OPEN TEXT CORP 10-K

Item 9A. Controls and Procedures (A) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) promulgated under the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that information required to be disclosed by us in the reports we file under the Exchange Act (according to Rule 13(a)-15(e)) is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 76 (B) Management's Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (ICFR), as such term is defined in Exchange Act Rule 13a-15(f). ICFR is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. ICFR includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Our management assessed our ICFR as of June 30, 2021, the end of our most recent fiscal year. In making our assessment, our management used the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of our evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our ICFR was effective as of June 30, 2021. The results of our management’s assessment were reviewed with our Audit Committee and the conclusion that our ICFR was effective as of June 30, 2021 has been audited by KPMG LLP, our independent registered public accounting firm, as stated in their report which is included in Part IV, Item 15 of this Annual Report. Our management, including the Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our ICFR will prevent or detect all error or all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any evaluation of prospective control effectiveness, with respect to future periods, is subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. (C) Attestation Report of the Independent Registered Public Accounting Firm KPMG LLP, our independent registered public accounting firm, has issued a report under Public Company Accounting Oversight Board Auditing Standards AS 2201 on the effectiveness of our ICFR. See Part IV, Item 15 of this Annual Report on Form 10-K. (D) Changes in Internal Control over Financial Reporting (ICFR) Based on the evaluation completed by our management, in which our Chief Executive Officer and Chief Financial Officer participated, our management has concluded that there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a result of COVID-19, we continue to operate under a work from home model. Although our pre-existing controls were not specifically designed to operate in this current environment, we continue to believe that our established internal control over financial reporting addresses all identified risk areas. We continue to monitor for any effects that the COVID-19 pandemic may have on the design or operating effectiveness of our internal control over financial reporting. Item 9B. Other Information None. 77 Part III Item 10. Directors, Executive Officers and Corporate Governance The following table sets forth certain information as to our directors and executive officers as of July 30, 2021. Name Age Office and Position Currently Held With Company Mark J. Barrenechea 56 Vice Chair, Chief Executive Officer and Chief Technology Officer, Director Madhu Ranganathan 57 Executive Vice President, Chief Financial Officer Lou Blatt 59 Senior Vice President, Chief Marketing Officer Gordon A. Davies 59 Executive Vice President, Chief Legal Officer and Corporate Development Prentiss Donohue 51 Executive Vice President, SMB/C Sales Paul Duggan 46 Executive Vice President, Worldwide Renewals Simon Harrison 51 Executive Vice President, Enterprise Sales Kristina Lengyel 53 Executive Vice President, Customer Solutions Muhi Majzoub 61 Executive Vice President, Chief Product Officer James McGourlay 52 Executive Vice President, International Sales Renee McKenzie 46 Senior Vice President, Chief Information Officer Douglas M. Parker 50 Senior Vice President, Corporate Development Howard Rosen 57 Senior Vice President, Chief Accounting Officer Brian Sweeney 57 Executive Vice President, Chief Human Resources Officer P. Thomas Jenkins 61 Chairman of the Board Randy Fowlie (2)(3) 61 Director Major General David Fraser (3) 64 Director Gail E. Hamilton (1) 71 Director Robert Hau (2) 55 Director Ann M. Powell 55 Director Stephen J. Sadler 70 Director Harmit Singh (2) 58 Director Michael Slaunwhite (1)(3) 60 Director Katharine B. Stevenson (2) 59 Director Deborah Weinstein (1)(3) 61 Director (1) Member of the Compensation Committee. (2) Member of the Audit Committee. (3) Member of the Corporate Governance and Nominating Committee. Mark J. Barrenechea Mr. Barrenechea joined OpenText in January 2012 as the President and Chief Executive Officer. In January 2016, Mr. Barrenechea took on the role of Chief Technology Officer, while remaining the Company’s Chief Executive Officer. In September 2017, Mr. Barrenechea was appointed Vice Chair, in addition to remaining the Chief Executive Officer and Chief Technology Officer. Before joining OpenText, Mr. Barrenechea was President and Chief Executive Officer of Silicon Graphics International Corporation (SGI), where he also served as a member of the Board. During Mr. Barrenechea's tenure at SGI, he led strategy and execution, which included transformative acquisition of assets, as well as penetrating diverse new markets and geographic regions. Mr. Barrenechea also served as a director of SGI from 2006 to 2012. Prior to SGI, Mr. Barrenechea served as Executive Vice President and CTO for CA, Inc. (CA), (formerly Computer Associates International, Inc.) from 2003 to 2006 and was a member of the executive management team. Before going to CA, Mr. Barrenechea was the Senior Vice President of Applications Development at Oracle Corporation from 1997 to 2003, managing a multi-thousand person global team while serving as a member of the executive management team. From 1994 to 1997, Mr. Barrenechea served as Vice President of Development at Scopus, a software applications company. Prior to Scopus, Mr. Barrenechea was the Vice President of Development at Tesseract, where he was responsible for reshaping the company's line of CRM and human capital management software. Mr. Barrenechea serves as a member of the Board and Audit Committee of Dick's Sporting Goods and also serves as a board member of Avery Dennison Corporation. In the past five years, Mr. Barrenechea also served as a director of Hamilton Insurance Group. Mr. Barrenechea holds a Bachelor of Science degree in computer science from Saint Michael's College. He 78 has been the recipient of many awards, including the 2011 Best Large Company CEO from the San Francisco Business Times and 2015 Results-Oriented CEO of the year by CEO World Awards. Mr. Barrenechea has authored several books including The Intelligent and Connected Enterprise, The Golden Age of Innovation, Digital Manufacturing, Digital Financial Services, On Digital, Digital: Disrupt or Die, eGovernment or Out of Government, Enterprise Information Management: The Next Generation of Enterprise Software . He has also written a number of whitepapers, such as The Resilient Organization: COVID-19 and New Ways to Work, The Cloud: Destination for Innovation and Security: Creating Trust in a Zero Trust World . Madhu Ranganathan Ms. Ranganathan joined OpenText as Executive Vice President, Chief Financial Officer in April 2018. With more than 25 years of financial leadership experience, Ms. Ranganathan most recently served as the Chief Financial Officer for [24]7.ai from June 2008 to March 2018. Ms. Ranganathan also held senior financial roles at Rackable Systems from December 2005 to May 2008, Redback Networks from August 2002 to November 2005, and Backweb Technologies from December 1996 to January 2000. She also has public accounting experience with PriceWaterhouseCoopers LLC. Ms. Ranganathan currently serves as a Board Member for the Bank of Montreal and Akamai Technologies. In past years she served as a Board Member of ServiceSource and Watermark, a Bay Area organization focused on professional development for women. Ms. Ranganathan holds an MBA in Finance from the University of Massachusetts, is a member of the AICPA and a Chartered Accountant (India). Lou Blatt Mr. Blatt has served as OpenText’s Senior Vice President and Chief Marketing Officer since April 2020. Prior to joining OpenText, Mr. Blatt served as the Senior Vice President, Strategy and Operations at Genesys from June 2015 to July 2019. While at Genesys, Mr. Blatt led strategic efforts, including the company’s transition to the cloud. From April 2011 to June 2015 Mr. Blatt served as Senior Vice President at Pega (PEGA) leading its transformation from a business process management company to a customer relationship management company. Mr. Blatt was also the Chief Product Officer at ACI Worldwide (ACIW) from March 2008 to March 2011 where he was responsible for defining and communicating the company’s product vision, strategy and the development life cycle. Mr. Blatt holds a Ph.D. and MA from Boston University and graduated from the Advanced Management Program at Harvard Business School. Mr. Blatt currently serves as Advisory Board Member for Earth PBC, a software company focused on sustainability and fair labor practices in some of the most remote parts of the world. Gordon A. Davies Mr. Davies joined OpenText as Chief Legal Officer in September 2009. Mr. Davies also has responsibility for Corporate Development, the Office of the Chief Compliance Officer and the Corporate Secretary Group. Prior to joining OpenText, Mr. Davies was the Chief Legal Officer and Corporate Secretary of Nortel Networks Corporation. During his sixteen years at Nortel, Mr. Davies acted as Deputy General Counsel and Corporate Secretary during 2008, and as interim Chief Legal Officer and Corporate Secretary in 2005 and again in 2007. He led the Corporate Securities legal team as General Counsel-Corporate from 2003, with responsibility for providing legal support on all corporate and securities law matters, and spent five years in Europe supporting all aspects of the Europe, Middle East and Africa (EMEA) business, ultimately as General Counsel, EMEA. Prior to joining Nortel, Mr. Davies practiced securities law at a major Toronto law firm. Mr. Davies holds an LL.B and an MBA from the University of Ottawa, and a B.A. from the University of British Columbia. He is a member of the Law Society of Upper Canada, the Canadian Bar Association, the Association of Canadian General Counsel and the Society of Corporate Secretaries and Governance Professionals. Prentiss Donohue Mr. Donohue has served as Executive Vice President of Small and Medium-sized Business and Consumer (SMB/C) Sales since December 2020. Prior to this role, Mr. Donohue served as Senior Vice President, Portfolio Group from January 2019 to December 2020 and as Senior Vice President of Professional Services from April 2016 to January 2019. He brings over 20 years of experience in support and services management. Prior to joining OpenText, Mr. Donohue served as Group Vice President and General Manager of Advanced Customer Services for Oracle Corporation from January 2010 to March 2016, where he was responsible for driving Oracle’s innovative software, systems and cloud services. From April 1998 to December 2010, Mr. Donohue worked at Sun Microsystems in various leadership roles, including in Managed Services Management and Corporate Marketing. Mr. Donohue served on the board of directors of Summit Charter School until May 2016. Mr. Donohue holds a BA from the University of Colorado and has completed executive leadership programs at the University of Michigan’s Ross School of Business and the University of Hong Kong. 79 Paul Duggan Mr. Duggan has served as Executive Vice President, Worldwide Renewals since July 2021. Prior to this role, Mr. Duggan served as Senior Vice President, Revenue Operations from January 2017 to July 2021. He is responsible for operations across sales, professional services, business networks, and customer support. Prior to joining OpenText, Mr. Duggan held various roles at Oracle Corporation, including Group Vice President of Support Renewal Sales, North America from December 1999 to January 2017. Previously, Mr. Duggan served on the advisory board for the Technology Services Industry Association from 2016 to 2017. He has completed executive leadership programs at the University of Michigan Ross School of Business and IESE Business School in Barcelona, Spain. Simon Harrison Mr. Harrison has served as the Company’s Executive Vice President of Enterprise Sales since March 2021. Prior to this, Mr. Harrison, who joined the Company through its acquisition of IXOS AG, has held a number of senior leadership roles, including serving as its Executive Vice President, Worldwide Sales from October 2017 to March 2021 , Senior Vice President of Enterprise Sales from 2015 to 2017, Senior Vice President of Fast Growth Markets from 2014 to 2015 and as the Company’s Senior Vice President of Sales for the EMEA region from 2012 to 2014. Mr. Harrison holds an honors degree in Computer Science from Leeds University. Kristina Lengyel Ms. Lengyel has served as the Company's Executive Vice President, Customer Solutions since March 2021. Prior to joining OpenText, Ms. Lengyel served as Vice President of Global Solutions at Salesforce from July 2019 to March 2021, heading their global analytics (Tableau) services practice. Ms. Lengyel held key executive roles at Kronos (now Ultimate Kronos Group), overseeing global customer solutions and engineering, from 2010 to 2019. Ms. Lengyel also served as a member of the executive leadership team at Open Solutions (acquired by Fiserv) from 2006 to 2009, and at Concerto (now Aspect) Software from 2001 to 2003. Ms. Lengyel holds a Master's Degree in Business Administration from Northeastern University and a Bachelor's Degree in computer engineering from Sault College of Applied Arts and Technology. Muhi Majzoub Mr. Majzoub has served as Executive Vice President, Chief Product Officer since September 2019. Prior to this role, Mr. Majzoub served as Executive Vice President, Engineering from January 2016 to September 2019 and as Senior Vice President, Engineering from June 2012 to January 2016. Mr. Majzoub is responsible for managing product development cycles, global development organization and driving internal operations and development processes. Mr. Majzoub is a seasoned enterprise software technology executive having recently served as Head of Products for NorthgateArinso, a private company that provides global Human Resources software and services. Prior to this, Mr. Majzoub was Senior Vice President of Product Development for CA, Technologies from June 2004 to July 2010. Mr. Majzoub also worked for several years as Vice President for Product Development at Oracle Corporation from January 1989 to June 2004. Mr. Majzoub attended San Francisco State University. James McGourlay Mr. McGourlay has served as Executive Vice President, International Sales since July 2021. Prior to this, Mr. McGourlay was the Company's Executive Vice President, Customer Operations from October 2017 to July 2021, Senior Vice President of Global Technical Services from May 2015 to October 2017 and Senior Vice President of Worldwide Customer Service from February 2012 to May 2015. Mr. McGourlay joined OpenText in 1997 and held progressive positions in information technology, technical support, product support and special projects, including, Director, Customer Service and Vice President, Customer Service. Renee McKenzie Ms. McKenzie was appointed Senior Vice President, Chief Information Officer for OpenText in April 2021. Ms. McKenzie joined the Company in 2004 and has held a number of positions within the Company, including Vice President, Enterprise Business Systems from 2015 to 2021. Ms. McKenzie holds a Master's Degree in Business Administration and a Bachelor's Degree in Biology & Psychology from Dalhousie University in Halifax, Nova Scotia, Canada. Douglas M. Parker Mr. Parker has served as the Company’s Senior Vice President, Corporate Development since October 2019. From January 2018 to October 2019, Mr. Parker served as President & Chief Executive Officer of Quarterhill Inc., focused on the acquisition, management and growth of companies in dedicated technology areas. Mr. Parker previously served as Senior Vice 80 President, Corporate Development of OpenText from 2015 to 2017. Prior to this role, Mr. Parker held the position of Vice President, General Counsel & Assistant Secretary from 2009 to 2015, where he was responsible for a variety of corporate legal, litigation management, and governance activities. Mr. Parker also served as Executive Sponsor to OpenText Brazil operations in 2014. Prior to joining OpenText, Mr. Parker worked for Nortel Networks Corporation in a variety of senior legal roles, including Managing Attorney, where he was responsible for the company’s global M&A legal function from 2006 to 2009. Mr. Parker holds an Executive Masters of Business Administration from the Richard Ivey School of Business, the University of Western Ontario, a Bachelor of Laws degree from Queen’s University, and a Bachelor of Arts (Honors) degree from Trinity College, the University of Toronto. Howard Rosen Mr. Rosen joined OpenText as Senior Vice President and Chief Accounting Officer in April 2020. Prior to joining OpenText, Mr. Rosen served as Vice President, Global Controller and Principal Accounting Officer at Wesco Aircraft from September 2018 to March 2020. Mr. Rosen also served as Vice President and Corporate Controller at Safe-Guard Products International from June 2017 to September 2018, as Senior Vice President and Chief Accounting Officer at RioCan from 2011 to 2016, as Chief Accounting Officer, Global Controller at Husky Injection Moldings System from 2010 to 2011 and as Senior Vice President and Chief Accounting Officer at MDS Inc. from 2007 to 2010. Mr. Rosen is a CPA and holds a BSBA, Accounting from Georgetown University. Brian Sweeney Mr. Sweeney joined OpenText as Chief Human Resources Officer in October 2018. He has over 25 years of experience as a Human Resource (HR) leader in high growth, global technology businesses, and professional services consulting. He has led organizational growth and transformation initiatives, including international expansion, M&A, global talent management, compensation and benefits, employee engagement, communication and cultural transformation. Prior to joining OpenText, Mr. Sweeney worked at Amgen Inc. from 2003 to 2018, where he served in various HR leadership roles, including Global VP of HR, Head of HR for Global R&D, and VP of International Human Resources. Prior to this, Mr. Sweeney worked at Dell, where he served as Director of Worldwide Compensation and Benefits from 1993 to 1997 and HR Director from 1997 to 2001. From 1989 to 1992, Mr. Sweeney was a Human Resource consultant at AON Hewitt Associates, working across multiple client industry sectors in the practice areas of employee benefits and executive compensation. Earlier in his professional career, Mr. Sweeney worked in corporate sales and sales management for Steelcase, Inc. Mr. Sweeney holds an MBA from the University of Michigan and a Bachelor's degree in Sociology from Vanderbilt University. P. Thomas Jenkins Mr. Jenkins is Chair of the Board of OpenText. From 1994 to 2005, Mr. Jenkins was President, then Chief Executive Officer and then from 2005 to 2013, Chief Strategy Officer of OpenText. Mr. Jenkins has served as a Director of OpenText since 1994 and as its Chairman since 1998. In addition to his OpenText responsibilities, Mr. Jenkins is Chair of the World Wide Web Foundation, a Commissioner of the Tri-Lateral Commission. Mr. Jenkins has also served as a board member of Manulife Financial Corporation, Thomson Reuters Inc. and TransAlta Corporation. He was also past Chair of the Ontario Global 100 (OG100) and past Canadian Co-Chair of the Atlantik Bruecke. He was the tenth Chancellor of the University of Waterloo and was the Chair of the National Research Council of Canada (NRC). Mr. Jenkins received an M.B.A. from Schulich School of Business at York University, an M.A.Sc. from the University of Toronto and a B.Eng. & Mgt. from McMaster University. Mr. Jenkins received honorary doctorates from six universities. He is a member of the Waterloo Region Entrepreneur Hall of Fame, a Companion of the Canadian Business Hall of Fame and recipient of the Ontario Entrepreneur of the Year award, the McMaster Engineering L.W. Shemilt Distinguished Alumni Award and the Schulich School of Business Outstanding Executive Leadership award. He is a Fellow of the Canadian Academy of Engineering (FCAE). Mr. Jenkins was awarded the Canadian Forces Decoration (CD) and the Queen's Diamond Jubilee Medal (QJDM). Mr. Jenkins is an Officer of the Order of Canada (OC). Randy Fowlie Mr. Fowlie has served as a director of OpenText since March 1998. From December 2010 to April 2017, Mr. Fowlie was the President and CEO of RDM Corporation, a leading provider of specialized hardware and software solutions in the electronic payment industry. Mr. Fowlie operated a consulting practice from July 2006 to December 2010. From January 2005 until July 2006, Mr. Fowlie held the position of Vice President and General Manager, Digital Media, of Harris Corporation, formerly Leitch Technology Corporation (Leitch), a company that was engaged in the manufacturing of audio and video infrastructure products for the professional broadcast and video industry. From June 1999 to January 2005, Mr. Fowlie held the position of Chief Operating Officer and Chief Financial Officer of Inscriber Technology Corporation (Inscriber), a software company providing products to the broadcast and video industry. From February 1998 to June 1999, Mr. Fowlie was the Chief Financial 81 Officer of Inscriber. Inscriber was acquired by Leitch in January 2005. Prior to working at Inscriber Mr. Fowlie was a partner with KPMG LLP, Chartered Accountants, where he worked from 1984 to February 1998. Mr. Fowlie received a B.B.A.(Honours) from Wilfrid Laurier University and is a Chartered Professional Accountant. Mr. Fowlie is also a director of Dye & Durham Limited (TSX: DND) a leading provider of cloud–based software and technology solutions for legal and business professionals, as well as InvestorCom Inc. and Sapphire Digital Health Solutions Inc., both privately held companies. In the last five years, Mr. Fowlie also served as a director of RDM Corporation. Major General David Fraser Major-General (Ret.) David Fraser has served as a director of OpenText since September 2018. Mr. Fraser is the President of Aegis Six Corporation of Toronto. Mr. Fraser was commissioned as an Infantry Officer following graduation from Carleton University with a Bachelor of Arts in 1980. He served in various command and staff positions in the Princess Patricia’s Canadian Light Infantry from platoon to Division throughout his 30 year career. Most notable, he commanded the NATO coalition in southern Afghanistan in 2006. He is a graduate of the Canadian Forces Command and Staff College in Toronto, holds a Master’s of Management and Policy and is a graduate of the United States Capstone Program (Executive School for generals). His honors and awards including the Commander of Military Merit, the Canadian Meritorious Service Cross, the Meritorious Service Medal, the United States Legion of Honor and Bronze Star (for service in Afghanistan), and leadership recognition awards from the Netherlands, Poland, and NATO. He is the recipient of the Vimy award for contributions to leadership and international affairs and the Atlantic Council Award for international leadership. Upon his departure from the military, Mr. Fraser joined the private sector and, along with his partners, created Blue Goose Pure Foods. Mr. Fraser joined INKAS® Armored Vehicle Manufacturing as their Chief Operating Officer in 2015 until 2017. In 2016, he founded Aegis Six Corporation, which aims at addressing the needs of capacity building abroad and for the private sector within Canada. Mr. Fraser currently works with the Bank of Montreal on their Canadian Defence Community Banking Program, serves as a director of Route1, Inc, Antoxa Corp. and the Canadian Forces College Foundation and is a member of The Prince’s Charities Advisory Council. In the last five years, Mr. Fraser was also a member of the Conference of Defence Association board. Mr. Fraser is also a mentor at the Ivey Business School and is the co-author of Operation Medusa, The Furious Battle that Saved Afghanistan from the Taliban . Gail E. Hamilton Ms. Hamilton has served as a director of OpenText since December 2006. For the five years prior thereto, Ms. Hamilton led a team of over 2,000 employees worldwide as Executive Vice President at Symantec Corp (Symantec), an infrastructure software company, and most recently had “P&L” responsibility for their global services and support business. While leading Symantec's $2B enterprise and consumer business, Ms. Hamilton helped steer the company through an aggressive acquisition strategy. In 2003, Information Security magazine recognized Ms. Hamilton as one of the “20 Women Luminaries” shaping the security industry. Ms. Hamilton has over 20 years of experience growing leading technology and services businesses in the enterprise market. She has extensive management experience at Compaq and Hewlett Packard, as well as Microtec Research. Ms. Hamilton received both a BSEE from the University of Colorado and an MSEE from Stanford University. Currently, Ms. Hamilton is also a director of Arrow Electronics. In the past five years Ms. Hamilton also served as a director of Ixia and Westmoreland Coal Company. She was recently named as one of WomenInc.'s 2018 Most Influential Corporate Board Directors. Robert Hau Mr. Hau has served as a director of OpenText since September 2020. He is the Chief Financial Officer and Treasurer at Fiserv, Inc., and provides oversight for all financial functions of the company. Mr. Hau has nearly 30 years of experience in business and financial leadership roles. Prior to joining Fiserv, he was Executive Vice President and Chief Financial Officer of TE Connectivity Ltd. from 2012 to 2016, where he was responsible for developing and implementing financial strategy, as well as creating the financial infrastructure necessary to drive the company’s financial direction, vision and compliance initiatives. Previously, Mr. Hau served as Chief Financial Officer for Lennox International Inc. Mr. Hau also spent 22 years at Honeywell International Inc. in a variety of progressive financial and operations leadership roles, including serving as Chief Financial Officer of its Aerospace Business Group, Specialty Materials Business Group and Aerospace Electronic Systems Unit. Mr. Hau holds a Master’s degree in business administration from the USC Marshall School of Business and a Bachelor’s degree in business administration from Marquette University. Ann M. Powell Ms. Powell has served as a director of OpenText since June 2021. She is the EVP, Global Chief Human Resource Officer for Bristol Myers Squibb (BMS) whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. With a focus on business performance, Ms. Powell leads efforts to drive the corporation’s global 82 people strategy, empowering the company’s current and future workforce and building a healthy culture focused on serving patients and communities. Ms. Powell works across the enterprise to support BMS’s commitment to creating an energizing work experience and a culture that is powerfully diverse and globally inclusive. Ms. Powell’s industry experience and expertise lie in executive compensation, global leadership development, change management, global diversity and inclusion, training design and delivery, recruitment and placement, labor relations, mergers and acquisitions, divestitures and green field start-ups. With a career spanning both international and domestic assignments, Ms. Powell has held leadership roles of increasing responsibility within the gas, chemical and pharmaceutical industries, including Dow Chemical and Wyeth Pharmaceuticals. Prior to joining BMS in 2013, Ms. Powell was the Chief Human Resources Officer for Shire Pharmaceuticals. Ms. Powell holds a B.S. degree from Iowa State University, a Master’s degree in Industrial Relations, University of Minnesota, and is certified as a Senior Professional in Human Resources (SPHR®) . Stephen J. Sadler Mr. Sadler has served as a director of OpenText since September 1997. From April 2000 to present, Mr. Sadler has served as the Chairman and CEO of Enghouse Systems Limited, a publicly traded software company that provides enterprise software solutions focusing on remote work, contact centers, visual computing and communications for next generation software defined networks. Mr. Sadler was previously Chief Financial Officer, President and Chief Executive Officer of GEAC Computer Corporation Ltd. (GEAC). Prior to Mr. Sadler's involvement with GEAC, he held executive positions with Phillips Electronics Limited and Loblaws Companies Limited, and was Chairman of Helix Investments (Canada) Inc. Currently, Mr. Sadler is a director of Enghouse Systems Limited. Mr. Sadler has a Business and Security Valuation certificate from Canadian Association of Business Valuators, holds a B.A. Sc. (Honours) in Industrial Engineering and an M.B.A. (Dean's List) from York University. He is also a Chartered Professional Accountant. Harmit Singh Mr. Singh has served as a director of OpenText since September 2018. He is the Executive Vice President and Chief Financial Officer of Levi Strauss & Co., where he is responsible for managing the company’s finance, information technology, strategic sourcing and global business services functions globally. This includes: financial planning and analysis; strategic planning and corporate development; accounting and controls; tax; enterprise risk management; treasury; internal audit; and investor relations. Mr. Singh is a seasoned financial executive with almost 30 years of experience in driving growth for global consumer brands. Prior to joining Levi Strauss & Co. in January 2013, Mr. Singh has served as Chief Financial Officer of Hyatt Hotels Corporation, where he played an instrumental role in successfully establishing a global financial structure, taking the company public, building a strong balance sheet, and driving growth by supporting capital deployment for acquisition and investments. Before Hyatt Hotels Corporation, Mr. Singh held various global leadership roles at Yum! Brands Inc., one of the world’s largest restaurant companies, (including acting as Chief Financial Officer of Pizza Hut and Chief Financial Officer of Yum International). Early in his career, Mr. Singh also worked at American Express India and PriceWaterhouse in India. Mr. Singh holds a Bachelor of Commerce from Shri Ram College of Commerce, Delhi University, and is a Chartered Accountant from India. He is also a member of the CNBC Global CFO Council and Wall Street Journal CFO Network. In October 2016, Mr. Singh was named to the board of directors of Buffalo Wild Wings Inc., the owner, operator and franchisor of Buffalo Wings® restaurants, where he served as a director and Chair of the Audit Committee until February 2018 . Michael Slaunwhite Mr. Slaunwhite has served as a director of OpenText since March 1998. Mr. Slaunwhite also previously served on the board of Vector Talent Holdings, L.P., the parent holding company of Saba Software from 2017 to December 2020. Previously, Mr. Slaunwhite also served as Chairman of the Board of Saba Software. Prior to his appointment at Vector Talent Holdings, Mr. Slaunwhite served as CEO and Chairman of Halogen Software Inc. from 2000 to August 2006, as President and Chairman from 1995 to 2000, and as a Director and Chairman from 1995 up to its acquisition by Vector Talent Holdings in 2017. From 1994 to 1995, Mr. Slaunwhite was an independent consultant to a number of companies, assisting them with strategic and financing plans. Mr. Slaunwhite was the Chief Financial Officer of Corel Corporation from 1988 to 1993. Mr. Slaunwhite holds a B.A. Commerce (Honours) from Carleton University . Katharine B. Stevenson Ms. Stevenson has served as a director of OpenText since December 2008. She has extensive corporate governance experience, having served on numerous public company and not-for-profit boards in Canada and the US over the past two decades, where she has consistently assumed leadership roles. Ms. Stevenson is the Chair of the Board of the Canadian Imperial Bank of Commerce (CIBC). Ms. Stevenson is also a director of CIBC Bancorp USA Inc. and CIBC USA, and serves on the board of Capital Power Corporation (Audit Committee Chair). In the last five years, Ms. Stevenson also served as a director of CAE Inc. She also serves on the St. Michael's Hospital Foundation Board and its Executive Committee. She was previously a 83 financial executive in the telecommunications and banking sectors. Ms. Stevenson holds a B.A. ( Magna Cum Laude ) from Harvard University. She is certified with the professional designation ICD.D. granted by the Institute of Corporate Directors (ICD). Ms. Stevenson was named one of the 2018 Top 100 Most Powerful Women. Deborah Weinstein Ms. Weinstein has served as a director of OpenText since December 2009. Ms. Weinstein is a co-founder and partner of LaBarge Weinstein LLP, a business law firm based in Ottawa, Ontario, since 1997. Ms. Weinstein's legal practice specializes in corporate finance, securities law, mergers and acquisitions and business law representation of public and private companies, primarily in knowledge-based growth industries. Prior to founding LaBarge Weinstein LLP, Ms. Weinstein was a partner of the law firm Blake, Cassels & Graydon LLP, where she practiced from 1990 to 1997 in Ottawa, and in Toronto from 1985 to 1987. Ms. Weinstein also serves on a number of not-for-profit boards. Ms. Weinstein has been recognized by Martindale-Hubbell (U.S.) with the highest possible rating in both Legal Ability and Ethical Standards. As well LaBarge Weinstein has been recognized by Canadian Lawyer as one of the Top 10 Corporate Boutiques. Ms. Weinstein holds an LL.B. from Osgoode Hall Law School of York University. Involvement in Certain Legal Proceedings Mr. Sadler was a director of Frontline Technologies Inc. (formerly Belzberg Technologies Inc.) from October 1997 to April 2012. Subsequent to Mr. Sadler's resignation, Frontline Technologies Inc. filed an assignment into bankruptcy under applicable bankruptcy and insolvency laws of Canada. Audit Committee The Audit Committee currently consists of four directors, Mr. Fowlie (Chair), Mr. Hau, Mr. Singh and Ms. Stevenson, all of whom have been determined by the Board of Directors to be independent as that term is defined in NASDAQ Rule 5605(a)(2) and in Rule 10A-3 promulgated by the SEC under the Exchange Act, and within the meaning of our director independence standards and those of any exchange, quotation system or market upon which our securities are traded. The responsibilities, mandate and operation of the Audit Committee are set out in the Audit Committee Charter, a copy of which is available on the Company's website, investors.opentext.com under the Corporate Governance section. The Board of Directors has determined that Mr. Fowlie qualifies as an “audit committee financial expert” as such term is defined in SEC Regulation S-K, Item 407(d)(5)(ii). Code of Business Conduct and Ethics We have a Code of Business Conduct and Ethics (the Ethics Code) that applies to all of our directors, officers and employees. The Ethics Code incorporates our guidelines designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and compliance with all applicable laws and regulations. The Ethics Code also incorporates our expectations of our employees that enable us to provide full, fair, accurate, timely and understandable disclosure in our filings with the SEC and other public communications. The full text of the Ethics Code is published on our web site at investors.opentext.com under the Corporate Governance section. If we make any substantive amendments to the Ethics Code or grant any waiver, including any implicit waiver, from a provision of the Ethics Code to our Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on our website at investors.opentext.com or on a Current Report on Form 8-K. Board Diversity and Term Limits The Company, including the Corporate Governance and Nominating Committee, views diversity in a broad context and considers a variety of factors when assessing nominees for the Board. The Company has established a Board Diversity Policy recognizing that a Board made up of highly qualified directors from diverse backgrounds, including diversity of gender, age, race, sexual orientation, religion, ethnicity and geographic representation, is important. In reference to the new disclosure requirements under the CBCA, the Company has not adopted a written policy that specifically relates to the identification and nomination of women, aboriginal peoples in Canada, persons with disabilities and members of visible minorities (the “Designated Groups”) for election as directors. As discussed above, the Board Diversity Policy of the Company includes consideration of broader categories of diversity beyond those of the Designated Groups but which encompass the Designated Groups and which the Board of Directors considers to be better aligned to achieve the range of perspectives, experience and expertise required by the Company. As of the date of this Annual Report on Form 10-K, for 84 each of the four Designated Groups, the Company has not established a specific target number or percentage, nor a specific target date by which to achieve a specific target number or percentage of members of each Designated Groups on the Board, as we consider a multitude of factors, including skills, experience, expertise, character and the Company’s objective and challenges at the time in determining the best nominee at such time. As of the date of this Annual Report on Form 10-K, there are currently four women on the Board which represents approximately 33% of the current Board and of the director nominees, and 40% of the current independent Board members. One director self-identified to the Company as a person with disabilities. The Company has not set term limits for independent directors because it values the cumulative experience and comprehensive knowledge of the Company that long serving directors possess. The Company does not have a director retirement policy. However the Corporate Governance and Nominating Committee considers the results of its director assessment process in determining the nominees to be put forward. In conducting director evaluations and nominations, the Corporate Governance and Nominating Committee considers the composition of the Board and whether there is a need to include nominees with different skills, experiences and perspectives on the Board. This flexible approach allows the Company to consider each director individually as well as the Board composition generally to determine if the appropriate balance is being achieved. Diversity in Executive Officer Positions The Company is committed to a diverse and inclusive workplace, including advancing women to executive officer positions. The Company has not adopted specific objectives or targets regarding Designated Groups at the executive officer level, as we consider a multitude of factors, including skills, experience, expertise, character and the Company’s objectives and challenges at the time in determining the best appointment at such time; however, the Company has adopted a formal written Global Employment Equity and Diversity Policy which expresses its commitment to fostering a diverse and inclusive workplace for all employees, regardless of culture, national origin, race, color, gender, gender identification, sexual orientation, family status, age, veteran status, disability, or religion, or other basis. The Company currently has one woman as a Named Executive Officer (20%) and three women as executive officers part of the executive leadership team (ELT) (23%), while approximately 25% of existing positions on the senior leadership team (SLT), exclusive of our ELT, are held by women. In addition, two members of the ELT and SLT have self-identified to the Company as a visible minority. A principal objective of our Global Employment Equity and Diversity Policy is to support and monitor the identification, development and retention of diverse employees, including gender diversity at executive and leadership positions. We will continue to develop a sustainable culture of equity, diversity and inclusion that provides all employees an opportunity to excel, and strive to present diverse slates of candidates for all our roles and mandate it for our senior leader positions. Item 11. Executive Compensation COMPENSATION COMMITTEE REPORT Our Compensation Committee has reviewed and discussed with our management the following Compensation Discussion and Analysis (CD&A). Based on this review and discussion, our Compensation Committee has recommended to the Board that the following CD&A be included in our Annual Report on Form 10-K for Fiscal 2021. This report is provided by the following independent directors, who comprise our Compensation Committee: Michael Slaunwhite (Chair), Gail E. Hamilton, Deborah Weinstein. To the extent that this Annual Report on Form 10-K has been or will be specifically incorporated by reference into any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (Exchange Act), this “Compensation Committee Report” shall not be deemed “soliciting materials”, unless specifically otherwise provided in any such filing. COMPENSATION DISCUSSION AND ANALYSIS The following discussion and analysis of compensation arrangements of the following individuals for the fiscal year which ended on June 30, 2021 (Fiscal 2021), should be read together with the compensation tables and related disclosures set forth below: (i) our principal executive officer, (ii) our principal financial officer, and (iii) our three most highly compensated executive officers, other than our principal executive officer and principal financial officer (collectively, the Named Executive Officers). This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and projections regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the various planned programs summarized in this discussion. 85 Payments in Canadian dollars included herein, unless otherwise specified, are converted to U.S. dollars using an average annual exchange rate of 0.773416. Overview of Compensation Program Determining the compensation of our Named Executive Officers is the responsibility of the Compensation Committee of OpenText's board of directors (the Compensation Committee or the Committee), either alone or in certain circumstances, in consultation with the Board. The Compensation Committee ensures compensation decisions are in line with our goal to provide total compensation to our Named Executive Officers that (i) is fair, reasonable and consistent with our compensation philosophy to achieve our short-term and long-term business goals, and (ii) provides market competitive compensation. The Named Executive Officers who are the subject of this CD&A are: • Mark J. Barrenechea - Vice Chair, Chief Executive Officer and Chief Technology Officer (CEO) • Madhu Ranganathan - Executive Vice President and Chief Financial Officer (CFO) • Simon Harrison - Executive Vice President, Enterprise Sales • Muhi Majzoub - Executive Vice President, Chief Product Officer • Gordon A. Davies - Executive Vice President, Chief Legal Officer and Corporate Development Compensation Oversight Process Role of Compensation Committee The Compensation Committee has responsibility for the oversight of executive compensation within the terms and conditions of our various compensation plans. The Compensation Committee approves the compensation of our executive officers, with the exception of our CEO. In making compensation decisions relating to, among other things, performance targets, base salary, bonuses, executive benefits, short-term incentives and long-term incentives, the Compensation Committee considers the input of the CEO. With respect to the compensation of our CEO, the Compensation Committee makes recommendations to the Board (excluding the CEO) for approval. The Compensation Committee reviews and approves all equity awards related to executive compensation prior to final approval and granting by the Board. The Board, the Compensation Committee, and our management have instituted a set of detailed policies and procedures to evaluate the performance of each of our Named Executive Officers which help determine the amount of the short-term incentives and long-term incentives to award to each Named Executive Officer. The Compensation Committee considers previous compensation awards, competitive market practice, the impact of tax, accounting treatments and applicable regulatory requirements when approving compensation programs. During Fiscal 2021, the Committee’s work included the following: • Executive Compensation Review - The Compensation Committee continually reviews compensation practices and policies with respect to our senior management team against similar-sized global technology companies, in order to allow us to place our compensation practices for these positions in a market context. This benchmarking may include a review of base salary, short-term incentives and long-term incentives. • Long-Term Incentive Plan - The Compensation Committee reviewed semi-annual analysis provided by Mercer Canada Limited (Mercer) related to performance under all outstanding Performance Share Unit Programs (for details on the programs, refer to the section titled “Long Term Incentives”). • COVID-19 Compensation Review - As previously disclosed, in order to mitigate the operational impacts of COVID-19, our Compensation Committee and Board approved certain compensation adjustments, relating to our Named Executive Officers and directors, effective for the period May 15, 2020 through June 30, 2021, subject to review and modification as the situation warranted. After careful consideration and review of performance during the COVID-19 pandemic, which was above the level expected at the start of the fiscal year, the Compensation Committee and Board approved the restoration of all previously announced compensation adjustments for all Named Executive Officers and directors, including the CEO, which became effective December 1, 2020. Cash compensation forbearance remained in place from July 1, 2020 through November 30, 2020, as detailed in the table under "Competitive Compensation" below. Please also see "Outlook for Fiscal 2022" in Part II, Item 7, elsewhere in this annual report on Form 10-K. 86 Although the Compensation Committee has responsibility for decisions on executive compensation, it may consider input from management, analysis provided from the compensation consultant, as well as other factors that the Committee considers appropriate. Please also see " Other Long-Term Equity Grants" and "Long-Term Equity Grants to CEO" below . Compensation Consultant NASDAQ standards require compensation committees to have certain responsibilities and authority regarding the retention, oversight and funding of committees' advisors and perform an evaluation of each advisor's independence, taking into consideration all factors relevant to that person's independence from management. NASDAQ standards also require that such rights and responsibilities be enumerated in the compensation committee's charter. While, as a foreign private issuer under the U.S. federal securities laws, we are exempt from these rules, nonetheless, our Compensation Committee has the sole authority to retain and terminate outside consultants. From time to time, the Compensation Committee seeks the advice of an outside compensation consultant to provide assistance and guidance on compensation issues. The compensation consultant may provide the Compensation Committee with relevant information pertaining to market compensation levels, alternative compensation plan designs, market trends and best practices and may assist the Compensation Committee with respect to determining the appropriate benchmarks for each Named Executive Officer's compensation. In Fiscal 2021, the Compensation Committee retained Hugessen Consulting Inc. (Hugessen), an independent consulting firm specializing in executive compensation consulting. During Fiscal 2021 representatives of Hugessen were consulted from time to time by members of the Compensation Committee. Hugessen reviewed relevant information and industry benchmarks and independently advised members of the Compensation Committee on matters relating to CEO and executive officer compensation. Hugessen did not provide any other services to the Company during Fiscal 2021, outside of its capacity as compensation consultants. In Fiscal 2021, Compensation Committee also had various discussions with Frederic W. Cook & Co., Inc. (FW Cook), an independent consulting firm specializing in executive compensation consulting. During Fiscal 2021, the Chairman and members of the Compensation Committee held discussions from time to time with representatives of FW Cook in connection with compensation market practices in light of COVID-19, and potential impacts on Company's financial performance. FW Cook reviewed relevant information and industry benchmarks on matters relating to CEO and executive officer compensation, including compensation market practices adopted in light of COVID-19. The Compensation Committee met four times during Fiscal 2021. Management assisted in the coordination and preparation of the meeting agenda and materials for each meeting. The agenda is reviewed and approved by the Chairman of the Compensation Committee. The meeting materials are generally posted and made available to the other Committee members and invitees, if any, for review approximately one week in advance of each meeting. Compensation Philosophy and Objectives We believe that compensation plays an important role in achieving short and long-term business objectives that ultimately drives business success in alignment with long-term shareholder value creation. 87 Our compensation philosophy is based on three fundamental principles: The objectives of our compensation program are to: l Strong link to business strategy - Our short and long-term goals are reflected in our overall compensation program. l Attract and retain highly qualified executive officers who have a history of proven success. l Pay for performance - We aim to reward sustained company performance by aligning a significant portion of total compensation to our financial results and strategic objectives. We believe compensation should fluctuate with financial performance and accordingly, we structure total compensation to be at or above our peer group median when our financial performance exceeds our target performance and likewise, we structure total compensation to be below our peer group median if our financial performance falls below our targets. l Align the interests of executive officers with our shareholders' interests and with the execution of our business strategy by evaluating executive performance on the basis of key financial metrics which we believe closely correlate to long-term shareholder value. l Motivate and reward our high caliber executive team through competitive pay practices and an appropriate mix of short and long-term incentives. l Market relevant - Our compensation program provides market competitive pay in terms of value and structure in order to retain talent who are performing according to their objectives and to attract new talent of the highest caliber. We aim to position our executive officers’ compensation targets at the median in relation to our peer group, however, actual pay depends on performance of the executive officers and the Company. l Tie compensation awards directly to key financial metrics with evaluations based on achieving and overachieving predetermined objectives. Our reward package is based primarily on results achieved by the Company as a whole. The Compensation Committee has the flexibility to exercise discretion to ensure total compensation appropriately reflects performance. The Compensation Committee rarely exercises said discretion. Competitive Compensation Aggregate compensation for each Named Executive Officer is designed to be market competitive. The Compensation Committee researches and refers to the compensation practices of similarly situated companies in determining our compensation policy. Although the Compensation Committee reviews each element of compensation for market competitiveness, and may weigh a particular element more heavily than another based on our Named Executive Officer's role within the Company, the focus remains on being competitive in the market with respect to total compensation. The Compensation Committee periodically reviews data related to compensation levels and programs of a peer group of comparable organizations. Our last peer group analysis was prepared for management by Radford, an AON Hewitt Company (Radford), in February 2019 using the criteria described in the table below, and was presented to and approved by the Compensation Committee at that time. Our peer group consists of 17 companies that include 16 US-based companies and one Israel-based company. In Fiscal 2021, no new companies were added to our peer group and two were removed. General Description Criteria Considered Peer Group List Global software and service providers that are similar in size, business complexity, and scope of operations to us. Key metrics considered include revenue, market capitalization, number of employees, and net income. Generally, organizations within our peer group are in a similar software/technology industry with similar revenues, market size and number of employees. Akamai Technologies, Inc. Amdocs Ltd. Autodesk, Inc. Avaya Inc. Broadridge Financial Solutions, Inc. Cadence Design Systems, Inc. CDK Global LLC Check Point Software Technologies Ltd. Citrix Systems, Inc. NetApp, Inc. Nuance Communications, Inc. Pitney Bowes Inc. Palo Alto Networks, Inc. Sabre Corporation SS&C Technologies, Inc. Synopsys, Inc. Teradata Corporation The following graph compares for each of the five fiscal years ended June 30, 2021, the yearly percentage change in the cumulative total shareholder return on our Common Shares with the average cumulative total return of the NASDAQ Composite Index, the S&P/TSX Composite Index (the Indices) and our peer group listed above. The graph illustrates the 88 cumulative return on a $100 investment in our Common Shares made on June 30, 2016, as compared with the cumulative return on a $100 investment in the respective Indices and the average cumulative return on a $100 investment in our peer group made on the same day. Dividends declared on securities comprising the respective Indices and our peer group and declared on our Common Shares are assumed to be reinvested. The performance of our Common Shares as set out in the graph is based upon historical data and is not indicative of, nor intended to forecast, future performance of our Common Shares. The graph lines merely connect measurement dates and do not reflect fluctuations between those dates. Please also see “Stock Performance Graph and Cumulative Total Return” included elsewhere in this Annual Report on Form 10-K for more details. Taking into account the peer group analysis established in February 2019 as well as market benchmarking performed in April 2020, further efforts were made to align our Named Executive Officers' compensation packages more closely with our stated compensation objectives. Accordingly, Messrs. Harrison, Majzoub, Davies and Ms. Ranganathan received an adjustment to their respective long-term incentive compensation during Fiscal 2021. Effective May 15, 2020, as a result of the COVID-19 compensation adjustments discussed above, all of our Named Executive Officers', with the exception of Mr. Barrenechea, accepted a 15% base salary reduction and a 15% reduction in target annual variable cash compensation. Mr. Barrenechea accepted a 15% base salary reduction and complete forbearance of any annual variable cash compensation, totaling an approximate 60% reduction in targeted cash compensation. These reductions were to remain in effect through June 30, 2021, subject to review and modification as the situation warranted. After careful consideration and review of performance during the COVID-19 pandemic, which was above the level expected at the start of the fiscal year, the Compensation Committee and Board approved the restoration of all previously announced compensation adjustments for all Named Executive Officers and directors, including the CEO, which became effective December 1, 2020. Cash compensation forbearance remained in place from July 1, 2020 through November 30, 2020, as detailed in a table below. The table below illustrates the total amount of cash compensation forbearance that was incurred by each Named Executive Officer during Fiscal 2021. Named Executive Officer Forbearance of Fixed Pay Forbearance of Short-Term Incentive Total Cash Reduction Mark J. Barrenechea $ 59,375 $ 1,186,850 $ 1,246,225 Madhu Ranganathan $ 31,250 $ 62,466 $ 93,716 Simon Harrison $ 28,125 $ 55,761 $ 83,886 Muhi Majzoub $ 26,563 $ 53,096 $ 79,659 Gordon A. Davies $ 24,894 $ 49,761 $ 74,655 89 CEO Compensation Mr. Barrenechea’s leadership of the company as CEO, including through the challenges of a global pandemic, have continued to strengthen the market position of Open Text and deliver shareholder value. The Compensation Committee and the Board of Directors are committed to providing the CEO with a competitive compensation package which rewards outstanding performance, provides incentives for continued long term sustainable growth, and accomplishes the Board’s retention objectives. To achieve these goals, and in recognition of the CEO's demonstrated operational leadership of the Company and exceptional navigation through the global pandemic, Mr. Barrenechea’s annual compensation has been supplemented with a grant of performance-and long-term-based equity. The structure of this grant is described in detail below in the section “ Long Term Incentives - Long Term Equity Grants to CEO ”. In Fiscal 2021, over 65% (over 55% at target) of our CEO's equity-based compensation was performance-contingent. The philosophy behind this grant is to align the CEO’s compensation with superior shareholder return, while accomplishing the long-term retention of the executive through its deferred vesting schedules. Its focus is on the long term strategic goals of the company and is targeted to pay above average compensation only for above average performance. Aligning Officers' Interests with Shareholders' Interests We believe that transparent, objective and easily verifiable corporate goals play an important role in creating and maintaining an effective compensation strategy for our Named Executive Officers. Our objective is to facilitate an increase in shareholder value, over the longer term, through the achievement of these corporate goals under the leadership of our Named Executive Officers working in conjunction with all of our valued employees. We use a combination of fixed and variable compensation to motivate our executive officers to achieve our corporate goals. For Fiscal 2021, the basic components of our executive officer compensation program were: • Fixed pay; • Short-term incentives; and • Long-term incentives. To ensure alignment of the interests of our executive officers with the interests of our shareholders, our executive officers have a significant proportion of compensation “at risk”. Compensation that is “at risk” means compensation that may or may not be paid to an executive officer depending on whether the Company and such executive officer is able to meet or exceed applicable performance targets. Short-term incentives and long-term incentives meet this definition of compensation which is at risk, and long-term incentives are an additional incentive used to promote the creation of longer-term shareholder value. In general, the greater the executive officer’s influence upon our financial or operational results, the higher is the "at risk" portion of the executive officer's compensation. The Compensation Committee annually considers the percentage of each Named Executive Officer's total compensation that is “at risk” depending on the Named Executive Officer's responsibilities and objectives. The chart below provides the approximate percentage of target total compensation, reflective of the compensation adjustments discussed above, provided to each Named Executive Officer that was either fixed pay or “at risk” for Fiscal 2021: Named Executive Officer Fixed Pay Percentage (“Not At Risk”) Short-Term Incentive Percentage (at 100% target) (“At Risk”) Long-Term Incentive Percentage (at 100% target) (“At Risk”) Mark J. Barrenechea 10% 10% 80% Madhu Ranganathan 18% 19% 63% Simon Harrison 20% 20% 60% Muhi Majzoub 20% 20% 60% Gordon A. Davies 18% 19% 63% 90 Fixed Pay Fixed pay includes: • Base salary; • Perquisites; and • Other benefits. Base Salary The base salary review for each Named Executive Officer takes into consideration factors such as current competitive market conditions and particular skills (such as leadership ability and management effectiveness, experience, responsibility and proven or expected performance) of the particular individual. The Compensation Committee obtains information regarding competitive market conditions through the assistance of management and our compensation consultants. The performance of each of our Named Executive Officers, other than our CEO, is assessed by our CEO in his capacity as the direct supervisor of the other Named Executive Officers. The performance of our CEO is assessed by the Board (excluding the CEO). The Board conducts the initial discussions and makes the initial decisions with respect to the performance of our CEO in a special session from which management is absent. For details on our benchmarking process, see "Competitive Compensation" above. Perquisites Our Named Executive Officers receive a minimal amount of non-cash compensation in the form of executive perquisites. In order to remain competitive in the marketplace, our Named Executive Officers are entitled to some limited benefits that are not otherwise available to all of our employees, including: • An annual executive medical physical examination; • A base allowance to cover expenses such as financial planning, tax preparation or club memberships. Other Benefits We provide various employee benefit programs on the same terms to all employees, including our Named Executive Officers, such as, but not limited to: • Medical health insurance; • Dental insurance; • Life insurance; and • Tax based retirement savings plans matching contributions. Short-Term Incentives In Fiscal 2021, all of our Named Executive Officers participated in our short-term incentive plan, which is designed to motivate achievement of our short-term corporate goals. These short-term corporate goals are typically derived from our annual business plan which is prepared by management and approved by the Board. Awards made under the short-term incentive plan are made by way of cash payments only. The amount of the short-term incentive payable to each Named Executive Officer, in general, is based on the ability of each Named Executive Officer to meet pre-established, qualitative and quantitative corporate objectives related to improving shareholder and company value, as applicable, which are reviewed and approved by the Compensation Committee and the Board. For all Named Executive Officers these objectives consist of worldwide revenues and worldwide adjusted operating income with the exception of Mr. Harrison. Due to his responsibilities relating to sales, Mr. Harrison's objectives consist of worldwide license and cloud revenues and minimum contract value (MCV) and worldwide adjusted operating income. Worldwide revenues are derived from the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable. Worldwide revenues are an important metric for measuring our growth and helps us to assess our Named Executive Officers’ performance. Worldwide license and cloud revenues are derived from the sum of "License" and "Cloud services and subscriptions" lines of our audited income statement. 91 MCV is the total projected commissionable incremental revenue in a signed and written agreement between the Company and its customer. It represents the minimum amount of revenue that we expect to receive from a contract. For the purposes of calculating the achievement of this performance objective, we only consider MCV that is derived from new business. Worldwide adjusted operating income, which is intended to reflect the operational effectiveness of our leadership, is calculated as total revenues less the total cost of revenues and operating expenses excluding amortization of intangible assets, special charges and stock-based compensation expense. Worldwide adjusted operating income is also adjusted to remove the impact of foreign exchange. For Fiscal 2021, the following table illustrates the total short-term target awards for each Named Executive Officer, along with the associated weighting of the related performance measures. Named Executive Officer Total Target Award (1) Worldwide Revenues Worldwide License and Cloud Revenues and MCV Worldwide Adjusted Operating Income Mark J. Barrenechea $ 831,576 50% N/A 50% Madhu Ranganathan $ 468,768 50% N/A 50% Simon Harrison $ 422,120 N/A 60% 40% Muhi Majzoub $ 398,452 50% N/A 50% Gordon A. Davies $ 373,428 50% N/A 50% (1) Target amounts have been reduced to reflect the COVID-19 compensation adjustments, which became effective May 15, 2020, and the subsequent restoration of those adjustments which became effective December 1, 2020. For the short-term incentive award amounts that would be earned at each of threshold, target and maximum levels of performance, for applicable objectives, see “Grants of Plan-Based Awards for Fiscal 2021” below. For each performance measure noted above, the Compensation Committee approves the total target award eligible to be earned by a Named Executive Officer, and the Board applies a threshold and target level of performance. Where applicable, the Board also applies an objective formula for determining the percentage payout under awards for levels of performance above and below threshold and target. In each case, performance targets for Fiscal 2021 were higher than Fiscal 2020. To the extent target performance is exceeded, the award will be proportionately greater. The threshold and target levels and payout formula are set forth below as well as actual performance and payout percentages achieved in Fiscal 2021. The Board and the Compensation Committee have broad discretion to make positive or negative adjustments if it considers them to be reasonably appropriate. No discretionary adjustments were made for Fiscal 2021 awards. Effective August 5, 2020, a policy addendum was adopted to our short-term and long-term compensation plans that outlines the principles under which the broad discretion may, from time to time, be applied in order to avoid unintended windfalls or penalties for plan participants. Events that might warrant such discretionary adjustments include, but are not limited to, terrorism, political unrest, war, pandemics and natural disasters. No such discretion was applied to the variable cash incentive payouts nor long-term incentive payouts during the fiscal year. The actual short-term incentive award earned by each Named Executive Officer for Fiscal 2021 was determined in accordance with the formulas described above, including the natural reductions due to the COVID-19 forbearance period that reduced the variable compensation earnout potential, and reflect the strong performance levels achieved by the Company in Fiscal 2021 related to this “at risk” compensation component. Objectives (in millions) Threshold Target Target Fiscal 2021 Actual (1) % Target Actually Achieved % of Payment per Fiscal 2021 Payout Table (2) Worldwide Revenues $ 2,799 $ 3,110 $ 3,293 106 % 200 % Worldwide License and Cloud Revenues and MCV $ 1,712 $ 1,902 $ 2,063 108 % 200 % Worldwide Adjusted Operating Income $ 900 $ 1,000 $ 1,217 122 % 200 % (1) Adjusted to remove the impact of foreign exchange and, in some cases, reflect certain adjustments relating to the aging of accounts receivable. (2) Payout reflective of COVID-19 forbearance reductions applied to each of our respective Named Executive Officers' compensation. 92 The table below illustrates the percentage of the target awards paid to our Named Executives Officers in accordance with our actual results achieved during Fiscal 2021. Worldwide Revenues, Worldwide License and Cloud Revenues and MCV, and Worldwide Adjusted Operating Income - Attainment and Corresponding Payment % Attainment % Payment % Attainment % Payment 0 - 89% —% 100.0% 100% 90 - 91% 15% 100.5% 125% 92 - 93% 40% 101.0% 150% 94 - 95% 55% 101.5% 175% 96 - 97% 70% 102% and above 200% cap 98 - 99% 85% Formula: Example: Actual / Budget = % of Attainment Linear x25 for every 0.5% over 100% Attainment of 101.0% results in a payment of 150% In Fiscal 2021, we achieved 106 % of our worldwide revenue target; 108 % of our worldwide license and cloud revenues and MCV target; and 122 % of our worldwide adjusted operating income target. The “Worldwide Revenues, Worldwide License and Cloud Revenues and MCV, and Worldwide Adjusted Operating Income Calculations” table above illustrates under the “% Attainment” column that an achievement of 106 % of target for the worldwide revenue performance criteria results in an award payment of 200 % of the target award amount; an achievement of 108 % of target for the worldwide license and cloud revenue and MCV performance criteria results in an award payment of 200 % of the target award amount; and an achievement of 122 % of target for the worldwide adjusted operating income performance criterion results in an award payment of 200 % of the target award amount. The actual short-term incentive award earned by each Named Executive Officer for Fiscal 2021 was determined in accordance with the formulas described above and are reflective of the strong performance levels achieved by the Company in Fiscal 2021 related to this “at risk” compensation component. We have set forth below for each Named Executive Officer the award amount actually paid for Fiscal 2021, and the percentage of target award amount represented by the actual award paid, in each case, subject to the pro rata forbearance previously discussed, broken out by performance measure as follows: Mark J. Barrenechea Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 415,788 $ 62,368 $ 831,575 200 % Worldwide Adjusted Operating Income $ 415,788 $ 62,368 $ 831,575 200 % Total $ 831,576 $ 124,736 $ 1,663,150 200 % Madhu Ranganathan Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 234,384 $ 35,158 $ 468,767 200 % Worldwide Adjusted Operating Income $ 234,384 $ 35,158 $ 468,767 200 % Total $ 468,768 $ 70,316 $ 937,534 200 % 93 Simon Harrison Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide License and Cloud Revenues and MCV $ 253,272 $ 37,991 $ 506,543 200 % Worldwide Adjusted Operating Income $ 168,848 $ 25,327 $ 337,696 200 % Total $ 422,120 $ 63,318 $ 844,239 200 % Muhi Majzoub Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 199,226 $ 29,884 $ 398,452 200 % Worldwide Adjusted Operating Income $ 199,226 $ 29,884 $ 398,452 200 % Total $ 398,452 $ 59,768 $ 796,904 200 % Gordon A. Davies Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 186,714 $ 28,007 $ 373,428 200 % Worldwide Adjusted Operating Income $ 186,714 $ 28,007 $ 373,428 200 % Total $ 373,428 $ 56,014 $ 746,856 200 % Long-Term Incentives As with many North American technology companies, we have a general practice of granting variable long-term incentives to executive officers, including our Named Executive Officers. Our long-term incentives represent a significant proportion of our Named Executive Officers’ total compensation, and its purpose is two-fold: (i) as a component of a competitive compensation package; and (ii) to align the interests of our Named Executive Officers with the interests of our shareholders. Grants are consistent with competitive market practice, and vesting occurs over time, to ensure alignment with our performance over the longer term. Usually a very high percentage of the long-term incentive is "at risk" indicating we will not provide any compensation to the executive unless shareholders have received a positive return. Long-Term Incentive Plans (LTIP) - General We incentivize our executive officers, including our Named Executive Officers, in part, with long-term compensation pursuant to our LTIP. For each LTIP grant, a target value is established by the Compensation Committee for each Named Executive Officer, except for the CEO , whose target value is established by the Board, based on competitive market practice and by the respective Named Executive Officer’s ability to influence financial or operational performance. The performance targets and the weightings of performance targets under each LTIP are first recommended by the Compensation Committee and then approved by the Board. Grants are generally made annually and are comprised of the components outlined in the table below. No dividends are paid or accrued on PSUs or RSUs. 94 Vehicle % of Total LTIP Description Vesting Payout Performance Share Units (PSU) 50% of LTIP target award value The value of each PSU is equivalent to one Common Share. The number of PSUs granted is determined by converting the dollar value of the target award to PSUs, based on an average share price determined at time of Board grant. The number of PSUs to vest will be based on the Company’s total shareholder return (TSR) at the end of a three year period as compared to the TSR of companies comprising the constituents of the S&P MidCap400 Software and Services Index. Cliff vesting in the third year following the determination by the Board that the performance criteria have been met. Once vested, units will be settled in either Common Shares or cash, at the discretion of the Board. We expect to settle these awards in Common Shares. Restricted Share Units (RSU) 25% of LTIP target award value The value of each RSU is equivalent to one Common Share. The number of RSUs granted is determined by converting the dollar value of the target award to RSUs, based on an average share price determined at time of Board grant. Cliff vesting, generally three years after grant date. Once vested, units will be settled in either Common Shares or cash, at the discretion of the Board. We expect to settle these awards in Common Shares. Stock Options 25% of LTIP target award value The dollar value of the target award is converted to a number of options using a Black Scholes model. The exercise price is equal to the closing price of our Common Shares on the trading day preceding the date of grant. Vesting is typically 25% on each of the first four anniversaries of grant date. Options expire seven years after the grant date. Once vested, participants may exercise options for Common Shares. Payouts under LTIP grants: • May also be subject to certain limitations in the event of early termination of employment or change in control of the Company; and • Are subject to mandatory repayment or “claw-back” in the event of fraud, willful misconduct or gross negligence by any executive officer, including a Named Executive Officer, affecting the financial performance or financial statements of the Company or the price of our Common Shares. LTIP 2023 Grants made in Fiscal 2021 under the LTIP (collectively referred to as "LTIP 2023" because the PSUs and RSUs do not vest until calendar 2023) took effect on August 10, 2020 with the goal of measuring performance over the three year period starting July 1, 2020. The table below illustrates the target value of each element under LTIP 2023 for each Named Executive Officer. Named Executive Officer Performance Share Units Restricted Share Units Stock Options Total Mark J. Barrenechea $ 3,500,000 $ 1,750,000 $ 1,750,000 $ 7,000,000 Madhu Ranganathan $ 800,000 $ 400,000 $ 400,000 $ 1,600,000 Simon Harrison $ 625,000 $ 312,500 $ 312,500 $ 1,250,000 Muhi Majzoub $ 612,500 $ 306,250 $ 306,250 $ 1,225,000 Gordon A. Davies $ 625,000 $ 312,500 $ 312,500 $ 1,250,000 Awards granted in Fiscal 2021 under LTIP 2023 were in addition to the awards granted in Fiscal 2020, Fiscal 2019, and prior years. For details of our previous LTIPs, see Item 11 of our Annual Report on Form 10-K for the appropriate year. LTIP 2023 - PSUs With respect to our PSUs, we use relative TSR to benchmark the Company’s performance against the performance of the corporations comprising the constituents of the S&P Mid Cap 400 Software & Services Index (the Index). The Index is comprised of 400 U.S. public companies with market capitalization of $1.8 billion to $13.6 billion and is a useful measure of the performance of mid-sized companies. Relative TSR is the sole measure for each Named Executive Officer's performance over the relevant three year period for LTIP 2023 with respect to PSUs. 95 If the Company's relative cumulative TSR, compared to the cumulative TSR of the Index is: Then the percentage of the PSU target award that will be paid out will be: Below 25th percentile —% 25th percentile 50% 50th percentile 100% 80th percentile 200% Any target percentile achieved between 25th and 80th percentile will be interpolated to determine a payout that can range from 50% to 200% of the target award. The amounts that may be realized for PSU awards under LTIP 2023 are as follows, calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2021, and applied to the number of PSUs granted to the Named Executive Officers on August 10, 2020 based on the levels of achievement disclosed above. LTIP 2023 PSUs value as of June 30, 2021 Named Executive Officer 50% Payout 100% Payout 200% Payout Mark J. Barrenechea $ 1,944,116 $ 3,888,232 $ 7,776,464 Madhu Ranganathan $ 444,246 $ 888,492 $ 1,776,984 Simon Harrison $ 347,218 $ 694,436 $ 1,388,872 Muhi Majzoub $ 340,106 $ 680,212 $ 1,360,424 Gordon A. Davies $ 347,218 $ 694,436 $ 1,388,872 LTIP 2023 - RSUs RSUs vest over three years and do not have any specific performance-based vesting criteria. Provided the eligible employee remains employed throughout the vesting period, all RSUs granted shall become vested RSUs at the end of the LTIP 2023 period. The following RSU award values under LTIP 2023 have been calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2021, and applied to the number of RSUs granted to the Named Executive Officers on August 10, 2020.. LTIP 2023 RSUs Named Executive Officer Value as of June 30, 2021 Mark J. Barrenechea $ 1,944,116 Madhu Ranganathan $ 444,500 Simon Harrison $ 346,964 Muhi Majzoub $ 340,360 Gordon A. Davies $ 346,964 LTIP 2023 - Stock Options The stock options granted in connection with LTIP 2023 vest over four years, do not have any specific performance-based vesting criteria and, if not exercised, expire after seven years. Our Named Executive Officers will only realize value on these stock options with future OpenText share price appreciation from the date of grant. For a discussion of the assumptions used in the valuation of stock options, see note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. Other Long-Term Equity Grants In addition to grants made in connection with our LTIP program, from time to time, we may grant stock options and/or RSUs to new strategic hires and to our employees in recognition of their service, such as for promotions, retention, or other reasons. In Fiscal 2021, we granted stock options and RSUs to each of our Named Executive Officers, with the exception of Mr. Barrenechea, through a special one-time grant for retention and engagement of our executives, who were critical in navigating through the uncertain times of the COVID-19 pandemic. Details of these grants are contained in the table below under "Grants of Plan Based Awards". Please also see " Long-Term Equity Grants to CEO " below. 96 The table below illustrates the target value of each element under the special one-time grants for each Named Executive Officer. Named Executive Officer Restricted Share Units Stock Options Total Madhu Ranganathan $ 306,250 $ 918,750 $ 1,225,000 Simon Harrison $ 275,610 $ 826,870 $ 1,102,480 Muhi Majzoub $ 260,300 $ 780,940 $ 1,041,240 Gordon A. Davies $ 230,250 $ 690,810 $ 921,060 Our RSUs and stock options vest over a specified contract date, typically over three and four years, respectively, and do not have any specific performance criteria. The vesting period for the special one-time options is 5 years, 25% after year two, then 25% per year thereafter and the vesting period for the special one-time RSUs is three years, 33% per year. With respect to stock option grants, the Board will determine the following, based upon the recommendation of the Compensation Committee: the executive officers entitled to participate in our stock option plan, the number of options to be granted, and any other material terms and conditions of the stock option grant. All stock option grants, whether part of the LTIP or granted separately for new hires, promotions, retention or other reasons, are governed by our stock option plans. In addition, grants and exercises of stock options are subject to our Insider Trading Policy. For details of our Insider Trading Policy, see “Other Information With Respect to Our Compensation Program - Insider Trading Policy” below. For details on the determination of targeted awards and our benchmarking process, see "Compensation Objective - Competitive Compensation" above. Long-Term Equity Grants to CEO In connection with the Compensation Committee's review of competitive compensation and the review of Mr. Barrenechea's performance, as discussed earlier under " Competitive Compensation - CEO Compensation ", on August 10, 2020, Mr. Barrenechea received a grant of performance stock options under the 2004 Stock Option Plan with an exercise price of $45.81, a seven year term, and vesting subject to certain performance conditions provided that Mr. Barrenechea remains an employee. These performance options will vest based on the extent to which the average closing price (ACP) of the Common Shares on the NASDAQ for the trading days in any fiscal quarter commencing October 1, 2020, prior to the expiration of the options, exceeds the exercise price by a specified percentage or greater (subject to a linear interpolation for quarterly ACP between the performance levels outlined below). Absolute share growth at target performance ($64.13 reflecting an increase of 40%) will result in 375,000 options vesting, with no options vesting below threshold performance ($54.97 reflecting an increase of 20%) and 750,000 options vesting if maximum performance is achieved ($73.30 reflecting an increase of 60%). No more than 750,000 performance options (2x target) may vest under the award. ACP Increase (%) Illustrative ACP ($) Aggregate Number of Options to Vest Threshold (20%) $54.97 150,000 30% $59.55 262,500 Target (40%) $64.13 375,000 50% $68.72 562,500 Maximum (60%) $73.30 750,000 To the extent that any performance options vest during the first five-year period, they must be held by Mr. Barrenechea until the earlier of the fifth anniversary of the date of grant and the date he ceases to be an employee. Any performance options that vest may be exercised by Mr. Barrenechea during this five-year period, provided that the Common Shares acquired on exercise, net of a number of Common Shares that may be sold by Mr. Barrenechea to fund the exercise price and any income taxes payable as a result of such exercise, must be held by Mr. Barrenechea for this same period. Additionally, on August 10, 2020, Mr. Barrenechea received a grant of 60,000 RSUs. These RSUs vest over three years, provided Mr. Barrenechea remains employed throughout the applicable vesting period, and are on identical terms to RSUs granted under LTIP 2023. The aggregate amount that may be realized for these RSU awards calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2021 and applied to the number of RSUs granted is approximately $3.0 million. 97 In Fiscal 2021, as illustrated in the table below for performance grants, over 55% of our CEO's equity compensation had target value that was performance-contingent on either relative TSR versus the S&P400 Mid-Cap Technology index companies (Performance Share Units) or increasing stock price to a target price of $64.13 (Performance Options). The table below illustrates the grant value of all equity-based awards granted to Mr. Barrenechea in Fiscal 2021: Performance-based Awards (# units/shares) at Target Performance-based Awards ($ grant value) at Target Total Performance-Based Grant Value at Target Performance Share Units Performance Stock Options Performance Share Units Performance Options 76,540 375,000 $ 4,720,222 $ 3,817,500 $ 8,537,722 Time-based Awards (# units) Time-based Awards ($ grant value) Total Time-Based Grant Value Restricted Share Units Stock Options Restricted Share Units Stock Options 98,270 213,680 $ 4,270,814 $ 1,750,993 $ 6,021,807 Executive Change in Control and Severance Benefits Our severance benefit agreements are designed to provide reasonable compensation to departing senior executive officers under certain circumstances. While we do not believe that the severance benefits would be a determinative factor in a senior executive's decision to join or remain with the Company, the absence of such benefits, we believe, would present a distinct competitive disadvantage in the market for talented executive officers. Furthermore, we believe that it is important to set forth the benefits payable in triggering circumstances in advance in an attempt to avoid future disputes or litigation. The severance benefits we offer to our senior executive officers are competitive with similarly situated individuals and companies. We have structured our senior executive officers' change in control benefits as “double trigger” benefits, meaning that the benefits are only paid in the event of, first, a change in control transaction, and second, the loss of employment within one year after the transaction. These benefits attempt to provide an incentive to our senior executive officers to remain employed with the Company in the event of such a transaction. Other Information With Respect to Our Compensation Program Pension Plans We do not provide pension benefits or any non-qualified deferred compensation to any of our Named Executive Officers. Share Ownership Guidelines We currently have equity ownership guidelines (Share Ownership Guidelines), the objective of which is to encourage our senior management, including our Named Executive Officers, and our directors to buy and hold Common Shares in the Company based upon an investment target. We believe that the Share Ownership Guidelines help align the financial interests of our senior management team and directors with the financial interests of our shareholders. The equity ownership levels are as follows: CEO 4x base salary Other senior management 1x base salary Non-management director 3x annual retainer For purposes of the Share Ownership Guidelines, individuals are deemed to hold all securities over which he or she is the registered or beneficial owner thereof under the rules of Section 13(d) of the Exchange Act through any contract, arrangement, understanding, relationship or otherwise in which such person has or shares: • voting power which includes the power to vote, or to direct the voting of, such security; and/or • investment power which includes the power to dispose, or to direct the disposition of, such security. Also, Common Shares will be valued at the greater of their book value (i.e., purchase price) or the current market value. On an annual basis, the Compensation Committee reviews the recommended ownership levels under the Share Ownership Guidelines and the compliance by our executive officers and directors with the Share Ownership Guidelines. The Board implemented the Share Ownership Guidelines in October 2009 and recommends that equity ownership levels be achieved within five years of becoming a member of the executive leadership team, including Named Executive Officers. The Board also recommends that the executive leadership team retain their ownership levels for so long as they remain members of the executive leadership team. 98 Named Executive Officers Named Executive Officers may achieve these Share Ownership Guidelines through the exercise of stock option awards, purchases under the OpenText Employee Stock Purchase Plan (ESPP), through open market purchases made in compliance with applicable securities laws or through any equity plan(s) we may adopt from time to time providing for the acquisition of Common Shares. Until the Share Ownership Guidelines are met, it is recommended that a Named Executive Officer retain a portion of any stock option exercise or LTIP award in Common Shares to contribute to the achievement of the Share Ownership Guidelines. Common Shares issuable pursuant to the unexercised options shall not be counted towards meeting the equity ownership target. As of the date of this Annual Report on Form 10-K, all Named Executive Officers comply with the Share Ownership Guidelines for Fiscal 2021, as they have either met the share ownership guidelines or, in the case of Ms. Ranganathan, have five years from becoming subject to these guidelines to achieve the equity ownership guidelines required by their position, which in the case of Ms. Ranganathan is 2023. Directors With respect to non-management directors, both Common Shares and deferred stock units (DSUs) are counted towards the achievement of the Share Ownership Guidelines. The Company currently has a Directors’ Deferred Share Unit Plan (DSU Plan), whereby any non-management director of the Company may elect to defer all or part of his or her retainer and/or fees in the form of common stock equivalents. As of the date of this Annual Report on Form 10-K, all non-management directors, have exceeded the Share Ownership Guidelines applicable to them, which is three times their annual retainer, with the exception of Ms. Powell, who recently joined as a member of our Board in June 2021. Ms. Powell will be required to comply with the Share Ownership Guidelines within five years of her election and as a result will have until September 2026 to meet the applicable requirements of the Share Ownership Guidelines. For further details, see the table below titled “Director Compensation for Fiscal 2021”. Insider Trading Policy All of our employees, officers and directors, including our Named Executive Officers, are required to comply with our Insider Trading Policy. Our Insider Trading Policy prohibits the purchase, sale or trade of our securities with the knowledge of material inside information. In addition, our Insider Trading Policy prohibits our employees, officers and directors, including our Named Executive Officers, from, directly or indirectly, short selling any security of the Company or entering into any other arrangement that results in a gain only if the value of the Company's securities decline in the future, selling a “call option” giving the holder an option to purchase securities of the Company, or buying a “put option” giving the holder an option to sell securities of the Company. The definition of “trading in securities” includes any derivatives-based, monetization, non-recourse loan or similar arrangement that changes the insider’s economic exposure to or interest in securities of the Company and which may not necessarily involve a sale. All grants of stock options are subject to our Insider Trading Policy and as a result, stock options may not be granted during the “blackout” period beginning on the fifteenth day of the last month of each quarter and ending at the beginning of the second trading day following the date on which the Company’s quarterly or annual financial results, as applicable, have been publicly released. If the Board approves the issuance of stock options during the blackout period, these stock options are not granted until the blackout period is over. The price at which stock options are granted is not less than the closing price of the Company’s Common Shares on the trading day for the NASDAQ market immediately preceding the applicable grant date. Tax Deductibility of Compensation Under Section 162(m) of the United States Internal Revenue Code (or Section 162(m)) publicly-held corporations cannot deduct compensation paid in excess of $1,000,000 to certain executive officers in any taxable year. The Tax Cuts and Jobs Act amended Section 162(m) to expand the corporations and executives to which it applies. Effective Fiscal 2019, we are no longer able to deduct under Section 162(m) compensation paid in excess of $1,000,000 to any person who served as CEO or CFO during the taxable year and any other Named Executive Officer serving as an executive at the end of the taxable year (each, a “covered employee”) as well any person who was a covered employee in a preceding taxable year, subject to limited transition relief. 99 Summary Compensation Table The following table sets forth summary information concerning the annual compensation of our Named Executive Officers. All numbers are rounded to the nearest dollar or whole share. Changes in exchange rates will impact payments illustrated below that are made in currencies other than the U.S. dollar. Any Canadian dollar payments included herein have been converted to U.S. dollars at an annual average rate of 0.773416 , 0.746217, and 0.756489, for Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively. Fiscal Year Salary ($) (1) Bonus ($) (2) Stock Awards ($) (3) Option Awards ($) (4) Non-Equity Incentive Plan Compensation ($) (1)(5) Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) All Other Compensation ($) (6) Total ($) Mark J. Barrenechea 2021 $ 890,625 — $ 8,991,036 $ 9,385,993 $ 1,663,150 N/A $ 31,825 (7) $ 20,962,629 Vice Chair, Chief Executive Officer and Chief Technology Officer 2020 $ 932,188 $ 273,028 $ 4,970,594 $ 1,751,342 $ 1,775,410 N/A $ 47,643 (8) $ 9,750,205 2019 $ 950,000 — $ 3,693,934 $ 1,407,800 $ 2,030,625 N/A $ 17,315 (8) $ 8,099,674 Madhu Ranganathan 2021 $ 468,750 — $ 1,765,137 $ 1,319,658 $ 937,534 N/A $ — (9) $ 4,491,079 EVP, Chief Financial Officer 2020 $ 490,625 $ 22,807 $ 781,072 $ 275,201 $ 699,068 N/A $ — (8) $ 2,268,773 2019 $ 500,000 — $ 656,237 $ 250,019 $ 712,500 N/A $ — (8) $ 2,118,756 Simon Harrison 2021 $ 421,875 — $ 1,415,475 $ 1,140,192 $ 844,239 N/A $ 304,118 (10) $ 4,125,899 Executive Vice President, Enterprise Sales 2020 $ 399,896 17,310 $ 354,786 $ 125,091 $ 413,648 N/A $ 278,775 (11) $ 1,589,506 2019 $ 400,000 — $ 287,042 $ 109,361 $ 533,750 N/A $ 655,329 (8) $ 1,985,482 Muhi Majzoub 2021 $ 398,437 — $ 1,377,238 $ 1,087,917 $ 796,904 N/A $ — (9) $ 3,660,496 Executive Vice President, Chief Product Officer 2020 $ 417,031 $ 19,386 $ 781,072 $ 275,201 $ 594,208 N/A $ — (8) $ 2,086,898 2019 $ 412,500 — $ 721,564 $ 938,260 $ 605,625 N/A $ — (8) $ 2,677,949 Gordon A. Davies 2021 $ 373,415 — $ 1,370,111 $ 1,004,026 $ 746,856 N/A $ — (9) $ 3,494,408 Executive Vice President, Chief Legal Officer and Corporate Development 2020 $ 377,096 $ 17,530 $ 781,072 $ 275,201 $ 537,306 N/A $ — (8) $ 1,988,205 2019 $ 371,310 — $ 656,237 $ 913,258 $ 555,169 N/A $ 14,730 (8) $ 2,510,704 (1) Amounts reflect the COVID-19 compensation adjustments, which became effective May 15, 2020 and the subsequent restoration of those adjustments which became effective December 1, 2020. (2) Amounts set forth in this column represent a special performance bonus, approved by the Board, equal to an amount equal to the reductions in their Fiscal 2020 salary and annual incentive payout made pursuant to the previously disclosed COVID-19 compensation adjustments. The special performance bonus was paid in September 2020; however, as it related to performance in Fiscal 2020, the bonus received by each of the Named Executive Officers was included in Fiscal 2020. (3) PSUs and RSUs were granted pursuant to LTIP 2023 and other non-LTIP related grants. The amounts set forth in this column represent the aggregate grant date fair value, as computed in accordance with ASC Topic 718 “Compensation-Stock Compensation” (Topic 718). Grant date fair value may vary from the target value indicated in the table set forth above in the section “LTIP 2023”. For a discussion of the assumptions used in these valuations, see note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. For the maximum value that may be received under the PSU awards granted in Fiscal 2021 by each Named Executive Officer, see the “Maximum” column under “Estimated Future Payouts under Equity Incentive Plan Awards” under the “Grants of Plan-Based Awards in Fiscal 2021” table below. (4) Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of stock option awards, as calculated in accordance with Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect 100 whether the recipient has actually realized a financial benefit from the exercise of the awards. The performance options granted to Mr. Barrenechea in Fiscal 2021 have been reflected and valued here assuming achievement at the maximum performance level. Please also see "Long-Term Equity Grants to CEO" and “Grants of Plan-Based Awards in Fiscal 2021” for details of target performance value and vesting. For a discussion of the assumptions used in this valuation, see note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. (5) The amounts set forth in this column for Fiscal 2021 represent payments under the short-term incentive plan based on actual performance achieved. (6) Except as otherwise indicated the amounts in “All Other Compensation” primarily include (i) car allowance; (ii) medical examinations; (iii) club memberships reimbursed, and (iv) tax preparation and financial advisory fees paid. “All Other Compensation” does not include benefits received by the Named Executive Officers which are generally available to all our salaried employees. (7) Represents amounts we paid or reimbursed for tax, financial, and estate planning. (8) For details of the amounts of fees or expenses we paid or reimbursed please refer to Summary Compensation Table in Item 11 of our Annual Report on Form 10-K for the corresponding fiscal years ended June 30, 2020 and June 30, 2019. (9) The total value of all perquisites and personal benefits for this Named Executive Officer was less than $10,000, and, therefore, excluded. (10) Represents amounts we paid or reimbursed for housing allowance inclusive of a related tax gross-up amount of $160,118. (11) Represents amounts we paid or reimbursed for housing allowance inclusive of a related tax gross-up amount of $146,775. Grants of Plan-Based Awards in Fiscal 2021 The following table sets forth certain information concerning grants of awards made to each Named Executive Officer during Fiscal 2021. Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) All Other Option Awards: Number of Securities Underlying (2) Exercise or Base Price of Option Awards Grant Date Fair Value of Options (3) Name Grant Date Threshold ($) Target ($) Maximum ($) Options (#) ($/share) Awards ($) Mark J. Barrenechea August 10, 2020 $ 124,736 $ 831,576 $ 1,663,152 213,680 $ 45.81 $ 1,750,993 Madhu Ranganathan August 10, 2020 $ 70,316 $ 468,768 $ 937,536 155,054 $ 45.81 $ 1,319,658 Simon Harrison August 10, 2020 $ 63,318 $ 422,120 $ 844,240 133,752 $ 45.81 $ 1,140,192 Muhi Majzoub August 10, 2020 $ 59,768 $ 398,452 $ 796,904 127,672 $ 45.81 $ 1,087,917 Gordon A. Davies August 10, 2020 $ 56,014 $ 373,428 $ 746,856 118,022 $ 45.81 $ 1,004,026 Estimated Future Payouts Under Equity Incentive Plan Performance Option Awards (4) Exercise or Base Price of Option Awards Grant Date Fair Value of Performance Options (3) Name Grant Date Threshold (#) Target (#) Maximum (#) ($/share) Threshold ($) Target ($) Maximum ($) Mark J. Barrenechea August 10, 2020 150,000 375,000 750,000 $ 45.81 $ 1,527,000 $ 3,817,500 $ 7,635,000 Estimated Future Payouts Under Equity Incentive Plan Awards (4) All Other Stock Awards: Number of Securities Underlying (5) Grant Date Fair Value of Stock (3) Name Grant Date Threshold (#) Target (#) Maximum (#) Stock (#) Awards ($) Mark J. Barrenechea August 10, 2020 38,270 76,540 153,080 98,270 $ 8,991,036 Madhu Ranganathan August 10, 2020 8,745 17,490 34,980 15,447 $ 1,765,137 Simon Harrison August 10, 2020 6,835 13,670 27,340 12,857 $ 1,415,475 Muhi Majzoub August 10, 2020 6,695 13,390 26,780 12,392 $ 1,377,238 Gordon A. Davies August 10, 2020 6,835 13,670 27,340 11,865 $ 1,370,111 (1) Represents the threshold, target and maximum estimated payouts under our short-term incentive plan for Fiscal 2021. For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Short-Term Incentives” above. 101 (2) For further information regarding our options granting procedures, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives” above. (3) Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect whether the recipient has actually realized a financial benefit from the exercise of the awards. For a discussion of the assumptions used in this valuation, see note 13 “Share Capital, Option Plan and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. (4) Represents the threshold, target and maximum estimated payouts under our LTIP 2023 PSUs for all Named Executive Officers and the threshold, target and maximum estimated payouts under Mr. Barrenechea's performance options. For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - LTIP 2023” and "Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - Long-Term Equity Grants to CEO" above. (5) Represents the estimated payouts under our LTIP 2023 RSUs and other non-LTIP related RSUs granted in Fiscal 2021. For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - LTIP 2023” above . Outstanding Equity Awards at End of Fiscal 2021 The following table sets forth certain information regarding outstanding equity awards held by each Named Executive Officer as of June 30, 2021. Option Awards (1) Stock Awards Name Grant Date Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Non- exercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) (2) Market Value of Shares or Units of Stock That Have Not Vested ($) (2) Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) (3) Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (3) Mark J. Barrenechea July 29, 2016 196,560 — $ 29.75 July 29, 2023 June 1, 2017 133,334 66,666 $ 32.63 June 1, 2024 June 1, 2017 307,633 92,367 $ 32.63 June 1, 2024 August 7, 2017 141,885 47,295 $ 34.49 August 7, 2024 August 6, 2018 80,520 80,520 $ 39.27 August 6, 2025 August 5, 2019 68,253 204,757 $ 38.76 August 5, 2026 August 10, 2020 — 213,680 $ 45.81 August 10, 2027 August 10, 2020 — 750,000 $ 45.81 August 10, 2027 August 6, 2018 37,320 $ 1,895,856 August 6, 2018 74,640 $ 3,791,712 August 5, 2019 41,470 $ 2,106,676 August 5, 2019 82,940 $ 4,213,352 August 10, 2020 98,270 $ 4,992,116 August 10, 2020 76,540 $ 3,888,232 Madhu Ranganathan May 11, 2018 146,755 73,377 $ 34.71 May 11, 2025 August 6, 2018 14,300 14,300 $ 39.27 August 6, 2025 August 5, 2019 10,725 32,175 $ 38.76 August 5, 2026 August 10, 2020 — 155,054 $ 45.81 August 10, 2027 August 6, 2018 6,630 $ 336,804 August 6, 2018 13,260 $ 673,608 August 5, 2019 6,520 $ 331,216 August 5, 2019 13,030 $ 661,924 August 10, 2020 15,447 $ 784,708 August 10, 2020 17,490 $ 888,492 102 Simon Harrison August 7, 2017 8,880 2,960 $ 34.49 August 7, 2024 November 6, 2017 60,000 40,000 $ 34.48 November 6, 2024 August 6, 2018 6,256 6,254 $ 39.27 August 6, 2025 August 5, 2019 4,875 14,625 $ 38.76 August 5, 2026 August 10, 2020 — 133,752 $ 45.81 August 10, 2027 August 6, 2018 2,900 $ 147,320 August 6, 2018 5,800 $ 294,640 August 5, 2019 2,960 $ 150,368 August 5, 2019 5,920 $ 300,736 August 10, 2020 12,857 $ 653,136 August 10, 2020 13,670 $ 694,436 Muhi Majzoub August 1, 2014 23,140 — $ 27.83 August 1, 2021 July 31, 2015 37,840 — $ 22.87 July 31, 2022 July 29, 2016 32,560 — $ 29.75 July 29, 2023 August 7, 2017 27,720 9,240 $ 34.49 August 7, 2024 August 6, 2018 15,730 15,730 $ 39.27 August 6, 2025 May 7, 2019 30,000 45,000 $ 40.20 May 7, 2026 August 5, 2019 10,725 32,175 $ 38.76 August 5, 2026 August 10, 2020 — 127,672 $ 45.81 August 10, 2027 August 6, 2018 7,290 $ 370,332 August 6, 2018 14,580 $ 740,664 August 5, 2019 6,520 $ 331,216 August 5, 2019 13,030 $ 661,924 August 10, 2020 12,392 $ 629,514 August 10, 2020 13,390 $ 680,212 Gordon A. Davies July 29, 2016 9,580 — $ 29.75 July 29, 2023 August 7, 2017 8,400 8,400 $ 34.49 August 7, 2024 August 6, 2018 14,300 14,300 $ 39.27 August 6, 2025 May 7, 2019 30,000 45,000 $ 40.20 May 7, 2026 August 5, 2019 10,725 32,175 $ 38.76 August 5, 2026 August 10, 2020 — 118,022 $ 45.81 August 10, 2027 August 6, 2018 6,630 $ 336,804 August 6, 2018 13,260 $ 673,608 August 5, 2019 6,520 $ 331,216 August 5, 2019 13,030 $ 661,924 August 10, 2020 11,865 $ 602,742 August 10, 2020 13,670 $ 694,436 (1) Options in the table above vest annually over a period of 4 years starting from the date of grant, with the exception of (i) 600,000 options granted to the CEO in Fiscal 2017 and performance options granted to the CEO in Fiscal 2021 assuming achievement of maximum performance level. For additional detail, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - Long-Term Equity Grants to CEO” above and under Item 11 of our Annual Report on Form 10-K for Fiscal 2017 and (ii) options granted to certain of our executive officers on August 10, 2020 in recognition of their service which vest annually over a 5 year period, with the first vesting date being two years from the date of grant. (2) Represents each Named Executive Officer's target number of RSUs granted pursuant to LTIP 2021, LTIP 2022, LTIP 2023, and other non-LTIP related RSUs, which vest upon the schedules described above in "Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long Term Incentives". These amounts illustrate the market value as of June 30, 2021 based upon the closing price for the Company's Common Shares as traded on the NASDAQ on such date of $50.80. (3) Represents each Named Executive Officer's target number of PSUs granted pursuant to the LTIP 2021, LTIP 2022, and LTIP 2023, which vest upon the schedules described above in "Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long Term Incentives". These amounts illustrate the market value as of June 30, 2021 based upon the closing price for the Company's Common Shares as traded on the NASDAQ on such date of $50.80. As of June 30, 2021, options to purchase an aggregate of 8,113,574 Common Shares had been previously granted (assuming maximum performance level achievement of Mr. Barrenechea's performance options) and are outstanding under our stock option plans, of which 2,567,483 Common Shares were vested. Options to purchase an additional 11,251,577 Common 103 Shares remain available for issuance pursuant to our stock option plans. Our outstanding options pool represents 3.0% of the Common Shares issued and outstanding as of June 30, 2021. During Fiscal 2021, the Company granted options to purchase 3,208,209 Common Shares or 1.2% of the Common Shares issued and outstanding as of June 30, 2021. Option Exercises and Stock Vested in Fiscal 2021 The following table sets forth certain details with respect to each of the Named Executive Officers concerning the exercise of stock options and vesting of stock in Fiscal 2021: Option Awards Stock Awards (3) Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise (1) ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting (2) ($) Mark J. Barrenechea 551,887 $ 10,885,947 103,498 $ 4,288,957 Madhu Ranganathan 73,378 $ 602,696 9,870 $ 409,013 Simon Harrison — $ — 6,473 $ 268,241 Muhi Majzoub 20,996 $ 572,795 20,219 $ 837,875 Gordon A. Davies — $ — 18,384 $ 761,833 (1) “Value realized on exercise” is the excess of the market price, at date of exercise, of the shares underlying the options over the exercise price of the options. (2) “Value realized on vesting” is the market price of the underlying Common Shares on the vesting date. (3) Relates to the vesting of PSUs and RSUs under our LTIP 2020. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL We have entered into employment contracts with each of our Named Executive Officers. These contracts may require us to make certain types of payments and provide certain types of benefits to the Named Executive Officers upon the occurrence of any of these events: • If the Named Executive Officer is terminated without cause; and • If there is a change in control in the ownership of the Company and subsequent to the change in control, there is a change in the relationship between the Company and the Named Executive Officer. When determining the amounts and the type of compensation and benefits to provide in the event of a termination or change in control described above, we considered available information with respect to amounts payable to similarly situated officers of our peer groups and the position held by the Named Executive Officer within the Company. The amounts payable upon termination or change in control represent the amounts determined by the Company and are not the result of any individual negotiations between us and any of our Named Executive Officers. Our employment agreements with our Named Executive Officers are similar in structure, terms and conditions, with the key exception of the amount of severance payments, which is determined by the position held by the Named Executive Officer. Details are set out below of each of their potential payments upon a termination by the Company without cause and upon a change in control event where there is a subsequent change in the relationship between the Company and the Named Executive Officer. Termination Without Cause If the Named Executive Officer is terminated without cause, we may be obligated to make payments or provide benefits to the Named Executive Officer. A termination without cause means a termination of a Named Executive Officer for any reason other than the following, each of which provides “cause” for termination: • The failure by the Named Executive Officer to attempt in good faith to perform his duties, other than as a result of a physical or mental illness or injury; • The Named Executive Officer's willful misconduct or gross negligence of a material nature in connection with the performance of his duties which is or could reasonably be expected to be injurious to the Company; • The breach by the Named Executive Officer of his fiduciary duty or duty of loyalty to the Company; • The Named Executive Officer's intentional and unauthorized removal, use or disclosure of information relating to the Company, including customer information, which is injurious to the Company or its customers; 104 • The willful performance by the Named Executive Officer of any act of dishonesty or willful misappropriation of funds or property of the Company or its affiliates; • The indictment of the Named Executive Officer or a plea of guilty or nolo contender to a felony or other serious crime involving moral turpitude; • The material breach by the Named Executive Officer of any obligation material to his employment relationship with the Company; or • The material breach by the Named Executive Officer of the Company's policies and procedures which breach causes or could reasonably be expected to cause harm to the Company; provided that in certain of the circumstances listed above, OpenText has given the Named Executive Officer reasonable notice of the reason for termination as well as a reasonable opportunity to correct the circumstances giving rise to the termination. Change in Control If there is a change in control of the Company and within one year of such change in control event, there is a change in the relationship between the Company and the Named Executive Officer without the Named Executive Officer's written consent, we may be obligated to provide payments or benefits to the Named Executive Officer, unless such a change is in connection with the termination of the Named Executive Officer either for cause or due to the death or disability of the Named Executive Officer. A change in control includes the following events: • The sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the Company’s assets; • The approval by the holders of Common Shares of any plan or proposal for the liquidation or dissolution of the Company; • Any transaction in which any person or group acquires ownership of more than 50% of outstanding Common Shares; or • Any transaction in which a majority of the Board is replaced over a twelve-month period and such replacement of the Board was not approved by a majority of the Board still in office at the beginning of such period. Examples of a change in the relationship between the Named Executive Officer and the Company where payments or benefits may be triggered following a change in control event include: • A material diminution in the duties and responsibilities of the Named Executive Officer, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the duties and responsibilities of similarly situated executive officers; • A material reduction to the Named Executive Officer's compensation, other than a similar reduction to the compensation of similarly situated executive officers; • A relocation of the Named Executive Officer's primary work location by more than fifty miles; • A reduction in the title or position of the Named Executive Officer, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the titles or positions of similarly situated executive officers; None of our Named Executive Officers are entitled to the payments or benefits described below, or any other payments or benefits, solely upon a change in control where there is no change to the Named Executive Officer's relationship with the Company. Amounts Payable Upon Termination or Change in Control Pursuant to our employment agreements with our Named Executive Officers and the terms of our LTIP, each Named Executive Officer’s entitlement upon termination of employment without cause or following a change in the Named Executive Officer’s relationship with the Company, both absent a change in control event and within twelve months of a change in control event, are set forth below. 105 No Change in Control No change in control Base Short term incentives (1) LTIP (2) Options (3) Employee and Medical Benefits (4) Mark J. Barrenechea Termination without cause or Change in relationship 24 months 24 months Prorated Vested 24 months (5) Madhu Ranganathan Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Simon Harrison Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Muhi Majzoub Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Gordon A. Davies Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months (1) Assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred. (2) LTIP amounts are prorated for the number of months of participation at termination date in the applicable 38 month performance period. If the termination date is before the commencement of the 19th month of the performance period, a prorated LTIP will not be paid. (3) Already vested as of termination date with no acceleration of unvested options. For a period of 90 days following the termination date, the Named Executive Officer has the right to exercise all options which have vested as of the date of termination. (4) Employee and medical benefits provided to each Named Executive Officer immediately prior to the occurrence of the trigger event. (5) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Vice Chair, Chief Executive Officer and Chief Technology Officer of the Company. These benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Vice Chair, Chief Executive Officer and Chief Technology Officer, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase. Within 12 Months of a Change in Control Within 12 Months of a Change in Control Base Short term incentives (1) LTIP Options (2) Employee and Medical Benefits (3) Mark J. Barrenechea Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months (4) Madhu Ranganathan Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months Simon Harrison Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months Muhi Majzoub Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months Gordon A. Davies Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months (1) Assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred. (2) For a period of 90 days following the termination date, the Named Executive Officer has the right to exercise all options which are deemed to have vested as of the date of termination. (3) Employee and medical benefits provided to each Named Executive Officer immediately prior to the occurrence of the trigger event. (4) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Vice Chair, Chief Executive Officer and Chief Technology Officer of the Company. These benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Vice Chair, Chief Executive Officer and Chief Technology Officer, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase. In addition to the information identified above, each Named Executive Officer is entitled to all accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unsettled LTIP. Except as otherwise required by law, we are required to make all these payments and provide these benefits over a period of 12 months or 24 months, depending on the Named Executive Officer’s entitlement and the circumstances which triggered our obligation to 106 make such payments and provide such benefits, from the date of the event which triggered our obligation. With respect to payments to Mr. Barrenechea, the Company intends to make all required payments to Mr. Barrenechea no later than two and a half months after the end of the later of the fiscal year or calendar year in which the payments are no longer subject to a substantial risk of forfeiture . In return for receiving the payments and the benefits described above, each Named Executive Officer must comply with certain obligations in favor of the Company, including a non-disparagement obligation. Also, each Named Executive Officer is bound by a confidentiality and non-solicitation agreement where the non-solicitation obligation lasts 6 months from the date of termination of his employment. Any breach by a Named Executive Officer of any provision of his contractual agreements may only be waived upon the review and approval of the Board. Quantitative Estimates of Payments upon Termination or Change in Control Further information regarding payments to our Named Executive Officers in the event of a termination or a change in control may be found in the table below. This table sets forth the estimated amount of payments and other benefits each Named Executive Officer would be entitled to receive upon the occurrence of the indicated event, assuming that the event occurred on June 30, 2021. Amounts (i) potentially payable under plans which are generally available to all salaried employees, such as life and disability insurance, and (ii) earned but unpaid, in both cases, are excluded from the table. The values related to vesting of stock options and awards are based upon the fair market value of our Common Shares of $50.80 per share as reported on the NASDAQ on June 30, 2021, the last trading day of our fiscal year. The other material assumptions made with respect to the numbers reported in the table below are: • Payments in Canadian dollars included herein are converted to U.S. dollars using an exchange rate, as of June 30, 2021, of 0.773416; • The salary and incentive payments are calculated based on the amounts of salary, incentive and benefit payments which were payable to each Named Executive Officer as of June 30, 2021; and • Payments under the LTIPs are calculated as though 100% of LTIP 2023 (granted in Fiscal 2021), LTIP 2022 (granted in Fiscal 2020), and LTIP 2021 (granted in Fiscal 2019) have vested with respect to a termination without cause or change in relationship following a change in control event, and as though a pro-rated amount have vested with respect to no change in control event. Actual payments made at any future date may vary, including the amount the Named Executive Officer would have accrued under the applicable benefit or compensation plan as well as the price of our Common Shares. Named Executive Officer Salary ($) Short-term Incentive Payment ($) Gain on Vesting of LTIP and Non-LTIP RSUs ($) Gain on Vesting of Stock Options ($) Employee Benefits ($) Total ($) Mark J. Barrenechea Termination Without Cause / Change in Relationship with no Change in Control $ 1,900,000 $ 2,850,000 $ 12,427,819 $ — $ 63,650 (1) $ 17,241,469 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,900,000 $ 2,850,000 $ 20,887,944 $ 8,120,944 $ 63,650 $ 33,822,538 Madhu Ranganathan Termination Without Cause / Change in Relationship with no Change in Control $ 500,000 $ 500,000 $ 1,924,686 $ — $ 2,500 $ 2,927,186 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,000,000 $ 1,000,000 $ 3,676,752 $ 2,506,621 $ 5,000 $ 8,188,373 Simon Harrison Termination Without Cause / Change in Relationship with no Change in Control $ 450,000 $ 450,000 $ 1,009,778 $ — $ 306,840 $ 2,216,618 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 900,000 $ 900,000 $ 2,240,636 $ 1,616,694 $ 613,680 $ 6,271,010 107 Muhi Majzoub Termination Without Cause / Change in Relationship with no Change in Control $ 425,000 $ 425,000 $ 1,968,922 $ — $ 7,125 $ 2,826,047 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 850,000 $ 850,000 $ 3,413,862 $ 1,833,542 $ 14,250 $ 6,961,654 Gordon A. Davies Termination Without Cause / Change in Relationship with no Change in Control $ 398,309 $ 398,309 $ 1,840,257 $ — $ 9,163 $ 2,646,038 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 796,619 $ 796,619 $ 3,300,730 $ 1,755,200 $ 18,326 $ 6,667,494 (1) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Chief Executive Officer of the Company. These benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Chief Executive Officer, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase . Director Compensation for Fiscal 2021 The following table sets forth summary information concerning the annual compensation received by each of the non-management directors of OpenText for the fiscal year ended June 30, 2021. Fees Earned or Paid in Cash ($) (1) Stock Awards ($) (2) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) P. Thomas Jenkins (3) $ 195,000 $ 391,037 $ — $ — N/A $ — $ 586,037 Randy Fowlie (4) $ 44,070 $ 370,409 $ — $ — N/A $ — $ 414,479 David Fraser (5) $ 68,250 $ 246,717 $ — $ — N/A $ — $ 314,967 Gail E. Hamilton (6) $ 82,875 $ 288,475 $ — $ — N/A $ — $ 371,350 Robert Hau (7) $ 95,542 $ 228,499 $ — $ — N/A $ — $ 324,041 Ann M. Powell (8) $ — $ — $ — $ — N/A $ — $ — Stephen J. Sadler (9) $ — $ 369,957 $ — $ — N/A $ 37,106 (15) $ 407,063 Harmit Singh (10) $ 24,375 $ 309,432 $ — $ — N/A $ — $ 333,807 Michael Slaunwhite (11) $ 1,609 $ 414,236 $ — $ — N/A $ — $ 415,845 Katharine B. Stevenson (12) $ — $ 393,268 $ — $ — N/A $ — $ 393,268 Carl Jurgen Tinggren (13) $ — $ 8,502 $ — $ — N/A $ — $ 8,502 Deborah Weinstein (14) $ — $ 408,895 $ — $ — N/A $ — $ 408,895 (1) Non-management directors may elect to defer all or a portion of their retainer and/or fees in the form of Common Share equivalent units under our Directors' Deferred Share Unit Plan (DSU Plan) based on the value of the Company's shares as of the date fees would otherwise be paid. The DSU Plan, originally effective February 2, 2010, and amended and restated in October 2018, is available to any non-management director of the Company and is designed to promote greater alignment of long-term interests between directors of the Company and its shareholders. DSUs granted as compensation for directors' fees vest immediately whereas the annual DSU grant vests at the Company’s next annual general meeting. No DSUs are payable by the Company until the director ceases to be a member of the Board. (2) The amounts set forth in this column represents the amount recognized as the aggregate grant date fair value of equity-based compensation awards, inclusive of DSU dividend equivalents, as calculated in accordance with ASC Topic 718. These amounts do not reflect whether the recipient has actually realized a financial benefit from the awards. For a discussion of the assumptions used in this valuation, see note 13 “Share Capital, Option Plan and Share-based Payments” to our consolidated financial statements. In Fiscal 2021, Messrs. Jenkins, Fowlie, Fraser, Hau, Sadler, Singh, Slaunwhite and Tinggren and Mses. Hamilton, Powell, Stevenson and Weinstein received 9,698, 9,124, 6,292, 5,893, 9,195, 7,890, 10,174, 202, 7,186, nil, 9,717, and 10,057 DSUs, respectively. (3) As of June 30, 2021, Mr. Jenkins holds 126,594 DSUs. Mr. Jenkins serves as Chairman of the Board. 108 (4) As of June 30, 2021, Mr. Fowlie holds 106.136 DSUs. (5) As of June 30, 2021, Mr. Fraser holds 19,886 DSUs. (6) As of June 30, 2021, Ms. Hamilton holds 83,843 DSUs. (7) As of June 30, 2021, Mr. Hau holds 5,893 DSUs. (8) Ms. Powell joined the board of directors on June 15, 2021. As of June 30, 2021, Ms. Powell holds no DSUs. (9) As of June 30, 2021, Mr. Sadler holds 101,507 DSUs. (10) As of June 30, 2021, Mr. Singh holds 22,799 DSUs. (11) As of June 30, 2021, Mr. Slaunwhite holds 121,538 DSUs. (12) As of June 30, 2021, Ms. Stevenson holds 101,546 DSUs. (13) Mr. Tinggren retired from the board of directors effective September 14, 2020, being the date of our annual general meeting. (14) As of June 30, 2021, Ms. Weinstein holds 116,621 DSUs. (15) During Fiscal 2021, Mr. Sadler received $37,106 in consulting fees, paid or payable in cash, for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. Directors who are salaried officers or employees receive no compensation for serving as directors. Mr. Barrenechea was the only employee director in Fiscal 2021. The material terms of our director compensation arrangements are as follows : Description Amount and Frequency of Payment Annual Chairman retainer fee payable to the Chairman of the Board $200,000 per year payable following our Annual General Meeting Annual retainer fee payable to each non-management director $70,000 per director payable following our Annual General Meeting Annual Audit Committee retainer fee payable to each member of the Audit Committee $25,000 per year payable at $6,250 at the beginning of each quarterly period. Annual Audit Committee Chair retainer fee payable to the Chair of the Audit Committee $10,000 per year payable at $2,500 at the beginning of each quarterly period. Annual Compensation Committee retainer fee payable to each member of the Compensation Committee $15,000 per year payable at $3,750 at the beginning of each quarterly period. Annual Compensation Committee Chair retainer fee payable to the Chair of the Compensation Committee $10,000 per year payable at $2,500 at the beginning of each quarterly period. Annual Corporate Governance Committee retainer fee payable to each member of the Corporate Governance Committee $8,000 per year payable at $2,000 at the beginning of each quarterly period. Annual Corporate Governance Committee Chair retainer fee payable to the Chair of the Corporate Governance Committee $6,000 per year payable at $1,500 at the beginning of each quarterly period. As a result of the COVID-19 compensation adjustments discussed above, all of our non-management directors accepted a 15% reduction in cash retainer compensation fees payable, effective for the period May 15, 2020 through June 30, 2021, subject to review and modification as the situation warranted. After careful consideration and review of performance during the COVID-19 pandemic, which was above the level expected at the start of the fiscal year, the Compensation Committee and Board approved the restoration of all previously announced compensation adjustments for all Named Executive Officers and directors, including the CEO, which became effective December 1, 2020. The Board has adopted a DSU Plan which is available to any non-management director of the Company. In Fiscal 2021, certain directors elected to receive DSUs instead of a cash payment for their directors’ fees. In addition to the scheduled fee arrangements set forth in the table above, whether paid in cash or DSUs, non-management directors also receive an annual DSU grant representing the long term component of their compensation. The amount of the annual DSU grant is discretionary; however, historically, the amount of this grant has been determined and updated on a periodic basis with the assistance of the 109 Compensation Committee and the compensation consultant and benchmarked against director compensation for comparable companies. For Fiscal 2021, the annual DSU grant was approximately $225,000 for each non-management director and approximately $295,000 for the Chairman of the Board. DSUs granted as compensation for directors' fees vest immediately whereas the annual DSU grant vests at the Company’s next annual general meeting. No DSUs are payable by the Company until the director ceases to be a member of the Board. As with its employees, the Company believes that granting compensation to directors in the form of equity, such as DSUs, promotes a greater alignment of long-term interests between directors of the Company and the shareholders of the Company and since Fiscal 2013 the Company has taken the position that non-management directors will receive DSUs instead of stock options where granting of equity awards is appropriate. All non-management directors have exceeded the Share Ownership Guidelines applicable to them, which is three times their annual retainer. For further details of our Share Ownership Guidelines as they relate to directors, see “Share Ownership Guidelines” above. The Company does not have a retirement policy for its directors; however, the Company does review its director performance annually as part of its governance process. Compensation Committee Interlocks and Insider Participation The members of our Compensation Committee consist of Mr. Slaunwhite (Chair) and Mses. Hamilton and Weinstein. None of the members of the Compensation Committee have been or are an officer or employee of the Company, or any of our subsidiaries, or had any relationship requiring disclosure herein. None of our executive officers served as a member of the compensation committee of another entity (or other committee of the board of directors performing equivalent functions, or in the absence of any such committee, the entire board of directors) one of whose executive officers served as a director of ours. Board's Role in Risk Oversight The Board has overall responsibility for risk oversight. The Board is responsible for overseeing management’s implementation and operation of enterprise risk management, either directly or through its committees, which shall report to the Board with respect to risk oversight undertaken in accordance with their respective charters. At least annually, the Board shall review reports provided by management on the risks inherent in the business of the Company (including appropriate crisis preparedness, business continuity, information system controls, cybersecurity and disaster recovery plans), the appropriate degree of risk mitigation and risk control, overall compliance with and the effectiveness of the Company’s risk management policies, and residual risks remaining after implementation of risk controls. In addition, each committee reviews and reports to the Board on risk oversight matters, as described below. The Audit Committee oversees risks related to our accounting, financial statements and financial reporting process. On a quarterly basis, the Audit Committee also reviews reports provided by management on the risks inherent in the business of the Company, including those related to cybersecurity and disaster recovery plans, and reports to the Board with respect to risk oversight undertaken. The Compensation Committee oversees risks which may be associated with our compensation policies, practices and programs, in particular with respect to our executive officers. The Compensation Committee assesses such risks with the review and assistance of the Company's management and the Compensation Committee's external compensation consultants. The Corporate Governance and Nominating Committee monitors risk and potential risks with respect to the effectiveness of the Board, and considers aspects such as director succession, Board composition and the principal policies that guide the Company's overall corporate governance. The members of each of the Audit Committee, Compensation Committee, and the Corporate Governance and Nominating Committee are all “independent” directors within the meaning ascribed to it in Multilateral Instrument 52-110- Audit Committees as well as the listing standards of NASDAQ, and, in the case of the Audit Committee, the additional independence requirements set out by the SEC. All of our directors are kept informed of our business through open discussions with our management team, including our CEO, who serves on our Board. The Board also receives documents, such as quarterly and periodic management reports and financial statements, as well our directors have access to all books, records and reports upon request, and members of management are available at all times to answer any questions which Board members may have. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information as of June 30, 2021 regarding Common Shares beneficially owned by the following persons or companies: (i) each person or company known by us to be the beneficial owner of approximately 5% or more of our outstanding Common Shares, (ii) each director of our Company, (iii) each Named Executive Officer, and (iv) all 110 directors and executive officers as a group. Except as otherwise indicated, we believe that the beneficial owners of the Common Shares listed below have sole investment and voting power with respect to such Common Shares, subject to community property laws where applicable. The number and percentage of shares beneficially owned as exhibited in Item 12 is based on filings made in accordance with the rules of the SEC, and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting or investment power and also any shares of Common Shares underlying options or warrants that are exercisable by that person within 60 days of June 30, 2021. Unless otherwise indicated, the address of each person or entity named in the table is “care of” Open Text Corporation, 275 Frank Tompa Drive, Waterloo, Ontario, Canada, N2L 0A1. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Common Shares Outstanding Jarislowsky, Fraser Ltd. (1) 1010 Sherbrooke St. West, Montreal QC H3A 2R7 16,333,691 6.02% P. Thomas Jenkins (2) 2,377,767 * Mark J. Barrenechea (3) 2,147,655 * Michael Slaunwhite (4) 793,870 * Muhi Majzoub (5) 306,706 * Randy Fowlie (6) 304,316 * Stephen J. Sadler (7) 230,687 * Madhu Ranganathan (8) 209,015 * Gordon A. Davies (9) 171,446 * Katharine B. Stevenson (10) 147,356 * Deborah Weinstein (11) 130,801 * Simon Harrison (12) 117,275 * Gail E. Hamilton (13) 78,033 * Harmit Singh (14) 16,979 * David Fraser (15) 14,066 * Robert Hau (16) 73 * Ann M. Powell (17) — * All executive officers and directors as a group (18) 7,228,707 2.64% * Less than 1% (1) Information regarding the shares outstanding is based on information filed in Schedule 13G, 13F, or Schedule 13G/A with the SEC. The percentage of Common Shares outstanding is calculated using the total shares outstanding as of June 30, 2021. (2) Includes 2,258,804 Common Shares owned and 118,963 deferred stock units (DSUs) which are exercisable. (3) Includes 1,010,242 Common Shares owned, 928,185 options which are exercisable and 209,228 options which will become exercisable within 60 days of June 30, 2021. (4) Includes 678,152 Common Shares owned and 115,718 DSUs which are exercisable. (5) Includes 91,813 Common Shares owned, 177,715 options which are exercisable and 37,178 options which will become exercisable within 60 days of June 30, 2021. (6) Includes 204,000 Common Shares owned and 100,316 DSUs which are exercisable. (7) Includes 135,000 Common Shares owned and 95,687 DSUs which are exercisable. (8) Includes 7,150 Common Shares owned, 171,780 options which are exercisable and 30,085 options which will become exercisable within 60 days of June 30, 2021. (9) Includes 62,626 Common Shares owned, 73,005 options which are exercisable and 35,815 options which will become exercisable within 60 days of June 30, 2021. (10) Includes 51,630 Common Shares owned and 95,726 DSUs which are exercisable. (11) Includes 20,000 Common Shares owned and 110,801 DSUs which are exercisable. (12) Includes 16,762 Common Shares owned, 80,011 options which are exercisable and 20,502 options which will become exercisable within 60 days of June 30, 2021. (13) Includes 10 Common Shares owned and 78,023 DSUs which are exercisable. (14) Includes 16,979 DSUs which are exercisable. (15) Includes 14,066 DSUs which are exercisable. (16) Includes 73 DSUs which are exercisable. (17) Ms. Powell joined the Board of Directors on June 15, 2021. As of June 30, 2021, Ms. Powell holds no DSUs. 111 (18) Includes 4,558,684 Common Shares owned, 1,535,793 options which are exercisable, 387,878 options which will become exercisable within 60 days of June 30, 2021, and 746,352 DSUs which are exercisable. Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth summary information relating to our various stock compensation plans as of June 30, 2021: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (a) (b) (c) Equity compensation plans approved by security holders: 8,113,574 $40.16 11,251,577 Equity compensation plans not approved by security holders: Under deferred stock unit awards 806,363 N/A — Under performance stock unit awards 688,462 N/A — Under restricted stock unit awards 1,045,518 N/A — Total 10,653,917 11,251,577 For more information regarding stock compensation plans, please refer to note 13 "Share Capital, Option Plans and Share-Based Payments" to our Consolidated Financial Statements within this Annual Report on Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director Independence Related Transactions Policy and Director Independence We have adopted a written policy that all transactional agreements between us and our officers, directors and affiliates will be first approved by a majority of the independent directors. Once these agreements are approved, payments made pursuant to the agreements are approved by the members of our Audit Committee. Our procedure regarding the approval of any related party transaction is that the material facts of such transaction shall be reviewed by the independent members of our Audit Committee and the transaction approved by a majority of the independent members of our Audit Committee. The Audit Committee reviews all transactions wherein we are, or will be a participant and any related party has or will have a direct or indirect interest. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate: whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person's interest in the transaction; the benefits to the company of the proposed transaction; if applicable, the effects on a director's independence; and if applicable, the availability of other sources of comparable services or products. The Board has determined that all directors, except Messrs. Barrenechea and Sadler, meet the independence requirements under the NASDAQ Listing Rules and qualify as “independent directors” under those Listing Rules. Mr. Barrenechea is not considered independent by virtue of being our Vice Chair, Chief Executive Officer and Chief Technology Officer. See “Transactions with Related Persons” below with respect to payments made to Mr. Sadler. Each of the members of our Compensation Committee, Audit Committee and Corporate Governance and Nominating Committee is an independent director. Transactions With Related Persons One of our directors, Mr. Sadler, received consulting fees for assistance with acquisition-related business activities pursuant to a consulting agreement with the Company. Mr. Sadler's consulting agreement, which was adopted by way of Board resolution effective July 1, 2011, is for an indefinite period. The material terms of the agreement are as follows: Mr. Sadler is paid at the rate of Canadian dollars (CAD) $450 per hour for services relating to his consulting agreement. In addition, he is eligible to receive a bonus fee equivalent to 1.0% of the acquired company's revenues, up to CAD $10.0 million in revenue, plus an additional amount of 0.5% of the acquired company's revenues above CAD $10.0 million. The total bonus fee payable, for any given fiscal year, is subject to an annual limit of CAD $450,000 per single acquisition and an aggregate annual limit of CAD $980,000. The acquired company's revenues, for this purpose, is equal to the acquired company's revenues for the 12 months prior to the date of acquisition. 112 During Fiscal 2021, Mr. Sadler received CAD $48.0 thousand in consulting fees from OpenText (equivalent to $37.1 thousand USD), none of which represented bonus fees for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. Item 14. Principal Accountant Fees and Services The aggregate fees for professional services rendered by our independent registered public accounting firm, KPMG LLP, for Fiscal 2021 and Fiscal 2020 were: Year ended June 30, (In thousands) 2021 2020 Audit fees (1) $ 5,306 $ 5,362 Audit-related fees (2) 41 257 Tax fees (3) 7 52 All other fees (4) — — Total $ 5,354 $ 5,671 (1) Audit fees were primarily for professional services rendered for (a) the annual audits of our consolidated financial statements and the accompanying attestation report regarding our ICFR contained in our Annual Report on Form 10-K, (b) the review of quarterly financial information included in our Quarterly Reports on Form 10-Q, (c) audit services related to mergers and acquisitions, and (d) annual statutory audits where applicable. (2) Audit related fees were primarily for assurance and related services, such as the review of offering documents and non-periodic filings with the SEC. (3) Tax fees were for services related to tax compliance, including the preparation of tax returns, tax planning and tax advice. (4) All other fees consist of fees for services other than the services reported in audit fees, audit-related fees, and tax fees. OpenText's Audit Committee has established a policy of reviewing, in advance, and either approving or not approving, all audit, audit-related, tax and other non-audit services that our independent registered public accounting firm provides to us. This policy requires that all services received from our independent registered public accounting firm be approved in advance by the Audit Committee or a delegate of the Audit Committee. The Audit Committee has delegated the pre-approval responsibility to the Chair of the Audit Committee. All services that KPMG LLP provided to us in Fiscal 2021 and Fiscal 2020 have been pre-approved by the Audit Committee. The Audit Committee has determined that the provision of the services as set out above is compatible with the maintaining of KPMG LLP's independence in the conduct of its auditing functions. 113 Part IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Schedules Index to Consolidated Financial Statements and Supplementary Data (Item 8) Page Number Report of Independent Registered Public Accounting Firm 119 Report of Independent Registered Public Accounting Firm 121 Consolidated Balance Sheets as of June 30, 2021 and 2020 122 Consolidated Statements of Income for the years ended June 30, 2021, 2020, and 2019 123 Consolidated Statements of Comprehensive Income for the years ended June 30, 2021, 2020, and 2019 124 Consolidated Statements of Shareholders' Equity for the years ended June 30, 2021, 2020, and 2019 125 Consolidated Statements of Cash Flows for the years ended June 30, 2021, 2020, and 2019 126 Notes to Consolidated Financial Statements 128 (b) The following documents are filed as a part of this report: 1) Consolidated financial statements and Reports of Independent Registered Public Accounting Firm and the related notes thereto are included in Part II, Item 8. 2) Valuation and Qualifying Accounts; see note 4 "Allowance for Credit Losses" and note 15 "Income Taxes" in the Notes to Consolidated Financial Statements included in Part II, Item 8. 3) Exhibits: The following exhibits are filed as part of this Annual Report on Form 10-K or are incorporated by reference to exhibits previously filed with the SEC. Exhibit Number Description of Exhibit 2.1 Agreement and Plan of Merger between Open Text Corporation, EPIC Acquisition Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of OpenText and EasyLink Services International Corporation dated May 1, 2012. (14) 2.2 Agreement and Plan of Merger, dated as of November 4, 2013, among Open Text Corporation, Ocelot Merger Sub, Inc., GXS Group, Inc. and the stockholders' representative named therein. (20) 2.3 Support Agreement, dated as of November 4, 2013, among GXS Group, Inc., Open Text Corporation, and Global Acquisition LLC. (20) 2.4 Support Agreement, dated as of November 4, 2013, among GXS Group, Inc., Open Text Corporation, CCG Investment Fund, L.P., CCG Associates - QP, LLC, CCG Investment Fund - AI, LP, CCG AV, LLC - Series A, CCG AV, LLC - Series C and CCG CI, LLC. (20) 2.5 Agreement and Plan of Merger, dated as of December 5, 2014, by and among Open Text Corporation, Asteroid Acquisition Corporation and Actuate. (24) 2.6 Agreement and Plan of Merger, dated September 12, 2016, by and among Open Text Corporation, EMC Corporation, EMC International Company, and EMC (Benelux) B.V. (26) 2.7 Agreement and Plan of Merger, dated November 10, 2019, by and among Open Text Corporation, Coral Merger Sub Inc. and Carbonite, Inc. ( 39 ) 3.1 Articles of Amalgamation of the Company. (1) 3.2 Articles of Amendment of the Company. (1) 3.3 Articles of Amendment of the Company. (1) 3.4 Articles of Amalgamation of the Company. (1) 3.5 Articles of Amalgamation of the Company, dated July 1, 2001. (2) 3.6 Articles of Amalgamation of the Company, dated July 1, 2002. (3) 3.7 Articles of Amalgamation of the Company, dated July 1, 2003. (4) 3.8 Articles of Amalgamation of the Company, dated July 1, 2004. (5) 3.9 Articles of Amalgamation of the Company, dated July 1, 2005. (6) 3.10 Articles of Continuance of the Company, dated December 29, 2005. (7) 3.11 By-Law 1 of Open Text Corporation. (3 7 ) 114 4.1 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 . (4 4 ) 4.2 Form of Common Share Certificate. (1) 4.3 Amended and Restated Shareholder Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc. dated September 23, 2016. (19) 4.4 Registration Rights Agreement, dated as of November 4, 2013, by and among Open Text Corporation and the principal stockholders named therein, and for the benefit of the holders (as defined therein). (20) 4.5 Indenture, dated as of January 15, 2015, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon (as successor to Citibank, N.A.), as U.S. trustee, and BNY Trust Company of Canada (as successor to Citi Trust Company Canada), as Canadian trustee (including form of 5.625% Senior Notes due 2023). (27) 4.6 Indenture, dated as of May 31, 2016, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee, and BNY Trust Company of Canada, as Canadian trustee (including form of 5.875% Senior Notes due 2026). ( 29 ) 4.7 Supplemental Indenture, dated as of December 9, 2016, to the Indenture governing 5.625% Senior Notes due 2023, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee, and BNY Trust Company of Canada, as Canadian trustee. (3 0 ) 4.8 Supplemental Indenture, dated as of December 9, 2016, to the Indenture governing 5.875% Senior Notes due 2026, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee, and BNY Trust Company of Canada, as Canadian trustee. (3 0 ) 4.9 Amended and Restated Shareholder Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc. dated September 4, 201 9 . (4 0 ) 4.10 Indenture (including form of Note), dated as of April 4, 2017, by and between Carbonite, Inc. and U.S. Bank National Association, as trustee . (4 1 ) 4.11 First Supplemental Indenture, dated as of December 24, 2019, by and between Carbonite, Inc. and U.S. Bank National Association, as trustee . (4 1 ) 4.12 Indenture, dated as of February 18, 2020, between Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee . (4 2 ) 4.13 Indenture, dated as of February 18, 2020, between Open Text Holdings, Inc. and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee . (4 2 ) 4.14 Open Text Corporation 2004 Stock Option Plan, as amended and restated on September 14, 2020 . ( 4 6 ) 4.15 Open Text Corporation 2004 Employee Stock Purchase Plan, as amended and restated on September 14, 2020 . ( 46) 10.1* 1998 Stock Option Plan. (8) 10.2* Form of Indemnity Agreement between the Company and certain of its officers dated September 7, 2006. (9) 10.3* Consulting Agreement between Steven Sadler and SJS Advisors Inc. and the Company, dated May 3, 2005. (10) 10.4* OpenText Corporation Directors' Deferred Share Unit Plan, as amended and restated October 30, 2018 . (11) 10.5 Amended and Restated Credit Agreement among Open Text Corporation and certain of its subsidiaries, the Lenders, Barclays Bank PLC, Royal Bank of Canada, Barclays Capital and RBC Capital Markets, dated as of November 9, 2011. (12) 10.6* OpenText Corporation 2004 Stock Option Plan, as amended and restated September 2 3 , 2016. (15) 10.7* OpenText Corporation Long-Term Incentive Plan 2015 for eligible employees, effective October 3, 2012. (16) 10.8* Employment Agreement, dated October 30, 2012 between Mark Barrenechea and the Company. (16) 10.9* Amendment No. 1 to the Employment Agreement between Mark J. Barrenechea and the Company dated January 24, 2013 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). (17) 10.10* Employment Agreement, as of December 19, 2012, between Gordon A. Davies and the Company. (18) 10.11 Commitment Letter, dated as of November 4, 2013, by and among Barclays Bank PLC, Royal Bank of Canada and Open Text Corporation. (20) 10.12 First Amendment to Amended and Restated Credit Agreement and Amended and Restated Security and Pledge Agreement, dated as of December 16, 2013, between Open Text ULC, as term borrower, Open Text ULC, Open Text Inc. and Open Text Corporation, as revolving credit borrowers, the domestic guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as sole administrative agent and collateral agent, and Royal Bank of Canada, as documentary credit lender. (21) 115 10.13 Credit Agreement, dated as of January 16, 2014, among Open Text Corporation, as guarantor, Ocelot Merger Sub, Inc., which on January 16, 2014 merged with and into GXS Group, Inc. which survived such merger, as borrower, the other domestic guarantors party thereto, the lenders named therein, as lenders, Barclays Bank PLC, as sole administrative agent and collateral agent, and with Barclays and RBC Capital Markets, as lead arrangers and joint bookrunners. (22) 10.14 Second Amendment to Amended and Restated Credit Agreement, dated as of December 22, 2014, between Open Text ULC, as term borrower, Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as revolving credit borrowers, the domestic guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as sole administrative agent and collateral agent, and Royal Bank of Canada, as documentary credit lender. (25) 10.15 Tender and Voting Agreement, dated as of December 5, 2014, by and among Open Text Corporation, Asteroid Acquisition Corporation and certain stockholders of Actuate. (24) 10.16* Employment Agreement, dated November 30, 2012, between Muhi Majzoub and the Company. (23) 10.17* Amendment No. 2 to the Employment Agreement between Mark J. Barrenechea and the Company dated July 30, 2014 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). (23) 10.18* Amended and Restated Employee Stock Purchase Plan . (2 8 ) 10.19 Repricing Amendment and Amendment No. 2 dated as of February 22, 2017 to Credit Agreement, by and among Open Text Corporation, as guarantor, Open Text GXS ULC, as borrower, the other guarantors party thereto, each of the lenders party thereto and Barclays Bank PLC, as administrative agent. (3 1 ) 10.20 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of May 5, 2017, among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, and Barclays Bank PLC, as sole administrative agent and collateral agent. (3 2 ) 10.21* Amendment No. 3 to the Employment Agreement between Mark J. Barrenechea and the Company dated June 1, 2017 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). (3 3 ) 10.22 Amendment No. 4 to Second Amended and Restated Credit Agreement, dated as of September 6, 2017, among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, and Barclays Bank PLC, as sole administrative agent and collateral agent. (3 4 ) 10.23* Employment Agreement, dated January 30, 2018, among the Company, Open Text Inc. and Madhu Ranganathan . (3 5 ) 10.24 Amended and Restated Credit Agreement dated as of May 30, 2018, by and among Open Text Corporation, as borrower, the guarantors party thereto, each of the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent . (3 6 ) 10.25 Third Amended and Restated Credit Agreement dated as of May 30, 2018, by and among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender. (3 6 ) 10.26* Employment Agreement, dated October 1, 2017, between Simon (Ted) Harrison and the Company . ( 38 ) 10.27 Fourth Amended and Restated Credit Agreement dated as of October 31, 2019, by and among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender . (4 3 ) 10.28* Amendment No. 4 to the Employment Agreement between Mark J. Barrenechea and the Company dated August 14, 2020 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012, as amended). ( 4 5 ) 18.1 Preferability letter dated February 2, 2012 from the Company's auditors, KPMG LLP, regarding a change in the Company's accounting policy relating to the income statement classification of tax related interest and penalties. (13) 21.1 List of the Company's Subsidiaries. 23.1 Consent of Independent Registered Public Accounting Firm. 31.1 Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 116 101.INS XBRL instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL taxonomy extension schema. 101.CAL Inline XBRL taxonomy extension calculation linkbase. 101.DEF Inline XBRL taxonomy extension definition linkbase. 101.LAB Inline XBRL taxonomy extension label linkbase. 101.PRE Inline XBRL taxonomy extension presentation. * Indicates management contract relating to compensatory plans or arrangements (1) Filed as an Exhibit to the Company's Registration Statement on Form F-1 (Registration Number 33-98858) as filed with the Securities and Exchange Commission (the “SEC”) on November 1, 1995 or Amendments 1, 2 or 3 thereto (filed on December 28, 1995, January 22, 1996 and January 23, 1996 respectively), and incorporated herein by reference. (2) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 28, 2001 and incorporated herein by reference. (3) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 28, 2002 and incorporated herein by reference. (4) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 29, 2003 and incorporated herein by reference. (5) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 13, 2004 and incorporated herein by reference. (6) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 27, 2005 and incorporated herein by reference. (7) Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on February 3, 2006 and incorporated herein by reference. (8) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 20, 1999 and incorporated herein by reference. (9) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 12, 2006 and incorporated herein by reference. (10) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 26, 2008 and incorporated herein by reference. (11) Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on January 31, 2019 and incorporated herein by reference. (12) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on November 9, 2011 and incorporated herein by reference. (13) Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on February 2, 2012 and incorporated herein by reference. (14) Filed as an Exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on July 3, 2012 and incorporated herein by reference. (15) Filed as an exhibit to the Company's Registration Statement on Form S-8, as filed with the SEC on November 4, 2016, and incorporated herein by reference. (16) Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 1, 2012 and incorporated herein by reference. (17) Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on January 25, 2013 and incorporated herein by reference. (18) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 1, 2013 and incorporated herein by reference. (19) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on September 23, 2016 and incorporated herein by reference. (20) Filed as an Exhibit to the Company's Current Report on Form 8-K/A, as filed with the SEC on November 6, 2013 and incorporated herein by reference. (21) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on December 20, 2013 and incorporated herein by reference. (22) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on January 16, 2014 and incorporated herein by reference. (23) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on July 31, 2014 and incorporated herein by reference. 117 (24) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on December 5, 2014 and incorporated herein by reference. (25) Filed as an exhibit to the Company's Current Report on Form 8-K, as fined with the SEC on December 23, 2014 and incorporated herein by reference. (26) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on September 13, 2016 and incorporated herein by reference. (27) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on January 15, 2015 and incorporated herein by reference. (28) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on October 2, 2015 and incorporated herein by reference. (29) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on May 31, 2016 and incorporated herein by reference. (30) Filed as an Exhibit to the Post-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-3, as filed with the SEC on December 12, 2016 and incorporated herein by reference. (31) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on February 22, 2017 and incorporated herein by reference. (32) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on May 8, 2017 and incorporated herein by reference. (33) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on June 6, 2017 and incorporated herein by reference. (34) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on November 2, 2017 and incorporated herein by reference. (35) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on February 1, 2018 and incorporated herein by reference. (36) Filed as an exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on May 30, 2018 and incorporated herein by reference. (37) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on September 26, 2013 and incorporated herein by reference. (38) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 2, 2018 and incorporated herein by reference. (39) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on November 12, 2019 and incorporated herein by reference. (40) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on September 4, 2019 and incorporated herein by reference. (41) Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on January 30, 2020 and incorporated herein by reference. (42) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on February 18, 2020 and incorporated herein by reference. (43) Filed as an Exhibit to Company's Current Report on Form 8-K, as filed with the SEC on November 5, 2019 and incorporated herein by reference. (44) Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 1, 2019 and incorporated herein by reference. (45) Filed as an Exhibit to the Company's Current Report on Form 8-K, as filed with the SEC on August 14, 2020 and incorporated herein by reference. (46) Filed as an Exhibit to the Company's Registration Statement on Form S-8, as filed with the SEC on September 30, 2020 and incorporated herein by reference. 118 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Open Text Corporation Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Open Text Corporation (the Company) as of June 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three‑year period ended June 30, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three‑year period ended June 30, 2021, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August 4, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Changes in Accounting Principles As discussed in Note 1 to the consolidated financial statements, in the year ended June 30, 2021, Open Text Corporation adopted the new accounting standard, "Financial Instruments – Credit Losses" on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings. In the year ended June 30, 2020, Open Text Corporation adopted the new accounting standard, "Leases" on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Evaluation of the determination of standalone selling prices of revenue performance obligations for customer contracts with a software license As discussed in Note 2 and Note 3 to the consolidated financial statements, the Company generally sells or licenses its software in combination with other products and services such as customer support and professional services. The accounting for customer contracts with a software license requires an allocation of the transaction price to each distinct performance obligation based on the determination of the standalone selling price (SSP). SSP for a performance obligation in a customer contract is an estimate of the price that would be charged for the specific product or service if it was sold separately in similar circumstances and to similar customers. This estimate determines the allocation of the transaction price and affects the amount and timing of revenue recognized for each performance obligation in a customer contract. SSP is estimated based on the impact of geographic or regional specific factors, profit objectives and pricing practices for different performance obligations. 119 We identified the evaluation of the determination of the SSP of revenue performance obligations for customer contracts with a software license as a critical audit matter. A higher degree of auditor judgment was required to evaluate the methodology used to establish SSP for each performance obligation which could be offered in a customer contract. The primary procedures we performed to address this critical audit matter included the following. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue process, including controls over the methodology used to determine SSP for identified performance obligations in customer contracts which include a software license. We evaluated the methodology used to determine SSP based on current pricing patterns in relevant customer contracts, historical analysis of renewal contract pricing completed by the Company and pricing practices observed in the industry. We inspected a selection of contracts from the SSP population and compared attributes such as price and employee consultant level to historical information. For a sample of software license contracts with multiple performance obligations, we tested that the determined SSP was correctly applied in the allocation of the transaction price to each performance obligation. Assessment of uncertain tax positions As discussed in Note 2 and Note 15 to the consolidated financial statements, the Company has recognized uncertain tax positions including associated interest and penalties. The Company’s tax positions are subject to audit by local taxing authorities across multiple global subsidiaries and the resolution of such audits may span multiple years. Tax law is complex and often subject to varied interpretations. Accordingly, the ultimate outcome with respect to taxes the Company may owe may differ from the amounts recognized. We identified the assessment of uncertain tax positions as a critical audit matter. The assessment of tax exposures and the ultimate resolution of uncertain tax positions requires a higher degree of auditor judgment in evaluating the Company’s interpretation of, and compliance with, tax law globally across multiple jurisdictions. The primary procedures we performed to address this critical audit matter included the following. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to assess uncertain tax positions, including controls related to the interpretation of tax law and identification of uncertain tax positions, the evaluation of which of the Company’s tax positions may not be sustained upon audit and the estimation of exposures associated with uncertain tax positions. We involved domestic and international tax professionals with specialized skills and knowledge who assisted in assessing filed tax positions and transfer pricing studies, and evaluating the Company’s interpretation of tax law and its assessment of certain tax uncertainties and expected outcomes, including, if applicable, the measurement thereof, by reading advice obtained from the Company’s external specialists and correspondence with taxation authorities. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants We have served as the Company’s auditor since 2001. Toronto, Canada August 4, 2021 120 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Open Text Corporation: Opinion on Internal Control Over Financial Reporting We have audited Open Text Corporation’s internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, Open Text Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated August 4, 2021 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in this Annual Report on Form 10-K. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada August 4, 2021 121 OPEN TEXT CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data) June 30, 2021 June 30, 2020 ASSETS Cash and cash equivalents $ 1,607,306 $ 1,692,850 Accounts receivable trade, net of allowance for credit losses of $ 22,151 as of June 30, 2021 and $ 20,906 as of June 30, 2020 (note 1 and note 4) 438,547 466,357 Contract assets (note 3) 25,344 29,570 Income taxes recoverable (note 15) 32,312 61,186 Prepaid expenses and other current assets (note 9) 98,551 136,436 Total current assets 2,202,060 2,386,399 Property and equipment (note 5) 233,595 244,555 Operating lease right of use assets (note 6) 234,532 207,869 Long-term contract assets (note 3) 19,222 15,427 Goodwill (note 7) 4,691,673 4,672,356 Acquired intangible assets (note 8) 1,187,260 1,612,564 Deferred tax assets (note 15) 796,738 911,565 Other assets (note 9) 208,894 154,467 Long-term income taxes recoverable (note 15) 35,362 29,620 Total assets $ 9,609,336 $ 10,234,822 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities (note 10) $ 423,592 $ 373,314 Current portion of long-term debt (note 11) 10,000 610,000 Operating lease liabilities (note 6) 58,315 64,071 Deferred revenues (note 3) 852,629 812,218 Income taxes payable (note 15) 17,368 44,630 Total current liabilities 1,361,904 1,904,233 Long-term liabilities: Accrued liabilities (note 10) 28,830 34,955 Pension liability (note 12) 74,511 73,129 Long-term debt (note 11) 3,578,859 3,584,311 Long-term operating lease liabilities (note 6) 224,453 217,165 Long-term deferred revenues (note 3) 98,989 94,382 Long-term income taxes payable (note 15) 34,113 171,200 Deferred tax liabilities (note 15) 108,224 148,738 Total long-term liabilities 4,147,979 4,323,880 Shareholders’ equity: Share capital and additional paid-in capital (note 13) 271,540,755 and 271,863,354 Common Shares issued and outstanding at June 30, 2021 and June 30, 2020, respectively; authorized Common Shares: unlimited 1,947,764 1,851,777 Accumulated other comprehensive income (note 21) 66,238 17,825 Retained earnings 2,153,326 2,159,396 Treasury stock, at cost ( 1,567,664 and 622,297 shares at June 30, 2021 and June 30, 2020, respectively) ( 69,386 ) ( 23,608 ) Total OpenText shareholders' equity 4,097,942 4,005,390 Non-controlling interests 1,511 1,319 Total shareholders’ equity 4,099,453 4,006,709 Total liabilities and shareholders’ equity $ 9,609,336 $ 10,234,822 Guarantees and contingencies (note 14) Related party transactions (note 25) Subsequent event (note 26) See accompanying Notes to Consolidated Financial Statements 122 OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands of U.S. dollars, except share and per share data) Year Ended June 30, 2021 2020 2019 Revenues (note 3): Cloud services and subscriptions $ 1,407,445 $ 1,157,686 $ 907,812 Customer support 1,334,062 1,275,586 1,247,915 License 384,711 402,851 428,092 Professional service and other 259,897 273,613 284,936 Total revenues 3,386,115 3,109,736 2,868,755 Cost of revenues: Cloud services and subscriptions 481,818 449,940 383,993 Customer support 122,753 123,894 124,343 License 13,916 11,321 14,347 Professional service and other 197,183 212,903 224,635 Amortization of acquired technology-based intangible assets (note 8) 218,796 205,717 183,385 Total cost of revenues 1,034,466 1,003,775 930,703 Gross profit 2,351,649 2,105,961 1,938,052 Operating expenses: Research and development 421,447 370,411 321,836 Sales and marketing 622,221 585,044 518,035 General and administrative 263,521 237,532 207,909 Depreciation 85,265 89,458 97,716 Amortization of acquired customer-based intangible assets (note 8) 216,544 219,559 189,827 Special charges (recoveries) (note 18) 1,748 100,428 35,719 Total operating expenses 1,610,746 1,602,432 1,371,042 Income from operations 740,903 503,529 567,010 Other income (expense), net (note 23) 61,434 ( 11,946 ) 10,156 Interest and other related expense, net ( 151,567 ) ( 146,378 ) ( 136,592 ) Income before income taxes 650,770 345,205 440,574 Provision for (recovery of) income taxes (note 15) 339,906 110,837 154,937 Net income $ 310,864 $ 234,368 $ 285,637 Net (income) loss attributable to non-controlling interests ( 192 ) ( 143 ) ( 136 ) Net income attributable to OpenText $ 310,672 $ 234,225 $ 285,501 Earnings per share—basic attributable to OpenText (note 24) $ 1.14 $ 0.86 $ 1.06 Earnings per share—diluted attributable to OpenText (note 24) $ 1.14 $ 0.86 $ 1.06 Weighted average number of Common Shares outstanding—basic (in '000's) 272,533 270,847 268,784 Weighted average number of Common Shares outstanding—diluted (in '000's) 273,479 271,817 269,908 See accompanying Notes to Consolidated Financial Statements 123 OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars) Year Ended June 30, 2021 2020 2019 Net income $ 310,864 $ 234,368 $ 285,637 Other comprehensive income (loss)—net of tax: Net foreign currency translation adjustments 42,440 ( 7,784 ) ( 3,882 ) Unrealized gain (loss) on cash flow hedges: Unrealized gain (loss) - net of tax expense (recovery) effect of $ 1,532 , ($ 599 ) and $ 6 for the year ended June 30, 2021, 2020 and 2019, respectively 4,246 ( 1,662 ) 16 (Gain) loss reclassified into net income - net of tax (expense) recovery effect of ($ 1,182 ), $ 355 and $ 539 for the year ended June 30, 2021, 2020 and 2019, respectively ( 3,280 ) 985 1,494 Actuarial gain (loss) relating to defined benefit pension plans: Actuarial gain (loss) - net of tax expense (recovery) effect of $ 990 , $ 1,219 and ($ 2,004 ) for the year ended June 30, 2021, 2020 and 2019, respectively 3,987 1,245 ( 7,421 ) Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $ 379 , $ 520 and $ 292 for the year ended June 30, 2021, 2020 and 2019, respectively 1,020 917 272 Total other comprehensive income (loss) net 48,413 ( 6,299 ) ( 9,521 ) Total comprehensive income 359,277 228,069 276,116 Comprehensive (income) loss attributable to non-controlling interests ( 192 ) ( 143 ) ( 136 ) Total comprehensive income attributable to OpenText $ 359,085 $ 227,926 $ 275,980 See accompanying Notes to Consolidated Financial Statements 124 OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of June 30, 2018 267,651 $ 1,707,073 ( 691 ) $ ( 18,732 ) $ 1,994,235 $ 33,645 $ 1,037 $ 3,717,258 Issuance of Common Shares Under employee stock option plans 1,472 35,626 — — — — — 35,626 Under employee stock purchase plans 711 21,835 — — — — — 21,835 Share-based compensation — 26,770 — — — — — 26,770 Purchase of treasury stock — — ( 726 ) ( 26,499 ) — — — ( 26,499 ) Issuance of treasury stock — ( 16,465 ) 614 16,465 — — — — Dividends declared ($ 0.6300 per Common Share) — — — — ( 168,859 ) — — ( 168,859 ) Cumulative effect of ASU 2016-16 — — — — ( 26,780 ) — — ( 26,780 ) Cumulative effect of Topic 606 — — — — 29,786 — — 29,786 Other comprehensive income (loss) - net — — — — — ( 9,521 ) — ( 9,521 ) Non-controlling interest — ( 625 ) — — — — 42 ( 583 ) Net income — — — — 285,501 — 136 285,637 Balance as of June 30, 2019 269,834 $ 1,774,214 ( 803 ) $ ( 28,766 ) $ 2,113,883 $ 24,124 $ 1,215 $ 3,884,670 Issuance of Common Shares Under employee stock option plans 1,530 41,282 — — — — — 41,282 Under employee stock purchase plans 499 17,757 — — — — — 17,757 Share-based compensation — 29,532 — — — — — 29,532 Purchase of treasury stock — — ( 300 ) ( 12,424 ) — — — ( 12,424 ) Issuance of treasury stock — ( 11,008 ) 481 17,582 — — — 6,574 Dividends declared ($ 0.6984 per Common Share) — — — — ( 188,712 ) — — ( 188,712 ) Other comprehensive income (loss) - net — — — — — ( 6,299 ) — ( 6,299 ) Non-controlling interest — — — — — — ( 39 ) ( 39 ) Net income — — — — 234,225 — 143 234,368 Balance as of June 30, 2020 271,863 $ 1,851,777 ( 622 ) $ ( 23,608 ) $ 2,159,396 $ 17,825 $ 1,319 $ 4,006,709 Adoption of ASU 2016-13 - cumulative effect, net (note 1) — — — — ( 2,450 ) — — ( 2,450 ) Issuance of Common Shares Under employee stock option plans 1,605 49,565 — — — — — 49,565 Under employee stock purchase plans 573 22,307 193 6,690 — — — 28,997 Share-based compensation — 51,969 — — — — — 51,969 Purchase of treasury stock — — ( 1,455 ) ( 64,847 ) — — — ( 64,847 ) Issuance of treasury stock — ( 12,379 ) 316 12,379 — — — — Repurchase of Common Shares ( 2,500 ) ( 15,475 ) — — ( 103,630 ) — — ( 119,105 ) Dividends declared ($ 0.7770 per Common Share) — — — — ( 210,662 ) — — ( 210,662 ) Other comprehensive income (loss) - net — — — — — 48,413 — 48,413 Net income — — — — 310,672 — 192 310,864 Balance as of June 30, 2021 271,541 $ 1,947,764 ( 1,568 ) $ ( 69,386 ) $ 2,153,326 $ 66,238 $ 1,511 $ 4,099,453 See accompanying Notes to Consolidated Financial Statements 125 OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) Year Ended June 30, 2021 2020 2019 Cash flows from operating activities: Net income $ 310,864 $ 234,368 $ 285,637 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangible assets 520,605 514,734 470,928 Share-based compensation expense 51,969 29,532 26,770 Pension expense 6,616 5,802 4,624 Amortization of debt issuance costs 4,548 4,633 4,330 Accelerated amortization of right of use assets — 36,864 — Loss on extinguishment of debt — 17,854 — Loss on sale and write down of property and equipment 2,771 9,714 9,438 Deferred taxes 73,039 51,388 47,425 Share in net (income) loss of equity investees ( 62,897 ) ( 8,700 ) ( 13,668 ) Changes in operating assets and liabilities: Accounts receivable 60,954 84,499 75,508 Contract assets ( 39,333 ) ( 40,301 ) ( 37,623 ) Prepaid expenses and other current assets 37,733 ( 6,897 ) ( 819 ) Income taxes ( 140,763 ) ( 35,086 ) 27,291 Accounts payable and accrued liabilities 26,088 30,613 ( 21,732 ) Deferred revenue 39,295 25,306 ( 1,827 ) Other assets 11,914 1,127 ( 4 ) Operating lease assets and liabilities, net ( 27,283 ) ( 914 ) — Net cash provided by operating activities 876,120 954,536 876,278 Cash flows from investing activities: Additions of property and equipment ( 63,675 ) ( 72,709 ) ( 63,837 ) Purchase of XMedius 444 ( 73,335 ) — Purchase of Carbonite, Inc., net of cash and restricted cash acquired — ( 1,305,097 ) — Purchase of Dynamic Solutions Group Inc. ( 971 ) ( 4,149 ) — Purchase of Catalyst Repository Systems Inc. — — ( 70,800 ) Purchase of Liaison Technologies, Inc. — — ( 310,644 ) Purchase of Guidance Software, Inc., net of cash acquired — — ( 2,279 ) Other investing activities ( 4,568 ) ( 14,127 ) ( 16,966 ) Net cash used in investing activities ( 68,770 ) ( 1,469,417 ) ( 464,526 ) Cash flows from financing activities: Proceeds from issuance of Common Shares from exercise of stock options and ESPP 80,067 66,600 57,889 Proceeds from long-term debt and Revolver — 3,150,000 — Repayment of long-term debt and Revolver ( 610,000 ) ( 1,713,631 ) ( 10,000 ) Debt extinguishment costs (note 23) — ( 11,248 ) — Debt issuance costs — ( 21,806 ) ( 322 ) Repurchase of Common Shares ( 119,105 ) — — Purchase of treasury stock ( 64,847 ) ( 12,424 ) ( 26,499 ) Purchase of non-controlling interests — — ( 583 ) Payments of dividends to shareholders ( 210,662 ) ( 188,712 ) ( 168,859 ) Net cash provided by (used in) financing activities ( 924,547 ) 1,268,779 ( 148,374 ) Foreign exchange gain (loss) on cash held in foreign currencies 29,734 ( 178 ) ( 3,826 ) Increase (decrease) in cash, cash equivalents and restricted cash during the period ( 87,463 ) 753,720 259,552 Cash, cash equivalents and restricted cash at beginning of the period 1,697,263 943,543 683,991 Cash, cash equivalents and restricted cash at end of the period $ 1,609,800 $ 1,697,263 $ 943,543 126 OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) Reconciliation of cash, cash equivalents and restricted cash: June 30, 2021 June 30, 2020 June 30, 2019 Cash and cash equivalents $ 1,607,306 $ 1,692,850 $ 941,009 Restricted cash (1) 2,494 4,413 2,534 Total cash, cash equivalents and restricted cash $ 1,609,800 $ 1,697,263 $ 943,543 (1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Consolidated Balance Sheets (note 9). Supplemental cash flow disclosures (note 6 and note 22) See accompanying Notes to Consolidated Financial Statements 127 OPEN TEXT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended June 30, 2021 (Tabular amounts in thousands of U.S. dollars, except share and per share data) NOTE 1— BASIS OF PRESENTATION The accompanying Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as "OpenText" or the "Company". We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa) and EC1 Pte. Ltd. (GXS Singapore), which as of June 30, 2021, were 70 % and 81 % owned, respectively, by OpenText. All intercompany balances and transactions have been eliminated. Throughout this Annual Report on Form 10-K: (i) the term "Fiscal 2022" means our fiscal year beginning on July 1, 2021 and ending June 30, 2022; (ii) the term "Fiscal 2021" means our fiscal year beginning on July 1, 2020 and ended June 30, 2021; (iii) the term “Fiscal 2020” means our fiscal year beginning on July 1, 2019 and ended June 30, 2020; (iv) the term “Fiscal 2019” means our fiscal year beginning on July 1, 2018 and ended June 30, 2019; (v) the term “Fiscal 2018” means our fiscal year beginning on July 1, 2017 and ended June 30, 2018; (vi) the term “Fiscal 2017” means our fiscal year beginning on July 1, 2016 and ended June 30, 2017; (vii) the term “Fiscal 2016” means our fiscal year beginning on July 1, 2015 and ended June 30, 2016; (viii) the term “Fiscal 2015” means our fiscal year beginning on July 1, 2014 and ended June 30, 2015; (ix) the term “Fiscal 2014” means our fiscal year beginning on July 1, 2013 and ended June 30, 2014; (x) the term “Fiscal 2013” means our fiscal year beginning on July 1, 2012 and ended June 30, 2013; and (xi) the term “Fiscal 2012” means our fiscal year beginning on July 1, 2011 and ended June 30, 2012. These Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, and (x) the valuation of pension obligations. In March 2020, COVID-19 was characterized as a pandemic by the World Health Organization. The spread of COVID-19 has significantly impacted the global economy. As the impacts of the pandemic continue to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. As of June 30, 2021, we have recorded certain estimates resulting from the pandemic, particularly with respect to the COVID-19 Restructuring Plan (as defined herein) and allowance for credit losses, based on management's estimates and assumptions utilizing the most currently available information. Such estimates may be subject to change particularly given the unprecedented nature of the COVID-19 pandemic. We will continue to monitor the potential impact of COVID-19 on our financial statements and related disclosures, including the need for additional estimates going forward, which could include costs related to potential items such as special charges (recoveries), restructurings, asset impairments and other non-recurring costs. Please see note 18 "Special Charges (Recoveries)" and "Risk Factors" included within Part I, Item 1A of this Annual Report on Form 10-K. Impact of Recently Adopted Accounting Pronouncements Financial Instruments Effective July 1, 2020, we adopted Accounting Standards Update (ASU) No. 2016-13 "Financial Instruments - Credit Losses (Topic 326)" on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings. 128 Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. Results for reporting periods effective as of July 1, 2020 are presented under the new standard, while prior period results continue to be reported under the previous standards. As a result of this adoption, we recorded a decrease to retained earnings of $ 2.5 million as of July 1, 2020 with the following corresponding impacts: • A decrease in accounts receivable trade, net of $ 3.0 million; • A decrease in contract assets of $ 0.3 million; and • An increase to deferred tax assets of $ 0.8 million. The adoption of Topic 326 had no impact on the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income or Consolidated Statements of Cash Flows. Please see note 4 "Allowance for Credit Losses" for additional information. NOTE 2— ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Accounting Policies Cash and cash equivalents Cash and cash equivalents include balances with banks as well as deposits that have terms to maturity of three months or less. Cash equivalents are recorded at cost and typically consist of term deposits, commercial paper, certificates of deposit and short-term interest bearing investment-grade securities of major banks in the countries in which we operate. Accounts Receivable and Allowance for Credit Losses From time to time, we may sell certain accounts receivable to a financial institution on a non-recourse basis for cash, less a discount. Proceeds from the sale of receivables approximate their discounted book value and are included in operating cash flows on the Consolidated Statement of Cash Flows. In accordance with Topic 326, we recognize expected credit losses for accounts receivable and contract assets based on lifetime expected losses. We recognize a loss allowance using a collective assessment for accounts receivable, including contract assets, with similar risk characteristics based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and economic environment. We continue to maintain an allowance for 100% of all accounts deemed to be uncollectible. Customer creditworthiness is evaluated prior to order fulfillment and based on evaluations, we adjust our credit limit to the respective customer. In addition to these evaluations, we conduct on-going credit evaluations of our customers' payment history and current creditworthiness. To date, the actual losses have been within our expectations. No single customer accounted for more than 10% of the accounts receivable balance as of June 30, 2021 and 2020, respectively. Property and equipment Property and equipment are stated at the lower of cost or net realizable value, and shown net of depreciation which is computed on a straight-line basis over the estimated useful lives of the related assets. Gains and losses on asset disposals are taken into income in the year of disposition. Fully depreciated property and equipment are retired from the Consolidated Balance Sheets when they are no longer in use. Please see the "Impairment of long-lived assets" section below for policy on property and equipment impairments. The following represents the estimated useful lives of property and equipment as of June 30, 2021: Furniture and fixtures 5 years Office equipment 5 years Computer hardware 3 to 5 years Computer software 3 to 7 years Capitalized software development costs 3 to 5 years Leasehold improvements Lesser of the lease term or 5 years Building 40 years 129 Capitalized Software We capitalize software development costs in accordance with ASC Topic 350-40 "Accounting for the Costs of Computer Software Developed or Obtained for Internal-Use". We capitalize costs for software to be used internally when we enter the application development stage. This occurs when we complete the preliminary project stage, management authorizes and commits to funding the project, and it is feasible that the project will be completed and the software will perform the intended function. We cease to capitalize costs related to a software project when it enters the post implementation and operation stage. If different determinations are made with respect to the state of development of a software project, then the amount capitalized and the amount charged to expense for that project could differ materially. Costs capitalized during the application development stage consist of payroll and related costs for employees who are directly associated with, and who devote time directly to, a project to develop software for internal use. We also capitalize the direct costs of materials and services, which generally includes outside contractors, and interest. We do not capitalize any general and administrative or overhead costs or costs incurred during the application development stage related to training or data conversion costs. Costs related to upgrades and enhancements to internal-use software, if those upgrades and enhancements result in additional functionality, are capitalized. If upgrades and enhancements do not result in additional functionality, those costs are expensed as incurred. If different determinations are made with respect to whether upgrades or enhancements to software projects would result in additional functionality, then the amount capitalized and the amount charged to expense for that project could differ materially. We amortize capitalized costs with respect to development projects for internal-use software when the software is ready for use. The capitalized software development costs are generally amortized using the straight-line method over a 3 to 5 year period. In determining and reassessing the estimated useful life over which the cost incurred for the software should be amortized, we consider the effects of obsolescence, technology, competition and other economic factors. If different determinations are made with respect to the estimated useful life of the software, the amount of amortization charged in a particular period could differ materially. As of June 30, 2021 and 2020 our capitalized software development costs were $ 127.7 million and $ 111.2 million, respectively. Our additions, relating to capitalized software development costs, incurred during Fiscal 2021 and Fiscal 2020 were $ 15.4 million and $ 15.4 million, respectively. Leases We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and we do not have any material finance leases. In accordance with Topic 842, we account for a contract as a lease when we have the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our right of use (ROU) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent our right to control the underlying assets under lease, and the lease liability is our obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the Consolidated Balance Sheets based on the present value of future minimum lease payments to be made over the lease term. When available, we will use the rate implicit in the lease to discount lease payments to present value. However, real estate leases generally do not provide a readily determinable implicit rate, therefore, we must estimate our incremental borrowing rate to discount the lease payments. We estimate our incremental borrowing rate based on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The ROU asset equals the lease liability, adjusted for any initial direct costs, prepaid rent and lease incentives on initial recognition. Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the Consolidated Statements of Income in the period in which the obligation for those payments is incurred. Lease expense for minimum lease payments continues to be recognized in the Consolidated Statements of Income on a straight-line basis over the lease term. We have not elected the practical expedient to combine lease and non-lease components in the determination of lease costs for our facility leases. For all other asset classes, we have elected the practical expedient to combine the lease and the non-lease components. The lease liability includes lease payments related to options to extend or renew the lease term only if we are reasonably certain we will exercise those options. Our leases typically do not contain any material residual value guarantees or restrictive covenants. In certain circumstances, we sublease all or a portion of a leased facility to various other companies through a sublease agreement. 130 Acquired intangibles Acquired intangibles consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is initially recorded at fair value based on the present value of the estimated net future income-producing capabilities of software products acquired on acquisitions. We amortize acquired technology over its estimated useful life on a straight-line basis. Customer relationships represent relationships that we have with customers of the acquired companies and are either based upon contractual or legal rights or are considered separable; that is, capable of being separated from the acquired entity and being sold, transferred, licensed, rented or exchanged. These customer relationships are initially recorded at their fair value based on the present value of expected future cash flows. We amortize customer relationships on a straight-line basis over their estimated useful lives. We continually evaluate the remaining estimated useful life of our intangible assets being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. Impairment of long-lived assets We account for the impairment and disposition of long-lived assets in accordance with ASC Topic 360, “Property, Plant, and Equipment” (Topic 360). We test long-lived assets or asset groups, such as property and equipment, ROU assets and definite lived intangible assets, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. We have no t recorded any significant impairment charges for long-lived assets during Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. Business combinations We apply the provisions of ASC Topic 805, “Business Combinations” (Topic 805), in the accounting for our acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities, including contingent consideration where applicable, assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement, particularly since these assumptions and estimates are based in part on historical experience and information obtained from the management of the acquired companies. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill in the period identified. Furthermore, when valuing certain intangible assets that we have acquired, critical estimates may be made relating to, but not limited to: (i) future expected cash flows from software license sales, cloud SaaS, "desktop as a service" (DaaS) and PaaS contracts, support agreements, consulting agreements and other customer contracts (ii) the acquired company's technology and competitive position, as well as assumptions about the period of time that the acquired technology will continue to be used in the combined company's product portfolio, and (iii) discount rates. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded to our Consolidated Statements of Income. For a given acquisition, we may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts. If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement 131 period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations. Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did not exist at the acquisition date, are recorded in the "Provision for (recovery of) income taxes" line of our Consolidated Statements of Income. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The carrying amount of goodwill is periodically reviewed for impairment (at a minimum annually) and whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Our operations are analyzed by management and our chief operating decision maker (CODM) as being part of a single industry segment: the design, development, marketing and sales of Information Management software and solutions. Therefore, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. We perform a qualitative assessment to test our reporting unit's goodwill for impairment. Based on our qualitative assessment, if we determine that the fair value of our reporting unit is more likely than not (i.e. a likelihood of more than 50 percent) to be less than its carrying amount, the quantitative assessment of the impairment test is performed. In the quantitative assessment, we compare the fair value of our reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and we are not required to perform further testing. If the carrying value of the net assets of our reporting unit exceeds its fair value, then an impairment loss equal to the difference, but not exceeding the total carrying value of goodwill allocated to the reporting unit, would be recorded. Our annual impairment analysis of goodwill was performed as of April 1, 2021. Our qualitative assessment indicated that there were no indications of impairment and therefore there was no impairment of goodwill required to be recorded for Fiscal 2021 ( no impairments were recorded for Fiscal 2020 and Fiscal 2019, respectively). Derivative financial instruments We use derivative financial instruments to manage foreign currency rate risk. We account for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging” (Topic 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments' fair values be recognized in earnings; unless specific hedge accounting and documentation criteria are met (i.e. the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in "Accumulated other comprehensive income", net of tax, in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, was recognized in our Consolidated Statements of Income. Asset retirement obligations We account for asset retirement obligations in accordance with ASC Topic 410, “Asset Retirement and Environmental Obligations” (Topic 410), which applies to certain obligations associated with “leasehold improvements” within our leased office facilities. Topic 410 requires that a liability be initially recognized for the estimated fair value of the obligation when it is incurred. The associated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset and depreciated over the remaining life of the underlying asset and the associated liability is accreted to the estimated fair value of the obligation at the settlement date through periodic accretion charges which are generally recorded within "General and administrative" expense in our Consolidated Statements of Income. When the obligation is settled, any difference between the final cost and the recorded amount is recognized as income or loss on settlement in our Consolidated Statements of Income. Revenue recognition In accordance with Topic 606, we account for a customer contract when we obtain written approval, the contract is committed, the rights of the parties, including the payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for our products and services (at its transaction price). Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on readily available information, which may include historical, current and forecasted information, taking into consideration the type of customer, the type of transaction and specific facts and circumstances of each 132 arrangement. We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced B2B integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis. Our cloud arrangements can be broadly categorized as PaaS, SaaS, cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period. However, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer's EDI environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. In connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. 133 Customer support revenue Customer support revenue is associated with perpetual, term license and off-cloud subscription arrangements. As customer support is not critical to the customer's ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (off-cloud). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use IP that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Professional service and other revenue Our professional services, when offered along with software licenses, consists primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example, we may consider total labor hours incurred compared to total expected labor hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If 134 a material right exists in one of our contracts, then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our Consolidated Financial Statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative SSP basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it were sold separately in similar circumstances and to similar customers. In most cases we can establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP requires judgment that could impact the amount and timing of revenue recognized. SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for licenses in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required and we will allocate the transaction price between license and customer support at a constant ratio reflecting the mid-point of the established SSP range. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). Typically, we conclude that the resellers are Open Text customers in our reseller agreements. The resellers have control over the pricing, service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. However, we do offer consumers who purchase certain of our products on-line directly from us an unconditional full 70-days money-back guarantee. Distributors 135 and resellers are also permitted to return the consumer products, subject to certain limitations. Revenue is reduced for such rights based on the estimate of future returns originating from contractual agreements with these customers. Additionally, in some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice date. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component, however, in determining the transaction price we consider whether we need to adjust the promised consideration for the effects of the time value of money if the timing of payments provides either the customer or OpenText with a significant benefit of financing. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Certain of our subscription services and product support arrangements generally contain performance response time guarantees. For subscription services arrangements, we estimate variable consideration using a portfolio approach because performance penalties are tied to standard response time requirements. For product support arrangements, we estimate variable consideration on a contract basis because such arrangements are customer-specific. For both subscription services and product support arrangements, we use an expected value approach to estimate variable consideration based on historical business practices and current and future performance expectations to determine the likelihood of incurring penalties. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied Cloud services and subscriptions revenue: Outsourced Professional Services Managed Services / Ongoing Hosting / SaaS As the services are provided (over time) Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) License revenue: Software licenses (Perpetual, Term, Subscription) When software activation keys have been made available for download (point in time) Professional service and other revenue: Professional services As the services are provided (over time) Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of 136 applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the new standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commissions allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within "Sales and marketing" expense in the Consolidated Statements of Income. Our short-term capitalized costs to obtain a contract are included in "Prepaid expenses and other current assets", while our long-term capitalized costs to obtain a contract are included in "Other assets" on our Consolidated Balance Sheets. Research and development costs Research and development costs internally incurred in creating computer software to be sold, licensed or otherwise marketed are expensed as incurred unless they meet the criteria for deferral and amortization, as described in ASC Topic 985-20, “Costs of Software to be Sold, Leased, or Marketed” (Topic 985-20). In accordance with Topic 985-20, costs related to research, design and development of products are charged to expense as incurred and capitalized between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers. In our historical experience, the dates relating to the achievement of technological feasibility and general release of the product have substantially coincided. In addition, no significant costs are incurred subsequent to the establishment of technological feasibility. As a result, we do not capitalize any research and development costs relating to internally developed software to be sold, licensed or otherwise marketed. Advertising Expenses Advertising costs, which include digital advertising, marketing programs and other promotional costs, are expensed as incurred. Advertising expenses incurred in Fiscal 2021, Fiscal 2020 and Fiscal 2019 were $ 52.9 million, $ 32.1 million and $ 19.2 million, respectively. Income taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes” (Topic 740). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the Consolidated Financial Statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. We account for our uncertain tax provisions by using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including the resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not that the position will be sustained on audit. On subsequent recognition and measurement the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company's best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. We recognize both accrued interest and penalties related to liabilities for income taxes within the "Provision for (recovery of) income taxes" line of our Consolidated Statements of Income (see note 15 "Income Taxes" for more details). 137 Equity investments We invest in investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 %. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value, is recorded as a component of "Other income (expense), net" in our Consolidated Statements of Income (see note 23 "Other Income (Expense), Net" for more details). Fair value of financial instruments Carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable (trade and accrued liabilities) approximates the fair value due to the relatively short period of time between origination of the instruments and their expected realization. The fair value of our Senior Notes is determined based on observable market prices and categorized as a Level 2 measurement. The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. We apply the provisions of ASC 820, “Fair Value Measurements and Disclosures”, to our derivative financial instruments that we are required to carry at fair value pursuant to other accounting standards (see note 16 "Fair Value Measurement" for more details). Foreign currency Our Consolidated Financial Statements are presented in U.S. dollars. In general, the functional currency of our subsidiaries is the local currency. For each subsidiary, assets and liabilities denominated in foreign currencies are translated into U.S dollars at the exchange rates in effect at the balance sheet dates and revenues and expenses are translated at the average exchange rates prevailing during the previous month of the transaction. The effect of foreign currency translation adjustments are recorded as a component of "Accumulated other comprehensive income". Transactional foreign currency gains (losses) included in the Consolidated Statements of Income under the line item “Other income (expense), net” for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were ($ 1.3 ) million, ($ 4.2 ) million, and ($ 4.3 ) million, respectively. Restructuring charges We record restructuring charges relating to contractual lease obligations, not accounted for under Topic 842, and other exit costs in accordance with ASC Topic 420, “Exit or Disposal Cost Obligations” (Topic 420). Topic 420 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at its fair value in the period in which the liability is incurred. In order to incur a liability pursuant to Topic 420, our management must have established and approved a plan of restructuring in sufficient detail. A liability for a cost associated with involuntary termination benefits is recorded when benefits have been communicated and a liability for a cost to terminate an operating lease or other contract is incurred, when the contract has been terminated in accordance with the contract terms or we have ceased using the right conveyed by the contract, such as vacating a leased facility not accounted for under Topic 842. The recognition of restructuring charges requires us to make certain judgments regarding the nature, timing and amount associated with the planned restructuring activities, including estimating sub-lease income and the net recoverable amount of equipment to be disposed of. At the end of each reporting period, we evaluate the appropriateness of the remaining accrued balances (see note 18 "Special Charges (Recoveries)" for more details). Loss Contingencies We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Annual Report on Form 10-K, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As 138 described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters (see note 14 "Guarantees and Contingencies" for more details). Net income per share Basic net income per share is computed using the weighted average number of Common Shares outstanding including contingently issuable shares where the contingency has been resolved. Diluted net income per share is computed using the weighted average number of Common Shares and stock equivalents outstanding using the treasury stock method during the year. For periods in which we incur a net loss, our outstanding Common Share equivalents are not included in the calculation of diluted earnings (loss) per share as their effect is anti-dilutive. Accordingly, basic and diluted net loss per share for those periods are identical . See note 24 "Earnings Per Share" for more details. Share-based payment We measure share-based compensation costs, in accordance with ASC Topic 718, “Compensation - Stock Compensation” (Topic 718) on the grant date, based on the calculated fair value of the award. We have elected to treat awards with graded vesting as a single award when estimating fair value. Compensation cost is recognized on a straight-line basis over the employee requisite service period, which in our circumstances is the stated vesting period of the award, provided that total compensation cost recognized at least equals the pro-rata value of the award that has vested. Compensation cost is initially based on the estimated number of options for which the requisite service is expected to be rendered. This estimate is adjusted in the period once actual forfeitures are known (see note 13 "Share Capital, Option Plans and Share-based Payments" for more details). Accounting for Pensions, post-retirement and post-employment benefits Pension expense is accounted for in accordance with ASC Topic 715, “Compensation-Retirement Benefits” (Topic 715). Pension expense consists of actuarially computed costs of pension benefits in respect of the current year of service, imputed returns on plan assets (for funded plans) and imputed interest on pension obligations. The expected costs of post-retirement benefits, other than pensions, are accrued in the Consolidated Financial Statements based upon actuarial methods and assumptions. The over-funded or under-funded status of defined benefit pension and other post-retirement plans are recognized as an asset or a liability (with the offset to “Accumulated other comprehensive income”, net of tax, within “Shareholders' equity”), respectively, on the Consolidated Balance Sheets. Actuarial gains or losses in excess of 10% of the projected benefit obligation are recognized as a component of "Other Comprehensive Income (Loss), net" and subsequently amortized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. See note 12 "Pension Plans and Other Post Retirement Benefits" for more details. Accounting Pronouncements Adopted in Fiscal 2021 During Fiscal 2021, we have adopted the following ASU, in addition to those discussed in note 1 "Basis of Presentation". The ASU listed below did not have a material impact to our reported financial position, results of operations or cash flows: • ASU No. 2018-14 "Compensation-Retirement Benefits-Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans" (ASU 2018-14). 139 NOTE 3— REVENUES Disaggregation of Revenue We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated: Year Ended June 30, 2021 2020 2019 Total Revenues by Geography: Americas (1) $ 2,069,083 $ 1,903,650 $ 1,683,282 EMEA (2) 1,031,607 942,281 920,422 Asia Pacific (3) 285,425 263,805 265,051 Total revenues $ 3,386,115 $ 3,109,736 $ 2,868,755 Total Revenues by Type of Performance Obligation: Recurring revenues (4) Cloud services and subscriptions revenue $ 1,407,445 $ 1,157,686 $ 907,812 Customer support revenue 1,334,062 1,275,586 1,247,915 Total recurring revenues $ 2,741,507 $ 2,433,272 $ 2,155,727 License revenue (perpetual, term and subscriptions) 384,711 402,851 428,092 Professional service and other revenue 259,897 273,613 284,936 Total revenues $ 3,386,115 $ 3,109,736 $ 2,868,755 Total Revenues by Timing of Revenue Recognition: Point in time $ 384,711 $ 402,851 $ 428,092 Over time (including professional service and other revenue) 3,001,404 2,706,885 2,440,663 Total revenues $ 3,386,115 $ 3,109,736 $ 2,868,755 (1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand. (4) Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue. Contract Balances A contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional. The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of June 30, 2021 As of June 30, 2020 Short-term contract assets $ 25,344 $ 29,570 Long-term contract assets $ 19,222 $ 15,427 Short-term deferred revenues $ 852,629 $ 812,218 Long-term deferred revenues $ 98,989 $ 94,382 The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and the customer’s payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the year ended June 30, 2021, we reclassified $ 39.2 million (year ended June 30, 2020—$ 33.0 million) of contract assets to receivables as a 140 result of the right to the transaction consideration becoming unconditional. During the year ended June 30, 2021, 2020 and 2019, respectively, there was no significant impairment loss recognized related to contract assets. We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the year ended June 30, 2021 that was included in the deferred revenue balances at June 30, 2020 was $ 811 million (year ended June 30, 2020 and 2019—$ 631 million and $ 617 million, respectively). Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since July 1, 2018: Capitalized costs to obtain a contract as of July 1, 2018 $ 35,151 New capitalized costs incurred 24,347 Amortization of capitalized costs ( 11,003 ) Adjustments on account of foreign exchange ( 211 ) Capitalized costs to obtain a contract as of June 30, 2019 48,284 New capitalized costs incurred 29,427 Amortization of capitalized costs ( 16,919 ) Adjustments on account of foreign exchange 371 Capitalized costs to obtain a contract as of June 30, 2020 61,163 New capitalized costs incurred 32,202 Amortization of capitalized costs ( 21,960 ) Adjustments on account of foreign exchange 1,495 Capitalized costs to obtain a contract as of June 30, 2021 $ 72,900 During the year ended June 30, 2021, 2020 and 2019, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to note 2 "Accounting Policies and Recent Accounting Pronouncements" and note 9 "Prepaid Expenses and Other Assets" for additional information on incremental costs of obtaining a contract. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2021, approximately $ 1.4 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts. We expect to recognize approximately 47 % of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. Refer to note 2 "Accounting Policies and Recent Accounting Pronouncements" for additional information on our revenue policy. 141 NOTE 4— ALLOWANCE FOR CREDIT LOSSES The following illustrates the activity in our allowance for credit losses on accounts receivable: Balance as of June 30, 2018 $ 9,741 Bad debt expense 13,461 Write-off /adjustments ( 6,191 ) Balance as of June 30, 2019 17,011 Bad debt expense 11,461 Write-off /adjustments ( 7,566 ) Balance as of June 30, 2020 20,906 Adoption of Topic 326 - cumulative effect 3,025 Credit loss expense 7,132 Write-off /adjustments ( 8,912 ) Balance of June 30, 2021 $ 22,151 Included in accounts receivable are unbilled receivables in the amount of $ 51.4 million as of June 30, 2021 (June 30, 2020—$ 55.2 million). As of June 30, 2021, we have an allowance for credit losses of $ 0.4 million for contract assets, as a result of the adoption of Topic 326. For additional information on contract assets please see note 3 "Revenues". NOTE 5— PROPERTY AND EQUIPMENT As of June 30, 2021 Cost Accumulated Depreciation Net Furniture and fixtures $ 38,541 $ ( 32,500 ) $ 6,041 Office equipment 2,533 ( 1,244 ) 1,289 Computer hardware 313,946 ( 212,448 ) 101,498 Computer software 129,690 ( 104,654 ) 25,036 Capitalized software development costs 127,697 ( 86,466 ) 41,231 Leasehold improvements 106,656 ( 81,135 ) 25,521 Land and buildings 48,537 ( 15,558 ) 32,979 Total $ 767,600 $ ( 534,005 ) $ 233,595 As of June 30, 2020 Cost Accumulated Depreciation Net Furniture and fixtures $ 39,158 $ ( 28,473 ) $ 10,685 Office equipment 2,272 ( 1,329 ) 943 Computer hardware 294,745 ( 198,194 ) 96,551 Computer software 127,299 ( 103,057 ) 24,242 Capitalized software development costs 111,202 ( 70,015 ) 41,187 Leasehold improvements 111,384 ( 74,395 ) 36,989 Land and buildings 49,268 ( 15,310 ) 33,958 Total $ 735,328 $ ( 490,773 ) $ 244,555 142 NOTE 6— LEASES We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and we do not have any material finance leases. Lease Costs and Other Information The following illustrates the various components of operating lease costs for the period indicated: Year Ended June 30, 2021 2020 Operating lease cost $ 63,068 $ 68,705 Short-term lease cost 881 1,178 Variable lease cost 2,754 3,536 Sublease income ( 6,469 ) ( 6,035 ) Total lease cost $ 60,234 $ 67,384 The weighted average remaining lease term and discount rate for the periods indicated below were as follows: As of June 30, 2021 As of June 30, 2020 Weighted-average remaining lease term 6.47 years 6.18 years Weighted-average discount rate 2.82 % 3.12 % Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease cost and short-term lease are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below: Year Ended June 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 72,871 $ 71,900 Right of use assets obtained in exchange for new operating lease liabilities (1) (2) $ 82,718 $ 32,328 (1) Excludes the impact of $ 60.1 million and $ 2.9 million of ROU assets acquired through the acquisitions of Carbonite and XMedius, respectively, during the year ended June 30, 2020. (2) Excludes the release of $ 22.6 million of lease liabilities during the year ended June 30, 2021 relating to office space that was abandoned during the fourth quarter of Fiscal 2020 that has since been early terminated or assigned to a third party. These recoveries have been recorded in "Special charges (recoveries)" in the Consolidated Statements of Income. Please see note 18 "Special Charges (Recoveries)". 143 Maturity of Lease Liabilities The following table presents the future minimum lease payments under our operating leases liabilities as of June 30, 2021: Fiscal years ending June 30, 2022 $ 65,260 2023 57,055 2024 46,455 2025 36,987 2026 25,046 Thereafter 77,546 Total Lease payments $ 308,349 Less: Imputed interest ( 25,581 ) Total $ 282,768 Reported as: Current operating lease liabilities $ 58,315 Non-current operating lease liabilities 224,453 Total $ 282,768 Operating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under the agreements initiated with third parties, we expect to receive sublease income of $ 9.4 million in Fiscal 2022 and $ 15.3 million thereafter. NOTE 7— GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2019: Balance as of June 30, 2019 $ 3,769,908 Acquisition of XMedius (note 19) 49,633 Acquisition of Carbonite (note 19) 853,162 Acquisition of The Fax Guys (note 19) 1,951 Adjustments relating to acquisitions prior to Fiscal 2020 that had open measurement periods (note 19) 1,476 Adjustments on account of foreign exchange ( 3,774 ) Balance as of June 30, 2020 4,672,356 Adjustments relating to acquisitions prior to Fiscal 2021 that had open measurement periods (note 19) ( 2,002 ) Impact of foreign exchange rate changes 21,319 Balance as of June 30, 2021 $ 4,691,673 144 NOTE 8— ACQUIRED INTANGIBLE ASSETS As of June 30, 2021 Cost Accumulated Amortization Net Technology assets $ 1,003,730 $ ( 635,965 ) $ 367,765 Customer assets 1,386,533 ( 567,038 ) 819,495 Total $ 2,390,263 $ ( 1,203,003 ) $ 1,187,260 As of June 30, 2020 Cost Accumulated Amortization Net Technology assets $ 1,084,144 $ ( 502,376 ) $ 581,768 Customer assets 1,434,832 ( 404,036 ) 1,030,796 Total $ 2,518,976 $ ( 906,412 ) $ 1,612,564 Where applicable, the above balances as of June 30, 2021 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the year ended June 30, 2021. The impact of this resulted in a reduction of $ 85.9 million to technology assets and $ 54.0 million to customer assets. The weighted average amortization periods for acquired technology and customer intangible assets are approximately five years and seven years , respectively. The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2022 $ 398,979 2023 317,017 2024 236,042 2025 123,425 2026 79,625 2027 and thereafter 32,172 Total $ 1,187,260 NOTE 9— PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets: As of June 30, 2021 As of June 30, 2020 Deposits and restricted cash $ 3,027 $ 7,464 Capitalized costs to obtain a contract 22,601 18,134 Short-term prepaid expenses and other current assets 72,923 110,838 Total $ 98,551 $ 136,436 Other assets: As of June 30, 2021 As of June 30, 2020 Deposits and restricted cash $ 11,577 $ 11,612 Capitalized costs to obtain a contract 50,299 43,029 Investments 121,777 76,002 Long-term prepaid expenses and other long-term assets 25,241 23,824 Total $ 208,894 $ 154,467 145 Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements. Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see note 3 "Revenues"). Investments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 %. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value, is recorded as a component of Other income (expense), net in our Consolidated Statements of Income (see note 23 "Other Income (Expense), Net"). During the year ended June 30, 2021, our share of income (loss) from these investments was $ 62.9 million (year ended June 30, 2020 and 2019 — $ 8.7 million and $ 13.7 million, respectively). Prepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets. NOTE 10— ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities: As of June 30, 2021 As of June 30, 2020 Accounts payable—trade $ 57,500 $ 41,469 Accrued salaries, incentives and commissions 214,884 155,496 Accrued liabilities 82,204 78,793 Accrued sales and other tax liabilities 31,583 50,255 Accrued interest on Senior Notes 31,161 30,761 Amounts payable in respect of restructuring and other special charges 4,396 12,185 Asset retirement obligations 1,864 4,355 Total $ 423,592 $ 373,314 Long-term accrued liabilities: As of June 30, 2021 As of June 30, 2020 Amounts payable in respect of restructuring and other special charges $ 4,359 $ 13,768 Other accrued liabilities 10,681 8,215 Asset retirement obligations 13,790 12,972 Total $ 28,830 $ 34,955 Asset retirement obligations We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of June 30, 2021, the present value of this obligation was $ 15.7 million (June 30, 2020—$ 17.3 million), with an undiscounted value of $ 16.4 million (June 30, 2020—$ 18.7 million). 146 NOTE 11— LONG-TERM DEBT As of June 30, 2021 As of June 30, 2020 Total debt Senior Notes 2030 $ 900,000 $ 900,000 Senior Notes 2028 900,000 900,000 Senior Notes 2026 850,000 850,000 Term Loan B 967,500 977,500 Revolver — 600,000 Total principal payments due 3,617,500 4,227,500 Premium on Senior Notes 2026 4,070 4,756 Debt issuance costs ( 32,711 ) ( 37,945 ) Total amount outstanding 3,588,859 4,194,311 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Revolver — 600,000 Total current portion of long-term debt 10,000 610,000 Non-current portion of long-term debt $ 3,578,859 $ 3,584,311 Senior Unsecured Fixed Rate Notes Senior Notes 2030 On February 18, 2020, OpenText Holdings, Inc. a wholly-owned indirect subsidiary of the Company, issued $ 900 million in aggregate principal amount of 4.125 % Senior Notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased. For the year ended June 30, 2021, we recorded interest expense of $ 37.0 million relating to Senior Notes 2030 (year ended June 30, 2020—$ 13.7 million). Senior Notes 2028 On February 18, 2020, we issued $ 900 million in aggregate principal amount of 3.875 % Senior Notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased. For the year ended June 30, 2021, we recorded interest expense of $ 34.8 million relating to Senior Notes 2028 (year ended June 30, 2020—$ 12.9 million). Senior Notes 2026 On May 31, 2016, we issued $ 600 million in aggregate principal amount of 5.875 % Senior Notes due 2026 (Senior Notes 2026) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2026 bear interest at a rate of 147 5.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016. Senior Notes 2026 will mature on June 1, 2026, unless earlier redeemed, in accordance with their terms, or repurchased. On December 20, 2016, we issued an additional $ 250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75 %. The additional notes have identical terms, are fungible with and are a part of a single series with the previously issued $ 600 million aggregate principal amount of Senior Notes 2026. The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, is $ 850 million. For the year ended June 30, 2021, we recorded interest expense of $ 49.9 million relating to Senior Notes 2026 (year ended June 30, 2020 and 2019— $ 49.9 million, respectively). Term Loan B On May 30, 2018, we refinanced our existing term loan facility, by entering into a new $ 1 billion term loan facility (Term Loan B), whereby we borrowed $ 1 billion on that day and repaid in full the loans under our prior $ 800 million term loan facility originally entered into on January 16, 2014. Borrowings under Term Loan B are secured by a first charge over substantially all of our assets on a pari passu basis with the Revolver (defined below). Term Loan B has a seven year term, maturing in May 2025, and repayments made under Term Loan B are equal to 0.25 % of the principal amount in equal quarterly installments for the life of Term Loan B, with the remainder due at maturity. Borrowings under Term Loan B currently bear a floating rate of interest equal to 1.75 % plus LIBOR. As of June 30, 2021, the outstanding balance on the Term Loan B bears an interest rate of 1.84 %. For more information regarding the impact of LIBOR, see "Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against" included within Part I, Item 1A of this Annual Report on Form 10-K. Under Term Loan B, we must maintain a “consolidated net leverage” ratio of no more than 4 :1 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of June 30, 2021, our consolidated net leverage ratio was 1.5 :1. For the year ended June 30, 2021, we recorded interest expense of $ 18.6 million relating to Term Loan B (year ended June 30, 2020 and 2019—$ 33.3 million and $ 41.1 million, respectively). Revolver On October 31, 2019, we amended our committed revolving credit facility (the Revolver) to increase the total commitments under the Revolver from $ 450 million to $ 750 million as well as to extend the maturity from May 5, 2022 to October 31, 2024. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with Term Loan B. The Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of LIBOR plus a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25 % to 1.75 %. For more information regarding the impact of LIBOR, see "Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against" included within Part I, Item 1A of this Annual Report on Form 10-K. During the second quarter of Fiscal 2020, we drew down $ 750 million from the Revolver to partially fund the acquisition of Carbonite. In February 2020, we repaid $ 750 million drawn under the Revolver with a portion of the proceeds from the Senior Notes 2030 and Senior Notes 2028. In March 2020, we drew down $ 600 million from the Revolver as a preemptive measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. As of June 30, 2020, the proceeds from the $ 600 million draw down remained outstanding and were presented within "Cash and cash equivalents" and "Current portion of long-term debt" on the Consolidated Balance Sheets. During the second quarter of Fiscal 2021, we repaid $ 600 million previously drawn on the Revolver using cash on hand. As of June 30, 2021, we had no outstanding balance under the Revolver. During the year ended June 30, 2021, we recorded interest expense of $ 3.6 million relating to amounts previously drawn (year ended June 30, 2020 and 2019— $ 7.7 million and nil , respectively). Debt Issuance Costs and Premium on Senior Notes Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes 2026, Senior Notes 2028 and Senior Notes 2030 (collectively referred to as the Senior Notes) and are being amortized through interest expense over the respective terms of the Senior Notes and Term Loan B and the Revolver using the effective interest method. 148 The premium on Senior Notes 2026 represents the excess of the proceeds received over the face value of Senior Notes 2026. This premium is amortized as a reduction to interest expense over the term of Senior Notes 2026 using the effective interest method. NOTE 12— PENSION PLANS AND OTHER POST RETIREMENT BENEFITS The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH (GXS GER), GXS Philippines, Inc. (GXS PHP) and other plans as of June 30, 2021 and June 30, 2020: As of June 30, 2021 Total benefit obligation Current portion of benefit obligation (1) Non-current portion of benefit obligation CDT defined benefit plan $ 32,865 $ 880 $ 31,985 GXS GER defined benefit plan 23,861 1,058 22,803 GXS PHP defined benefit plan 10,973 42 10,931 Other plans 9,594 802 8,792 Total $ 77,293 $ 2,782 $ 74,511 As of June 30, 2020 Total benefit obligation Current portion of benefit obligation (1) Non-current portion of benefit obligation CDT defined benefit plan $ 32,851 $ 777 $ 32,074 GXS GER defined benefit plan 24,105 943 23,162 GXS PHP defined benefit plan 10,270 115 10,155 Other plans 8,590 852 7,738 Total $ 75,816 $ 2,687 $ 73,129 (1) The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Consolidated Balance Sheets (see note 10 "Accounts Payable and Accrued Liabilities"). Defined Benefit Plans CDT Plan CDT sponsors an unfunded defined benefit pension plan covering substantially all CDT employees (CDT plan) which provides for old age, disability and survivors’ benefits. Benefits under the CDT plan are generally based on age at retirement, years of service and the employee’s annual earnings. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. GXS GER Plan As part of our acquisition of GXS Group, Inc. (GXS) in Fiscal 2014, we assumed an unfunded defined benefit pension plan covering certain German employees which provides for old age, disability and survivors' benefits. The GXS GER plan has been closed to new participants since 2006. Benefits under the GXS GER plan are generally based on a participant’s remuneration, date of hire, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. GXS PHP Plan As part of our acquisition of GXS in Fiscal 2014, we assumed a primarily unfunded defined benefit pension plan covering substantially all of the GXS Philippines employees which provides for retirement, disability and survivors' benefits. Benefits under the GXS PHP plan are generally based on a participant’s remuneration, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Aside from an initial contribution which has a fair value of $ 0.04 million as of June 30, 2021, no additional contributions have been made since the inception of the plan. 149 The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated: As of June 30, 2021 As of June 30, 2020 CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Benefit obligation—beginning of fiscal year $ 32,851 $ 24,105 $ 10,270 $ 67,226 $ 35,836 $ 26,739 $ 6,904 $ 69,479 Service cost 473 206 1,822 2,501 572 319 1,247 2,138 Interest cost 505 364 469 1,338 459 337 368 1,164 Benefits paid ( 800 ) ( 1,027 ) ( 19 ) ( 1,846 ) ( 644 ) ( 926 ) ( 792 ) ( 2,362 ) Actuarial (gain) loss ( 1,976 ) ( 1,118 ) ( 1,853 ) ( 4,947 ) ( 3,073 ) ( 2,083 ) 2,333 ( 2,823 ) Foreign exchange (gain) loss 1,812 1,331 284 3,427 ( 299 ) ( 281 ) 210 ( 370 ) Benefit obligation—end of period 32,865 23,861 10,973 67,699 32,851 24,105 10,270 67,226 Less: Current portion ( 880 ) ( 1,058 ) ( 42 ) ( 1,980 ) ( 777 ) ( 943 ) ( 115 ) ( 1,835 ) Non-current portion of benefit obligation $ 31,985 $ 22,803 $ 10,931 $ 65,719 $ 32,074 $ 23,162 $ 10,155 $ 65,391 The following are details of net pension expense relating to the following pension plans: Year Ended June 30, 2021 2020 2019 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 473 $ 206 $ 1,822 $ 2,501 $ 572 $ 319 $ 1,247 $ 2,138 $ 550 $ 566 $ 771 $ 1,887 Interest cost 505 364 469 1,338 459 337 368 1,164 642 489 300 1,431 Amortization of actuarial (gains) and losses 705 113 ( 1 ) 817 939 244 ( 288 ) 895 696 130 ( 562 ) 264 Net pension expense $ 1,683 $ 683 $ 2,290 $ 4,656 $ 1,970 $ 900 $ 1,327 $ 4,197 $ 1,888 $ 1,185 $ 509 $ 3,582 Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under "Interest and other related expense, net" on our Consolidated Statements of Income. In determining the fair value of the pension plan benefit obligations as of June 30, 2021 and June 30, 2020, respectively, we used the following weighted-average key assumptions: As of June 30, 2021 As of June 30, 2020 CDT GXS GER GXS PHP CDT GXS GER GXS PHP Assumptions: Salary increases 1.50 % 1.50 % 5.00 % 1.75 % 2.50 % 6.50 % Pension increases 1.50 % 1.50 % N/A 1.50 % 2.00 % N/A Discount rate 1.39 % 1.39 % 5.00 % 1.46 % 1.46 % 3.50 % Normal retirement age 65 - 67 65 - 67 60 65 - 67 65 - 67 60 Employee fluctuation rate: to age 20 — % — % 13.98 % — % — % 12.19 % to age 25 — % — % 7.10 % — % — % 16.58 % to age 30 1.00 % — % 3.00 % 1.00 % — % 13.97 % to age 35 0.50 % — % 2.44 % 0.50 % — % 10.77 % to age 40 — % — % 2.59 % — % — % 7.39 % to age 45 0.50 % — % 1.15 % 0.50 % — % 3.28 % to age 50 0.50 % — % — % 0.50 % — % — % from age 51 1.00 % — % — % 1.00 % — % — % 150 Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, CDT GXS GER GXS PHP 2022 880 1,058 42 2023 960 1,046 356 2024 1,039 1,047 140 2025 1,086 1,071 192 2026 1,123 1,059 202 2027 to 2031 6,501 5,142 2,516 Total $ 11,589 $ 10,423 $ 3,448 Other Plans Other plans include defined benefit pension plans that are offered by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. These other plans are primarily unfunded, with the aggregate projected benefit obligation included in our pension liability. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. NOTE 13— SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Cash Dividends For the year ended June 30, 2021, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.7770 per Common Share in the aggregate amount of $ 210.7 million, which we paid during the same period (year ended June 30, 2020 and 2019—$ 0.6984 and $ 0.6300 per Common Share, respectively, in the aggregate amount of $ 188.7 million and $ 168.9 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 year ended June 30, 2021, we repurchased 1,455,088 of our Common Shares on the open market, at a cost of $ 64.8 million for potential reissuance under our LTIP or other plans, described below (year ended June 30, 2020 and 2019— 300,000 and 726,059 Common Shares, respectively, at a cost of $ 12.4 million and $ 26.5 million, respectively). During the year ended June 30, 2021, we reissued 509,721 Common Shares from treasury stock in connection with the settlement of awards and other plans (year ended June 30, 2020 and 2019— 480,574 and 613,524 Common Shares, respectively). Share Repurchase Plan On November 5, 2020, the Board authorized a share repurchase plan (Repurchase Plan), pursuant to which we may 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. During the year ended June 30, 2021, we repurchased and cancelled 2,500,000 Common Shares for $ 119.1 million under the Repurchase Plan. 151 Share-Based Payments Total share-based compensation expense for the periods indicated below is detailed as follows: Year Ended June 30, 2021 2020 2019 Stock options $ 15,639 $ 9,779 $ 10,232 Performance Share Units (issued under LTIP) 9,898 5,997 3,461 Restricted Share Units (issued under LTIP) 7,358 5,943 5,917 Restricted Share Units (other) 10,561 174 175 Deferred Share Units (directors) 3,396 3,345 3,133 Employee Stock Purchase Plan 5,117 4,294 3,852 Total share-based compensation expense $ 51,969 $ 29,532 $ 26,770 Option Plans A summary of stock options outstanding under our 2004 Stock Option Plan 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, as determined by the Board of Directors Options granted to date 38,348,857 Options exercised to date ( 20,798,129 ) Options cancelled to date ( 9,437,154 ) Options outstanding 8,113,574 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 $ 22.68 - $ 48.74 Expiration dates 8/1/2021 - 5/10/2028 Summary of Outstanding Stock Options The following table summarizes information regarding stock options outstanding at June 30, 2021: Options Outstanding Options Exercisable Range of Exercise Prices Number of options Outstanding as of June 30, 2021 Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of options Exercisable as of June 30, 2021 Weighted Average Exercise Price $ 22.68 — $ 33.06 1,102,966 2.38 $ 30.61 943,933 $ 30.27 33.07 — 34.60 712,037 3.14 34.16 507,976 34.09 34.61 — 38.30 874,882 4.90 36.72 358,255 36.10 38.31 — 39.02 634,760 5.10 38.76 144,703 38.76 39.03 — 39.98 704,352 4.21 39.34 312,972 39.34 39.99 — 43.22 821,355 5.35 40.74 176,519 40.46 43.23 — 45.40 538,625 5.60 44.99 123,125 44.99 45.41 — 46.88 2,382,097 6.11 45.81 — — 46.89 — 48.34 200,000 6.86 47.94 — — 48.35 — 48.74 142,500 6.61 48.74 — — $ 22.68 — $ 48.74 8,113,574 4.88 $ 40.16 2,567,483 $ 34.83 As of June 30, 2021, an aggregate of 8,113,574 options to purchase Common Shares were outstanding and an additional 11,251,577 options to purchase Common Shares were available for issuance under our stock option plans. Our stock options 152 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 year ended June 30, 2021 and 2020 are as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2020 7,429,537 $ 36.18 4.78 $ 49,574 Granted 3,208,209 45.77 Exercised ( 1,605,134 ) 30.88 Forfeited or expired ( 919,038 ) 43.75 Outstanding at June 30, 2021 8,113,574 $ 40.16 4.88 $ 86,297 Exercisable at June 30, 2021 2,567,483 $ 34.83 3.47 $ 41,005 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: Year Ended June 30, 2021 2020 2019 Weighted–average fair value of options granted $ 8.45 $ 6.88 $ 8.39 Weighted-average assumptions used: Expected volatility 26.26 % 22.63 % 25.72 % Risk–free interest rate 0.24 % 1.30 % 2.57 % Expected dividend yield 1.55 % 1.64 % 1.54 % Expected life (in years) 4.59 4.12 4.44 Forfeiture rate (based on historical rates) 7 % 7 % 6 % Average exercise share price $ 45.76 $ 41.81 $ 38.81 153 For the periods in which performance options were granted, as indicated, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Year Ended June 30, 2021 Weighted–average fair value of options granted $ 10.18 Derived service period (in years) 1.80 Weighted-average assumptions used: Expected volatility 28.00 % Risk–free interest rate 0.42 % Expected dividend yield 1.70 % Average exercise share price $ 45.81 During the year ended June 30, 2021, we granted 750,000 performance options, which are included in the summary of stock option plan activity above. There were no performance options granted during the year ended June 30, 2020 and 2019, respectively. As of June 30, 2021, the total compensation cost related to the unvested stock option awards not yet recognized was $ 38.7 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 no t 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 year ended June 30, 2021 was $ 25.0 million (year ended June 30, 2020 and 2019—$ 26.6 million and $ 21.0 million, respectively). For the year ended June 30, 2021, cash in the amount of $ 49.6 million was received as the result of the exercise of options granted under share-based payment arrangements (year ended June 30, 2020 and 2019—$ 41.3 million and $ 35.6 million, respectively). The tax benefit realized by us during the year ended June 30, 2021 from the exercise of options eligible for a tax deduction was $ 2.3 million (year ended June 30, 2020 and 2019—$ 1.9 million and $ 2.9 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 June 30, 2021, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $ 28.8 million, which is expected to be recognized over a weighted average period of 1.8 years. 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. LTIP 2020 Grants made in Fiscal 2018 under the LTIP (collectively referred to as LTIP 2020), consisting of PSUs and RSUs, took effect in Fiscal 2018 starting on August 7, 2017. We settled the LTIP 2020 awards by issuing 292,401 Common Shares from treasury stock during the second quarter of Fiscal 2021, with a cost of $ 11.2 million. 154 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 expect to settle the LTIP 2021 awards in stock. 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. Restricted Share Units (RSUs) During the year ended June 30, 2021, we granted 484,956 RSUs to employees in accordance with employment and other non-LTIP related agreements (year ended June 30, 2020 and 2019— 15,000 RSUs and nil , respectively). RSUs vest over a specified contract date, typically three years from the respective date of grants. As of June 30, 2021, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 9.0 million, which is expected to be recognized over a weighted average period of 2.1 years. We expect to settle RSU awards in stock. During the year ended June 30, 2021, we did no t issue any Common Shares from treasury stock in connection with the settlement of vested RSUs (year ended June 30, 2020 and 2019— 3,334 and 22,627 Common Shares, respectively, with a cost of $ 0.1 million and $ 0.7 million, respectively). Deferred Share Units (DSUs) During the year ended June 30, 2021, we granted 85,428 DSUs, respectively, to certain non-employee directors (year ended June 30, 2020 and 2019— 82,733 and 100,271 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 year ended June 30, 2021, we issued 23,640 Common Shares from treasury stock, at a cost of $ 1.1 million, in connection with the settlement of vested DSUs (year ended June 30, 2020 and 2019— nil and 51,794 Common Shares, respectively, with a cost of nil and $ 2.0 million respectively). Employee Stock Purchase Plan (ESPP) Our ESPP offers employees a purchase price discount of 15 %. During the year ended June 30, 2021, 769,031 Common Shares were eligible for issuance to employees enrolled in the ESPP (year ended June 30, 2020 and 2019— 742,961 and 696,091 Common Shares, respectively). During the year ended June 30, 2021, cash in the amount of $ 30.5 million was received from employees relating to the ESPP (year ended June 30, 2020 and 2019 —$ 25.3 million and $ 22.2 million, respectively). 155 NOTE 14— GUARANTEES AND CONTINGENCIES We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total July 1, 2021 - June 30, 2022 July 1, 2022 - June 30, 2024 July 1, 2024 - June 30, 2026 July 1, 2026 and beyond Long-term debt obligations (1) $ 4,514,954 $ 149,942 $ 299,371 $ 2,047,391 $ 2,018,250 Purchase obligations for contracts not accounted for as lease obligations (2) 70,646 42,887 27,759 — — $ 4,585,600 $ 192,829 $ 327,130 $ 2,047,391 $ 2,018,250 (1) Includes interest up to maturity and principal payments. Please see note 11 "Long-Term Debt" for more details. (2) For contractual obligations relating to leases and purchase obligations accounted for under Topic 842, please see note 6 "Leases". Guarantees and Indemnifications We have entered into customer agreements which may include provisions to indemnify our customers against third party claims that our software products or services infringe certain third party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Consolidated Financial Statements. Occasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows. Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Annual Report on Form 10-K, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters. Contingencies IRS Matter As we have previously disclosed, the United States Internal Revenue Service (IRS) has been examining certain of our tax returns for our fiscal year ended June 30, 2010 (Fiscal 2010) through Fiscal 2012, and in connection with those examinations has been reviewing our internal reorganization in Fiscal 2010 and Fiscal 2012 to consolidate certain intellectual property ownership in Luxembourg and Canada and our integration of certain acquisitions into the resulting structure. We also previously disclosed that the examinations may lead to proposed adjustments to our taxes that may be material, individually or in the aggregate, and that we had not recorded any material accruals for any such potential adjustments in our Consolidated Financial Statements. We previously disclosed that, as part of these examinations, on July 17, 2015 we received from the IRS an initial Notice of Proposed Adjustment (NOPA) in draft form, for Fiscal 2010 (the 2010 NOPA), and on July 11, 2018, we also received, consistent with previously disclosed expectations, a draft NOPA for Fiscal 2012 (the 2012 NOPA). 156 On January 7, 2019, we received from the IRS official notification of proposed adjustments to our taxable income for Fiscal 2010 and Fiscal 2012, together with the 2010 NOPA and 2012 NOPA in final form. As of December 31, 2020, our estimated potential aggregate liability, as originally proposed by the IRS under the 2010 NOPA and the 2012 NOPA, including additional state income taxes plus penalties and continually accruing interest that may be due, would have been approximately $ 830 million, comprised of approximately $ 430 million in U.S. federal and state taxes, approximately $ 130 million of penalties, and approximately $ 270 million of interest. As previously disclosed, we disagree with the IRS’ positions and have been vigorously contesting the proposed adjustments to our taxable income, along with the proposed penalties and interest. On December 21, 2020, we entered into a closing agreement with the IRS resolving all of the proposed adjustments to our taxable income for Fiscal 2010 and Fiscal 2012 (the IRS Settlement). The IRS Settlement resulted in charges of $ 300.5 million during the year ended June 30, 2021 to "Provision for (recovery of) income taxes". In connection with the IRS Settlement, during the year ended June 30, 2021, we made aggregate payments to the IRS of $ 288.6 million in U.S. federal taxes and interest and $ 11.0 million of certain associated state tax and interest payments. As of June 30, 2021, the outstanding settlement amount of approximately $ 0.9 million is recorded within "Income taxes payable" in our Consolidated Balance Sheets. Interest at the applicable statutory rates will continue to accrue until the time of payment. The IRS Settlement also eliminates approximately $ 90 million in future withholding taxes that we had expected to incur over the next 10 years. We believe the IRS Settlement to be in the best interest of all stakeholders, as it closes all past, present and future items related to this matter. The IRS Settlement provides finality to this longstanding matter. For additional information regarding the history of this IRS matter, please see note 14 "Guarantees and Contingencies" in our Annual Report on Form 10-K for Fiscal 2020. CRA Matter As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2021, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $ 74 million. As of June 30, 2021, we have provisionally paid approximately $ 28 million in order to fully preserve our rights to object to the CRA's audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute. This amount is recorded within "Long-term income taxes recoverable" on the Consolidated Balance Sheets as of June 30, 2021. The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 would, as drafted, increase our taxable income by approximately $ 90 million to $ 100 million for each of those years, as well as impose a 10 % penalty on the proposed adjustment to income. Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability. We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit. We have filed notices of objection for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016. We are currently seeking competent authority consideration under applicable international treaties in respect of these reassessments. Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above. The CRA is also currently auditing Fiscal 2017 on a basis that we strongly disagree with and will vigorously contest. The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016. In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm. In conjunction with the Fiscal 2017 audit, the CRA issued a proposal letter dated April 7, 2021 (Proposal Letter) indicating to us that it proposes to reassess our Fiscal 2017 tax year to reduce the depreciable basis of these assets. We are currently engaged in dialogue with the CRA regarding the 2017 audit and expect to be making extensive submissions in support of our position shortly. CRA’s currently-proposed position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit. Other aspects of CRA’s currently-proposed position 157 for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position. If the CRA determines to issue a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter and we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $ 470 million. Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada. We strongly disagree with the CRA’s position for Fiscal 2017 and intend to vigorously defend our original filing position. We will continue to vigorously contest the proposed adjustments to our taxable income and any penalty and interest assessments, as well as any proposed reduction to the basis of our depreciable property. We are confident that our original tax filing positions were appropriate. Accordingly, as of the date of this Annual Report on Form 10-K, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Consolidated Financial Statements. The CRA has also advised us that they are currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019. Carbonite Class Action Complaint On August 1, 2019, prior to our acquisition of Carbonite, a purported stockholder of Carbonite filed a putative class action complaint against Carbonite, its former Chief Executive Officer, Mohamad S. Ali, and its former Chief Financial Officer, Anthony Folger, in the United States District Court for the District of Massachusetts captioned Ruben A. Luna, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19-cv-11662-LTS). The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint generally alleges that the defendants made materially false and misleading statements in connection with Carbonite’s Server Backup VM Edition, and seeks, among other things, the designation of the action as a class action, an award of unspecified compensatory damages, costs and expenses, including counsel fees and expert fees, and other relief as the court deems appropriate. On August 23, 2019, a nearly identical complaint was filed in the same court captioned William Feng, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19- cv-11808-LTS) (together with the Luna Complaint, the “Securities Actions”). On November 21, 2019, the court consolidated the Securities Actions, appointed a lead plaintiff, and designated a lead counsel. On January 15, 2020, the lead plaintiff filed a consolidated amended complaint generally making the same allegations and seeking the same relief as the complaint filed on August 1, 2019. The defendants moved to dismiss the Securities Actions on March 10, 2020. The motion was fully briefed in June 2020 and a hearing on the motion to dismiss the Securities Actions was held on October 15, 2020. Following the hearing, on October 22, 2020, the court granted with prejudice the defendants’ motion to dismiss the Securities Actions. On November 20, 2020, the lead plaintiff filed a notice of appeal to the Court of Appeals for the First Circuit. The appeal has been fully briefed and oral arguments before the Court of Appeals for the First Circuit were held on July 29, 2021. The court’s decision on the appeal is expected in the coming months and the defendants remain confident in the District Court’s dismissal with prejudice of the Securities Actions. Carbonite vs Realtime Data On February 27, 2017, prior to our acquisition of Carbonite, a non-practicing entity named Realtime Data LLC (Realtime Data) filed a lawsuit against Carbonite in the U.S. District Court for the Eastern District of Texas "Realtime Data LLC v. Carbonite, Inc. et al (No 6:17-cv-00121-RWS-JDL)", alleging that certain of Carbonite’s cloud storage services infringe upon certain patents held by Realtime Data. Realtime Data’s complaint against Carbonite sought damages in an unspecified amount and injunctive relief. On December 19, 2017, the U.S. District Court for the Eastern District of Texas transferred the case to the U.S District Court for the District of Massachusetts (No. 1:17-cv-12499). Realtime Data has also filed numerous other patent suits on the asserted patents against other companies around the country. In one of those suits, filed in the U.S. District Court for the District of Delaware, the Delaware Court on July 29, 2019 dismissed the lawsuit after declaring invalid three of the four patents asserted by Realtime Data against Carbonite; that decision was appealed to the U.S. Court of Appeals for the Federal Circuit. By way of Order dated August 19, 2019, the U.S. District Court for the District of Massachusetts stayed the action against Carbonite pending the aforementioned appeal of the dismissal in the Delaware lawsuit. On October 23, 2020, the Appeals Court vacated and remanded the Delaware Court’s decision. Following the Appeals Court's decision, the Massachusetts District Court lifted the stay on the action against Carbonite. On January 21, 2021, the Court held a hearing to construe the claims of the asserted patents. As to the fourth patent asserted against Carbonite, the U.S. Patent & Trademark Office Patent Trial and Appeal Board on September 24, 2019 invalidated certain claims of that patent, including certain claims that had been asserted against Carbonite, and the parties jointly stipulated to dismiss the patent from the action. No trial date has been set in the action against Carbonite. We are vigorously defending the matter. We have not accrued a loss contingency related to this matter because litigation related to a non-practicing entity is inherently unpredictable. Although a loss is reasonably possible, an unfavorable outcome is not considered by management to be probable at this time and we remain unable to reasonably estimate a possible loss or range of loss associated with this litigation. 158 Please also see Part I, Item 1A "Risk Factors" in this Annual Report on Form 10-K. NOTE 15— INCOME TAXES Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates. The effective tax rate increased to a provision of 52.2 % for the year ended June 30, 2021, compared to a provision of 32.1 % for the year ended June 30, 2020. Tax expense increased by $ 229.1 million from $ 110.8 million during the year ended June 30, 2020 to $ 339.9 million during the year ended June 30, 2021. This was primarily due to (i) an increase of $ 300.5 million relating to the IRS Settlement, (ii) an increase of $ 76.4 million relating to higher net income including the impact of foreign rates and (iii) an increase of $ 7.0 million related to the one-time benefit from the US CARES Act in Fiscal 2020 that did not recur in Fiscal 2021. These were partially offset by (i) a decrease of $ 66.9 million for changes in unrecognized tax benefits, (ii) a decrease of $ 34.1 million related to tax benefits of internal reorganizations that occurred in Fiscal 2021 (iii) a decrease of $ 33.2 million related to the US Base Erosion Anti-Abuse Tax (US BEAT), (iv) a decrease of $ 5.7 million for net changes in valuation allowance, (v) a decrease of $ 3.1 million related to permanent differences and (vi) a decrease of $ 3.1 million related to differences in tax filings being higher than estimates. The remainder of the difference was due to normal course movements and non-material items. A reconciliation of the combined Canadian federal and provincial income tax rate with our effective income tax rate is as follows: Year Ended June 30, 2021 2020 2019 Expected statutory rate 26.50 % 26.50 % 26.50 % Expected provision for income taxes $ 172,454 $ 91,479 $ 116,752 Effect of foreign tax rate differences ( 4,309 ) 218 ( 1,344 ) Change in valuation allowance ( 5,900 ) ( 222 ) ( 5,045 ) Effect of permanent differences ( 1,885 ) 1,215 ( 577 ) Effect of changes in unrecognized tax benefits ( 86,170 ) ( 19,284 ) 31,992 Effect of withholding taxes 8,500 8,036 2,097 Difference in tax filings from provision ( 2,162 ) 933 ( 250 ) Effect of tax credits for research and development ( 16,086 ) ( 14,947 ) ( 13,550 ) Effect of accrual for undistributed earnings 3,209 4,233 ( 13,112 ) Effect of US BEAT 7,967 41,207 16,030 Effect of CARES Act — ( 7,009 ) — Effect of IRS Settlement 300,460 — — Impact of internal reorganization of subsidiaries ( 33,676 ) 451 16,471 Other Items ( 2,496 ) 4,527 5,473 $ 339,906 $ 110,837 $ 154,937 The following is a geographical breakdown of income before the provision for income taxes: Year Ended June 30, 2021 2020 2019 Domestic income (loss) $ 462,315 $ 241,862 $ 269,331 Foreign income 188,455 103,343 171,243 Income before income taxes $ 650,770 $ 345,205 $ 440,574 159 The provision for (recovery of) income taxes consisted of the following: Year Ended June 30, 2021 2020 2019 Current income taxes (recoveries): Domestic $ 310,615 $ 12,547 $ 7,862 Foreign ( 43,748 ) 46,902 99,650 266,867 59,449 107,512 Deferred income taxes (recoveries): Domestic 111,232 68,580 52,889 Foreign ( 38,193 ) ( 17,192 ) ( 5,464 ) 73,039 51,388 47,425 Provision for (recovery of) income taxes $ 339,906 $ 110,837 $ 154,937 As of June 30, 2021, we have $ 305.7 million of domestic non-capital loss carryforwards. In addition, we have $ 413.0 million of foreign non-capital loss carryforwards of which $ 73.1 million have no expiry date. The remainder of the domestic and foreign losses expire between 2022 and 2039. In addition, investment tax credits of $ 59.3 million will expire between 2022 and 2041. The primary components of the deferred tax assets and liabilities are as follows, for the periods indicated below: As of June 30, 2021 2020 Deferred tax assets Non-capital loss carryforwards $ 174,486 $ 208,248 Capital loss carryforwards 5,570 152 Undeducted scientific research and development expenses 197,791 160,354 Depreciation and amortization 391,974 415,516 Restructuring costs and other reserves 24,919 21,999 Deferred revenue 11,388 60,026 Other 73,236 76,031 Total deferred tax asset $ 879,364 $ 942,326 Valuation allowance $ ( 72,888 ) $ ( 81,810 ) Deferred tax liabilities Scientific research and development tax credits $ ( 15,080 ) $ ( 14,361 ) Other ( 102,882 ) ( 83,328 ) Deferred tax liabilities $ ( 117,962 ) $ ( 97,689 ) Net deferred tax asset $ 688,514 $ 762,827 Comprised of: Long-term assets 796,738 911,565 Long-term liabilities ( 108,224 ) ( 148,738 ) $ 688,514 $ 762,827 We believe that sufficient uncertainty exists regarding the realization of certain deferred tax assets that a valuation allowance is required. We continue to evaluate our taxable position quarterly and consider factors by taxing jurisdiction, including but not limited to factors such as estimated taxable income, any historical experience of losses for tax purposes and the future growth of OpenText. 160 The aggregate changes in the balance of our gross unrecognized tax benefits (including interest and penalties) were as follows: Unrecognized tax benefits as of June 30, 2019 $ 209,242 Increases on account of current year positions 7,296 Increases on account of prior year positions 17,853 Decreases due to settlements with tax authorities ( 20,457 ) Decreases due to lapses of statutes of limitations ( 18,853 ) Unrecognized tax benefits as of June 30, 2020 $ 195,081 Increases on account of current year positions 1,279 Increases on account of prior year positions 773 Decreases due to settlements with tax authorities ( 158,070 ) Decreases due to lapses of statutes of limitations ( 2,314 ) Unrecognized tax benefits as of June 30, 2021 $ 36,749 Included in the above tabular reconciliation are unrecognized tax benefits of $ 6.7 million relating to deferred tax assets in jurisdictions in which these deferred tax assets are offset with valuation allowances. The net unrecognized tax benefit excluding these deferred tax assets is $ 29.9 million as of June 30, 2021 (June 30, 2020—$ 180.0 million). We recognize interest expense and penalties related to income tax matters in income tax expense. For the year ended June 30, 2021, 2020 and 2019, respectively, we recognized the following amounts as income tax-related interest expense and penalties: Year Ended June 30, 2021 2020 2019 Interest expense (recoveries) $ 44,657 $ 5,764 $ 10,512 Penalties expense (recoveries) 1,125 327 945 Total $ 45,782 $ 6,091 $ 11,457 The following amounts have been accrued on account of income tax-related interest expense and penalties: As of June 30, 2021 As of June 30, 2020 Interest expense accrued (1) $ 5,166 $ 70,364 Penalties accrued (1) $ 2,605 $ 2,620 (1) These balances are primarily included within "Long-term income taxes payable" within the Consolidated Balance Sheets. We believe that it is reasonably possible that the gross unrecognized tax benefits, as of June 30, 2021, could decrease tax expense in the next 12 months by $ 3.8 million, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. Our four most significant tax jurisdictions are Canada, the United States, Luxembourg and Germany. Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The earliest fiscal years open for examination are 2012 for Germany, 2010 for the United States, 2015 for Luxembourg, and 2012 for Canada. We are subject to tax audits in all major taxing jurisdictions in which we operate and currently have tax audits open in Canada, the United States, Germany, India, Austria, Italy, France, and the Philippines. On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. Statements regarding the United States and Canada audits are included in note 14 "Guarantees and Contingencies". The timing of the resolution of income tax audits is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax audits in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. For more information relating to certain tax audits, please refer to note 14 "Guarantees and Contingencies". 161 On December 21, 2020, we entered into a closing agreement with the IRS resolving all of the proposed adjustments to our taxable income for Fiscal 2010 and Fiscal 2012. As a result, we recorded charges of $ 300.5 million during the year ended June 30, 2021 to "Provision for (recovery of) income taxes". The IRS Settlement also eliminates approximately $ 90 million in future withholding taxes that we had expected to incur over the next 10 years. We believe the IRS Settlement to be in the best interest of all stakeholders, as it closes all past, present and future items related to this matter. The IRS Settlement provides finality to this longstanding matter. During the year ended June 30, 2021, we made payments of $ 299.6 million associated with the IRS Settlement. As of June 30, 2021, the outstanding settlement amount of approximately $ 0.9 million is recorded within "Income taxes payable" in our Consolidated Balance Sheets. Please refer to note 14 "Guarantees and Contingencies" for additional details. As of June 30, 2021, we have recognized a provision of $ 27.5 million (June 30, 2020—$ 24.8 million) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future. NOTE 16— FAIR VALUE MEASUREMENT ASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. 162 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis: Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of June 30, 2021 and June 30, 2020: June 30, 2021 June 30, 2020 Fair Market Measurements using: Fair Market Measurements using: June 30, 2021 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs June 30, 2020 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Financial Assets: Foreign currency forward contracts designated as cash flow hedges (note 17) $ 1,131 $ — $ 1,131 $ — $ — $ — $ — $ — Total $ 1,131 $ — $ 1,131 $ — $ — $ — $ — $ — Financial Liabilities: Foreign currency forward contracts designated as cash flow hedges (note 17) $ — $ — $ — $ — $ ( 185 ) $ — $ ( 185 ) $ — Total $ — $ — $ — $ — $ ( 185 ) $ — $ ( 185 ) $ — Our valuation techniques used to measure the fair values of the derivative instruments, the counterparty to which has high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates. Our cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Consolidated Financial Statements at an amount that approximates the fair value (a Level 2 measurement) due to their short maturities. The fair value of our Senior Notes is determined based on observable market prices and categorized as a Level 2 measurement. As of June 30, 2021, the fair value was $ 2.7 billion (June 30, 2020—$ 2.6 billion). The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. Please see note 11 "Long-Term Debt" for further details. If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the year ended June 30, 2021 and 2020, respectively, we did not have any transfers between Level 1, Level 2 or Level 3. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended June 30, 2021, 2020, and 2019, respectively, no indications of impairments were identified and therefore no fair value measurements were required. 163 NOTE 17— DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Foreign Currency Forward Contracts We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months . We do not use foreign currency forward contracts for speculative purposes. We have designated these transactions as cash flow hedges of forecasted transactions under ASC Topic 815 “Derivatives and Hedging” (Topic 815). As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within "Other Comprehensive Income (Loss), net". The fair value of the contracts, as of June 30, 2021, is recorded within "Prepaid expenses and other current assets" and represents the net gain before tax effect that is expected to be reclassified from accumulated other comprehensive income into earnings with the next twelve months. As of June 30, 2021, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $ 66.9 million (June 30, 2020—$ 62.3 million). Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The effect of these derivative instruments on our Consolidated Financial Statements for the periods indicated below were as follows (amounts presented do not include any income tax effects). Fair Value of Derivative Instruments in the Consolidated Balance Sheets (see note 16 "Fair Value Measurement") As of June 30, 2021 As of June 30, 2020 Derivatives Balance Sheet Location Fair Value Asset (Liability) Fair Value Asset (Liability) Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ 1,131 $ ( 185 ) 164 Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Year Ended June 30, 2021 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Foreign currency forward contracts $ 5,778 Operating expenses $ 4,462 Year Ended June 30, 2020 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Foreign currency forward contracts $ ( 2,261 ) Operating expenses $ ( 1,340 ) Year Ended June 30, 2019 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Foreign currency forward contracts $ 22 Operating expenses $ ( 2,033 ) NOTE 18— SPECIAL CHARGES (RECOVERIES) Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Year Ended June 30, 2021 2020 2019 COVID-19 Restructuring Plan $ ( 8,929 ) $ 53,616 $ — Fiscal 2020 Restructuring Plan 3,669 26,680 — Restructuring Plans prior to Fiscal 2020 Restructuring Plan ( 53 ) 1,371 29,111 Acquisition-related costs 5,906 13,750 5,625 Other charges (recoveries) 1,155 5,011 983 Total $ 1,748 $ 100,428 $ 35,719 During Fiscal 2020, we entered into the COVID-19 and Fiscal 2020 Restructuring Plans (as defined below), which included the abandonment of certain leased facilities. As a result of the COVID-19 pandemic, at the time of the initial abandonment of leased facilities during the fourth quarter of Fiscal 2020, we anticipated that we would not be able to early terminate any of our lease obligations. During the year ended June 30, 2021, we recorded net recoveries of $ 29.5 million within "Special charges (recoveries)" relating to early lease terminations and assignments of previously abandoned office space. These recoveries were recorded under the COVID-19 and Fiscal 2020 Restructuring Plans, consistent with the initial abandonment. COVID-19 Restructuring Plan During the fourth quarter of Fiscal 2020, in response to the COVID-19 pandemic, we made a strategic decision to move towards a significant work from home model. We began to implement restructuring activities to streamline our operations and significantly reduce our real estate footprint around the world (COVID-19 Restructuring Plan). The COVID-19 Restructuring Plan charges relate to workforce reductions and facility costs, including the accelerated amortization associated with the abandonment of ROU assets, the write-off of fixed assets and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. With respect to the COVID-19 Restructuring Plan, at the time of initial abandonment we assumed there would be no additional sublease income, lease assignments or early terminations from vacated facilities. 165 Since the inception of the plan, $ 44.7 million has been recorded within "Special charges (recoveries)" to date. We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending restructuring liability, which is included within "Accounts payable and accrued liabilities" in our Consolidated Balance Sheets, for the year ended June 30, 2021 and 2020 is shown below. COVID-19 Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2019 $ — $ — $ — Accruals and adjustments 8,702 12,319 21,021 Cash payments ( 3,609 ) ( 321 ) ( 3,930 ) Foreign exchange and other non-cash adjustments 79 278 357 Balance payable as of June 30, 2020 5,172 12,276 17,448 Accruals and adjustments 1,983 ( 2,224 ) ( 241 ) Cash payments ( 7,172 ) ( 6,142 ) ( 13,314 ) Foreign exchange and other non-cash adjustments 272 100 372 Balance payable as of June 30, 2021 $ 255 $ 4,010 $ 4,265 During the year ended June 30, 2021, we recognized net recoveries of $ 16.0 million relating to previously abandoned office space that has since been early terminated or assigned to a third party, as discussed above. Included in these recoveries is $ 12.5 million relating to the reversal of lease liabilities (see note 6 "Leases"), with the remainder relating to other facility charges and recoveries. Additionally, during the year ended June 30, 2021, we incurred $ 7.1 million in charges related to abandoned facilities, workforce reductions and the write-off of fixed assets. During the year ended June 30, 2020, we incurred $ 27.2 million in charges related to accelerated amortization associated with the abandonment of ROU assets and $ 5.4 million in charges associated with the write-off of fixed assets. Additionally, during the year ended June 30, 2020, we incurred $ 21.0 million in charges related to abandoned facilities and workforce reductions. Fiscal 2020 Restructuring Plan During Fiscal 2020, we began to implement restructuring activities to streamline our operations (Fiscal 2020 Restructuring Plan), including in connection with our acquisitions of Carbonite and XMedius, to take further steps to improve our operational efficiency. The Fiscal 2020 Restructuring Plan charges relate to workforce reductions and facility costs, including the accelerated amortization associated with the abandonment of ROU assets, the write-off of fixed assets and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. With respect to the Fiscal 2020 Restructuring Plan, at the time of the initial abandonment we assumed there would be no additional sublease income, lease assignments or early terminations from vacated facilities. Since the inception of the plan, $ 30.3 million has been recorded within "Special charges (recoveries)" to date. We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending restructuring liability, which is included within "Accounts payable and accrued liabilities" in our Consolidated Balance Sheets, for the year ended June 30, 2021 and 2020 is shown below. Fiscal 2020 Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2019 $ — $ — $ — Accruals and adjustments 5,993 6,734 12,727 Cash payments ( 4,412 ) ( 261 ) ( 4,673 ) Foreign exchange and other non-cash adjustments ( 5 ) ( 31 ) ( 36 ) Balance payable as of June 30, 2020 1,576 6,442 8,018 Accruals and adjustments 11,444 ( 869 ) 10,575 Cash payments ( 10,828 ) ( 3,369 ) ( 14,197 ) Foreign exchange and other non-cash adjustments 25 ( 338 ) ( 313 ) Balance payable as of June 30, 2021 $ 2,217 $ 1,866 $ 4,083 166 During the year ended June 30, 2021, we recognized net recoveries of $ 13.5 million relating to previously abandoned office space that has since been early terminated or assigned to a third party, as discussed above. Included in these recoveries is $ 10.1 million relating to the reversal of lease liabilities (see note 6 "Leases"), with the remainder relating to other facility charges and recoveries. Additionally, during the year ended June 30, 2021, we incurred $ 17.2 million in charges related to abandoned facilities, workforce reductions and the write-off of fixed assets. During the year ended June 30, 2020, we incurred $ 9.7 million in charges related to accelerated amortization associated with the abandonment of ROU assets and $ 4.3 million in charges associated with the write-off of fixed assets. Additionally, during the year ended June 30, 2020, we incurred $ 12.7 million in charges related to abandoned facilities and workforce reductions. Acquisition-related costs Acquisition-related costs, recorded within "Special charges (recoveries)" include direct costs of potential and completed acquisitions. Acquisition-related costs for the year ended June 30, 2021 were $ 5.9 million (year ended June 30, 2020 and 2019—$ 13.8 million and $ 5.6 million, respectively). Other charges (recoveries) For the year ended June 30, 2021, "Other charges" includes $ 1.2 million relating to other miscellaneous charges. For the year ended June 30, 2020, "Other charges" includes $ 0.7 million relating to accelerated amortization associated with the abandonment of ROU assets and $ 4.3 million relating to other miscellaneous charges. For the year ended June 30, 2019, "Other charges" includes (i) $ 1.2 million relating to one-time system implementation costs and (ii) $ 1.4 million relating to other miscellaneous charges. These charges were partially offset by a recovery of $ 1.5 million relating to certain pre-acquisition sales and use tax liabilities becoming statute barred. NOTE 19— ACQUISITIONS Fiscal 2020 Acquisitions Acquisition of XMedius On March 9, 2020, we acquired all of the equity interest in XMedius, a provider of secure information exchange and unified communication solutions, for $ 73.5 million, of which $ 0.7 million is currently unpaid in accordance with the terms of the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition complements our Customer Experience Management (CEM) and Business Network (BN) platforms. The results of operations of this acquisition have been consolidated with those of OpenText beginning March 9, 2020. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of March 9, 2020, are set forth below: Current assets $ 8,479 Non-current tangible assets 3,792 Intangible customer assets 35,910 Intangible technology assets 11,143 Liabilities assumed ( 34,602 ) Total identifiable net assets 24,722 Goodwill 48,823 Net assets acquired $ 73,545 The goodwill of $ 48.8 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $ 0.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $ 18.5 million, which represents our estimate of the fair value of the contractual obligations assumed based on a valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by $ 2.7 million. The fair value of current assets acquired includes accounts receivable with a fair value of $ 6.3 million. The gross amount receivable was $ 6.6 million, of which $ 0.3 million is expected to be uncollectible. 167 The finalization of the above purchase price allocation during the year ended June 30, 2021 did not result in any significant changes to the preliminary amounts previously disclosed. Acquisition of Carbonite On December 24, 2019, we acquired all of the equity interest in Carbonite, a leading provider of cloud-based subscription backup, disaster recovery and endpoint security to SMB, consumers, and a wide variety of partners. Total consideration for Carbonite was $ 1.4 billion paid in cash (inclusive of cash acquired). In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition increases our position in the data protection and endpoint security space, further strengthens our cloud capabilities and opens a new route to connect with customers through Carbonite's marquee SMB and consumer channels and products. The results of operations of Carbonite have been consolidated with those of OpenText beginning December 24, 2019. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of December 24, 2019, are set forth below: Current assets (inclusive of cash acquired of $ 62.9 million) $ 127,532 Non-current tangible assets (inclusive of restricted cash acquired of $ 2.4 million) 105,742 Intangible customer assets 549,500 Intangible technology assets 290,000 Liabilities assumed ( 554,320 ) Total identifiable net assets 518,454 Goodwill 851,970 Net assets acquired $ 1,370,424 The goodwill of $ 852.0 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $ 6.9 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $ 171.0 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $ 74.7 million. The fair value of current assets acquired includes accounts receivable with a fair value of $ 45.7 million. The gross amount receivable was $ 47.1 million of which $ 1.4 million of this receivable was expected to be uncollectible. The finalization of the purchase price allocation completed during the year ended June 30, 2021 did not result in any significant changes to the preliminary amounts previously disclosed. Acquisition of Dynamic Solutions Group Inc. (The Fax Guys) On December 2, 2019, we acquired certain assets and assumed certain liabilities of The Fax Guys, for $ 5.1 million. During the year ended June 30, 2021, we paid consideration of $ 1.0 million which was previously accrued. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements our Information Management portfolio. The results of operations of The Fax Guys have been consolidated with those of OpenText beginning December 2, 2019. Fiscal 2019 Acquisitions Acquisition of Catalyst Repository Systems Inc. On January 31, 2019, we acquired all of the equity interest in Catalyst, a leading provider of eDiscovery that designs, develops and supports market-leading cloud eDiscovery software. Total consideration for Catalyst was $ 71.4 million, of which $ 70.8 million was paid in cash and $ 0.6 million is currently held back and unpaid in accordance with the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our Information Management portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning January 31, 2019. 168 Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of January 31, 2019, are set forth below: Current assets $ 9,699 Non-current tangible assets 5,754 Intangible customer assets 30,607 Intangible technology assets 11,658 Liabilities assumed ( 17,891 ) Total identifiable net assets 39,827 Goodwill 31,607 Net assets acquired $ 71,434 The goodwill of $ 31.6 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $ 3.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $ 0.8 million, which represents our estimate of the fair value of the contractual obligations assumed based on a valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $ 10.8 million. The gross amount receivable was $ 11.8 million, of which $ 1.0 million was expected to be uncollectible. The finalization of the purchase price allocation during the year ended June 30, 2020 resulted in an adjustment to amounts previously disclosed of $ 0.6 million. Acquisition of Liaison Technologies, Inc. On December 17, 2018, we acquired all of the equity interest in Liaison, a leading provider of cloud-based business to business integration, for $ 310.6 million in an all cash transaction. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our Information Management portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning December 17, 2018. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of December 17, 2018, are set forth below: Current assets $ 23,006 Non-current tangible assets 5,168 Intangible customer assets 68,300 Intangible technology assets 107,000 Liabilities assumed ( 57,265 ) Total identifiable net assets 146,209 Goodwill 164,434 Net assets acquired $ 310,643 The goodwill of $ 164.4 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $ 2.2 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $ 7.6 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $ 20.5 million. The gross amount receivable was $ 22.2 million, of which $ 1.7 million was expected to be uncollectible. The finalization of the purchase price allocation during the year ended June 30, 2020 did not result in any significant changes to the preliminary amounts previously disclosed. 169 NOTE 20— SEGMENT INFORMATION ASC Topic 280, “Segment Reporting” (Topic 280), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas, and major customers. The method of determining what information, under Topic 280, to report is based on the way that an entity organizes operating segments for making operational decisions and how the entity’s management and CODM assess an entity’s financial performance. Our operations are analyzed by management and our CODM as being part of a single industry segment: the design, development, marketing and sale of Information Management software and solutions. The following table sets forth the distribution of revenues, by significant geographic area, for the periods indicated: Year Ended June 30, 2021 2020 2019 Revenues (1) : Canada $ 166,430 $ 149,457 $ 153,890 United States 1,870,620 1,719,877 1,490,863 United Kingdom 195,721 186,756 182,815 Germany 212,014 195,286 203,403 Rest of EMEA (2) 623,872 560,239 534,204 All other countries 317,458 298,121 303,580 Total revenues $ 3,386,115 $ 3,109,736 $ 2,868,755 (1) Total revenues by geographic area are determined based on the location of our end customer. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. The following table sets forth the distribution of long-lived assets, representing property and equipment, ROU assets and intangible assets, by significant geographic area, as of the periods indicated below. As of June 30, 2021 As of June 30, 2020 Long-lived assets: Canada $ 530,830 $ 651,214 United States 868,376 1,150,638 United Kingdom 14,629 13,388 Germany 60,470 117,891 Rest of EMEA (1) 116,429 75,183 All other countries 64,653 56,674 Total $ 1,655,387 $ 2,064,988 (1) EMEA primarily consists of countries in Europe, the Middle East and Africa. 170 NOTE 21— ACCUMULATED OTHER COMPREHENSIVE INCOME Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income Balance as of June 30, 2018 $ 44,634 $ ( 969 ) $ ( 10,020 ) $ 33,645 Other comprehensive income (loss) before reclassifications, net of tax ( 3,882 ) 16 ( 7,421 ) ( 11,287 ) Amounts reclassified into net income, net of tax — 1,494 272 1,766 Total other comprehensive income (loss) net, for the period ( 3,882 ) 1,510 ( 7,149 ) ( 9,521 ) Balance as of June 30, 2019 40,752 541 ( 17,169 ) 24,124 Other comprehensive income (loss) before reclassifications, net of tax ( 7,784 ) ( 1,662 ) 1,245 ( 8,201 ) Amounts reclassified into net income, net of tax — 985 917 1,902 Total other comprehensive income (loss) net, for the period ( 7,784 ) ( 677 ) 2,162 ( 6,299 ) Balance as of June 30, 2020 32,968 ( 136 ) ( 15,007 ) 17,825 Other comprehensive income (loss) before reclassifications, net of tax 42,440 4,246 3,987 50,673 Amounts reclassified into net income, net of tax — ( 3,280 ) 1,020 ( 2,260 ) Total other comprehensive income (loss) net, for the period 42,440 966 5,007 48,413 Balance as of June 30, 2021 $ 75,408 $ 830 $ ( 10,000 ) $ 66,238 NOTE 22— SUPPLEMENTAL CASH FLOW DISCLOSURES Year Ended June 30, 2021 2020 2019 Cash paid during the period for interest $ 147,996 $ 146,698 $ 138,631 Cash received during the period for interest $ 3,856 $ 11,768 $ 8,014 Cash paid during the period for income taxes (1) $ 400,137 $ 94,733 $ 80,583 (1) Included for the year ended June 30, 2021 is cash paid of $ 299.6 million relating to the IRS Settlement. Please see note 15 "Income Taxes" for additional details. NOTE 23— OTHER INCOME (EXPENSE), NET Year Ended June 30, 2021 2020 2019 Foreign exchange gains (losses) $ ( 1,273 ) $ ( 4,184 ) $ ( 4,330 ) OpenText share in net income of equity investees (1) 62,897 8,700 13,668 Loss on debt extinguishment (2) — ( 17,854 ) — Other miscellaneous income (expense) ( 190 ) 1,392 818 Total other income (expense), net $ 61,434 $ ( 11,946 ) $ 10,156 (1) OpenText’s share in net income of equity investees relates to our share of net income, which approximates fair value, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 % and these investments are accounted for using the equity method (see note 9 "Prepaid Expenses and Other Assets" for more details). (2) On March 5, 2020, we redeemed in full $ 800 million aggregate principal amount of our 5.625 % Senior Notes due 2023 (Senior Notes 2023), which resulted in a loss on debt extinguishment of $ 17.9 million. Of this, $ 6.7 million related to unamortized debt issuance costs and the remaining $ 11.2 million related to the early termination call premium. 171 NOTE 24— EARNINGS PER SHARE Basic earnings per share are computed by dividing net income, attributable to OpenText, by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share are computed by dividing net income, attributable to OpenText, by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method. Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive. Year Ended June 30, 2021 2020 2019 Basic earnings per share Net income attributable to OpenText $ 310,672 $ 234,225 $ 285,501 Basic earnings per share attributable to OpenText $ 1.14 $ 0.86 $ 1.06 Diluted earnings per share Net income attributable to OpenText $ 310,672 $ 234,225 $ 285,501 Diluted earnings per share attributable to OpenText $ 1.14 $ 0.86 $ 1.06 Weighted-average number of shares outstanding (in '000's) Basic 272,533 270,847 268,784 Effect of dilutive securities 946 970 1,124 Diluted 273,479 271,817 269,908 Excluded as anti-dilutive (1) 4,147 3,001 2,759 (1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period. NOTE 25— RELATED PARTY TRANSACTIONS Our procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products. During the year ended June 30, 2021, Mr. Stephen Sadler, a member of the Board of Directors, earned $ 37 thousand ( year ended June 30, 2020 and 2019 — $ 0.7 million and $ 0.6 million, respectively) in consulting fees from OpenText for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. NOTE 26— SUBSEQUENT EVENT Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on August 4, 2021, a dividend of $ 0.2209 per Common Share. The record date for this dividend is September 3, 2021 and the payment date is September 24, 2021. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. Item 16. Form 10-K Summary None. 172 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OPEN TEXT CORPORATION Date: August 5, 2021 By: /s/ MARK J. BARRENECHEA Mark J. Barrenechea Vice Chair, Chief Executive Officer and Chief Technology Officer (Principal Executive Officer) /s/ MADHU RANGANATHAN Madhu Ranganathan Executive Vice President and Chief Financial Officer (Principal Financial Officer) /s/ HOWARD ROSEN Howard Rosen Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) 173 DIRECTORS Signature Title Date /s/ MARK J. BARRENECHEA Vice Chair, Chief Executive Officer and Chief Technology Officer (Principal Executive Officer) August 5, 2021 Mark J. Barrenechea /S/ P. THOMAS JENKINS Chairman of the Board August 5, 2021 P. Thomas Jenkins /S/ RANDY FOWLIE Director August 5, 2021 Randy Fowlie /S/ DAVID FRASER Director August 5, 2021 David Fraser /S/ GAIL E. HAMILTON Director August 5, 2021 Gail E. Hamilton /S/ ROBERT HAU Director August 5, 2021 Robert Hau /S/ ANN M. POWELL Director August 5, 2021 Ann M. Powell /S/ STEPHEN J. SADLER Director August 5, 2021 Stephen J. Sadler /S/ HARMIT SINGH Director August 5, 2021 Harmit Singh /S/ MICHAEL SLAUNWHITE Director August 5, 2021 Michael Slaunwhite /S/ KATHARINE B. STEVENSON Director August 5, 2021 Katharine B. Stevenson /S/ DEBORAH WEINSTEIN Director August 5, 2021 Deborah Weinstein 174