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Share Capital, Option Plans And Share-Based Payments | 12 Months Ended
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Jun. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share Capital, Option Plans And Share-Based Payments | SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of preference shares. No preference shares have been issued. Treasury Stock During the year ended June 30, 2012 we repurchased 221,081 of our Common Shares in the amount of $10.9 million, for potential future reissuance under our Long Term Incentive Plans (LTIP) (June 30, 2011— repurchased 264,834 Common Shares for $12.5 million, June 30, 2010— repurchased 307,579 Common Shares for $14.0 million). As of June 30, 2012, we have not reissued any Common Shares from treasury (June 30, 2011—nil). Option Plans A summary of stock options outstanding under our various Stock Option Plans is set forth below. All numbers shown in the chart below have been adjusted, where applicable, to account for the two-for-one stock split that occurred on October 22, 2003.
| 1998 Stock Option Plan | 2004 Stock Option Plan | Artesia Stock Option Plan | Centrinity Stock Option Plan | Gauss Stock Option Plan | Hummingbird Option Plan | IXOS Stock Option Plan | Vista Stock Option Plan
Date of inception | Jun-98 | Oct-04 | Sep-04 | Jan-03 | Jan-04 | Oct-06 | Mar-04 | Sep-04
Eligibility | Eligible employees and directors, as determined by the Board of Directors | Eligible employees, as determined by the Board of Directors | Eligible employees, and consultants of Artesia Technologies Inc. | Eligible employees, consultants and directors, as determined by the Board of Directors | Eligible employees as determined by the Board of Directors | Eligible employees, and consultants of Hummingbird Inc. | Eligible employees as determined by the Board of Directors | Former employees, and consultants of Vista Inc.
Options granted to date | 7,914,290 | 4,145,400 | 20,000 | 414,968 | 51,000 | 355,675 | 210,000 | 43,500
Options exercised to date | (5,138,180) | (1,722,500) | (7,500) | (400,968) | (13,000) | (23,854) | (59,250) | (22,625)
Options cancelled to date | (2,555,110) | (542,375) | (12,500) | (13,500) | (13,000) | (319,695) | (144,750) | (18,875)
Options outstanding | 221,000 | 1,880,525 | — | 500 | 25,000 | 12,126 | 6,000 | 2,000
Termination grace periods | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death
Vesting schedule | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified
Exercise price range | $13.10 - $31.35 | $14.02 - $61.63 | n/a | $13.50 - $13.50 | $26.24 - $26.24 | $18.36 - $27.75 | $26.24 - $26.24 | $17.99 - $17.99
Expiration dates | 12/12/2012 to 2/3/2016 | 11/7/2012 to 6/15/2019 | n/a | 1/28/2013 to 1/28/2013 | 1/27/2014 to 1/27/2014 | 10/2/2013 to 10/2/2013 | 1/27/2014 to 1/27/2014 | 9/3/2012 to 9/3/2013
The following table summarizes information regarding stock options outstanding at June 30, 2012:
| Options Outstanding | Options Exercisable
Range of Exercise Prices | Number of Options Outstanding as of June 30, 2012 | Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise Price | Number of Options Exercisable as of June 30, 2012 | Weighted Average Exercise Price
$13.10 - $14.94 | 274,500 |  | 0.86 | $ | 13.97 |  | 274,500 |  | $ | 13.97 |
$14.95 - $27.70 | 302,395 |  | 2.29 | 22.68 |  | 302,395 |  | 22.68 |
$27.71 - $34.75 | 315,831 |  | 2.79 | 32.73 |  | 233,581 |  | 32.86 |
$34.76 - $43.51 | 266,175 |  | 4.32 | 40.85 |  | 109,925 |  | 41.05 |
$43.52 - $52.15 | 305,500 |  | 6.04 | 48.63 |  | 30,500 |  | 48.39 |
$52.16 - $56.25 | 256,500 |  | 6.68 | 52.82 |  | 6,750 |  | 56.25 |
$56.26 - $61.63 | 426,250 |  | 6.57 | 60.37 |  | 2,500 |  | 61.63 |
$13.10 - $61.63 | 2,147,151 |  | 4.34 | $ | 40.07 |  | 960,151 |  | $ | 25.92 |
Share-Based Payments Total share-based compensation cost for the periods indicated below is detailed as follows:
|  | Year Ended June 30,
|  | 2012 |  | 2011 |  | 2010
Stock options |  | $ | 4,567 |  |  | $ | 3,546 |  |  | $ | 7,293 |
Deferred stock units (Directors) |  | 415 |  |  | 295 |  |  | 127 |
Restricted stock units |  | 243 |  |  | — |  |  | — |
Restricted stock awards (legacy Vignette employees) |  | 30 |  |  | 124 |  |  | 869 |
Performance stock units (Fiscal 2010, 2011 and 2012 LTIPs) |  | 12,842 |  |  | 7,343 |  |  | 1,476 |
Total share-based compensation expense |  | $ | 18,097 |  |  | $ | 11,308 |  |  | $ | 9,765 |
Summary of Outstanding Stock Options As of June 30, 2012, options to purchase an aggregate of 2,147,151 Common Shares were outstanding and 437,795 Common Shares were available for issuance under our stock option plans. Our stock options generally vest over four years and expire between seven and ten years from the date of the grant. The exercise price of the options we grant is set at an amount that is not less than the closing price of our Common Shares on the NASDAQ on the trading day immediately preceding the applicable grant date. A summary of option activity under our stock option plans for the year ended June 30, 2012 and 2011 is as follows:
| Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000s)
Outstanding at June 30, 2011 | 2,277,733 |  |  | $ | 24.51 |  |  |  |  |
Granted | 944,500 |  |  | 54.84 |  |  |  |  |
Exercised | (1,022,556 | ) |  | 18.79 |  |  |  |  |
Forfeited or expired | (52,526 | ) |  | 45.05 |  |  |  |  |
Outstanding at June 30, 2012 | 2,147,151 |  |  | $ | 40.07 |  |  | 4.34 |  | $ | 26,541 |
Exercisable at June 30, 2012 | 960,151 |  |  | $ | 25.92 |  |  | 2.33 |  | $ | 23,093 |
| Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000s)
Outstanding at June 30, 2010 | 2,669,142 |  |  | $ | 23.55 |  |  |  |  |
Granted | 78,800 |  |  | 51.24 |  |  |  |  |
Exercised | (439,071 | ) |  | 22.98 |  |  |  |  |
Forfeited or expired | (31,138 | ) |  | 31.75 |  |  |  |  |
Outstanding at June 30, 2011 | 2,277,733 |  |  | $ | 24.51 |  |  | 2.75 |  | $ | 89,998 |
Exercisable at June 30, 2011 | 1,701,308 |  |  | $ | 19.80 |  |  | 2.06 |  | $ | 75,234 |
We estimate the fair value of stock options using the Black-Scholes option pricing model, consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (ASC Topic 718), and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. For the periods indicated, the following weighted-average fair value of options and weighted-average assumptions used were as follows:
|  | Year Ended June 30,
|  | 2012 |  | 2011 |  | 2010
Weighted–average fair value of options granted |  | $ | 19.39 |  |  | $ | 17.89 |  |  | $ | 14.26 |
Weighted-average assumptions used: |  |  |  |  |  |
Expected volatility |  | 41 | % |  | 40 | % |  | 39 | %
Risk–free interest rate |  | 0.69 | % |  | 1.70 | % |  | 2.20 | %
Expected dividend yield |  | — | % |  | — | % |  | — | %
Expected life (in years) |  | 4.62 |  |  | 4.30 |  |  | 4.30 |
Forfeiture rate (based on historical rates) |  | 5 | % |  | 5 | % |  | 5 | %
As of June 30, 2012, the total compensation cost related to the unvested stock awards not yet recognized was $16.8 million, which will be recognized over a weighted-average period of approximately three years. No cash was used by us to settle equity instruments granted under share-based compensation arrangements. We have not capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented. For the year ended June 30, 2012, cash in the amount of $19.2 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2012 from the exercise of options eligible for a tax deduction was $3.7 million. For the year ended June 30, 2011, cash in the amount of $10.1 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2011 from the exercise of options eligible for a tax deduction was $2.8 million. For the year ended June 30, 2010, cash in the amount of $8.9 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2010 from the exercise of options eligible for a tax deduction was $1.9 million. Long-Term Incentive Plans On September 10, 2007, our Board of Directors approved the implementation of an incentive plan called the “Open Text Corporation Long-Term Incentive Plan” (LTIP). The LTIP is a rolling three year program whereby we make a series of annual grants, each of which covers the respective performance period, to certain of our employees, and which vests upon the employee and/or the Company meeting pre-determined performance and market-based criteria. One criterion we use to measure performance is, if over the three year period the relative cumulative total shareholder return (TSR) of our Company, compared to the cumulative TSR of companies comprising a peer index group, is higher than a pre-determined target percentile (that is set at the date of grant), then a payout will be made. Depending on whether this target is met or exceeded with respect to the stipulations of the individual LTIPs, the amount of payout would be determined. In the past, in calculating the TSR achievement, the closing price of our stock, as it traded on the last day of our fiscal year end, for the third year in the LTIPs rolling three year program, would be used to determine the TSR achievement for the Company. However, starting in Fiscal 2012, the TSR achievement will be calculated using the average closing price of our Common Stock, as it trades over the last 30 days ending September 15th (following the third year in the LTIPs rolling three year program). The Compensation Committee determined that it was desirable to extend the performance period this way to reduce the impact of fluctuations in the price of our Common Shares, particularly around our fiscal year end prior to the release of our audited financial results. This allows the determination of the TSR achievement to occur after the audited financial results have been publicly released and fully disseminated. We believe this will ensure the achievements of LTIP participants are measured on the full impact of the Company's financial results. As such, our existing LTIP plans have all been updated, in accordance with the accepted provisions of the LTIP agreement, to change the end measurement date and to use an average share price in determining our TSR achievement. We have accordingly treated this change as a modification of the awards previously granted and have revalued our LTIP expense as reflected in our current financial results. The impact of the modification resulted in an additional expense of approximately $1.0 million, $53,000 and $197,000, on account of LTIP grants made in Fiscal 2010, Fiscal 2011 and Fiscal 2012, respectively. Grants made in Fiscal 2008 under the LTIP (Fiscal 2008 LTIP) took effect in Fiscal 2008, starting on July 1, 2007. Awards under the Fiscal 2008 LTIP have been settled in cash in the aggregate amount of $14.4 million as of the first quarter of Fiscal 2011. Grants made in Fiscal 2009 under the LTIP (Fiscal 2009 LTIP) took effect in Fiscal 2009 starting on July 1, 2008. Awards under the Fiscal 2009 LTIP are equal to 100% of the target. Awards under the 2009 LTIP have been settled in cash in the aggregate amount of $10.7 million as of the first quarter of Fiscal 2012. Grants made in Fiscal 2010 under the LTIP (Fiscal 2010 LTIP) took effect in Fiscal 2010 starting on July 1, 2009. Awards under the Fiscal 2010 LTIP may be equal to 50%, 100% or 150% of the target. We expect to settle the Fiscal 2010 LTIP awards in stock in Fiscal 2013. Grants made in Fiscal 2011 under the LTIP (Fiscal 2011 LTIP) took effect in Fiscal 2011 starting on July 1, 2010. Awards under the Fiscal 2011 LTIP may be equal to 50%, 100% or 150% of the target. We expect to settle the Fiscal 2011 LTIP awards in stock. Grants made in Fiscal 2012 under the LTIP (Fiscal 2012 LTIP) took effect in Fiscal 2012 starting on February 3, 2012. Awards under the Fiscal 2012 LTIP will be interpolated between 0% and 150% of the target. We expect to settle the Fiscal 2012 LTIP awards in stock. PSUs granted under the LTIP equity plans (Fiscal 2010, 2011 and 2012 LTIP) have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. During the year ended June 30, 2012, $12.8 million, has been charged to share-based compensation expense on account of the LTIP equity plans (June 30, 2011— $7.3 million, June 30, 2010—$1.5 million on account of the Fiscal 2010 LTIP only). Deferred Stock Units (DSUs), Performance Stock Units (PSUs) and Restricted Stock Units (RSUs) During the year ended June 30, 2012, we granted 9,299 deferred stock units (DSUs), to certain nonemployee directors (June 30, 2011—6,606, June 30, 2010—4,299). The DSUs were issued under the Company’s Deferred Share Unit Plan that came into effect on February 2, 2010 and will vest at the Company’s next annual general meeting following the granting of the DSUs. During the year ended June 30, 2012, we granted 234,146 Performance Stock Units (PSUs) under the 2012 LTIP (June 30, 2011— granted 264,834 PSUs under the Fiscal 2011 LTIP, June 30, 2010— granted 307,579 PSUs under the Fiscal 2010 LTIP). Awards achieved under the Fiscal 2010 LTIP, 2011 LTIP and 2012 LTIP will be settled over the performance periods ending September 15, 2012, September 15, 2013 and September 15, 2014, respectively. For more information see 'Long-Term Incentive Plans' above. On February 3, 2012, we granted 33,333 Restricted Stock Units (RSUs) to the President and Chief Executive Officer, in accordance with his employment agreement, effective as of January 2, 2012. The RSUs will vest in 3 equal amounts of 11,111 RSUs over 3 years. Restricted Stock Awards (RSAs) On July 21, 2009, we granted, as part of our acquisition of Vignette, 574,767 OpenText restricted stock awards (RSAs) to certain legacy Vignette employees and directors as replacement for similar restricted stock awards held by these employees and directors when they were employed by Vignette. These awards were valued at $13.33 per RSA on July 21, 2009 and a portion was allocated to the purchase price of Vignette. The remaining portion is amortized, as part of share-based compensation expense, over the vesting period of these awards. Employee Share Purchase Plan (ESPP) During the year ended June 30, 2012, cash in the amount of approximately $2.1 million, was received from employees that will be used to purchase Common Shares in future periods (June 30, 2011— $1.4 million, June 30, 2010— $1.1 million).

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Also includes disclosure of compensation-related costs for equity-based compensation which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details, and employee stock purchase plan details. + References No definition available. + Details
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