SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS

Share Split

On December 21, 2016, we announced that our board of directors (the Board) approved a two-for-one share split of our outstanding Common Shares. The two-for-one share split was implemented by way of a share sub-division whereby shareholders of record on the record date received one additional Common Share for each Common Share held. The record date for the share split was January 9, 2017 and the distribution date was January 24, 2017. In connection with the share split, the Company’s articles were amended on December 22, 2016 to change the number of Common Shares, whether issued or unissued, on a two-for-one basis, such that each Common Share became two Common Shares.

As a result of the two-for-one share split, all current and historical period per share data, number of Common Shares outstanding and share-based compensation awards are presented on a post share split basis.

Cash Dividends

For the year ended June 30, 2017, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.4770, per Common Share in the aggregate amount of $120.6 million, which we paid during the same period.

For the year ended June 30, 2016, pursuant to the Company’s dividend policy, we paid total non-cumulative dividends of $0.4150, per Common Share in the aggregate amount of $99.3 million.

For the year ended June 30, 2015, pursuant to the Company's dividend policy, we paid total non-cumulative dividends of $0.3588, per Common Share in the aggregate amount of $87.6 million.

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

Repurchase

During the year ended June 30, 2017, we repurchased 244,240 Common Shares, in the amount of $8.2 million, for potential reissuance under our Long Term Incentive Plans (LTIP) or other plans. (June 30, 2016—repurchased 450,000 Common Shares for $10.6 million; June 30, 2015—repurchased 480,444 Common Shares for $10.6 million). See below for more details on our various plans.

Reissuance

During the year ended June 30, 2017, we reissued 409,922 Common Shares, from treasury stock (June 30, 2016— 434,156 Common Shares; June 30, 2015—755,550 Common Shares), in connection with the settlement of our LTIP and other awards.

Share Repurchase Plan

On July 26, 2016, the Board authorized the repurchase of up to $200 million of Common Shares pursuant to a normal course issuer bid (Share Repurchase Plan). Shares may be repurchased from time to time in the open market, private purchases through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise.

During the year ended June 30, 2017, we did not repurchase any of our Common Shares under the Share Repurchase Plan. (June 30, 2016—2,952,496 Common Shares; June 30, 2015—nil under our previous share repurchase plan).

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 splits that occurred on October 22, 2003, February 18, 2014 and January 24, 2017.



	2004 Stock Option Plan
Date of inception	Oct-04
Eligibility	Eligible employees and directors, as determined by the Board of Directors
Options granted to date	29,205,738
Options exercised to date	(13,321,448)
Options cancelled to date	(6,906,460)
Options outstanding	8,977,830
Termination grace periods	Immediately “for cause”; 90 days for any other reason; 180 days due to death
Vesting schedule	25% per year, unless otherwise specified
Exercise price range	$11.68 - $33.49
Expiration dates	8/12/2018 to 6/1/2024

The following table summarizes information regarding stock options outstanding at June 30, 2017:



					Options Outstanding				Options Exercisable
Range of Exercise Prices					Number of options Outstanding as of June 30, 2017	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Number of options Exercisable as of June 30, 2017	Weighted Average Exercise Price
$	11.68	-	$	14.82	650,198	1.97	$	13.08	650,198	$	13.08
15.09		-	15.10		1,330,246	1.60	15.09		1,330,246	15.09
15.88		-	22.87		916,774	4.48	20.96		309,776	18.72
23.51		-	24.52		128,000	4.43	24.18		58,750	24.48
25.04		-	25.05		1,239,500	3.54	25.04		829,500	25.04
25.58		-	27.56		1,641,640	4.57	26.92		191,100	26.57
27.83		-	28.65		915,908	4.70	28.17		366,610	28.23
29.75		-	30.37		813,564	6.12	29.83		—	—
32.63		-	32.86		702,500	6.91	32.66		—	—
33.48		-	33.49		639,500	6.66	33.48		—	—
$	11.68	-	$	33.49	8,977,830	4.27	$	24.57	3,736,180	$	19.27

Share-Based Payments

Total share-based compensation expense for the periods indicated below is detailed as follows:



	Year Ended June 30,
	2017		2016		2015
Stock options	$	12,196	$	13,202	$	12,193
Performance Share Units (issued under LTIP)	3,624		2,688		2,287
Restricted Share Units (issued under LTIP)	6,452		5,086		4,574
Restricted Share Units (other)	2,804		1,573		955
Deferred Share Units (directors)	2,849		2,764		2,038
Employee Share Purchase Plan	2,582		665		—
Total share-based compensation expense	$	30,507	$	25,978	$	22,047

Summary of Outstanding Stock Options

As of June 30, 2017, an aggregate of 8,977,830 options to purchase Common Shares were outstanding and an additional 11,864,002 options to purchase 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. Currently we also have options outstanding that vest over five years, as well as options outstanding that vest based on meeting certain market conditions. The exercise price of all our 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 years ended June 30, 2017 and 2016 are as follows:



	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value ($’000s)
Outstanding at June 30, 2016	8,354,816		$	21.94
Granted	2,278,974		31.75
Exercised	(1,012,644	)	20.47
Forfeited or expired	(643,316	)	22.30
Outstanding at June 30, 2017	8,977,830		$	24.57	4.27	$	64,707
Exercisable at June 30, 2017	3,736,180		$	19.27	2.74	$	45,830



	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value ($’000s)
Outstanding at June 30, 2015	8,750,730		$	21.13
Granted	1,475,280		24.09
Exercised	(936,590	)	15.57
Forfeited or expired	(934,604	)	24.17
Outstanding at June 30, 2016	8,354,816		$	21.94	4.56	$	63,862
Exercisable at June 30, 2016	3,214,376		$	18.02	3.41	$	37,167

We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo Valuation Method, consistent with the provisions of ASC Topic 718, "Compensation—Stock Compensation" (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 techniques 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:



	Year Ended June 30,
	2017			2016			2015
Weighted–average fair value of options granted	$	7.06		$	5.69		$	6.73
Weighted-average assumptions used:
Expected volatility	28.32		%	31.76		%	31.74		%
Risk–free interest rate	1.46		%	1.31		%	1.41		%
Expected dividend yield	1.43		%	1.62		%	1.23		%
Expected life (in years)	4.51			4.33			4.33
Forfeiture rate (based on historical rates)	5		%	5		%	5		%
Average exercise share price	$	31.75		$	24.09		$	27.17
Derived service period (in years)*	1.79			N/A			2.07

*Options valued using Monte Carlo Valuation Method

As of June 30, 2017, the total compensation cost related to the unvested stock option awards not yet recognized was approximately $23.8 million, which will be recognized over a weighted-average period of approximately 2.4 years.

No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented.

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, 2017, cash in the amount of $20.8 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, 2017 from the exercise of options eligible for a tax deduction was $2.2 million.

For the year ended June 30, 2016, cash in the amount of $14.6 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, 2016 from the exercise of options eligible for a tax deduction was $0.8 million.

For the year ended June 30, 2015, cash in the amount of $12.2 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, 2015 from the exercise of options eligible for a tax deduction was $1.0 million.

Long-Term Incentive Plans

We incentivize our executive officers, in part, with long term compensation pursuant to our 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 achievement 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 have yet to vest, are described below. LTIP grants are referred to in this Annual Report on Form 10-K based upon the year in which the grants are expected to vest.

Fiscal 2016 LTIP

Grants made in Fiscal 2014 under the LTIP (collectively referred to as Fiscal 2016 LTIP) consisting of PSUs and RSUs, took effect in Fiscal 2014 starting on November 1, 2013. We settled the Fiscal 2016 LTIP by issuing 339,922 Common Shares from our treasury stock during the quarter ended December 31, 2016, with a cost of $4.4 million.

Fiscal 2017 LTIP

Grants made in Fiscal 2015 under the LTIP (collectively referred to as Fiscal 2017 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2015 starting on September 4, 2014. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2017 LTIP. We expect to settle the Fiscal 2017 LTIP awards in stock.

Fiscal 2018 LTIP

Grants made in Fiscal 2016 under the LTIP (collectively referred to as Fiscal 2018 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2016 starting on August 23, 2015. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2018 LTIP. We expect to settle the Fiscal 2018 LTIP awards in stock.

Fiscal 2019 LTIP

Grants made in Fiscal 2017 under the LTIP (collectively referred to as Fiscal 2019 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2017 starting on August 14, 2016. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2019 LTIP. We expect to settle the Fiscal 2019 LTIP awards in stock.

PSUs and RSUs granted under the LTIPs have been measured at fair value as of the effective date, consistent with 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 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.

As of June 30, 2017, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $12.6 million, which is expected to be recognized over a weighted average period of 1.8 years.

Restricted Share Units (RSUs)

During the year ended June 30, 2017, we granted 19,300 RSUs to employees in accordance with employment and other agreements (June 30, 2016—122,072, June 30, 2015—90,000). The RSUs vest over a specified contract date, typically three years from the respective date of grants. We expect to settle the awards in stock.

During the year ended June 30, 2017, we issued 70,000 Common Shares from treasury stock, with a cost of $1.5 million, in connection with the settlement of these vested RSUs (June 30, 2016—30,000 with a cost of $0.3 million; June 30, 2015—44,444 with a cost of $1.3 million).

Deferred Stock Units (DSUs)

During the year ended June 30, 2017, we granted 91,680 DSUs to certain non-employee directors (June 30, 2016—111,716; June 30, 2015—76,104). The DSUs were issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board.

Employee Share Purchase Plan (ESPP)

Beginning January 1, 2016, our ESPP offers employees a purchase price discount of 15%. Any Common Shares that were issued under the ESPP prior to January 1, 2016 were issued at a purchase price discount of 5%.

During the year ended June 30, 2017, 530,170 Common Shares were eligible for issuance to employees enrolled in the ESPP (June 30, 2016—160,546; June 30, 2015—148,138).

During the year ended June 30, 2017, cash in the amount of approximately $14.8 million was received from employees relating to the ESPP (June 30, 2016—$5.5 million; June 30, 2015—$3.1 million).