XML 24 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Share Capital, Option Plans And Share-Based Payments | 3 Months Ended
--- | ---
Sep. 30, 2013
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 three months ended September 30, 2013 and 2012, we did not repurchase any of our Common Shares for potential future reissuance under our Long Term Incentive Plans (LTIP) or otherwise. During the three months ended September 30, 2013 and 2012, we reissued no Common Shares from treasury stock. Dividend In August 2013, pursuant to the Company's dividend policy, we declared a non-cumulative quarterly dividend of $0.30 per Common Share, paid on September 20, 2013 to shareholders of record as of the close of business on August 30, 2013. Share-Based Payments Total share-based compensation expense for the periods indicated below is detailed as follows:
|  | Three Months Ended September 30,
|  | 2013 |  | 2012
Stock options |  | $ | 1,357 |  |  | $ | 1,339 |
Performance Share Units (issued under LTIP) |  | 2,168 |  |  | 1,414 |
Restricted Share Units (issued under LTIP) |  | 604 |  |  | — |
Restricted Share Units (other) |  | 216 |  |  | 151 |
Deferred Share Units (directors) |  | 267 |  |  | 188 |
Restricted Stock Awards (legacy Vignette employees) |  | — |  |  | 10 |
Total share-based compensation expense |  | $ | 4,612 |  |  | $ | 3,102 |
Summary of Outstanding Stock Options As of September 30, 2013, options to purchase an aggregate of 1,805,721 Common Shares were outstanding and 2,609,749 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 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 activity under our stock option plans for the three months ended September 30, 2013 is as follows:
| Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000s)
Outstanding at June 30, 2013 | 1,805,391 |  |  | $ | 49.44 |  |  |  |  |
Granted | 135,144 |  |  | 66.33 |  |  |  |  |
Exercised | (42,171 | ) |  | 27.41 |  |  |  |  |
Forfeited or expired | (92,643 | ) |  | 48.93 |  |  |  |  |
Outstanding at September 30, 2013 | 1,805,721 |  |  | $ | 51.25 |  |  | 4.84 |  | $ | 42,262 |
Exercisable at September 30, 2013 | 657,550 |  |  | $ | 41.29 |  |  | 3.22 |  | $ | 21,939 |
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 weighted-average fair value of options and weighted-average assumptions were as follows:
|  | Three Months Ended September 30,
|  | 2013 |  | 2012
Weighted–average fair value of options granted |  | $ | 15.51 |  |  | $ | 18.23 |
Weighted-average assumptions used: |  |  |  |
Expected volatility |  | 32 | % |  | 40 | %
Risk–free interest rate |  | 1.19 | % |  | 0.62 | %
Expected dividend yield |  | 1.8 | % |  | — | %
Expected life (in years) |  | 4.36 |  |  | 4.35 |
Forfeiture rate (based on historical rates) |  | 5 | % |  | 5 | %
Average exercise share price |  | $ | 66.33 |  |  | $ | 54.52 |
As of September 30, 2013, the total compensation cost related to the unvested stock option awards not yet recognized was $17.4 million, which will be recognized over a weighted-average period of approximately 3.0 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 months ended September 30, 2013, cash in the amount of $1.2 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 three months ended September 30, 2013 from the exercise of options eligible for a tax deduction was $0.1 million. For the three months ended September 30, 2012, cash in the amount of $3.4 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 three months ended September 30, 2012 from the exercise of options eligible for a tax deduction was $0.8 million. Long-Term Incentive Plans On September 10, 2007, our Board of Directors (the Board) 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 that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the satisfaction of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. Target RSUs become vested when an eligible employee remains employed throughout the vesting period. LTIP grants that have recently vested, or which are still not vested, are described below. LTIP grants will be referred to in this Quarterly Report on Form 10-Q based upon the year in which the grants are expected to vest and be settled. Grants made in Fiscal 2011 under the LTIP (Fiscal 2013 LTIP) took effect in Fiscal 2011 starting on October 29, 2010. Awards if made under the Fiscal 2013 LTIP will be issued in the second quarter of Fiscal 2014 in accordance with our insider trading policy, which states, in part, that stock awards may not be issued while a "trading window" is closed. We expect to settle the Fiscal 2013 LTIP awards in stock. Grants made in Fiscal 2012 under the LTIP (Fiscal 2014 LTIP) took effect in Fiscal 2012 starting on February 3, 2012. Grants made under the Fiscal 2014 LTIP consisted of PSUs and the Performance Conditions for vesting relating to these grants are based solely on market conditions. We expect to settle the Fiscal 2014 LTIP awards in stock. Grants made in Fiscal 2013 under the LTIP (Fiscal 2015 LTIP) took effect in Fiscal 2013 starting on November 2, 2012 for the RSUs and December 3, 2012 for the PSUs. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. RSUs granted are employee service-based awards and vest over the life of the LTIP. We expect to settle the Fiscal 2015 LTIP awards in stock. PSUs and RSUs granted under the LTIPs 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. Stock options granted under the LTIPs have been measured using the Black-Scholes option-pricing model, consistent with ASC Topic 718. We estimate the fair value of PSUs using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. Expected and actual stock compensation expense for each of the above mentioned LTIP plans is as follows:
|  |  |  |  |  |  | Three Months Ended September 30,
Grants Made Under LTIP | Equity Instrument | Grant Date | End Date |  | Expected Total LTIP Expense |  | 2013 |  | 2012
Fiscal 2012 LTIP | PSU | 3/31/2010 | 9/15/2012 |  | $ | 17,314 |  |  | $ | — |  |  | $ | 579 |
Fiscal 2013 LTIP | PSU | 10/29/2010 | 9/15/2013 |  | 6,489 |  |  | 215 |  |  | 300 |
Fiscal 2014 LTIP | PSU | 2/3/2012 | 9/15/2014 |  | 8,080 |  |  | 1,370 |  |  | 535 |
Fiscal 2015 LTIP | PSU | 12/3/2012 | 9/15/2015 |  | 2,683 |  |  | 583 |  |  | — |
Fiscal 2015 LTIP | RSU | 11/2/2012 | 9/15/2015 |  | 5,376 |  |  | 604 |  |  | — |
|  |  |  |  | $ | 39,942 |  |  | $ | 2,772 |  |  | $ | 1,414 |
Of the total compensation cost of $39.9 million noted in the table above, $32.7 million has been recognized to date and the remaining expected total compensation cost of $7.2 million is expected to be recognized over a weighted average period of 1.8 years. Deferred Stock Units (DSUs) During the three months ended September 30, 2013, we granted 243 deferred stock units (DSUs) to certain non-employee directors (three months ended September 30, 2012—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. Employee Share Purchase Plan (ESPP) During the three months ended September 30, 2013, cash in the amount of approximately $0.7 million was received from employees that will be used to purchase Common Shares in future periods (three months ended September 30, 2012—$0.6 million).

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, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, 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