Dundalk, Co. Louth, A91 H9N9
We are furnishing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors of Cimpress plc (which is also referred to as we, us, the company, or Cimpress in this proxy statement) for use at the annual meeting and at any adjournment of the annual meeting.
We are first mailing or making available the Notice of Annual General Meeting, this proxy statement, and our Annual Report to Shareholders for the fiscal year ended June 30, 20202021 on or about [_______], 2020.October 20, 2021.
INFORMATION ABOUT OUR DIRECTORS AND EXECUTIVE OFFICERS
Our Board of Directors:
The Board of Directors of Cimpress plc consists of fourfive independent, non-employee directors and Robert Keane, our Chief Executive Officer, who serve for rotating terms of up to three years. The Board appointed Dessislava Temperley as a director effective September 15, 2021, and John Gavin's term as director ends at the conclusion of the 2021 annual meeting, at which time Cimpress' Board will consist of five directors.
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Name | Age | Board Position | Cimpress Director Since | Current Term Expires at our Annual General Meeting In: | Independent Director |
Robert S. Keane | 58 | Chairman | January 1995 | 2022 | No |
Sophie A. Gasperment | 57 | Non-Employee Director | November 2016 | 2023 | Yes |
John J. Gavin, Jr. | 66 | Non-Employee Director | August 2006 | 2021* | Yes |
Zachary S. Sternberg | 36 | Non-Employee Director | November 2017 | 2021 | Yes |
Dessislava Temperley | 48 | Non-Employee Director | September 2021 | 2024 | Yes |
Scott J. Vassalluzzo | 49 | Non-Employee Director | January 2015 | 2022 | Yes |
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Name | Age | Board Position | Cimpress Director Since | Current Term Expires at our Annual General Meeting In: | Independent Director |
Robert S. Keane | 57 | Chairman | January 1995 | 2022 | No |
Sophie A. Gasperment | 56 | Non-Employee Director | November 2016 | 2020 | Yes |
John J. Gavin, Jr. | 65 | Non-Employee Director | August 2006 | 2021 | Yes |
Zachary S. Sternberg | 35 | Non-Employee Director | November 2017 | 2021 | Yes |
Scott J. Vassalluzzo | 48 | Non-Employee Director | January 2015 | 2022 | Yes |
*Mr. Gavin is retiring and decided not to stand for re-election at the 2021 annual meeting.
ROBERT S. KEANE has served as our President, Chief Executive Officer, and Chairman since he founded Cimpress in January 1995. From 1988 to 1994, Mr. Keane was an executive at Flex-Key Corporation, an original equipment manufacturer of keyboards, displays and retail kiosks used for desktop publishing. Mr. Keane has also served on the Board of Directors of Astronics Corporation, a leading supplier of advanced technologies and products to the global aerospace, defense and other mission critical industries, since December 2019. Mr. Keane brings to Cimpress' Board his experience growing Cimpress from inception in 1995 to more than $2$2.6 billion of revenue in our 20202021 fiscal year, his understanding of the drivers of intrinsic value per share, and his knowledge of Cimpress' customer needs, business model and markets.
SOPHIE A. GASPERMENT has served as Senior Advisor to Boston Consulting Group since November 2019, where her primary focus is to support their Consumer and Digital Acceleration practices. Ms. Gasperment previously held multiple senior management positions at L’Oréal, the world’s leading beauty company, from September 1986 to November 2018. This included Chief Executive Officer and Executive Chairman of The Body Shop International, the iconic British retailer spanning 60 countries and ca. 20,000 people strong, from July 2008 to October 2013, as well as Managing Director, L’Oréal UK and Ireland, from January 2004 to January 2008. More recently, from January 2014 to November 2018, Ms. Gasperment was L’Oréal's Group General Manager leading Strategic Prospective and Financial Communication. Since June 2010, Ms. Gasperment has served on the board of Accor, a CAC40 publicly tradedEuronext-listed company and a world leader in hospitality, and is currently Chair of that board's Appointments, Compensation and CSR Committee and a member of the Audit and Compliance Committee. Since May 2018, Ms. Gasperment has served on the supervisory board of D’Ieteren, a Euronext-listed global company, and is a member of the Appointments and Compensation Committee. Since December 2018, Ms. Gasperment has also served on the board of Kingfisher plc, a FTSE 100 Home Improvement international company, and is currently Chair of that board's Responsible Business Committee and a member of the Nomination Committee. Since September 2020, Ms. Gasperment has been elected, effective September 2020, toserved on the board of directors of Givaudan SA, the world leading flavour and fragrances company that is publicly traded on the SIX Swiss Exchange. In addition to serving on the Board of Directors of Cimpress plc, Ms. Gasperment serves on the supervisory board of Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Ms. Gasperment brings to Cimpress' Board her leadership and strategy skills and perspective, her international
brand-building expertise, her experience of digital transformation and acceleration, her acumen in both consumer goods and retail, as well as her experience on the boards of other public companies and her broader business experience in multi-cultural environments.
JOHN J. GAVIN, JR. serves on the board of Varonis Systems, Inc., a provider of data governance solutions for unstructured data. Mr. Gavin previously served as Chief Financial Officer of BladeLogic, Inc., a provider of data center automation software, from January 2007 through June 2008, when it was acquired by BMC Software, and as Chief Financial Officer of Navisite, Inc., a provider of information technology hosting, outsourcing and professional services, from April 2004 through December 2006. Prior to Navisite, Mr. Gavin served as the Chief Financial Officer of Cambridge Technology Partners and Data General Corporation. Mr. Gavin also spent ten years at Price Waterhouse LLP (now PricewaterhouseCoopers LLP), an accounting firm, in various accounting and audit positions including as Senior Manager in charge of multi-national audits. In addition to serving on the Board of Directors of Cimpress plc, Mr. Gavin also serves on the supervisory board of Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Mr. Gavin brings to Cimpress' Board his extensive experience as chief financial officer of several growing companies, his experience on the boards of other public companies, and ten years as an independent auditor. Mr. Gavin is a certified public accountant.
ZACHARY S. STERNBERG is the co-founder and Managing Member of the General Partner of The Spruce House Partnership, a New York-based investment partnership. Spruce House invests in public and private companies globally and seeks to partner with management teams that are focused on growing the per share value of their companies over the long-term. Spruce House holds 9.1%9.0% of Cimpress' outstanding shares and has been a shareholder of Cimpress since 2011. Mr. Sternberg also serves on the boards of directors of Victoria PLC, an international manufacturer and distributor of innovative flooring products, and GTT Communications, Inc., the owner/operator of a global Tier 1 internet network and provider of a comprehensive suite of cloud networking services. Mr. Sternberg brings to Cimpress' Board his perspective as a material and long-term shareholder of Cimpress with a deep understanding of the importance of long-term stewardship of capital informed by more than a decade of successful investment experience.
DESSISLAVA TEMPERLEY joined the Cimpress Board of Directors on September 15, 2021 and also serves on the boards of Coca-Cola Europacific Partners PLC, a British multinational bottling company, and Corbion N.V., a Dutch food and biochemicals company. Ms. Temperley previously served as Group Chief Financial Officer of Beiersdorf AG, a German multinational company that manufactures personal-care products and pressure-sensitive adhesives, from July 2018 through June 2021. Ms. Temperley spent 14 years at Nestlé, from April 2004 through June 2018, serving in various roles including Head of Investor Relations, CFO of Nestle Purina Petcare (EMENA), Head of Global Planning and Performance Monitoring, Controller, and Finance Director. Ms. Temperley brings to Cimpress' Board a wealth of financial and operating expertise from her over 20 years of experience in various finance leadership roles at multinational companies. The Board has determined that Ms. Temperley is an audit committee financial expert, as defined under SEC rules, and plans to appoint her chair of the Audit Committee at the expiration of John Gavin's term as director at the conclusion of this 2021 annual meeting.
SCOTT J. VASSALLUZZO is a Managing Member of Prescott General Partners LLC ("PGP"), an investment adviser registered with the SEC that holds 15% of Cimpress' outstanding shares. PGP serves as the general partner of three private investment limited partnerships, including Prescott Associates L.P. (together, the "Prescott Partnerships"). Mr. Vassalluzzo joined the Prescott organization in 1998 as an equity analyst, became a general partner of the Prescott Partnerships in 2000, and transitioned to Managing Member of PGP following Prescott's reorganization in January 2012. Prior to 1998, Mr. Vassalluzzo worked in public accounting at Coopers & Lybrand (now PricewaterhouseCoopers LLP) and was a certified public accountant. Mr. Vassalluzzo serves on the boards of directors of Credit Acceptance Corporation, an auto finance company providing automobile loans and other related financial products, and World Acceptance Corporation, a personal installment loan company. Mr. Vassalluzzo brings to Cimpress' Board his advocacy for the priorities of long-termism and intrinsic value per share, his appreciation and understanding of the perspectives of our other long-term shareholders, and his experience on the boards and board committees of other publicly traded companies.
Our Executive Officers:
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Name | Title | Age | Joined Cimpress |
Robert S. Keane | Founder, Chief Executive Officer, and Chairman | 5758 | January 1995 |
Sean E. Quinn | Executive Vice President and Chief Financial Officer | 4142 | October 2009 |
Maarten Wensveen | Executive Vice President and Chief Technology Officer | 4041 | October 2011 |
ROBERT S. KEANE: Mr. Keane's biography is in the "Our Board of Directors" section above.
SEAN E. QUINN has served as our Chief Financial Officer since October 2015 and as Executive Vice President since July 2016. Mr. Quinn previously served as Senior Vice President from October 2015 to July 2016, as Chief Accounting Officer from November 2014 to October 2015, as Vice President, Corporate Finance from January 2014 to October 2015, as Global Controller from April 2012 to November 2014, and in various other financial roles from October 2009 to April 2012. Before joining Cimpress, Mr. Quinn was a certified public accountant with KPMG LLP from September 2001 to October 2009 in the firm’s Philadelphia, London, and Boston offices.
MAARTEN WENSVEEN has served as our Executive Vice President and Chief Technology Officer since February 2019. Mr. Wensveen previously served as Senior Vice President from January 2017 to February 2019 and Vice President of Technology from February 2015 to January 2017. Mr. Wensveen joined Cimpress in November 2011 when we acquired Albumprinter, and he served in various roles at Albumprinter including IT Manager from December 2006 to June 2012.
There are no family relationships among any of Cimpress' directors and executive officers. No arrangements or understandings exist between any director and any other person pursuant to which such person is to be selected for appointment to the Board of Directors.
PROPOSAL 1 - REAPPOINT SOPHIE A. GASPERMENTZACHARY S. STERNBERG TO OUR BOARD OF DIRECTORS
The five members of our Board of Directors serve for rotating terms of up to three years. In accordance with the recommendation of the Nominating Committee of the Board, our Board recommends the reappointment of Sophie A. GaspermentZachary S. Sternberg for a three-year term ending at the conclusion of our annual general meeting of shareholders in 20232024 because of her leadershiphis perspective as a material and strategy skills and perspective, her international brand-building expertise, her experiencelong-term shareholder of digital transformation and acceleration, her acumen in both consumer goods and retail, as well as her experience onCimpress with a deep understanding of the boardsimportance of other public companies and her broader business experience in multi-cultural environments.long-term stewardship of capital informed by more than a decade of successful investment experience.
You can find more information about Ms. GaspermentMr. Sternberg in the section of this proxy statement entitled “INFORMATION ABOUT OUR DIRECTORS AND EXECUTIVE OFFICERS.”
Our Board of Directors recommends that you vote FOR the reappointment of Ms. GaspermentMr. Sternberg to the Board.
PROPOSAL 2 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
At the annual meeting, we are asking our shareholders to approve the compensation of our named executive officers, as described in the Compensation Discussion and Analysis or CD&A,section, executive compensation tables, and accompanying narrative disclosures below. This is an advisory vote, meaning that this proposal is not binding on us, but our Compensation Committee values the opinions expressed bytakes shareholder feedback into account when designing our executive compensation program, which has received more than 96% approval from our shareholders and will carefully consider the outcomeat each of the shareholder vote when making future compensation decisions for our named executive officers.last eight annual general meetings of shareholders.
At our annual general meeting in 2017, a majority of our shareholders voted to hold the advisory vote to approve our executive compensation on an annual basis. Therefore, we intend to put forth at each annual general meeting of shareholders an advisory vote on the compensation of our named executive officers for the immediately preceding fiscal year.
Our Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers, as described below.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Overview
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to motivate that talent to achieve outstanding performance. In determining the compensation of our executive officers, our Compensation Committee begins with an analysis of the competitiveness of our executive compensation program and, as a starting point, seeks to pay our executives total compensation (including base salary and target long-term incentive awards)award values) at the 75th percentile of the competitive market for extraordinary performance by Cimpress.market. The Compensation Committee then applies its own discretion to take into account any other factors it may deem relevant in any given fiscal year, such as general economic conditions, the internal equity of compensation among our executives, each executive’s experience and role, individual performance, and, individual performance.particularly in fiscal year 2021, the impact of the COVID-19 pandemic. The Committee does not assign specific weights to particular factors but considers them together in determining compensation.
When considering the competitiveness ofWe have designed our executive compensation program for fiscal year 2020,to encourage our Compensation Committee took into account a compensation analysis that we developed internally using published compensation survey data, as well as detailed historical compensation analyses for each executive officer. The Committee did not use a compensation peer group or engage a compensation consultant for fiscal year 2020.
Temporary measures for COVID-19 pandemic. In light of the effects of the COVID-19 pandemic on Cimpress' businessexecutives and financial results, for the fourth quarter 2020 we instituted a salary restructuring program for certain employees pursuant to which each employee’s cash compensation payable during the quarter was reduced in exchange for an award of restricted share units (RSUs) having the same value as the amount by which such employee’s cash compensation was reduced. Our Board of Directors approved this program for our executive officers other than Robert Keane and also agreed to waive cash compensation payablemanage to the non-employee
directors in the third and fourth quarters of 2020 in exchange for RSU awards having the same value as the waived cash compensation. As Mr. Keane already receives all of his compensation in the form of performance share units, other than the minimum weekly salary for exempt employees under the U.S. Fair Labor Standards Act, there was no change to his compensation.
Incentive compensation. In fiscal year 2020, we used performance share units (PSUs) granted under our 2016 Performance Equity Plan as the sole long-term incentive (LTI) compensation vehicle for our named executive officers. Each PSU represents a right to receive between 0 and 2.5 ordinary sharessuccess of Cimpress plc upon the satisfaction of both service-based vesting over timein line with our uppermost financial objective and performance conditions relatingto forgo short-term actions and metrics except to the compound annual growth rate, or CAGR, of the three-year moving average of the daily closing share price of Cimpress’ ordinary shares, or 3YMA, over a multiple-year period determined byextent those short-term actions and metrics support our Board of Directors.
In the past, we allowed our executive officers and some of our other employees to elect to receive a portion of their LTI awards in the form of cash retention bonuses that pay the employee a fixed amount in equal payments over several years so long as Cimpress continues to employ the recipient. However, in fiscal year 2020, while non-executive officer employees could elect to receive cash retention bonuses, we changed the LTI compensation structure for our named executive officers to be 100% PSUs in order to tie their compensation more fully to Cimpress' long-term performance.
Pay for performance.goals. Cimpress' uppermost financial objective is to maximize our intrinsic value per share, or IVPS. WeIVPS, which we define IVPS as (a) the unlevered free cash flow per diluted share that, in our best judgment, will occur between now and the long-term future, appropriately discounted to reflect our cost of capital, minus (b) net debt per diluted share. We define unlevered free cash flow as free cash flow plus cash interest expense related to borrowing. Extending our history of success into the next decade and beyond in line with this top-level objective is important to us, and we have designed our compensation program to encourage our executives and employees to manage to a long-term time horizon and to forgo short-term actions and metrics except to the extent those short-term actions and metrics support our long-term goals. We believe that the compound annual growth rate, or CAGR, of the three-year moving average of the daily closing share price of Cimpress’ ordinary shares, or 3YMA, CAGR over a multiple-year period is a proxy for the change in our IVPS over the same time frame. Accordingly, our long-term incentive compensation (LTI) program features performance share unit (PSU) awards
representing a right to receive Cimpress ordinary shares based on the performance of our 3YMA CAGR over a multiple-year period.
In fiscal year 2021, the COVID-19 pandemic had a material adverse effect on our business, financial results, customers, and markets. The pandemic also underscored the effect that sustained downward pressure on our share price due to macroeconomic factors beyond our control can have on our LTI awards, especially our PSUs, and the importance of retaining top talent capable of guiding Cimpress through difficult times. In response to the pandemic, we grantedmade adjustments to our LTI program in fiscal year 20202021, including the following:
1.We diversified the program to include restricted share units (RSUs) that pay out in Cimpress ordinary shares over the first four years after grant, in addition to longer-term, higher-risk PSUs.
2.We used a two-year moving average of the daily closing share price of Cimpress' ordinary shares (2YMA), instead of the three-year moving average, as the baseline against which the performance of our fiscal year 2021 PSU awards will be measured. On each of the measurement dates during the performance period, we will calculate a CAGR by comparing the 3YMA on the measurement date against the 2YMA baseline to determine whether the CAGR performance condition has been satisfied. We chose to use a 2YMA as the baseline to enhance the value of our PSU awards in retaining talented employees. During fiscal year 2021 the 2YMA was lower than the 3YMA, and we expect that comparing the lower 2YMA to the future 3YMA will make the achievement of the CAGR performance condition easier, but still challenging, in recognition of the exceptional macroeconomic conditions of the pandemic.
3.We delayed until February 2021 the determination and grant of fiscal year 2021 LTI awards due to the uncertainty caused by the pandemic.
The changes to our executivesLTI program described in #1 and employees other than#2 above did not apply to the LTI awards granted to Robert Keane, our Chief Executive Officer. Mr. Keane are based on Cimpress'signed a PSU Limitation Agreement with Cimpress providing that, until June 30, 2023, he will continue to receive all of his long-term incentive compensation in the form of PSUs, the maximum number of PSUs we may grant him in any fiscal year is 75,000, and the performance conditions in his PSU awards must be that the 3YMA CAGR equal or exceed 11% over a performance period of four to eight years, and PSUs granted to our Board of Directors including Mr. Keane are based on Cimpress' performance over six to ten years.
The total compensation package for our executive officers is weighted heavily toward compensation based on Cimpress' long-term performance. For example, our Chief Executive Officer receives all In fiscal year 2021 Mr. Keane received 99% of his total compensation, including his base salary, and Board retainer fees, and LTI, in the form of PSUs other than $684 per week paidwith a 3YMA baseline for measuring performance.
Sean Quinn, our Chief Financial Officer, and Maarten Wensveen, our Chief Technology Officer, were entitled to receive annual LTI awards in cash which isFebruary 2021 consisting of a mix of 75% PSUs and 25% RSUs (based on target values), with the minimum weekly salaryopportunity for exempt employees under the U.S. Fair Labor Standards Actexecutive officers to elect to receive 100% PSUs and no RSUs if they wished. Mr. Wensveen elected to receive 100% of his annual LTI award granted in February 2021 as of June 30, 2020.PSUs.
Our Compensation Committee takes into account shareholder feedback when designing our executive compensation program, which has received more than 96% approval from our shareholders at each of our last seven annual general meetings of shareholders. The Compensation Committee intends to continue to consider the outcome of the say-on-pay vote when making future compensation decisionsPay for our named executive officers.Performance
Compensation Components for Executives
For fiscal year 2020,2021, the principal elements of our compensation program for our named executive officers included:
Under our pay-for-performance philosophy, the compensation of our executives and other employees at higher levels in the organization is more heavily weighted toward variable compensation based on our performance, and base salary generally accounts for a smaller portion of these employees’ total compensation packages. The percentiles of competitive market data that we use to evaluate the compensation of our named executive officers are designed to ensure that our executive officers will receive total compensation significantly below the median if Cimpress does not perform well and significantly above the median for Cimpress' extraordinary performance. In accordance with this philosophy, the Compensation Committee initially allocates the compensation of our executive officers within the percentiles listed below, and then may use its discretion to adjust each executive officer’s compensation to reflect other factors such as general economic conditions, the internal equity of compensation among our executives, and the executive’s experience, role, and individual performance.
•Base salary at the 50th percentile of competitive market data
Total•Target total compensation (base salary plus target LTI awards)award values) at the 75th percentile of competitive market data
When considering the competitiveness of our executive compensation program for fiscal year 2021, our Compensation Committee took into account a compensation analysis that we developed internally using published compensation survey data, as well as detailed historical compensation analyses for each executive officer, but did not use a compensation peer group or engage a compensation consultant. The Compensation Committee set the total target fiscal year 2021 compensation of Sean Quinn and Maarten Wensveen at significantly above the 75th percentile of market data because both executives are serving in dual roles as Chief Financial Officer (Mr. Quinn) and Chief Technology Officer (Mr. Wensveen) of both Cimpress and Vistaprint, our largest business, and because the Compensation Committee believes that retaining these executives is critical to the success of Cimpress and Vistaprint and that their performance and contributions to Cimpress and Vistaprint warranted target compensation above the 75th percentile.
Base Salary
For fiscal year 2020,2021, our Board of Directors increasedCompensation Committee maintained the base salaries of Robert Keane and Sean Quinn by 4% fromat their fiscal year 20192020 levels and increased Maarten Wensveen's base salary by 25% to bring his salary more closely align their salariesin line with 50th percentile of competitive market data.other Cimpress executives. Beginning in the second half of fiscal year 2019, in order to tie Mr. Keane's compensation as fully as possible to Cimpress' long-term performance, Mr. Keane's base salary and director fees are paid almost entirely in PSUs. In fiscal year 2021, we paid Mr. Keane's compensation in PSUs other than a small amount of$56,237 paid in cash, representing the minimum weeklyannual salary for exempt employees under the U.S. Fair Labor Standards Act ($455plus the amount of LTI compensation payable to Mr. Keane that exceeded the 75,000 PSUs per week for calendar year 2019 and $684 per week for calendar year 2020).
Maarten Wensveen was promoted from Senior Vice President to Executive Vice President in February 2019 and received a 33% increase in base salary at that time in connection with the promotion. Our Board of Directors did not make any further change to his base salary for fiscal year 2020.limit set forth in his PSU Limitation Agreement.
Beginning in MarchIn the fourth quarter of fiscal year 2020, in light of the effects of the COVID-19 pandemic on Cimpress' business and financial results, we executed on significant cost reductions in order to fortify our financial position. One of those cost reductions wasimplemented a temporary 50% reduction in the base salaries of our named executive officers other than Robert Keane during the fourth quarter 2020. In exchange for this reduction, weand granted to each impacted executive an RSU award under our 2011 Equity Incentive Plan having the same value as the executive's salary reduction for the fourth quarter. These RSU awards vestvested in full on August 15, 2020, so long as the executive is still a Cimpress employee on the vesting date, at which time each RSU iswas automatically converted into ordinary shares of Cimpress plc on a one-to-one basis. Because Mr. Keane already receivesreceived almost all of his compensation in the form of PSUs, as noted above, he was not included in the salary reduction program.
Long-Term Incentive Program
Our LTI program is designed to focus our executives and employees on long-term performance and value creation formaximizing our IVPS. Although in recent fiscal years PSU awards were the company and our shareholders. Although we have various LTI programs for our non-executive officer employees that are tailored to the employees' responsibilities and contributions, the soleprimary LTI compensation vehicle for our named executive officers, forthe COVID-19 pandemic underscored the effect that sustained downward pressure on our share price due to macroeconomic factors beyond our control can have on our PSU awards, as well as the importance of retaining top talent capable of guiding Cimpress through difficult times. Accordingly, in fiscal year 2020 was2021 we diversified our LTI program to include RSU awards for employees and executives other than Robert Keane, in addition to PSU awards. Mr. Keane received his LTI awards granted under our 2016 entirely in the form of PSUs in fiscal year 2021 in accordance with his PSU Limitation Agreement.
Performance Incentive Plan (2016 Plan).Share Units. Each PSU represents a right to receive between 0 and 2.5 ordinary shares of Cimpress plc upon the satisfaction of both service-based vesting over time and performance conditions relating to the 3YMA CAGR over a period determined by the Board. For PSUs granted during fiscal year 2020 this performance period was four to eight years for employees and executives other than Mr. Keane, and a longer-term performance period of six to ten years for our Board of Directors including Mr. Keane. We refer to the issuance of Cimpress ordinary shares
pursuant to a PSU upon satisfaction of both conditions as thea Performance Dependent Issuance. With challenging performance hurdles and performance periods extending multiple years into the future, PSU awards are designed to encourage our executives and employees to manage to a long-term time horizon.
First condition to a Performance Dependent Issuance: Service-based Vesting.Vesting. PSUs granted to employees generally vest 25% per year over four years so long as the employee remains employed by Cimpress. However, service-based vesting is not sufficient for payout; PSU service-based vesting events are the dates after which the participant gains the future right to a Performance Dependent Issuance with respect to their then-vested PSUs, subject to achievement of the relevant performance conditions.
If a participant resigns or is terminated other than for cause, they retain all PSUs that have satisfied the service-based vesting condition as of their resignation or termination date. If Cimpress achieves the performance thresholds described below, the former participant would receive Cimpress ordinary shares upon settlement of the PSUs, even though they no longer have an employment, director, or other service relationship with Cimpress.
Second condition to a Performance Dependent Issuance: 3YMA Performance.Performance. For each PSU award, we calculate a baseline 3YMAmoving average share price as of a specified date at the time of grant for two purposes: to establish the number of units to be granted and to establish the baseline for future performance measurement. OurOn each measurement date during the performance period determined by our Board of Directors determines the performance period and measurement dates for each PSU award, and on each measurement date we calculate the 3YMA as of such date. Ondate, and on the first of these measurement datesdate that the 3YMA, as compared to the baseline moving average share price, equals or exceeds a minimum CAGR of set by the Board, the 3YMA performance condition would be satisfied, and we would issue to the participant the number of Cimpress ordinary shares determined by multiplying the number of PSUs subject to the award by the applicable performance-based multiplier set by the Board.satisfied.
3YMA Performance Criteria for our CEO and Board.. PSU awards granted in fiscal year 2021 to Robert Keane andhave a baseline equal to the other members of our Board of Directors have3YMA on the grant date and a performance period of six to ten years, in order to helpencourage focus our CEO and Board on Cimpress' performance over the long term. Beginning on the sixth anniversary of the baseline measurementgrant date, set forth in these PSU awards, and on each anniversary thereafter through year ten, we will calculate the 3YMA as of such date. On the first of these measurement dates that the 3YMA equals or exceeds a CAGR of 11%, as compared to the baseline 3YMA, the performance condition would be satisfied, and we would issue to the participantMr. Keane the number of Cimpress ordinary shares determined by multiplying the number of PSUs subject to the award by the applicable performance-based multiplier. The performance-based multiplier begins at 125% for an 11% 3YMA CAGR and increases on a sliding scale to 250% for a 3YMA CAGR of 20% or above. If the 3YMA CAGR does not reach at least 11% on any of the sixth through tenth anniversaries of the baseline measurementgrant date, then the PSU award would be terminated and no Cimpress ordinary shares would be issued with respect to the award.
3YMA Performance Criteria for Employees and Executive Officers other than our CEO.CEO In past years,. PSU awards granted in fiscal year 2021 to employees and executive officers hadother than Robert Keane have a baseline equal to the same six-to-ten-year2YMA on the grant date and a performance period of four to eight years. We set the baseline for these PSU awards at the 2YMA of $95.46 as of the grant date, which was lower than the 3YMA of $108.31 on that date, in recognition that the exceptionally challenging macroeconomic conditions of the pandemic and similar 3YMA CAGR thresholds assustained downward pressure on Cimpress' share price had a significant negative impact on the value and likelihood of payout with respect to the PSU awards granted to our CEO and Board members.the executives in previous fiscal years. We expect that comparing the lower 2YMA baseline to the 3YMA on future measurement dates will make the achievement of the CAGR performance condition easier, but still challenging. For PSU awards granted in fiscal year 2020, in order2022, we reverted to enhance the retention value of the awards and bring our equity compensation program more in line with other companies with which we are competing for talent, we reduced the performance period and lowered the CAGR thresholds for employees and executive officers other than Robert Keane. a 3YMA baseline.
Beginning on the fourth anniversary of the baseline measurementgrant date, set forth in these PSU awards, and on each anniversary thereafter through year seven, we will calculate the 3YMA as of such date. On the first of these measurement dates that the 3YMA equals or exceeds a CAGR of 9%, as compared to the 3YMA2YMA baseline, the performance condition would be satisfied, and we would issue to the participant the number of Cimpress ordinary shares determined by multiplying the number of PSUs subject to the award by the
applicable performance-based multiplier. The performance-based multiplier begins at 100% for a 9% 3YMA CAGR and increases on a sliding scale to 250% for a 3YMA CAGR of 20% or above.
If the 3YMACAGR has not reached at least 9% on any of the fourth through seventh anniversaries of the baseline measurementgrant date for the PSU award and thus a Performance Dependent Issuance has not yet occurred, then for PSU awards granted to employees and executive officers other than Mr. Keane, the threshold CAGR level
for 3YMA performance at the eighth anniversary of the grant date, as compared to the baseline measurement date2YMA, is lowered to a 7% CAGR,, and if the 3YMA performance meets or exceeds a 7% CAGR on the eighth anniversary the recipient would still receive Cimpress ordinary shares, but at a significantly declininglower multiple beginning at 75% for a 7% 3YMA CAGR and increasing on a sliding scale to 250% for a 3YMA CAGR of 20% or above.
If none of the 3YMA CAGR performance goals are achieved by the eighth anniversary of the baseline measurementgrant date, for the PSU award, then the PSU award would be terminated and no Cimpress ordinary shares would be issued with respect to the award.
The actual closing price of the Cimpress shares issued upon the Performance Dependent Issuance may be higher or lower than the 3YMA used to calculate the number of shares issued at such time.
Restricted Share Units. In fiscal year 2021, in order to enhance the retention value of our LTI program in light of the adverse effects of the COVID-19 pandemic on our share price and thus on the likelihood of achievement of the 3YMA performance targets in our PSU awards, we added RSU awards to our LTI program for executives and employees other than Mr. Keane. Our RSU awards typically vest annually over four years, and upon vesting each RSU is automatically converted into ordinary shares of Cimpress plc on a one-to-one basis so long as Cimpress continues to employ the recipient on the vesting date. Our executive officers other than Mr. Keane received a supplemental RSU award on July 1, 2020 to help retain and incent them to continue to guide Cimpress through difficult times and in recognition of the added difficulty of achieving the 3YMA performance targets in the PSU awards they had received in previous years due to the adverse effects of the pandemic on our share price. Our executive officers other than Mr. Keane were also eligible to receive annual LTI awards in February 2021 consisting of a mix of 75% PSUs and 25% RSUs (based on target values), with the opportunity for the executives to elect to receive 100% PSUs and no RSUs if they wished. Mr. Wensveen elected to receive 100% of his annual LTI award granted in February 2021 as PSUs.
Cash Retention BonusesBonuses.
In past years, we allowed our executive officers other than Mr. Keane to elect to receive a portion of their LTI awards in the form of cash retention bonuses, subject to a minimum threshold that was required to be allocated to PSUs. The cash retention bonuses pay the employee a fixed amount in equal payments over several years (typically four years) so long as Cimpress continues to employ the recipient.
In fiscal year 2020, Although we changed the LTI compensation structure for our named executive officersno longer grant cash retention bonuses to be 100% PSUs in order to tie their compensation more fully to Cimpress' long-term performance. However,executives, Mr. Quinn still holds cash retention bonus awards that were granted in previous fiscal years and that continued to vest, with the incremental vested amounts being earned, in fiscal year 2020.2021.
Benefit Programs
The Compensation Committee believes that all employees based in the same geographic location should have access to similar levels of health and welfare benefits, and therefore our executive officers are eligible for the same health and welfare benefits, including medical, dental, vision, and disability plans, group life and accidental death and disability insurance and other benefit plans, as those offered to other employees in their location.
U.S.-based employees may participate in a 401(k) plan that provides a company match of up to 50% on the first 6% of the participant’s eligible compensation that is contributed, subject to certain limits under the United States Internal Revenue Code of 1986, or US Tax Code, with company matching contributions vesting over a four-year period. As part of the cost reductions we executed due to the COVID-19 pandemic, we suspended the 401(k) matching contributions for U.S. employees beginning infrom April 2020 through the end of September 2020.
We also provide customary pension plans to our European employees.
Perquisites
In general, executives are not entitled to benefits that are not otherwise available to all other employees who work in the same geographic location, although we do pay for a driver for Mr. Keane so that he can work during his commute. We also from time to time enter into arrangements with some of our named executive officers to reimburse them for living and relocation expenses and tax preparation fees and associated tax gross-ups relating to their work outside of their home countries. You can find more information about these arrangements in the Summary Compensation Table of this proxy statement.
Executive Retention and Other Agreements
We have entered into executive retention agreements with all of our executive officers. Under the executive retention agreements, if we terminate an executive officer’s employment other than for cause, death, or disability (each as defined in the agreements) or the executive terminates his or her employment for good reason (as defined
in the agreements) before a change in control of Cimpress or within one year after a change in control (as cause, disability, good reason, and change in control are defined in the agreements), then the executive is entitled to receive:
•A lump sum severance payment equal to two years’ salary and annual bonus, in the case of Mr. Keane, or one year’s salary and annual bonus, in the case of the other executive officers. Because we no longer grant annual bonuses to our executives and employees, this amount would include only salary.
•With respect to any outstanding annual or multi-year cash incentive award under our previous cash performance incentive plan, a pro rata portion, based on the number of days from the beginning of the then current performance period until the date of termination, of his or her target incentive. Because we no longer grant awards under the cash performance incentive plan to our executives and employees, this amount would be zero.
•The continuation of all other employment-related health and welfare benefits for up to two years after the termination in the case of Mr. Keane, or up to one year after the termination in the case of our other executive officers.
Both the executive retention agreements and our 2016 PlanPSU awards have change in control provisions. The executive retention agreements provide that, upon a change in control of Cimpress, all equity awards (other than PSUs granted under the 2016 Plan)PSUs) granted to each executive officer will accelerate and become fully vested, and each executive’s annual or multi-year cash incentive awards under our previous cash performance incentive plan would accelerate such that the executive would receive a portion of his or her target bonus for the remaining performance period after the change in control. In addition,None of our executives currently holds any share options, but if they did, then the exercise period of the share options would be extended in certain circumstances if the executive's employment terminated after a change in control Cimpress' successor terminates the executive's employment without cause, or the executive terminates his or her employment for good reason, then each of the executive’s share options remains exercisable until the earlier of one year after termination or the original expiration date of the award.Cimpress.
The 2016 Plan providesequity plans and agreements that govern our PSUs provide that, upon a change in control, all PSUs that have satisfied the applicable service-based vesting conditions will be settled for Cimpress ordinary shares in accordance with the planterms of the awards if the actual price paid per share to holders of Cimpress' securities in connection with the change in control equals or exceeds the CAGR performance goals set forth in the plan.award agreements.
Our Compensation Committee decided that we would no longer include any excise tax gross-up provisions in any executive retention agreements we enter into with new executives after August 1, 2012, and accordingly, the only current executive officer who has an excise tax gross-up provision in his agreement is Mr. Keane. If Mr. Keane is required to pay any excise tax pursuant to Section 4999 of the US Tax Code as a result of compensation payments made to him, or benefits he obtained (including the acceleration of equity awards), in connection with a change in ownership or control of Cimpress, we are required to pay him an amount, referred to as a gross-up payment, equal to the amount of such excise tax plus any additional taxes attributable to such gross-up payment. However, if reducing Mr. Keane's compensation payments by up to $50,000 would eliminate the requirement to pay an excise tax under Section 4999 of the US Tax Code, then Cimpress has the right to reduce the payment by up to $50,000 to avoid triggering the excise tax and thus avoid providing gross-up payments to Mr. Keane.
The following table sets forth information on the potential payments to our named executive officers upon their termination or a change in control of Cimpress, assuming that a termination or change in control took place on June 30, 2020.2021.
|
| | | | | | | | | | | | | | | |
Name | Cash Payment ($)(1) |
| Accelerated Vesting of RSUs and PSUs ($)(2) |
| Benefits ($)(3) |
| Tax Gross-Up Payment ($)(4) |
| Total ($) |
Robert S. Keane |
|
|
|
|
|
|
|
|
|
• | Termination Without Cause or With Good Reason | 3,500,000 |
|
| — |
|
| 62,624 |
|
| — |
|
| 3,562,624 |
|
• | Change in Control | — |
|
| 18,105,176 |
|
| — |
|
| — |
|
| 18,105,176 |
|
• | Change in Control w/ Termination Without Cause or With Good Reason | 3,500,000 |
|
| 18,105,176 |
|
| 62,624 |
|
| — |
|
| 21,667,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean E. Quinn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Termination Without Cause or With Good Reason | 800,000 |
|
| — |
|
| 21,516 |
|
| — |
|
| 821,516 |
|
• | Change in Control | — |
|
| 6,000,629 |
|
| — |
|
| — |
|
| 6,000,629 |
|
• | Change in Control w/ Termination Without Cause or With Good Reason | 800,000 |
|
| 6,000,629 |
|
| 21,516 |
|
| — |
|
| 6,822,145 |
|
|
| | | | | | | | | | | | | | | |
Maarten Wensveen |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Termination Without Cause or With Good Reason | 600,000 |
|
| — |
|
| 21,228 |
|
| — |
|
| 621,228 |
|
• | Change in Control | — |
|
| 3,292,392 |
|
| — |
|
| — |
|
| 3,292,392 |
|
• | Change in Control w/ Termination Without Cause or With Good Reason | 600,000 |
|
| 3,292,392 |
|
| 21,228 |
|
| — |
|
| 3,913,620 |
|
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | Cash Payment ($)(1) | | Accelerated Vesting of RSUs and PSUs ($)(2) | | Benefits ($)(3) | | Tax Gross-Up Payment ($)(4) | | Total ($) |
Robert S. Keane | | | | | | | | | |
• | Termination Without Cause or With Good Reason | 3,500,000 | | | — | | | 68,699 | | | — | | | 3,568,699 | |
• | Change in Control | — | | | 35,912,764 | | | — | | | — | | | 35,912,764 | |
• | Change in Control w/ Termination Without Cause or With Good Reason | 3,500,000 | | | 35,912,764 | | | 68,699 | | | — | | | 39,481,463 | |
| | | | | | | | | | |
Sean E. Quinn | | | | | | | | | |
• | Termination Without Cause or With Good Reason | 800,000 | | | — | | | 22,486 | | | — | | | 822,486 | |
• | Change in Control | — | | | 10,524,443 | | | — | | | — | | | 10,524,443 | |
• | Change in Control w/ Termination Without Cause or With Good Reason | 800,000 | | | 10,524,443 | | | 22,486 | | | — | | | 11,346,929 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Maarten Wensveen | | | | | | | | | |
• | Termination Without Cause or With Good Reason | 750,000 | | | — | | | 22,198 | | | — | | | 772,198 | |
• | Change in Control | — | | | 5,514,817 | | | — | | | — | | | 5,514,817 | |
• | Change in Control w/ Termination Without Cause or With Good Reason | 750,000 | | | 5,514,817 | | | 22,198 | | | — | | | 6,287,015 | |
| | | | | | | | | | |
_____________
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Amounts in this column for Termination Without Cause or With Good Reason represent severance amounts payable under the executive retention agreements. |
|
|
(2) | Amounts in this column represent the value, based on $76.34$108.41 per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2020,2021, the last trading day of our 20202021 fiscal year, of (1) unvested RSUs that would vest and (2) shares that would be issued pursuant to vested PSUs upon the triggering event described in the first column. For PSUs, we assumed the price paid per share to holders of Cimpress' shares in connection with the change in control would represent an 11%a CAGR over the baseline 3YMA of the PSUs, which isequal to the target performance goal infor the 2016 Plan.PSU awards. |
|
|
(3) | Amounts reported in this column represent the estimated cost of providing employment related benefits (such as insurance for medical, dental, and vision) during the period the named executive officer is eligible to receive those benefits under the executive retention agreements, which is two years for Mr. Keane and one year for the other named executive officers. |
|
|
(4) | None of our executive officers other than Mr. Keane have excise tax gross-up provisions in their agreements. The amounts in this column forWe calculate the amount of tax gross up to which Mr. Keane are estimates basedwould have been entitled if a triggering event had occurred on a number of assumptionsJune 30, 2021 and do not necessarily reflect the actual amount of a tax gross-up paymentdetermined that he would receive.not have been entitled to a gross-up payment. |
The Role of Company Executives in the Compensation Process
Although the Compensation Committee makes the final decisions about executive compensation, the Committee also takes into account the views of our Chief Executive Officer, who makes initial recommendations with respect to the compensation of executive officers other than himself. Other employees of Cimpress also participate in the preparation of materials presented to or requested by the Compensation Committee for use and consideration at Compensation Committee meetings.
Share Ownership Guidelines and Policy on Hedging
We have share ownership guidelines for all of our executive officers and members of our Board of Directors. The guidelines require our executive officers and directors to hold Cimpress equity, including ordinary shares they hold directly or indirectly, unvested RSUs, vested and unvested PSUs, and vested, unexercised, in-the-money share options, with a value, based on the two-year trailing average of the closing prices of Cimpress' ordinary shares on Nasdaq, equal to or greater than a multiple of the executive officer’s annual base salary or the director's annual retainer, as follows:
•Chief Executive Officer: 5 times annual base salary
•Other executive officers: 3 times annual base salary
•Board of Directors: 3 times Board annual cash retainer
We give each executive officer and Board member four years from his or her initial appointment as a Cimpress officer or director to comply with the share ownership guidelines. As of June 30, 2020,2021, all executive officers and directors had satisfied their ownership guideline requirement.
Our Insider Trading Policy prohibits Cimpress' executive officers, directors, and employees from engaging in any derivative or hedging transactions in Cimpress securities, including but not limited to short sales, put options, call options, collars, futures contracts, forward contracts, and swaps.
Tax Deductibility of Certain Awards
Changes to the United States tax laws in 2017 eliminated the tax deduction pursuant to Section 162(m) of the US Tax Code for performance-based compensation paid after January 1, 2018 to named executive officers under arrangements entered into or materially modified on or after November 2, 2017. Although our Compensation Committee previously considered the impact of Section 162(m) when administering Cimpress' compensation plans, it did not make decisions regarding executive compensation based solely on the expected tax treatment of such compensation. We do not expect the elimination of the deduction to have a material effect on Cimpress or our compensation programs.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on the Compensation Committee’s review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee of the
Board of Directors
Scott J. Vassalluzzo, Chair
Sophie A. Gasperment
Zachary S. Sternberg
SUMMARY COMPENSATION TABLES
Summary Compensation Table
The following table summarizes the compensation earned in each of the last three fiscal years by:
(i) our principal executive officer,
(ii) our principal financial officer, and
(iii) our other executive officer as of June 30, 2020.2021.
Throughout this proxy statement, we refer to the individuals listed in (i) through (iii) above as our named executive officers.
| | Name and Principal Position |
| Year |
|
Salary ($)(1) |
|
Bonus ($)(2) |
| Share Awards ($)(3) |
| Non-Equity Incentive Plan Compensation ($)(4) |
| All Other Compensation ($) |
|
Total ($) | Name and Principal Position | | Year | |
Salary ($)(1) | |
Bonus ($)(2) | | Share Awards ($)(3) | | All Other Compensation ($) | | Total ($) |
Robert S. Keane |
| 2020 |
| 29,888(5) |
|
| — |
|
| 9,338,794 |
|
| — |
|
| 31,100(6) |
|
| 9,399,782 |
| Robert S. Keane | | 2021 | | 35,568 | | | 20,669 | | | 8,283,797 | | | 0 | | 8,340,034 | |
Chairman and |
| 2019 |
| 863,628(5) |
|
| — |
|
| 11,369,327 |
|
| — |
|
| 47,965 |
|
| 12,280,920 |
| Chairman and | | 2020 | | 29,888 | | | — | | | 9,338,794 | | | 31,100 | | | 9,399,782 | |
Chief Executive Officer |
| 2018 |
| 1,677,243 |
|
| — |
|
| 6,784,477 |
|
| — |
|
| 1,961 |
|
| 8,463,681 |
| Chief Executive Officer | | 2019 | | 863,628 | | | ��� | | | 11,369,327 | | | 47,965 | | | 12,280,920 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Sean E. Quinn |
| 2020 |
| 710,769 |
|
| 354,375 |
|
| 3,199,628 |
|
| — |
|
| 4,000(7) |
|
| 4,268,772 |
| Sean E. Quinn | | 2021 | | 803,077 | | | 241,875 | | | 4,667,581 | | | 5,931(4) | | 5,718,464 | |
Executive Vice President |
| 2019 |
| 769,774 |
|
| 354,375 |
|
| 2,836,524 |
|
| — |
|
| 7,620 |
|
| 3,968,293 |
| Executive Vice President | | 2020 | | 710,769 | | | 354,375 | | | 3,199,628 | | | 4,000 | | | 4,268,772 | |
and Chief Financial Officer |
| 2018 |
| 772,919 |
|
| 225,000 |
|
| 3,615,997 |
|
| 55,419 |
|
| 6,363 |
|
| 4,675,698 |
| and Chief Financial Officer | | 2019 | | 769,774 | | | 354,375 | | | 2,836,524 | | | 7,620 | | | 3,968,293 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Maarten Wensveen(8) |
| 2020 |
| 530,769.42 |
|
| — |
|
| 2,554,745 |
|
| — |
|
| 33,535(9) |
|
| 3,119,049 |
| |
Executive Vice President and Chief Technology Officer |
| 2019 |
| 501,923 |
|
| — |
|
| 548,018 |
|
| — |
|
| 35,991 |
|
| 1,085,932 |
| |
Maarten Wensveen | | Maarten Wensveen | | 2021 | | 756,317 | | | — | | | 4,032,234 | | | 133,957(5) | | 4,922,508 | |
Executive Vice President and | | Executive Vice President and | | 2020 | | 530,769 | | | — | | | 2,554,745 | | | 33,535 | | | 3,119,049 | |
Chief Technology Officer | | Chief Technology Officer | | 2019 | | 501,923 | | | — | | | 548,018 | | | 35,991 | | 1,085,932 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
_____________
|
| | | | | | | | | | | | |
(1) |
| For Mr. Keane, the amounts in this column for fiscal years 2021 and 2020 represent the aggregate minimum salary for exempt employees under the U.S. Fair Labor Standards Act, which is paid in cash. Beginning in the second half of fiscal year 2019, Mr. Keane began receiving substantially all of his compensation, including base salary and Board retainer fees, in the form of PSUs. |
| | |
(2) | | The amount in this column for Mr. Keane in fiscal year 2021 represents the amount of LTI compensation payable to him that exceeded the 75,000 PSUs per fiscal year limit set forth in his PSU Limitation Agreement and was instead paid to him as a cash bonus. The amounts reported in this column for fiscal year 2020 for executive officers other than Mr. Keane reflect the temporary 50% reduction in cash base salary during the fourth quarter 2020. The grant date fair value of the RSU awards granted to the affected executive officers in replacement of the reduced salary is included in the Share Awards column. |
|
|
|
(2) |
| The amounts reported in this columnQuinn represent the payment of cash retention bonuses. bonuses that were granted in previous fiscal years and vested in the years shown. |
|
|
|
(3) |
| The amounts reported in this column represent a dollar amount equal to the grant date fair value of the share awards as computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations for these amounts in Note 11 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.2021. See footnote 5 to the Grants of Plan-Based Awards in the Fiscal Year Ended June 30, 20202021 table for the value of the PSUs granted in 20202021 assuming the maximum achievement of the performance conditions.
|
|
|
|
(4) |
| The amount reported in this column represents the payment of the portion of Mr. Quinn's legacy long-term cash incentive award that was attributable to fiscal year 2018. |
|
|
|
(5) |
| Beginning in the second half of fiscal year 2019, Mr. Keane receives all of his compensation, including base salary and Board retainer fees, in the form of PSUs, other than the minimum weekly salary for exempt employees under the U.S. Fair Labor Standards Act ($455 per week for calendar year 2019 and $684 per week for calendar year 2020), which is paid in cash. |
|
|
|
(6) |
| $27,920 of this amount represents reimbursement of commuting expenses, $2,980 of this amount represents payments of tax preparation fees, and $200 represents tax-gross up amounts associated with the tax preparation fees. |
|
|
|
(7) |
| This amount represents our matching contributions under our 401(k) deferred savings retirement plans.
|
|
|
|
(8)(5) |
| Mr. Wensveen was appointed as an executive officer in January 2019. |
|
|
|
(9) |
| $15,00074,575 of this amount represents our payment of state tax in connection with Mr. Wensveen's repatriation to the United States, $6,246$30,981 of this amount represents a tax gross up associated with the payment of state tax, $10,904$9,328 represents our payment of storage rental fees and import taxes associated with the storage of Mr. Wensveen's personal effects in Switzerland after his repatriation to the United States, $7,954 represents a tax gross up associated with the storage rental fees and $1,385import taxes, $1,850 represents tax preparation fees paid, $1,020 represents a tax gross up for tax preparation fees, and $8,250 of this amount represents our matching contributions under our 401(k) deferred savings retirement plan. The storage rental fees and import taxes were paid in Euros, and for purposes of this table, we converted these payments from Euros to U.S. dollars at a currency exchange rate of 1.12504 based on the average currency exchange rate for the month of June 2020, which was the last month of our most recent fiscal year. |
Grants of Plan-Based Awards in the Fiscal Year Ended June 30, 20202021
The following table contains information about plan-based awards granted to each of our named executive officers during the fiscal year ended June 30, 2020.2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | All Other Share Awards: Number of Shares or Units | | Grant Date Fair Value of Share Awards |
| | | | Estimated Future Payouts | | |
| | | | Under Equity Incentive Plan Awards(1) | |
| | | | Threshold | | Target | | Maximum | |
Name | | Grant Date | | (#) | | (#)(2) | | (#)(3) | | (#)(4) | | ($)(5) |
Robert S. Keane | | 8/15/2020(6) | | — | | | 17,902 | | | 35,805 | | | | | 1,350,295 | |
| | 8/15/2020(7) | | — | | | 1,108 | | | 2,217 | | | | | 83,627 | |
| | 11/15/2020(8) | | — | | | 1,403 | | | 2,807 | | | | | 86,034 | |
| | 2/15/2021(9) | | — | | | 73,335 | | | 146,670 | | | | | 6,763,840 | |
| | | | | | | | | | | | |
Sean E. Quinn | | 7/1/2020(10) | | | | | | | | 15,953 | | | 1,199,985 | |
| | 2/15/2021(11) | | | | | | | | 5,958 | | | 624,935 | |
| | 2/15/2021(9) | | — | | | 19,641 | | | 49,102 | | | | | 2,842,662 | |
| | | | | | | | | | | | |
Maarten Wensveen | | 7/1/2020(10) | | | | | | | | 13,294 | | | 999,975 | |
| | 2/15/2021(9) | | — | | | 20,951 | | | 52,377 | | | | | 3,032,259 | |
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | All Other Share Awards: Number of Share Units | | Grant Date Fair Value of Share Awards |
|
|
|
| Estimated Future Payouts |
|
|
|
|
|
| Under Equity Incentive Plan Awards(1) |
|
|
|
|
| Threshold |
| Target |
| Maximum |
|
Name |
| Grant Date |
| (#) |
| (#)(2) |
| (#)(3) |
| (#)(4) |
| ($)(5) |
Robert S. Keane |
| 8/15/2019(6) |
| — |
|
| 71,726 |
|
| 143,452 |
|
|
|
|
| 7,170,054 |
|
|
| 8/15/2019(7) |
| — |
|
| 18,663 |
|
| 37,327 |
|
|
|
|
| 1,865,706 |
|
|
| 8/15/2019(8) |
| — |
|
| 1,147 |
|
| 2,295 |
|
|
|
|
| 114,709 |
|
|
| 11/15/2019(9) |
| — |
|
| 1,398 |
|
| 2,797 |
|
|
|
|
| 188,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean E. Quinn |
| 8/15/2019(6) |
| — |
|
| 22,952 |
|
| 57,380 |
|
|
|
|
| 3,099,635 |
|
|
| 4/1/2020 |
|
|
|
|
|
|
|
|
|
| 2,143 |
|
| 99,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maarten Wensveen |
| 8/15/2019(6) |
| — |
|
| 18,362 |
|
| 45,905 |
|
|
|
|
| 2,479,762 |
|
|
| 4/1/2020 |
|
|
|
|
|
|
|
|
|
| 1,607 |
|
| 74,983 |
|
________________________________________
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| | | | | | | |
(1) |
| These columns represent PSUs granted under our 2016 Plan.PSU awards. Each PSU represents a right to receive between 0 and 2.5 Cimpress ordinary shares upon the satisfaction of (A) service-based vesting, and (B) performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares.
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(2) |
| For Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable six to ten years after the grant date if he fully satisfies the service-based vesting condition described in footnote 6, 7, 8, or 9, as applicable, and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). For the named executive officers other than Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable four to eight years after the grant date if the executive officer fully satisfies the service-based vesting condition described in footnote 69 and the 3YMA CAGR is 9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). |
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(3) |
| For Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable six to ten years after the grant date if he fully satisfies the service-based vesting condition described in footnote 6, 7, 8, or 9, as applicable, and the 3YMA CAGR is 20% to 25.8925%or above on any of the sixth through tenth anniversaries of the grant date (multiplier is 250%). For the named executive officers other than Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable four to eight years after the grant date if the executive officer fully satisfies the service-based vesting condition described in footnote 69 and the 3YMA CAGR is 20% or above on any of the fourth through eighth anniversaries of the grant date (multiplier of 250%). |
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(4) |
| The amounts reported in this column represent restricted share units granted in accordance with our salary reduction program pursuant to which the named executive officer's cash compensation was reduced in exchange for an RSU award having the same value as the amount by which such officer's cash compensation was reduced. The RSU awards vest in full on August 15, 2020, on which date we will automatically issue one ordinary share for each vested unit so long as the named executive officer remains a Cimpress employee on that date.awards. |
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(5) |
| The amounts reported in this column represent the grant date fair value for the RSU and PSU awards computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations for these amounts in Note 11 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.2021. The maximum value of the PSUs granted in fiscal year 20202021 assuming the maximum achievement of the performance conditions, which we estimated by multiplying the maximum number of shares issuable pursuant to each PSU award by the closing price of our ordinary shares on Nasdaq on the applicable grant date, or on the last trading date immediately before the grant date if the grant date is $21,524,623not a trading date, is $19,240,485 in the aggregate for all of Mr. Keane's PSU awards, $6,623,373$5,150,309 for Mr. Quinn, and $5,298,814$5,493,824 for Mr. Wensveen.
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(6) |
| The service-based vesting condition of the PSUs reported in this row is that 25% of the original number of PSUs vest on June 30 of each of 2020 through 2023 so long as the executive officer continues to be an eligible participant under Cimpress' 2016 Plan on such vesting date.
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(7) |
| This PSU award was granted to Mr. Keane in lieu of his base salary for his role as Chief Executive Officer in fiscal year 2020.2021. The service-based vesting condition of this PSU award is that 25% of the original number of PSUs vest on each of September 30, 2019,2020, December 31, 2019,2020, March 31, 2020,2021, and June 30, 20202021 so long as Mr. Keane continues to be an eligible participant under Cimpress' 20162020 Equity Incentive Plan on such vesting date.
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(8)(7) |
| This PSU award was granted to Mr. Keane in lieu of his $100,000 cash retainer fee for his role as a member of our Board of Directors in fiscal year 2020.2021. The service-based vesting condition of this PSU award is that 25% of the original number of PSUs vest on each of September 30, 2019,2020, December 31, 2019,2020, March 31, 20202021, and June 30, 20202021 so long as Mr. Keane continues to be an eligible participant under Cimpress' 20162020 Equity Incentive Plan on such vesting date.
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(9)(8) |
| This is the annual PSU award granted to the members of our Board of Directors, including Mr. Keane. The service-based vesting condition of this PSU award is that 25% of the PSUs vest on November 2124 of each of 20202021 through 20232024 so long as Mr. Keane continues to be an eligible participant under Cimpress' 20162020 Equity Incentive Plan on such vesting date. |
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(9) | | The service-based vesting condition of the PSUs reported in this row is that 25% of the original number of PSUs vest on June 30 of each of 2021 through 2024 so long as the executive officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting date.
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| | | | | | | | |
| | |
(10) | | 25% of the original number of RSUs subject to this award vest on July 1 of each of 2021 through 2024 so long as the executive officer continues to be an eligible participant under Cimpress' 2011 Equity Incentive Plan on such vesting date. |
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(11) | | 25% of the original number of RSUs subject to this award vest on August 15 of each of 2021 through 2024 so long as the executive officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting date. |
Outstanding Equity Awards at June 30, 20202021
The following table contains information about unexercised share options, unvested RSUs and unearned shares subject to PSUs as of June 30, 20202021 for each of our named executive officers.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Share Awards |
| | Number of Share Units That Have Not Vested | | Market Value of Share Units That Have Not Vested | | Equity Incentive Plan Awards: Number of Unearned Shares | | Equity Incentive Plan Awards: Market Value of Unearned Shares |
Name | | (#)(1) | | ($)(2) | | (#)(3) | | ($)(4) |
Robert S. Keane | | | | | | 93,750(5) | | 10,163,438 | |
| | | | | | 78,970(6) | | 8,561,138 | |
| | | | | | 73,498(7) | | 7,967,918 | |
| | | | | | 8,895(8) | | 964,307 | |
| | | | | | 1,428(9) | | 154,809 | |
| | | | | | 436(10) | | 47,267 | |
| | | | | | 71,726(11) | | 7,775,816 | |
| | | | | | 18,663(12) | | 2,023,256 | |
| | | | | | 1,147(12) | | 124,346 | |
| | | | | | 1,398(13) | | 151,557 | |
| | | | | | 17,902(14) | | 1,940,756 | |
| | | | | | 1,108(14) | | 120,118 | |
| | | | | | 1,403(15) | | 152,099 | |
| | | | | | 73,335(16) | | 7,950,247 | |
| | | | | | | | |
Sean E. Quinn | | 15,953(17) | | 1,729,465 | | | 24,301(5) | | 2,634,471 | |
| | 5,958(18) | | 645,907 | | | 20,306(6) | | 2,201,373 | |
| | | | | | 18,898(7) | | 2,048,732 | |
| | | | | | 22,952(19) | | 2,488,226 | |
| | | | | | 19,641(20) | | 2,129,281 | |
| | | | | | | | |
Maarten Wensveen | | 13,294(17) | | 1,441,203 | | | 14,400(5) | | 1,561,104 | |
| | | | | | 6,016(6) | | 652,195 | |
| | | | | | 3,651(7) | | 395,805 | |
| | | | | | 18,362(19) | | 1,990,624 | |
| | | | | | 20,951(20) | | 2,271,298 | |
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| | | | | | | | | | | | | | | | | | | | | | | |
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|
| Option Awards |
| Share Awards |
|
|
| Number of Securities Underlying Unexercised Options |
| Option Exercise Price |
| Option Expiration Date |
| Number of Share Units That Have Not Vested |
| Market Value of Share Units That Have Not Vested |
| Equity Incentive Plan Awards: Number of Unearned Shares |
| Equity Incentive Plan Awards: Market Value of Unearned Shares |
|
|
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|
|
|
| Name |
| (#) Exercisable |
| (#) Unexercisable |
| ($)(1) |
|
|
| (#)(2) |
| ($)(3) |
| (#)(4) |
| ($)(5) |
| Robert S. Keane |
| 105,240 |
|
| — |
|
| 54.02 |
|
| 5/5/2021 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| N/A |
|
| N/A |
|
| 93,750(6) |
| 7,156,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 78,970(7) |
| 6,028,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 73,498(8) |
| 5,610,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,895(9) |
| 679,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,428(10) |
| 109,014 |
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
| 436(11) |
| 33,284 |
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|
|
|
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|
|
|
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|
|
|
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|
|
|
|
|
|
| 71,726(12) |
| 5,475,563 |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,663(13) |
| 1,424,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,147(13) |
| 87,562 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,398(14) |
| 106,723 |
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sean E. Quinn |
| — |
|
| — |
|
| N/A |
|
| N/A |
| 2,143 |
|
| 163,597 |
|
| 24,301(6) |
| 1,855,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20,306(7) |
| 1,550,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20,306(15) |
| 1,550,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18,898(8) |
| 1,442,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22,952(16) |
| 1,752,156 |
|
|
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|
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|
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|
| Maarten Wensveen |
| — |
|
| — |
|
| N/A |
|
| N/A |
| 1,607 |
|
| 122,678 |
|
| 14,400(6) |
| 1,099,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,016(7) |
| 459,261 |
|
|
|
|
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|
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|
|
|
|
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|
| 15,041(15) |
| 1,148,230 |
|
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|
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|
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|
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|
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|
|
|
|
|
|
|
|
| 3,651(8) |
| 278,717 |
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|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
| 18,362(16) |
| 1,401,755 |
|
_____________________________ |
| | | | | | | |
(1) |
| Each share option has an exercise price equal to the fair market value of our ordinary shares on the date of grant, is fully exercisable as of June 30, 2020, and expires 10 years after the date on which it was granted. Mr. Keane’s share option awards are held by entities wholly owned by irrevocable discretionary trusts established for the benefit for Mr. Keane or members of his immediate family (the Trusts).
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(2) |
| These amounts represent the number of Cimpress ordinary shares issuable pursuant to RSU awards upon vesting. The RSU awards vest in full on August 15, 2020, on which date we will automatically issue one ordinary share for each vested unit so long as the named executive officer continues to be an eligible participant under Cimpress' 2011 Equity Incentive Plan on that date.
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(3)(2) |
| The market value of the unvested RSUs is determined by multiplying the number of RSUs by $76.34$108.41 per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2020,2021, the last trading day of our 20202021 fiscal year.
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(4)(3) |
| These amounts represent the number of Cimpress ordinary shares issuable pursuant to PSU awards if the applicable service-based vesting condition and 3YMA CAGR performance conditions described in the footnotes below are satisfied for such PSU award. |
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(5)(4) |
| The market value of the unearned PSUs is determined by multiplying the number of shares that would be issuable if the conditions described in footnote 43 were achieved by $76.34$108.41 per share, which was the closing price of our ordinary shares on Nasdaq on June 30, 2020,2021, the last trading day of our 20202021 fiscal year.
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(6)(5) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August 15, 2016 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2022 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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| | | | | | |
(7) |
| |
(6) | | This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August 15, 2017 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, is that 25% of the original number of PSUs vest on June 30 of each of 2018 through 2021 so long as the officer continues to be an eligible participant under Cimpress' 2016 Plan on each vesting date. However,but the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2023 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(8)(7) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August 15, 2018 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2019 through 2022 so long as the officer continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2024 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(9)(8) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of February 15, 2019 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(10)(9) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of February 15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on November 12 of each of 2019 through 2022 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(11)(10) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of February 15, 2019 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(12)(11) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August 15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2020 through 2023 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(13)(12) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August 15, 2019 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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(14)(13) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of November 15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition of these PSUs is that 25% of the PSUs vest on November 21 of each of 2020 through 2023 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on such vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until November 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
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(15)(14) |
| This amount represents the number of Cimpress ordinary shares that would have been issuable pursuant to a supplemental PSU award six to ten years after the grant date of August 15, 20172020 if the unlevered free cash flow performance condition had been satisfied and the 3YMA CAGR wereis 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The supplemental PSU awards contain an additional performance goal, determined byservice-based vesting condition has been fully satisfied for these PSUs, but the Compensation Committee at the grant date, relating to Cimpress' cumulative consolidated unlevered free cash flow over the period from July 1, 2017 through June 30, 2020. On August 6, 2020, our Compensation Committee determined that Cimpress hadPSUs are not met the unlevered free cash flow goal, and therefore the supplemental PSUs expired on that dateearned, and no shares are issuable pursuant to the supplemental PSUs.PSUs, until August 15, 2026 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
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| | | | | | | | |
(15) | | This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of November 15, 2020 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition of these PSUs is that 25% of the PSUs vest on November 24 of each of 2021 through 2024 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on such vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until November 15, 2026 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
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(16) |
| This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of February 15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2021 through 2024 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2027 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
| | |
(17) | | These RSU awards vest as to 25% of the original number of units on July 1 of each of 2021 through 2024, on each of which dates we will automatically issue one ordinary share for each vested unit so long as the named executive officer continues to be an eligible participant under Cimpress' 2011 Equity Incentive Plan on that date. |
| | |
(18) | | This RSU award vests as to 25% of the original number of units on August 15 of each of 2021 through 2024, on each of which dates we will automatically issue one ordinary share for each vested unit so long as Mr. Quinn continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on that date. |
| | |
(19) | | This amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of August 15, 2019 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2020 through 2023 so long as the officer continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2023 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
| | |
(20) | | This amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of February 15, 2021 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). The service-based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2021 through 2024 so long as the officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied. |
Option Exercises and Shares Vested in the Fiscal Year Ended June 30, 20202021
The following table contains information about option exercises and vesting of RSUs on an aggregated basis during fiscal year 20202021 for each of our named executive officers.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Share Awards |
Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise (1)($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting (2)($) |
Robert S. Keane | | 105,240 | | | 5,459,851 | | | — | | | — | |
Sean E. Quinn | | — | | | — | | | 2,143 | | | 204,249 | |
Maarten Wensveen | | — | | | — | | | 1,607 | | | 153,163 | |
|
| | | | | | | | | | | | |
|
| Option Awards |
| Share Awards |
Name |
| Number of Shares Acquired on Exercise (#) |
| Value Realized on Exercise (1)($) |
| Number of Shares Acquired on Vesting (#) |
| Value Realized on Vesting (2)($) |
Robert S. Keane |
| 1,321,262 |
|
| 92,571,738 |
|
| — |
|
| — |
|
Sean E. Quinn |
| — |
|
| — |
|
| 1,338 |
|
| 170,696 |
|
Maarten Wensveen |
| — |
|
| — |
|
| 100 |
|
| 11,543 |
|
_____________
_________________________ |
| | | | | | | | | | | | | | | | | | | | | | | | | |
(1) |
| RepresentsThe value received on exercise of share options is determined by multiplying the net amount realized from all option exercises during fiscal year 2020. In cases involving an exercise and immediate sale,number of shares exercised by the value was calculated ondifference between the basis of the actual sale price. In cases involving an exercise without immediate sale, the value was calculated on the basis of our closing sale price of our ordinary shares on Nasdaq on the date of exercise.exercise and the exercise price. |
|
|
|
(2) |
| The value realized on vesting of RSUs is determined by multiplying the number of shares that vested by the closing sale price of our ordinary shares on Nasdaq on the vestingvest date, or on the last trading date immediately before the vest date if the vest date is not a trading date. |
|
|
|
CEO Pay Ratio
Mr. Keane's fiscal year 20202021 annual total compensation was $9,399,782,$8,340,034, as reported in the Summary Compensation Table above, and the fiscal year 20202021 annual total compensation of our median compensated employee other than Mr. Keane was $26,277.$27,136. The ratio of the median employee's total compensation to Mr. Keane's total compensation is 1-to-358. $9,338,7941-to-307. $8,283,797 of Mr. Keane's total compensation for fiscal year 20202021 was in the form of PSU awards that will pay out six to ten years after grant only if the 3YMA CAGR performance conditions are met.
Because ofthere were no changes to our employee population andor employee compensation from fiscal year 20192020 to fiscal year 2020,2021 that significantly impacted our pay ratio disclosure, we identified a new median compensated employee for fiscal year 2020. We used the same methodology to identifymedian employee this year as we did last year. For purposes of identifying the median compensated employee for fiscal year 2020, that we used for fiscal year 2018, the last time we identified a median compensated employee, which is that we took into account base salary (for salaried employees) and wages paid (for hourly employees) during the fiscal year for all our employees as of May 1, 2020. We annualized this compensation for employees who did not work the entire fiscal year, except for employees designated as seasonal or temporary. For employees whose cash compensation was temporarily reduced for the fourth quarter of 2020 and replaced with RSUs as part of the salary restructuring program describedwe instituted in fiscal year 2020 in response to the Executive Overview of the Compensation Discussion and Analysis section of this proxy statement,COVID-19 pandemic, we included the RSUs as part of each employee's base salary and assumed that the RSUs granted to each employee had the same value as the amount by which such employee’s cash compensation was reduced.
PROPOSAL 3 - APPROVE OUR 2020 EQUITY INCENTIVE PLAN
On August 26, 2020, our Board of Directors adopted our 2020 Equity Incentive Plan, or the 2020 Plan, subject to shareholder approval. If the 2020 Plan is approved by our shareholders, we will cease granting any new awards under any of our current equity plans that have shares available for future grant, consisting of our 2016 Performance Equity Plan, 2011 Equity Incentive Plan, and 2005 Non-Employee Directors' Share Option Plan, and we will make future equity awards under the 2020 Plan.
Summary of Material Features of the Plan
The material features of the 2020 Plan are as follows:
The maximum number of ordinary shares to be issued under the 2020 Plan is 3,500,000 plus an additional number of ordinary shares equal to the number of PSUs (on a 1:1 basis) currently outstanding under the 2016 Performance Equity Plan that expire, terminate or are otherwise surrendered, canceled or forfeited.
The 2020 Plan permits the award of share options (both incentive stock options and nonstatutory share options), share appreciation rights, restricted shares, restricted share units, other share-based awards, and dividend equivalent rights.
Shares tendered or held back for taxes will not be added back to the reserved pool under the 2020 Plan. Upon the exercise of a share appreciation right that is settled in ordinary shares, the full number of shares underlying the award will be charged to the reserved pool. Additionally, shares we reacquire on the open market will not be added to the reserved pool under the 2020 Plan.
Share options and share appreciation rights will not be repriced in any manner without shareholder approval.
Any dividends and dividend equivalent rights payable with respect to any equity award are subject to the same vesting provisions as the underlying award.
Any material amendment to the 2020 Plan is subject to approval by our shareholders.
The 2020 Plan will expire on November 23, 2030.
Based solely on the closing price of our ordinary shares as reported by Nasdaq on August 19, 2020, which was $93.39 per share, and the 3,500,000 shares that would have been available for awards as of such date under the 2020 Plan if the plan had been in place, the maximum aggregate market value of the ordinary shares that could potentially be issued under the 2020 Plan is $326,865,000.
Why the 2020 Plan Is Important
We believe that the future success of Cimpress depends in large part on our ability to attract, retain and motivate employees whose experience and ability are key to our achievement of our vision and goals. We face intense competition for talented employees, and we believe that our ability to offer equity awards helps us remain competitive. We believe equity incentives motivate high levels of performance and provide an effective means of recognizing employee contributions to the success of Cimpress. Moreover, equity incentives align the interests of the employees with the long-term interests of our shareholders. Therefore, we believe that the adoption of our 2020 Plan and authorization of shares for issuance thereunder is appropriate and in the best interests of our shareholders.
If approved, the 2020 Plan will enhance our flexibility to provide different incentives to different employees, depending on their role and level within the organization and the Cimpress business they are a part of, by allowing us to issue a variety of types of equity awards. We currently issue PSUs under our 2016 Performance Equity Plan and equity awards other than PSUs under our 2011 Equity Incentive Plan, which will expire in June 2021, and we are seeking to replace our existing equity plans with the 2020 Plan in order to streamline and simplify our equity compensation program by granting all future equity awards under one plan.
Until June 30, 2023, Robert Keane will continue to receive all of his long-term incentive compensation in the form of PSUs, and the maximum number of PSUs we may grant him in any fiscal year is 75,000 PSUs, as set forth in the Agreement Limiting PSU Awards between Cimpress and Mr. Keane, which was filed with the SEC on May 17, 2016 as an exhibit to our Current Report on Form 8-K. Although Mr. Keane's future PSU awards would be issued under the 2020 Plan, the awards would be subject to the same terms and conditions as PSUs granted to Mr. Keane under the 2016 Performance Equity Plan, as described under the heading Long-Term Incentive Compensation in the Compensation Discussion and Analysis section of this proxy statement, including the performance condition that the compound annual growth rate of Cimpress' three-year moving average share price must equal or exceed 11% over a performance period of six to ten years for any shares to be issued under Mr. Keane's PSU awards.
Our Grant Practices
As of August 19, 2020, there were 5,827,774 ordinary shares available for issuance under all of our current equity compensation plans, and the 3,500,000 ordinary shares covered by the 2020 Plan represents a material reduction in the shares available for future grant. As of August 19, 2020, the outstanding awards under our current equity compensation plans consisted of the following:
share options to acquire 110,538 ordinary shares, with a weighted average exercise price of $55.27 and a weighted average remaining term of 0.9 years
108,655 unvested full value awards in the form of RSUs with time-based vesting
full value awards in the form of PSUs with performance-based conditions and time-based vesting covering 941,296 ordinary shares on a 1:1 basis and 2,353,240 ordinary shares assuming maximum achievement of the performance conditions
Below is information regarding historical awards granted and earned for the fiscal year 2018 through fiscal year 2020 period:
Fiscal year 2020:
| |
◦ | No share options granted |
| |
◦ | Full-value non-performance awards: 193,365 RSUs granted; no restricted shares granted |
| |
◦ | Full-value performance awards: 295,239 PSUs granted and no shares earned pursuant to PSUs (i.e., no shares were issued pursuant to PSUs during the fiscal year) |
| |
◦ | 27,180,744 weighted average ordinary shares outstanding |
Fiscal year 2019:
| |
◦ | No share options granted |
| |
◦ | Full-value non-performance awards: No RSUs granted; 6,000 restricted shares granted |
| |
◦ | Full-value performance awards: 226,220 PSUs granted and no shares earned pursuant to PSUs |
| |
◦ | 30,786,349 weighted average ordinary shares outstanding |
Fiscal year 2018:
| |
◦ | No share options granted |
| |
◦ | No full-value non-performance awards granted |
| |
◦ | Full-value performance awards: 361,582 PSUs granted and no shares earned pursuant to PSUs |
| |
◦ | 30,948,081 weighted average ordinary shares outstanding |
Each RSU represents Cimpress' commitment to issue one ordinary share upon vesting. Each PSU represents a right to receive between 0 and 2.5 ordinary shares upon the satisfaction of both service-based vesting over time and performance conditions relating to the compound annual growth rate of Cimpress' three-year moving average share price over a multiple-year period determined by our Board.
Description of our 2020 Plan The following summary of the 2020 Plan is qualified in its entirety by reference to the full copy of the 2020 Plan attached as Appendix A to the electronic copy of this proxy statement filed with the SEC. You may access the 2020 Plan by viewing our proxy statement on the SEC’s web site at www.sec.gov, or you may obtain a copy by emailing ir@cimpress.com, writing us at Investor Relations, Cimpress, 275 Wyman Street, Waltham, MA 02451 USA, or calling us at telephone no. +1 781-652-6480.
Types of Awards; Authorized Number of Ordinary Shares and Share Counting The 2020 Plan provides for the grant of incentive stock options, non-statutory share options, share appreciation rights, restricted shares, restricted share units, other share-based awards, and dividend equivalent rights, to which we refer in this proxy
statement collectively as awards. Subject to adjustment in the event of stock splits, stock dividends and other similar events, we may make awards under the 2020 Plan for up to 3,500,000 of our ordinary shares plus an additional number of ordinary shares equal to the number of PSUs currently outstanding under the 2016 Performance Equity Plan that expire, terminate or are otherwise surrendered, canceled or forfeited. Ordinary shares underlying awards under the 2020 Plan, and after our shareholders approve the 2020 Plan, ordinary shares underlying PSUs under the 2016 Performance Equity Plan on the basis of one ordinary share for each PSU, that expire, terminate or are otherwise surrendered, canceled or forfeited, or are not issued will become available for the grant of new awards under the 2020 Plan. We will not add back to the number of ordinary shares available for the grant of awards under the 2020 Plan any ordinary shares that a participant delivers to Cimpress (whether by actual delivery, attestation or net exercise) to (1) purchase ordinary shares upon the exercise of an award or (ii) satisfy tax withholding obligations (including shares retained from the award creating the tax obligation). Similarly, ordinary shares that we may repurchase on the open market, whether using the proceeds from the exercise of awards or using other funds, do not increase the number of shares available for future grant of awards.
Description of Awards
Incentive Stock Options and Non-statutory Share Options. Optionees receive the right to purchase a specified number of ordinary shares at a specified exercise price and subject to such other terms and conditions as we specify in connection with the option grant. The exercise price of the options may not be less than 100% of the fair market value per share of our ordinary shares on the date the option is granted, unless our Board approves the grant of an option with an exercise price to be determined on a future date, in which case the exercise price may not be less than 100% of the fair market value on such future date. Fair market value for this purpose is determined by reference to the price of the shares of ordinary shares on Nasdaq. Options may not have a term in excess of ten years. The 2020 Plan allows optionees to pay the exercise price of options through the following forms of payment: (a) cash or check, (b) a “cashless exercise” through a broker, (c) subject to certain conditions, surrender of ordinary shares to Cimpress, (d) subject to certain conditions, in the case of non-statutory share options, by “net exercise,” (e) any other lawful consideration as our Board may determine, or (f) any combination of these forms of payment. To qualify as incentive stock options, options must meet additional federal tax requirements, including a $100,000 limit on the value of ordinary shares subject to incentive stock options that first become exercisable by a participant in any one calendar year.
Share Appreciation Rights. A share appreciation right, or SAR, is an award entitling the holder, upon exercise, to receive an amount of our ordinary shares or cash or a combination thereof determined by reference to appreciation, from and after the date of grant, in the fair market value of an ordinary share over the measurement price established pursuant to the applicable SAR agreement. The measurement price may not be less than 100% of the fair market value of our ordinary shares on the date the SAR is granted, unless the Board approves the grant of an SAR effective as of a future date, in which case the measurement price may not be less than 100% of the fair market value on such future date. SARs may be granted independently or in tandem with an option. SARs may not have a term in excess of ten years.
Restricted Share Awards. A restricted share award entitles the recipient to acquire our ordinary shares subject to our right to repurchase all or some of the shares from the recipient if the conditions specified in the award are not satisfied before the end of the restriction period established for the award. Our Board determines the terms and conditions of restricted share awards, including the purchase price, if any. Any dividends that we may pay during the vesting period of restricted share awards will accrue but not be paid to the participant until and only to the extent the restricted share award vests.
Restricted Share Unit Awards. A restricted share unit award entitles the recipient to receive ordinary shares or cash at the time the award vests pursuant to the terms and conditions that our Board determines.
Other Share-Based Awards. We may grant under the 2020 Plan other awards that are based on our ordinary shares pursuant to the terms and conditions that our Board determines, including awards of our ordinary shares and other awards that are valued in whole or in part by reference to, or are otherwise based on, ordinary shares or other property.
Dividend Equivalent Rights. We may grant dividend equivalent rights to participants as a component of a restricted share unit award, which entitle the recipient to receive credits for dividends that would be paid if the recipient held the ordinary shares underlying the restricted share unit award. Dividend equivalent rights granted as a component of a restricted share unit award may be paid only if the related restricted share units become vested.
Dividend equivalent rights may be settled in cash, ordinary shares of common stock or a combination thereof, as determined by the Board.
Eligibility to Receive Awards Employees, officers, directors, consultants and advisors of Cimpress and its subsidiaries and of other business ventures in which Cimpress has a controlling interest are eligible to be granted awards under the 2020 Plan. Under present law, however, incentive stock options may be granted only to employees of Cimpress and its subsidiaries. As of August 19, 2020, approximately 12,000 people would have been eligible to receive awards under the 2020 Plan had it been in effect on that date, including our three executive officers and the four non-employee directors who serve on our Board. The granting of awards under the 2020 Plan is discretionary, and we cannot now determine the number or type of awards to be granted in the future to any particular person or group.
Transferability of Awards A person who is granted an award under the 2020 Plan may not sell, assign, transfer, pledge or otherwise encumber such award, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an incentive stock option and awards subject to Section 409A of the US Tax Code, pursuant to a qualified domestic relations order. During the life of the participant, only the participant may exercise such award. However, the Board may permit or provide in an award for the gratuitous transfer of the award by a participant without consideration, subject to any limitations that the Board deems appropriate.
Administration of the 2020 Plan The Board administers the 2020 Plan and has the authority to grant awards and adopt, amend and repeal such administrative rules, guidelines and practices relating to the plan as it deems advisable. The Board may delegate any or all of its powers under the 2020 Plan to one or more committees or subcommittees of the Board, and the Board may also delegate to one or more of our officers the power to grant awards to Cimpress employees or officers and to exercise such other powers under the 2020 Plan as the Board may determine. Our Board, or any committee to whom our Board delegates authority, as the case may be, selects the recipients of awards and determines (a) the number of ordinary shares covered by awards and the dates upon which such awards become exercisable, issuable or otherwise vest; (b) the exercise, measurement or purchase price of awards (which may not be less than 100% of the fair market value of our ordinary shares on the date of grant for options and SARs); (c) the duration of awards (which may not exceed ten years for options and SARs), and (d) the terms and conditions of such awards.
Adjustments for Changes in our Ordinary Shares and Certain Other Events We are required to make equitable adjustments, in the manner determined by our Board, in connection with the 2020 Plan and any outstanding awards to reflect stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in our capitalization. The 2020 Plan also contains provisions addressing the consequences of any Reorganization Event, which is defined as (a) any merger or consolidation of Cimpress with or into another entity as a result of which all of our ordinary shares are converted into or exchanged for the right to receive cash, securities or other property, or are canceled; (b) the transfer or disposition of all of our ordinary shares for cash, securities or other property pursuant to a share exchange or other transaction; (c) the sale of all or substantially all of the assets of Cimpress on a consolidated basis to an unrelated person or entity; (d) any other transaction in which the owners of Cimpress’ outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of Cimpress or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from Cimpress; or (e) any liquidation or dissolution of Cimpress. In connection with a Reorganization Event, our Board may take any one or more of the following actions as to all or any outstanding awards (other than restricted share awards) on such terms as our Board determines: (i) provide that the acquiring or succeeding corporation assume such awards or substitute substantially equivalent awards; (ii) provide that all of the participant’s unexercised awards will terminate immediately before the consummation of the Reorganization Event unless exercised by the participant; (iii) provide that outstanding awards become exercisable, realizable, or deliverable, or restrictions applicable to an award lapse, in whole or in part before or upon the Reorganization Event; (iv) in the event of a Reorganization Event under which holders of our ordinary shares will receive a cash payment for each ordinary share surrendered in the Reorganization Event, make or provide for a cash payment to participants with respect to each award held by a participant; (v) provide that, in connection with a liquidation or dissolution of Cimpress, awards convert into the right to receive liquidation proceeds; and (vi) any combination of the above actions.
Acceleration The Board may at any time provide that any award becomes immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part.
Substitute Awards In connection with Cimpress’ acquisition of another entity, the Board may grant awards in substitution for any options or other stock or stock-based awards granted by such entity, on such terms as the Board deems appropriate in the circumstances notwithstanding the 2020 Plan’s limitations on awards. Substitute awards do not count against the plan’s overall share limit, except as the US Tax Code may require.
Repricings Unless approved by our shareholders, we may not (1) amend any outstanding option or SAR granted under the 2020 Plan to provide an exercise or measurement price that is lower than the then-current exercise or measurement price of such option or SAR, (2) cancel any outstanding option or SAR (whether or not granted under the 2020 Plan) and grant in substitution for that option or SAR any new awards under the 2020 Plan (other than substitute awards granted in connection with a merger with another entity or acquisition of the property or stock of an entity) covering the same or a different number of shares and having an exercise or measurement price lower than the then-current exercise or measurement price of the canceled option or SAR, (3) cancel in exchange for a cash payment an option or SAR with an exercise price above the then-current fair market value of the shares, or (4) take any other action under the 2020 Plan that constitutes a repricing under the rules of the NASDAQ Stock Market.
Amendment and Termination We may not grant any awards under the 2020 Plan after the expiration of 10 years from the date of shareholder approval of the plan, but previously granted awards may extend beyond that date. We may not grant any incentive stock options under the 2020 Plan after the expiration of 10 years from the date the 2020 Plan was approved by the Board. The Board may amend, suspend or terminate the 2020 Plan or any portion thereof at any time, subject to shareholder approval of certain amendments. We must obtain the approval of our shareholders for any amendment to the 2020 Plan to the extent required under the rules of the NASDAQ Stock Market.
If our shareholders do not approve the 2020 Plan, then the plan will not go into effect, and we will not grant any awards under the plan. In such an event, our Board will continue to grant awards under our 2011 Plan until that plan expires in June 2021 and will consider what alternative arrangements to adopt based on its assessment of Cimpress’ needs.
United States Federal Income Tax Consequences
As required by SEC rules, we are providing a summary of the United States federal income tax consequences that will generally arise with respect to awards granted under the 2020 Plan. The following summary is based on the federal tax laws in effect as of the date of this proxy statement and assumes that all awards are exempt from, or comply with, the rules under Section 409A of the IUS Tax Code regarding nonqualified deferred compensation. Changes to these laws could alter the tax consequences described below. This summary does not describe all United States federal tax consequences under the 2020 Plan, nor does it describe state, local or non-U.S. tax consequences.
Incentive Stock Options No taxable income is generally realized by a participant upon the grant or exercise of an incentive stock option. If ordinary shares issued to a participant pursuant to the exercise of an incentive stock option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such ordinary shares, any amount realized in excess of the option exercise price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) Cimpress will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive stock option will give rise to an item of tax preference that may result in alternative minimum tax liability for the participant.
If ordinary shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a "disqualifying disposition"), generally (i) the participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the ordinary shares at exercise (or, if less, the amount realized on a sale of such ordinary shares) over the exercise price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive stock option is paid by tendering ordinary shares.
If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a nonstatutory option. Generally, an incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one
year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Nonstatutory Options No income is realized by the optionee at the time a nonstatutory option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option exercise price and the fair market value of the ordinary shares on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the ordinary shares have been held. Special rules will apply where all or a portion of the exercise price of the nonstatutory option is paid by tendering ordinary shares. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Other Awards We are generally will be entitled to a tax deduction in connection with other awards under the 2020 Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.
Parachute Payments The vesting of any portion of an award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as "parachute payments" as defined in the US Tax Code. Any such parachute payments may be non-deductible by Cimpress, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions Under Section 162(m) of the US Tax Code, the Company’s deduction for awards under the 2020 Plan may be limited to the extent that any "covered employee" (as defined in Section 162(m) of the US Tax Code) receives compensation in excess of $1 million a year.
Our Board of Directors recommends that you vote FOR our proposed 2020 Equity Incentive Plan.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of June 30, 20202021 about the securities issued or authorized for future issuance under our current equity compensation plans.
Equity Compensation Plan Information
| | Plan Category |
|
(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) |
| (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) |
| (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a) | Plan Category | | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | | (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) | | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) |
Equity compensation plans approved by shareholders(1) |
| 2,873,264 |
| $2.13 |
| 5,815,482 | Equity compensation plans approved by shareholders(1) | | 3,336,477 | | $0.13 | | 2,710,926 |
Equity compensation plans not approved by shareholders |
| — |
| — |
| — | Equity compensation plans not approved by shareholders | | — | | — | | — |
Total |
| 2,873,264 |
| $2.13 |
| 5,815,482 (3) | Total | | 3,336,477 | | $0.13 | | 2,710,926 (3) |
Our treasury account contains ordinary shares that we previously repurchased from our shareholders, and when we issue ordinary shares to satisfy our obligations under our equity compensation plans or for other purposes, we generally issue shares from our treasury account instead of issuing new ordinary shares from our authorized share capital. Under Irish law, we need our shareholders to set the minimum and maximum prices at which we are authorized to issue treasury shares off-market. Once set by our shareholders, the price range is valid for no more than 18 months. Unless the price range is set by our shareholders, we cannot issue treasury shares.
The formal text of the resolution that we are asking our shareholders to approve is as follows:
"As a special resolution for the purposes of section 1078 of the Companies Act 2014 of Ireland (the "Companies Act"), the maximum and minimum prices at which ordinary shares that we previously purchased or redeemed and hold in treasury may be reissued off-market isare as follows:
The authority conferred by this resolution is effective from the date of passing of this resolution and expires eighteen months from the date of the passing of this resolution, unless previously varied, revoked or renewed by special resolution in accordance with the provisions of section 1078 of the Companies Act.
For the purpose of this resolution, the "market price" of our ordinary shares is the average of the closing price on each of the consecutive days of trading during a period no shorter than one trading day and no longer than 10 trading days immediately preceding the date of the issuance, as reasonably determined by the Board of Directors of Cimpress plc."
Our Board of Directors recommends that you vote FOR the proposal to set the price range for issuing treasury shares as described above.
The Irish Companies Act 2014 requires that our statutory auditors be appointed at each annual general meeting of shareholders, to hold office from the conclusion of the annual general meeting until the conclusion of the next annual general meeting. PricewaterhouseCoopers Ireland has served as Cimpress plc's Irish statutory auditor duringsince fiscal year 2020 and is affiliated with PricewaterhouseCoopers LLP, who our Audit Committee has selected as our U.S. registered independent registered public accounting firm for the fiscal year ending June 30, 20212022 with respect to our consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. We refer to PricewaterhouseCoopers LLP and Pricewaterhouse CoopersPricewaterhouseCoopers Ireland together as "PwC."
Our Audit Committee has recommended that PricewaterhouseCoopers Ireland be appointed as our Irish statutory auditor. If our shareholders do not approve the reappointment of PricewaterhouseCoopers Ireland at this annual meeting, our Board of Directors may appoint a person or firm to fill the vacancy.
The following table presents the aggregate fees and expenses billed for services rendered by PwC for the fiscal years ended June 30, 20202021 and June 30, 2019.2020. The amounts reported for each fiscal year represent the fees and expenses for services rendered during the applicable fiscal year, regardless of when the fees and expenses were billed.