Vistaprint 2013 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2013 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

73
Share options
We grant options to purchase ordinary shares at prices that are at least equal to the fair market value of the
shares on the date the option is granted and have a contractual term of approximately eight to ten years. Options
generally vest quarterly over 3 years for non-employee directors and 25% after one year and quarterly for 12
quarters thereafter for employees. During the year ended June 30, 2013 and 2012, we granted options to purchase
an aggregate of 416,190 and 1,567,330, ordinary shares, respectively, to certain executives which will vest over
approximately 7 years. As of June 30, 2013, options to purchase 1,224,462 of those shares are subject to market
conditions and will result in $15,191 of future compensation expense, excluding forfeitures, to be recognized on an
accelerated basis through fiscal 2019.
The fair value of each option award subject only to service period vesting is estimated on the date of grant
using the Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the
requisite service period, net of estimated forfeitures based on historical experience. Use of a valuation model
requires management to make certain assumptions with respect to inputs. The expected volatility assumption is
based upon historical volatility of our share price. The expected term assumption is based on the contractual and
vesting term of the option and historical experience. The risk-free interest rate is based on the U.S. Treasury yield
curve with a maturity equal to the expected life assumed at the grant date. We value share options with a market
condition using a lattice model with compensation expense recorded on an accelerated basis over the requisite
service period.
Weighted-average values used for option grants in fiscal 2013, 2012 and 2011 were as follows:
Year Ended June 30,
2013 2012 2011
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.81% 1.04% 1.79%
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —% —% —%
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0 6.0 5.0
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58% 58% 57%
Weighted average fair value of options granted . . . . . . . . . . . . . . . . . $ 17.23 $ 17.78 $ 24.47
A summary of our share option activity and related information for the year ended June 30, 2013 is as
follows:
Shares Pursuant
to Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic
Value
Outstanding at the beginning of the period. . . . . . . . . 4,275,039 $ 34.02 5.8
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449,248 48.88
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (280,970) 17.10
Forfeited/cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,110) 45.62
Outstanding at the end of the period . . . . . . . . . . . . . 4,379,207 $ 36.46 5.1 $ 58,489
Vested or expected to vest at the end of the period. . 4,154,412 $ 35.73 5.1 $ 58,458
Exercisable at the end of the period. . . . . . . . . . . . . . 2,368,807 $ 25.16 3.6 $ 57,824
The intrinsic value in the table above represents the total pre-tax amount, net of exercise price, which would
have been received if all option holders exercised in-the-money options on June 30, 2013. The total intrinsic value
of options exercised during the fiscal years ended June 30, 2013, 2012 and 2011 was $6,648, $1,900, and $8,319,
respectively.
Restricted share units
The fair value of RSU grants is equal to the fair market value of our ordinary shares on the date of grant
and is recognized as expense on a straight-line basis over the requisite service period, net of estimated forfeitures
based on historical experience. RSUs generally vest quarterly for three years for non-employee directors and 25%
after one year and quarterly for 12 quarters thereafter for employees. For awards with a performance condition, we
Form 10-K