Visa 2015 Annual Report Download - page 128

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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
Performance-based Shares
The following table summarizes the maximum number of performance-based shares which could
be earned and related activity for fiscal 2015:
Shares
Weighted-
Average
Grant Date
Fair Value
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (1)
(in millions)
Outstanding at October 1, 2014 ...... 2,075,240 $ 44.32
Granted(2) ........................ 785,884 $ 69.78
Vested and earned ................ (1,221,020) $ 42.68
Unearned ........................ (24,924) $ 42.68
Forfeited ......................... (351,218) $ 54.25
Outstanding at September 30, 2015 . . 1,263,962 $ 57.61 0.7 $88
(1) Calculated by multiplying the closing stock price on the last trading day of fiscal 2015 of $69.66 by
the number of instruments.
(2) Represents the maximum number of performance-based shares which could be earned.
For the Company’s performance-based shares, in addition to service conditions, the ultimate
number of shares to be earned depends on the achievement of both performance and market
conditions. The performance condition is based on the Company’s earnings per share target. The
market condition is based on the Company’s total shareholder return ranked against that of other
companies that are included in the Standard & Poor’s 500 Index. The fair value of the performance-
based shares, incorporating the market condition, is estimated on the grant date using a Monte Carlo
simulation model. The grant-date fair value of performance-based shares granted in fiscal 2015, 2014
and 2013 was $69.78, $56.37 and $41.04 per share, respectively. Earned performance shares granted
in fiscal 2015, 2014 and 2013 vest approximately 3 years from the initial grant date. All performance
awards are subject to earlier vesting in full under certain conditions.
Compensation cost for performance-based shares is initially estimated based on target
performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the
performance period. At September 30, 2015, there was $11 million of total unrecognized compensation
cost related to unvested performance-based shares, which is expected to be recognized over a
weighted-average period of approximately 0.7 years.
Employee Stock Purchase Plan
In January 2015, the Company’s class A stockholders approved the Visa Inc. Employee Stock
Purchase Plan (the “ESPP”), under which substantially all employees are eligible to participate. The
ESPP permits eligible employees to purchase the Company’s class A common stock at a 15%
discount of the stock price on the purchase date, subject to certain restrictions. A total of 20 million
shares of class A common stock have been reserved for issuance under the ESPP. The first offering
date was April 1, 2015. The ESPP does not have a material impact on the consolidated financial
statements.
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