Vistaprint 2014 Annual Report Download - page 133

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In general, we grant equity awards to our executive officers annually at the regularly scheduled meeting of the
Compensation Committee held in the fourth quarter of each fiscal year. Accordingly, grants made in fiscal 2014 were
approved at the May 2014 Compensation Committee meeting. We typically grant equity awards to employees who
are not executive officers during our first fiscal quarter after the conclusion of our annual performance review cycle.
Long-Term Cash Incentive Compensation
The Compensation Committee did not grant any new long-term cash incentive awards to our executive officers in
fiscal 2014, in keeping with the 2012 redesign of our long-term incentive program to emphasize premium-priced share
options. In the past, the Compensation Committee has granted long-term cash incentive awards to reflect our pay-
for-performance culture and philosophy, enhance our ability to manage the number of shares available under our
equity compensation plans, and balance the focus on share price appreciation created through equity awards with
cash awards based on the achievement of financial metrics that drive long-term company and shareholder value
creation. Long-term cash incentive awards granted during previous fiscal years were payable for fiscal 2014 based
on fiscal 2014 performance goals.
Each long-term cash incentive award granted in previous fiscal years has a performance cycle of four fiscal years,
and each executive officer is eligible to receive 25% of his or her total award for each fiscal year in the performance
cycle. At the beginning of each four-year performance cycle, the Compensation Committee developed performance
goals for each fiscal year within that specific cycle. Our named executive officers' outstanding long-term cash incentive
awards were granted in fiscal years 2011 and 2012 with performance goals based on Vistaprint’s achievement of EPS
targets for each of the four fiscal years that followed, expressed as:
• a lowest (minimum) EPS dollar value for each fiscal year corresponding to a percentage payout of 50% of
each executive’s target for that year,
• a medium EPS dollar value for each fiscal year corresponding to a percentage payout of 100% of each
executive’s target for that year, and
• a highest (stretch goal) EPS dollar value corresponding to a percentage payout between 130% and 250%
(depending on the year) of each executive’s target for that year.
“Earnings per share” is defined as EPS on a diluted basis for the results of Vistaprint’s operations on a consolidated
basis for the fiscal year, calculated in accordance with U.S. GAAP with some exclusions for income or expenses relating
to certain specific events that the Committee believes do not accurately reflect management-driven performance. We
measure performance on an annual basis and make payments for each fiscal year in the performance cycle based
on the level of goal achievement for that fiscal year.
If Vistaprint’s adjusted EPS is less than the lowest (minimum) goal for a fiscal year, then our executive officers receive
no payout for that performance period. If Vistaprint’s adjusted EPS is equal to or higher than the highest (stretch) EPS
goal, then our executives receive the percentage payout for achievement of the highest EPS goal. If Vistaprint’s adjusted
EPS is greater than or equal to the lowest EPS goal but less than the EPS highest goal for a performance period, then
the percentage payout for that performance period is equal to:
• the payout threshold percentage for the highest EPS target achieved with respect to the applicable
performance period, plus
• a number calculated as follows: (A) a percentage equal to a fraction, the numerator of which equals the
amount by which adjusted EPS exceeded such applicable EPS goal and the denominator of which equals
the difference between the next highest EPS goal that was not achieved and the highest EPS goal
achieved, multiplied by (B) the difference between the payout threshold percentage for the next highest
EPS goal that was not achieved and the payout threshold percentage for the highest EPS goal achieved.
Long-Term Cash Incentives Relating to Fiscal 2014 Performance
Each of our named executive officers had two outstanding long-term cash incentive awards described below:
2011-2014 Awards Granted in Fiscal 2011. Under the long-term cash incentive awards that the Compensation
Committee granted in fiscal 2011, each named executive officer is eligible to receive 25% of his or her total award for
each of our fiscal years ending June 30, 2011, 2012, 2013 and 2014 based on our achievement of EPS goals for each
fiscal year. The EPS goals for the 2011-2014 awards were determined before July 2011 when we launched a strategy
that included increased investments in our business that we expected to result in lower EPS. The Compensation
Proxy Statement