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SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS | 6 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS | SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Cash Dividends For the three and six months ended December 31, 2021, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.2209 and $0.4418 per Common Share, respectively, in the aggregate amount of $59.7 million and $119.5 million, respectively, which we paid during the same period (three and six months ended December 31, 2020—$0.2008 and $0.3754 per Common Share, respectively, in the aggregate amount of $54.5 million and $101.8 million, respectively). 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 From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the three and six months ended December 31, 2021, we repurchased 400,000 Common Shares, respectively, on the open market at a cost of $19.6 million, respectively, for potential reissuance under our LTIP or other plans as described below (three and six months ended December 31, 2020— nil and 965,154 Common Shares, respectively, at a cost of nil and $41.9 million, respectively). During the three and six months ended December 31, 2021, we reissued 349,792 and 491,244 Common Shares, respectively, from treasury stock in connection with the settlement of awards and other plans (three and six months ended December 31, 2020—292,401 and 486,081 Common Shares, respectively). Share Repurchase Plan On November 5, 2020, the Board authorized a share repurchase plan (Repurchase Plan), pursuant to which we were authorized to purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2020, up to an aggregate of $350 million of our Common Shares. On November 4, 2021, the Board authorized a share repurchase plan (Renewed Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2021, up to an aggregate of $350 million of our Common Shares. During the three and six months ended December 31, 2021, we repurchased and cancelled 1,809,559 Common Shares, respectively, for $91.0 million, respectively (three and six months ended December 31, 2020—nil, respectively). Share repurchases during the three and six months ended December 31, 2021 were completed under the share repurchase plans authorized on both November 5, 2020 and November 4, 2021. Share-Based Payments Total share-based compensation expense for the periods indicated below is detailed as follows:
| Three Months Ended December 31, |  | Six Months Ended December 31,
| 2021 |  | 2020 |  | 2021 |  | 2020
Stock options | $ | 4,748 |  |  | $ | 4,575 |  |  | $ | 9,015 |  |  | $ | 7,869 |
Performance Share Units (issued under LTIP) | 3,726 |  |  | 2,555 |  |  | 7,171 |  |  | 5,039 |
Restricted Share Units (issued under LTIP) | 1,930 |  |  | 1,956 |  |  | 4,096 |  |  | 3,958 |
Restricted Share Units (other) | 1,019 |  |  | 3,084 |  |  | 2,747 |  |  | 5,070 |
Deferred Share Units (directors) | 1,324 |  |  | 1,075 |  |  | 2,154 |  |  | 1,813 |
Employee Stock Purchase Plan | 1,662 |  |  | 1,281 |  |  | 3,160 |  |  | 2,513 |
Total share-based compensation expense | $ | 14,409 |  |  | $ | 14,526 |  |  | $ | 28,343 |  |  | $ | 26,262 |
Summary of Outstanding Stock Options As of December 31, 2021, an aggregate of 8,212,360 options to purchase Common Shares were outstanding and an additional 10,300,222 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 six months ended December 31, 2021 is as follows:
| Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value ($’000's)
Outstanding at June 30, 2021 | 8,113,574 |  |  | $ | 40.16 |  |  | 4.88 |  | $ | 86,297 |
Granted | 1,304,110 |  |  | 52.35 |  |  |  |  |
Exercised | (852,569) |  |  | 34.33 |  |  |  |  |
Forfeited or expired | (352,755) |  |  | 44.41 |  |  |  |  |
Outstanding at December 31, 2021 | 8,212,360 |  |  | $ | 42.52 |  |  | 4.87 |  | $ | 47,275 |
Exercisable at December 31, 2021 | 2,448,802 |  |  | $ | 36.40 |  |  | 3.41 |  | $ | 27,144 |
We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, 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 estimated under the Black-Scholes option-pricing model were as follows:
| Three Months Ended December 31, |  | Six Months Ended December 31,
| 2021 |  | 2020 |  | 2021 |  | 2020
Weighted–average fair value of options granted | $ | 9.73 |  |  | $ | 7.33 |  |  | $ | 9.74 |  |  | $ | 8.38 |
Weighted-average assumptions used: |  |  |  |  |  |  |
Expected volatility | 26.66 | % |  | 26.64 | % |  | 26.63 | % |  | 26.18 | %
Risk–free interest rate | 0.90 | % |  | 0.26 | % |  | 0.64 | % |  | 0.20 | %
Expected dividend yield | 1.63 | % |  | 1.75 | % |  | 1.58 | % |  | 1.54 | %
Expected life (in years) | 4.13 |  | 4.15 |  | 4.15 |  | 4.66
Forfeiture rate (based on historical rates) | 7 | % |  | 7 | % |  | 7 | % |  | 7 | %
Average exercise share price | $ | 51.61 |  |  | $ | 41.44 |  |  | $ | 52.35 |  |  | $ | 45.36 |
As of December 31, 2021, the total compensation cost related to the unvested stock option awards not yet recognized was $40.8 million, which will be recognized over a weighted-average period of 2.8 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. The aggregate intrinsic value of options exercised during the three and six months ended December 31, 2021 was $0.9 million and $16.3 million, respectively (three and six months ended December 31, 2020—$2.5 million and $7.7 million, respectively). For the three and six months ended December 31, 2021, cash in the amount of $2.0 million and $29.3 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements (three and six months ended December 31, 2020—$6.9 million and $15.5 million, respectively). The tax benefit realized by us during the three and six months ended December 31, 2021 from the exercise of options eligible for a tax deduction was $0.2 million and $1.5 million, respectively (three and six months ended December 31, 2020—$0.4 million and $1.1 million, respectively). Long-Term Incentive Plans We incentivize certain eligible employees, 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. 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. 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. Stock options granted under the LTIPs have been measured using the Black-Scholes option-pricing model, consistent with Topic 718. As of December 31, 2021, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $50.9 million, which is expected to be recognized over a weighted average period of 2.1 years. LTIP grants that have recently vested, or have yet to vest, are described below. LTIP grants are referred to in this Quarterly Report on Form 10-Q based upon the year in which the grants are expected to vest. LTIP 2021 Grants made in Fiscal 2019 under the LTIP (collectively referred to as LTIP 2021), consisting of PSUs and RSUs, took effect in Fiscal 2019 starting on August 6, 2018. 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 LTIP 2021. We settled the LTIP 2021 awards by issuing 349,792 Common Shares from treasury stock during the three months ended December 31, 2021, at a cost of $15.1 million. LTIP 2022 Grants made in Fiscal 2020 under the LTIP (collectively referred to as LTIP 2022), consisting of PSUs and RSUs, took effect in Fiscal 2020 starting on August 5, 2019. 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 LTIP 2022. We expect to settle the LTIP 2022 awards in stock. LTIP 2023 Grants made in Fiscal 2021 under the LTIP (collectively referred to as LTIP 2023), consisting of PSUs and RSUs, took effect in Fiscal 2021 starting on August 10, 2020. 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 LTIP 2023. We expect to settle the LTIP 2023 awards in stock. LTIP 2024 Grants made in Fiscal 2022 under the LTIP (collectively referred to as LTIP 2024), consisting of PSUs and RSUs, took effect in Fiscal 2022 starting on August 9, 2021. 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 LTIP 2024. We expect to settle the LTIP 2024 awards in stock. Restricted Share Units (RSUs) In addition to the grants made in connection with the LTIP plans discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. During the three and six months ended December 31, 2021, we did not grant any such RSUs to employees (three and six months ended December 31, 2020— nil and 484,956 RSUs, respectively). RSUs vest over a specified contract date, typically three years from the respective date of grants. As of December 31, 2021, the total expected compensation cost related to the unvested RSU awards not yet recognized was $5.0 million, which is expected to be recognized over a weighted average period of 1.3 years. We expect to settle RSU awards in stock. During the three and six months ended December 31, 2021, we issued nil and 141,452 Common Shares, respectively, from treasury stock in connection with the settlement of vested RSUs, at a cost of nil and $5.9 million, respectively (three and six months ended December 31, 2020—nil). Deferred Share Units (DSUs) During the three and six months ended December 31, 2021, we granted 68,312 and 73,647 DSUs, respectively, to certain non-employee directors (three and six months ended December 31, 2020—72,903 and 76,570 DSUs, respectively). 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. During the three and six months ended December 31, 2021 and 2020, respectively, we did not issue any of our Common Shares from treasury stock in connection with the settlement of vested DSUs. Employee Stock Purchase Plan (ESPP) Our ESPP offers employees a purchase price discount of 15%. During the three and six months ended December 31, 2021, 172,782 and 398,513 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and six months ended December 31, 2020—166,635 and 367,407 Common Shares, respectively). During the three and six months ended December 31, 2021, cash in the amount of $7.0 million and $16.4 million, respectively, was received from employees relating to the ESPP (three and six months ended December 31, 2020—$6.5 million and $13.7 million, respectively).

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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