Shutterfly 2015 Annual Report Download - page 103

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(2) Includes performance-based restricted stock units (PBRSUs) issued under the 2006 Equity Incentive Plan to
specific employees which are tied to the Company’s 2015 financial performance and which have four year
service criteria. Compensation cost associated with these PBRSUs is recognized on an accelerated
attribution model and ultimately based on whether or not satisfaction of the performance criteria is
probable. As of December 31, 2015, the performance criteria for the fiscal year was met and the associated
stock-based compensation has been recognized.
(3) Also includes the PBRSUs issued to the Chief Executive Officer which are tied to multi-year performance
metrics and the Company’s stock performance relative to market measures. These PBRSUs also have a
three year service criteria. The Company valued the market criteria using a Monte Carlo valuation model
and took into consideration the likelihood of the market criteria being achieved. Compensation cost
associated with these PBRSUs is recognized on an accelerated attribution model and ultimately based on
whether or not satisfaction of the performance and market criteria is probable. As of December 31, 2015, the
performance criteria and market criteria appeared to be attainable and the Company recognized the
associated stock-based compensation. During the fourth quarter of 2015, the Chief Executive Officer
announced his separation from the Company effective February 19, 2016. As a result, the Company
determined that certain tranches will no longer vest and were included in award forfeitures in 2015.
(4) Inducement awards are issued to newly hired officers and to certain new employees from acquired
companies. During 2015, inducement awards included time-based and performance based awards issued to
two newly hired officers and vest over four years.
During the years ended December 31, 2015 and 2014, the fair value of awards vested were $64.5 million and
$56.8 million, respectively.
At December 31, 2015, the Company had $97.3 million of total unrecognized stock-based compensation
expense, net of estimated forfeitures, related to stock options and RSUs that will be recognized over a weighted-
average period of approximately three years.
Note 9 — Income Taxes
Income/(loss) before income taxes is as follows (in thousands):
Year Ended December 31,
2015 2014 2013
United States ............................................. $ (2,303) $ (10,317) $ 12,570
Foreign .................................................. 314 338 350
Total .................................................... $ (1,989) $ (9,979) $ 12,920
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