connection to our Company (that is, no material financial, personal, business or other relationship that a reasonable person could conclude could potentially influence boardroom objectivity) prior to being appointed to the Board. We are committed to having this new director in place as quickly as possible after the Annual Meeting. While the Board may elect a new director to fill the vacant spot on the Board, the Board believes it is important for our stockholders to ratify any member of the Board who the Board appoints. As a result, whenever the Board appoints a new member, the Board will submit such new member’s directorship for approval at the next regularly scheduled Annual Meeting of Stockholders. If the stockholders elect the Board member, he or she will serve the remaining term of the class of director to which he or she was elected.

On the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors selected and approved Shane EvangelistMessrs. Meniane and Phelps and Dr. Costa as nomineenominees for election in the class being electedas Class III directors at the Annual Meeting to serve for a term of three years, expiring at the 20162027 Annual Meeting of Stockholders, orand until his successor is dulytheir respective successors are elected and qualified or until histheir earlier resignation or removal. TheEach nominee for election is currently a member of our Board of Directors and has consented to be named as a nominee in this proxy statement and agreed to serve as a director if elected. Management has no reason to believe that any of the nomineenominees will be unavailable to serve. In the event any of the nomineenominees named herein is unable to serve or declines tofor good cause will not serve at the time of the Annual Meeting, the personpersons named inon the enclosed proxy card will exercise discretionary authority to vote for a substitute.substitute nominee or the Board may determine to reduce the size of the Board. Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR ALL the nomineenominees named below.

Stockholder Approval

Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of director. The nominee receiving the highest number of affirmative votes will be elected. At the Annual Meeting, stockholders are only being asked to elect Shane Evangelist for Class I director to hold office for a term of three years or until his respective successor is elected and qualified.

4

Recommendation of Our Board of Directors

Our Board of Directors recommends a vote “FOR” the Class I director nominee listed below.

Our Board of Directors recommends a vote “FOR ALL” of the Class III Director nominees listed below.
Information Aboutabout our Directors and Nominee

Nominees

We believe that our Board as a whole should encompass a range of talent, skill, diversity and expertise enabling it to provide sound guidance with respect to our operations and interests. In addition to considering a candidate’s background and accomplishments, the Nominating and Corporate Governance Committee reviews candidates in the context of the current composition of the Board and the evolving needs of our business. In accordance with the listing standards of The NASDAQNasdaq Stock Market (the “NASDAQ“Nasdaq Rules”) we have charged our Nominating and Corporate Governance committeeCommittee with ensuring that at least a majority of the directors qualify as “independent” under the NASDAQNasdaq Rules. See “Board“Corporate Governance - Board Committees and Meetings –- Nominating and Corporate Governance Committee” for a discussion of the factors that are considered in selecting our director nominees.
CarParts.com, Inc.  7  2024 Proxy Statement

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Our Board is currently comprised of eight directors. The table and narrative below sets forth information regarding each of our directors and our director nominee,nominees, including his or her age as of the date of the Annual Meeting, the year they first became directors, business experience during at least the past five years, public company boards they currently serve on or have recently served, on since January 1, 2008, and certain other biographical information and attributes that the Nominating and Corporate Governance Committee determined qualify them to serve as directors. The Nominating and Corporate Governance Committee believes that the director nomineenominees and the other current directors have the following other key attributes that are important to an effective board of directors: integrity and demonstrated high ethical standards; sound judgment; analytical skills; the ability to engage management and each other in a constructive and collaborative fashion; diversity of origin, background, experience and thought; and the commitment to devote significant time and energy to serve on the Board and its committees.

Name

 Age  

Current Position(s)

 Independent  Director
Since		  Committee
             Audit Compensation Nominating
and
Corporate
Governance

Robert J. Majteles

  48   Chairman of the Board  X    2006   X X Chairman

Joshua L. Berman

  43   Director  X    2007    Chairman X

Shane Evangelist

  39   Chief Executive Officer and Director   2007     

Fredric W. Harman

  52   Director   2006     

Sol Khazani

  55   Director   2001     

Warren B. Phelps III

  66   Director  X    2007   Chairman  X

Ellen F. Siminoff (1)(2)

  45   Director  X    2006   X X 

 
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Committee
Name
​​
Age
​​
Director
Since
​​
Current Position(s)
​​
Independent
​​
Audit
​​
Compensation
​​
Nominating and
Corporate
Governance
Warren “Barry” Phelps III
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77
​​
2007
​​
Chairman of the Board
​​
•
​​
•
​​
Chair
​​
 
Jim Barnes
​​
57
​​
2019
​​
Director
​​
•
​​
 
​​
•
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Dr. Lisa Costa
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60
​​
2020
​​
Director
​​
•
​​
•
​​
 
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Jay K. Greyson
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64
​​
2014
​​
Director
​​
•
​​
Chair
​​
•
​​
 
Nanxi Liu
​​
33
​​
2020
​​
Director
​​
•
​​
 
​​
 
​​
Chair
Henry Maier
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70
​​
2021
​​
Director
​​
•
​​
 
​​
 
​​
•
Ana Dutra
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59
​​
2022
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Director
​​
•
​​
 
​​
 
​​
•
David Meniane
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41
​​
2022
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Chief Executive Officer and Director
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Class III Director Nominees
(1)
David Meniane
Chief Executive Officer
and director
Age: 41
Director Since: 2022

In February 2013, Ms. Siminoff resigned​

​
DAVID MENIANE has served as our Chief Executive Officer and director since April 2022, and served as our Chief Operating and Financial Officer from March 2019 until April 2022. He previously served as Executive Vice President of L.A. Libations, a start-up accelerator for packaged consumer goods companies in North America, from August 2016 to March 2019, and as Chief Executive Officer of Victoria’s Kitchen, a specialty beverage company, from October 2011 through its acquisition by Hispanica International, Inc. in October 2017. Prior to that, he served as Chief Financial Officer of Aflalo & Harkham Investments, a commercial real estate investment partnership. Mr. Meniane holds a bachelor’s degree in accounting and a master’s degree in taxation from the University of Southern California and is a certified C.P.A.

We believe Mr. Meniane’s valuable business and leadership experience, combined with his intimate knowledge of our financial and operational status gained through his various roles at the Company, qualify Mr. Meniane to serve as a director.
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Warren “Barry”
Phelps III
Executive Chairman of
Empower RF Systems
Age: 77
Director Since: 2007
​​
WARREN “BARRY” PHELPS III has been a director since September 2007 and Chairman of the Board since August 2017. Since January 2013, he has served as Executive Chairman of Empower RF Systems, a developer and manufacturer of high power RF amplifiers for the defense and commercial markets. Mr. Phelps joined the Board of Empower in February 2007, and served as its Chairman and CEO from October 2009 to January 2013. Since May of 2017, Mr. Phelps has also served on the Board of Luna Innovations, a developer and manufacturer of high-speed optical test products for the commercial and defense markets. From 2000 until his retirement in September 2006, Mr. Phelps served in several executive positions for Spirent Communications plc, a leading communications technology company, most recently as President of the Performance Analysis-Broadband Division. From 1996 to 2000, Mr. Phelps was at Netcom Systems, a provider of network test and measurement equipment, most recently as President and Chief Executive Officer. Prior to that, Mr. Phelps held executive positions, including Chairman and Chief Executive Officer at MICOM Communications, and various financial management roles at Burroughs/Unisys Corporation. He also served on the Board of Trustees of St. Lawrence University. Mr. Phelps holds a B.S. degree in mathematics from St. Lawrence University in Canton, New York and an M.B.A. from The University of Rochester in Rochester, New York.

We believe that Mr. Phelps is qualified to serve as a director due to his financial background as well as his executive management experience across numerous technology companies.
COMMITTEES:
Audit
Compensation (Chair)
Dr. Lisa Costa
Chief Technology and
Innovation Officer
Age: 60
Director Since: 2020
​​
DR. LISA COSTA has been a director since November 2020. Since 2018, she has been a member of the US Government Senior Executive Service. She serves as the Chief Technology and Innovation Officer (CTIO) for the US Space Force. As such she is the most senior cyber civilian of the Service and leads the work for the Service in artificial intelligence (AI), data, communications networking, Modeling Simulation & Analyses, Futures, and Energy. Previously she was CIO for USSOCOM – where she oversaw a $1.3 billion annual IT budget and network and cyber operations that included cloud infrastructure, secure mobility, satellite and terrestrial communications, and DevSecOps agile software development supporting AI. Dr. Costa was a member of multiple Defense Science Boards, invented numerous systems and algorithms, and has advised Presidential Transition Teams on national security issues. She served on the board of Hire Our Heroes and has advised Fortune 500 companies, including Target, Hilton, Starbucks, Cheniere, and FedEx on enterprise risk management. Previously Dr. Costa served as a director at the MITRE Corporation and was Vice President and Chief Scientist at Planet Risk, Inc. from 2017 to 2018. She is an honoree of the James Schlesinger Award for Service to Our Nation and has been awarded the Joint Chiefs of Staff Joint Meritorious Civilian Service Medal. Dr. Costa holds Bachelor of Science degrees in Computer Science and Mathematics from Rollins College, an MBA from Tampa College, and a PhD in Computer Science from Union Institute.

We believe that Dr. Costa is qualified to serve as a director due to her cybersecurity, network operations, and data analytics expertise and her deep understanding of business, technology, and eCommerce, as well as her experience in advising Fortune 500 companies.
COMMITTEES:
Audit
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Directors Whose Terms Continue
Class I Directors - Terms Expiring at the 2025 Annual Meeting of Stockholders
Jay K. Greyson
Partner, Managing Director,
and Principal of Supply Chain
Equity Partners
Age: 64
Director Since: 2014
​​
JAY K. GREYSON has been a director since June 2014. He is a Partner, Managing Director, and Principal of Supply Chain Equity Partners, a committed capital private equity fund dedicated exclusively to the distribution and supply chain industry which he co-founded in 2006. Jay serves as the Non-Executive Chairman of Supply Chain Equity's portfolio companies and leads the development of strategic & tactical planning and execution initiatives. Before co-founding Supply Chain Equity Partners, Jay was a Founding Partner and the Chief Compliance Officer of Vetus Partners, an investment bank specializing in domestic and cross-border mergers, acquisitions and corporate divestitures of middle market businesses, and established and led practice groups at Brown Gibbons Lang & Company, a regional investment banking firm. Over his career, Jay has held various operating company roles, including General Manager, National Sales Manager, Product Manager, and Marketing Manager, as well as having served on a number of boards. Jay holds a B.S.E.E. degree from the University of Virginia, an M.B.A. from the University of Chicago, is recognized by the National Association of Corporate Directors (NACD) as NACD Directorship Certified, and has completed his CERT Certification in Cybersecurity Oversight.

We believe that Mr. Greyson is qualified to serve as a director due to his leadership experience in private equity and investment banking, combined with his financial background and management experience in manufacturing, distribution and supply chain.
COMMITTEES:
Audit (Chair)
Compensation
Jim Barnes
CEO of enVista, LLC,
a supply chain and unified
commerce consulting firm
Age: 57
Director Since: 2019
​​
JIM BARNES has been a director since October 2019. From 2002 to 2022, Mr. Barnes served as the CEO of enVista, LLC, a supply chain and unified commerce consulting firm, which he co-founded. Prior to founding enVista, he was the Executive Vice President and co-founder of Q4 Logistics. Mr. Barnes has over 30 years, designing, implementing and managing supply chain solutions for Fortune 500 companies, and consults for a number of automotive parts manufacturers, distributors and retailers. Mr. Barnes holds a B.S. degree in Mechanical Engineering Technology from Purdue University.

We believe Mr. Barnes extensive subject matter expertise with respect to supply planning, supply chain execution and commerce platforms qualify him to serve as a director.
COMMITTEES:
Compensation
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Ana Dutra
Board of the Latino Corporate
Directors Association and chairs
its Educational Foundation Board
Age: 59
Director Since: 2022
​​
ANA DUTRA has been a director since January 2022. She serves on the Board of the Latino Corporate Directors Association and chairs its Educational Foundation Board, and Pembina Pipeline (NYSE: PBA). Previously, she served as a member of the Board of Directors of First Internet Bancorp (Nasdaq: INBK), CME Group Inc. (Nasdaq:CME), Amyris (Nasdaq: AMRS) and Harvest Inc. (NCSX:HARV). Before that, she was the CEO of The Executives’ Club of Chicago from 2014 until 2018 and of Korn/Ferry Consulting from 2007 until 2013. Ana holds an M.B.A. from Kellogg at Northwestern University, a Masters in Economics from Pontificia Universidade do Rio de Janeiro, and a Juris Doctor from Federal Universidade of Rio de Janeiro. She is a faculty member of NACD and holds a NACD Directorship Certification, a CERT Certification in Cybersecurity Oversight by Carnegie Mellon University and Diligent ESG and Climate Leadership Certification.

We believe Ms. Dutra’s extensive experience assisting boards of directors, CEOs and management teams to identify and execute growth strategies through innovation, acquisitions, and new technologies and to pursue their corporate governance objectives qualify her to serve as a director.
COMMITTEES:
Nominating and Corporate Governance
Class II Directors - Terms Expiring at the 2026 Annual Meeting of Stockholders
Nanxi Liu
Co-CEO and Co-Founder of Blaze Technology, Inc., CFO and Co-Founder
of Nanoly Bioscience, Inc.,
Age: 33
Director Since: 2020
​​
NANXI LIU has been a director since July 2020. She serves as the Co-CEO and Co-Founder of Blaze Technology, Inc., an AI-powered no-code software platform. Nanxi also serves on the Board of Directors of Proeza Group, a conglomerate, and is a Partner at XFactor Ventures, where she invests in women-founded startups. She previously served on the Boards of Directors of Carlotz (Nasdaq:LOTZ) prior to its acquisition by Shift Technologies in 2022, and Kindred Biosciences (Nasdaq: KIN), prior to its acquisition by Elanco (NYSE: ELAN) in 2021. She also served on the Board of Directors for California Department of Motor Vehicles’ New Motor Vehicle Board. Ms. Liu holds a Bachelor of Science degree in Business Administration and a Bachelor of Arts degree in Political Economy from the University of California, Berkeley.

We believe that Ms. Liu’s extensive experience in running and advising technology companies qualify her to serve as a director.

COMMITTEES:
Nominating and Corporate Governance and Mr. Majteles was appointed as her replacement.

(Chair)
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(2)
Henry J. Maier
President and Chief Executive
Officer of FedEx Ground,
a subsidiary of FedEx Corp.
Age: 70
Director Since: 2021

In February​

​
HENRY J. MAIER has been a director since April 2021. From 2013 Ms. Siminoff informed us that she does not intenduntil his retirement on July 31, 2021, Henry was President and Chief Executive Officer of FedEx Ground, a subsidiary of FedEx Corp. Prior to standserving as President and Chief Executive Officer, Mr. Maier was an executive vice president of FedEx Ground and responsible for re-election when her termall the company’s strategic planning, contractor relations and corporate communications programs. Mr. Maier has over 40 years of experience in the transportation industry, including more than 35 years at FedEx companies. He currently serves as a Class I director expires aton the boards and various committees of CalAmp Corp. (Nasdaq: CAMP), CH Robinson, Inc. (Nasdaq:CHRW) and Kansas City Southern (NYSE: KSU), a transportation holding company. Mr. Maier previously served on the Strategic Management Committee of FedEx Corp. (NYSE: FDX), which set the strategic direction for the FedEx enterprise. Mr. Maier receive a Bachelor of Arts degree in Economics from the University of Michigan.

We believe Henry is qualified to serve on the Board due to his extensive executive leadership skills and experience within the logistics and transportation industry, which will strengthen the Board’s ability to oversee the execution of our Annual Meeting.

Company’s strategy.
COMMITTEES:
Nominating and Corporate Governance

Class I Director Nominee

Shane Evangelist has been our CEO and a director since October 2007. From August 2004 to September 2007, Mr. Evangelist served as Senior Vice President and General Manager of BLOCKBUSTER Online, a division of Blockbuster Inc., which he joined in 2001, where he was responsible for leading the creation, development and launch of Blockbuster’s online movie rental service. Prior to that, from January 2001 to July 2004, Mr. Evangelist served as Vice President of Strategic Planning for Blockbuster Inc., with responsibility for strategy development, mergers and acquisitions, marketing and capital deployment. Prior to Blockbuster,

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Mr. Evangelist began his career at IBM where he served from 1997 to 2001 as a business executive responsible for media and entertainment accounts. Mr. Evangelist currently serves on the board of one privately held company. Mr. Evangelist holds a B.A. degree in Business Administration from the University of New Mexico and an M.B.A. from Southern Methodist University. We believe that Mr. Evangelist’s valuable business and leadership experience, particularly in the e-commerce industry, his experience running an industry-transforming business, combined with his intimate knowledge of our financial and operational status gained in his role as our Chief Executive Officer, qualifies Mr. Evangelist to serve as a director.

Directors Whose Terms Continue

Class II Directors – Terms Expiring at the 2014 Annual Meeting

Joshua L. Berman has been a director since October 2007. Mr. Berman co-founded and serves as President of BeachMint, a next generation eCommerce company focused on building brands and delivering a personalized user experience, since April 2010. Mr. Berman served as President of Slingshot Labs, an incubator dedicated to building and developing new web ventures for News Corporation, from February 2008 through April 2010. Mr. Berman was a co-founder of MySpace.com, a leading online lifestyle portal, and served as its Chief Operating Officer from January 2003 until April 2010. Prior to 2003, Mr. Berman co-founded and managed two Internet companies: Response Base Marketing, where he held positions as the Chief Operating Officer and Chief Financial Officer from 2001 through 2003, and Xdrive Technologies from 1999 through November 2001, where he served as Chief Financial Officer and Senior Vice President of Corporate Development. Mr. Berman also worked from 1997 through 1999 as a management consultant at PricewaterhouseCoopers and as an international marketing manager and a senior financial analyst at Twentieth Century Fox. Mr. Berman was actively licensed as a certified public accountant from 1991 through 2002, and holds a B.A. degree in economics from the University of California, Santa Barbara and an M.B.A. from the University of Southern California. We believe that Mr. Berman is qualified to serve as a director due to his industry knowledge and operational experience with, and service as COO or President of internet companies, including internet marketing and social networking, combined with his strong accounting and financial background and management experience.

Sol Khazani is a co-founder of U.S. Auto Parts and has been a director since January 2001. Mr. Khazani also served as our Chairman of the Board from January 2001 to March 2007, as our Chief Financial Officer from January 2001 to April 2005 and as a Vice President from October 1995 to January 2001. From 1995 through December 2008, Mr. Khazani served as the Vice President of American Condenser, Inc., a company that he co-founded which manufactures air-conditioning condensers for automotive and industrial applications. Mr. Khazani also serves as financial director of the non-profit organization Women for World Health. Mr. Khazani holds a B.S. degree in accounting and an M.B.A. from National University in San Diego. We believe Mr. Khazani’s extensive background in the auto parts and industrial manufacturing and distribution industries provides a valuable juxtaposition with the e-commerce experience of many our other directors. We also believe that his historical insight into the Company’s operations and strategic relationships, combined with his foresight and creativity in driving the growth of the Company from a small, local operation delivering parts, to an international internet organization qualifies him to serve as a director.

Robert J. Majteles has been a director since November 2006 and has been our Chairman of the Board since March 2007. Mr. Majteles is the managing partner of Treehouse Capital, LLC, an investment firm he launched in 2000. Mr. Majteles serves as an active and involved board member for the companies in Treehouse’s portfolio. Prior to launching Treehouse, Mr. Majteles was the Chief Executive Officer of three different technology companies. Mr. Majteles has also been an investment banker and a mergers and acquisitions attorney. Mr. Majteles has served on several public company boards. Mr. Majteles serves on the boards of directors of iPass, Inc., from 2009 through the present, where he also serves as chairman of the Audit Committee. Mr. Majteles was previously a board member of several additional public company boards: Rovi Corporation (formerly Macrovision Corporation) from 2006 through 2010; Adept Technology, Inc. from 2003 through 2011; Unify Corporation from 2004 through 2011; Merriman, Curhan, & Ford Group, Inc. from 2008 through 2009; Phoenix Technologies Ltd. from 2007 through 2008; World Heart Corporation from 2003 through 2008; and

6

Comarco Inc, from 2008 through 2011. Mr. Majteles obtained his B.A. from Columbia University in 1986 and his J.D. from Stanford University in 1989. We believe that Mr. Majteles is qualified to serve as a member of the Board due to his combined business, investment, and financial expertise and experience. His management experience in leading companies, including serving as CEO of three technology companies, and his prior and current service on multiple boards of directors of innovative technology companies makes Mr. Majteles effective at leading the Board on behalf of our stockholders.

Class III Directors – Terms Expiring at the 2015 Annual Meeting

Fredric W. Harman has been a director since March 2006. Mr. Harman is a Managing Partner of Oak Investment Partners, a venture capital firm, which he joined as a General Partner in 1994. From 1991 to 1994, Mr. Harman served as a General Partner of Morgan Stanley Venture Capital. Mr. Harman currently serves as a director of Demand Media, Inc., an online media company, Limelight Networks, Inc., an internet infrastructure company, and several privately held companies. Mr. Harman holds B.S. and M.S. degrees in electrical engineering from Stanford University and an M.B.A. from the Harvard Business School. We believe that Mr. Harman is qualified to serve as a director due to his broad financial and industry experience, combined with his operational oversight gained through his investment in and extensive board service since 1991 with a broad range of technology and internet companies.

Warren B. Phelps III has been a director since September 2007. From October 2009 until December 2012, he served as Chairman and CEO of Empower RF Systems, a developer and manufacturer of high power RF amplifiers for the defense and commercial markets. As of January 1, 2013, he has assumed the position of Executive Chairman. From 2000 until his retirement in September 2006, Mr. Phelps served in several executive positions for Spirent Communications plc, a leading communications technology company, most recently as President of the Performance Analysis Broadband division. From 1996 to 2000, Mr. Phelps was at Netcom Systems, a provider of network test and measurement equipment, most recently as President and Chief Executive Officer. Prior to that, Mr. Phelps held executive positions, including Chairman and Chief Executive Officer, at MICOM Communications and in various financial management roles at Burroughs/Unisys Corporation. Mr. Phelps currently serves on the boards of directors of one privately held company and on the Board of Trustees of St. Lawrence University. Mr. Phelps holds a B.S. degree in mathematics from St. Lawrence University in Canton, New York and an M.B.A. from the University of Rochester in Rochester, New York. We believe that Mr. Phelps is qualified to serve as both a Board member and as the financial expert of our Audit Committee due to his extensive experience as a President or a Chief Executive Officer of a variety of companies in the technology industry, as well as his experience in financial management roles, including the creation and oversight of internal controls, preparation of the financial statements and coordination of the audit for public companies.

Family Relationships

There are no family relationships among any of our directors, executive officers and director nominee.nominees.
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CORPORATE GOVERNANCE

Corporate Governance
Code of Ethics and Business Conduct

Our Board of Directors has adopted a Code of Ethics and Business Conduct which applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and employees. The full text of our Code of Ethics and Business Conduct is available on the Investor Relations section of our website atwww.usautoparts.net which can be directly accessed athttp:https://investor.usautoparts.net/www.carparts.com/investor/corporate-governance. We intend to disclose future amendments to certain provisions of the Code of Ethics and Business Conduct and any waivers of provisions of the Code of Ethics and

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Business Conduct required to be disclosed under the rules of the Securities and Exchange Commission (“SEC”),SEC or the Nasdaq Rules, at the same location on our website. The information contained in, or that can be accessed through, our website does not constitute a part of this proxy statement.

Corporate Governance Guidelines
Our Board of Directors has adopted corporate governance guidelines, which provide the framework for our corporate governance along with our Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws (the “Bylaws”), committee charters and other key governance practices and policies. Our corporate governance guidelines cover a wide range of subjects, including the conduct of board meetings, independence and selection of directors, and director ownership guidelines. The corporate governance guidelines can be accessed on our website at https://www.carparts.com/investor/corporate-governance.
The Board may periodically engage an independent third-party advisor experienced in corporate governance matters to facilitate, and bring an outside perspective to, the Board’s annual self-assessment process. The Board engaged such an advisor in 2023. During 2023, the advisor conducted one-on-one, open-ended interviews with all Board members to provide each director with the opportunity to openly discuss the performance and effectiveness of the Board as a whole and its committees. The interviews also provided each director with an opportunity to identify areas for the Board to improve its effectiveness. In addition to the director interviews, the advisor conducted interviews with members of senior management who regularly attend Board meetings to solicit their perspectives on the relationship between the Board and management. The advisor’s process was developed in consultation with the Chairman of the Board and the Chair of the Nominating and Governance Committee, as well as our CEO and our General Counsel. The advisor gathered and analyzed the data and presented its findings and recommendations to the full Board.
Director Independence

The Board reviewed the independence of each of our directors on the basis of the standards adopted by the NASDAQNasdaq Stock Market (“NASDAQ”Nasdaq”). During this review, the Board considered transactions and relationships between the Company, on the one hand, and each director, members of his or her immediate family, and other entities with which he or she is affiliated, on the other hand. The purpose of this review was to determine which of such transactions or relationships were inconsistent with a determination that the director is independent under the NASDAQNasdaq Rules. After the review, the Board of Directors has determined that Messrs. Berman, Majteles, Phelps and Ms. Siminoff each of our directors with the exception of Mr. Meniane satisfies the requirements for “independence” under the listing standards of the NASDAQNasdaq Rules. However, Ms. Siminoff informed usIn making its determination regarding the independence of Mr. Maier, the Board considered the fact that she does not intendMr. Maier previously served as president and CEO of FedEx Ground and payments made by the Company in the ordinary course to standFedEx Ground for re-election when her term as a Class I director expiresshipping and carrier services at our Annual Meetingmarket rates and she will no longer serve as a director followingterms which payments represented less than 1% of the Annual Meeting.

total revenue of each of FedEx Ground and its parent FedEx Corporation. Mr. Maier retired from his position at FedEx Ground effective July 31, 2021.

Board Leadership Structure
The Board has additionally, maintained a separation between the seats of Chairman and CEOChief Executive Officer since wethe Company went public in 2007 in recognition of the different demands and responsibilities of the roles and to emphasize the independence of the role of Chairman. The separate roles allow us to have a Chairman focused on the leadership of the Board, providing our Chief Executive Officer with the ability to focus more of his time and energy on managing our operations. The Board also meets regularly in executive session.session without the presence of management.
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Board Oversight of Risk

The Board is responsible for overseeing our risk management but its duties in this regard are supplementedaided by the Audit Committee, which is responsible for discussing with management and our independent auditors policies with respect to risk assessment and risk management, including the process by which we undertake major financial and accounting risk assessment and management. The Audit Committee also oversees our corporate compliance programs, as well as the internal audit function. In addition to the Audit Committee’s work in overseeing risk management, our full Board periodically engages in discussions of the most significant risks that the Company is facing and how these risks are being managed, and the Board receives reports on risk management from senior officers of the Company and from the Chairman ofCompensation Committee, and the AuditNominating and Corporate Governance Committee. The Audit Committee additionally meets privately with representatives of our management team in order to assess the overall climatecontrol environment and “tone at the top” and to provide the Audit Committee with direct feedback as to any control or oversight issues. Other committees, including the Compensation Committee and the Nominating and Corporate Governance Committee, review risks relevant to their particular areas of responsibility, such as whether the compensation of executive management encourages them to take undue risk.responsibility. These matters are reviewed at Board meetings as well and, if deemed necessary and appropriate, in executive session with only the independent directors present. Our management team has the primary responsibility for identifying and managing the known, material risks which could affect our operating and financial performance. At least annually, upon reviewing and establishing the financial and operating targets for the next fiscal year,Periodically, the management team reviews with the full boardBoard the key risks facing the Company, during the upcoming yearCompensation Committee, and the Nominating and Corporate Governance and the plans the Company has put in place to mitigate those risks, and therisks. Our management team also reviews subsets of risk on a more frequent basis with the Board.

Our Board believes that the process it has established to administer the Board’s risk oversight function would be effective under a variety of leadership frameworks and, therefore, does not have a material effect on our choice of the Board’s leadership structure described above under “Board Leadership Structure.”
Board Committees and Meetings

Our Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Each committee has a written charter that is reviewed annually and revised as appropriate. A copy of each committee’s charter is available on the Investor Relations section of our website atwww.usautoparts.net.

8

www.carparts.com.

During fiscal 2012,2023, the Board of Directors and the various committees of the Board held the following number of meetings: Board of Directors – 6;11; Audit Committee – 4; Compensation Committee – 5;8; and Nominating and Corporate Governance Committee – 2. Additionally, there was 1 action taken by the Board via Unanimous Written Consent. During fiscal 2012, all but one director6. All directors attended 100%at least 75% of the aggregate of the total number of meetings of the Board of Directors and no director attended fewer than 100% of the aggregate ofcommittees on which they served during the total number of meetings of any committees of the Board,period in which he or she was required to attend. Warren B. Phelps III attended 83% of the aggregate of the total number of meetings of the Board of Directors.they served in 2023. We do not have a formal policy regarding attendance by members of our Board of Directors at annual meetings of stockholders; however, directors are encouraged to attend all such meetings. All of our then-serving directors attended our 20122023 Annual Meeting of Stockholders.

Stockholders in person or via video conference.

Audit Committee. Our Audit Committee consists of Messrs. Majteles,Greyson and Phelps and Ms. Siminoff. However, Ms. Siminoff informed us that she does not intend to stand for re-election when her term as a Class I director expires at our Annual Meeting and will cease to serve on our Audit Committee beyond that date.Dr. Costa. Mr. PhelpsGreyson is the Chairman of the Audit Committee. Our Board of Directors has determined that each member of the Audit Committee is independent under the NASDAQNasdaq Rules and Rule 10A-3 under the Securities Exchange ActAct. In addition, our Board of 1934, as amended (the “Exchange Act”). Mr.Directors has determined that each of Messrs. Greyson and Phelps qualifies as an “audit committee financial expert” as that term is defined in the rules and regulations established by the SEC. The primary functions of this committee include the following:

meeting with our management periodically to consider the adequacy of our internal controls and the objectivity of our financial reporting;

meeting with our independent auditors and with internal financial personnel regarding these matters;

pre-approving audit and non-audit services to be rendered by our independent auditors;

appointing from time to time, engaging, determining the compensation of, evaluating, providing oversight of the work of and, when appropriate, replacing our independent auditors;

reviewing our financial statements and periodic reports and discussing the statements and reports with our management and independent auditors, including any significant adjustments, management judgments and estimates, new accounting policies and disagreements with management;

establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls and auditing matters;

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reviewing our financing plans and reporting recommendations to our full Board of Directors for approval and to authorize action; and

administering and discussing with management and our independent auditors our Code of Ethics and Business Conduct.

Our internal financial personnel regularly meet privately with the Audit Committee and have unrestricted access to this committee. Our independent auditors report directly to the Audit Committee and they also have unrestricted access to this committee.

Compensation Committee. Our Compensation Committee consists of Messrs. BermanPhelps, Barnes and Majteles and Ms. Siminoff. However, Ms. Siminoff informed us that she does not intend to stand for re-election when her term as a Class I director expires at our Annual Meeting and will cease to serve on our Compensation Committee beyond that date.Greyson. Mr. BermanPhelps is the Chairman of our Compensation Committee. Our Board of Directors has determined that each member of the Compensation Committee is independent under the NASDAQNasdaq Rules. The primary functions of this committee include the following:

determining the compensation and other terms of employment of our executive officers and senior management, and reviewing and as it deems appropriate, approving corporate performance goals and objectives relevant to such compensation;

recommending to our Board of Directors policies, practicesthe type and procedures relatingamount of compensation to the compensationbe paid or awarded to members of our directors, officersBoard of Directors;
evaluating and recommending to our Board of Directors the equity incentive plans, compensation plans and similar programs advisable for us, as well as modification or termination of existing plans and programs;
administering the issuance of stock options and other managerial employees and the establishment and administration of our employee benefit plans;

9

exercising authorityequity incentive arrangements under our employee benefitequity incentive plans;

and

reviewing and approving the terms of employment agreements, severance arrangements, change-in-control protections and any other compensatory arrangements for our executive officerofficers and director indemnification and insurance matters; and

senior management.

advising and consulting with our officers regarding managerial personnel and development and succession planning.

A more detailed description of the role of the committee,Compensation Committee, including the role of executive officers and consultants in compensation decisions, can be found under “Executive Compensation and Other Information – Compensation Discussion and Analysis”Information” below.

Nominating and Corporate Governance Committee.Committee. Our Nominating and Corporate Governance Committee consists of Messrs. Phelps, BermanMses. Liu and Majteles.Dutra, and Mr. MajtelesMaier. Ms. Liu is the Chairman of our Nominating and Corporate Governance Committee. Prior to February 2013, Ms. Siminoff served as the Chair of our Nominating and Corporate Governance Committee, until her replacement, Mr. Majteles, was appointed following her resignation from the committee.Committee. Our Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent under the NASDAQNasdaq Rules. The primary functions of this committee include the following:

identifying qualified candidates to become members of our Board of Directors;

selecting nominees for election of directors at the next annual meeting of stockholders (or special meeting of stockholders at which directors are to be elected);

selecting candidates to fill vacancies of our Board of Directors;

and

developing and recommending to our Board of Directors our corporate governance guidelines; and

overseeing the evaluation of our Board of Directors.

The Nominating and Corporate Governance Committee generally seeks directors with strong reputations and experience in areas relevant to the operations and strategies of the Company’s business. In connection with their recommendations regarding the size and composition of the Board, the Nominating and Corporate Governance Committee reviews the appropriate qualities and skills required of directors in the context of the then current make-up of the Board and the needs of the Company. The Nominating and Corporate Governance Committee generally identifies candidates for election to the Board of Directors; reviews their skills, characteristics and experiences; and recommends director nominees to the Board for approval. While we do not have a formal policy with regard to the consideration of diversity in identifying director nominees, the Company is taking active steps to comply with applicable legislation relating to Board diversity requirements. The Nominating and Corporate Governance Committee strives to nominate directors with a variety of complementary skills and backgrounds so that, as a group, the Board will possess the appropriate talent, skills, insight and expertise to oversee our business. The Nominating and Corporate Governance Committee assesses each candidate’s independence, personal and professional integrity, financial literacy or other professional or business experience relevant to an understanding of our business,business; his or her ability to think and act independently and with sound judgment,judgment; and his or her ability and commitment to serve our and itsour stockholders’ long-term interests. All factors considered by the Nominating and Corporate Governance Committee are reviewed in the context of an assessment of the perceived needs of the
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Board at a particular point in time. As a result, the priorities and emphasis of the Nominating and Corporate Governance Committee and of the Board may change from time to time to take into account changes in our business, our future opportunities and strategic plans, and other trends, as well as the portfolio of skills and experience of current and prospective directors.

The Nominating and Corporate Governance Committee generally leads the search for and selects, or recommends that the Board select, candidates for election to the Board. Consideration of new director candidates typically involves a series of committee discussions, a review of information concerning candidates and interviews with selected candidates. The Nominating and Corporate Governance Committee may in the future engage the services of a third-party search firm to identify director candidates.

10

The Nominating and Corporate Governance Committee has the discretion to decide which individuals to recommend for nomination as directors.

The Nominating and Corporate Governance Committee will consider candidates for directorsdirector recommended by our stockholders who meet the eligibility requirements for submitting stockholder proposals pursuant to Rule 14a-8 for inclusion in our next proxy statement. This committeeThe Nominating and Corporate Governance Committee will evaluate such recommendations applying its regular nominee criteria. Eligible stockholders wishing to recommend a director nominee must submit such recommendation in writing to the Chair, Nominating and Corporate Governance Committee, care of the corporateCorporate Secretary, at the Company’s address set forth on the first page of this proxy statement by the deadline for submitting stockholder proposals pursuant to Rule 14a-8 or our Bylaws for inclusion in our next proxy statement set forth under “Additional Information” below. Nominations in the prior year’s proxy statement, specifyingaccordance with our Bylaws must specify the following information: (a) the name and address of the nominee,candidate, (b) the name, address and phone number of the stockholder making the nominationrecommendation and of the director nominee,candidate, (c) a representation that the nominating stockholder is a stockholder of record of our stock entitled to vote at the next annual meeting and intends to appear in person or by proxy at such meeting to nominate the person specified in the notice, (d) the nominee’sdirector candidate’s qualifications for membership on the Board, (e)(d) a resume of the candidate’s business experience and educational background as well as all of the information that would be required in a proxy statement soliciting proxies for the election of the nomineecandidate as a director (f)if nominated by the Board, (e) a description of all direct or indirect arrangements or understandings between the nominatingrecommending stockholder and the nomineecandidate and any other person or persons (naming such person or persons) pursuant to whose request the nominationrecommendation is being made by the stockholder, (g)(f) all other companies to which the nomineecandidate is being recommended as a nomineecandidate for director, and (h)(g) a signed consent of the nomineecandidate to cooperate with reasonable background checks and personal interviews, and to serve as a director, if nominated and elected. In connection with its evaluation, the Nominating and Corporate Governance Committee may request additional information from the candidate or the recommending stockholder, and may request an interview with the candidate. The Nominating
Compensation Committee Interlocks and Corporate Governance Committee has the discretion to decide which individuals to recommend for nomination as directors.

No candidates for director nominations were submitted to the Nominating and Corporate Governance Committee by any stockholder in connection with the election of a director at the Annual Meeting. The director nominee standing for election at this Annual Meeting is a current directorInsider Participation

None of the company.

members of our Compensation Committee is or has been an officer or employee of our Company or has had any relationship requiring disclosure under Item 404 of Regulation S-K during the last fiscal year. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our Board of Directors or Compensation Committee.

Voting Agreements with Stockholders
None
Stockholder Communications to the Board

Our Board of Directors has implemented a process by which stockholders may send written communications directly to the attention of the Board, any committee of the Board or any individual Board member, care of our corporateCorporate Secretary at 16941 Keegan Avenue, Carson,2050 W. 190th Street, Suite 400, Torrance, California 90746.90504. The name of any specific intended Board recipient should be noted in the communication. Our corporateCorporate Secretary will be primarily responsible for collecting, organizing and monitoring communications from stockholders and, where appropriate depending on the facts and circumstances outlined in the communication, providing copies of such communications to the intended recipients. Communications will be forwarded to directors if they relate to appropriate and substantive corporate or Board matters. Communications that are of a commercial or frivolous nature, or otherwise inappropriate for the Board’s consideration will not be forwarded to the Board.

CarParts.com, Inc.  16  2024 Proxy Statement

11

PROPOSAL TWO:

RATIFICATIONTABLE OF SELECTION OF INDEPENDENT AUDITORSCONTENTS

Policy on Stock Hedging
All directors and executive officers are prohibited from engaging in short-term or speculative transactions involving our securities, such as publicly t-aded options, short sales, puts and calls, and hedging transactions.
Environmental, Social, Governance (“ESG”) Oversight
We engagedare committed to conducting business in an environmentally sustainable and socially responsible manner and managing the accounting firm of Deloitte & Touche LLPrisks and opportunities that arise from ESG issues. We believe that operating in a socially responsible and sustainable manner will drive long-term value creation for our Company and its stockholders.
The Nominating and Corporate Governance Committee is responsible for overseeing the Company's ESG processes, policies, and performance and making recommendations to serve as our independent auditors for the fiscal year ended December 29, 2012full Board. The Nominating and December 31, 2011.Corporate Governance Committee will receive regular updates from management on progress and strategy to satisfy these oversight responsibilities. The Audit Committee oversees additional risk management functions, including cybersecurity risks.
In 2021, the Company launched a new initiative to enhance our ESG policies and disclosures informed by the Sustainability Accounting Standards Board (“SASB”) e-commerce industry disclosure guidelines. In 2022, our management reviewed and updated various ESG policies and processes located on the investor relations page of our website at https://www.carparts.com/ESG/. The enhanced policies included: Environmental, Data Privacy, Human Rights, Labor Rights, Whistleblower, and Political Involvement.
In 2022, the Company published its first Corporate Social Responsibility Report (“CSR Report”), located at https://www.carparts.com/ESG/. The CSR Report incorporates the Company’s SASB report, which aligned with the standards for the e-commerce industry includes quantitative data, discussion of data privacy and security, and analysis of the Company’s environmental considerations.
We aim to build upon ESG progress made thus far and continue to develop our long-term ESG roadmap.
Diversity and Inclusion
We work to enable our employees to think creatively and authentically, share their ideas, bring their whole selves to work, and strive to make a difference every day. We are proud to have a diverse team, and we recognize that there is opportunity for us to continue improving representation, particularly among our senior leadership. We support and celebrate all diversity, and are committed to providing an equal employment opportunity regardless of race, color, ancestry, religion, sex, national origin, sexual orientation, age, marital status, disability, gender identity, or Veteran status. Below is a breakdown of how our team self-identifies as of December 30, 2023:
Category
​​
All
​​
Corporate
​​
Management
​​
Executives
​​
Board
Black
​​
22%
​​
4%
​​
11%
​​
—
​​
—
Hispanic/Latinx
​​
16%
​​
17%
​​
14%
​​
33.4%
​​
12.5%
Asian
​​
42%
​​
41%
​​
35%
​​
33.3%
​​
12.5%
White
​​
18%
​​
35%
​​
36%
​​
33.3%
​​
75%
Female
​​
39%
​​
39%
​​
32%
​​
16.7%
​​
37.5%
In addition, our Board of Directors believes that in order to fulfill its overall fiduciary responsibility to stockholders and the Company, it must maintain a strategic composition that includes the experience, qualifications, skills, and diversity needed for each member of the Board of Directors to complement the others. When searching for new directors, the Board of Directors actively seeks to maintain its diversity. During 2023 and as of March 19, 2024, three of our eight board members were female, and two of our eight members represented a minority group.
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Board Diversity
The Board believes that it should seek diversity in experience and viewpoint to be represented on the Board. In selecting a director nominee, the Nominating and Governance Committee focuses on a combination of skills, professional expertise, background, and diverse viewpoints that would complement the existing Board.
Board Diversity Matrix (as of 3-19-2024)
Board Size:
Total Number of Directors
​​
8
Gender:
​​
Male
​​
Female
​​
Non-Binary
​​
Undisclosed
Directors
​​
5
​​
3
​​
0
​​
0
Number of directors who identify in any of the categories below:
​​
 
​​
 
​​
 
​​
 
African American or Black
​​
0
​​
0
​​
0
​​
0
Alaskan Native or American Indian
​​
0
​​
0
​​
0
​​
0
Asian (other than South Asian)
​​
0
​​
1
​​
0
​​
0
South Asian
​​
0
​​
0
​​
0
​​
0
Hispanic or Latinx
​​
0
​​
1
​​
0
​​
0
Native Hawaiian or Pacific Islander
​​
0
​​
0
​​
0
​​
0
White
​​
5
​​
1
​​
0
​​
0
Two or More Races or Ethnicities
​​
0
​​
0
​​
0
​​
0
LGBTQ+
​​
0
Did Not Disclose Demographic Background
​​
0
Directors with Disabilities
​​
0
CarParts.com, Inc.  18  2024 Proxy Statement

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PROPOSAL TWO:
Ratification of Tax Benefits Preservation Plan
You are being asked to ratify the adoption by our Board of the Tax Benefits Preservation Plan (the “Tax Plan”), dated as of April 5, 2024, by and between the Company and Computershare Trust Company, N.A., as rights agent. A summary of the Tax Plan appears below and is qualified by the full text of the Tax Plan attached as Appendix B to this Proxy Statement.
Background of the Proposal
On April 5, 2024, we entered into the Tax Plan between us and Computershare Trust Company, N.A., as rights agent. The Tax Plan is designed to preserve the availability of our existing net operating loss carryforwards and other tax attributes (collectively, the “Tax Assets”). In adopting the Tax Plan, the Board of Directors concluded that it is in the best interests of the Company and our stockholders that the Company provide for the preservation of our Tax Assets by adopting the Tax Plan.
While stockholder ratification of the Tax Plan is not required under Delaware law, our Board of Directors has selecteddetermined to seek stockholder ratification of the Tax Plan in furtherance of good corporate governance. The Rights issued pursuant to the Tax Plan will expire upon the earliest of: (i) the close of business on the third anniversary of the adoption of the Plan (the “Final Expiration Date”); (ii) the close of business on the first anniversary of the date of the adoption of the Tax Plan if stockholder approval of the Tax Plan is not obtained prior to such date; (iii) the time at which the Rights are redeemed pursuant to the Tax Plan, (iv) the time at which the Rights are exchanged pursuant to the Tax Plan; (v) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement approved by the Board; (vi) the close of business on the effective date of the repeal of Section 382 of the Code if the Board determines that firmthe Tax Plan is no longer necessary or desirable for the preservation of the Tax Attributes (as defined in the Tax Plan); or (vii) the close of business on the first day of a taxable year of the Company to which the Board determines that no Tax Attributes may be carried forward or otherwise utilized
The Tax Benefits Preservation Plan
The Tax Plan is intended to help protect the Company’s Tax Assets. Through year-end 2023, the Company has U.S. federal net operating loss carryforwards of approximately $105 million as well as other tax attributes that could potentially be used to offset the Company’s future U.S. federal income tax expense. We can utilize the Tax Assets in certain circumstances to offset taxable income and reduce our federal income tax liability. Our ability to use the Tax Assets would be substantially limited if there were an “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Internal Revenue Service rules.
The Board of Directors adopted the Tax Plan to reduce the risk that our ability to use our Tax Assets would be substantially limited following an “ownership change” under Section 382 of the Code. The Tax Plan deters any person or group from becoming or obtaining the right to become a “5-percent shareholder” (as such term is used in Section 382 of the Code) or, in certain cases, from increasing such person’s or group’s ownership of shares of the Company’s common stock beyond 4.99%, in each case, without first obtaining the approval of the Board of Directors. In general, an ownership change would occur if the Company’s “5-percent shareholders” collectively increase their ownership in the Company by more than 50 percentage points over a rolling three-year period. While the Board of Directors adopted the Tax Plan to diminish the risk that the Company’s ability to use our Tax Assets would be substantially impaired, nonetheless, the Tax Plan may also have an “anti-takeover effect” because it may deter or discourage a person or group from acquiring beneficial ownership of 4.99% or more of the shares of common stock or, in the case of a person or group that already own 4.99% or more of the shares of common stock, from acquiring any additional shares without advance approval from the Board of Directors. Subject to certain exceptions, if any person or group acquires 4.99% or more of the outstanding shares of common stock without approval of the Board of Directors, there would be a triggering event under the Tax Plan that could result in significant dilution in the ownership interest of such person or group. As such, the Tax Plan has anti-takeover effects.
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The description of the Tax Plan contained in this Proposal Two is qualified in its entirety by reference to the text of the Tax Plan which is attached hereto as Appendix B. You are urged to carefully read the Tax Plan in its entirety as the discussion herein is only a summary.
The Rights. On April 4, 2024, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock. Rights were issued to the stockholders of record as of the close of business on April 16, 2024 (the “Tax Plan Record Date”). Each Right, upon becoming exercisable, entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock (the “Series B Preferred Stock”), par value $0.001 per share, of the Company at a price of $11.13 per one one-thousandth of a share of Series B Preferred Stock (the “Purchase Price”), subject to adjustment and to the other terms, provisions and conditions of the Tax Plan.
The description and terms of the Rights are set forth in the Tax Plan. Until it is exercised or exchanged, a Right does not give its holder any rights as a stockholder of the Company, including without limitation any dividend, voting or liquidation rights, powers or preferences.
Series B Preferred Stock.  Each share of Series B Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of an amount equal to the greater of (a) $10.00 per share and (b) 1,000 times the dividend declared per share of common stock, subject to adjustment. In the event of liquidation, dissolution or winding up of the Company, the holders of the Series B Preferred Stock will be entitled to a minimum preferential liquidation payment of the greater of (a) $10.00 per share (plus any accrued but unpaid dividends), and (b) an amount equal to 1,000 times the payment made per share of common stock. Each share of Series B Preferred Stock will have 1,000 votes, voting together with the common stock. Finally, in the event of any merger, consolidation or other transaction in which outstanding shares of common stock are converted or exchanged, each share of Series B Preferred Stock will be entitled to receive 1,000 times the amount received per share of common stock. These rights are protected by customary antidilution provisions. Shares of Series B Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Because of the nature of the Series B Preferred Stock’s dividend, liquidation and voting rights, the value of the one one-thousandth interest in a share of Series B Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of common stock.
Exercisability. The Rights will not be exercisable until the earlier of (i) ten (10) business days following a public announcement that a person or group (an “Acquiring Person”) has acquired beneficial ownership of 4.99% or more of the shares of common stock then outstanding or any existing 4.99% or greater holder has acquired one or more additional shares of common stock (except in certain situations) or (ii) ten (10) business days after the date of commencement of a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 4.99% or more of the then-outstanding shares of common stock (the earlier of such dates called the “Distribution Date”). Until the Distribution Date, the Rights will be evidenced, with respect to any of the common stock certificates (or book entry shares in respect of the common stock) outstanding as of the Tax Plan Record Date, by such common stock certificate (or such book entry shares) together with a notation to that effect.
Until the Distribution Date, the Rights will be transferred only with the common stock. Until the Distribution Date, new common stock certificates (or book entry shares in respect of the common stock) issued after the Tax Plan Record Date upon transfer or new issuances of common stock, as applicable, will contain a notation incorporating the Tax Plan by reference and, with respect to any uncertificated book entry shares issued after the Tax Plan Record Date, proper notice will be provided that incorporates the Tax Plan by reference.
In the event that a person or group becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, that number of shares of common stock having a market value of two times the Purchase Price.
Exchange. At any time after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the voting power of the outstanding shares of common stock, the Board of Directors may exchange the Rights (other than Rights owned by such person or group, which will have become void), in whole or in part, for shares of common stock, at an exchange ratio of one share of common stock per Right (subject to adjustment).
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Expiration. Pursuant to the Tax Plan, the Rights will expire upon the earliest to occur of the following:
the close of business on April 5, 2027;
the close of business on the first anniversary of the date of the adoption of the Tax Plan if stockholder approval of the Tax Plan is not obtained prior to such date;
the time at which the Rights are redeemed or exchanged under the Tax Plan;
the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in the Tax Plan;
the repeal of Section 382 of the Code or any successor statute if the Board of Directors determines that the Tax Plan is no longer necessary for the preservation of the Company’s Tax Attributes; or
the beginning of a taxable year of the Company to which the Board of Directors determines that no Tax Attributes may be carried forward.
Anti-Dilution Provisions.  The Purchase Price payable, and the number of shares of Series B Preferred Stock issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a reclassification, subdivision or combination of, the Series B Preferred Stock; (ii) upon the grant to holders of the Series B Preferred Stock of certain rights or warrants to subscribe for or purchase Series B Preferred Stock at a price, or securities convertible into Series B Preferred Stock with a conversion price, less than the then-current market price of the Series B Preferred Stock; or (iii) upon the distribution to holders of the Series B Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Series B Preferred Stock) or of subscription rights or warrants. No adjustments to the Purchase Price of less than 1% will be made. The Rights are also subject to adjustment in the event of a stock dividend on the common stock payable in shares of common stock, or subdivisions, consolidation or combinations of the common stock occurring, in any such case, prior to the Distribution Date.
Redemption. The Board of Directors may, at any time prior to a Trigger Event, as defined in the Tax Plan, redeem the Rights in whole, but not in part, at a price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend, recapitalization or similar transaction occurring after the date of the adoption of the Tax Plan (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
Amendments. For so long as the Rights are then redeemable, the Company may amend the Tax Plan in any manner. After the Rights are no longer redeemable, the Company may amend the Tax Plan (i) to cure any ambiguity or to correct or supplement any provision which may be defective or inconsistent with any other provision or (ii) to make any other changes or provisions which the Company may deem necessary or desirable; provided, however, that no such supplement or amendment will adversely affect the interests of the holders of Rights (other than an Acquiring Person), and no such supplement or amendment will cause the Rights again to become redeemable or cause the Tax Plan again to become amendable as to an Acquiring Person; provided further, that the right of the Board of Directors to extend the Distribution Date shall not require any amendment or supplement under the Tax Plan.
Vote Required
Approval of this Proposal Two requires the affirmative vote of a majority of the voting power of the stockholders present in person or by proxy and entitled to vote at the Annual Meeting and on the proposal. Abstentions will be counted as present and entitled to vote on the proposal and will therefore have the same effect as a vote against the proposal. Brokers do not have discretionary authority to vote on this proposal. Consequently, broker non-votes will have no effect on the vote
Recommendation of Our Board of Directors
Our Board Of Directors recommends that the stockholders vote “FOR” the ratification of the Tax Benefits Preservation Plan.
CarParts.com, Inc.  21  2024 Proxy Statement

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PROPOSAL THREE:
Ratification of Appointment of Independent Registered Public Accounting Firm
RSM US LLP (“RSM”) has audited our consolidated financial statements since 2015. The Audit Committee has appointed RSM to continue in this capacity for the fiscal year ending December 28, 2013.30, 2024 (“fiscal 2024”). We are asking our stockholders to ratify the selectionappointment by the Audit Committee of Deloitte & Touche LLPRSM as our independent auditorsregistered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 28, 20132024 and to perform other appropriate services. Stockholder ratification of the selectionappointment of Deloitte & Touche LLPRSM as our independent auditorsregistered public accounting firm is not required by our bylawsthe Bylaws or otherwise. In the event that the stockholdersour shareholders fail to ratify the appointment,selection, it will be considered a recommendation to the Board of Directors and the Audit Committee will reconsider its selection.to consider the selection of a different firm. Even if the selectionappointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent accounting firm at any time if the committee feels that such a change would be in our best interests and in the best interests of our stockholders.

A representative of Deloitte & Touche LLPRSM is expected to be present at the Annual Meeting, and that representative will have thean opportunity to make a brief presentation to the stockholdersstatement if he or she desires to do so, desires and is expected to be available to respond to appropriate questions from stockholders.

Stockholder Approval

The affirmative vote of the holders of a majority of the shares of our common stock present or represented by proxy and entitled to vote at the Annual Meeting is being sought to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 28, 2013.

questions.

Recommendation of Our Board of Directors
Our Board Of Directors recommends that the stockholders vote “FOR” the ratification of the appointment of RSM as our independent registered public accounting firm for fiscal 2024.
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Our Board of Directors recommends that the stockholders vote “FOR” the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 28, 2013.

12

PROPOSAL THREE:

APPROVE A PROPOSED STOCK EXCHANGE PROGRAM

Overview of Proposal

On February 26, 2013, our Board approved, subject

Fees Paid to stockholder approval, the exchange of certain outstanding stock options held by current employees, including our employees in the Philippines and executive officers (“Eligible Employees”), for new options to purchase fewer shares with an exercise price equal to at least the fair market value of our common stock on the date of grant of the new options. The options included in the proposed stock option exchange program are those options that have an exercise price greater than $4.00 per share (the “Eligible Options”). Participation in the stock option exchange program by Eligible Employees will be voluntary. Former employees, consultants and non-employee directors will not be eligible to participate in the stock option exchange program. The exchange ratio for the stock option exchange program is 3.5:1; that is, each 3.5 shares subject to an Eligible Option will be exchanged for a new option to purchase one share of common stock, with the aggregate number of shares subject to the new option rounded down to the nearest share.

Stockholder approval of the stock option exchange program applies only to the stock option exchange program described in this proxy statement. If we were to implement a different stock option exchange program in the future, we would plan to seek stockholder approval for such other exchange program.

Reasons for the Stock Option Exchange Program

Stock option grants are a critical component of our compensation philosophy, the focal point of which is to increase long-term stockholder value. We believe stock options help us achieve this objective in several important ways: by aligning the employees’ interests with those of our stockholders, by motivating employees’ performance toward our long term success and by encouraging our executives and employees who have received option grants to continue their employment with us.

Despite our corporate achievements during the past fiscal year, our stock price has declined. Presently, almost all of our outstanding stock options are “underwater”, meaning the exercise price of those options is greater than our current stock price. This means that the vast majority of our historically granted stock options have little or no perceived value to the employees who hold them and are therefore no longer effective as incentives to motivate and retain these employees.

Our Board believes that it is critical to our future success to revitalize the incentive value of our stock option program to retain employees and recreate a personal stake in the long term financial success of the Company. The Board believes that without the proper balance between the long term components of our compensation structure (i.e., equity awards) and its short term components (i.e., salary and bonus), key employees are not properly motivated to align their interests with those of the stockholders and work toward reward for their contributions based upon increases in share value. The Board also recognizes our competition’s ability to attract and recruit top talent. The Board believes that it has a responsibility to address these issues and to properly incentivize our employees. Consequently, the Board has proposed the stock option exchange program described below.

Eligible Options

The Eligible Options are those outstanding options held by the Eligible Employees that have an exercise price greater than $4.00 per share. As of                 , 2013, these options were held by 93 Eligible Employees and covered 3,712,437 shares, representing     % of the Company’s total outstanding stock options. Of the total number of shares subject to Eligible Options,                 shares, or     % of the Eligible Options, were held by our named executive officers. Some of the Eligible Options have exercise prices as high as $11.68 per share.

13

Of the Eligible Options, 577,960 were granted under our 2006 Equity Incentive Plan, 2,349,477 were granted under our 2007 Omnibus Incentive Plan and 785,000 were granted under the 2007 New Employee Incentive Plan.

Exchange Ratios

The exchange ratio will be 3.5:1; that is, each 3.5 shares subject to an Eligible Option will be exchanged for a new option to purchase one share of common stock. Under the proposed stock option exchange program, Eligible Employees will be given the opportunity to exchange their Eligible Options for new stock options to purchase a fewer number of shares with an extended vesting period. Assuming that 100% of Eligible Employees participate in the stock option exchange program, Eligible Options covering 3,712,437 shares would be surrendered and cancelled, while new options covering 1,060,696 shares would be issued, resulting in a net reduction of 2,651,741shares subject to outstanding options, or approximately     % of all outstanding options as of                 , 2013.

The table below provides an example of the exchange of an Eligible Option based on the exchange ratio:

Original
    Strike Price    

 

Options
to be
Exchanged

 

Exchange
Rate

 

New
Options
Issued

 

Net
Reduction
in Overhang

$5.00

 35,000 3.5:1 10,000 25,000

Stock Option Exchange Program Participation

Because the decision whether to participate in the stock option exchange program is completely voluntary, we are not able to predict who or how many Eligible Employees will elect to participate, how many Eligible Options will be surrendered for exchange, or the number of new options that may be issued.

Implementing the Stock Option Exchange Program

If stockholders approve the stock option exchange program, the program may be commenced at any time within six (6) months following stockholder approval, as determined by the Board. Even if the stockholders approve the stock option exchange program, the Board will retain the authority, in its sole discretion, to terminate or postpone the stock option exchange program at any time prior to the closing of the actual exchange offer to Eligible Employees (described below), or to exclude certain Eligible Options or Eligible Employees from participating in the stock option exchange program due to tax, regulatory or accounting reasons or because their participation would be inadvisable or impractical.

Upon commencement of the stock option exchange program, Eligible Employees will be offered the opportunity to participate in the exchange under a Tender Offer Statement to be filed by us with the SEC and distributed to all Eligible Employees. Employees will be given at least 20 business days in which to accept the offer of the new options in exchange for the surrender of their Eligible Options. The surrendered Eligible Options will be cancelled on the first business day following this election period. The new options will be granted on the date of cancellation of the surrendered Eligible Options and will have an exercise price at least equal to the fair market value of our common stock on the date of grant of such new options. Surrendered options from the 2006 Equity Incentive Plan, the 2007 Omnibus Incentive Plan and the 2007 New Employee Incentive Plan will be returned to the plan, as applicable, and will be available for future grant under such plan.

If on the date that the stock option exchange program commences, an Eligible Employee is no longer an employee of the Company for any reason (including layoff, termination, voluntary resignation, death or disability), that person will not be entitled to participate in the stock option exchange program. An Eligible Employee who elects to participate in the stock option exchange program must also continue to be employed with the Company on the date of the new grant in order to participate in the stock option exchange program and receive the new options.

14

A vote by an Eligible Employee in favor of this proposal at the Annual Meeting does not constitute an election to participate in the stock option exchange program.

Description of New Options Issued in Exchange

Exercise Price of New Options. All new options issued in the stock option exchange program will be granted with an exercise price at least equal to the fair market value of our common stock on the date of grant of the new options.

Vesting of New Options. New options granted in the stock option exchange program will vest beginning one year from the date of grant of the new options. This means that Eligible Employees who elect to participate in the stock option exchange program must complete an additional year of service to the Company before their new options would be exercisable, regardless of whether the old Eligible Options surrendered were partially or fully vested. All new options granted under the stock option exchange program will vest 25% on the first anniversary of the date of the grant of the new option and in 36 equal monthly installments thereafter.

Term of New Options. Each of the new options will have an expiration date that is ten years from the date of grant of the new option.

Other Conditions of New Options. The new options will be granted under and subject to the terms and conditions of the Company’s 2007 Omnibus Incentive Plan. New option grants calculated according to the exchange ratio will be rounded down to the nearest whole share on a grant-by-grant basis. New options will not be issued for fractional shares.

U.S. Federal Income Tax Consequences

The exchange of options pursuant to the stock option exchange program should be treated as a non-taxable event for U.S. federal income tax purposes. No income should be recognized for U.S. federal income tax purposes by either the Company or participating employees upon the cancellation of surrendered options and the grant of new options in the exchange. All new options granted under the stock option exchange program will be incentive stock options for U.S. federal income tax purposes.

Independent Registered Public Accounting Impact

The stock option exchange program may result in additional share-based compensation expense for the Company depending on the number of shares tendered and our stock price at the time of the exchange. The unamortized compensation expense from the surrendered options and incremental compensation expense associated with the new options granted under the stock option exchange program will be recognized over the service period of the new options. If any portion of the new options granted is forfeited prior to the completion of the service condition due to termination of employment, the compensation cost for the forfeited portion of the award will not be recognized.

Potential Modification to Terms to Comply with Governmental Requirements

The terms of the stock option exchange program will be described in a Tender Offer Statement that we will file with the SEC. Although we do not anticipate that the SEC would require us to modify the terms materially, it is possible that we will need to alter the terms of the stock option exchange to comply with potential SEC comments.

Effect on Stockholders

The stock option exchange program is designed to reduce the number of shares currently subject to outstanding options and provide renewed incentives to motivate Eligible Employees to continue to create

15

stockholder value. While we cannot predict which or how many employees will elect to participate in the stock option exchange program, please see the “Exchange Ratios” section above for the approximate reduction of the number of shares underlying options outstanding assuming that 100% of Eligible Options are exchanged and replacement option grants are made in accordance with the exchange ratio described above.

Stockholder Approval

The affirmative vote of the holders of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting is being sought to approve the stock option exchange program.

Recommendation of Our Board

Our Board of Directors recommends that the stockholders vote “FOR” the approval of the stock option exchange program.

FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Firm

Principal Accountant Fees

The following table sets forth the fees billed to us for the fiscal year ended December 29, 2012 (“fiscal 2012”)years 2023 and December 31, 2011 (“fiscal 2011”)2022 by Deloitte & Touche LLP:

   Fiscal 2012  Fiscal 2011 

Audit Fees

  $[            ]  $737,341  

Audit Related Fees

   —      —   

Tax Fees

   76,923    79,933  

All Other Fees

   —      —    
  

 

 

  

 

 

 

Total Fees

  $[            ]  $817,274  
  

 

 

  

 

 

 

RSM:

 
​​
Fiscal 2023
​​
Fiscal 2022
Audit Fees
​​
$1,270,500
​​
$1,317,750
Audit Related Fees
​​
$42,000
​​
$21,000
Tax Fees
​​
$8,400
​​
$9,975
All Other Fees
​​
—
​​
—
Total
​​
$1,320,900
​​
$1,348,725
Audit Fees. Audit fees consisted of fees billed by Deloitte & Touche LLPRSM for professional services rendered in connection with the audit and quarterly reviews of our consolidated financial statements. For
Audit Related Fees. Audit related fees for fiscal 2011, such fees included fees associated with the review of registration statements on Form S-3 and Form S-8.

Tax Fees. Tax fees2023 consisted of fees billed by Deloitte & Touche LLPRSM for professional services rendered in connection with reviews of registration statements and other accounting consultations not qualifying under audit fees.

Tax Fees. Tax fees include fees for tax compliance, tax advice and tax planning services.
All Other Fees. All other fees relate to services not captured in the audit, and quarterly reviews of our consolidated financial statements, and preparation of federal and state incomeaudit-related, or tax returns.

The Audit Committee of the Board of Directors has determined that the provision by Deloitte & Touche LLP of the non-audit services described above is compatible with maintaining the independence of Deloitte & Touche LLP during their periods of service.

categories.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

All engagements for services by Deloitte & Touche LLPRSM are subject to prior approval by the Audit Committee pursuant to the pre-approval policy set forth in the charter of the Audit Committee; however, de minimis non-audit services may instead be approved in accordance with applicable SEC rules. The Audit Committee may also delegate to one or more designated members of the Audit Committee the authority to grant such preapprovals, provided that the decision of any member to whom authority is so delegated shall be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee approved all services provided by Deloitte & Touche LLPRSM for fiscal 2012years 2023 and 2011.2022.
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16

AUDIT COMMITTEE REPORT

Audit Committee Report*
The following is the report of the Audit Committee with respect to the Company’s audited consolidated financial statements for the fiscal year ended December 29, 201230, 2023 included in the Company’s Annual Report on Form 10-K for that year.

In carrying out its responsibilities under the Audit Committee Charter, dated January 19, 2007, which is available by accessing the investor relations section of our website athttp: https://investor.usautoparts.net/,www.carparts.com/investor/corporate-governance#governance-documents, the Audit Committee, among other things, supervises the relationship between the Company and its independent auditors, including making decisions with respect to their appointment or removal, reviewing the scope of their audit services, pre-approving audit engagement fees and non-audit services and evaluating their independence. The Audit Committee oversees and evaluates the adequacy and effectiveness of the Company’s systems of internal and disclosure controls and internal audit function. The Audit Committee has the authority to investigate any matter brought to its attention and may engage outside counsel for such purpose.

The Company’s management is responsible, among other things, for preparing the financial statements and for the overall financial reporting process, including the Company’s system of internal controls. The independent auditor’s responsibilities include (i) auditing the financial statements and expressing an opinion on the conformity of the audited financial statements with U.S. generally accepted accounting principles (“GAAP”) and (ii) auditing the financial statements and expressing an opinion on management’s assessment of, and the effective operation of, the Company’s internal control over financial reporting.

The Audit Committee met four times during fiscal year 2012.2023. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. The Audit Committee’s meetings include sessions with the Company’s independent auditor and management present and regular sessions without the presence of the Company’s management.

As part of its oversight of the Company’s financial statements, the Audit Committee reviewed and discussed with management and Deloitte & Touche LLP, the Company’s independent auditor,auditors, the audited financial statements of the Company for the fiscal year ended December 29, 2012.30, 2023. The Audit Committee discussed with Deloitte & Touche LLPthe independent auditors such matters as are required to be discussed by Statement on Auditing Standards No. 16 (Communication with Audit Committees), relating to the conductapplicable requirements of the audit.Public Company Accounting Oversight Board and the SEC. The Audit Committee also discussed with Deloitte & Touche LLP the auditor’sauditors the independence of the auditors from the Company and its management, including the matters in the written disclosures the Audit Committee received from the independent auditor as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and considered the compatibility of non-audit services with the auditor’s independence.

Based on its review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012,30, 2023, for filing with Securities and Exchange Commission.the SEC. The Audit Committee has also selected Deloitte & Touche LLPRSM as the Company’s independent auditors for fiscal year 2013.

2024.

Submitted by the Audit Committee


of the Board of Directors:
Jay Greyson, Chairman
Barry Phelps
Dr. Lisa Costa
*
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act whether made before or after the date of this proxy statement and without regard to any general incorporation language therein.
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Warren B. Phelps III, Chairman

Robert J. Majteles

Ellen F. Siminoff

17

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Executive Officers


The table below sets forth certain information regarding our current executive officers who are not directors.

officers.
Name
​​
Age
​​
Current Position(s)

Name

David Meniane
​Age​
41
​

Current Position(s)

Shane Evangelist

​		39
Chief Executive Officer

David G. Robson

Ryan Lockwood
​​46
41
​​
Chief Financial Officer

Aaron E. Coleman

Michael Huffaker
​​38
44
​​
Chief Operating Officer

Houman Akhavan

Kals Subramanian
​​35
48
​​Vice President of Marketing

Bryan P. Stevenson

40Vice President, General Counsel and Secretary
Chief Technology Officer

The following is certain biographical information describing the business experience of each of our executive officers who is not a director. The biography of Mr. EvangelistMeniane appears earlier in this proxy statement. See “Proposal One: Election of Director.“Information about our Directors and Nominees.”

David G. Robson

Ryan Lockwood has beenserved as our Chief Financial Officer since January 2012. Prior to his appointment as the Company’s Chief Financial Officer,April 2022. Previously, Mr. RobsonLockwood served as the Executive Vice President and Chief Administrative Officer at Mervyns’ LLC since 2007. From 2001 until 2007, Mr. Robson served as theour Senior Vice President of Finance since June 2020. Before joining CarParts.com, Mr. Lockwood was a Portfolio Manager and Principal Accounting OfficerHead of Fixed Income from 2011 to 2020 for Guitar Center, Inc.Private Management Group, a registered investment advisor based out of California. From 2008 to 2011, Mr. Robson began his career in public accounting withLockwood served as the accounting firm Deloitte & Touche LLP.CFO and Controller of HFE, LP, a family office that managed a multi-sector real estate portfolio. Mr. RobsonLockwood holds a B.S.Bachelor of Science degree in Accounting and a Master of Business Taxation degree from the University of Southern California and he is also a certified public accountant.

Aaron E. ColemanCFA Charterholder.

Michael Huffaker has beenserved as our Chief Operating Officer since September 2010, and was our Executive Vice President of Operations and Chief Information Officer from April 2008 until September 2010. From July 2007 to April 2008,December 2022. Mr. Coleman served as Senior Vice President – Online Systems at Blockbuster Inc., which he joined as Vice President – Online Systems in March 2005. From April 2003 to March 2005, he was the Chief Technology Officer of Travelweb LLC, which is owned by priceline.com Incorporated, and was responsible for all aspects of Travelweb’s technology, including the technology for Travelweb.com and over 40 affiliate websites, as well as the booking gateway for the merchant property processing for Orbitz and priceline.com. Mr. Coleman’s prior experience also includes serving as Manager of the Customer Technology Infrastructure group at American Airlines. Mr. Coleman holds a B.A. degree in Business Administration from Gonzaga University.

Houman Akhavan has been our Vice President of Marketing since January 2006. Prior to that, from August 2004 to December 2005, Mr. Akhavan served as a consultant to U.S. Auto Parts, providing advice and guidance on marketing strategy and website optimization. From February 2000 to July 2004, Mr. Akhavan served as the founder and Chief Strategy Officer of Edigitalweb, Inc., an online marketing and software development firm.

Bryan P. Stevenson has been our Vice President, General Counsel and Secretary since March 2011. From January 2008 to March 2011, Mr. StevensonHuffaker, previously served as Vice President, Associate General CounselCategory 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. Mr. Huffaker began his buying career in 2003 at BlockbusterWal-Mart Stores and thereafter held additional buying roles with Sam’s Club and Circuit City. Mr. Huffaker received both his undergraduate degree and MBA from the University of Arkansas.

Kals Subramanian has served as our Chief Technology Officer since April 2022. Before joining CarParts.com, Mr. Subramanian served as Vice President of eCommerce Technology at Lowe’s Company, Inc., which from February 2021 to April 2022, and as its Senior Director of Product Management from April 2020 to February 2021. From 2015 to 2020, Mr. Subramanian served as Director of IT Application Delivery and Strategy at Best Buy Co, Inc. and from 2012 to 2015, he joined as Senior Corporate Counsel in November 2004.held various management positions at Target Corporation within its Target.com and Mobile, Technology Services division. Mr. Stevenson worked as an attorney in private practice from 1999 to 2004. Mr. StevensonSubramanian holds a B.A.Bachelor of Engineering degree in Electrical and Electronics Engineering from Dallas Baptist University and a J.D. from BaylorBharathidasan University.

Our executive officers are elected by our Board of Directors and serve at the discretion of our Board until their successors have been duly elected and qualified or until their earlier resignation or removal.
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Compensation Committee Report*
The Compensation Committee has reviewed and discussed with management the following Compensation Discussion and Analysis section of the Company’s 2024 Proxy Statement. Based on our review and discussions, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s 2024 Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for its 2023 fiscal year.
Submitted by the Compensation Committee
of the Board of Directors:
Barry Phelps, Chairman
Jay Greyson
Jim Barnes
*
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act whether made before or after the date of this proxy statement and without regard to any general incorporation language therein.
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Compensation Discussion and Analysis
This section explainsCompensation Discussion and Analysis (CD&A) describes the principles, objectives, policies, practices and components of our executive compensation program as it relatesand the bases on which executive compensation decisions were made by our Compensation Committee for fiscal 2023 and discloses the various forms of compensation paid to our executives, including the following named executive officers or “NEOs”.
David Meniane – Chief Executive Officer
Ryan Lockwood – Chief Financial Officer
Michael Huffaker – Chief Operating Officer
Kals Subramanian – Chief Technology Officer
•
Houman Akhavan – Former Chief Marketing Officer(1)
(1)
On July 7, 2023, the Company announced that its then Chief Marketing Officer, Houman Akhavan, had departed the Company. On July 10, 2023, Mr. Akhavan ceased to serve as an officer or employee of the Company and its affiliates. At the time of his departure, no severance or other consideration was paid to Mr. Akhavan.
Policies Relating to Our Common Stock
Insider Trading Policy
Our insider trading policy prohibits all directors, employees and their family members from purchasing or selling any type of security, whether the issuer of that security is the Company or any other company, while aware of material, non-public information relating to the six “named executive officers” listed below whose 2012 compensation information is presented in the tables following this discussion in

18

accordance with SEC rules. The primary objective of our executive compensation policies and programs is to serve our stockholders by attracting, retaining and motivating talented and qualified executives. We believe this best serves our stockholders by providing a stable management team that is focused on long-term growth and profitability without incurring undue risk.

The three key elementsissuer of the current executive compensation program are annual base salary, cash bonuses,security or from providing such material, non-public information to any person who may trade while aware of such information. The insider trading policy also contains anti-hedging and long-term, equity-based incentives.pledging prohibitions, which among other things, prohibit directors and employees from engaging in short sales with respect to our securities, purchasing or pledging Company stock on margin and entering into derivative or similar transactions (i.e. puts, calls, options, forward contracts, collars, swaps or exchange agreements) with respect to our securities. We also provide certainhave procedures that require trades by executive officers and directors to be pre-cleared by appropriate Company personnel.

Stock Ownership Policy
To further align the long-term interests of our executive officers with severancethose of our stockholders, our stock ownership guidelines require executive officers and change-in-control benefitsnon-employee directors to maintain significant direct ownership in our common stock. In particular, our Executive Officer Stock Ownership Policy (“Stock Ownership Policy”) mandates that our executive officers own shares of our common stock having an aggregate value at least equal to 100% of the officer’s annual base salary (600% in the case of our CEO, and 300% in the case of our CFO). Newly-hired or promoted executive officers are required to comply within three years following his or her hire or promotion date. The Stock Ownership Policy also requires that the Company’s CEO and CFO maintain a minimum retention ratio of at least one half of their Company common stock and option holdings until they meet the stock ownership guidelines and a minimum retention ratio of at least two-thirds of all vested restricted stock (net of shares withheld for or used to pay taxes) for a period of at least 36 months following the date such restricted stock vests. The Company maintains separate Director Stock Ownership Guidelines which are discussed below.
Each executive officer and non-employee director remains subject to the Stock Ownership Policy or Director Stock Ownership Guidelines, as wellapplicable, as limited perquisiteslong as he or she continues to be employed by us or serves on the Board, respectively. Exceptions may be made in extraordinary circumstances such as personal hardship. We measure ongoing compliance with the Stock Ownership Policy and other personal benefits. Our discussion below contains an additional explanationDirector Stock Ownership Guidelines annually, as of eachthe date of these elements.

In evaluatingour annual meeting of stockholders (“Determination Date”), and value the mix of these compensation components, as wellshares held based on the higher of: (i) the price they were acquired or (ii) market value, with market value determined as the short-termclosing price of our common stock on the Determination Date. To calculate stock ownership, shares underlying unexercised stock options are not included, while 65% of unvested restricted stock awards (estimating net after tax shares assuming a 35% tax rate) are included.

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Executive Compensation Clawback Policy
In May 2023, we adopted the CarParts.com, Inc. Incentive Compensation Recovery Policy, effective as of May 25, 2023 (the “Clawback Policy”), for compliance with the Nasdaq Rules and long-term value of the executive compensation plans, the Compensation Committee considers both the performance and skills of each executive, as well as the compensation paid to those executives in similar organizations with similar responsibilities. We focus on providing a competitive compensation package which provides significant short and long-term incentives for the achievement of measurable corporate and individual performance objectives. We focus on, among other things, the following five elements in determining compensation:

•

Competition. Compensation should reflect the competitive marketplace, so that the Company can attract, retain, and motivate key executives of superior ability who are critical to our future success.

•

Accountability for Business Performance. Compensation should be tied in part to overall Company financial performance, so our executive officers are held accountable through their compensation both in salary and in long-term incentive compensation.

•

Accountability for Individual Performance. Compensation should be tied in part to the individual’s performance to encourage and reflect individual contributions to the Company’s performance.

•

Alignment with Stockholder Interests. Compensation should be tied in part to the Company’s stock performance through the grant of equity-based awards which serve to align our executive officer’s interests with those of our stockholders.

•

Likelihood of Compensation Structure to Encourage Excessive Risk Taking. Compensation, while tied in part to Company financial and stock performance, should not be tied in such a way as to encourage our executive officers to take excessive risk in operating the business or consummating strategic projects designed to artificially inflate earnings or share price.

Additionally, the Board of Directors adopted, and the Company’s stockholders approved at the 2011 Annual Meeting, a say-on-pay policy pursuant to the recently adopted Section 14A – Shareholder Approval of Executive Compensation,10D of the Exchange Act. EveryThe Clawback Policy requires the Company to clawback erroneously awarded incentive compensation received by covered employees (current and former executive officers) during the three fiscal years that precede the date the Company is required to prepare an accounting restatement due to material noncompliance with a financial reporting requirement. A copy of the Clawback Policy is included as an exhibit in the Company’s Annual Report on Form 10-K for the year ended December 30, 2023.

We previously adopted an Executive Compensation Clawback Policy pursuant to which executive officers are required to return incentive compensation paid to them if the financial results upon which the awards were based are materially restated and such executive officer engaged in fraud or intentional illegal conduct which materially contributed to the need for such restatement (a “Material Financial Restatement”). Under the Executive Compensation Clawback Policy, the Company can require reimbursement of all or a portion of any bonus, incentive payment, equity-based compensation (including performance-vesting restricted stock awards, time-vesting restricted stock awards and stock options), or other compensation to the extent that it is paid, earned or vests less than three years stockholders are ableprior to approve, on an advisory basis, the date we publicly disclose the need for the applicable Material Financial Restatement. The Executive Compensation Clawback Policy will continue to apply to incentive compensation received prior to the effective date of the Company’s namedClawback Policy.
We believe the Clawback Policy is sufficiently broad to reduce the potential risk that an executive officers as disclosed pursuantofficer would intentionally misstate results in order to Item 402 of Regulation S-K, includingbenefit under an incentive program and provides the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrativeopportunity for recoupment in the Proxy Statement. This advisory say-on-pay resolution is non-binding onevent that an executive officer took actions that, in hindsight, should not have been rewarded.
Good Governance and Best Practices
In furtherance of our objective of implementing policies and practices that are mindful of the Boardconcerns of Directors, however, the Board of Directors andour stockholders, (i) the Compensation Committee will carefully reviewis comprised solely of independent directors, and consider the voting results when evaluating the Company’s executive compensation, in the applicable years when advisory votes are solicited. The Board of Directors and(ii) the Compensation Committee carefully evaluated the results of the stockholder advisory vote ofretained Compensia, Inc. (“Compensia”) as its independent compensation consultant to provide it with advice on matters related to executive compensation, non-employee director remuneration and assistance with preparing compensation disclosure for inclusion in fiscal 2011our SEC filings.
The Company provides competitive pay opportunities that we believe reflect best practices. The Compensation Committee continually reviews best practices in governance and considered this voteexecutive compensation. In observance of such best practices, the Company:
Does not provide supplemental retirement benefits to the NEOs;
Maintains incentive compensation plans that do not encourage undue risk taking and align executive rewards with annual and long-term performance;
Has not engaged in the practice of re-pricing/exchanging stock options;
Does not provide for any “modified single trigger” severance payments to any NEO;
Does not provide any tax gross-up payments in connection with any Company compensation programs to any NEO;
Maintains an equity compensation program that has a long-term focus, including equity awards that generally vest over a period of three or four years; and
Does not permit our directors or employees to engage in short sales with respect to our securities, purchasing or pledging Company stock on margin and entering into derivative or similar transactions with respect to our securities.
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Compensation Philosophy and Objectives
Our executive compensation programs are designed to attract, motivate, and retain talented executives who possess skills relevant to the highly competitive and dynamic e-commerce industry in which we operate. Our compensation programs offer competitive compensation and reward the achievement of both short and long-term financial objectives. Compensation generally consists of long-term and short-term incentives and cash and non-cash forms of compensation. Short-term compensation primarily consists of base salary and cash or equity-based bonuses. Long term-incentives include equity awards, typically in the form of restricted stock units or options, although we did not grant any stock options to our executives in 2023. Other compensation components include severance benefits and accelerated vesting upon certain triggering conditions (e.g. change of control), allowances, generally available benefits such as health insurance and retirement benefits (401(k)), benefits associated with participation in our deferred compensation plan, the ability to purchase discounted stock under the Company’s 2021 Employee Stock Purchase Plan (“ESPP”), and the ability to purchase stock under the Company’s Officer and Director Share Purchase Plan. Our general employee benefit programs are selected to be a strong endorsement ofcompetitive with the Company’s policies and practices and has determined to conduct its review of executive compensation consistent with past practice. Unless the Board of Directors decides to modify its policy regarding the frequency of soliciting advisory votes on the compensation of the Company’s named executives, which is currently set at every three years, the next scheduled say-on-pay vote will be at the 2014 Annual Meeting of Stockholders.

broader job market.

Decisions regarding executive compensation are the primary responsibility of our Compensation Committee, in consultation from time to time with the Board of Directors, members of management and independent compensation consultants. To assist with 2012 compensation decisions,Our CEO provides performance reviews of the Chief Executive Officer prepared an assessment of

19

each individual’s performance during the preceding calendar year, as well as a review of how each executive’s compensation compared with the executives in the peer group companies provided in Compensia’s report for fiscal 2011,other NEOs and recommendedmakes recommendations to the Compensation Committee base salary amounts, annual performance goals and annual incentiveregarding their compensation, for all executive officers except himself based upon those goals. When making 2012 compensation decisions,although the Compensation Committee is not bound by his recommendations. The Compensation Committee believes it possesses the skills and resources required to effectively discharge its duties in reviewing and recommending the compensation arrangements for our NEOs. The Compensation Committee also regularly reviews and approves equity grants to non-executive employees proposed by management, typically on the basis of pre-established ranges, and requires business justification to approve any grants that exceed pre-established ranges. The Compensation Committee meets as frequently as it deems necessary to address matters within its area of responsibility. Review of proposed executive compensation packages for the following year typically commences in the fourth quarter of each fiscal year.

As part of the Compensation Committee’s annual evaluation of executive compensation, the Compensation Committee engaged Compensia to ensure that the Company remained competitive in attracting and retaining talented executives. Other than its work for the Compensation Committee, Compensia has not performed any other services for us, and the Compensation Committee has determined that the work performed by Compensia has not raised any conflict of interest. Compensia consults with the Compensation Committee regarding our executive compensation programs and provides recommendations to ensure our executive compensation practices are competitive, cost effective and reasonably suited to our operational needs, strategic direction and financial condition.
In determining an executive officer’s compensation, the Compensation Committee considers several factors, including, the executive’s responsibilities, expertise, past experience, performance history, our financial condition and outlook, and the compensation practices of companies within our peer group. In general, we seek to be competitive within our peer group for total executive compensation, and allocate more weight to long-term and short-term performance-based forms of compensation, which we believe incentivize our executives to manage our operations in a manner that will increase our competitiveness, strengthen our financial position and generate long-term stockholder value.
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The Compensation Committee utilized data from the group of peer companies listed below to assist in making compensation decisions for the NEOs. This peer group was reviewed by Compensia and approved by the Compensation Committee and consisted of heavily technology-enabled companies with an internet or applications software focus that we believe are of a similar size to us utilizing trailing twelve-month revenues, market capitalization and employee headcount. At the time this report, assessedpeer group was selected, the CEO with regardmedian revenue and market capitalization of these firms were approximately $598,000,000 and $531,000,000, respectively. In 2023, the Compensation Committee elected to his ownutilize a peer group used to design our 2023 executive compensation program, consisting of the following entities:
•
​​
Boot Barn
​​
•
​​
Limelight Networks
•
​​
America’s Car-Mart
​​
•
​​
Purple Innovation
•
​​
Revolve Group
​​
•
​​
Quotient Technology
•
​​
e.l.f. Beauty
​​
•
​​
Brightcove
•
​​
Gentherm
​​
•
​​
Shutterstock
•
​​
Motorcar Parts of America
​​
•
​​
Stoneridge
•
​​
PetMed Express
​​
•
​​
The Buckle
•
​​
Magnite
​​
•
​​
The Lovesac Company
•
​​
The RealReal
​​
•
​​
Turtle Beach
Base salaries are set to be competitive within our industry and are important in attracting and retaining talented executives. Base salaries may be adjusted based on numerous factors, including a change in an NEO’s responsibilities, demonstrated performance established and madeor relevant competitive market data. Although the final determinations regardingCompensation Committee does not have a pre-established policy or target a specific percentile among the peer group for the allocation of the various components of executive compensation, given our financial performance in 2022, the Compensation Committee determined it appropriate to maintain the compensation of our NEOs for fiscal 2023 at levels that closely approximate the peer group median percentile for total compensation. This was achieved in part by increasing the use of “at-risk” equity-based forms of compensation. Adjustments to a NEO’s compensation made in connection with the Compensation Committee’s annual review generally occur in the first quarter of the fiscal year. Equity awards for our NEOs are typically granted during the first quarter of the fiscal year.
Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) disallows a tax deduction to publicly held companies for compensation paid to certain covered executives to the extent such compensation exceeds $1.0 million per covered officer in any year. The Compensation Committee understands that it is possible that the compensation payable to our named executive officers will exceed the $1.0 million limit under Section 162(m). We believe that in establishing the cash and then determinedequity incentive compensation programs for our named executive officers, the potential deductibility of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration and not the sole governing factor. For that there would be no increases inreason, we may deem it appropriate to provide one or more NEOs with the opportunity to earn incentive compensation, whether through annual cash incentive programs tied to our financial performance or through equity awards, which together with base salaries based upon the Company’s 2011 performance. Since there were no increasessalary in the aggregate may be in excess of the amount deductible by reason of Section 162(m) or other provisions of the Internal Revenue Code. We believe it is important to maintain cash and equity incentive compensation at the levels needed to attract and retain the named executive officers essential to our success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation.
Components of Compensation
The components of our 2023 executive compensation program include:
Base salary
Performance based annual incentive bonus under our annual bonus plan
Performance based long-term equity incentive awards (“LTI”)
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Time-based long term equity incentive awards
Severance and change of control protection
Generally available benefit programs
Benefits under our deferred compensation plan
Discounted stock purchases under our ESPP
Base salaries are paid in cash but NEOs may elect to have a portion of their salaries paid in shares of our common stock under our Officer and Director Share Purchase Plan and may also allocate a portion of their earnings to purchase stock under our Employee Stock Purchase Plan, in each case subject to plan-specific limits as discussed below. Annual incentive bonuses for fiscal 2023 consisted of equity awards granted at 50% of target under our 2023 annual bonus plan, in the form of performance-based restricted stock units (“Annual Bonus PRSUs”), and additional cash consideration for any amount above 50% of target bonus achievement. The Annual Bonus PRSUs are granted based on 50% of target amount that is set for each executive officer, which is expressed as a percentage of base salary, and vest after 1 year. The total amount of bonus earned can range from 0% to 200% of the target amount, depending on the degree to which applicable financial metrics and individual management-based objectives (“MBOs”) are realized. Long-term incentive-based payments consist of (1) time-based RSUs, which generally vest over a period of three years in equal annual installments (“RSUs”); and (2) performance based restricted stock units which are paid out on the basis of annual and cumulative shareholder returns realized for our executive officers and nocommon stock over a three-year period relative to the Russell 2000 index (“TSR PRSUs”). The maximum total amount of TSR PRSUs that can be paid out is 300% of the target amount. We did not award any stock options to our NEOs in 2023. Additionally, NEOs are eligible to receive certain severance benefits and acceleration of awards in the event they are involuntarily terminated or we undergo a change of control.
Compensation Structure
Our 2023 compensation structure includes short-term and long-term incentives tied to financial performance in the current and future years. The following table illustrates the percentage of each compensation component for our CEO versus our other executive officers. For incentive-based compensation, target amounts were granted to them during fiscal 2012, ourused.
Overview of Target Executive Compensation Committee determined that the Company could continue on rely on Compensia’s report for fiscal 2011 and the Company did not engage Compensia’s services for fiscal 2012.

Fiscal 2023

Position
​​
Short Term
​​
Long Term Incentives
​​
Other Compensation
​
Base Salary
($)
​​
Target Bonus
($)
​​
Time-based
RSUs
($)
​​
Performance-
based RSUs
($)
​​
($)
CEO(1)
​​
646,000
​​
646,000
​​
1,438,500
​​
1,438,500
​​
46,531
Other NEOs as a group(2)
​​
1,275,000
​​
637,500
​​
1,174,998
​​
1,570,998
​​
104,046
(1)
Represents the Compensation for Mr. Meniane.
(2)
Represents the Compensation for Messrs. Lockwood, Huffaker and Subramanian.
Compensation Components
The primary components of our executive compensation program generally include (a) base salaries; (b) annual cash incentive opportunities;bonuses in the form of performance-based restricted stock and cash; (c) in certain years, annual equity grants; and (d) in certain years,cases, other long-term equity incentive opportunitiesopportunities. Executives also participate in employee benefit programs available to the broader employee population such as our 401(k) plan and health insurance. We also maintain a deferred compensation plan for employees of the Company earning greater than $110,000 annually, in which such employeesinsurance and are eligibleentitled to participate and for which the Company matches 50% of contributions up to 2% of annual base salary.severance protection benefits. Our executive compensation program is intended to provide executives with overall levels of compensation that are competitive within the e-commerce industry, as well as within a broader spectrum of companies with comparable revenues and profitability.market capitalizations. Our 2023 compensation structure includes short-term and long-term incentives tied to financial performance, in the current and future years. The Compensation Committee selected these components for fiscal 2023 in order to attract and retain high-performing executives and reward the delivery of strong financial results and stock performance. The use and weight of these components were based on the Compensation Committee's general experience in making a subjective determination of the importance of each component in meeting our overall compensation philosophy and performance objectives. The Compensation Committee believed that this set of
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components was appropriate and effective but will continue to review these elements of compensation and may change them if it believes that doing so will improve our compensation objectives. The Compensation Committee reviews the entire executive compensation program (other than generally available benefit programs) on at least an annual basis. However, the Compensation Committee at any time may review one or more components as necessary or appropriate to ensure such components remain competitive, appropriately designed to reward performance, and aligned with our compensation philosophy and objectives.
Advisory Vote on Executive Compensation
At our 2023 Annual Meeting of Stockholders, stockholders were asked to vote on the frequency of say-on-pay. In line with stockholder preference, the Board has approved an annual say-on-pay vote until the next say-on-pay frequency vote in 2029. Our most recent say on pay vote took place in connection with our initial public offering2023 Annual Meeting of Stockholders, and the next vote (following the vote at our 2024 Annual Meeting of Stockholders) will take place in 2007, we retained an independent compensation consultant, Compensia, Inc., to assist us in establishing aconnection with the 2025 Annual Meeting of Stockholders.
Our executive compensation program which includes objective criteriahas previously received strong shareholder support. At the 2017, 2020 and formalized policies2023 Annual Meetings, it received support of 98.8%, 98.4% and 91.9% of the votes cast, respectively. Our Compensation Committee and the other members of our Board view this consistent high level of support as indicative of our commitment to effectively link pay and performance. Our shareholders’ votes, reflects strong support for our executive compensation program, pay-for-performance compensation philosophy and goals, market best practices and focus on shareholders’ interests.
Annual Base Salaries
Base salaries for NEOs are set with respectregard to the determination of compensation amounts for our executives. As partindividual’s position within the Company and the individual’s current and sustained performance results and, in the case of our annual evaluation ofNEOs for 2023, at levels that would allow us to successfully attract them to the Company. Base salary levels, and any increases or decreases to those levels for each executive, compensation, we engaged Compensia each year following the initial public offering until fiscal 2012 in order to ensure that the Company remained competitive in attracting and retaining talented executives. We relied on Compensia’s report for fiscal 2011andare reviewed Compensia’s fiscal 2011 report when determining fiscal 2012 compensation, but becauseannually by the Compensation Committee determined there wouldand may be no changesadjusted based on factors such as the overall performance of the Company, new roles and/or responsibilities assumed by the executive, the performance of the executive’s area of responsibility, the executive’s significant impact on strategic goals, the executive’s length of service with the Company, or revisions to the Company’s compensation amounts forphilosophy.
The Compensation Committee reviews executive base salaries in conjunction with our executive officersannual performance review process. During this process, the CEO will review the performance of the other NEOs and will report those findings to the Compensation Committee. A NEO’s personal performance will be judged in fiscal 2012 from fiscal 2011, Compensia was not engaged to assist with determining fiscal 2012 compensation. The peer group identified by Compensia includes the following companies, which were selected based uponpart on their revenue size and their e-commerce technology and retail market focus.

•   Actuate

•   Alloy, Inc.

•      Art Technology Group, Inc.

•   Blue Nile

•   Bottomline Technologies

•      DealerTrack Holdings

•   Drugstore.com

•   InfoSpace

•      Internap Network Services

•   Internet Brands, Inc.

•   Magma Design Automation

•      Move, Inc.

•   Perficient, Inc.

•   PetMed Express

•      QAD, Inc.

•   Shutterfly

•   Vitacost.com

Elementssuccessful completion of Executive Compensation

Base Salary

We seek to provide our senior management with aindividualized MBOs. Factors considered in setting an NEO’s base salary, include their experience, skills, expertise, responsibilities, individual performance, and our overall performance as a company, and, where appropriate, to their rolesthe recommendations of our CEO. Individual performance assessments are qualitative and responsibilities,are guided by the recommendations of our CEO (other than for himself) as well as the experience and salaries for named executive officers (as defined below in “Summary Compensation Table”) are established and adjusted atknowledge of the discretionmembers of the Compensation Committee. In 2012,Committee regarding compensation matters. No specific weight is attributed to any of the base salary for our executives did not change from fiscal 2011 becausefactors considered by the Compensation Committee determined that no increases in setting base salaries were appropriate based onsalary changes although expansions in responsibilities or the Company’s performanceassumption of additional roles within the Company may result in 2011. Base salariessignificant merit increases. Salaries are reviewed annually,benchmarked against market data for comparable positions to determine whether total short-term compensation is competitive with the overall job market and adjusted from timethe Compensation Committee will evaluate a proposed executive salary in relation to timeour operational budget and financial projections to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

20

2012 base salaries for each named executive officer were as follows:

NAME AND TITLE

  2012 BASE SALARY 

Shane Evangelist

  $425,000  

Chief Executive Officer

  

David G. Robson

  $300,000  

Chief Financial Officer

  

Theodore R. Sanders

  $307,500  

former Chief Financial Officer (1)

  

Aaron E. Coleman

  $300,000  

Chief Operating Officer

  

Houman Akhavan

  $270,000  

Vice President Marketing

  

Bryan P. Stevenson

  $231,000  

Vice President, General Counsel

  

(1)Mr. Sanders resigned as the Company’s Chief Financial Officer on January 3, 2012.

determine the extent to which granting an increase is financially prudent. The Compensation Committee does not follow a fixed formula to determine salary increases.

NAME AND TITLE
​​
2022 BASE
SALARY
​​
2023 BASE
SALARY
David Meniane, Chief Executive Officer
​​
$609,000
​​
$646,000
Ryan Lockwood, Chief Financial Officer
​​
$400,000
​​
$425,000
Houman Akhavan, Former Chief Marketing Officer
​​
$360,000
​​
$380,000
Michael Huffaker, Chief Operating Officer
​​
—
​​
$425,000
Kals Subramanian, Chief Technology Officer
​​
400,000
​​
$425,000
Annual Incentive Bonuses

In addition to base salary, our

Our executives are eligible to earn annual incentive bonus compensation. Ourcompensation under our incentive bonus plan that ties the level of achievement of Companythe Company’s annual financial performance goals to the amount of annual incentive compensation that we pay to
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each of our executives. TheseOur annual incentive payouts have typically been denominated in equity rather than cash. Our 2023 Bonus Plan for executive officers was designed to drive toward the achievement of our annual objectives and reward individual performance goals incorporatein connection with achievement of those shorter-term objectives, while at the same time linking executives’ interests with the creation of stockholder value. Each NEO has a combinationtarget bonus opportunity expressed as a percentage of revenuehis base salary as in effect at the end of the fiscal year. For 2023, the Compensation Committee initially granted our NEOs incentive bonuses in the form of performance-based equity awards under our 2016 Equity Incentive Plan at 50% of target bonus amounts, with an opportunity to earn cash bonus if performance exceeded 50% of targets. Our Equity Incentive Plan provides the Compensation Committee discretion to grant equity or cash to employees in many forms.
For 2023, incentive bonuses were established based upon a mix of Adjusted EBITDA, total sales, and EBITDA thresholds, as well as individual performance,MBOs, so as to encourage the executives to maximize the generation of profitable new business as well as optimizing the profitability and performance of existing business. As a result, a significant portion of our executives’ total compensation is dependent on the degree to which we achieve these performance goals. This provides an incentive for our executives to increase our performance with respect to these measures,business, and in turn, increase stockholder value. This combination additionally limitsFor purposes of the incentive for executives2023 Bonus Plan, we defined Adjusted EBITDA, a non-GAAP measure, as net income (loss) before net interest expense, income tax provision, depreciation and amortization expense and amortization of intangible assets, plus share-based compensation expense. A reconciliation of Adjusted EBITDA to take undue risknet income (loss) is provided in our Annual Report on Form 10-K. and as Appendix A to maximize their incentive compensation.this Proxy Statement. Incentive bonuses are established, adjusted and given final approval by the Compensation Committee, which has full discretion as to whether or not to award a bonus or not. While the incentive bonus has traditionally been paid in cash, in 2009 the Company initiated a program whereby the executives can each make an election to receive part of his bonus in shares of Company common stock at the time the target bonus-parameters are approved by the committee. For 2011 and 2012, incentive bonuses were established based upon revenue and adjusted EBITDA goals.given bonus. Target incentive bonuses for our executive officers were established at approximately 36% to 80% of their respective annual base salaries in alignment with Compensia’s report for fiscal year 2011, with Messrs. Evangelist, Sanders, Coleman and Akhavan each electing to take a portion of his incentive compensation in common stock of the Company rather than cash. The Compensation Committee believed that with the significant equity granted to each executive in 2009 in the form of optionsPRSUs in lieu of target cash bonus, with the opportunity to earn additional amounts in cash if the bonus performance exceeds target amounts. Each executive’s target bonus for fiscal 2023 is as well as the payout of Mr. Evangelist’s 2009 bonus in shares of common stockfollows:
NAME AND TITLE
​​
TARGET BONUS
(% OF BASE
SALARY)
​​
#
TARGET
PRSUs (#)
David Meniane, Chief Executive Officer
​​
100%
​​
48,939
Ryan Lockwood, Chief Operating and Financial Officer
​​
50%
​​
16,098
Houman Akhavan, former Chief Marketing Officer(1)
​​
50%
​​
14,394
Michael Huffaker, Chief Operating Officer
​​
50%
​​
16,098
Kals Subramanian, Chief Technology Officer
​​
50%
​​
16,098
(1)
Mr. Akhavan’s PRSUs were forfeited once he ceased to be the Company’s Chief Marketing Officer.
Under our 2023 Bonus Plan, 35% of the Company,target bonus for executive officers were based on Adjusted EBITDA, 35% on sales and 30% on achievement of individual MBOs. In 2023, based on achievement relative to sales and Adjusted EBITDA, our NEOs received bonuses as discussed below.
The PRSUs were used to better align the lower cash compensation was appropriateof the executive officers with financial performance. The actual bonus earned by the NEOs for fiscal 2010, 2011the sales and 2012. However,Adjusted EBITDA components is assessed on a linear basis by the Compensation Committee based on the degree to which the Company fell shortachieved its Adjusted EBITDA and sales goals for 2023. Each PRSU earned is settled in one share of its fiscal 2012 revenuethe Company’s common stock. The maximum bonus payable to each executive officer under the 2023 Bonus Plan based on the Adjusted EBITDA, sales performance and adjusted EBITDA goals, thereforeMBO components is equal to 200% of the executive’s target bonus opportunity with respect to these components. The Compensation Committee determined to cap bonus payouts for outperformance at 200% of the target bonus amount to limit our executives’ maximum bonus potential.
The following table summarizes the minimum, target, and maximum performance thresholds for the sales and Adjusted EBITDA components of our 2023 Bonus Plan.
Measure/(Weight)
​​
Minimum
($)
​​
Target
($)
​​
Maximum
($)
Sales (35%)
​​
691,376,000
​​
705,000,000
​​
727,764,000
Adjusted EBITDA (35%)
​​
24,000,000
​​
27,000,000
​​
30,389,000
Payout (%)
​​
50%
​​
100%
​​
200%
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The table below illustrates the minimum, target, and maximum bonus amounts, expressed in dollars, potentially payable to our NEOs under the annual incentive bonusesbonus plan, inclusive of bonus amounts attributable to realization of MBOs:
Name
​​
Minimum
($)(1)
​​
Target
($)
​​
Maximum
($)
David Meniane
​​
323,000
​​
646,000
​​
1,292,000
Ryan Lockwood
​​
106,250
​​
212,500
​​
425,000
Houman Akhavan
​​
95,000
​​
190,000
​​
380,000
Michael Huffaker
​​
106,250
​​
212,500
​​
425,600
Kals Subramanian
​​
106,250
​​
212,500
​​
425,000
(1)
Minimum bonus amount assumes that only minimum thresholds are met for sales and Adjusted EBITDA goals, and that MBOs are completed at 50% of target.
Applying the formula to our 2023 financial performance, and accounting for the completion of individual MBOs, the Compensation Committee determined that each of our NEOs achieved 100% of their respective MBO performance goals and approved that the following cash bonus amounts to Messrs. Meniane, Lockwood, Huffaker and Subramanian, respectively: $193,800, $63,750, $63,750, and $63,750. The Committee also elected to cancel and return all PRSU previously granted under the 2023 annual bonus plan in order to conserve shares under the Company’s 2016 Equity Incentive Plan. Actual payouts were not paid.

21

Total target bonusesbased solely on the performance of the NEOs and actual bonuses paid for fiscal 2012 were as follows:

   TARGET BONUS   BONUS PAID/GRANTED 

NAME AND TITLE

  CASH   CASH   STOCK 

Shane Evangelist

  $340,000    $—       —   

Chief Executive Officer

      

David G. Robson

  $150,000    $—       —   

Chief Financial Officer

      

Theodore R. Sanders

  $153,750    $—       —   

former Chief Financial Officer

      

Aaron E. Coleman

  $150,000    $—       —   

Chief Operating Officer

      

Houman Akhavan

  $95,000    $—       —   

Vice President Marketing

      

Bryan P. Stevenson

  $70,000    $—       —   

Vice President, General Counsel

      

the completion and performance of MBOs at target.

Long-Term Equity Compensation

Our Chief Executive Officer, together with the Chair of our Compensation Committee, makes recommendations on equity awards to the Compensation Committee. Our Chief Executive Officer recuses himself with respect to his own equity awards, in which case the Chairman of our Compensation Committee makes such recommendations. Based on these recommendations, the Compensation Committee considers the proposed grants. We believe that the long-term performance of the Company is achieved through an ownership culture that encourages long-term performance by our executive officers through the use of equity-based awards and we have established equity incentive plans to provide our employees, including our executive officers, with incentives to help align those employees’ interests with the interests of stockholders. We do not have specific ownership percentage requirements forIn fiscal years 2019 and 2020, our executive officers, butlong-term equity incentive compensation had been awarded in making additional awards take into consideration the ownership percentages of the executive officers of our peer group companies, as well as the balance between vested and unvested options held by the executive. All option grants are made at the fair market value of the Company’s stock on the date of grant. Our Chief Executive Officer makes recommendations on awardsform of options to acquire shares of our common stock. The Compensation Committee also considers other forms of equity awards, such as time-based and performance-vesting restricted stock or restricted stock units, and performance-vesting stock options. In 2021, 2022, and 2023 long-term equity incentive compensation consisted 50% of grants of time-based restricted stock units and 50% of performance-vesting restricted stock units based on relative total shareholder return (as described below). When appropriate, the Compensation Committee which thenalso considers (i) the recommended grants at each meeting, which generally coincide with meetingstotal number of shares used for new equity awards, (ii) the Boardproportion of Directors. Ifoutstanding equity awards relative to the hire datetotal number of an employee who is not anshares issued and outstanding and (iii) the proportion of outstanding equity awards and the remaining available share pool relative to the total number of shares issued and outstanding. Analyzing these additional factors allows the Compensation Committee to assess the effects that issuing new awards will have on the then-current share reserve, dilution of existing stockholder interests and any resulting share overhang.
An executive officer does not occurtypically receives a significant restricted stock unit or stock option grant in the year he or she commences employment at the time of afirst Compensation Committee meeting we may creditfollowing the employee with vesting time retroactiveexecutive’s date of hire. Stock option grants vest as to hire date, but the exercise price25% of the option is always equal to the fair market value on the date of grant, no matter the vesting schedule. Executive officer options are generally granted at the time of hire.

From time-to-time, we may also grant options that will vest based on the achievement of certain operational performance goals, which we believe help create incentives to help align our employees’ interests with the interests of stockholders. For example, Charlie Fischer, our Senior Vice President Global Sourcing and Procurement, has been granted two options that have performance-based vesting. Mr. Fischer is no longer considered a named executive officer under Item 402 (a)(3) of Regulation S-K, however he remains as the Company’s Senior Vice President Global Sourcing and Procurement. The first option with performance-based vesting was granted to Mr. Fischer on October 29, 2009 and the second option with performance-based vesting was granted to Mr. Fischer on December 7, 2011. The shares underlying Mr. Fischer’s options will vest and become exercisable 25% afterthe option on the first anniversary of the grant anddate, with the remainder vesting in 36 equal monthly installments thereafter, subject in each case to such executive’s continued service through such date. Stock grants generally vest as to 33 1/3% of the shares on the first anniversary of the grant date, with the remainder vesting over the next 36 months, except that they shall not be exercisable untilfollowing two years, subject in each case to such executive’s continued service through such date. These stock and stock option grants may vest on an accelerated basis if we undergo a change of control or upon certain performance thresholds are met related to incremental increasesterminations of private label stock keeping units available for sale and incremental increases in profitability related to the applicable additional private label stock keeping units available for sale,employment with us, as set forthfurther described in the applicable non-incentive stock option agreement.section titled: “Employment Agreements and Potential Payments upon Termination or Change of Control” below. The Company does not have discretion thatCompensation Committee generally approves annual refresh grants for the executives in the first fiscal quarter of each year. The Compensation Committee will, however, periodically consider equity award grants as may be exercisednecessary or appropriate to achieve the philosophy and objectives of the overall executive compensation program.

The principal objectives served by our long-term equity incentive awards are to align the interests of our NEOs with our stockholders and to provide each NEO with a significant long-term incentive to manage CarParts.com from the perspective of an
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owner with an equity stake in the business. Another objective of the equity incentive component of our compensation program is to provide a competitive overall compensation package that will enable us to attract and retain talented executives. The Compensation Committee believes that unvested equity awards are a key factor in motivating and retaining executive personnel, as well as incentivizing executive personnel to preserve the current value and grow the future value of our stock, thereby furthering the interests of our other stockholders.
The Compensation Committee determined the appropriate size of long-term equity-based incentives awarded for fiscal 2023 to our NEOs to meet our philosophy and objectives by reviewing and considering the following factors:
Experience, skills, expertise, responsibilities, and position within our company
Competitive market data
The number and value of each NEOs equity award holdings
The amount and value of each NEO’s outstanding awards
Each NEO’s total compensation
Each NEO’s personal performance
Each NEO’s role in contributing to long-term value creation
The Compensation Committee’s experience and knowledge with respect to equity compensation, as supplemented by the vestingadvice of Mr. Fischer’s options absent attainment ofour compensation consultant
Based on the specified operational performance goals. In formulating the performance goals for Mr. Fischer’s options,foregoing considerations, the Compensation Committee balancedgranted time-based and performance-based equity awards for fiscal 2023 to our NEOs under our 2016 Equity Incentive Plan (“Equity Incentive Plan”). Our Equity Incentive Plan provides the consideration of the likelihood of achievement for these operational performance goals with the effectiveness of such goalsCompensation Committee discretion to grant equity to employees in incentivizing Mr. Fischer.many forms. The Compensation Committee aimedselected restricted stock units (RSUs) in various forms, including time-based RSUs which vest over a three-year period, and PRSUs vesting over a period of three years on the basis of total shareholder return. The Compensation Committee believes that these forms address the goals of our long-term incentive program. Time-based RSUs are principally intended to set performance goals thatretain key executives and encourage prudent management of our business, and the PRSUs are closely alignedintended to incentivize stockholder value creation. Time-based RSUs vest over three years with the first 1/3 vesting at least one year after the grant date. For PRSUs tied to total shareholder return, payouts are determined based on 1-year, 2-year, and 3-year total shareholder returns for the Company’s common stock relative to the Company’s goals. The goals are expected to be possible, but not easy, to achieve with

22

meaningful effort. However, with respectconstituents of the Russell 2000 Index. Total shareholder return is equal to the performance-based optiondifference between the average price during the last 90 days of the current year of the measuring period and the average price during the last 90 days of 2022. A maximum of 1/3 of the target amount may be earned after each of years 1 and 2 of the measuring period (calendar years 2023 and 2024), respectively, based on 1-year and 2-year total shareholder return. After year 3, up to 300% of the target amount may be awarded, less amounts previously awarded for years 1 and 2. Target payout levels correspond to performance at the 60th percentile level. Minimum performance at the 25th percentile level is required for vesting to commence and maximum payouts correspond to performance at the 90th percentile level. Payouts are capped at 100% of the target level if total shareholder return is negative. Linear interpolation is used to determine payouts between threshold, target, and maximum performance levels.

During 2023, we granted to Mr. Fischer’sour NEOs time-based RSUs with an aggregate fair market value of $3,434,653. For TSR PRSUs tied to relative total shareholder return, the fair value of the grants issued to our NEOs during 2023 at target levels was $3,830,653. Based on October 29, 2009, because the Company expects a continued downward trendrelative total shareholder return realized in 2023, none of the PRSU grant was paid out and none of the TSR PRSUs granted in 2021 and 2022 to our NEOs were paid out. The combined fair value of the RSU and PRSU grants are reported in the Stock Awards Column of the Summary Compensation Table.
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Summary of Equity Incentive Awards to our NEOs
Based on the factors described above, the Compensation Committee authorized and approved the following equity incentive awards during fiscal 2023 for each of our named executive officers:
Name and Principal Position
​​
Grant Date
​​
Type(1)(2)
​​
Reason
​​
Amount (#)
​​
Vesting
David Meniane,
Chief Executive Officer
​​
2/06/2023
​​
PRSU
​​
Long-term Incentive
​​
217,995
​​
3 years
​
2/06/2023
​​
PRSU
​​
Annual Bonus
​​
48,939
​​
1 year
​
2/06/2023
​​
RSU
​​
Retention
​​
217,995
​​
3 years
Ryan Lockwood,
Chief Financial Officer
​​
2/06/2023
​​
PRSU
​​
Long Term Incentive
​​
73,447
​​
3 years
​
2/06/2023
​​
PRSU
​​
Annual Bonus
​​
16,098
​​
1 year
​
2/06/2023
​​
RSU
​​
Retention
​​
73,447
​​
3 years
Houman Akhavan,
Former Chief Marketing Officer
​​
2/06/2023
​​
PRSU
​​
Long-term Incentive
​​
49,848
​​
3 years
​
2/06/2023
​​
PRSU
​​
Annual Bonus
​​
14,394
​​
1 year
​
2/06/2023
​​
RSU
​​
Retention
​​
49,848
​​
3 years
Michael Huffaker,
Chief Operating Officer
​​
2/06/2023
​​
PRSU
​​
Long-term Incentive
​​
100,000
​​
3 years
​
2/06/2023
​​
PRSU
​​
Annual Bonus
​​
16,098
​​
1 year
​
2/06/2023
​​
RSU
​​
Retention
​​
40,000
​​
3 years
Kals Subramanian,
Chief Technology Officer
​​
2/06/2023
​​
PRSU
​​
Long-term Incentive
​​
73,447
​​
3 years
​
2/06/2023
​​
PRSU
​​
Annual Bonus
​​
16,098
​​
1 year
​
2/06/2023
​​
RSU
​​
Retention
​​
73,447
​​
3 years
(1)
For long-term incentive PRSUs, the amount shown in the table represents the target amount.
(2)
For Annual Bonus PRSUs the amounts shown in the table represents 50% of the target amount of the NEO. The award vests contingent upon the Company’s and individual NEO’s achievement of applicable performance objectives. The percentage of award vesting shall be calculated as follows: (i) up to 35% will be determined and paid out in accordance with Adjusted EBITDA factors, (ii) up to 35% will be determined and paid out in accordance with sales factors, and (iii) up to 30% will be determined and paid out based on accomplishment of individual MBOs.
CarParts.com, Inc.  36  2024 Proxy Statement

TABLE OF CONTENTS

Executive Compensation and Other Information
Summary Compensation Table
The following tables sets forth information regarding the compensation earned or awarded during fiscal year ended December 30, 2023 by our named executive officers (“NEOs”). The following table also sets forth such information for our NEOs for fiscal years 2022 and 2021.
Name and Principal
Position(3)
​​
Year
​​
Salary
($)
​​
Bonus
($)
​​
Stock
Awards
($)(6)(7)
​​
Option
Awards
($)
​​
Non-equity
Incentive
Plan
Compensation
($)(8)
​​
Change in
Pension Value
and Nonqualified
deferred
compensation
earnings
($)(9)
​​
All Other
Compensation
($)(10)
​​
Total
($)
David Meniane(1)
Chief Executive Officer
​​
2023
​​
646,000
​​
—
​​
3,220,000
​​
—
​​
193,800
​​
—
​​
46,531
​​
4,106,331
​
2022
​​
591,115
​​
—
​​
5,813,754
​​
—
​​
145,681
​​
(14,762)
​​
53,766
​​
6,589,554
​
2021
​​
442,192
​​
—
​​
1,620,121
​​
—
​​
—
​​
13,739
​​
48,360
​​
2,124,412
Ryan Lockwood,(2)
Chief Financial Officer
​​
2023
​​
425,000
​​
—
​​
958,750
​​
—
​​
63,750
​​
—
​​
$40,314
​​
1,487,814
​
2022
​​
350,769
​​
—
​​
1,508,819
​​
—
​​
32,861
​​
(1,118)
​​
40,396
​​
1,931,727
​
2021
​​
233,538
​​
—
​​
78,016
​​
—
​​
—
​​
3,321
​​
35,520
​​
350,395
Houman Akhavan(3)
Former Chief Marketing Officer
​​
2023
​​
197,307
​​
—
​​
753,000
​​
—
​​
—
​​
—
​​
12,164
​​
962,471
​
2022
​​
359,423
​​
—
​​
2,402,238
​​
—
​​
47,669
​​
(6,435)
​​
25,006
​​
2,827,901
​
2021
​​
329,423
​​
—
​​
1,175,094
​​
—
​​
—
​​
4,377
​​
45,188
​​
1,554,082
Michael Huffaker(4)
Chief Operating Officer
​​
2023
​​
425,000
​​
—
​​
1,030,250
​​
—
​​
63,750
​​
—
​​
$24,688
​​
1,543,688
Kals Subramanian(5)
Chief Technology Officer
​​
2023
​​
425,000
​​
—
​​
1,075,750
​​
—
​​
63,750
​​
—
​​
$26,680
​​
1,591,180
​
2022
​​
276,923
​​
100,0000
​​
1,355,127
​​
—
​​
53,088
​​
—
​​
27,599
​​
1,759,649
(1)
Mr. Meniane joined the Company in March 2019. He was appointed as Chief Executive Officer effective in April 2022. Prior to that date, he served as the Chief Operating Officer and Chief Financial Officer of the Company.
(2)
Mr. Lockwood joined the Company in June, 2020 . He was appointed as Chief Financial Officer effective in April 2022. Prior to that date, he served as the Senior Vice President of Finance of the Company.
(3)
On July 10, 2023, Mr. Akhavan ceased to serve as an officer or employee of the Company and its affiliates. At the time of his departure, no severance or other consideration was paid to Mr. Akhavan.
(4)
Mr. Huffaker joined the Company in December 2022, as its Chief Operating Officer.
(5)
Mr. Subramanian joined the Company in April 2022, as its Chief Technology Officer.
(6)
The amounts shown represent the aggregate grant date fair value of time-vesting restricted stock units (“RSUs”) and performance-based restricted stock unit awards (“PRSUs”) as computed in accordance with FASB ASC Topic 718. For RSUs and PRSUs granted in connection with our annual bonus program, fair value is calculated using the closing price on the grant date as if these awards were vested and issued on the grant date at target levels. For PRSUs issued in connection with our long-term incentive compensation program, fair value was measured using a Monte Carlo simulation model as the grants contained a market condition.
See also our discussion of share-based compensation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” and “Note 5 to the Consolidated Financial Statements - Stockholders Equity and Share-based Compensation” in the Company’s revenuesAnnual Report on Form 10-K for the fiscal years ended January 2, 2021, December 31, 2022 and increasesDecember 30, 2023. For PRSUs, figures provided above for 2021 and 2022 represent target amounts to be issued at 100% performance levels, and for 2023 the represent target amounts to be issued at 50%.
(7)
For PRSUs, this column discloses the grant date fair value based on the probable outcome (i.e. vesting conditions equal to 100% of annual bonus and Long Term Incentive grant thresholds). For 2023, based on achievement of Adjusted EBITDA, sales objectives, and MBOs, NEOS under our annual bonus plan achieved
CarParts.com, Inc.  37  2024 Proxy Statement

TABLE OF CONTENTS

30% of the target amount, with no shares released to our NEOs equaling the target amount, and a payment of cash for the achievement the 2023 annual bonus achievement, with such cash payment reflected in net lossthe Non-equity Incentive Plan Compensation column. For our Long Term Incentive Program, based on 1-year total shareholder return, none of available shares were released to continue over the next twelve months, it is not likely that Mr. Fischer will achieve his performance targets by October 2013, which is the vesting end date for this option. Relatedour NEOs. For more information, refer to the performance-based option grantedsection above, entitled Summary of Equity Incentive Awards to Mr. Fischer’s on December 7, 2011, if the expected downward trend in the Company’s resultsour NEOs.
(8)
The amounts shown represent the amounts cash earned in 2023 and paid in March 2024 under the Company’s annual bonus plan, NEOS under our annual bonus plan reached from the 45% to 47% of the target amount under the annual bonus plan.
(9)
All amounts reported in this column for 2021, 2022, and 2023 represent changes in nonqualified deferred compensation earnings. The Company’s deferred compensation plan was discontinued in 2023.
(10)
The tables below show the components of “All Other Compensation” for the NEOs.
All Other Compensation
The following tables set forth all other categories of operations continues for longer than the Company expects, the Company similarly believes it is not likely that Mr. Fischer will achieve his performance targets for this option.

Equity compensation granted to the executive officers and its grant date fair values are presentedour NEOs during fiscal year 2023, as summarized in the compensation tables, below.

All Other Compensation

The column of the Summary Compensation Committee may determine or the Chief Executive Officer may recommend from time to time that an executive officer has performed in a manner that should be rewarded with a “spot” or extraordinary bonus. No such bonuses were paid in fiscal 2012 and 2011. Finally, ourTable above.

Name
​​
Auto
Allowance
​​
401(k),
Employer
Match
​​
Deferred
Compensation,
Employer Portion
​​
Health Insurance
Premiums and
Expenses
​​
Life Insurance
Premiums
​​
Total
David Meniane
​​
$12,000
​​
$11,250
​​
$8,030
​​
$23,740
​​
$3,512
​​
$46,531
Ryan Lockwood
​​
$12,000
​​
$8,474
​​
$4,584
​​
$23,740
​​
$3,512
​​
$40,314
Houman Akhavan
​​
$12,000
​​
$7,252
​​
$2,534
​​
—
​​
$2,378
​​
$12,164
Michael Huffaker
​​
$12,000
​​
$6,375
​​
$2,135
​​
$12,358
​​
$3,821
​​
$24,688
Kals Subramanian
​​
$12,000
​​
—
​​
—
​​
$21,590
​​
$5,090
​​
$26,680
Other Compensation
Our executive officers are eligible to receive the same benefits, including non-cash group life and health benefits, as well as a Company match of 50% of contributions to the Company’s 401(k) up to 6% of salary, that are available to all employees. We intend for the 401(k) plan to qualify under Section 401 of the Internal Revenue Code so that contributions by employees plus a Company match of 50% of contributionsor by us to the Company’s non-qualified401(k) plan, and income earned on plan contributions, are not taxable to employees until withdrawn from the 401(k) plan.
In 2023, we also maintained a deferred compensation plan up to 2% of salary. Certain additional benefits may be provided to our executives such as a car allowance, but each on a case-by-case basis.

Likelihood of Compensation Structure to Encourage Excessive Risk Taking

After a thorough review of the Company’s compensation policies as they apply to all(non-qualified) for employees and more specifically the executive officers, the Compensation Committee believes that the policies do not encourage unnecessary risk taking and the impact of risk that may be encouraged by the policies would not present a material adverse impact to the Company. We provide base salaries to provide stability and predictability of monthly income, and provide incentive cash or stock bonuses and long-term equity grants to encourage focus on profitability and growth of the Company over time.

Pension Benefits

We do not have any qualified or non-qualified defined benefit plans.

Non-Qualified Deferred Compensation

We have a non-qualified defined contribution plan that was established in January 2010; employees earning greater than $110,000$140,000 annually, in which such employees are currently eligible to participate in the plan. The plan utilizes a rabbi trustand for protection of its assets, although in the event of bankruptcy the plan would become a general creditor of the Company. Participants may contribute up to 90% of their annual base salary and up to 100% of bonus awards andwhich the Company matches 50% of contributions up to 2% of annual base salary. This plan was discontinued in January 2024. We also provide reimbursement for life insurance premiums to our NEOs and some of our other key executives. Certain additional benefits are also provided to some of our executives from time to time, such as a car allowance and payment of health insurance and life insurance premiums, or relocation assistance, each on a case-by-case basis.

CarParts.com, Inc.  38  2024 Proxy Statement

TABLE OF CONTENTS

Grant of Plan-Based Awards
The following table summarizes all awards granted to our NEOs in fiscal year 2023. All equity awards were granted pursuant to our 2016 Equity Incentive Plan.
 
​​
 
​​
Estimated Future Payouts Under
Equity Incentive Plan Awards
​​
Exercise
or base
price of
option
awards
($/Sh)
​​
All other stock
awards: Number of
shares of stock or
units
(#)
​​
Grant Date Fair
Value of Stock and
Option Awards
($)(1)
Name
​​
Grant Date
​​
Threshold
(#)
​​
Target
(#)
​​
Maximum
(#)
​
David Meniane
​​
2/06/2023
​​
—
​​
—
​​
—
​​
—
​​
217,995
​​
1,438,767(2)
​
2/06/2023
​​
1
​​
48,939
​​
48,939
​​
—
​​
—
​​
322,997(3)
​
2/06/2023
​​
1
​​
217,995
​​
653,985
​​
—
​​
—
​​
1,438,767(4)
Houman Akhavan
​​
2/06/2023
​​
—
​​
—
​​
—
​​
—
​​
49,848
​​
328,996(2)
​
2/06/2023
​​
1
​​
14,394
​​
14,394
​​
—
​​
—
​​
95,000(3)
​
2/06/2023
​​
1
​​
49,848
​​
211,377
​​
—
​​
—
​​
328,996(4)
Michael Huffaker
​​
2/06/2023
​​
—
​​
—
​​
—
​​
—
​​
40,000
​​
264,000(2)
​
2/06/2023
​​
1
​​
16,098
​​
16,098
​​
—
​​
—
​​
106,246(3)
​
2/06/2023
​​
0
​​
100,000
​​
300,000
​​
—
​​
—
​​
660,000(4)
Ryan Lockwood
​​
2/06/2023
​​
—
​​
—
​​
—
​​
—
​​
64,583
​​
426,247(2)
​
2/06/2023
​​
1
​​
16,098
​​
16,098
​​
—
​​
—
​​
106,246(3)
​
2/06/2023
​​
1
​​
64,583
​​
193,749
​​
—
​​
—
​​
426,247(4)
Kals Subramanian
​​
2/06/2023
​​
—
​​
—
​​
—
​​
—
​​
73,447
​​
484,750(2)
​
2/06/2023
​​
1
​​
16,098
​​
16,098
​​
—
​​
—
​​
106,246(3)
​
2/06/2023
​​
0
​​
73,447
​​
220,341
​​
—
​​
—
​​
484,750(4)
(1)
Grant Date Fair Value of Stock and Option Awards. Amounts shown in this column represent fair value under target vesting conditions computed in accordance with FASB ASC Topic 718.
(2)
For time-vesting RSUs, the fair market- value of the grants made on February 6, 2023 was based on $6.60, the closing price of our common stock on the grant date.
(3)
For PRSUs granted in connection our annual bonus program on February 6, 2023, the fair-market value of the grant was based on $6.60, the closing price of our common stock on the grant date.
(4)
For PRSUs granted in connection with our long-term incentive program on the basis of total shareholder return, the fair value of the grant was based on $6.60, the closing price of our common stock on the grant date.
CarParts.com, Inc.  39  2024 Proxy Statement

TABLE OF CONTENTS

Outstanding Equity Awards at Fiscal Year-End
The following table presents the outstanding equity awards held by each of the NEOs as of December 30, 2023.
 
​​
 
​​
Option Awards
​​
 
​​
Stock Awards
Name
​​
 
​​
Grant
Date
​​
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
​​
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
​​
Option
Exercise
Price
($)
​​
Option
Expiration
Date
​​
Number of
shares or
units of
stock that
have not
vested
(#)(1)
​​
Market
value of
shares or
units of
stock that
have not
vested
(#)(2)
​​
Equity Incentive
Plan Awards;
Number of
unearned
shares
of stock
that have
not
vested (#)
​​
Equity Incentive
Plan Awards:
Market or
payout value
of unearned
shares of
stock that
have
not vested
($)(2)
David Meniane
​​
3/15/2019
​​
125,000
​​
 
​​
$1.00
​​
3/15/2029
​​
 
​​
 
​​
 
​​
 
 
​​
 
​​
12/30/2019
​​
68,540
​​
 
​​
$2.12
​​
12/30/2029
​​
 
​​
 
​​
 
​​
 
 
​​
 
​​
1/13/2021
​​
 
​​
 
​​
 
​​
 
​​
10,283
​​
$32,494
​​
 
​​
 
 
​​
 
​​
1/10/2022
​​
 
​​
 
​​
 
​​
 
​​
30,137
​​
$95,233
​​
 
​​
 
(3)
​​
 
​​
1/10/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
105,478
​​
$333,310
 
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
20,662
​​
$65,292
​​
 
​​
 
 
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
113,861
​​
$359,801
​​
 
​​
 
(4)
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
72,316
​​
$228,519
 
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
217,955
​​
$688,738
​​
 
​​
 
(5)
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
217,955
​​
$688,738
Ryan Lockwood
​​
 
​​
6/15/2020
​​
78,909
​​
12,500
​​
$8.73
​​
6/15/2030
​​
 
​​
 
​​
 
​​
 
 
​​
 
​​
5/12/2021
​​
 
​​
 
​​
 
​​
 
​​
2,369
​​
$7,486
​​
 
​​
 
 
​​
 
​​
1/10/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
7,097
​​
$44,427
 
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
44,508
​​
$140,645
​​
 
​​
 
(4)
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
58,417
​​
$184,598
 
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
64,583
​​
$204,082
​​
 
​​
 
(5)
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
64,583
​​
$204,082
Kalamegan Subramanian
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
33,573
​​
$106,091
​​
 
​​
 
(4)
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
100,719
​​
$318,272
 
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
73,447
​​
$232,093
​​
 
​​
 
(5)
​​
 
​​
2/6/2023
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
73,447
​​
$232,093
Michael Huffaker
​​
 
​​
12/5/2022
​​
 
​​
 
​​
 
​​
 
​​
73,334
​​
$231,735
​​
 
​​
 
 
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
40,000
​​
$126,400
​​
 
​​
 
(5)
​​
 
​​
4/18/2022
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
100,000
​​
$316,000
(1)
Amounts reported in this column includes (i) outstanding time-vesting RSUs and (ii) PRSUs whose payout values were certified by the Compensation Committee prior to fiscal year-end and remain subject to a time-vesting condition.
(2)
The market value of the unvested stock awards is calculated by multiplying the number of units by the closing price of our common stock as of December 29, 2023 (the last trading day of the fiscal year), which was $3.16.
(3)
Stock Awards represented in this row include the number of shares issuable under target vesting conditions in connection with our 2022 long-term-incentive program, as target vesting conditions were not satisfied. These Stock Awards are subject to a three-year vesting period, with a portion of the grant vesting each year on the basis of Total Shareholder Return.
(4)
Stock Awards represented in this row include the number of shares issuable under target vesting conditions in connection with our April 2022 long-term-incentive program, as target vesting conditions were not satisfied. These Stock Awards are subject to a three-year vesting period, with a portion of the grant vesting each year on the basis of Total Shareholder Return.
(5)
Stock Awards represented in this row include the number of shares issuable under target vesting conditions in connection with our 2023 long-term-incentive program, as target vesting conditions were not satisfied. These Stock Awards are subject to a three-year vesting period, with a portion of the grant vesting each year on the basis of Total Shareholder Return.
CarParts.com, Inc.  40  2024 Proxy Statement

TABLE OF CONTENTS

Option Exercises and Stock Vested in Last Fiscal Year
The following table presents certain information concerning the exercise of options and vesting of stock awards by each of our NEOs during the fiscal year ended December 30, 2023, including the value of gains on exercise and the value of the stock awards.
 
​​
Option Awards
​​
Stock Awards
Name
​​
Number of shares
acquired on
exercise
(#)
​​
Value
realized on
exercise
($)(1)
​​
Number of shares
acquired on
vesting
(#)
​​
Value
realized on
vesting
($)(2)
David Meniane
​​
—
​​
—
​​
125,797
​​
953,168
Ryan Lockwood
​​
—
​​
—
​​
12,203
​​
89,684
Houman Akhavan
​​
148,032
​​
937,611
​​
86,615
​​
657,465
(1)
The aggregate dollar amount realized upon exercise is computed by multiplying the number of shares at exercise by the difference between the market price of common stock on the date of exercise and the exercise price of the options.
(2)
The aggregate dollar amount realized upon vesting is computed by multiplying the number of shares vested by the closing stock price on the vesting date.
Nonqualified Deferred Compensation
Our non-qualified deferred compensation plan allows employees of the Company earning greater than $140,000 annually to contribute up to 90% of their salary and/or commissions, and up to 100% of annual and discretionary bonuses. The Company matches 50% of employee deferrals to 2% from all compensation, other than equity-based compensation. The minimum deferral amount is $5,000 per year. All participant contributions vest immediately and each Company matching contribution vests over a period of 3 years in equal installments. Matching contributions are credited on December 31 of the then-current year, subject to a participant’s continued employment. Matching contributions may be revoked for a participant who is terminated for cause or negligence involving a matter of material significance. Participants can select from a range of investment indices and earnings, gains and losses on participant and Company contributions are credited or debited based upon the performance of the investment indices selected by the participant. Upon retirement, accumulated balances are paid out, either as a lump sum or in annual installments over a period of up to 15 years, as selected by the participant. Active participants may also schedule a portion of their accumulated balances to be distributed at a date that is at least 3 years following the year in which the underlying contribution was made. Upon termination of employment, accumulated balances are distributed in a lump sum, less any non-vested matching contributions. Matching contributions become 100% vested in the event of death, disability, non-early retirement or certain changes of control. Hardship withdrawals may be requested for up to 100% of vested deferred compensation and earnings. This plan was discontinued in January 2024.
Securities Authorized for Issuance Under Equity Compensation Plans

We have options granted and outstanding under three

The following table provides certain information with respect to all of our equity compensation plans the 2006 Equityin effect as of December 30, 2023:
 
​​
Number of securities to be
issued upon exercise of
outstanding options and
awards (a)
​​
Weighted-average
exercise price of
outstanding options
and awards (b)(3)
​​
Number of securities
remaining available for future
issuance under
equity compensation plans
(excluding securities reflected in
column (a) (c)
Equity compensation plans approved by security holders:
​​
5,301,700
​​
$0.89
​​
1,537,526(1)(2)
Equity compensation plans not approved by security holders:
​​
—
​​
—
​​
—
Total
​​
5,301,700
​​
$0.89
​​
1,537,526
(1)
Represents securities available for issuance under the 2007 Omnibus Plan and 2016 Incentive Plan that may be granted in the form of stock options, restricted stock units, PRSUs or any other type of award available for grant under the 2016 Incentive Plan.
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(2)
The share reserve under the 2016 Incentive Plan will automatically increase on January 1st of each year through (and including) January 1, 2026 in an amount equal to one million five hundred thousand (1,500,000) shares per year; however, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the automatic increase.
(3)
Weighted-average exercise price reflects (i) 3,796,482 awards of restricted stock convertible into common stock upon completion of applicable vesting criteria and (ii) options to purchase 4,738,304 shares of common stock at a weighted average exercise price of $2.15.
Additional Narrative Disclosure
Equity Compensation Plans
We currently have outstanding equity awards that were granted under two equity compensation plans, the 2007 Omnibus Incentive Plan and the 2007 New Employee2016 Equity Incentive Plan.

2006 Equity Incentive Plan

Our 2006 Equity Incentive Plan (the “2006 Incentive Plan”) was adopted by our board of directors and approved by our stockholders in March 2006. A total of 4,365,340 shares of our common stock were previously reserved for issuance under the 2006 Incentive Plan. Under the 2006 Incentive Plan, we were authorized to grant

23

to officers and other employees options to purchase shares of our common stock intended to qualify as incentive stock options, as defined under Section 422 of the Internal Revenue Code of 1986, and to grant to employees, consultants or independent advisors options that do not qualify as incentive stock options under the Internal Revenue Code. All options granted under the 2006 Incentive Plan have terms not exceeding ten years and are immediately exercisable but vest over time. Options granted under the 2006 Incentive Plan are not transferable by the recipient except by will or by the laws of descent and distribution. As of [                ], 2013, options to purchase [                ] shares of our common stock were outstanding under the 2006 Incentive Plan at a weighted average exercise price of $[        ] per share. No options have been granted under the 2006 Incentive Plan after September 30, 2006, and all outstanding options are governed by the terms and conditions of this plan.

2007 Omnibus Incentive Plan

We adopted the 2007 Omnibus Incentive Plan (the “2007 Omnibus Plan”) in January 2007, which became effective on February 8, 2007, the effective date of the registration statement filed in connection with our initial public offering. Under the 2007 Omnibus Plan, the Company was previously authorized to issue 2.4 million shares of common stock under various instruments plus an automatic annual increase on the first day of each of the Company’s fiscal years beginning on January 1, 2008 and ending on January 1, 2017 equal to (i) the lesser of (A) 1,500,000 shares of Common Stock or (B) five percent (5%) of the number of shares of Common Stock outstanding on the last day of the immediately preceding fiscal year or (ii) such lesser number of shares of Common Stock as determined by the Company’s board of directors. Options granted under the 2007 Omnibus Plan generally expire no later than ten years from the date of grant and generally vest over a period of four years. The exercise priceprices of all option grants must beare equal to 100% of the fair market value on the date of grant. TheNo further shares are available for future grants under the 2007 Omnibus Plan provides for automatic grantfollowing the Company’s adoption of the 2016 Equity Incentive Plan (the “2016 Incentive Plan”). As of March 26, 2024, 0 restricted stock units were outstanding under the 2007 Omnibus Plan and options to purchase common stock to non-employee directors. As of [                ], 2013, options to purchase [                ]169,250 shares of our common stock were outstanding under the 2007 Omnibus Plan at a weighted average exercise price of $[        ]$2.73 per shareshare.
2016 Incentive Plan
Our 2016 Incentive Plan was adopted by our Board of Directors in March 2016 and [                ]approved by our stockholders in May 2016. Subject to adjustment for certain changes in the Company’s capitalization, the aggregate number of shares of ourthe Company’s common stock are reservedthat may be issued under the 2016 Incentive Plan will not exceed the sum of (i) two million five hundred thousand (2,500,000) new shares, (ii) the number of unallocated shares remaining available for future issuancethe grant of new awards under the Company’s 2007 Omnibus Plan described above as of the effective date of the 2016 Plan (which was equal to 3,894,000 shares as of May 31, 2016) and (iii) any shares subject to a stock award under the 2007 Omnibus Plan.

2007 New Employee Incentive Plan

We adopted that are not issued because such stock award expires or otherwise terminates without all of the 2007 New Employee Incentive Plan (the “2007 New Employee Plan”)shares covered by such stock award having been issued, that are not issued because such stock award is settled in October 2007. Under the 2007 New Employee Plan,cash, that are forfeited back to or repurchased by the Company is authorizedbecause of the failure to issue 2.0meet a contingency or condition required for the vesting of such shares, or that are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. In addition, the share reserve will automatically increase on January 1st of each year, for a period of nine years, commencing on January 1, 2017 and ending on (and including) January 1, 2026, in an amount equal to one million five hundred thousand (1,500,000) shares per year; however the Board of Directors of the Company may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock under various instruments solely to new employees. than would otherwise occur pursuant the automatic increase. The share reserve increased by 1,500,000 shares on January 1, 2023.

Options granted under the 2007 New Employee2016 Incentive Plan generally expire no later than ten years from the date of grant and generally vest over a period of four years. The exercise priceprices of all option grants must beare equal to 100% of the fair market value on the date of grant. AsThe 2016 Incentive Plan allows for the grant of [                ], 2013, options to purchase [                ]common stock to non-employee directors. During 2023, we granted an aggregate of 2,310,681 restricted stock units (including 793,530 PRSUs) and 0 options to purchase share of common stock under the 2016 Equity Incentive Plan, which reduced the shares of common stock reserved for future issuance under the 2016 Incentive Plan. As of March 26, 2024, 5,728,555 restricted stock units (including 2,215,572 PRSUs) were outstanding under the 2016 Equity Incentive Plan and options to purchase 1,519,559 shares of our common stock were outstanding under the 2007 New Employee2016 Equity Incentive Plan at a weighted average exercise price of $[        ]$2.79 per share and [                ]share. As of March 26, 2024, 886,190 shares of our common stock are reserved for future issuance under the 2007 New2016 Incentive Plan.
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2021 Officer and Director Share Purchase Plan
On November 16, 2021, the Board of Directors of CarParts.com, Inc. (the “Company”) adopted an Officer and Director Share Purchase Plan (the “Purchase Plan”). The Purchase Plan provides for the optional purchase of shares of Common Stock, directly from the Company at their fair market value, by the Company’s directors and executive officers, at regular intervals in accordance with their pay schedules. Purchases under the Purchase Plan will be funded using payroll deductions, or deductions from fees payable to directors, which deductions will be used to purchase shares of fully vested Common Stock on the payment date when the cash compensation deducted would otherwise have been paid. With respect to the Company’s officers, the payroll deductions may not reduce the participant’s compensation below an amount equal to two (2) times the federal or applicable state minimum wage, whichever is higher, required to be paid each pay period. Participation in the plan is subject to a minimum threshold 1% of the participant’s compensation or director fees. The Compensation Committee is responsible for oversight of the Purchase Plan and approving plan enrollments. In connection with the adoption of the Purchase Plan, the Board reserved a total of 250,000 shares of the Company’s common stock for issuance under the Purchase Plan.
2021 Employee Plan.

Stock Purchase Plan

Since 2021 we have maintained an Employee Stock Purchase Plan (“ESPP”) in which all employees who work more than 20 hours per week are eligible to participate. Under the ESPP, eligible participants may purchase shares of our common stock at a price that is equal to 85% of the fair market value of our common stock on the first day or last day of a six-month offering period, whichever is lower. There are two offering periods per year, and participants may deduct up to 30% of their post-tax regular compensation. Subject to the number of shares remaining in the share reserve, the maximum number of shares that may be purchased by a participant on any one purchase date for any offering period may not exceed 5,000 shares. A reserve of 250,000 shares was allocated to the ESPP and as of April 10, 2024, 453,924 shares remain available for issuance under the ESPP.
Employment ContractsAgreements and Potential Payments upon Termination of Employment andor Change of Control Arrangements

In March 2010, in order to rectify certain inconsistencies and to provide more standard language regarding benefits and responsibilities of each executive in the event of a change in control, we amended the

Employment Agreements with Named Executive Officers
We have entered into employment agreements originally entered into with Shane Evangelist,each of our NEOs. Certain of the key terms of these employment agreements are described below:
Employment Agreement with Mr. Meniane
In connection with his promotion to Chief Executive Officer, Theodore R. Sanders, our former Chief Financial Officer, and Aaron Coleman, our Chief Operating Officer. The amendments were made after the Compensation Committee consulted with Compensia, its compensation consultant, as well as outside counsel and determined that the provisions were in accordanceMr. Meniane entered into an Employment Agreement with the Company’s benchmark peer group. The changes are primarilyCompany (the “Meniane Employment Agreement”) to serve as follows:

Provide, for the CEO, the CFO and the COO, that all options (those initially granted in connection with commencement of employment and those granted thereafter) will be subject to “double-trigger” vesting acceleration in the event the officer is terminated or resigns for “good reason” (as defined in the Amended Agreement) following a change in control of the Company;

24

Provide that the “double trigger” vesting acceleration protection period will commence 3 months before a change in control and end 12 months following the change in control;

Provide that a resignation with good reason must occur within two years following the event giving rise thereto;

To provide, for the CFO and the COO, that good reason will include a change in the executive’s authority, duties or responsibilities (including diminished duties resulting from no longer being an executive officer of a publicly-traded company) and a change in the authorities, duties or responsibilities of the supervisor to whom the executive is required to report;

Provide that, following a change in control, a resignation for rood reason due to a change in the executive’s authority, duties or responsibility or that of his supervisor cannot be triggered prior to six months after a change in control; and

Provide that the portion of severance relating to the pro rata bonus is at the “target” level.

Agreements with Shane Evangelist

On September 18, 2012, we amended the employment agreement with Shane Evangelist, our Chief Executive Officer, pursuant to extend the term of the Company’s existing employment agreement entered into withwhich Mr. Evangelist on October 12, 2007, as amended on March 29, 2010. Pursuant to the amended agreement, Mr. Evangelist will continue to receiveMeniane receives an annual base salary of $425,000.$646,000, subject to an annual performance review. Mr. Evangelist willMeniane is also continue to be eligible to receive an annual target incentive bonus of up to 80%100% of his annual base salary, depending on the achievement of certain performance goals to be established by the Compensation Committee as describedof the Board, which may be paid in the CD&A above.form of cash, common stock or restricted stock. While Mr. Evangelist will continue to beMeniane is employed on an at-will basis, this amended employment agreementthe Meniane Employment Agreement provides that in the event of his involuntary termination by the Company for any reason (other than for cause) or in the event of his own voluntary resignation with good reason,, Mr. EvangelistMeniane will continue to be entitled to severance benefits consisting of, among other things, continuation of his annualpayments equal to twelve months’ base salary for a period of one year following termination,(payable in accordance with the Company’s regular pay practices), plus a pro-rated portion of his accrued target bonus for the year in which he was terminated but solely to the extent such annual bonuses are paid to a majority of the other Company’s bonus eligible employees, and reimbursement for the cost of COBRA coverage for a period of up to one yeartwelve months following his termination of employment. If a triggering event under

Mr. Meniane was promoted to the severance provisionsrole of his employment agreement had occurred on the last business day of fiscal 2012, then Mr. Evangelist would have been entitled to a payment of $425,000 and approximately $16,000 of COBRA payments. As of December 29, 2012, in the event of a change in control, unvested outstanding options of 10,417 shares would have immediately vested and become fully exercisable, and the value realized would have been approximately $3,000. The value realized is based on the fair market value per share of our common stock as of December 29, 2012 of $1.85 minus the exercise price of $1.59 per share.

Agreements with David G. Robson

On January 3, 2012, the Company appointed David G. Robson as the Company’s Chief FinancialExecutive Officer, effective immediately.April 18, 2022. In connection with his promotion, Mr. Robson’s appointmentMeniane’ s annual base salary was increased to $609,000 and he received a promotion grant of $1,187,000 in the form of 3-year time vesting RSUs. His annual bonus amount (payable in PRSUs) was increased by $51,000, and his long-term incentive awards were increased by $718,000 (at target levels).

Employment Agreement with Mr. Lockwood
Mr. Lockwood entered into an Employment Agreement with the Company (the “Lockwood Employment Agreement”) to serve as Chief Financial Officer Mr. Robson entered into an employment agreement, pursuant to which Mr. Robson will receiveLockwood receives an annual base salary of $300,000,$400,000, subject to an annual performance review. Mr. Robson willLockwood is 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, which may be paid in the form of Directors.cash, common stock or restricted stock. While Mr. Robson will beLockwood is employed on an at-will
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basis, the employment agreementLockwood Employment Agreement provides that in the event of his termination for any reason (other than for cause) or as a result of his own voluntary resignation with good reason,, Mr. RobsonLockwood will be entitled to severance payments equal to one year’ssix months’ base salary (payable in accordance with the Company’s regular pay practices), plus a pro-rated portion of his accrued target bonus for the year in which he was terminated but solely to the extent such annual bonuses are paid to a majority of the other Company’s bonus eligible employees, and reimbursement for the cost of COBRA coverage for a period of up to six months following his termination of employment.
In connection with the Lockwood Employment Agreement, Mr. Lockwood was granted, and he received, a promotion grant of $464,000 in the form of 3-year time vesting RSUs. He was also granted $406,000 of performance restricted stock units vesting over a period of three years on the basis of total shareholder return, and $104,000 of performance restricted stock units, vesting in accordance with the Company’s bonus plan requirements, all subject to Mr. Lockwood’s continued service with the Company through such vesting dates.
Employment Agreement with Mr. HUFFAKER
Mr. Huffaker entered into an Employment Agreement with the Company (the “Huffaker Employment Agreement”) to serve as Chief Operating Officer, pursuant to which Mr. Huffaker receives an annual base salary of $425,000, subject to an annual performance review. Mr. Huffaker is also 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, which may be paid in the form of cash, common stock or restricted stock. While Mr. Huffaker is employed on an at-will basis, the Huffaker Employment Agreement provides that in the event of his termination for any reason (other than for cause), Mr. Huffaker will be entitled to severance payments equal to twelve months’ base salary (payable in accordance with the Company’s regular pay practices), plus a pro-rated portion of his accrued target bonus for the year in which he was terminated but solely to the extent such annual bonuses are paid to a majority of the other Company’s bonus eligible employees, and reimbursement for the cost of COBRA coverage for a period of up to twelve months following his termination of employment. If a triggering event under the severance provisions of his employment agreement had occurred on the last business day of fiscal 2012, then Mr. Robson would have been entitled to a payment of $300,000and approximately $12,000 of COBRA payments.

25

In connection with the employment agreement,Huffaker Employment Agreement, Mr.  RobsonHuffaker was granted was granted, and he received, a new-hire grant of $110,000 time-vesting restricted stock option to purchase 300,000 sharesunits 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. The Company has also agreed to grant in January 2023 to Mr. Huffaker (i) 100,000 performance restricted stock units on the Company’s commonrelated standard form of grant agreement, vesting in accordance with the total shareholder return performance requirements therein, and (ii) 40,000 time-vesting restricted stock pursuant tounits on the 2007 Omnibus Incentive PlanCompany’s related standard form of grant agreement, vesting in three equal installments on the first, second, and a Non-Qualified Stock Option Agreement between the Company and Mr. Robson. The exercise price for the option is $4.62, which was the closing sales pricethird anniversaries of the Company’s common stock as reported by NASDAQ on the date of grant. The option vests over a four year period, with 25% vesting and becoming exercisable on January 3, 2013, and the remainder of which vests and becomes exercisable in 36 equal monthly installments thereafter. As of December 29, 2012, in the event of a change in control, unvested outstanding options of 300,000 shares would have immediately vested and become fully exercisable, but there would have been no value realized as the per share exercise price of $4.62 exceeded the fair market value of our common stock as of December 29, 2012 of $1.85.

Agreements with Theodore R. Sanders

On January 3, 2012, Theodore R. Sanders resigned as the CFO, effective immediately. In connection with his resignation, the Company entered into an Amended and Restated grant date.

Employment Agreement with Mr. Sanders,Subramanian
Mr. Subramanian entered into an Employment Agreement with the Company (the “Subramanian Employment Agreement”) to serve as Chief Technology Officer, pursuant to which Mr. Sanders served as an Internal Consultant for the Company through June 17, 2012. The Amended and Restated Employment Agreement replaces and supersedes the Employment Agreement entered into with Mr. Sanders in March 2010. Pursuant to the terms of the Amended and Restated Employment Agreement, Mr. Sanders received an annual pro-rata base salary of $307,500 through June 17, 2012 and reimbursement for the cost of COBRA coverage until January 17, 2013.

Agreements with Aaron E. Coleman

On September 18, 2012, we amended the employment agreement with Aaron Coleman, our Chief Operating Officer to extend the term of the Company’s existing employment agreement entered into with Mr. Coleman on April 3, 2008, as amended on March 29, 2010. Pursuant to the amended agreement, Mr. Coleman will continue to receiveSubramanian receives an annual base salary of $300,000.$400,000, subject to an annual performance review. Mr. Coleman willSubramanian is also be eligible to receive an annual target incentive bonus of up to 50% of his annual base salary, based upon us reaching our revenue and EBITDA goals as well as hisdepending on the achievement of certain individualperformance goals to be established by the Compensation Committee.Committee of the Board, which may be paid in the form of cash, common stock or restricted stock. While Mr. Coleman will beSubramanian is employed on an at-will basis, his employment agreementthe Subramanian Employment Agreement provides that in the event of his termination for any reason other(other than for cause or other than as a result of his own voluntary resignation without good reason,cause), Mr. ColemanSubramanian will be entitled to severance payments equal to one year’ssix months’ base salary (payable over one year in accordance with ourthe Company’s regular pay practices), plus a pro-rated portion of his annualaccrued target performance bonus for the year in which he was terminated but solely to the extent such annual bonuses are paid to a majority of the other Company’s bonus eligible employees, and reimbursement for the cost of COBRA coverage for a period of up to one yearsix months following his termination of employment. If a triggering transaction had occurred as of

In connection with the last business day of fiscal year 2012, then Mr. Coleman would have been entitledSubramanian Employment Agreement, in addition to a payment of $300,000 and approximately $16,000 of COBRA payments.

As provided in his employment agreement,$100,000 sign-on bonus, Mr. ColemanSubramanian was granted one ten yearand he received a grant of $350,000 in the form of 3-year time vesting RSUs. And he was granted $700,000 of performance restricted stock option to purchase up to 250,000 shares of our common stock, which will vestunits vesting over a four year period with 25% vestingof three years on the one year anniversarybasis of the grant datetotal shareholder return, and the remainder$142,308 of performance restricted stock units, vesting in 36 equal monthly installments thereafter. Inaccordance with the event thatCompany’s bonus plan requirements, all subject to Mr. Coleman’s employmentSubramanian’s continued service with us is terminatedthe Company through such vesting dates.

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Severance and Change of Control Terms of Equity Awards
Upon an executive officer’s termination or resignation for any reason, other than for cause or if he resigns without good reason following certain changes in control of our company, the option will immediately vest and become fully exercisable. If a triggering transaction had occurred as of the last business day of fiscal year 2012, under the amended agreement, all of his unvestedstock options granted to such officer that are outstanding shares would have vested and become fully exercisable, totaling 65,105 shares, and the value realized would have been approximately $1,000. The value realized, if any, is based on the excessdate of the fair market value per share of our common stock as of December 29, 2012 of $1.85 over the exercise price. The exercise price per share for these options are $7.99 for 32,500 shares, $1.59 for 2,605 shares and $5.00 for 30,000 shares.

26

Agreements with Houman Akhavan

We entered into an offer letter with Houman Akhavan in January 2006, pursuant to which he agreed to serve as our Vice President of Marketing. In the event Mr. Akhavan’s employment is terminated for any reason other than for cause, then we will be required to pay six months of severance to Mr. Akhavan based on his average pay for the six month preceding thesuch termination date. If a triggering event under the severance provisions of his agreement had occurred on the last business day of fiscal year 2012, then Mr. Akhavan would have been entitled to a payment of approximately $135,000.

In 2006, we granted to Mr. Akhavan options to purchase an aggregate of 231,000 shares of our common stock. This stock option agreement provides that in the event of an involuntary termination of the applicable officer’s service with us within 12 months after a change in control of the Company, then all unvested option shares will immediately vest and willor resignation shall remain exercisable until the earlier of (i) the expiration of such options,date set forth in the applicable stock option agreement or (ii) the expiration of one year anniversarymeasured from the date of such termination or resignation;

In the involuntary termination. Ifevent a triggering transaction had occurredNEO’s employment is terminated by the Company without cause or such executive officer resigns for good reason within three months before, and ending twelve months following, a change in control, the vesting of all equity compensation awards, including all stock option awards, that are outstanding as of the last business daydate of fiscal year 2012, allsuch termination or resignation, shall accelerate in full (except with respect to any restricted stock units granted to such executive officer).
In addition, the Company has granted PRSU awards to its NEOs, pursuant to which the unvested portion of his unvested outstanding options would have vested and become fully exercisable, totaling 51,668 shares, and the value realized would have been approximately $1,000. The value realized, if any, is based on the excess of the per share fair market value of our common stock as of December 29, 2012 of $1.85 over the exercise price. The exercise price per share for these options are $1.59 for 2,084 shares, $5.00 for 22,500 shares and $7.99 for 27,084 shares.

Agreements with Bryan P. Stevenson

On May 15, 2012, we entered into an employment agreement with Bryan P. Stevenson, our Vice President, General Counsel and Secretary. Mr. Stevenson will receive an annual base salary of $231,000. Mr. Stevenson will also be eligible to receive an annual target incentive bonus of up to 30% of his annual base salary, based upon goals to be established by the Compensation Committee. While Mr. Stevenson will be employed on an at-will basis, his employment agreement provides thatsuch awards accelerate in full in the event of his termination for any reason other than forsuch executive officer’s employment is terminated by the Company without cause or other than as a result of his own voluntary resignation withoutsuch executive officer resigns for good reason Mr. Stevenson will be entitled to severanceat any time.

The tables below show the potential payments equal to six month’s base salary (payable over six months year in accordance with our regular pay practices), plus a pro-rated portion of his annual target performance bonus for the year in which he was terminated, and reimbursement for the cost of COBRA coverage for up to one year following his termination of employment. If a triggering transaction had occurred asbenefits each of the last business day of fiscal year 2012, then Mr. StevensonNEOs would have been entitled to receive in the event of a paymentchange of $115,000 and approximately $12,000 of COBRA payments.

Mr. Stevenson was grantedcontrol (assuming that a stock option to purchase 75,000 shares and 50,000 shares ofsuccessor entity assumes, substitutes, or continues outstanding equity awards) or if each such officer’s employment had been terminated under the Company’s common stock pursuant to the Company’s 2007 Omnibus Incentive Plan and Non-Qualified Stock Option Agreements between the Company and Mr. Stevenson. The exercise prices for the options are $6.76 and $4.64 respectively, which was the closing sales price of the Company’s common stock as reported by NASDAQ on the dates of grant. These option vests over a four year period, with 25% vesting and became exercisable on March 14, 2012 and December 6, 2012 respectively, and the remainder of which vests and becomes exercisable in 36 equal monthly installments thereafter. If a triggering transaction had occurred as of the last business day of fiscal year 2012, all of his unvested outstanding shares would have vested and become fully exercisable, totaling 79,688 shares, but there would have been no value realized as the exercise prices per share of $6.76 and 4.64 exceeded the fair market value per share of our common stockfollowing circumstances as of December 29, 201230, 2023. Due to a number of $1.85.

Taxfactors that affect the nature and Accounting Impactamount of Executive Compensationany potential payments or benefits, any actual payments and benefits may be different.

Potential Payments Upon a Change of Control With no Termination of Employment
Name
​​
Severance Salary
($)
​​
Severance Bonus
($)(1)
​​
Acceleration of
Unvested Equity
Awards
($)
​​
Health and Welfare
Benefits
($)
​​
Total
($)(1)
David Meniane
​​
—
​​
477,647
​​
2,492,125
​​
—
​​
2,969,772
Ryan Lockwood
​​
—
​​
157,119
​​
785,320
​​
—
​​
942,439
Michael Huffaker
​​
—
​​
157,119
​​
674,135
​​
—
​​
831,254
Kals Subramanian
​​
—
​​
157,119
​​
979,549
​​
—
​​
1,136,668
(1)
The amount reported in the Severance Bonus column includes the market value as of December 30, 2023, of the target number of PRSUs granted and the target amount of cash eligibility pursuant to our annual incentive bonus plan for fiscal 2023.
(2)
Amounts shown include unvested option and stock awards as of December 30, 2023, excluding PRSUs granted for fiscal 2023 which are reported in the Severance Bonus column. Under our 2016 Equity Incentive Plan, in the event of a Change of Control, our Board of Directors generally has discretion to arrange for an acquiring corporation to assume an outstanding equity award or to accelerate the vesting, in whole or in part. For purposes of this table, it is assumed that (i) all time-based awards, including RSUs and PRSUs whose performance conditions were previously certified, and (ii) PRSUs granted in 2023 on the basis of total shareholder return, will be accelerated in full at maximum vesting levels.
Potential Payments Upon Termination Without Cause or Resignation for Good Reason (in each case other than in connection with a Change of Control)
Name
​​
Severance Salary
($)(1)
​​
Severance Bonus
($)(2)
​​
Acceleration of
Unvested Equity
Awards
($)
​​
Health and Welfare
Benefits
($)(3)
​​
Total
($)
David Meniane
​​
646,000
​​
646,000
​​
—
​​
25,589
​​
1,320,589
Ryan Lockwood
​​
212,500
​​
212,500
​​
—
​​
12,794
​​
437,794
Michael Huffaker
​​
425,000
​​
212,500
​​
—
​​
25,589
​​
663,089
Kals Subramanian
​​
212,500
​​
212,500
​​
—
​​
11,698
​​
436,698
(1)
For Messrs. Meniane and Huffaker the amount in this column amount represents 12 months of continued base salary and for the other NEOs, 6 months base salary.
CarParts.com, Inc.  45  2024 Proxy Statement

TABLE OF CONTENTS

(2)
The amount reported in the Severance Bonus column includes the market value as of the grant date, of the target number of PRSUs granted, and the target amount of cash eligibility pursuant to our annual incentive bonus plan for fiscal 2023. All severance amounts will be pro-rated for the amount of year actually worked.
(3)
Health and welfare benefits are calculated using the monthly COBRA cost of medical, dental, and vision insurance elected by the NEO during fiscal 2023, multiplied by 12 months for Messrs. Meniane and Huffaker, and by 6 months for the other NEOs.
Potential Payments Upon Termination Without Cause or Resignation for Good Reason, each in Connection with a Change of Control
Name
​​
Severance Salary
($)(1)
​​
Severance Bonus
($)(2)
​​
Acceleration of
Unvested Equity
Awards
($)(3)
​​
Health and Welfare
Benefits
($)(4)
​​
Total
($)
David Meniane
​​
646,000
​​
477,647
​​
2,492,125
​​
25,589
​​
3,641,361
Ryan Lockwood
​​
212,500
​​
157,119
​​
785,320
​​
12,794
​​
1,176,733
Michael Huffaker
​​
425,000
​​
157,119
​​
674,135
​​
25,589
​​
1,281,843
Kals Subramanian
​​
212,500
​​
157,119
​​
979,549
​​
11,698
​​
1,360,866
(1)
For Messrs. Meniane and Huffaker, amount represents 12 months of continued base salary and for the other NEOs, 6 months base salary.
(2)
The amount reported in the Severance Bonus column includes the market value as of December 30, 2023, of the target number of PRSUs granted and the target amount of cash eligibility pursuant to our annual incentive bonus plan for fiscal 2023.
(3)
Valuation of acceleration of vesting of unvested equity awards is equal to 100% of the unvested RSUs and long term incentive PRSUs and 100% of the unvested stock options with an exercise price less than the $3.16 per share closing price of our common stock on December 29, 2023, held by each NEO.
(4)
Health and welfare benefits are calculated using the monthly COBRA cost of medical, dental, and vision insurance elected by the NEO during fiscal 2023, multiplied by 12 months for Messrs. Meniane and Huffaker, and by 6 months for the other NEOs.
CEO Pay Ratio
As required by Section 162(m)953(b) of the Internal Revenue Code limitsDodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the deductibilityfollowing information for fiscal 2023 about the relationship of executivethe annual total compensation of our employees and the annual compensation of our CEO, Mr. Meniane.
the annual total compensation of our median employee was $35,360;
the annual total compensation of our CEO was $4,106,331 as reflected in the Summary Compensation Table above; and
our estimate of the ratio of our CEO’s annual total compensation to our median employee's annual total compensation was 116 to 1.
As permitted by SEC rules, we selected the individual who represented our median employee, by reviewing total compensation, paid to the chief executive officer and to each of the three other most highly compensated officers of a public company (other than the chief financial officer) to $1 million per year. However, compensation that is considered qualified “performance-based compensation” generally does not count toward the $1 million deduction limit.

27

The Company annually reviews the compensation paid to its Chief Executive Officer and each of the three other most highly compensated officers to determine the deductibility of compensation under Section 162(m). Base salary, by its nature, does not qualify as performance-based under Section 162(m). The Company’s grants of performance-based stock and annual cash bonus payments may qualify as performance-based compensation.

For 2012, the Company believesus for all compensation paid to its executives is fully deductible by the Company without regard to Code Section 162(m).

Summary Compensation Table

The following table shows information regarding the compensation earned or awarded during the fiscal years ended December 29, 2012, December 31, 2011 and January 1, 2011 by our Chief Executive Officer and our other executive officers1,706 individuals worldwide who were employed by us on December 30, 2023 (whether employed on a full-time, part-time, seasonal, or temporary basis). For employees paid in other than U.S. dollars, we converted their compensation to U.S. dollars and did not make any cost-of-living adjustments to such compensation. We did not annualize total direct compensation for employees employed by us for less than the full fiscal year.

Once we selected the individual who represented the median employee, we then calculated the annual total compensation for this employee using the same methodology we used for our NEOs Summary Compensation Table to yield the median annual total compensation disclosed above.
The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
CarParts.com, Inc.  46  2024 Proxy Statement

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Pay Versus Performance
The following table reports the compensation of December 29, 2012.our Principal Executive Officers (“PEOs”) or CEOs and the average compensation of the other non-CEO NEOs as reported in the Summary Compensation Table for the past four fiscal years, as well as Compensation Actually Paid (“CAP”) as calculated under new Pay-Versus-Performance (“PVP”) disclosure requirements and certain performance measures required by the rules. The officers listed belowdisclosure covers our four most-recent fiscal years, which will be collectively referredexpand incrementally over the next year to a rolling five years. Dollar amounts reported as the “named executive officers”CAP are computed in this proxy statement.

Name

 Fiscal
Year		  Salary  Bonus  Stock
Awards(1)		  Option
Awards(1)		  All Other
Compensation		  Total 

Shane Evangelist

  2012   $425,000   $—    $—    $—     $35,719(2)  $460,719  

Chief Executive Officer

  2011    425,000    —     —      —      37,582(2)   462,582  
  2010    367,770    137,230    147,250    —      30,676(2)   682,926  

David G. Robson

  2012    293,100    —     —     870,000    28,731(2)   1,191,831  

Chief Financial Officer

  2011    —      —      —     —      —      —    
  2010    —      —      —     —      —      —    

Theodore R. Sanders

  2012    189,231    —     —     —      23,815(2)   213,046  

former Chief Financial

  2011    307,500    —      —     —      33,445(2)   340,945  

Officer

  2010    307,500    76,875    76,875   —      37,888(2)   499,135  

Aaron E. Coleman

  2012    300,000    —     —     —      38,790(2)   338,790  

Chief Operating Officer

  2011    298,000    10,000    —      332,800    78,848(2)   719,648  
  2010    284,040    71,000    71,000    —      64,008(2)   490,048  

Houman Akhavan

  2012    270,000    —     —     —      46,150(2)   316,150  

Vice President of

  2011    269,000    10,000    —     269,900    46,988(2)   595,888  

Marketing

  2010    261,000    95,000    —     —      41,762(2)   397,762  

Bryan P. Stevenson

  2012    231,000    —     —     —      11,402(2)   252,402  

Vice President, General

  2011    177,400    35,166    —     371,750    8,776(2)   593,092  

Counsel

  2010    —      —     —     —      —      —    

accordance with Item 402(v) of Regulation S-K.
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
Value of Initial Fixed $100
Investment Based On:
​​
 
​​
 
Fiscal
Year
​​
Summary
Compensation
Table Total
for First PEO
​​
Compensation
Actually Paid
to First PEO(1)
​​
Summary
Compensation
Table Total
for Second
PEO
​​
Compensation
Actually Paid
to Second
PEO(1)
​​
Average
Summary
Compensation
Table Total
for non-PEO
NEOs
​​
Average
Compensation
Actually Paid
to non-PEO
NEOs(1)(2)
​​
Total
Shareholder
Return(3)
​​
Peer
Group Total
Shareholder
Return(3)
​​
Net
Income (In
thousands)
​​
Revenue (in
thousands)
2023
​​
 
​​
 
​​
$4,203,231
​​
$18,015
​​
$1,387,322
​​
$45,037
​​
$143.64
​​
$128.14
​​
($8,223)
​​
$675,729
2022
​​
$7,968,902
​​
($6,095,075)
​​
$6,443,873
​​
$1,370,234
​​
$2,187,729
​​
$549,094
​​
$284.55
​​
$109.59
​​
($951)
​​
$661,604
2021
​​
$4,186,297
​​
$9,946,222
​​
$0
​​
$0
​​
$1,645,704
​​
$3,690,466
​​
$509.09
​​
$137.74
​​
($10,339)
​​
$582,440
2020
​​
$2,001,650
​​
$24,365,673
​​
$0
​​
$0
​​
$954,086
​​
$9,946,269
​​
$563.18
​​
$119.96
​​
($1,513)
​​
$443,884
(1)
To calculation CAP, as defined by the SEC, the following deductions and additions were made to the Summary Compensation Table totals:
First PEO – Lev Peker – Summary Compensation Table Total to CAP Reconciliation
Fiscal Year
​​
2020
​​
2021
​​
2022
Summary Compensation Table Total
​​
$2,001,650
​​
$4,186,297
​​
$7,968,902
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
​​
($1,507,000)
​​
($3,614,415)
​​
($7,861,712)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year
​​
$15,617,949
​​
$5,711,202
​​
$0
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years
​​
$4,994,356
​​
($751,287)
​​
$0
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
​​
$1,418,923
​​
$62,577
​​
$0
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
​​
$1,839,795
​​
$4,351,848
​​
$357,135
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
​​
$0
​​
$0
​​
($6,559,400)
+ Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation
​​
$0
​​
$0
​​
$0
Compensation Actually Paid
​​
$24,365,673
​​
$9,946,222
​​
($6,095,075)
CarParts.com, Inc.  47  2024 Proxy Statement

TABLE OF CONTENTS

Second PEO – David Meniane – Summary Compensation Table Total to CAP Reconciliation
Fiscal Year
​​
2020
​​
2021
​​
2022
​​
2023
Summary Compensation Table Total
​​
$0
​​
$0
​​
$6,443,873
​​
$4,203,231
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
​​
$0
​​
$0
​​
($5,813,754)
​​
($3,220,000)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in
Fiscal Year
​​
$0
​​
$0
​​
$3,535,149
​​
$1,477,509
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior
Fiscal Years
​​
$0
​​
$0
​​
($1,648,372)
​​
($1,255,505)
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During
Fiscal Year
​​
$0
​​
$0
​​
$0
​​
$0
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years
For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
​​
$0
​​
$0
​​
($1,146,662)
​​
($113,598)
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years
That Failed to Meet Applicable Vesting Conditions During Fiscal Year
​​
$0
​​
$0
​​
$0
​​
($1,073,622)
+ Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair
Value or Total Compensation
​​
$0
​​
$0
​​
$0
​​
$0
Compensation Actually Paid
​​
$0
​​
$0
​​
$1,370,234
​​
$18,015
Average Non–PEO NEO — Summary Compensation Table Total to CAP Reconciliation
Fiscal Year
​​
2020
​​
2021
​​
2022
​​
2023
Summary Compensation Table Total
​​
$954,086
​​
$1,645,704
​​
$2,187,729
​​
$1,387,322
- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year
​​
($574,400)
​​
($1,242,718)
​​
($1,788,515)
​​
($954,438)
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock
Awards Granted in Fiscal Year
​​
$6,068,565
​​
$1,912,753
​​
$1,147,519
​​
$354,593
+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards
Granted in Prior Fiscal Years
​​
$2,344,975
​​
($239,417)
​​
($595,769)
​​
($467,623)
+ Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That
Vested During Fiscal Year
​​
$469,768
​​
$54,121
​​
$0
​​
$0
+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted
in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
​​
$683,276
​​
$1,560,023
​​
($401,870)
​​
$6,299
- Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior
Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
​​
$0
​​
$0
​​
$0
​​
($281,115)
+ Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise
Reflected in Fair Value or Total Compensation
​​
$0
​​
$0
​​
$0
​​
$0
Compensation Actually Paid
​​
$9,946,269
​​
$3,690,466
​​
$549,094
​​
$45,037
(2)
The amounts listed represent aggregate grant date fair value of such stock and option awards as computed in accordance with FASB ASC Topic 718. See also our discussion of share-based compensation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” inNon-PEO NEOs include the Company’s Annual Report on Form 10-Kfollowing individuals for the fiscal year ended December 29, 2012. For option awards, please note that amounts reported for fiscal 2011 and 2010 in our 2012 Proxy Statement wereyears indicated:
2020 – David Meniane and Houman Akhavan
2021 – David Meniane, Houman Akhavan, Alfredo Gomez, and Sanjiv N. Gomes
2022 – Houman Akhavan, Alfredo Gomez, Ryan Lockwood, and Kals Subramanian
2023 – Michael Huffaker, Ryan Lockwood, and Kals Subramanian
(3)
Total Shareholder Return is measured based on an assumed investment of $100 as of December 31, 2019 in both the share-based compensation expense recognized in accordance with FASB ASC Topic 718 so amounts previously reported were revised to reflect the grant date fair value of the option awards.
(2)

Mr. Evangelist: represents automobile allowances ($15,000 in 2012, $15,000 in 2011 and $8,623 in 2010), health insurance premiums ($16,469 in 2012, $17,047 in 2011 and $15,621 in 2010), and deferred compensation employer portion ($4,250 in 2012, $5,534 in 2011 and $6,432 in 2010). Mr. Robson: represents automobile allowance, 401(k) employer contribution, deferred compensation employer portion and health insurance premiums for $12,000, $1,385 and $2,995 and $12,352, respectively in 2012.

28

Mr. Sanders: represents automobile allowances ($6,000 in 2012, $12,000 in 2011 and $12,000 in 2010), 401(k) plan employer contribution ($0 in 2012, $4,438 in 2011 and $7,350 in 2010), health insurance premiums ($16,472 in 2012, $16,239 in 2011 and $15,519 in 2010) and deferred compensation plan ($1,343 in 2012, $769 in 2011 and $3,019 in 2010). Mr. Coleman: represents relocation expense associated with his temporary relocation to Chicago on behalfcommon stock of the Company in 2011 and 2010the peer group, and assumes reinvestment of $38,607 and $23,262, respectively, and automobile allowance, 401(k) employer contribution, health insurance premiums and deferred compensation employer portion ($12,000, $7,222, $16,469, and $3,100dividends. The Russell 2000 Index has been selected as the peer group for 2012, $12,000, $7,350, $17,103 and $3,789 for 2011, and $12,000, $7,641, $15,457 and $5,648 for 2010). Mr. Akhavan: represents health insurance premiums, 401(k) plan employer contribution, automobile allowance and deferred compensation employer portion ($24,000, $7,350, $12,000 and $2,800 for 2012, $24,000, $7,350, $12,000 and $3,638 for 2011, and $18,000, $7,350, $12,000 and $4,412 in 2010). Mr. Stevenson: represents 401(k) employer portion, deferred compensation employer portion and health insurance premiums ($6,869, $2,290 and $2,244 for 2012, and $5,292, $0 and $3,584 for 2011).this comparison.
CarParts.com, Inc.  48  2024 Proxy Statement

GrantsTABLE OF CONTENTS

Compensation Actually Paid Versus Company Performance
The graphs below depict the relationship between each of Plan-Based Awardsfinancial performance measures in the pay versus performance table above and compensation actually paid to our former and current CEOs and, on average, to our other NEOs, for each of the three previous fiscal years.

CarParts.com, Inc.  49  2024 Proxy Statement

TABLE OF CONTENTS



CarParts.com, Inc.  50  2024 Proxy Statement

All plan-based awards that might be grantedTABLE OF CONTENTS

Performance Measures
The performance measures which we believe are most important and are used in determining compensation paid to each of our named executive officers can vary by individual. Included in the table below are non-qualified stock options or shares of stock. The exercise price per share of each option grantedthe most important performance measures used to our namedlink compensation actually paid to company performance, by executive officers is equal toofficer, for the closing sales price of a share of our common stock, as reported by the NASDAQ Stock Market, on the date of the stock option grant.

As discussed above in Compensation Discussion and Analysis –Long-Term Equity Compensation, in fiscal 2012, the Company made a stock option grants to Mr. Robson to purchase 300,000 shares pursuant to the Company’s 2007 Omnibus Incentive Plan. The option vests over a four year period, with 25% vesting and becoming exercisable on January 3, 2013, and the remainder of which vests and becomes exercisable in 36 equal monthly installments thereafter. There were no stock option grants to other named executive officers in fiscal 2012.The following table presents information concerning grant of plan-based awards to Mr. Robson during 2012:

Name

  Grant
Date		   All Other Option
Awards: Number of
Securities Underlying
Options (#)		   Exercise or Base
Price of Option
Awards
($/Share)		   Grant Date Fair
Value of Option
Awards (1)		 

David G. Robson

   01/03/12     300,000     4.62     2.90  

Chief Financial Officer

        

ended December 30, 2023.
(1)The per share amounts listed represent the grant date fair value of such option awards as computed in accordance with FASB ASC Topic 718. See also our discussion of share-based compensation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012.
Most Important Performance Measures

29

Outstanding Equity Awards at Fiscal Year-End

The following table presents the outstanding equity awards held by each of the named executive officers as of December 29, 2012. Except as otherwise indicated below, each option was granted under the 2007 Omnibus Incentive Plan and vests as to 25% of the shares underlying the option on the first anniversary of the grant date, with the remainder vesting in 36 equal monthly installments thereafter.

   Option Awards         

Name

  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable		  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable		   Option
Exercise
Price
($)		   Option
Expiration
Date		 

Shane Evangelist

   750,000    —       8.65     10/14/2017  

Chief Executive Officer

   125,000(1)   —       3.72     5/14/2018  
   125,000(1)   —       3.72     5/14/2018  
   489,583    10,417     1.59     1/4/2019  

David G. Robson

   —      300,000     4.62     1/2/2022  

Chief Financial Officer

       

Theodore R. Sanders (2)

   —      —       —       —    

former Chief Financial Officer

       

Aaron E. Coleman

   250,000    —       4.01     4/2/2018  

Chief Operating Officer

   122,395    2,605     1.59     1/4/2019  
   27,500    32,500     7.99     2/22/2021  
   10,000    30,000     5.00     12/6/2021  

Houman Akhavan

   231,000(3)  —       6.78     3/27/2016  

Vice President of Marketing

   16,363(3)  —       9.17     6/5/2016  
   75,000    —       5.81     4/10/2017  
   97,916    2,084     1.59     1/4/2019  
   7,500    22,500     5.00     12/6/2021  
   22,916    27,084     7.99     2/22/2021  

Bryan P. Stevenson

   32,812    42,188     6.76     3/14/2021  

Vice President, General Counsel

   12,500    37,500     4.64     12/6/2021  

(1)
Revenue
The stock options vested and became exercisable upon meeting certain stock price metrics. Fifty percent of the shares underlying the option vested and became exercisable upon the monthly average closing sales price of our common stock as reported by NASDAQ (the “Average Closing Price”) equaling or exceeding $6.00 per share in any consecutive three month period prior to October 15, 2012. The remaining 50% of the shares underlying the option also vested and became exercisable upon the Average Closing Price equaling or exceeding $8.00 per share in any consecutive three-month period prior to October 15, 2012. The Average Closing Price equaled or exceeded $6.00 for the three consecutive months ended March 31, 2010, and the shares subject to that portion of the grant, 125,000 shares, vested on March 31, 2010. Additionally, the Average Closing Price equaled or exceeded $8.00 for the three consecutive months ended October 29, 2010 and the shares subject to that portion of the grant, 125,000 shares, vested on October 29, 2010.
Adjusted EBITDA*
Relative Total Shareholder Return
(2)*

On January 3, 2012, Theodore R. Sanders resigned as the CFO, effective immediately. After his employment with the Company, 66,667 shares were cancelledAdjusted EBITDA is a non-GAAP measure used by management and 433,333 shares were exercised (for additional details, referour board of directors to discussion below under “Option Exercises and Stock Vested in Fiscal 2012”). In February 2009, in connection with Mr. Sanders’ Employment Agreement, he received a performance-based option to purchase up to an aggregateassess our financial performance. Appendix A sets forth our reconciliation of 100,000 shares of the Company’s common stock. The shares underlying the option will vest and become exercisable if the monthly average closing sales price of the Company’s common stock as reported by NASDAQ (the “Average Closing Price”) equals or exceeds

Adjusted EBITDA (in millions).

30

$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 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 performance-based option became fully-vested in October 2009.
(3)This option was granted
All information provided above under the 2006 Incentive Plan.

Option Exercises and Stock Vested in Fiscal 2012

The following table sets forth the number of shares acquired upon exercise of options by each named executive officer during fiscal 2012.

Name

  Number of Shares
Acquired  on Exercise		   Value Realized
On Exercise (1)		 

Theodore R. Sanders

   433,333      $1,157,082  

(1)Value realized is based on the fair market value of our common stock on the date of exercise minus the exercise price.

Nonqualified Deferred Compensation

The following table shows for fiscal 2012 certain information regarding nonqualified deferred compensation benefits for the named executive officers:

Name

  Executive
Contributions
in 2012		   Company
Contributions
in 2012 (1)		   Aggregate
Earnings
(Losses)
in 2012 (2)		   Aggregate
Withdrawals /
Distributions		   Aggregate
Balance at
December 29,
2012		 

Shane Evangelist

  $8,500    $4,250    $6,547    $—      $56,939  

David G. Robson

   57,692     2,995     1,499     —       62,186  

Theodore R. Sanders

   —       —       2,287     —       23,819  

Aaron E. Coleman

   6,199     3,100     16,862     —       134,116  

Houman Akhavan

   5,600     2,800     3,974     —       37,515  

Bryan P. Stevenson

   6,869     2,289     —       —       9,158  

(1)All Company Contributions have also been included under All Other Compensation in the Summary Compensation Table above.
(2)Aggregate annual earnings have not been included in the Summary Compensation Table above.

The Board of Directors determined in 2009 that it is appropriate for retention of our executives to implement a deferred compensation plan so that employees earning greater than $110,000 annually could make contributions to their retirement in addition to those allowed under our 401(k) plan, which has required deferrals“Pay Versus Performance” heading will not be deemed to be returned to certain employees who contributed more than 401(k) discrimination testing will allowincorporated by reference into any filing of the Company under certain circumstances. The deferred compensation plan allows participants to deferthe Securities Act of 1933, as muchamended, or the Securities Exchange Act of 1934, as 90% of salaryamended, whether made before or after the date hereof and 100%irrespective of any bonuses, andgeneral incorporation language in any such filing, except to the extent the Company matches 50% of any employee contributions, up to a maximum of 2% of salary and credited to the account at the end of each year. Company contributions vest over a 3-year period. The minimum allowed deferral is $5,000, and the participant can elect to have contributions paid out at a date certain or upon retirement from the Company. Account balances can be paid out in lump sum or installments upon retirement or disability of the participant, but lump-sum payouts are mandatory upon termination of employment or death; change of control; or an “in-service” or date certain payout. The plan is funded through the purchase of company owned life insurance through a rabbi trust, and each participant is granted a death benefit of 3 times his or her salary. Included above, total participant deferrals and Company contributions into the plan were $100,294 for the year ended December 29, 2012.specifically incorporates such information by reference.

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31

Director Compensation

The compensation and benefits for service as a member of the Board of Directors isare determined by our Board of Directors. Directors employed by us or one of our subsidiaries are not compensated for service on the Board or on any committee of the Board; however, we reimburse each of our directors for any out-of-pocket expenses in connection with attending meetings of our Board of Directors and committees of the Board of Directors. EachFor 2023, each of our non-employee directors other than Messrs. Harman and Khazani, are entitled to a fee of $25,000$30,000 per year for his or her service as a director.director (the “Director Cash Retainer”). Members of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee each receive an additional $7,500, $5,000 and $2,500, respectively, per year for his or her service on such committee. TheIn fiscal year 2023, the chairpersons of the Board, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee receiveeach received an additional $25,000, $22,000, $7,500,$10,000, and $5,000,$7,500, respectively, per year for his or her service as chairperson for such committee.

Any non-employee director who is first elected to In fiscal 2024, the chairpersons of the Board, of Directorsthe Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee will be grantedeach receive an option to purchase 45,000 shares of our common stock on the date ofadditional $25,000, $22,000, $10,000, and $7,500, respectively, per year for his or her initial election to the Board of Directors. service as chairperson for such committee.

In addition, on the date of each annual stockholders meeting, each person who has served as a non-employee member of the Board of Directors will be granted $167,600 of restricted stock units based on the closing stock price on the grant date (the “Director Stock Retainer”) and our Chairman of the Board (provided such Chairman has served as non-employee member of the Board of Directors and Chairman for at least six months before the date of the stockholder meetingmeeting) will be granted aan additional $25,000 of restricted stock option to purchase 20,000 shares of our common stock. This was increased from prior years due to additional demandsunits based on the time of each director in providing oversight and guidance to the Company. These options will have an exerciseclosing price per share equal to the fair market value of our common stock on the date of grant anddate. These restricted stock units will vest over a three year period,in full at the 2024 annual stockholders meeting, subject to the director’s continuing service on our Board of Directors. Each newly elected Director who first becomes a non-employee director on a date other than an annual stockholders meeting will be granted a number of restricted stock units equal to the product of (i) the amount obtained by dividing (A) $167,600 by (B) the fair market value of a share of the Company’s Common Stock on the grant date, multiplied by (ii) the amount obtained by dividing (x) 12 minus the number of full months that have elapsed from the immediately preceding annual meeting of stockholders of the Company to the initial grant date, by (y) 12 (the “Pro Rata Grant”). Subject to the director's continued service with the Company, each Pro Rata Grant award will vest in full on the date of the next annual stockholders meeting. These optionsrestricted stock units will also immediately vest in full upon a change in control of the Company. The term of each option grantedrestricted stock units are to a non-employee director shall be ten years. These options will be granted under our 2007 Omnibus2016 Equity Incentive Plan.

Commencing in 2024, the Director Cash Retainer was adjusted to $50,000 per year, and the Director Stock Retainer was adjusted to $147,600.
Director Stock Ownership Guidelines and Director Payment Election Plan

In June 2011,

Our Board believes that an ownership stake in an effort tothe Company strengthens the alignment of interests between directors and stockholders. To further align directors’ interests with those of shareholdersstockholders and implementing best practices in corporate governance, the Company implementedupdated its stock ownership guidelines for director share ownership. The stock ownership guidelineAccordingly, each director is for directorsrequired to own and maintaincommon stock having a minimum value of $100,000 of our stock (a multiple of 42 times the amount of the independent director annual $25,000restricted stock unit grant within four (4) years of joining the Board.
Each director retainer). Current directors will have 3has four years from the dateimplementation of the approval of the guideline and any new directors will have 3policy or four years from the date of their initial electionafter a non-employee director’s appointment to the Board of Directors(whichever is later) to comply.

satisfy this requirement. To avoid fluctuating ownership requirements, once our directors have achieved the ownership guidelines, they will be considered to have satisfied the requirements as long as the shares used to meet the underlying requirements are retained.

In July 2011, the Board of Directors approved the Director Payment Election Plan which provides the directors with a convenient mechanism to acquire stock to comply with the director stock ownership guidelines. Each year the Director Payment Election Plan allows for a director to elect, beginning on the first day of the open trading window following the annual meeting of the Company’s stockholders and ending on the last day of such open trading window, to receive, in lieu of cash, all or a specified percentage of all fees to be earned for serving on the Board of Directors in shares of the Company’s common stock. The election shall be irrevocable for each applicable year. The Company will issue to each director who has elected to receive common stock, on the date fees become payable on a quarterly basis during the applicable year in accordance with the Company’s normal payment practices, a number of shares of
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common stock equal to (i) the cash value of any fees otherwise payable to the director, divided by (ii) the closing sales price for the common stock on the applicable payment date. If the calculation would result in the issuance of any fractional share, the Company will, in lieu of issuing any fractional share, pay cash equal to the fraction multiplied by the closing sales price on the applicable payment date.

For fiscal 2012 each of our non-employee directors, other than Messrs. Harman and Khazani, received stock options and $25,000 per year for his or her service as a director, as well as the payment of an additional $7,500 per year for serving on the Audit Committee, $5,000 per year for serving on the Compensation Committee or $2,500 per year for serving on the Nominating and Governance Committee. In addition, the chairpersons of the

32

Audit Committee, the Compensation Committee and the Nominating and Governance Committee received $22,000, $7,500 and $5,000 per year, respectively for their service on such committees during fiscal 2012.

The following table sets forth a summary of the compensation earned in fiscal year 20122023 by each person who served as a non-employee director during such year, who is not a named executive officer.

Name

  Fees Earned or
Paid in Cash ($)		   Option Awards
($)(1)(2)		   Total ($) 

Joshua L. Berman

  $35,000    $47,588    $82,588  

Fredric W. Harman

   —      —      —   

Sol Khazani

   —      —      —   

Robert J. Majteles

   62,500     95,176     157,676  

Warren B. Phelps III

   49,500     47,588     97,088  

Ellen F. Siminoff(3)

   42,500     47,588     90,088  

2023.
Name
​​
Fees Earned or Paid
in Cash
($)
​​
Stock Awards
($)(1)(2)(3)
​​
Total
($)
Barry Phelps
​​
$72,500
​​
$192,600
​​
$265,100
Jim Barnes
​​
$35,000
​​
$167,600
​​
$202,600
Jay K. Greyson
​​
$34,213
​​
$190,387
​​
$224,600
Nanxi Liu
​​
$37,500
​​
$167,600
​​
$205,100
Dr. Lisa Costa
​​
$37,500
​​
$167,600
​​
$205,100
Henry Maier
​​
$32,500
​​
$167,600
​​
$200,100
Ana Dutra
​​
$32,500
​​
$167,600
​​
$200,100
(1)
Stock options
Restricted stock units were granted pursuant to our 2007 Omnibus2016 Incentive Plan. The amounts listedshown represent the aggregate grant date fair value of such optionrestricted stock unit awards as computed in accordance with FASB ASC Topic 718. See also our discussion of share-based compensation under “Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations – CriticalOperations-Critical Accounting Policies and Estimates”Estimates” and “Note 5 to the Consolidated Financial Statements - Stockholders Equity and Share-based Compensation” in ourthe Company’s Annual Report on Form 10-K.10-K for the fiscal year ended December 30, 2023.
(2)
Messrs. Majteles held 455,000 options, Berman held 165,000 options,As of December 30, 2023, Mr. Phelps held 165,00045,967 restricted stock units and 90,000 options outstanding, Mr. Greyson held 40,000 restricted stock units and 80,000 options outstanding, each of Mr. Barnes, Ms. Liu, Dr. Costa, Mr. Maier, and Ms. SiminoffDutra held 185,000 options, to purchase shares of our Common40,000 restricted stock as of December 29, 2012.units.
(3)
In connection with the Director Payment Election Plan, Ms. SiminoffMr. Greyson elected to receive 100%have 40% of herhis director compensation in common stock, effective in July 2011. During fiscal 2012, $42,500 of the total fees earned was paid in common stock. Total director fees paid in stock to Mr. Greyson was $22,787, which is included in the amount of stock awarded to him as disclosed in the above table.
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Ownership of Securities by
Certain Beneficial Owners and Insider Participation

The members of the Compensation Committee of our Board of Directors during fiscal 2012 were Messrs. Berman and Majteles and Ms. Siminoff. None of the members of our Compensation Committee at any time has been one of our officers or employees or an officer or employee of one of our subsidiaries at any time during fiscal 2012. None of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers on our Board of Directors or Compensation Committee.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors has furnished the following report to the stockholders of the Company in accordance with rules adopted by the SEC. We have reviewed and discussed with the management of U.S. Auto Parts Network, Inc. the Compensation Discussion and Analysis to be included in the proxy statement on Schedule 14A for our 2013 Annual Meeting of Stockholders. Based on the reviews and discussions referred to above, we recommended to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in such proxy statement and incorporated by reference into our annual report on Form 10-K for the year ended December 29, 2012.

Submitted by the Compensation Committee

of the Board of Directors:

Joshua L. Berman

Robert J. Majteles

Ellen F. Siminoff

33

OWNERSHIP OF SECURITIES BY

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Management

The following table indicates information as of April 5, 20134, 2024 regarding the ownership of our common stock by:

each person who is known by us to own more than 5% of our shares of common stock;

each named executive officer;

Each NEO;

each of our directorsdirectors; and director nominees; and

all of our directors and executive officers as a group.

The number of shares beneficially owned and the percentage of shares beneficially owned are based on [                ]56,644,740 shares of common stock outstanding and 4,149,997 shares of Series A Convertible Preferred outstanding as of April 5, 2013.4, 2024. Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission.SEC. Shares subject to options that are exercisable within 60 days following April 5, 20134, 2024 and shares subject to restricted stock units that are convertible within 60 days following April 4, 2024 are deemed to be outstanding and beneficially owned by the optioneegrant recipient for the purpose of computing share and percentage ownership of that optionee,grant recipient, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them.

Name and Address of Beneficial Owners(1)

  Number of
Shares		   Percent of
Class		 

5% Stockholders:

    

Oak Investment Partners XI, L.P.(2)

   10,712,795     26.3% 

Mehran Nia(3)

   4,642,073     11.4  

William Blair & Company, L.L.C.(4)

   4,194,578     10.3  

Sol Khazani(5)

   2,515,017     6.2  

Mina Khazani(6)

   2,400,982     5.9  

Officers and Directors:

    

Shane Evangelist(7)

   1,817,189     4.5  

David G. Robson(9)

   100,000     *  

Aaron E. Coleman(8)

   441,859     1.1  

Houman Akhavan(10)

   474,113     1.2  

Bryan P. Stevenson(11)

   58,333     *  

Joshua L. Berman(12)

   151,166     *  

Fredric W. Harman(2)

   10,712,795     26.3  

Sol Khazani(4)

   2,515,017     6.2  

Robert J. Majteles(13)

   629,980     1.5  

Warren B. Phelps III(14)

   161,990     *  

Ellen F. Siminoff(15)

   227,731     *  

All directors and executive officers as a group (11 persons)(16)

   17,290,173     42.4  

*Less than 1%.
Name and Address of Beneficial Owners(1)
​​
Number of
Shares
​​
Percentage of Shares
Beneficially Owned
5% Stockholders:
​​
 
​​
 
Blackrock, Inc.(2)
​​
5,835,302
​​
10.3%
The Vanguard Group(3)
​​
4,375,335
​​
7.7%
Oaktop Capital Management II, L.P.(4)
​​
3,725,185
​​
6.5%
Officers and Directors:
​​
 
​​
 
David Meniane(6)
​​
1,641,609
​​
2.8%
Ryan Lockwood(7)
​​
186,380
​​
*
Houman Akhavan(8)
​​
226,393
​​
*
Kals Subramanian
​​
53,594
​​
*
Michael Huffaker
​​
58,982
​​
*
Jim Barnes(10)
​​
125,297
​​
*
Jay K. Greyson(11)
​​
213,320
​​
*
Nanxi Liu(10)
​​
74,751
​​
*
Lisa Costa(10)
​​
73,701
​​
*
Barry Phelps(13)
​​
387,433
​​
*
Henry Maier(10)
​​
72,936
​​
*
Ana Dutra(10)
​​
69,664
​​
*
All directors and executive officers as a group (14 persons)
​​
3,184,060
​​
5.6%
* Less than 1%
(1)
The address for each of the directorsofficers and officers listed above, Mehran Nia and Mina Khazanidirectors is c/o U.S. Auto Parts Network,CarParts.com, Inc. at 16941 Keegan Avenue, Carson,2050 W. 190th Street, Suite 400, Torrance, California 90746. The address for Oak Investment Partners XI, L.P. is 525 University Avenue, Suite 1300, Palo Alto, California 94301. The address for William Blair & Co. is 222 W. Adams, Chicago, IL 60606.90504.
(2)

Consists of (i) 9,333,485 of common stock based on Schedule 13D/A filed with the SEC on February 14, 2013, and (ii) 1,379,310 shares of Series A Convertible Preferred Stock based on Form 4 filed with the SEC on March 28, 2013. Mr. Harman is a Managing Member of Oak Associates XI, LLC (“Oak Associates”), the general partner of Oak Investment Partners XI, L.P. (“Oak Partners”). Mr. Harman has shared power to vote

34

and shared power to dispose of the shares held by Oak Partners. The names of the parties who share power to vote and dispose of the shares held by Oak Partners with Mr. Harman are Bandel L. Carano, Ann H. Lamont, Edward F. Glassmeyer, and Gerald R. Gallagher, all of whom are Managing Members of Oak Associates. Mr. Harman, Bandel L. Carano, Ann H. Lamont, Edward F. Glassmeyer, and Gerald R. Gallagher each disclaims beneficial ownership of the shares held by Oak Partners, except to the extent of each such person’s pecuniary interest therein.
(3)Consists of (i) 3,607,591 of common stock, and (ii) 1,034,482 shares of Series A Convertible Preferred Stock based on Form 4 filed with the SEC on March 27, 2013. Mehran Nia has shared power to vote or to direct the vote of and the shared power to dispose or to direct the disposition of shares in the aggregate, and is thus deemed to beneficially own such shares, in his capacity as trustee or co-trustee of several trusts. Mr. Nia additionally shares the right to receive dividends from, and the proceeds from the sale of, the shares.
(4)
Based on a Schedule 13G/A filed with the SEC on April 10, 2013. William Blair & Company, L.L.C.February 1, 2023, consists of 3,604,726 shares for which Blackrock, Inc. has sole power to vote or to direct the votevoting and dispositive power. The business address of and sole power to dispose or to direct the disposition of 4,194,578 shares, andBlackrock, Inc. is thus deemed to beneficially own such shares.55 East 52nd Street, New York, NY 10055
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(5)
(3)
Consists of (i) 1,956,211 shares of common stock owned directly by the Sol Khazani Living Trust Established June 1, 2007, of which Mr. Khazani is the sole trustee, (ii) 213,979 shares of common stock owned directly by the Sol Khazani Annuity Trust Established November 18, 2006, of which Mr. Khazani is the sole trustee, and (iii) 344,827 shares of Series A Convertible Preferred Stock basedBased on Form 4a Schedule 13G filed with the SEC on March 27, 2013.
(6)Consists of (i) 1,366,500February 9, 2023, The Vanguard Group beneficially owns shares of our common stock owned directly by the Mina Khazani Living Trust, Dated May 30, 2007, of which Ms. Khazani is the sole trustee, and (ii) 1,034,482 shares of Series A Convertible Preferred Stock basedas follows:
Entity
​​
Sole
Voting
Power
​​
Shared
Voting
Power
​​
Sole
Dispositive
Power
​​
Shared
Dispositive
Power
​​
Aggregate
Amount
Beneficially
Owned
The Vanguard Group
​​
0
​​
88,211
​​
4,268,912
​​
106,423
​​
4,375,335
(4)
Based on Form 8-Ka Schedule 13G filed with the SEC on March 25, 2013.February 14, 2023, consists of 3,725,185 shares over which Oaktop Capital Management II, L.P. has sole voting and dispositive power. The business address of Oaktop Capital Management II, L.P. is One Main Street, Suite 202, Chatham, NJ 07928
The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355
(5)
[Intentionally Deleted]
(7)(6)
Includes 1,500,000193,540 shares issuable upon exercise of outstanding options which are exercisable, as of April 5, 20134, 2024 or within 60 days after such date.
(8)(7)
Includes 422,91687,242 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 20134, 2024 or within 60 days after such date.
(9)(8)
Includes 100,000Based solely on a Form 4 filed March 17, 2023.
(9)
[Intentionally Deleted].
(10)
Amount shown also includes 40,000 restricted stock units which are subject to vesting within 60 days of April 4, 2024.
(11)
Amount shown also includes 40,000 restricted stock units which are subject to vesting within 60 days of April 4, 2024 and 80,000 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 20134, 2024 or within 60 days after such date.
(10)(12)
Includes 444,750[Intentionally Deleted]
(13)
Amount shown also includes 45,967 restricted stock units which are subject to vesting within 60 days of April 4, 2024 and 90,000 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 20134, 2024 or within 60 days after such date.
(11)Includes 58,333 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
(12)Includes 144,990 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
(13)Consists of (i) 65,000 shares of common stock, (ii) 150,000 shares of Series A Convertible Preferred Stock based on Form 4 filed with the SEC on April 9, 2013, and (iii) 414,980 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
(14)Includes 144,990 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
(15)Includes 164,990 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
(16)Includes 3,395,949 shares issuable upon exercise of outstanding options which are exercisable as of April 5, 2013 or within 60 days after such date.
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35

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS

Except

Certain Relationships and Related Transactions
Since January 1, 2023, except as disclosedset forth below, since December 31, 2011, there has not been, nor is there any proposed transaction where we were or will be a party in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years and in which any director, director nominee, executive officer, holder of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than the compensation agreements and other agreements and transactions which are described in “Executive “Compensation Discussion and Other Information”Analysis” and the transactions described below. We believe that the agreements and transactions described below were generally on terms that were comparable to terms we could have obtained from unaffiliated third parties.

“Corporate Governance - Voting Agreements with Stockholders”.

Policies and Procedures for Related Party Transactions

Pursuant to the written charter of our Audit Committee originally adopted in January 2007 and most recently updated in August 2020, our Audit Committee of the Board of Directors is responsible for reviewing and approving all related party transactions and potential conflict of interest situations involving a principal stockholder, a member of the Board of Directors or senior management. In addition, our company policies require that our officers and employees avoid using their positions for purposes that are, or give the appearance of being, motivated by a desire for personal gain, and our policies further require that all officers and employees who have authority to initiate related party transactions provide a written report, on an annuala quarterly basis, of all activities which could result in a conflict of interest or impair their professional judgment. All such written reports concerning related party transactions or conflicts of interest are submitted to, and reviewed by, our Chief Financial Officer and our Audit Committee.

Related Party Transactions

Beginning in November 2003, the Company has leased its former corporate headquarters and primary warehouse from Nia Chloe, LLC (“Nia Chloe”), a member of which is our board member, Sol Khazani. Another Nia Chloe member, Mehran Nia, was also one of our board members until his resignation in December 2009, and Mr. Nia remains a stockholder owning greater than 5% of our common stock. Lease payments and expenses associated with this related party arrangement totaled $374,000, $374,000 and $389,000, respectively, for the years ended December 29, 2012, December 31, 2011 and January 1, 2011.

Indemnification Agreements. The Company has entered into indemnification agreements with the Company’s directors and executive officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The Company also intends to enter into indemnification agreements with the Company’s future directors and executive officers.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under

PROPOSAL FOUR:
Advisory Vote on Executive Compensation
As part of the federal securities laws,Board's commitment to excellence in corporate governance, and as required by Section 14A(a)(1) of the Exchange Act, which was added under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Board is providing our directors and officers and any persons holding more than 10%stockholders with an opportunity to approve, on an advisory (non-binding) basis, the compensation of our common stocknamed executive officers (“NEOs”) as disclosed in this Proxy Statement in accordance with SEC rules.
Summary
We are requiredasking our stockholders to report their ownershipprovide advisory approval of the compensation of our common stockNEOs, which consist of the Chief Executive Officer, Chief Financial Officer and any changesnext three highest paid executive officers, as described in that ownershipthe Compensation Discussion and Analysis section of this Proxy Statement and the related executive compensation tables. The Compensation Committee establishes, recommends and governs all of the compensation and benefits policies and actions for the NEOs. Consistent with our compensation philosophy, the compensation program of our NEOs has been designed to promote a performance-based culture and align the SEC on Section 16(a) forms. Specific due datesinterests of executives with those of stockholders by linking a substantial portion of compensation to our performance. The program rewards superior performance and provides consequences for these reports have been established,underperformance. The program is also designed to attract and weretain highly-qualified executives who are requiredcritical to reportour success. We urge our stockholders to review the Compensation Discussion and Analysis section of this Proxy Statement and the related executive compensation tables for more information.
We emphasize pay-for-performance. Annual performance-based incentives play an important role in this proxy statement any failureproviding incentives to file by these dates. our executives to achieve and exceed short-term performance goals.
Based solely on our reviewperformance in 2023, we achieved the following objectives under our performance based annual incentive bonus plan:
Revenue was $675.7 million, which did not meet the minimum threshold established by the Compensation Committee of copies$691.376 million; and
Adjusted EBITDA was $19.7 million, which did not meet the minimum target threshold established by the Compensation Committee of $24 million.
Based on our performance in 2023, we achieved the following relative shareholder returns under long term incentive performance-vesting restricted stock unit awards granted in 2023 (the “Performance Shares”):
Grants made in February 2023 to our NEOs did not meet the minimum relative total shareholder return for 2023 versus constituents of the reports onRussell 2000 index (“Total Shareholder Return”), and therefore none of these Performance Shares vested.
We believe that our compensation programs are strongly aligned with the Section 16(a) forms receivedlong-term interests of our stockholders. We provide pay that is highly leveraged toward equity in order to align total compensation with stockholder interests by usencouraging long-term performance. Equity represents a key component of the compensation of our NEOs as a percentage of total target compensation. Specifically:
For our CEO, approximately 68.2% of target total compensation in 2023 was in the form of long-term equity; approximately 15.3% was base salary; and approximately 15.3% was short-term incentive; and
For our NEOs (other than the CEO), approximately 57.6% (on average) of target total compensation in 2023 was in the form of long-term equity; approximately 26.7% was base salary; and approximately 13.38% was short-term incentive.
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We are committed to having strong governance standards with respect to our compensation program, procedures and practices. Pursuant to our commitment to strong governance standards, the Compensation Committee is comprised solely of independent directors. The Compensation Committee has previously retained an independent compensation consultant to provide it with advice on matters related to executive compensation and assistance with preparing compensation disclosure for inclusion in our SEC filings.
We provide competitive pay opportunities that reflect best practices. The Compensation Committee continually reviews best practices in governance and executive compensation. In observance of such best practices, the Company:
Does not provide supplemental retirement benefits to the NEOs;
Maintains a stock ownership policy for our executives;
Maintains incentive compensation plans that do not encourage undue risk taking and align executive rewards with annual and long-term performance;
Has not engaged in the practice of re-pricing/exchanging stock options;
Does not provide for any “modified single trigger” severance payments to any NEO;
Does not provide any tax gross-up payments in connection with any Company compensation programs to any NEO;
Maintains an equity compensation program that has a long-term and performance focus, including equity awards that generally vest over a period of three years or which vest only if minimum performance and relative stock performance milestones are met;
Maintains compensation programs that have a strong pay-for-performance orientation. For example, in fiscal year ended December 29, 20122023, between the at-risk short-term bonus and representationsincentive compensation and grants of equity compensation to NEO participants related to 3-year total shareholder return, (comprising approximately 50% of total direct compensation for our CEO and approximately 51% of total direct compensation for our NEOs (other than CEO)); and
Prohibits our directors or employees from engaging in short sales with respect to our securities, purchasing or pledging Company stock on margin and entering into derivative or similar transactions with respect to our securities.
The Board believes that the reporting personsinformation provided above and within the Compensation Discussion and Analysis section of this Proxy Statement demonstrates that no other reports were required, we believeour executive compensation program was designed appropriately and is working to ensure that all directors,management's interests are aligned with our stockholders' interests to support long-term value creation.
The Board is asking our stockholders to cast a non-binding advisory vote on the following resolution:
“RESOLVED, that the Company's stockholders approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and persons who own more than 10%Analysis, the compensation tables and the accompanying narrative disclosure, in this Proxy Statement.”
The say-on-pay vote is advisory, and therefore, not binding on the Board or the Compensation Committee. While the resolution is non-binding, the Board and the Compensation Committee value the opinions that stockholders express in their votes and in any additional dialogue, and will consider the outcome of the vote and those opinions when making future compensation decisions. At our common stock have complied2023 Annual Meeting of Stockholders, stockholders were asked to vote on the frequency of say-on-pay. In line with stockholder preference, the reporting requirementsBoard has approved an annual say-on-pay vote until the next say-on-pay frequency vote in 2029. Unless the Board modifies its determination on the frequency of Section 16(a) and have filed all reports requiredfuture say-on-pay votes, the next such advisory vote will be held at the 2025 annual meeting of stockholders.
Our stockholders, by such section.91.9% of the votes cast, approved our say-on-pay proposal at our 2023 annual meeting.
Recommendation of Our Board of Directors
Our Board of Directors unanimously recommends that you vote “FOR” the advisory (non-binding) resolution approving the compensation of the Company’s named executive officers.
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36

ANNUAL REPORT

Annual Report
A copy of our annual report on Form 10-K for the fiscal year ended December 29, 201230, 2023, (excluding the exhibits thereto) accompanies the proxy materials being mailed to all stockholders. The Annual Report is not incorporated into this proxy statement and is not considered proxy solicitation material.Stockholders may obtain a copy of the Annual Report and any of our other filings with the SEC, without charge, by writing to our corporateCorporate Secretary, U.S. Auto Parts Network,CarParts.com, Inc., 16941 Keegan Avenue, Carson,2050 W. 190th Street, Suite 400, Torrance, California 90746.90504. The annual reportAnnual Report on Form 10-K (including the exhibits thereto) is also available on the SEC’s website at www.sec.gov.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF

PROXY MATERIALS

FOR THE 20132024 ANNUAL MEETING OF STOCKHOLDERS


TO BE HELD ON , 2013

MAY 23, 2024

AT THE OFFICES OF THE COMPANY LOCATED AT 16941 KEEGAN AVENUE, CARSON, CA 90746


2050 W. 190TH STREET, SUITE 400, TORRANCE, CALIFORNIA 90504.
This proxy statement and our annual report on Form 10-K for the year ended December 29, 201230, 2023 are also available at http://investor.usautoparts.net.carparts.com/investor. We encourage you to access and review all of the important information contained in the proxy materials before voting. To obtain directions to be able to attend the shareholderstockholder meeting and vote in person, please contact our corporateCorporate Secretary, at our principal executive offices at 16941 Keegan Avenue, Carson,2050 W. 190th Street, Suite 400, Torrance, California 9074690504 or by calling us at (424)702-1445 ext 8258.

DEADLINE FOR RECEIPT OF

STOCKHOLDER PROPOSALS OR NOMINATIONS

Stockholders may present proposals for action at a future meeting or nominate persons 205-5512. You will also be required to register for the election of directors only if they comply withmeeting at proxyvote.com to attend the requirements of the proxy rules established by the SEC and our bylaws.meeting in person.

Additional Information
Stockholder Proposals Pursuant to Rule 14a-8 of
A stockholder seeking to have a proposal included in the Exchange Act, some stockholders proposals may be eligible for inclusion in ourCompany’s proxy statement for the 2014 Annual Meetingour 2025 annual meeting of Stockholdersstockholders (the “2014“2025 Annual Meeting”). Stockholder must comply with Rule 14a-8 under the Exchange Act. Such stockholder proposals that are intended to be presented at our 2014 Annual Meeting and included in the proxy statement, form of proxy and other proxy solicitation materials related to that meeting must be received by us not later than December 13, 2024 and must comply with the requirements of Rule 14a-8. Such stockholder proposals should be addressed to CarParts.com, Inc., 2013.

Attn: Corporate Secretary, 2050 W. 190th Street, Suite 400, Torrance, California 90504.

Stockholder Proposals and Director Nominations
If a stockholder wishes to submit a proposal whichthat is not intended to be included in our proxy statement under Rule 14a-8 of the Exchange Act, or wishes to nominate a person as a candidate for election to the Board, in accordance with the Bylaws, the stockholder must submit the proposal or nomination between                      and                     . If the date of the 2014 Annual Meeting is advanced by more than 30 days or delayed (other than as a result of adjournment) by more than 60 days from the anniversary date of the 2013 Annual Meeting of Stockholders (a situation that we do not anticipate), the stockholder must submit any such proposal or nomination not earlier than the 90th day before the 2014 Annual MeetingJanuary 23, 2025, and not later than 5:00 p.m., Pacific time, on February 22, 2025. Any such proposals or nominations must be submitted in accordance with the close of business onrequirements specified in the later of (i)Bylaws and, if applicable, Rule 14a-19 under the 60th day before the 2014 Annual Meeting and (ii) the 10th day following the day on which public announcement of the date of such meeting is first made.Exchange Act. Stockholders are advised to review our bylaws which contain these advance noticeby the Bylaws carefully.
Stockholders Sharing the Same Address
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Annual Meeting materials with respect to advance noticetwo or more stockholders sharing the same address by delivering a single copy of stockholder proposals and director nominations.

In addition, with respect to any proposal that a stockholder presents at the 2014 Annual Meeting thatmaterials to those stockholders. This process, which is not submittedcommonly referred to as “householding,” potentially means extra convenience for inclusion in ourstockholders and cost savings for companies.

This year, a number of brokers with account holders who are stockholders will be “householding” the Company’s proxy materials pursuant to Rule 14a-8 under the Exchange Act, the proxy solicited by the Board of Directors for such annual meeting will confer discretionary voting authority to vote on such stockholder proposal to the extent permitted under Rule 14a-4 under the Exchange Act.

Stockholder proposals must be in writing and should be addressed to our corporate Secretary, at our principal executive offices at 16941 Keegan Avenue, Carson, California 90746. It is recommended that

37

stockholders submitting proposals direct them to our corporate Secretary and utilize certified mail, return receipt requested in order to provide proof of timely receipt. The presiding officermaterials. A single copy of the Annual Meeting reservesmaterials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the rightaffected stockholders. Once you have received notice from your broker that they will be “householding” communications to reject, rule outyour address, “householding” will continue until you are notified otherwise or until you revoke

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your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate copy of order,the Annual Meeting Materials, please notify your broker or take other appropriate action with respectthe Company. Direct your written request to any proposal that does not comply with theseCarParts.com, Inc., Attn: Corporate Secretary, 2050 W. 190th Street, Suite 400, Torrance, California 90504 or contact the Company by telephone at (424) 205-5512. Stockholders who currently receive multiple copies of the Annual Meeting Materials at their addresses and other applicable requirements, including conditions set forth in our bylaws and conditions established by the SEC.

OTHER BUSINESS

would like to request “householding” of their communications should contact their brokers.

Other Business
The Board of Directors is not aware of any other matter which will be presented for action at the Annual Meeting other than the matters set forth in this proxy Statement.statement. If any other matter requiring a vote of the stockholders arises, it is intended that the proxy holders will vote the shares they represent as the Board of Directors may recommend. The enclosed proxy grants the proxy holders discretionary authority to vote on any such other matters properly brought before the Annual Meeting.
By Order of the Board of Directors

 
David Meniane
Chief Executive Officer
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Appendix A
Supplemental Financial Information
Non-Gaap Measures
The table below reconciles net loss to Adjusted EBITDA for the periods presented (in thousands):
 
​​
Fiscal Year Ended
 
​​
December 30,
2023
​​
December 31,
2022
​​
January 1,
2022
Net loss
​​
$(8,223)
​​
$(951)
​​
$ (10,339)
Depreciation & amortization
​​
16,690
​​
13,607
​​
9,895
Amortization of intangible assets
​​
36
​​
108
​​
110
Interest (income) expense, net
​​
(636)
​​
1,421
​​
1,089
Income tax provision
​​
145
​​
632
​​
351
EBITDA
​​
$8,012
​​
$ 14,817
​​
$1,106
Stock compensation expense
​​
$ 11,675
​​
$ 11,296
​​
$15,685
Adjusted EBITDA
​​
$ 19,687
​​
$ 26,113
​​
$16,791
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INCORPORATION BY REFERENCETABLE OF CONTENTS

Appendix B
CARPARTS.COM, INC.
and
COMPUTERSHARE TRUST COMPANY, N.A.
as Rights Agent
Tax Benefits Preservation Plan
Dated as of April 5, 2024
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TAX BENEFITS PRESERVATION PLAN
Tax Benefits Preservation Plan, dated as of April 5, 2024 (this “Plan”), between CarParts.com, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company, as Rights Agent (the “Rights Agent”).
RECITALS
WHEREAS, on April 5, 2024, the Board of Directors (the “Board”) of the Company adopted this Plan and, in connection therewith, authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each share of Common Stock (as defined in Section 1.6) of the Company outstanding at the close of business on April 16, 2024 (the “Record Date”) and authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earliest of the Distribution Date and the Expiration Date (as such terms are defined in Sections 3.1 and 7.1), each Right initially representing the right to purchase one one-thousandth (subject to adjustment) of a share of Series B Junior Participating Preferred Stock (the “Preferred Stock”) of the Company having the rights, powers and preferences set forth in the form of Certificate of Designation of Series B Junior Participating Preferred Stock attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth, provided, however, that Rights may be issued with respect to Common Stock that shall become outstanding after the Distribution Date and prior to the Expiration Date in accordance with Section 22;
WHEREAS, an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), in respect of the Company may jeopardize or endanger the value or availability of certain of the Company’s tax attributes (the, “Tax Attributes”); and
WHEREAS, the Company views its Tax Attributes as a valuable asset of the Company, which is likely to inure to the benefit of the Company and its stockholders, and the Company believes that it is in the best interests of the Company and its stockholders that the Company provide for the protection of the Tax Attributes on the terms and conditions set forth herein; and
WHEREAS, in addition, the Board has determined that it is desirable and in the best interests of the Company and its stockholders that steps be taken to preserve for the Company’s stockholders the long-term value of the Company in the event of a takeover.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Plan, the following terms have the meanings indicated:
1.1. “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, from and after the date of this Plan shall be the Beneficial Owner of 4.99% or more of the Common Stock then outstanding, but shall not include (i) an Exempt Person, (ii) any Person who or which becomes the Beneficial Owner of 4.99% or more of the Common Stock solely as a result of equity compensation awards granted to such Person by the Company or as a result of an adjustment to the number of shares of Common Stock represented by such equity compensation award pursuant to the terms thereof, unless and until such time, in the case of this clause (ii), as such Person or one or more of its Affiliates or Associates thereafter acquires Beneficial Ownership of one additional share of Common Stock (other than Common Stock acquired as described in clause (ii) or pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common Stock) or (iii) any Existing Holder, unless and until such time as such Existing Holder shall become the Beneficial Owner of (A) one or more additional shares of Common Stock (excluding any shares of Common Stock acquired after the first public announcement of the adoption of this Plan in the manner described in the immediately preceding clause (ii) or pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common Stock) or (B) less than
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4.99% of the Common Stock then outstanding (after which time, if such Person shall be the Beneficial Owner of 4.99% or more of the Common Stock then outstanding (other than by virtue of acquiring Beneficial Ownership of any shares of Common Stock in the manner described in the immediately preceding clause (ii) or pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or reclassification of the outstanding Common Stock), such Person shall be or become deemed an “Acquiring Person”). Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares Beneficially Owned by such Person to 4.99% or more of the Common Stock then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 4.99% or more of the Common Stock then outstanding solely by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of one or more additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock in Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner of such additional Common Stock, such Person does not Beneficially Own 4.99% or more of the Common Stock then outstanding. Notwithstanding the foregoing, (i) if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1.1, has become such inadvertently (including, without limitation, because (A) such Person was unaware that it Beneficially Owned a percentage of Common Stock that would otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Plan), and such Person divests or otherwise no longer Beneficially Owns as promptly as practicable (as determined in good faith by the Board) a sufficient number of shares of Common Stock so that such Person would no longer be an Acquiring Person, as defined pursuant to the foregoing provisions of this Section 1.1, then such Person shall not be deemed to be or have become an “Acquiring Person” at any time for any purposes of this Plan, and (ii) if a bona fide swaps dealer who would otherwise be an “Acquiring Person” has become so as a result of its actions in the ordinary course of its business that the Board determines, in its sole discretion, were taken without the intent or effect of evading or assisting any other Person to evade the purposes and intent of this Plan, or otherwise seeking to control or influence the management or policies of the Company, then, and unless and until the Board shall otherwise determine, such Person shall not be deemed to be or to have ever become an “Acquiring Person” for any purposes of this Plan. For all purposes of this Plan, any calculation of the number of shares of Common Stock outstanding at any particular time, for purposes of determining the particular percentage of such outstanding Common Stock of which any Person is the Beneficial Owner, shall be made pursuant to and in accordance with Section 382 of the Code and the Treasury Regulations promulgated thereunder and/or the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.
1.2. “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Plan, and, to the extent not included within the foregoing clause of this Section 1.2, shall also include, with respect to any Person, any other Person (other than an Exempt Person or an Existing Holder) whose Common Stock would be deemed constructively owned by such first Person, owned by a “single entity” with respect to such first Person as defined in Section 1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with shares owned by such first Person, pursuant to the provisions of Section 382 of the Code and the Treasury Regulations promulgated thereunder.
1.3. A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” or have “Beneficial Ownership” of any securities:
1.3.1. which such Person or any of such Person’s Affiliates or Associates directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (A) voting power which includes the power to vote, or to direct the voting of, such security (except that a Person shall not be deemed to be the Beneficial Owner of any security under this clause (A) if such voting power arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement filed on Schedule 14A), and/or (B) investment power which includes the power to dispose, or to direct the disposition of such security;
1.3.2. which such Person or any of such Person’s Affiliates or Associates directly or indirectly, has the Right to Acquire; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (v) securities (including rights, options or warrants) which are convertible or exchangeable into or exercisable for Common Stock until such time as such securities are
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converted or exchanged into or exercised for Common Stock except to the extent the acquisition or transfer of securities (including rights, options or warrants) would be treated as exercised on the date of its acquisition or transfer under Section 1.382-4(d) of the Treasury Regulations promulgated under Section 382, (w) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, (x) securities which such Person has a Right to Acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring Person (except to the extent the acquisition or transfer of such rights, options or warrants would be treated as exercised on the date of its acquisition or transfer under Section 1.382-4(d) of the Treasury Regulations under Section 382 of the Code), or (y) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person if such Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date or pursuant to Section 3.1 or Section 22 (“Original Rights”) or pursuant to Section 11.9 or Section 11.15 with respect to an adjustment to Original Rights;
1.3.3. which are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with whom such Person or any of such Person’s Affiliates or Associates, has an agreement, arrangement or understanding to act together for the purpose of acquiring, holding, voting or disposing of any securities of the Company, provided that the foregoing shall apply only if the effect of such agreement, arrangement or understanding is to treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations under Section 382 of the Code (except that a Person shall not be deemed to be the Beneficial Owner of any security under this clause 1.3.3 if such voting power arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by means of a solicitation statement filed on Schedule 14A);
1.3.4. of which such Person would otherwise be deemed to be the beneficial owner pursuant to Rule 13d-3 under the Exchange Act; or
1.3.5. which such Person would be deemed to actually or constructively own for purposes of Section 382 of the Code, or any successor provision or replacement provision.
No Person shall be deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities which such Person or any of such Person’s Affiliates or Associates would otherwise be deemed to “Beneficially Own” pursuant to this Section 1.3 (x) solely as a result of any merger or other acquisition agreement between the Company and such Person (or one or more of such Person’s Affiliates or Associates), or any tender, voting or support agreement entered into by such Person (or one or more of such Person’s Affiliates or Associates) in connection therewith, if, prior to such Person becoming an Acquiring Person, the Board has approved such merger or other acquisition agreement, or such tender, voting or support agreement, (y) solely as a result of the Right to Acquire such securities unless the acquisition or transfer of such Right to Acquire would be deemed, on the date of such acquisition or transfer, to constitute the exercise of such Right to Acquire for the purposes of Section 1.382-4(d) of the Treasury Regulations promulgated under Section 382 of the Code, or (z) solely as a result of any agreement, arrangement, understanding or relationship unless the effect thereof is to treat such Person, or any of such Person’s Affiliates or Associates, as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations promulgated under Section 382 of the Code.
No Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities that are “Beneficially Owned” (as defined in this Section 1.3), including, without limitation, in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.
1.4. “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
1.5. “Close of Business” on any given date shall mean 5:00 p.m., New York time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.
1.6. “Common Stock” shall mean the common stock, par value $0.001 per share, of the Company.
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1.7. “Exempt Person” shall mean (i) the Company, any Subsidiary of the Company, in each case including, without limitation, the officers and board of directors thereof acting in their fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company or any entity or trustee holding shares of capital stock of the Company for or pursuant to the terms of any such plan, or for the purpose of funding other employee benefits for employees of the Company or any Subsidiary of the Company, (ii) any Person deemed to be an “Exempt Person” in accordance with Section 28 for so long as such Person complies with any limitations or conditions required by the Board in making such determination, (iii) any other Person whose Beneficial Ownership (together with all Affiliates and Associates of such Person) of shares in excess of 4.99% of the then-outstanding Common Stock will not, as determined by the Board in its sole discretion, jeopardize or endanger the value or availability to the Company of the Tax Attributes, and (iv) any other Person if the Board has determined in good faith that such Person shall be an “Exempt Person”; provided, however, that any Person deemed to be an “Exempt Person” pursuant to subclauses (ii), (iii) or (iv) will cease to be an “Exempt Person” if the Board thereafter makes a determination that such Person’s Beneficial Ownership (together with all Affiliates and Associates of such Person) would, notwithstanding its prior determination to the contrary, jeopardize or endanger the value or availability to the Company of the Tax Attributes or the Board otherwise determines it is not in the best interests of the Company that such Person be an “Exempt Person.”
1.8. “Existing Holder” shall mean any Person (together with all Affiliates and Associates of such Person) who, immediately prior to the first public announcement of the adoption of this Plan, is the Beneficial Owner of 4.99% or more of the Common Stock then outstanding, together with any Affiliates and Associates of such Person. Any Existing Holder who (together with all Affiliates and Associates of such Existing Holder), after the first public announcement of the adoption of this Plan becomes the Beneficial Owner of less than 4.99% of the Common Stock then outstanding shall cease to be an Existing Holder and shall be subject to all the provisions of this Plan in the same manner as any Person who is not and was not an Existing Holder.
1.9. “Person” shall mean any individual, partnership, joint venture, limited liability company, firm, corporation, unincorporated association, trust or other entity, and shall include any successor (by merger or otherwise) of such entity.
1.10. “Right to Acquire” shall mean a legal, equitable or contractual right to acquire any securities (whether directly or indirectly and whether exercisable immediately, or only after the passage of time, compliance with regulatory requirements, fulfillment of a condition or otherwise), pursuant to any agreement, arrangement or understanding, whether or not in writing (excluding customary agreements entered into in good faith with and between an underwriter and selling group members in connection with a firm commitment underwriting registered under the Securities Act of 1933, as amended (the “Securities Act”)), or upon the exercise of any option, warrant or right, through conversion of a security, pursuant to the power to revoke a trust, discretionary account or similar arrangement, pursuant to the power to terminate a repurchase or similar so-called “stock borrowing” agreement or arrangement, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement.
1.11. “Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, the filing of a report pursuant to Section 13(d) of the Exchange Act or pursuant to a comparable successor statute) by the Company or an Acquiring Person that an Acquiring Person has become such or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board shall become aware of the existence of an Acquiring Person.
1.12. “Subsidiary” of any Person shall mean any partnership, joint venture, limited liability company, firm, corporation, unincorporated association, trust or other entity of which a majority of the voting power of the voting equity securities or equity interests is owned, of record or beneficially, directly or indirectly, by such Person.
1.13. A “Trigger Event” shall be deemed to have occurred upon any Person becoming an Acquiring Person.
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1.14. The following itemsterms shall have the meanings defined for such terms in the Sections set forth below:
Term
​​
Section
Adjustment Shares
​​
11.1.2
Board
​​
Recitals
Book Entry Shares
​​
3.1
Code
​​
Recitals
common stock equivalent
​​
11.1.3
Company
​​
Preamble
current per share market price
​​
11.4.1
Current Value
​​
11.1.3
Distribution Date
​​
3.1
equivalent preferred stock
​​
11.2
Exchange Act
​​
1.2
Exchange Consideration
​​
27.1
Exemption Request
​​
28
Expiration Date
​​
7.1
Final Expiration Date
​​
7.1
Original Rights
​​
1.3.2
Plan
​​
Preamble
Preferred Stock
​​
Recitals
Purchase Price
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4
Record Date
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Recitals
Redemption Date
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7.1
Redemption Price
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23.1
Requesting Person
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28
Right
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Recitals
Right Certificate
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3.1
Rights Agent
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Preamble
Securities Act
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1.10
Security
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11.4.1
Spread
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11.1.3
Substitution Period
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11.1.3
Tax Attributes
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Recitals
Trading Day
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11.4.1
Trust
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27.1
Trust Agreement
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27.1
Section 2. Appointment of our 2012 Annual ReportRights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the express terms and conditions hereof (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable (the term “Rights Agent” being used herein to refer, collectively, to the Rights Agent together with any such co-Rights Agents), upon ten (10) calendar days’ prior written notice to the Rights Agent . The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-Rights Agent. In the event the Company appoints one or more co-Rights Agents, the respective duties of the Rights Agent and any co-Rights Agent shall be as the Company shall reasonably determine, provided that such duties and determination are consistent with the terms and provisions of this Plan and that contemporaneously with such appointment, if any, the Company shall notify the Rights Agent in writing thereof.
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Section 3. Issuance of Right Certificates.
3.1. Rights Evidenced by Stock Certificates. Until the close of business on the earlier of (i) the tenth (10th) Business Day after the Stock Acquisition Date or (ii) the tenth (10th) Business Day after the date of the commencement of, or first public announcement of, the intent of any Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in any Person (other than an Exempt Person) becoming an Acquiring Person (the earlier of (i) and (ii) being herein referred to as the “Distribution Date”; provided, however, that the Distribution Date shall in no event be prior to the Record Date), (x) the Rights (unless earlier expired, redeemed or terminated) will be evidenced (subject to the provisions of Section 3.2) by the certificates for Common Stock registered in the names of the holders thereof or, in the case of uncertificated shares of Common Stock registered in book entry form (“Book Entry Shares”), by notation in book entry (which certificates for Common Stock and Book Entry Shares shall also be deemed to be Right Certificates) and not by separate certificates, and (y) the Rights (and the right to receive certificates therefor) will be transferable only in connection with the transfer of the underlying Common Stock. The preceding sentence notwithstanding, prior to the occurrence of a Distribution Date specified as a result of an event described in clause (ii) (or such later Distribution Date as the Board may select pursuant to this sentence), the Board may postpone, one or more times, the Distribution Date which would occur as a result of an event described in clause (ii) beyond the date set forth in such clause (ii). Nothing herein shall permit such a postponement of a Distribution Date after a Person becomes an Acquiring Person, except as a result of the operation of the third sentence of Section 1.1. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company (or, if requested, the Rights Agent at the expense of the Company and upon receipt of all relevant information) will send, by first-class, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company, one or more certificates for Rights, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.
3.2. Registered Holders; Transfer. With respect to certificates for Common Stock and Book Entry Shares outstanding as of the close of business on the Record Date, until the Distribution Date (or the earlier Expiration Date), the Rights will be evidenced by such certificates for Common Stock registered in the names of the holders thereof or Book Entry Shares, as applicable, and the registered holders of the Common Stock shall also be registered holders of the associated Rights. Until the Distribution Date (or the earlier Expiration Date), the surrender for transfer of any certificate for Common Stock or Book Entry Shares outstanding at the close of business on the Record Date shall also constitute the transfer of the Rights associated with the Common Stock represented thereby and the Book Entry Shares, as applicable.
3.3. New Certificates and Uncertificated Shares After Record Date. Certificates for Common Stock which become outstanding after the Record Date but prior to the earliest of the Distribution Date or the Expiration Date, shall have impressed, printed, stamped, written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Tax Benefits Preservation Plan between CarParts.com, Inc. (the “Company”) and Computershare Trust Company, N.A., as Rights Agent, dated as of April 5, 2024, as the same may be amended from time to time (the “Plan”), the terms of which are hereby incorporated herein by reference

and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Plan, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Plan without charge after receipt of a written request therefor. As described in the Plan, Rights which are owned by, transferred to or have been owned by Acquiring Persons or Associates or Affiliates thereof (each, as defined in the Plan) and their transferees shall become null and void and will no longer be transferable.
With respect to any Book Entry Shares, such legend shall be included in a notice to the record holder of such shares in accordance with applicable law. Until the Distribution Date (or the earlier Expiration Date), the Rights associated with the Common Stock represented by such certificates and such Book Entry Shares shall be evidenced by such certificates and the Book Entry Shares alone, and the surrender for transfer of any such certificates or Book Entry Shares, except as otherwise provided herein, shall also
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Item 7 – Management’s Discussion

constitute the transfer of the Rights associated with the Common Stock represented thereby. In the event that the Company purchases or acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and Analysisretired so that the Company shall not be entitled to exercise any Rights associated with the shares of Common Stock that are no longer outstanding.
Notwithstanding this Section 3.3, neither the omission of the legend, nor the failure to provide the notice thereof, shall affect the enforceability of any part of this Plan or the rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase shares, certification and assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties, liabilities or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Plan, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or trading system on which the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the terms and conditions hereof, the Right Certificates, whenever issued, shall be dated as of the Record Date, and shall show the date of countersignature by the Rights Agent, and on their face shall entitle the holders thereof to purchase such number of one one-thousandths of a share of Preferred Stock as shall be set forth therein at the price per one one-thousandth of a share of Preferred Stock set forth therein (the “Purchase Price”), but the number of such one one-thousandths of a share of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
5.1. The Right Certificates shall be executed on behalf of the Company by the Chief Executive Officer, the Chief Financial ConditionOfficer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary or any other authorized officer of the Company, shall have affixed thereto the Company’s seal or a facsimile thereof, and Resultsshall be attested by the Secretary or any Assistant Secretary of Operations

Item 7A – Quantitativethe Company or by such other officers as the Board may designate, either manually or by facsimile signature. The Right Certificates shall be countersigned, either manually or by facsimile or other electronic signature, by an authorized signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign all of the Right Certificates hereunder. No Right Certificate shall be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and Qualitative Disclosures about Market Risk

Item 8 – Financial Statementsissuance and Supplementary Data

delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Plan any such person was not such an officer.

Item 9 – Changes5.2. Following the Distribution Date, and receipt by the Rights Agent of written notice to that effect and all other relevant information referred to in this Plan, the Rights Agent will keep or cause to be kept, at its office designated for such purpose, books for registration and Disagreements With Accountantstransfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on Accountingits face by each of the Right Certificates, the certificate number of each of the Right Certificates and Financial Disclosure

the date of each of the Right Certificates.

All documents filed by us

Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 11.1.2 and Section 14, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 13(a), 13(c), 1411.1.2 or 15(d)that have been exchanged pursuant to Section 27) may be transferred, split up or combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up or combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender, together with any required form of assignment and certificate duly completed, the Right Certificate or Right Certificates to be transferred, split up or combined or exchanged at the office of the ExchangeRights Agent designated for such purpose accompanied by a signature guarantee (“Signature Guarantee”) from an eligible guarantor institution participating in a signature guarantee program approved by the
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Securities Transfer Association, and any other reasonable evidence of authority that may be reasonably required by the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate or Right Certificates until the registered holder shall have properly completed and duly signed the certificate contained in the form of assignment on the reverse side of such Right Certificate or Right Certificates and shall have provided a Signature Guarantee and such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or Rights Agent shall reasonably request. Thereupon, the Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment from the holders of Right Certificates of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up or combination or exchange of such Right Certificates. If and to the extent the Company does require payment of any such taxes or charges, the Company shall give the Rights Agent prompt written notice thereof, and the Rights Agent shall not have any duty or obligation to take any action under any section of this Plan that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made.
Subject to the provisions of Section 11.1.2, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity, including an open penalty surety bond, or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
7.1. Exercise of Rights. Subject to Section 11.1.2 and except as otherwise provided herein, the registered holder of any Right Certificate may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase and certification on the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose accompanied by a Signature Guarantee, and any other reasonable evidence of authority that may be reasonably required by the Rights Agent, together with payment of the aggregate Purchase Price for the total number of one one-thousandths of a share of Preferred Stock (or other securities, cash or other assets) as to which the Rights are exercised, at or prior to the time (the “Expiration Date”) that is the earliest of (i) the close of business on April 5, 2027 (the “Final Expiration Date”), (ii) the close of business on the first anniversary of the date of this Plan if stockholder approval of this Plan has not been obtained prior to such date, (iii) the time at which the Rights are redeemed as provided in Section 23 (the “Redemption Date”), (iv) the time at which the Rights are exchanged as provided in Section 27, (v) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in the penultimate paragraph of Section 1.3, (vi) the close of business on the effective date of the repeal of Section 382 of the Code if the Board determines that this Plan is no longer necessary or desirable for the preservation of the Tax Attributes or (vii) the close of business on the first day of a taxable year of the Company to which the Board determines that no Tax Attributes may be carried forward or otherwise utilized.
7.2. Purchase. The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall be initially $11.13, shall be subject to adjustment from time to time as provided in Sections 11 and 26 and shall be payable in lawful money of the United States of America in accordance with Section 7.3.
7.3. Payment Procedures. Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and certification duly executed, accompanied by payment of the aggregate Purchase Price for the total number of one one-thousandths of a share of Preferred Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9, in cash or by certified or cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i)(A) requisition from any transfer agent of the Preferred Stock (or make available, if the Rights Agent is the transfer agent) certificates for the number of shares of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights
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hereunder with a depository agent, requisition from the depositary agent depositary receipts representing interests in such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with all such requests, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of fractional shares in accordance with Section 14 or otherwise in accordance with Section 11.1.3, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to Section 11.1.3, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate, and until so received, the Rights Agent shall have no duties or obligations with respect to such securities, cash and/or property.
7.4. Partial Exercise. In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of such Right Certificate or to his or her duly authorized assigns, subject to the provisions of Section 14.
7.5. Full Information Concerning Ownership. Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported exercise as set forth in this Section 7 unless the certificate contained in the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise shall have been duly completed and executed by the registered holder thereof and the Company and the Rights Agent shall have been provided with such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Plan. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. At the expense of the Company, the Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request and expense of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. The Company covenants and agrees that, from and after the Distribution Date, it will cause to be reserved and kept available out of its authorized and unissued Preferred Stock (and, following the occurrence of a Trigger Event, out of its authorized and unissued Common Stock or other securities or out of its shares held in its treasury) the number of shares of Preferred Stock (and, following the occurrence of a Trigger Event, Common Stock and/or other securities) that will be sufficient to permit the exercise in full of all outstanding Rights.
So long as the Preferred Stock (and, following the occurrence of a Trigger Event, Common Stock and/or other securities) issuable upon the exercise of Rights may be listed on any national securities exchange or traded in the over-the-counter market, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on such exchange or market upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Stock (and, following the occurrence of a Trigger Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.
From and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of Preferred Stock upon the exercise of Rights, to register and qualify such Preferred Stock under the Securities Act and
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any applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause such registration statement and qualifications to become effective as soon as possible after such filing and keep such registration and qualifications effective until the earlier of the date as of which the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend, for a period of time not to exceed one hundred twenty (120) days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this Plan to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective. The Company shall promptly notify the Rights Agent in writing whenever it makes a public announcement pursuant to this Section 9 and give the Rights Agent a copy of such announcement.
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates for the Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates for Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the registered holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s and the Rights Agent’s satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any certificate for Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Stock (or Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Stock for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of shares of Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
11.1. Post-Execution Events.
11.1.1. Corporate Dividends, Reclassifications, Etc. In the event the Company shall, at any time after the date of this Plan, (A) declare and pay a dividend on the Preferred Stock payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11.1.1, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend,
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subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided for in this Section 11.1.1 shall be in addition to, and shall be made prior to, the adjustment required pursuant to, Section 11.1.2.
11.1.2. Acquiring Person Events; Triggering Events. Subject to Section 27, in the event that a Trigger Event occurs, then, from and after the first occurrence of such event, each holder of a Right, except as provided below, shall thereafter have a right to receive, upon exercise thereof at a price per Right equal to the then current Purchase Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable (without giving effect to this Section 11.1.2), in accordance with the terms of this Plan and in lieu of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable (without giving effect to this Section 11.1.2) and (y) dividing that product by 50% of the current per share market price of the Common Stock (determined pursuant to Section 11.4) on the first of the date of the occurrence of, or the date of the first public announcement of, a Trigger Event (the “Adjustment Shares”); provided that the Purchase Price and the number of Adjustment Shares shall thereafter be subject to further adjustment as appropriate in accordance with Section 11.6. Notwithstanding anything in this Plan to the contrary, upon the occurrence of a Trigger Event, any Rights that are or were acquired or Beneficially Owned by (1) any Acquiring Person or any Associate or Affiliate thereof, (2) a transferee of any Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (3) a transferee of any Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of this Section 11.1.2, and subsequent transferees, shall become void without any further action, and any holder (whether or not such holder is an Acquiring Person or an Associate or Affiliate of an Acquiring Person) of such Rights shall thereafter have no right to exercise such Rights under any provision of this Plan or otherwise. From and after the Trigger Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6 that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions of this paragraph shall be canceled.
The Company shall use all reasonable efforts to ensure that the provisions of this Section 11.1.2 are complied with, but neither the Company nor the Rights Agent shall have any liability to any holder of Right Certificates or any other Person as a result of the Company’s failure to make any determinations with respect to any Acquiring Person or its Affiliates, Associates or transferees hereunder.
11.1.3. Insufficient Shares. The Company may at its option substitute for Common Stock issuable upon the exercise of Rights in accordance with the foregoing Section 11.1.2 a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock. In the event that upon the occurrence of a Trigger Event there shall not be sufficient Common Stock authorized but unissued, or held by the Company as treasury shares, to permit the exercise in full of the Rights in accordance with the foregoing Section 11.1.2, the Company shall take all such action as may be necessary to authorize additional Common Stock for issuance upon exercise of the Rights, provided, however, that if the Company determines that it is unable to cause the authorization of a sufficient number of additional shares of Common Stock, then, in the event the Rights become exercisable, the Company, with respect to each Right and to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”), over (2) the Purchase Price (such excess, the “Spread”) and (B) with respect to each Right (other than Rights which have become void pursuant to Section 11.1.2), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Preferred Stock, (4) other equity securities of the Company (including, without limitation, shares, or fractions of shares, of preferred stock which, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the Common Stock, the Board has deemed in good faith to have substantially the same value as the Common Stock) (each such share of preferred stock or fractions of shares of preferred stock constituting a “common stock equivalent”), (5) debt securities of the Company, (6) other assets or (7) any combination of the foregoing having an aggregate value
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equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected in good faith by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the occurrence of a Trigger Event, then the Company shall be obligated to deliver, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Common Stock (to the extent available) and then, if necessary, such number or fractions of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is unlikely that sufficient additional Common Stock would be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended and re-extended to the extent necessary, but not more than ninety (90) days following the occurrence of a Trigger Event, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period as may be extended, the “Substitution Period”). To the extent that the Company determines that some actions need be taken pursuant to the second and/or third sentences of this Section 11.1.3, the Company (x) shall provide that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11.1.3, the value of a share of Common Stock shall be the current per share market price (as determined pursuant to Section 11.4) on the date of the occurrence of a Trigger Event and the value of any “common stock equivalent” shall be deemed to have the same value as the Common Stock on such date. The Board may, but shall not be required to, establish procedures to allocate the right to receive Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11.1.3. The Company shall promptly notify the Rights Agent in writing whenever it makes a public announcement pursuant to this Section 11.1.3 and give the Rights Agent a copy of such announcement.
11.2. Dilutive Rights Offering. In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring within forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or securities having the same rights, privileges and preferences as the Preferred Stock (“equivalent preferred stock”)) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion or exercise price per share, if a security convertible into or exercisable for Preferred Stock or equivalent preferred stock) less than the current per share market price of the Preferred Stock (as determined pursuant to Section 11.4) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and shares of equivalent preferred stock outstanding on such record date plus the number of shares of Preferred Stock and shares of equivalent preferred stock which the aggregate offering price of the total number of shares of Preferred Stock and/or shares of equivalent preferred stock to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current per share market price and the denominator of which shall be the number of shares of Preferred Stock and shares of equivalent preferred stock outstanding on such record date plus the number of additional Preferred Stock and/or shares of equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Preferred Stock and shares of equivalent preferred stock owned by or held for the account of the Company or any Subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
11.3. Distributions. In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or
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surviving corporation) of evidences of indebtedness, cash, securities or assets (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment of such dividend, or a dividend payable in Preferred Stock (which dividend, for purposes of this Plan, shall be subject to the provisions of Section 11.1.1(A))) or convertible securities, or subscription rights or warrants (excluding those referred to in Section 11.2), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current per share market price of the Preferred Stock (as determined pursuant to Section 11.4) on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets, securities or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such current per share market price of the Preferred Stock (as determined pursuant to Section 11.4); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
11.4. Current Per Share Market Value.
11.4.1. General. For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11.4.1) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during any period following the announcement by the issuer of such Security of (i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares or (ii) any subdivision, combination or reclassification of such Security, and prior to the expiration of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the “current per share market price” shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported thereby or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board. If on any such date no such market maker is making a market in the Security, the fair value of the Security on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. If the Security is not publicly held or not so listed or traded, or if on any such date the Security is not so quoted and no such market maker is making a market in the Security, “current per share market price” shall mean the fair value per share as determined in good faith by the Board or, if the Board shall determine, in its sole discretion, by a nationally recognized investment banking firm selected by the Board, which shall have the duty to make such determination in a reasonable and objective manner, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes of this Plan.
11.4.2. Preferred Stock. Notwithstanding Section 11.4.1, for the purpose of any computation hereunder, the “current per share market price” of the Preferred Stock shall be determined in the same manner as set forth above in Section 11.4.1 (other than the last sentence thereof). If the current per share market price of the Preferred Stock cannot be determined in the manner described in Section 11.4.1, the “current per share market price” of the Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Plan) multiplied by the current per share market price of the Common Stock (as determined pursuant to Section 11.4.1). If neither the Common Stock nor the Preferred Stock are publicly held or so
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listed or traded, or if on any such date neither the Common Stock nor the Preferred Stock are so quoted and no such market maker is making a market in either the Common Stock or the Preferred Stock, “current per share market price” of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, or, if the Board shall determine, in its sole discretion, by a nationally recognized investment banking firm selected by the Board, which shall have the duty to make such determination in a reasonable and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes of this Plan. For purposes of this Plan, the “current per share market price” of one one-thousandth of a share of Preferred Stock shall be equal to the “current per share market price” of one share of Preferred Stock divided by 1,000.
11.5. Insignificant Changes. No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price. Any adjustments which by reason of this Section 11.5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-thousandth of a share of Preferred Stock or the nearest one-thousandth of a share of Common Stock or other share or security, as the case may be.
11.6. Shares Other Than Preferred Stock. If as a result of an adjustment made pursuant to Section 11.1, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10 and 14 with respect to the Preferred Stock shall apply on like terms to any such other shares.
11.7. Rights Issued Prior to Adjustment. All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
11.8. Effect of Adjustments. Unless the Company shall have exercised its election as provided in Section 11.9, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11.2 and 11.3, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a share of Preferred Stock (calculated to the nearest one one-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the number of one one-thousandths of a share of Preferred Stock covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.
11.9. Adjustment in Number of Rights. The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11.9, the Company may, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after
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such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.
11.10. Right Certificates Unchanged. Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per share and the number of one one-thousandths of a share of Preferred Stock which were expressed in the initial Right Certificates issued hereunder.
11.11. Par Value Limitations. Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth of the then par value, if any, of the Preferred Stock or other shares of capital stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Stock or other such shares at such adjusted Purchase Price.
11.12. Deferred Issuance. In any case in which this proxySection 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuance to the holder of any Right exercised after such record date of that number of shares of Preferred Stock and shares of other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Stock and shares of other capital stock or other securities, assets or cash of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment (and shall provide the Rights Agent prompt written notice of such election); provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.
11.13. Reduction in Purchase Price. Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any of the Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in Preferred Stock or issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
11.14. Company Not to Diminish Benefits of Rights. The Company covenants and agrees that after the earlier of the Stock Acquisition Date or Distribution Date it will not, except as permitted by Section 23, Section 26 or Section 27, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.
11.15. Adjustment of Rights Associated with Common Stock. Notwithstanding anything contained in this Plan to the contrary, in the event that the Company shall at any time after the date hereof and prior to the Distribution Date (i) declare or pay any dividend on the outstanding Common Stock payable in shares of Common Stock, (ii) effect a subdivision or consolidation of the outstanding Common Stock (by reclassification or otherwise than by the payment of dividends payable in shares of Common Stock), or (iii) combine the outstanding Common Stock into a greater or lesser number of shares of Common Stock, then in any such case, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date or in accordance with Section 22 shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. The adjustments provided for in this Section 11.15 shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11, the Company shall (a) promptly prepare a certificate setting forth such adjustment, and a brief, reasonably detailed statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the
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Common Stock or the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not have any duty or liability with respect thereto and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate.
Section 13. [Reserved]
Section 14. Fractional Rights and Fractional Shares.
14.1. Cash in Lieu of Fractional Rights. The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights (except prior to the Distribution Date in accordance with Section 11.15). In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14.1, the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by such system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board. If on any such date no such market maker is making a market in the Rights, the current market value of the Rights on such date shall be the fair value of the Rights as determined in good faith by the Board, or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which shall have the duty to make such determination in a reasonable and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
14.2. Cash in Lieu of Fractional Shares of Preferred Stock. The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise or exchange of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock). Interests in fractions of shares of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as Beneficial Owners of the Preferred Stock represented by such depositary receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current per share market price of one share of Preferred Stock (as determined in accordance with Section 14.1) for the Trading Day immediately prior to the date of such exercise or exchange.
14.3. Cash in Lieu of Fractional Shares of Common Stock. The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock upon the exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock (as determined in accordance with Section 14.1) for the Trading Day immediately prior to the date of such exercise or exchange.
14.4. Waiver of Right to Receive Fractional Rights or Shares. The holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right, except as permitted by this Section 14.
14.5. Reliance by Rights Agent. Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under any section of this Plan, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in
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reasonable detail the facts related to such payments and the prices and formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments . The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of, any payment for fractional Rights or fractional shares under any section of this Plan relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this Plan, except the rights of action given to the Rights Agent under this Plan, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce this Plan, and may institute and maintain any suit, action or proceeding against the Company to enforce this Plan, or otherwise enforce or act in respect of his right to exercise the Rights evidenced by such Right Certificate (or, prior to the Distribution Date, such Common Stock) in the manner provided in such Right Certificate and in this Plan. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Plan by the Company and shall be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations by the Company of its obligations under this Plan.
Section 16. Agreement of Right Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock;
(b) as of and after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose accompanied by a Signature Guarantee and any other reasonable evidence of authority that may be reasonably required by the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer with all required certifications completed; and
(c) the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.
(d) notwithstanding anything in this Plan to the contrary, the Rights Agent shall not have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Plan by reason of any preliminary or permanent injunction or other order, decree, judgment or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 24), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
18.1. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in accordance with a mutually agreed upon fee schedule and, from time to time, on demand of the Rights Agent, its reasonable
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expenses and counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of this Plan and the exercise and performance of its duties hereunder. The Company also covenants and agrees to indemnify the Rights Agent for, and to hold it harmless against, any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject, without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith, or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction), for any action taken, suffered, or omitted to be taken by the Rights Agent in connection with the execution, acceptance, administration, exercise and performance of its duties under this Plan, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, or enforcing its rights hereunder . The provisions under this Section 18 and Section 20 below shall survive the expiration of the Rights and the termination of this Plan and the resignation, replacement or removal of the Rights Agent. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.
18.2. The Rights Agent shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Plan and the exercise and performance of its duties hereunder in reliance upon any Right Certificate or certificate for the Preferred Stock or the Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be duly signed, executed and, where necessary, guaranteed, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith unless and until it has received such notice in writing.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
19.1. Any corporation, limited liability company or other entity into which the Rights Agent or any successor Rights Agent may be merged, converted or with which it may be consolidated, or any corporation, limited liability company or other entity resulting from any merger, conversion or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation or limited liability company succeeding to the corporate trust, stock transfer or other shareholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation, limited liability company or other entity would be eligible for appointment as a successor Rights Agent under the provisions of Section 21. The purchase of all or substantially all of the Rights Agent’s assets employed in the performance of the transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 19. In case at the time such successor Rights Agent shall succeed to the agency created by this Plan, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan.
19.2. In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan.
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Section 20. Duties of Rights Agent. The Rights Agent undertakes only the duties and obligations imposed by this Plan upon the following express terms and conditions (and no implied duties or obligations), by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:
20.1. Legal Counsel. The Rights Agent may consult with legal counsel selected by it (who may be legal counsel for the Company), and the opinion or advice of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall have no liability as to any action taken or omitted by it in the absence of bad faith and in accordance with such opinion or advice.
20.2. Certificates as to Facts or Matters. Whenever in the performance of its duties under this Plan the Rights Agent shall deem it necessary or desirable that any fact or matter (including the identity of any Acquiring Person and the determination of the current market price) be proved or established by the Company prior to taking, suffering or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary or any other authorized officer of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted in the absence of bad faith by it under the provisions of this Plan in reliance upon such certificate. The Rights Agent shall have no duty to act without such certificate as set forth in this Section 20.2.
20.3. Standard of Care. The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction). Notwithstanding anything in this Plan to the contrary, any liability of the Rights Agent under this Plan will be limited to the amount of annual fees (not including reimbursed expenses and charges) paid by the Company to the Rights Agent during the twelve (12) months immediately preceding the event for which recovery from the Rights Agent is being sought . Anything to the contrary notwithstanding, in no event will the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damages of any kind whatsoever (including, without limitation, lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damages, and regardless of the form of action.
20.4. Reliance on Agreement and Right Certificates. The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Plan or in the Right Certificates (except as to its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.
20.5. No Responsibility as to Certain Matters. The Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Plan or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the legality or validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Plan or in any Right Certificate; nor shall it be liable or responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11.1.2) or any adjustment required under the provisions of Sections 3, 11, 23 or 27 or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates subject to the terms and conditions hereof after actual notice of any such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Stock or other securities to be issued pursuant to this Plan or any Right Certificate or as to whether any Preferred Stock or other securities will, when so issued, be validly authorized and issued, fully paid and nonassessable.
20.6. Further Assurance by Company. The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required or requested by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Plan.
20.7. Authorized Company Officers. The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by the Rights Agent to be any one of the Chief Executive Officer, the Chief Financial Officer, the President, the Chief Operating Officer, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary or any other authorized officer of the Company, and to apply to such officers for
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advice or instructions in connection with its duties under this Plan, and such authorization shall provide full authorization and protection to the Rights Agent, and the Rights Agent shall not be liable for any action taken or suffered to be taken by it in the absence of bad faith in accordance with instructions of any such officer or for any delay in acting while waiting for these instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its duties or obligations under this Plan and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified therein (which date shall not be less than three (3) Business Days after the date any such officer actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking of any such action (or the effective date in the case of omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted.
20.8. Freedom to Trade in Company Securities. The Rights Agent and any stockholder, director, Affiliate, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or obtain a pecuniary interest in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Plan. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity.
20.9. Reliance on Attorneys and Agents. The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, omission, default, neglect or misconduct absent gross negligence or bad faith in the selection and continued employment thereof (which gross negligence or bad faith must be determined by a final, non-appealable judgment of a court of competent jurisdiction).
20.10. Incomplete Certificate. If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company; provided, however that Rights Agent shall not be liable for any delays arising from the duties under this Section 20.10.
20.11. Rights Holders List. At any time and from time to time after the Distribution Date, upon the request of the Company, the Rights Agent shall promptly deliver to the Company a list, as of the most recent practicable date (or as of such earlier date as may be specified by the Company), of the holders of record of Rights.
20.12. No Risk of Own Funds. No provision of this Plan shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise any of its rights or powers if it reasonably believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
20.13. No Interest. The Rights Agent shall have no responsibility to the Company, any holders of Rights, any holders of shares of Common Stock or any other Person for interest or earnings on any moneys held by the Rights Agent pursuant to this Plan.
20.14. No Notice. The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including any event or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically notified in writing of such event or condition by the Company, and all notices or other instruments required by this Plan to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as specified in Section 25 hereof, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists.
20.15. Miscellaneous.
20.15.1. In the event the Rights Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Rights Agent hereunder, the Rights Agent, may, in its sole discretion,
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refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Rights Certificate or Book-Entry Shares or any other Person for refraining from taking such action, unless the Rights Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Rights Agent.
20.15.2. The Rights Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any registration statement filed with the Securities and Exchange Commission or this Plan, including without limitation obligations under applicable regulation or law.
20.15.3. The Rights Agent shall act hereunder solely as agent for the Company. The Rights Agent shall not assume any obligations or relationship of agency or trust with any of the owners or holders of the Rights or Common Stock.
20.15.4. The Rights Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing; or (b) any related law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed.
20.15.5. The Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Rights with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Plan upon thirty (30) days’ notice in writing mailed to the Company and (if then known to the Rights Agent) to each transfer agent of the Common Stock and/or Preferred Stock, as applicable, by registered or certified mail. Following the Distribution Date, the Company shall promptly notify the holders of the Right Certificates by first-class mail of any such resignation. In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties under this Plan as of the effective date of such termination, and the Company shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and/or Preferred Stock, as applicable, by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the resigning, removed, or incapacitated Rights Agent shall remit to the Company, or to any successor Rights Agent designated by the Company, all books, records, funds, certificates or other documents or instruments of any kind then in its possession which were acquired by such resigning, removed or incapacitated Rights Agent in connection with its services as Rights Agent hereunder, and shall thereafter be discharged from all duties and obligations hereunder. Following notice of such removal, resignation or incapacity, the Company shall appoint a successor to such Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be organized and doing business under the laws of the United States, in good standing, which is authorized under such laws to exercise stock transfer, corporate trust or shareholder services powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose, but such predecessor Rights Agent shall not be required to make any additional expenditure or assume any additional liability in connection with the foregoing. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and
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each transfer agent of the Common Stock and/or Preferred Stock, as applicable, and, following the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Plan or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Plan. In addition, in connection with the issuance or sale of Common Stock following the Distribution Date and prior to the Expiration Date, the Company shall, with respect to Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded, or upon exercise, conversion or exchange of securities hereinafter issued by the Company, in each case existing prior to the Distribution Date, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Right Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued and (ii) no such Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
23.1. Right to Redeem. The Board may, at its option, at any time prior to a Trigger Event, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend, recapitalization or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”), and the Company may, at its option, pay the Redemption Price in Common Stock (based on the “current per share market price,” determined pursuant to Section 11.4, of the Common Stock at the time of redemption), cash or any other form of consideration deemed appropriate by the Board. The redemption of the Rights by the Board may be made effective at such time, on such basis and subject to such conditions as the Board in its sole discretion may establish.
23.2. Redemption Procedures. Immediately upon the action of the Board ordering the redemption of the Rights (or at such later time as the Board may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. The Company shall promptly give public notice of such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. The Company shall promptly give, or cause the Rights Agent to give, notice of such redemption to the holders of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 27, and other than in connection with the purchase, acquisition or redemption of Common Stock prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company shall propose at any time after the earlier of the Stock Acquisition Date and the Distribution Date (a) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share of the Company for the four quarters ended immediately prior to the payment of such dividends, or a stock dividend on, or a subdivision, combination or reclassification of the Common Stock), or (b) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional Preferred Stock or shares of stock of any class or any other securities, rights or options, or (c) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding Preferred Stock), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any
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sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to a merger or other acquisition agreement of the type excluded from the definition of “Beneficial Ownership” in Section 1.3), or (e) to effect the liquidation, dissolution or winding up of the Company, or (f) to declare or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 25, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Preferred Stock and/or Common Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least ten (10) days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten (10) days prior to the date of the special meeting,taking of such proposed action or the date of participation therein by the holders of the Preferred Stock and/or Common Stock, whichever shall be the earlier.
In case any event set forth in Section 11.1.2 shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 25, a notice of the occurrence of such event, which notice shall describe the event and the consequences of the event to holders of Rights under Section 11.1.2, and (ii) all references in this Section 24 to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Plan to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:
CarParts.com, Inc.
2050 W. 190th Street, Suite 400
Torrance, CA 90504
Attn: Corporate Secretary
Subject to the provisions of Section 21 and Section 24, any notice or demand authorized by this Plan to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, or overnight courier delivery addressed (until another address is filed in writing with the Company) as follows:
Computershare Trust Company, N.A.
150 Royall Street
Canton, MA 02021
Attn: Client Services
Notices or demands authorized by this Plan to be given or made by the Company or the Rights Agent to the holder of any Right Certificate (or, prior to the Distribution Date, to the holder of any certificate representing Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company; provided that prior to the Distribution Date a filing by the Company with the Securities and Exchange Commission shall constitute sufficient notice to the holders of securities of the Company, including the Rights, for purposes of this Plan and no other notice need be given.
Section 26. Supplements and Amendments. For so long as the Rights are then redeemable, the Company, subject to the terms of this Section 26, may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Plan in any respect without the approval of any holders of Rights or Common Stock. From and after the time that the Rights are no longer redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from time to time supplement or amend this Plan without the approval of any holders of Rights (i) to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein or (ii) to make any other changes or provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable, including but not limited to extending the Final Expiration Date; provided, however, that no such supplement or
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amendment shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such supplement or amendment may cause the Rights again to become redeemable or cause this Plan again to become amendable as to an Acquiring Person or an Affiliate or Associate of an Acquiring Person other than in accordance with this sentence; provided further, that the right of the Board to extend the Distribution Date shall not require any amendment or supplement hereunder. Upon the delivery of a certificate from the Chief Executive Officer, Chief Financial Officer, Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary or any other authorized officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement or amendment. Notwithstanding anything in this Plan to the contrary, the Rights Agent shall not be required to execute any supplement or amendment to this Plan that adversely affects the Rights Agent’s own rights, duties, obligations or immunities under this Plan. No supplement or amendment to this Plan shall be effective unless duly executed by the Rights Agent and the Company.
Section 27. Exchange.
27.1. Exchange of Common Stock for Rights. At any time after the occurrence of a Trigger Event, the Board may, at its option, exchange Common Stock for all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11.1.2) by exchanging at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such amount per Right being hereinafter referred to as the “Exchange Consideration”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Acquiring Person shall have become the Beneficial Owner of 50% or more of the Common Stock then outstanding. The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Without limiting the foregoing, prior to effecting an exchange pursuant to this Section 27, the Board may direct the Company to enter into a Trust Agreement in such form and with such terms as the Board shall then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all of the shares of Common Stock issuable pursuant to the exchange (or any portion thereof that have not theretofore been issued in connection with the exchange). From and after the time at which such shares are issued to the Trust, all stockholders then entitled to receive shares pursuant to the exchange shall be entitled to receive such shares (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Any shares of Common Stock issued at the direction of the Board in connection herewith shall be validly issued, fully paid and nonassessable shares of Common Stock, and the Company shall be deemed to have received as consideration for such issuance a benefit having a value that is at least equal to the aggregate par value of the shares so issued.
27.2. Exchange Procedures. Immediately upon the action of the Board ordering the exchange for any Rights pursuant to Section 27.1 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive the Exchange Consideration. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange shall state the method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than the Rights that have become void pursuant to the provisions of Section 11.1.2) held by each holder of Rights.
27.3. Insufficient Shares. The Company may at its option substitute, and, in the event that there shall not be sufficient Common Stock issued but not outstanding or authorized but unissued to permit an exchange of Rights for Common Stock as contemplated in accordance with this Section 27, the Company shall substitute to the extent of such insufficiency, for each share of Common Stock that they updatewould otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof (or equivalent preferred stock, as such term is defined in Section 11.2) such that the current per share market price (determined pursuant to Section 11.4) of one share of Preferred Stock (or equivalent preferred stock) multiplied by such number or fraction is
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equal to the current per share market price of one share of Common Stock (determined pursuant to Section 11.4) as of the date of such exchange. In the case of a substitution described in the immediately preceding sentence, references to “Common Stock” shall be replaced with “Preferred Stock” where applicable throughout Section 27 of this Plan and any other provisions where appropriate to effect and properly reflect this substitution.
Section 28. Process to Seek Exemption. Any Person who desires to effect any acquisition of Common Stock that would, if consummated, result in such Person (together with its Affiliates and Associates) Beneficially Owning 4.99% or more of the then outstanding Common Stock (or, in the case of an Existing Holder, one or more additional shares of Common Stock) (a “Requesting Person”) may, prior to the Stock Acquisition Date and in accordance with this Section 28, request that the Board grant an exemption with respect to such acquisition under this Plan so that such Person would be deemed to be an “Exempt Person” under subsection (ii) of Section 1.7 hereof for purposes of this Plan (an “Exemption Request”). An Exemption Request shall be in proper form and shall be delivered by registered mail, return receipt requested, to the Secretary of the Company at the principal executive office of the Company. To be in proper form, an Exemption Request shall set forth (i) the name and address of the Requesting Person, (ii) the number and percentage of shares of Common Stock then Beneficially Owned by the Requesting Person, together with all Affiliates and Associates of the Requesting Person, and (iii) a reasonably detailed description of the transaction or transactions by which the Requesting Person would propose to acquire Beneficial Ownership of Common Stock aggregating 4.99% or more of the then outstanding Common Stock (or, in the case of an Existing Holder, one or more additional shares of Common Stock) and the maximum number and percentage of shares of Common Stock that the Requesting Person proposes to acquire. The Board shall make a determination whether to grant an exemption in response to an Exemption Request as promptly as practicable (and, in any event, within ten (10) Business Days) after receipt thereof but first may request further information included hereinfrom such Requesting Person (e.g., information with respect to such Person or incorporatedits proposed acquisition of Common Stock) in which case such determination shall be made as promptly as practicable (and, in any event, within ten (10) Business Days) after receipt of the written response to such request; provided, that the failure of the Board to make a determination within such period shall be deemed to constitute the denial by reference above,the Board of the Exemption Request. The Board shall only grant an exemption in response to an Exemption Request if the Board determines in its sole discretion that the acquisition of Beneficial Ownership of Common Stock by the Requesting Person will not jeopardize or endanger the value or availability to the Company of the Tax Attributes or is otherwise in the best interests of the Company. Any exemption granted hereunder may be granted in whole or in part, and may be subject to limitations or conditions (including a requirement that the Requesting Person agree that it will not acquire Beneficial Ownership of shares of Common Stock in excess of the maximum number and percentage of shares approved by the Board), in each case as and to the extent the Board shall determine necessary or desirable to provide for the protection of the Company’s Tax Attributes. Any Exemption Request may be submitted on a confidential basis and, except to the extent required by applicable law, the Company shall maintain the confidentiality of such Exemption Request and the Board’s determination with respect thereto.
Section 29. Successors. All the covenants and provisions of this Plan by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Plan. Nothing in this Plan shall be construed to give to any Person or corporation other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right, remedy or claim under this Plan; but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 31. Determination and Actions by the Board. Without limiting any of the rights and immunities of the Rights Agent, the Board shall have the exclusive power and authority to administer this Plan and to exercise the rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable, as determined by the Board, in the administration of this Plan, including, without limitation, the right and power to (i) interpret the provisions of this Plan and (ii) make all determinations and calculations deemed necessary or advisable, as determined by the Board, for the administration of this Plan (including, without limitation, a determination to redeem or not redeem the Rights or amend this Plan). All such actions, calculations, interpretations and determinations that are done or made by the Board in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties. The Rights Agent is entitled always to assume the Company’s Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon.
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Section 32. Severability. If any term, provision, covenant or restriction of this Plan is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately upon written notice to the Company.
Section 33. Governing Law. This Plan and each Right Certificate issued hereunder shall be deemed to be incorporateda contract made under the internal laws of the State of Delaware and for all purposes shall be governed by reference herein and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
Section 34. Counterparts. This Plan may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Plan transmitted electronically shall have the same authority, effect and enforceability as an original signature.
Section 35. Descriptive Headings. Descriptive headings of the several Sections of this Plan are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
Section 36. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent will not have any liability for not performing, or a part hereofdelay in the performance of, any act, duty, obligation or responsibility by reason of any occurrence beyond the reasonable control of the Rights Agent (including any act or provision or any present or future law or regulation or governmental authority, any act of God, epidemics, pandemics, war, civil or military disobedience or disorder, riot, rebellion, terrorism, insurrection, fire, earthquake, storm, flood, strike, work stoppage, interruptions or malfunctions of computer facilities, loss of data due to power failures or mechanical difficulties, labor dispute, accident or failure or malfunction of any utilities communication or computer services or similar occurrence).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Plan to be duly executed, as of the day and year first above written.
​​
CARPARTS.COM, INC.
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​​
​​
​​
​​
By
​​
/s/ David Meniane
​​
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Name: David Meniane
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Title: Chief Executive Officer
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COMPUTERSHARE TRUST COMPANY, N.A.
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By
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/s/ Patrick Hayes
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Name: Patrick Hayes
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Title: Manager, Client Management
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EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
CARPARTS.COM, INC.
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
CarParts.com, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) in accordance with the provisions of the Certificate of Incorporation of the Corporation, as heretofore amended (the “Certificate of Incorporation”), the Board of Directors on April 4, 2024 adopted the following resolution creating a series of 100,000 shares of Preferred Stock designated as “Series B Junior Participating Preferred Stock”:
RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock, par value $0.001 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
Series B Junior Participating Preferred Stock
1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as “Series B Junior Participating Preferred Stock,” and the number of shares constituting such series shall be 100,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series B Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of Series B Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series B Junior Participating Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series B Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the 15th day of March, June, September and December, in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 and (b) the sum of (1) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, plus (2) the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock, par value $0.001 per share, of the Corporation (the “Common Stock”), or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), in each case declared on the Common Stock since the immediately preceding
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Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 1,000. In the event the Corporation shall at any time after April 5, 2024 (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date; in which case dividends on such shares shall begin to accrue from the date of filingissue of such documents. Any statement containedshares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a document incorporatedshare-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B Junior Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except as required by law, by Section 3(C) and by Section 10 hereof, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
(C) If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series B Junior Participating Preferred Stock are in default, the number of directors constituting the Board of Directors shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series B Junior Participating Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Series B Junior Participating Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series B Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series B Junior Participating Preferred Stock as is specified in paragraph (A) of this Section 3. To the extent the Board of Directors is divided into classes, with the directors in the classes serving staggered terms, at the time of the election of directors elected by the holders of the Series B Junior Participating Preferred Stock pursuant hereto, each such additional director shall not be a member of any such class, but shall serve until the next annual meeting of stockholders for the election of directors, or until his successor shall be elected and shall qualify, or until his right to hold such office terminates pursuant to the provisions of this Section 3(C). Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series B Junior Participating Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for
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the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series B Junior Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the Series B Junior Participating Preferred Stock in this Section 3.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of stock options, warrants or similar rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted stock, restricted stock units or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price of such options, warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient of such award in respect of such grant, exercise, vesting or lapse of restrictions; (B) the repurchase, redemption, or other acquisition or retirement for value of any such shares from employees, former employees, directors, former directors, consultants or former consultants of the Corporation or their respective estate, spouse, former spouse or family member, pursuant to the terms of the agreements pursuant to which such shares were acquired;
(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, except dividends paid ratably on the Series B Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or
(iii) purchase or otherwise acquire for consideration any shares of Series B Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series B Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series B Junior Participating Preferred Stock, or to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be incorporatedretired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by reference hereinresolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of
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Series B Junior Participating Preferred Stock shall have received an amount per share (the “Series B Liquidation Preference”) equal to the greater of (i) $10.00 plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, and (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation.
(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series B Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series B Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall be deemed to be modifieda liquidation, dissolution or superseded for purposeswinding up of the Corporation within the meaning of this proxy statementSection 6.
7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the extent that a statement contained herein Adjustment Number times the aggregate amount of stock, securities, cash and/or in any other subsequently filed document that alsoproperty (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or supersededexchanged.
8. No Redemption. Shares of Series B Junior Participating Preferred Stock shall not be deemed, exceptsubject to redemption by the Corporation.
9. Ranking. The Series B Junior Participating Preferred Stock shall rank junior to all other series of Preferred Stock as so modifiedto the payment of dividends and as to the distribution of assets upon liquidation, dissolution or superseded, to constitute a part of this proxy statement.

We will provide you, without charge, a copywinding up, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters.

10. Amendment. At any time that any shares of Series B Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation of the information incorporatedCorporation shall not be amended, by referencemerger, consolidation or otherwise, which would materially alter or change the powers, preferences or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series B Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series B Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Junior Participating Preferred Stock.
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IN WITNESS WHEREOF, the undersigned has executed this proxy statement (excluding exhibits) by first class mail or other equally prompt means within one businessCertificate this 4th day of receiving a written request directed to us at: U.S. Auto Parts Network, Inc., Attn: Secretary, 16941 Keegan Avenue, Carson, CA 90746 or by calling us at (424)702-1445 ext 8258.

April, 2024.
​​
CARPARTS.COM, INC.
By Order of the Board of Directors
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By:
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/s/ David Meniane
/s/ Shane Evangelist
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Name: David Meniane
Shane Evangelist
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Title: Chief Executive Officer
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38

EXHIBIT B
Form of Right Certificate
Certificate No. R-
​​
Electronic Voting Instructions
LOGO

You can vote by Internet or telephone!

Available 24 hours a day, 7 days a week!

Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.

VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.

Proxies submitted by the Internet or telephone must be received by12:00 a.m., Central Time, on.

LOGOVote by Internet

•   

Log on to the Internet and go towww.envisionreports.com/PRTS

•   

Follow the steps outlined on the secured website.

LOGO

Vote by telephone

•   

Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There isNO CHARGE to you for the call.

Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas.x

•   

Follow the instructions provided by the recorded message.

Rights

LOGO

q

NOT EXERCISABLE AFTER , 2027 OR EARLIER IF YOU HAVE NOT VOTED VIAUPON AN EXPIRATION DATE, INCLUDING IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE INTERNETOR TELEPHONE, FOLD ALONGRIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTIONTERMS SET FORTH IN THE ENCLOSED ENVELOPE.  q

  A  Proposals — The Board of Directors recommends a voteFOR the following nominee andFOR Proposals 2 and 3.

1.Election of the following Class I Director:

+

For

Withhold

01 – Shane Evangelist¨¨
ForAgainstAbstain
2.Ratification of Deloitte & Touche LLP as the independent auditor of U.S. Auto Parts Network, Inc. for the fiscal year ending December 28, 2013.¨¨¨
ForAgainstAbstain
3.Approval of stock option exchange program.¨¨¨

  B  Non-Voting Items

Change of Address — Please print new address below.Meeting Attendance
Mark box to the right if you plan to attend the Annual Meeting.¨

  C  Authorized Signatures — This section must be completed for your vote to be counted. —  Date and Sign Below

NOTE: PLAN. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE PLAN), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE PLAN), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

Right Certificate
CARPARTS.COM, INC.
This proxy must be signed exactly as your name appears hereon. Executors, administrators, trustees, etc.certifies that , should give full title as such. Ifor registered assigns, is the stockholder is a corporation, a duly authorized officer should sign on behalfregistered owner of the corporationnumber of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and should indicate his or her title.

Date (mm/dd/yyyy) — Please print date below.   Signature 1 — Please keep signature within the box.   Signature 2 — Please keep signature within the box.
/        /

q  IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

Proxy — U.S. AUTO PARTS NETWORK, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of U.S. AUTO PARTS NETWORK, INC. (the “Company”) hereby appoints BRYAN P. STEVENSON, proxyconditions of the undersigned, with full powerTax Benefits Preservation Plan, dated as of April 5, 2024, as the same may be amended from time to acttime (the “Plan”), between CarParts.com, Inc., a Delaware corporation (the “Company”), and with power of substitution,Computershare Trust Company, N.A., a federally chartered trust company, as Rights Agent (the “Rights Agent”), to represent the undersigned at the Annual Meeting of Stockholders ofpurchase from the Company at any time after the Distribution Date and prior to be held5:00 P.M. (New York time) on,at 1:00 p.m. Pacific Time April 5, 2027 at the offices of the Rights Agent, or its successors as Rights Agent, designated for such purpose, one one-thousandth of a fully paid, nonassessable share of Series B Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of the Company, 16941 Keegan Ave.at a purchase price of $11.13 per one one-thousandth of a share of Preferred Stock, subject to adjustment (the “Purchase Price”), Carson, CA 90746upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and certification duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a share of Preferred Stock which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of , 2024 based on the Preferred Stock as constituted at such date. Capitalized terms used in this Right Certificate without definition shall have the meanings ascribed to them in the Plan. As provided in the Plan, the Purchase Price and the number of shares of Preferred Stock which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

This Right Certificate is subject to all of the terms, provisions and conditions of the Plan, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Plan are on file at the principal offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon surrender at the offices of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one one-thousandths of a share of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Plan, the Board may, at its option, (i) redeem the Rights evidenced by this Right Certificate at a redemption price of $0.001 per Right or (ii) exchange Common Stock for the Rights evidenced by this Certificate, in whole or in part.
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No fractional Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depository receipts), but in lieu thereof a cash payment will be made, as provided in the Plan.
No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the Company which may at any adjournmenttime be issuable on the exercise hereof, nor shall anything contained in the Plan or postponement thereof, andherein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote all sharesfor the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Plan), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Plan.
If any term, provision, covenant or restriction of the Company’s common stockPlan is held by a court of recordcompetent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of the Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding for any purpose until it shall have been countersigned by the undersigned onRights Agent.
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WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of , 2024.
Attest:
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CARPARTS.COM, INC.
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Countersigned:
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COMPUTERSHARE TRUST COMPANY, N.A.
as Rights Agent
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By:
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Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR     VALUE
RECEIVED
​​
hereby sells, assigns
and transfers unto
​​
​​
​​
(Please print name and address
of transferee)
Rights evidenced by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the powers the undersigned would possess if personally present, in accordance with the instructionswithin Right Certificate on the reverse hereof.

books of the within-named Company, with full power of substitution.
Dated:
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Signature
Signature Guaranteed:
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Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.
CarParts.com, Inc.  98  2024 Proxy Statement

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS HEREIN, OR IF NO INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS ONE, TWO AND THREE IN ACCORDANCE WITH THE DISCRETIONTABLE OF THE PROXY HOLDER WITH REGARD TO ANY OTHER MATTERS PROPERLY BROUGHT TO A VOTE AT THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.CONTENTS

The undersigned hereby revokescertifies that:
(1) the Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate thereof.
Dated:
​​
​​
​​
​​
Signature
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To CarParts.com, Inc.:
The undersigned hereby irrevocably elects to exercise Rights represented by this Right Certificate to purchase the Preferred Stock issuable upon the exercise of such Rights (or such other securities or property of the Company or of any other proxy to vote atPerson which may be issuable upon the exercise of the Rights) and requests that certificates for such Annual Meetingstock be issued in the name of:
​​
(Please print name and address)
​​
​​
If such number of StockholdersRights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and hereby ratifies and confirms all that said proxies, and eachdelivered to:
Please insert social security
or other identifying number
​​
(Please print name and address)
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​​
Dated:
​​
​​
​​
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Signature
Signature Guaranteed:
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​​
​​
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Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of them, may lawfully do by virtue hereof. 1934, as amended.
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The undersigned also acknowledges receipthereby certifies that:
(1) the Rights evidenced by this Right Certificate are not Beneficially Owned by and are not being assigned to an Acquiring Person or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the Noticeundersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate from any person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate thereof.
Dated:
​​
​​
​​
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Signature
NOTICE
The signature in the foregoing Form of Assignment and Form of Election to Purchase must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or Form of Election to Purchase is not completed, the Company will deem the Beneficial Owner of the Annual Meeting of Stockholders, the proxy statement and the annual report on Form 10-K for the fiscal year ended December 29, 2012, which were furnished withRights evidenced by this proxy.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

(continued andRight Certificate to be signed on the reverse side)an Acquiring Person or an Affiliate or Associate hereof and such Assignment or Election to Purchase will not be honored

CarParts.com, Inc.  101  2024 Proxy Statement

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