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Shareholders' Equity

12 Months Ended

Jun. 30, 2021

Stockholders' Equity, Policy [Policy Text Block]

Shareholders' Equity (Deficit)

Treasury shares

On November 25, 2019, we announced that our Board had approved a new share repurchase program under which we may repurchase up to 5,500,000 of our issued and outstanding ordinary shares on the open market (including block trades), through privately negotiated transactions, or in one or more self-tender offers. This repurchase program expired on May 22, 2021, and during the year ended June 30, 2021 we did not repurchase any shares under this program.

Warrants

In conjunction with our issuance of the Second Lien Notes in fiscal year 2020, we also issued 7-year warrants, to purchase 1,055,377 ordinary shares of Cimpress, representing approximately 3.875% of our outstanding diluted ordinary shares. The warrants are accounted for as equity, as they are redeemable only in our own shares, with an exercise price of $60 per share. The warrants may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised.

The fair value used for the warrants in this allocation was calculated using the Monte Carlo valuation model. The valuation of the notes and warrants resulted in a carrying value allocated to the warrants of $22,432, which, in addition to be being accounted for as an equity instrument recorded in additional paid in capital, was included as a discount to the Second Lien Notes. As of June 30, 2021 the warrants remain outstanding.

Share-based awards

On November 25, 2020, our shareholders approved our 2020 Equity Incentive Plan, or the 2020 Plan. Upon approval, we ceased granting any new awards under any of our prior equity plans that had shares available for future grant, consisting of our 2016 Performance Equity Plan, 2011 Equity Incentive Plan, and 2005 Non-Employee Directors' Share Option Plan. We will make future equity awards under the 2020 Plan. 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 currently outstanding under the 2016 Performance Equity Plan that expire, terminate or are otherwise surrendered, canceled or forfeited. The 2020 Plan allows us to grant share options, share appreciation rights, restricted shares, restricted share units, other share-based awards, and dividend equivalent rights to our employees, officers, non-employee directors, consultants, and advisors.

As noted above, all future awards will be granted under our 2020 Plan. Our 2016 Performance Equity Plan previously allowed us to grant PSUs to our employees, officers, non-employee directors, consultants, and advisors. The 2011 Equity Incentive Plan previously allowed us to grant share options, share appreciation rights, restricted shares, restricted share units and other awards based on our ordinary shares to our employees, officers, non-employee directors, consultants and advisors. Our 2005 Non-Employee Directors’ Share Option Plan previously allowed us to grant share options to our non-employee directors upon initial appointment as a director and annually thereafter in connection with our annual general meeting of shareholders if they continued to serve as a director at such time.

As of June 30, 2021, 2,710,926 ordinary shares were available for future awards under our 2020 Plan. For PSUs, we assumed that we would issue ordinary shares equal to 250% of the outstanding PSUs, which is the maximum potential share issuance. Treasury shares have historically been used in fulfillment of our share-based awards.

Performance share units

PSU awards entitle the recipient to receive Cimpress ordinary shares between 0% and 250% of the number of units, based upon continued service to Cimpress and the achievement of a compounded annual growth rate target based on Cimpress' three-year moving average share price. Awards with a grant date prior to fiscal year 2020 and all awards granted to our Chief Executive Officer and Board of Directors will be assessed annually in years 6 - 10 following the grant date and awards with a grant date in or after fiscal year 2020 (other than to the CEO and Board) will be assessed annually in years 4 - 8 following the grant date. The fair value of the PSUs is based on a Monte Carlo simulation, and the resulting expense is recognized on an accelerated basis over the requisite service period.

A summary of our PSU activity and related information for the fiscal year ended June 30, 2021 is as follows:


	PSUs	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at the beginning of the period	1,034,197	$	133.89
Granted	228,132	129.25
Vested and distributed	—	—
Forfeited	(103,613)	117.40
Outstanding at the end of the period	1,158,716	$	134.45	$	125,616

The weighted average fair value of PSUs granted during the fiscal years ended June 30, 2021, 2020, and 2019 was $129.25, $142.90, and $176.16, respectively. The total intrinsic value of PSUs outstanding at the fiscal years ended June 30, 2021, 2020, and 2019 was $125,616, $78,951 and $74,688, respectively. As of June 30, 2021 the number of shares subject to PSUs included in the table above assumes the issuance of one share for each PSU, but based on actual performance that amount delivered can range from zero shares to a maximum of 2,896,790 shares.

Restricted share units

The fair value of an RSU award is equal to the fair market value of our ordinary shares on the date of grant and the expense is recognized on a straight-line basis over the requisite service period. RSUs generally vest over 4 years.

A summary of our RSU activity and related information for the fiscal year ended June 30, 2021 is as follows:


	RSUs	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested at the beginning of the period	177,233	$	47.06
Granted	453,916	93.64
Vested and distributed	(180,494)	47.92
Forfeited	(16,266)	96.03
Unvested at the end of the period	434,389	$	93.54	$	47,092

The weighted average fair value of RSUs granted during the fiscal years ended June 30, 2021 and 2020 was $93.64 and $46.94, respectively. We did not grant any RSUs during the year ended June 30, 2019. The total intrinsic value of RSUs vested during the fiscal years ended June 30, 2021, 2020, 2019 was $17,231, $1,905 and $6,749, respectively.

Share options

We have previously granted options to purchase ordinary shares at prices that are at least equal to the fair market value of the shares on the date the option is granted and have a contractual term of approximately eight to ten years. Options generally vested over 3 years for non-employee directors and over 4 years for employees.

The fair value of each option award subject only to service period vesting is estimated on the date of grant using the Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period. Use of a valuation model requires management to make certain assumptions with respect to inputs. The expected volatility assumption is based upon historical volatility of our share price. The expected term assumption is based on the contractual and vesting term of the option and historical experience. The risk-free interest rate is based on the U.S. Treasury yield curve with a maturity equal to the expected life assumed at the grant date. We value share options with a market condition using a lattice model with compensation expense recorded on an accelerated basis over the requisite service period.

We did not grant any share options in fiscal year 2021. A summary of our share option activity and related information for the year ended June 30, 2021 is as follows:


	Shares Pursuant to Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at the beginning of the period	110,538	$	55.27	1.0
Granted	—	—
Exercised	(105,240)	54.02
Forfeited/expired	—	—
Outstanding at the end of the period	5,298	80.01		3.8	$	150
Exercisable at the end of the period	5,298	$	80.01	3.8	$	150

The intrinsic value in the table above represents the total pre-tax amount, net of exercise price, which would have been received if all option holders exercised in-the-money options on June 30, 2021. The total intrinsic value of options exercised during the fiscal years ended June 30, 2021, 2020, and 2019 was $5,460, $92,582 and $12,498, respectively.

Share-based compensation

Total share-based compensation costs were $37,034, $34,874 and $21,716 for the years ended June 30, 2021, 2020, and 2019, respectively, and we elected to recognize the impact of forfeitures as they occur. Share-based compensation costs capitalized as part of software and website development costs were $1,338, $1,157 and $1,141 for the years ended June 30 2021, 2020, and 2019, respectively. As of June 30, 2021, there was $61,127 of total unrecognized compensation cost related to non-vested, share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 2.5 years.

Shareholders' Equity and Share-based Payments