Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity and Share-Based Compensation

v3.5.0.2
Stockholders' Equity and Share-Based Compensation
 6 Months Ended
Jul. 02, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stockholders' Equity and Share-Based Compensation
Stockholders’ Equity and Share-Based Compensation
Non-Controlling Interest
Non-controlling interests represent equity interests in consolidated subsidiaries that are not attributable, either directly or indirectly, to the Company (i.e., minority interests). Non-controlling interests consist of the minority equity holders' proportionate share of the equity of AutoMD. Ownership interests in subsidiaries held by parties other than the Company are presented as non-controlling interests within stockholders' equity, separately from the equity held by the Company. Revenues, expenses, net income (loss) and other comprehensive loss are reported in the consolidated financial statements at the consolidated amounts, which includes amounts allocated to both the Company's interest and the non-controlling interests in AutoMD. Net loss and other comprehensive loss is then attributed to the Company's interest and the non-controlling interests. Net income (loss) to non-controlling interests is deducted from net income (loss) in the consolidated statements of comprehensive operations to determine net income (loss) attributable to the Company's common stockholders.
The following table summarizes the Company’s stock option activity under the AutoMD 2014 Equity Incentive Plan (the "AMD Plan") for the twenty-six weeks ended July 2, 2016, and details regarding the options outstanding and exercisable at July 2, 2016:

 
Shares
(in thousands)
 
Weighted
Average
Exercise Price
 
Weighted Average
Remaining
Contractual
Term (in years)
 
Aggregate
Intrinsic Value
Options outstanding, January 2, 2016
1,430

 
$1.00
 
 
 
 
Granted
10

 
$1.00
 
 
 
 
Exercised
—

 
—

 
 
 
 
Expired
—

 
—

 
 
 
 
Forfeited
(35
)
 
$1.00
 
 
 
 
Options outstanding, July 2, 2016
1,405

 
$1.00
 
8.70
 
$
—

Vested and expected to vest at July 2, 2016
1,047

 
$1.00
 
8.69
 
$
—

Options exercisable, July 2, 2016
429

 
$1.00
 
8.56
 
$
—

At July 2, 2016, 545 shares were available for future grants under the AMD Plan.
The weighted-average fair value of options granted and outstanding as of July 2, 2016 and July 4, 2015 was $0.55 and $0.54, respectively. The intrinsic value of stock options at the date of exercise is the difference between the fair value of the stock at the date of the balance sheet and the exercise price. During the twenty-six weeks ended July 2, 2016 and July 4, 2015, the options had $0 intrinsic value. The Company had $325 of unrecognized share-based compensation expense related to stock options outstanding as of July 2, 2016, which expense is expected to be recognized over a weighted-average period of 2.69 years.
Options exercised under all share-based compensation plans are granted net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. For those employees who elect not to receive shares net of the minimum statutory withholding requirements, the appropriate taxes are paid directly by the employee. During the thirteen and twenty-six weeks ended July 2, 2016, we withheld 0 shares to satisfy $0 of employees' tax obligations and 0 shares related to the net settlement of the stock options.
U.S. Auto Parts Network Options and Restricted Stock Units
The Company had the following common stock option activity during the twenty-six weeks ended July 2, 2016:
•Granted options to purchase 925 common shares.
•Forfeitures of 17 options to purchase common shares.
•Expiration of 26 options to purchase common shares.

The following table summarizes the Company’s restricted stock unit ("RSU") activity for the twenty-six weeks ended July 2, 2016, and details regarding the awards outstanding and exercisable at July 2, 2016 (in thousands):
 
Shares
 
Weighted
Average
Exercise Price
 
Weighted Average
Remaining
Contractual
Term (in years)
 
Aggregate
Intrinsic Value
Awards outstanding, January 2, 2016
804

 
$
—

 
 
 
 
Awarded
954

 
$
—

 
 
 
 
Vested
(774
)
 
$
—

 
 
 
 
Forfeited
(3
)
 
$
—

 
 
 
 
Awards outstanding, July 2, 2016
981

 
$
—

 
1.00
 
$
3,904

Vested and expected to vest at July 2, 2016
878

 
$
—

 
0.96
 
$
3,493

During the twenty-six weeks ended July 2, 2016, all RSU's that vested were time-based. For the majority of RSUs awarded, the number of shares issued on the date the RSUs vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. For those employees who elect not to receive shares net of the minimum statutory withholding requirements, the appropriate taxes are paid directly by the employee. During the twenty-six weeks ended July 2, 2016, we withheld 131 shares to satisfy $371 of employees' tax obligations. Although shares withheld are not issued, they are treated as a common stock repurchase in our consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting.

For the thirteen and twenty-six weeks ended July 2, 2016, we recorded compensation expense of $889 and $1,717, respectively. As of July 2, 2016, there was unrecognized compensation expense of $1,355 related to unvested RSUs based on awards that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1 year.