Vistaprint 2014 Annual Report Download - page 79

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75
Share-based awards
The 2011 Equity Incentive Plan (the “2011 Plan”) became effective upon shareholder approval on June 30,
2011 and allows us to grant share options, share appreciation rights, restricted shares, restricted share units and
other awards based on our ordinary shares to our employees, officers, non-employee supervisory board directors,
consultants and advisors. Among other terms, the 2011 Plan requires that the exercise price of any share option or
share appreciation right granted under the 2011 Plan be at least 100% of the fair market value of the ordinary
shares on the date of grant; limits the term of any share option or share appreciation right to a maximum period of
10 years; provides that shares underlying outstanding awards under the Amended and Restated 2005 Equity
Incentive Plan that are canceled, forfeited, expired or otherwise terminated without having been issued in full will
become available for the grant of new awards under the 2011 Plan; and prohibits the repricing of any share options
or share appreciation rights without shareholder approval. In addition, the 2011 Plan provides that the number of
ordinary shares available for issuance under the plan will be reduced by (i) 1.56 ordinary shares for each share
subject to a restricted share or other share-based award with a per share or per unit purchase price lower than
100% of the fair market value of the ordinary shares on the date of grant and (ii) one ordinary share for each share
subject to any other award under the 2011 Plan.
Our 2005 Non-Employee Directors’ Share Option Plan provides for non-employee directors to receive
share option grants upon initial appointment as a director and annually thereafter in connection with our annual
general meeting of shareholders if they are continuing to serve as a director at such time.
We also have two additional plans with options and RSUs outstanding from which we will not grant any
additional awards. An aggregate of 2,752,919 ordinary shares are available for future awards under all of our share-
based award plans as of June 30, 2014. A combination of new shares and treasury shares has historically been
used in fulfillment of option exercises and issuance of shares upon RSU award vesting.
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.
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 2014, 2013 and 2012 were as follows:
Year Ended June 30,
2014 2013 2012
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.56% 0.81% 1.04%
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —% —% —%
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.75 6.00 6.00
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56% 58% 58%
Weighted average fair value of options granted . . . . . . . . . . . . . . . . . $ 28.14 $ 17.23 $ 17.78
Form 10-K