CarParts.com, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity and Share-Based Compensation (Tables)

Stockholders' Equity and Share-Based Compensation (Tables)

12 Months Ended

Dec. 28, 2013

The following table summarizes the Company’s stock option activity for the fifty-two weeks ended December 28, 2013, and details regarding the options outstanding and exercisable at December 28, 2013:


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value ⁽¹⁾
Options outstanding, December 29, 2012		7,428		$	5.13		6.23
Granted ⁽²⁾		1,908		$	1.51
Exercised		(101	)	$	1.83
Cancelled:
Forfeited		(137	)	$	4.20
Expired		(303	)	$	4.38
Stock option exchange ⁽²⁾		(3,475	)	$	6.65

Options outstanding, December 28, 2013		5,320		$	2.97		6.77	$	2,921
Vested and expected to vest at December 28, 2013		4,514		$	3.20		6.25	$	2,184
Options exercisable, December 28, 2013		3,171		$	3.74		4.88	$	1,012

⁽¹⁾	These amounts represent the difference between the exercise price and the closing price of U.S. Auto Parts Network, Inc. common stock on December 28, 2013 as reported on the NASDAQ National Market, for all options outstanding that have an exercise price currently below the closing price.

⁽²⁾	Refer to discussion below under the heading “Stock Option Exchange Program” for details. For stock options granted during the period, 993 shares were issued from the stock option exchange program.

Summary of Assumptions Used for Fair Value of Options

The fair value of each option grant, excluding those options issued from the stock option exchange program as discussed above, was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for each of the periods ended:


	Fifty-Two Weeks Ended
	December 28, 2013	December 29, 2012	December 31, 2011
Expected life	5.21 – 5.73 years	5.73 years	6 – 6.25 years
Risk-free interest rate	1% – 2%	1%	1% – 3%
Expected volatility	67% – 73%	71% – 74%	50% – 52%
Expected dividend yield	0%	0%	0%

Summary of Share-based Compensation from Options, Warrants and Stock Awards

Share-based compensation from options, warrants and stock awards, is included in our consolidated statements of comprehensive operations, as follows:


	Fifty-Two Weeks Ended
	December 28, 2013		December 29, 2012			December 31, 2011
Marketing expense	$	285	$	505		$	413
General and administrative expense		805		1,119			1,580
Fulfillment expense ⁽¹⁾		102		(38	)		370
Technology expense		71		87			244

Total share-based compensation expense	$	1,263	$	1,673		$	2,607

⁽¹⁾	For the fifty-two weeks ended December 29, 2012, the negative balance was due to an adjustment of $279 related to performance stock options where the performance goal was not met or it was not probable to be met at the end of the requisite service period.

Surrendered Stock Options and New Stock Options [Member]

Summary of Assumptions Used for Fair Value of Options

The fair value of the surrendered stock options and the new stock options was estimated on the date of the exchange using the Black-Scholes option pricing model with the following assumptions:


	Surrendered Stock Options	New Stock Options
Expected life	1.93 – 6.87 years	5.84 years
Risk-free interest rate	0.5% – 2.4%	2.0%
Expected volatility	55% – 73%	72%
Expected dividend yield	0%	0%