XML 70 R17.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Share Capital, Option Plans And Share-Based Payments | 6 Months Ended
--- | ---
Dec. 31, 2011
Share Capital, Option Plans And Share-Based Payments [Abstract] |
Share Capital, Option Plans And Share-Based Payments | NOTE 12—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 three and six months ended December 31, 2011, we did not purchase any of our Common Shares. During the three months ended December 31, 2010, we repurchased 264,834 Open Text Common Shares, in the amount of $12.5 million, for potential future reissuance under our Long Term Incentive Plans (LTIP). No such purchases were made in the three months ended September 30, 2010. As of December 31, 2011, we have not reissued any Common Shares from treasury (June 30, 2011—nil). Share-Based Payments Total share-based compensation cost for the periods indicated below is detailed as follows:
|  | Three months ended December 31, |  |  | Six months ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Stock options |  | $ | 974 |  |  | $ | 784 |  |  | $ | 1,772 |  |  | $ | 1,781 |
Restricted stock units (legacy Vignette employees) |  |  | 9 |  |  |  | 28 |  |  |  | 20 |  |  |  | 76 |
Deferred stock units (Directors) |  |  | 64 |  |  |  | 53 |  |  |  | 129 |  |  |  | 105 |
Performance stock units (LTIP 3 and LTIP 4) |  |  | 2,350 |  |  |  | 1,872 |  |  |  | 6,320 |  |  |  | 3,375 |
Total share-based compensation expense |  | $ | 3,397 |  |  | $ | 2,737 |  |  | $ | 8,241 |  |  | $ | 5,337 |
Summary of Outstanding Stock Options As of December 31, 2011, options to purchase an aggregate of 1,837,552 Common Shares were outstanding and 1,207,795 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 NASDAQ on the trading day immediately preceding the applicable grant date. A summary of option activity under our stock option plans for the six months ended December 31, 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 |  |  | 142,000 |  |  |  | 52.16 |  |  |  |  |  |  |  |  |
Exercised |  |  | (562,931 | ) |  |  | 18.19 |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (19,250 | ) |  |  | 34.25 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2011 |  |  | 1,837,552 |  |  | $ | 28.48 |  |  |  | 3.20 |  |  | $ | 42,083 |
Exercisable at December 31, 2011 |  |  | 1,333,177 |  |  | $ | 22.71 |  |  |  | 2.42 |  |  | $ | 37,903 |
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:
|  | Three months ended December 31, |  |  | Six months ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Weighted–average fair value of options granted |  | $ | 17.99 |  |  | $ | 14.97 |  |  | $ | 17.71 |  |  | $ | 14.97 |
Weighted-average assumptions used: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 41 | % |  |  | 40 | % |  |  | 41 | % |  |  | 40 | %
Risk–free interest rate |  |  | 0.74 | % |  |  | 1.4 | % |  |  | 0.79 | % |  |  | 1.4 | %
Expected dividend yield |  |  | 0 | % |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Expected life (in years) |  |  | 4.3 |  |  |  | 4.3 |  |  |  | 4.3 |  |  |  | 4.3 |
Forfeiture rate (based on historical rates) |  |  | 5 | % |  |  | 5 | % |  |  | 5 | % |  |  | 5 | %
As of December 31, 2011, the total compensation cost related to the unvested stock awards not yet recognized was $5.7 million, which will be recognized over a weighted average period of approximately 2 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 three and six months ended December 31, 2011, cash in the amount of $3.0 million and $10.2 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three and six months ended December 31, 2011 from the exercise of options eligible for a tax deduction was $0.4 million and $0.8 million, respectively. For the three and six months ended December 31, 2010, cash in the amount of $1.0 million and $3.9 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three and six months ended December 31, 2010 from the exercise of options eligible for a tax deduction was $0.2 million and $1.1 million, respectively. Deferred Stock Units (DSUs) and Performance Stock Units (PSUs) During the three and six months ended December 31, 2011, we granted 6,760 and 7,023 deferred stock units (DSUs), respectively, to certain nonemployee directors (DSUs granted during the three and six months ended December 31, 2010—4,721 and 4,878). 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. We did not grant any PSUs under the Fiscal 2011 Long Term incentive Plan (LTIP 4) or the Fiscal 2010 Long Term Incentive Plan (LTIP 3) during the three and six months ended December 31, 2011. During the three and six months ended December 31, 2010, we granted 264,834 PSUs, respectively, under LTIP 4 and nil under LTIP 3. Awards achieved under the LTIP 3 and LTIP 4 will be settled over the three-year period ending June 30, 2012 and June 30, 2013, respectively. Restricted Stock Awards (RSAs) On July 21, 2009, we granted, as part of our acquisition of Vignette, 574,767 Open Text 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. 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 a three-year 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. Grants made in Fiscal 2008 under the LTIP (LTIP 1) took effect in Fiscal 2008, starting on July 1, 2007. Awards under LTIP 1 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 (LTIP 2) took effect in Fiscal 2009 starting on July 1, 2008. Awards under LTIP 2 are equal to 100% of the target. Awards under LTIP 2 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 (LTIP 3) took effect in Fiscal 2010 starting on July 1, 2009. Awards under LTIP 3 may be equal to 50%, 100% or 150% of the target. We expect to settle LTIP 3 awards in stock. Grants made in Fiscal 2011 under the LTIP (LTIP 4) took effect in Fiscal 2011 starting on July 1, 2010. Awards under LTIP 4 may be equal to 50%, 100% or 150% of the target. We expect to settle LTIP 4 awards in stock. PSUs granted under the LTIP equity plans (LTIP 3 and 4) 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 three and six months ended December 31, 2011, $2.4 million and $6.3 million, respectively, has been charged to share-based compensation expense on account of the LTIP equity plans (three and six months ended December 31, 2010—$1.9 million and $3.4 million, respectively). Employee Share Purchase Plan ("ESPP") During the three and six months ended December 31, 2011, cash in the amount of approximately $0.4 million and $1.0 million respectively, was received from employees that will be used to purchase Common Shares in future periods (three and six months ended December 31, 2010—$0.3 million and $0.6 million, respectively).

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration