What changed in this filing

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Item 9A. Controls and Procedures

2023-08-03 compared with 2022-08-05 · 1056 added, 1079 removed, 2623 unchanged (45% of the section changed)

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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.

Our management has excluded the ICFR of Zix, which we acquired on December 23, 2021 as discussed in Note 19 “Acquisitions” to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Total revenues subject to Zix’s ICFR represented 2.5% of our consolidated total revenues for the fiscal year ended June 30, 2022.

Total assets subject to Zix’s ICFR represented 9.6% of our consolidated total assets as of June 30, 2022 (of which $868 million, or 8.5% of our consolidated total assets, represents goodwill and net intangible assets subject to our internal control over financial reporting as of June 30, 2022).

Our management has excluded the ICFR of Micro Focus, which we acquired on January 31, 2023 as discussed in Note 19 “Acquisitions” to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Total revenues subject to Micro Focus’ ICFR represented 21.8% of our consolidated total revenues for the fiscal year ended June 30, 2023.

Total assets subject to Micro Focus’ ICFR represented 47.6% of our consolidated total assets as of June 30, 2023 (of which $6.8 billion, or 39.6% of our consolidated total assets, represents Micro Focus’ goodwill and net intangible assets subject to our internal control over financial reporting as of June 30, 2023).

Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of ICFR for a period of up to one year following an acquisition while integrating the acquired company.

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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.

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.

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(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, except as noted above with respect to the acquisition of Zix, 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, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on the evaluation completed by our management, in which our Chief Executive Officer and Chief Financial Officer participated, our management has concluded that, except as noted above with respect to the acquisition of Micro Focus, 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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Rule 10b5-1 Trading Plans

During the three months ended June 30, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

The following table sets forth certain information as to our directors and executive officers as of July 30, 2022.

The following table sets forth certain information as to our directors and executive officers as of August 3, 2023.

Name Age Office and Position Currently Held With Company

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Madhu Ranganathan 59 Executive Vice President, Chief Financial Officer

Michael Acedo 41 Senior Vice President, Chief Legal Officer & Corporate Secretary

Davies 60 Executive Vice President, Special Advisor to the Chief Executive Officer

Prentiss Donohue 52 Executive Vice President, SMB/C Sales

Paul Duggan 47 Executive Vice President, Worldwide Renewals

Michael Acedo 42 Executive Vice President, Chief Legal Officer & Corporate Secretary

Cosmin Balota 49 Senior Vice President, Chief Accounting Officer

Prentiss Donohue 53 Executive Vice President, Cybersecurity Sales

Paul Duggan 48 Executive Vice President, Chief Customer Officer

Simon Harrison 53 Executive Vice President, Enterprise Sales

Kristina Lengyel 54 Executive Vice President, Customer Solutions

Muhi Majzoub 63 Executive Vice President, Chief Product Officer

James McGourlay 54 Executive Vice President, International Sales

Renee McKenzie 47 Senior Vice President, Chief Information Officer

Renee McKenzie 48 Executive Vice President, Chief Information Officer

Sandy Ono 41 Executive Vice President, Chief Marketing Officer

Parker 52 Executive Vice President, Corporate Development

Howard Rosen 58 Senior Vice President, Chief Accounting Officer

Paul Rodgers 60 Executive Vice President, Sales Operations

Brian Sweeney 59 Executive Vice President, Chief Human Resources Officer

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Sadler 72 Director

Harmit Singh (2)

Michael Slaunwhite (1)(3)

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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.

Barrenechea serves as a member of the Board and Audit Committee Chair of Dick's Sporting Goods.

five years, Mr.

Barrenechea serves as a member of the Board and Audit Committee Chair of Dick’s Sporting Goods and is also on the Board of Directors of the Leukemia & Lymphoma Society.

In the past five years, Mr.

Barrenechea also served as a director of Hamilton Insurance Group and as a board member of Avery Dennison Corporation.

Barrenechea holds a Bachelor of Science degree in computer science from Saint Michael's College.

Barrenechea holds a

Bachelor of Science degree in computer science from Saint Michael’s College.

He 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.

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Disrupt or Die, eGovernment or Out of Government, Enterprise Information Management:

The Next Generation of Enterprise Software .

The Next Generation of Enterprise Software, Versant .

He has also written a number of whitepapers, such as The Resilient Organization:

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Michael Acedo

Acedo has served as Senior Vice President, Chief Legal Officer and Corporate Secretary since January 2022.

Acedo was appointed Chief Legal Officer and Corporate Secretary in January 2022, and became Executive Vice President, Chief Legal Officer and Corporate Secretary in August 2022.

Since joining OpenText in 2014, Mr.

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(Honours) from The University of Toronto, and is a member of the New York State Bar Association and a Foreign Legal Consultant with the Law Society of Ontario.

Davies joined OpenText as the Chief Legal Officer and Corporate Secretary in September 2009.

In March 2016, Mr.

Davies was appointed as Executive Vice President, Chief Legal Officer and Corporate Development, and remained the Corporate Secretary until September 2018.

In January 2022, Mr.

Davies was appointed to serve as Special Advisor to the Chief Executive Officer.

After thirteen years, Mr.

Davies will retire from OpenText in September 2022.

Cosmin Balota

Balota has served as the Company’s Senior Vice President and Chief Accounting Officer since December 2022.

Prior to this, Mr.

Balota served as Vice President, Accounting and Reporting from August 2020 to December 2022 and Vice President, Corporate Accounting from January 2019 to August 2020.

Balota has over 25 years of experience in various U.S., Canadian and international finance and accounting roles where he has been responsible for external reporting, corporate accounting, controllership, mergers & acquisitions, and financial planning & analysis.

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.

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.

Balota served as Vice President, Corporate Finance at Enercare Inc.

from January 2017 to December 2018, along with other finance leadership positions from April 2012 to January 2017.

He also held various increasingly senior finance, accounting, and audit positions from October 1998 to April 2012 at Expedia Group, The Globe and Mail, and Deloitte.

Balota is a Chartered Professional Accountant (CPA, CA) in Canada and holds a Bachelor of Arts (Honours) degree in Chartered Accountancy Studies and a Master of Accounting degree from The University of Waterloo.

Prentiss Donohue

Donohue has served as Executive Vice President of Small and Medium-sized Business and Consumer (SMB/C) Sales since December 2020.

Donohue has served as Executive Vice President of Cybersecurity Sales since January 2023.

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.

Donohue served as Executive Vice President of Small and Medium-sized Business and Consumer (SMB/C) Sales from December 2020 to January 2023, 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.

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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.

Duggan has served as Executive Vice President, Worldwide Renewals since July 2021.

Duggan has served as Executive Vice President, Chief Customer Officer since January 2023.

Prior to this role, Mr.

Duggan served as Senior Vice President, Revenue Operations from January 2017 to July 2021.

Duggan served as Executive Vice President, Worldwide Renewals from July 2021 to January 2023 and 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.

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Harrison holds an honors degree in Computer Science from Leeds University.

Kristina Lengyel

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.

Lengyel held key executive roles at Kronos (now Ultimate Kronos Group), overseeing global customer solutions and engineering, from 2010 to 2019.

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.

Lengyel currently serves on the board of Local Measure.

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.

Majzoub has served as Executive Vice President, Chief Product Officer since September 2019.

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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.

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.

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

McKenzie was appointed Senior Vice President, Chief Information Officer for OpenText in April 2021.

McKenzie has served as Executive Vice President, Chief Information Officer since August 2022.

Prior to this, Ms.

McKenzie was the Senior Vice President, Chief Information Officer for OpenText from April 2021 to August 2022.

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.

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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.

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.

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.

Rosen is a CPA and holds a BSBA, Accounting from Georgetown University.

Rodgers joined OpenText as Executive Vice President, Sales Operations in January 2023.

Prior to joining the Company, Mr.

Rodgers served as the Business Operations and Integration lead for Micro Focus from April 2018 to January 2023, where he was responsible for overseeing the successful integrations resulting from Micro Focus’ merger and acquisition activity.

Rodgers joined Micro Focus in April 2008 as the Group Human Resources Director, and prior to joining Micro Focus, Mr.

Rodgers spent 17 years with IBM and four years as Managing Director of a successful Executive Human Resources consultancy business.

Brian Sweeney

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Jenkins was President, then Chief Executive Officer and then from 2005 to 2013, Chief Strategy Officer of OpenText.

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.

Jenkins has served as a Director of OpenText since 1994 and as its Chairman since 1998.

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 also past Chair of the Ontario Global 100 (OG100), past Canadian Co-Chair of the Atlantik Bruecke and past Chair of the World Wide Web Foundation, a Commissioner of the Tri-Lateral Commission.

He was the tenth Chancellor of the University of Waterloo and was the Chair of the National Research Council of Canada (NRC).

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from McMaster University.

Jenkins received honorary doctorates from six universities.

Jenkins has 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.

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In 2016, he founded Aegis Six Corporation, which aims at addressing the needs of capacity building abroad and for the private sector within Canada.

Fraser currently works with the Bank of Montreal on their Canadian Defence Community Banking Program, serves as a director of Route1, Inc, Antoxa Corp.

Fraser currently works with the Bank of Montreal on their Canadian Defence Community Banking Program, serves as a director of 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.

Fraser was also a member of the Conference of Defence Association board and was a director of Route1 Inc..

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 .

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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.

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He is also a Chartered Professional Accountant.

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;

enterprise risk management;

internal audit;

and investor relations.

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.

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

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Stevenson is the Chair of the Board of the Canadian Imperial Bank of Commerce (CIBC).

Stevenson also serves on the board of Capital Power Corporation and the board of Unity Health Toronto.

Stevenson also served as a director of CAE Inc.

Stevenson also serves on the board of Unity Health Toronto.

Stevenson has previously served as a director of Capital Power Corporation and CAE Inc.

She was previously a financial executive in the telecommunications and banking sectors.

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granted by the Institute of Corporate Directors (ICD).

In June 2023, Ms.

Stevenson received an honorary doctorate from Carleton University.

Stevenson has been named one of the Top 100 Most Powerful Women in Canada.

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Involvement in Certain Legal Proceedings

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.

None of our directors or executive officers have been involved in any events during the past ten years that would require disclosure under Item 401(f) of Regulation S-K.

Audit Committee

The Audit Committee currently consists of four directors, Mr.

The Audit Committee currently consists of three directors, Mr.

Fowlie (Chair), 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.

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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 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 (each, the “Designated Groups”) for election as directors.

In reference to the 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 (collectively, 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.

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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.

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.

The onboarding of three new directors since 2018 demonstrates the Company’s focus on this approach.

The table below reports self-identified diversity statistics for the Board as required by NASDAQ Rule 5606.

Board Diversity Matrix (As of June 30, 2022)

Country of Principal Executive Offices:

Board Diversity Matrix

Country of Principal Executive Offices Canada

Foreign Private Issuer Yes

Disclosure Prohibited Under Home Country Law No

As of June 30, 2023

As of June 30, 2022

Total Number of Directors

Female Male Non-Binary Did Not Disclose Gender

Gender Identity

Gender Identity Female Male Non-Binary Did Not Disclose Gender Female Male Non-Binary Did Not Disclose Gender

Directors 4 5 0 2 4 6 0 2

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To advance equity, diversity and inclusion, we have committed to have, by 2030, a majority of ethnically diverse staff, with a 50/50 gender representation in key roles and 40% women in leadership positions at all management levels.

The Company currently has one woman as a Named Executive Officer (20%) and four women as executive officers part of the executive leadership team (ELT) (30%), while approximately 21% of existing positions on the senior leadership team (SLT), exclusive of our ELT, are held by women.

17% of SLT members are based outside of North America.

In addition, three members of the ELT and SLT have self-identified to the Company as a visible minority.

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 16% of existing positions on the senior leadership team (SLT), exclusive of our ELT, are held by women.

40% of ELT and SLT members are based outside of North America.

Within North America, 16% of the ELT/SLT members are visible minorities.

Executive Compensation

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Actual compensation programs that we adopt in the future may differ materially from the various planned programs summarized in this discussion.

Payments in Canadian dollars included herein, unless otherwise specified, are converted to U.S.

dollars using an average annual exchange rate of 0.792677.

Executive Summary

Despite the prior five years having averaged greater than 90% shareholder support, at our last annual meeting of shareholders held on September 15, 2022, our advisory vote on our approach to executive compensation for Fiscal 2022 received the support of 45% of the shareholder votes cast.

The results of the vote are not acceptable to our Compensation Committee and were not taken lightly, and we acknowledge the votes cast by shareholders in this regard.

In full collaboration with our Board, throughout Fiscal 2023, management and, in certain instances, our Board Chair and Compensation Committee Chair, directly engaged with our U.S., Canadian and global shareholders as well as leading corporate governance organizations to discuss, among other things, their feedback regarding our approach to executive compensation overall.

See “Shareholder Engagement and Say on Pay” for an overview of our shareholder outreach and feedback channels.

Our Committee considered the vote result and the feedback we received from shareholders as it evaluated the design of our executive compensation program for Fiscal 2023.

See “Summary of Key Fiscal 2023 Considerations” for details of key considerations and our response to shareholder feedback.

On August 25, 2022, we announced our acquisition of all of the issued and to be issued share capital of Micro Focus for a total purchase price of $6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness, subject to final adjustments (the Micro Focus Acquisition).

The Micro Focus Acquisition significantly expands our scope and size by adding substantial assets and operations to our existing business.

As a result of the Micro Focus Acquisition, we possess one of the largest global customer bases and broadest solution suites in enterprise software.

For the year ended June 30, 2023, the combined company generated approximately $4.5 billion in revenue, approximately $150.6 million in net income and approximately $1.5 billion in Adjusted EBITDA.

See Part II, Item 7 “Use of Non-GAAP Financial Measures” of the Annual Report on Form 10-K for definitions and reconciliations of GAAP-based measures to Non-GAAP-based measures.

As of June 30, 2023, we employed a total of approximately 24,100 individuals, of which approximately 9,700 joined our workforce as part of the Micro Focus Acquisition.

Given the significance of the Micro Focus Acquisition, our approach to Executive Compensation in Fiscal 2023 included adjustments to our existing compensation programs to reflect the added complexity and larger scale resulting from the acquisition, in combination with feedback from our engagement with shareholders.

On January 31, 2023, we completed the acquisition.

Following the acquisition of Micro Focus, our CEO and other Named Executive Officers have had the responsibility to lead the combined organization, which includes accountability for a more diverse geographical footprint and a company with significantly larger revenues and greater scale.

To address this unique transition year, we adjusted our approach to executive compensation to ensure:

(1) appointment and retention of a qualified executive team to lead the combined organization with a strong alignment to long term shareholder value;

(2) clear line of sight to achievement of the performance objectives set for stand-alone OpenText operations (which excludes the results from the Micro Focus Acquisition);

and (3) immediate post-close actions to ensure customer and revenue retention across the Micro Focus business within the first five months of the acquisition (from the January 31, 2023 acquisition close date to the end of Fiscal 2023).

Summary of Key Fiscal 2023 Considerations

In the discussions that were held with our shareholders prior to and following our September 2022 annual meeting of shareholders, feedback generally supported the design of our executive compensation program, including that we continue to increase the proportion of our executive officers’ compensation that is “at risk”, in line with our peers.

The table below outlines the areas of specific feedback and topics discussed during our shareholder engagement efforts and how we responded, informed by such feedback.

What We Heard

How We Responded and Rationale

Ensure relevant peer group and pay position

• The Fiscal 2023 compensation of the CEO and other Named Executive Officers was set based on an industry peer group of organizations of a similar size, scope and geographic reach.

In setting Fiscal 2023 compensation, which occurred in July 2022, the peer group was the same from Fiscal 2022.

CEO target cash and total direct compensation was aligned based on the median of the peer group.

• In April 2023, our peer group was updated to reflect the new size and scope of our operations resulting from the Micro Focus Acquisition.

The new peer group, comprised of primarily U.S.-based companies, is designed to reflect competitors for executive talent in our industry and our focus on geographic markets outside of Canada.

A number of proxy advisors compare us to primarily Canadian companies, which does not reflect where we recruit for executive talent, nor does it represent who we benchmark against for compensation practices and competitive pay levels.

Executives must have relevant experience with complex enterprise delivery of cloud-based products and be able to mobilize delivery across global operations - requiring experience in both the global commercial and compliance context.

As such, our recruitment of qualified executive talent does not come from adjacent industries such as telecommunications or from firms with a primarily domestic or North American footprint.

• Our new peer group is not aspirational.

Our revenue is near the 75 th percentile of our new peer group, with the CEO’s total direct compensation remaining at the median of the peer group.

To align with the market for talented software executives as evidenced by independent data from the updated peer group, effective April 1, 2023, Named Executive Officers (other than the CEO) were provided base salary increases between 9% and 18%, which is reflective of our larger revenue base that has grown 28% year-over-year, from $3.5 billion in Fiscal 2022 to $4.5 billion in Fiscal 2023, largely due to the impact of the Micro Focus Acquisition.

Despite the significant revenue growth, there was no base salary adjustment for the CEO.

• In order to reflect the increased size and scope of the roles of our executives due to leading a significantly larger, combined organization, and in order to focus and reward management on the attainment and sustainability of Micro Focus revenue for the first five month “stub” period from February 1, 2023 to June 30, 2023, specific incentive plans to align with our business objectives were put in place.

The Named Executive Officers target short-term incentive opportunity increased year-over-year, where in each case, the incremental increase was directly tied to attaining certain revenue thresholds for Micro Focus’ operations during the balance of Fiscal 2023.

See “Micro Focus Special Performance Incentive Plan (MF SPIP).” Even after incorporating these adjustments to short-term incentive opportunity, the pay position of the CEO’s target total compensation remained at market median (as compared to our peers), and the pay position of all other Named Executive Officers' target total compensation remained below median.

What We Heard

How We Responded and Rationale

Demonstrate pay-for-performance linkages

• The pay program, with pay levels set to industry peer group practices, is designed to ensure that Named Executive Officer compensation aligns with our shareholders’ interests and supports our business objectives.

Our compensation philosophy is that the realizable pay of the CEO and other Named Executive Officers be:

◦ Directly correlated to total shareholder return;

◦ Aligned with the realizable pay earned by our peers for similar relative shareholder return.

• The assessment of realizable CEO pay relative to our peers can be found on page 112 and confirms that, over the past three years, CEO realizable pay aligned with our relative total shareholder return (Relative TSR) performance (i.e., the amount of compensation actually paid to the CEO was at a percentile that was similar to the Company's Relative TSR for the same period).

What We Heard

How We Responded and Rationale

CEO Pay Appears High Relative to Other Named Executive Officers

• We recognize the importance of providing a clear rationale of how Named Executive Officer pay levels are set, including the careful consideration of both our external market peer group position and internal equity.

• Among our peer group, the CEO pay ratio as compared to the average compensation of its other named executive officers was 3.2x, with the highest ratio amongst our peers at 5.9x.

In comparison, our CEO pay ratio as compared to the average compensation of our other Named Executive Officers was 4.7x, due to the fact that our CEO serves in a dual capacity as CEO and Chief Technology Officer (CTO).

None of our peers had its CEO serve in a dual operating capacity with such a high level of responsibility and personal contribution.

The Board believes this distinction is important, as it means that this role is accountable for the long-term strategy and success of the business overall, as CEO, as well as technology innovation, development strategy and long-term innovation roadmap, as CTO.

The Board believes our CEO pay ratio as compared to other Named Executive Officers should reflect these above-average accountabilities.

• Prior to setting executive compensation, the Compensation Committee considered internal pay equity and determined that, given the dual responsibilities, the ratio of the CEO’s pay to that of our other Named Executive Officers is appropriate.

As the CEO and CTO roles are individually significant, the Board believes the compensation awarded should reflect leadership in these critical areas that would typically be handled by two individuals.

Notwithstanding that, to ensure internal pay equity and reflect the increasing role scope and accountabilities, our Named Executive Officers’ have received base salary increases over the past two years, while the CEO base salary has remained constant over the same period.

Use of and insufficient rationale for one time stock awards

• In recognition of the requirement to complete the Micro Focus Acquisition and achieve integration targets over the longer term with strong alignment to shareholder returns, one-time stock options with stock price growth performance conditions were awarded to the CEO in August 2022, after the announcement of the Micro Focus Acquisition but prior to our last annual meeting of shareholders.

One-time stock options were also granted to our other Named Executive Officers in November 2022.

All stock option grants have a four-year vesting horizon and do not begin vesting until year two.

These awards were granted to the Named Executive Officers to align executive compensation directly to the integration and longer term success of the Micro Focus Acquisition.

With these one-time awards, at least 80% of our Named Executive Officers’ compensation is directly tied to company share growth appreciation – ensuring appropriate pay for performance, retention of key executives, and alignment with the annual compensation positioning relative our peers.

• The use of these one-time awards in Fiscal 2023 was to drive and reward growth related to the integration of the large-scale Micro Focus Acquisition and are not intended to be adopted as a go-forward compensation process.

• Specifically, Fiscal 2024 long-term incentive awards will be delivered through the annual LTIP program without any one-time awards.

Further, the annual LTIP in Fiscal 2024 will include a revised Relative TSR measured against the NASDAQ Composite Index for our performance share unit program, given the significance of the Micro Focus Acquisition.

What We Heard

How We Responded and Rationale

Fiscal 2023 Short-Term Incentive Performance Metric Target Setting Below Prior Year Actual Results

• Under the Annual Worldwide Short-Term Incentive Plan for Fiscal 2023, revenue targets were set at $3.558 billion, 1.8% above Fiscal 2022 actual results.

• The worldwide adjusted operating income (AOI), as defined in “Compensation Discussion and Analysis - Our Compensation Program - Short-Term Incentives,” target was set at $1.13 billion, which was 4.0% lower than Fiscal 2022 actual results to reflect a planned $80 million investment in Research and Development and Sales and Marketing that we expect will drive organic growth under our long-term strategic plan.

This strategic investment increased expenses and resulted in a reduced AOI target, which the AOI target would have been flat compared to the prior year actual results if not for such investment (excludes foreign currency effect).

The Fiscal 2024 AOI target, excluding any results from Micro Focus, has been set higher than the Fiscal 2023 actual results to reflect an increase in organic growth and a reduction in expenses.

• Further, the payout of short-term incentives in Fiscal 2023 was 93% of target based on worldwide revenue and AOI, which is a considerable reduction from the 200% target short-term incentive payout under the Fiscal 2022 Short-Term Incentive plan.

Importance of Micro Focus Acquisition and shareholder value

• Integration of the Micro Focus Acquisition highlighted the following needs:

(1) Retention of a qualified executive team to lead the combined organization with a strong alignment to long-term shareholder value – including the provision of one-time stock option grants in consideration of an appropriate mix of awards in favor of long-term incentives.

(2) Clear line of sight to achievement of the performance objectives set for stand-alone OpenText operations, excluding the impact of the Micro Focus Acquisition (before the incremental revenue and operating profit attributed to the Micro Focus Acquisition) to maintain a focus on OpenText organic revenue growth and efficient operations.

(3) Implementing immediate post-close actions to ensure customer and revenue retention across the Micro Focus business within the first five months of the acquisition – through the use of a supplemental short-term incentive plan tied to the achievement of Micro Focus planned revenue target for the period from February 1, 2023 to June 30, 2023.

Compensation Governance Best Practices

Our approach to executive pay is guided by the following compensation governance best practices:

What We Do What We Don’t Do

Balance among short- and long-term incentives, cash and equity and fixed and variable pay.

Overemphasize any single performance metric.

Link a significant amount (at least 80%) of target Named Executive Officer pay to company performance.

Use an aspirational peer group of significantly larger companies.

Cap short-term incentive plans at 200% of target.

Replace underwater options.

Use multiple types of equity awards to balance risk and reward.

Grant in-the-money stock options with an exercise price below the fair market value on the grant date.

Maintain overlapping performance periods for long-term incentives.

Guarantee a minimum level of vesting for long-term incentives.

Compare executive compensation and company performance to relevant peer group companies considering our industry scope and geographic footprint.

Guarantee annual base salary increases.

Provide discretionary bonuses.

Require executives to meet minimum stock ownership requirements.

Provide supplemental executive retirement plans.

Maintain a compensation claw back policy to recapture unearned incentive pay.

Provide single-trigger change in control benefits.

Provide only limited perquisites.

Apply pay policies or practices that pose a material adverse risk to the Company.

Retain an independent compensation consultant.

Conduct an annual shareholder say-on-pay advisory vote.

Overview of Compensation Program

Determining the compensation of our Named Executive Officers is the responsibility of the Compensation 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.

Determining the compensation of our Named Executive Officers is the responsibility of the Compensation Committee alone, or in certain circumstances, in consultation with the Board.

The Named Executive Officers who are the subject of this CD&A are:

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• Muhi Majzoub - Executive Vice President, Chief Product Officer

Davies - Executive Vice President, Special Advisor to the Chief Executive Officer

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 for our executive officers 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 recommends for approval 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 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 discussions and makes decisions with respect to the performance of our CEO in special sessions from which management is absent.

The Compensation Committee considers previous compensation awards, competitive market practice, the impact of tax, accounting treatments, applicable regulatory requirements and the results of the most recent shareholder advisory vote on executive compensation when approving compensation programs.

See “Shareholder Engagement and Say-on-Pay.”

During Fiscal 2022, 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 software and technology companies with a global presence, 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”).

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.

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 2022, the Compensation Committee retained Frederic W.

Cook & Co., Inc.

(FW Cook), an independent consulting firm specializing in executive compensation consulting.

During Fiscal 2022, 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, 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.

In addition, in Fiscal 2022, management engaged AON Consulting, Inc.

(AON), an independent consulting firm, to review our peer group and supply market data to assist in the evaluation of our approach to executive and director compensation.

For further information, see “Compensation Philosophy and Objectives” below.

The Compensation Committee met six times during Fiscal 2022.

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.

• Paul Duggan - Executive Vice President, Chief Customer Officer

Shareholder Engagement and Say-on-Pay

We have a longstanding practice of proactive shareholder engagement every quarter, during both the proxy season and non-quiet periods, to address investor questions and concerns and encourage their feedback on a variety of topics such as company performance, executive compensation, and environmental, governance and social issues.

These meetings are primarily attended by members of management, including some led by our CEO, Chief Financial Officer and Investor Relations team, as well as where appropriate, members of our Board from time to time.

Throughout Fiscal 2022, we met or initiated contact with shareholders representing:

At our last annual meeting of shareholders held on September 15, 2021, we received 77.94% in favour of our approach to executive compensation.

While we received a substantial majority of support, this result is not aligned with our historical support of over 90% approval.

Prior to and following last year’s annual meeting of shareholders, in full collaboration with our Board, we and, in certain instances, our Compensation Committee Chair, directly engaged with our U.S., Canadian and global shareholders to discuss, among other things, their feedback regarding our approach to executive compensation.

While our shareholders were generally supportive of the design of our executive compensation program, including that we continue to increase the proportion of our executive officers’ compensation being “at risk” in line with our peers, we received questions from a limited number of our institutional shareholders regarding the one-time special awards granted to our CEO and the amount of CEO total compensation.

The CEO’s compensation plan is structured to align with long-term shareholder return and to reward outstanding performance, provide incentives for continued long-term sustainable growth, accomplish the Board’s retention objectives and reflect the dual responsibilities of our CEO who serves as both our CEO and Chief Technology Officer.

These meetings are primarily attended by members of management, including some led by our CEO, CFO and Investor Relations team, as well as members of our Board from time to time.

Throughout Fiscal 2023, we met or initiated contact with shareholders representing 64% of our outstanding shares and all of our top 25 shareholders that actively manage assets.

At our last annual meeting of shareholders held on September 15, 2022, for the first time in our history, we did not receive a favorable result for our approach to executive compensation.

This result is not acceptable to the Compensation Committee and is not aligned with our previous historical support for our approach to executive compensation, which in the prior five years had averaged greater than 90% support.

While our shareholders understood the design of our executive compensation program, and were generally supportive that we continue to increase the proportion of our executive officers’ compensation that is “at risk” in line with our peers, a number of key areas of discussion throughout Fiscal 2023 included:

(1) peer group selection;

(2) demonstration of the pay-for-performance linkages in our programs, particularly with respect to CEO pay;

(3) ratio of CEO compensation as compared to other Named Executive Officer’s pay;

(4) use of one-time awards;

(5) Fiscal 2022 short-term incentive metric targets set below previous year actual results;

and (6) aligning compensation with the achievement of stated goals for the Micro Focus transaction, particularly given the size, complexity and importance of the transaction and need to deliver sustainable shareholder value through a successful integration.

The CEO’s compensation plan is structured to align with long-term shareholder return, to reward outstanding performance, provide incentives for continued long-term sustainable growth, accomplish the Board’s retention objectives and reflect the dual responsibilities of our CEO who serves as both our CEO and CTO.

In reviewing executive compensation, the Compensation Committee benchmarks against U.S.

software and technology companies with a global presence, and not Canadian companies, for a variety of factors including that greater than 95% of our revenues are outside of Canada and most of the executive leadership team are based in the U.S.

Specifically, four of our five Named Executive Officers, including our CEO, and a majority of our executive leadership team are located in the highly competitive Silicon Valley - a key market for multi-national executive talent in the software and technology industry - which has higher pay levels than the limited market for software and technology executives in Canada.

software and technology companies with a global presence, and not Canadian companies, for a variety of reasons including that greater than 95% of our revenues are outside of Canada and most of the executive leadership team are based in the U.S.

where we primarily recruit for executive talent.

Specifically, all Named Executive Officers, including our CEO, and a majority of our other executive leadership team members are located in the highly competitive Silicon Valley — a key market for multi-national executive talent in the software and technology industry — which has higher pay levels than the limited market for software and technology executives in Canada.

Our executive compensation benchmarking, like that of our direct competitors, is focused on the compensation practices of U.S.-based peer companies, as we generally recruit from U.S.-based competitors for executive leadership talent.

Executive talent from Canada and from adjacent sectors such as telecommunications is not viewed as reflecting the same competition for company talent.

The Board believes that our CEO’s total compensation is reasonable relative to comparable U.S.

Compensation for executive talent in Canada, and in adjacent sectors such as telecommunications, do not reflect the same level of competitiveness as among our Company and its peers.

The Board believes that our CEO and other Named Executive Officer’s total compensation is reasonable relative to comparable U.S.

software and technology companies with a global presence.

See “Compensation Philosophy and Objectives” for our benchmarking practices.

Nonetheless, we considered and evaluated the feedback received from our shareholders.

For Fiscal 2022, the Company did not award any one-time special grants to the CEO or any other Named Executive Officer.

Further, the Compensation Committee decisions resulted in the CEO’s total compensation, as reported in the Summary Compensation Table, to be 24% lower in Fiscal 2022 than in Fiscal 2021.

See “Summary Compensation Table.” We value the input of our shareholders and will continue to engage with our shareholders to consider their views expressed through our annual Say-on-Pay voting process.

Further, the peer group was updated in April 2023 to reflect the Company’s increased size and scope following completion of the Micro Focus Acquisition.

See “Peer Group” for our peer group, including our CEO’s relative target pay positioning for Fiscal 2023.

CEO’s in our peer group were paid an average of 3.2x the average of the other named executive officers, with the highest ratio amongst our peers at 5.9x.

In comparison, our CEO is paid 4.7x the average of our other Named Executive Officers because he serves in a dual capacity as CEO and CTO.

Among our peer group, none of our peers had its CEO serve in a dual capacity.

Further, the Board believes that our CEO’s extensive experience and expertise in the information management and cloud computing industry makes him uniquely positioned to provide leadership in this dual capacity.

We considered and evaluated the feedback received from our shareholders in the context of the enlarged organization as a result of the Micro Focus Acquisition and its impact on executive compensation.

See “Summary of Key Fiscal 2023 Considerations” for details of decisions made in this transition year.

We value the input of our shareholders and will continue to engage with our shareholders to consider their views expressed through our annual Say-on-Pay voting process.

Compensation Philosophy and Objectives

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We use market data of similarly sized U.S.

software and technology companies with a global presence, rather than Canadian companies, for a variety of factors including that greater than 95% of our revenues are outside of Canada, most of the executive leadership team are based in the U.S., and we generally recruit from U.S.-based competitors for executive leadership talent.

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.

software and technology companies with a global presence, rather than Canadian companies, for a variety of reasons including that greater than 95% of our revenues are outside of Canada, all of our Named Executive Officers and most of the executive leadership team are based in the U.S., and we generally recruit from U.S.-based competitors for executive leadership talent.

We aim to position our executive officers’ compensation targets at the median in relation to our peer group, however, actual pay depends on the performance of the executive officers and the Company.

Tie compensation awards directly to key financial metrics with evaluations based on achieving and overachieving predetermined objectives.

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The Compensation Committee has the flexibility to exercise discretion to ensure total compensation appropriately reflects performance.

The Compensation Committee rarely exercises said discretion.

The Compensation Committee rarely exercises this discretion.

Competitive Compensation

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In particular, we are a global cloud software company with greater than 95% of our revenues outside of Canada, including 56% of our revenues in the U.S.

Four of our five Named Executive Officers, including our CEO, and a majority of our executive leadership team are located in the highly competitive Silicon Valley - a key market for multi-national executive talent in the software and technology industry.

All of our Named Executive Officers, including our CEO, and a majority of our executive leadership team are located in the highly competitive Silicon Valley — a key market for multi-national executive talent in the software and technology industry.

Executive talent from Canada and adjacent sectors such as telecommunications is not viewed as reflecting the same competition for company talent.

The Compensation Committee recognizes that, while executive compensation levels in Silicon Valley are higher than the market for compensation in Canada, recruiting talent from this area is critical for our success.

Attracting and retaining talent with the highest level of industry expertise is the basis for the Company’s business and strategy, and therefore our compensation practices must align with market expectations where the industry skills reside.

Executive talent from Canada and adjacent sectors such as telecommunications is not viewed as reflecting the

same competition for company talent.

See “Peer Group” for details of OpenText’s profile relative to the selected peer group as well as the relative peer group pay positioning of the CEO and Named Executive Officers, respectively.

The Compensation Committee recognizes that, while executive compensation levels in the United States are higher than the market for compensation in Canada, recruiting talent from this area is critical for our success.

Attracting and retaining talent with the highest level of industry expertise is a key part of the Company’s business and strategy, and therefore our compensation practices must align with market expectations where the industry skills reside.

Further, the Compensation Committee also acknowledges that paying U.S.

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executives in U.S.

dollars may result in the appearance of higher relative compensation compared to other Canadian companies.

Converting amounts paid to U.S.-based

executives in U.S.

dollars to Canadian dollars further gives the appearance of high compensation in Canadian dollars if analyzed against other Canadian companies.

The Compensation Committee believes that this appearance of high compensation relative to Canadian companies mischaracterizes the Company’s pay practices and that paying according to each executive’s local market serves the long-term interests of our shareholders better than being unable to find appropriate leadership talent.

dollars may result in higher relative compensation compared to other Canadian companies.

Converting amounts paid to U.S.-based executives in U.S.

dollars to Canadian dollars further inflates the compensation in Canadian dollars if analyzed against other Canadian companies.

Despite the elevated compensation relative to Canadian companies, the Compensation Committee believes that the Company’s pay practice of paying according to each executive’s local market serves the long-term interests of our shareholders and enhances our ability to find appropriate leadership talent.

The Compensation Committee periodically reviews market data related to compensation levels and programs at comparable peer companies.

Our peer group consists of 17 companies in the software and technology industry, including 16 U.S.-based companies and one company based in Israel.

Our peer group consists of companies in the software and technology industry.

The peer group is reviewed annually.

In Fiscal 2022, no new companies were added or removed to our peer group.

Below is our peer group list for Fiscal 2022 and the criteria considered.

General Description Criteria Considered Peer Group List

In July 2022, when setting compensation for Fiscal 2023, no new companies were added to or removed from our peer group.

In April 2023, in line with our key metrics considered for our peer group, which included an increase in revenue, market capitalization, number of employees and net income as a result of the Micro Focus Acquisition, we updated our peer group to reflect our new size and scope of our operations.

Below are our peer groups used to set Fiscal 2023 pay and changes made to reflect the addition of the Micro Focus organization, as well as the criteria considered in establishing the peer groups.

General Description Criteria Considered Peer Group used in July 2022 to set Fiscal 2023 Compensation Program Peer Group Updated as of April 2023 based on Company Size and Scope including the Impact of the Micro Focus Acquisition

Global software and service providers that are similar in size, business complexity, and scope of operations to us.

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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.

Akamai Technology, Inc.

Autodesk, Inc.

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Citrix Systems, Inc.

Nuance Communications, Inc.

Pitney Bowes Inc.

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Synopsys, Inc.

Teradata Corporation

Teradata Corporation Akamai Technology, Inc.

Autodesk, Inc.

Broadridge Financial Solutions, Inc.

Cadence Design Systems, Inc.

DXC Technology Company

Euronet Worldwide, Inc.

Fortinet, Inc.

Gen Digital Inc.

NCR Corporation

Palo Alto Networks, Inc.

Roper Technologies Inc.

SS&C Technologies, Inc.

Synopsys, Inc.

Workday, Inc.

OpenText revenues and operating income are positioned at the 75 th and 25 th percentiles, respectively, compared to the updated peer group as of April 2023.

Following the adoption of our updated peer group, our CEO’s target pay positioning was aligned closer to the market median as summarized in the following table:

Position to Market Median of

July 2022 Peer Group Position to Market Median of Peer Group

Updated Effective April 2023

Total Target Cash Compensation Total Target Direct Compensation Total Target Cash Compensation Total Target Direct Compensation

CEO 50 th Percentile

50 th -75 th Percentile

50 th Percentile

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.

Compensation decisions for our executive officers consider, among other things, performance goals, base salary, bonuses, executive benefits, short-term incentives and long-term incentives.

The Compensation Committee also considers the input of the CEO with respect to his direct reports.

The Compensation Committee considers CEO compensation without the CEO present and makes recommendations to the Board for approval.

The Compensation Committee reviews and recommends for approval all equity awards related to executive compensation prior to final approval by the Board.

Further, the Compensation Committee supports the Board with respect to succession and development of our executive officers;

reports to the Board on human resources matters including reviewing and discussing the progress of our equity, diversity and inclusion efforts across our global talent;

provides input on human capital disclosures;

and reviews our approach to retirement programs.

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 discussions and makes decisions with respect to the performance of our CEO in special sessions from which management and the CEO is absent.

The Compensation Committee considers previous compensation awards, competitive market practice, the impact of tax and accounting treatments, applicable regulatory requirements, any material acquisitions closed during the year and the results of the most recent shareholder advisory vote on executive compensation when approving compensation programs.

See “Shareholder Engagement and Say-on-Pay.”

During Fiscal 2023, the Committee’s work included the following:

This benchmarking may include a review of base salary, short-term incentives and long-term incentives.

Although the Compensation Committee has responsibility for decisions on executive compensation, it may consider input from management, analysis provided by the compensation consultant, as well as other factors that the Committee considers appropriate.

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.

In Fiscal 2023, the Compensation Committee retained Frederic W.

Cook & Co., Inc.

(FW Cook), an independent consulting firm specializing in executive compensation consulting.

During Fiscal 2023, 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, 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.

In addition, in Fiscal 2023, management engaged AON Consulting, Inc.

(AON), an independent consulting firm, to review our peer group and supply

market data to assist in the evaluation of our approach to executive and director compensation.

For further information, see “Compensation Philosophy and Objectives.”

The Compensation Committee met six times during Fiscal 2023.

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.

Following each meeting, the Compensation Committee reported items that it, in its determination, considered noteworthy to the Board.

Compensation Decisions for Fiscal 2023

Aligned with our competitive compensation philosophy, we continue to ensure market alignment of total compensation positioning for our Named Executive Officers.

In setting executive compensation levels for the fiscal year in the first quarter of Fiscal 2022, the Compensation Committee considered our relative performance against our peers, including our strong 3-year TSR performance (for the three years ended June 30, 2021, our annual compounded TSR was 15% versus our peer median of 10%), our revenue was above the peer median and our operating income approximated the 75 th percentile.

The Compensation Committee made certain decisions at the start of Fiscal 2022 that resulted in the CEO’s total compensation, as reported in the Summary Compensation Table, to be 24% lower in Fiscal 2022 than in Fiscal 2021 notwithstanding strong relative performance at the time the decisions were made.

In addition, our CEO was not provided any adjustment to base salary or short-term incentive target despite having had no increase in base salary or short-term incentive target for the past five fiscal years and despite market adjustments being made to the base salary and short-term incentive targets for our other Named Executive Officers in Fiscal 2022.

Further, our CEO gave up $1.25 million in cash compensation in Fiscal 2021 to mitigate the operational impacts of COVID-19, which was not repaid by the Company.

To ensure an appropriate portion of our Named Executive Officers pay is “at risk” in alignment with shareholders, and with the advice of our external compensation consultant, for Fiscal 2022 we increased the long-term incentive targets of our Named Executive Officers, a component of total compensation where we have historically lagged the market.

For our CEO, his long-term incentive target was increased to align with the market data of our peers.

The Compensation Committee considered this increase appropriate in light of the need to retain high-quality leadership to drive our growth strategy, our historical strong performance relative to our peers, and the positive future trajectory of the company.

Further, prior to setting executive compensation, the Compensation Committee considered internal pay equity and determined that, given the dual responsibilities of being both CEO and Chief Technology Officer, the CEO pay differential is appropriate to other Named Executive Officers.

Performance Graph

The following graph compares for each of the five fiscal years ended June 30, 2022, 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 cumulative return on a $100 investment in our Common Shares made on June 30, 2017, 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.

As illustrated in the graph below, due to significant market volatility in the software and technology sector as a result of rising interest rates and inflation, during calendar year 2022 the cumulative total shareholder return on our Common Shares has seen a significant reduction relative to the S&P/TSX Composite Index.

The information contained in the above graph shall not be deemed to be filed as part of this document, does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of the Company under the Securities Act or the Exchange Act, except to the extend we specifically incorporate the graph by reference.

Our compensation philosophy is to consider market data and the relative position of total compensation for our Named Executive Officers.

Most executive compensation decisions were made in the first quarter of Fiscal 2023, at which time the Compensation Committee considered performance, size, pay amounts, and incentive design relative to our peer group.

The Performance Share Unit Plan awards granted in 2019, which vested in September 2022, were measured against the constituents of the S&P MidCap400 Software and Services Index.

Absolute TSR for the measurement period was negative 9%, which was 32 nd percentile TSR performance, above the peer group’s 25 th percentile TSR performance of negative 19% and below the median TSR of +17%.

The Committee reviewed these results and concluded that the formulaic payout factor was 64% of target, based on a linear interpolation applied between the 25 th and 50 th percentiles as applied according to the plan’s payout table.

The below-target funding combined with the reduction in share price for the period aligned with the 2019 Performance Share Unit Plan’s objective of aligning actual executive compensation with our shareholders’ experience.

During Fiscal 2023, our CEO was not provided any adjustment to base salary despite having had no increase in base salary for the past five fiscal years.

Other Named Executive Officers were provided with adjustments to their base salary and short-term incentive targets based on market data following the increase in scope of their roles upon close of the Micro Focus Acquisition.

The short-term target incentive opportunity for all Named Executive Officers was adjusted on a pro-rated basis to reflect the increase in responsibilities of leading the larger, integrated organization, including for our CEO.

To ensure an appropriate portion of our Named Executive Officers pay is “at risk” in alignment with our selected peer group, and with the advice of our external compensation consultant, for Fiscal 2023 we increased the long-term incentive targets of our Named Executive Officers (excluding our CEO), a component of total compensation where we have historically lagged the market.

For our CEO, the long-term incentive target remains unchanged year-over-year.

Similar to previous years, the Compensation Committee considered this increase to the long-term incentive compensation of our other Named Executive Officers appropriate in light of the need to retain high-quality leadership to drive our growth strategy, our historical strong performance relative to our peers and the positive future trajectory of the Company.

Further, prior to setting executive compensation, the Compensation Committee considered internal pay equity and determined that, given the dual responsibilities of being both CEO and CTO, the ratio of the CEO’s pay to that of our other Named Executive Officers is appropriate.

Aligning CEO Pay with Shareholders’ Interests

We look at pay for performance from different perspectives to ensure there is strong alignment between what our executive officers earn and our total shareholder return (TSR).

We look at pay for performance from different perspectives to ensure there is strong alignment between what our executive officers earn and our TSR.

A realized and realizable pay analysis shows the actual value of compensation awarded to our CEO in each of the last five fiscal years as of June 30, 2023 relative to the amount reported.

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We have indexed these values at $100 to provide a meaningful comparison.

The graphic and table below illustrate that the actual value of CEO compensation is aligned with the experience of shareholders.

This analysis shows that the executive compensation program has performed as intended, reinforcing accountability as the actual value (realized and realizable) for each fiscal year fluctuates with our share performance.

The graphic and table below illustrate that the actual value of CEO compensation is aligned with the experience of shareholders because CEO realized and realizable compensation directly correlates to TSR performance.

This analysis shows

that the executive compensation program has performed as intended, reinforcing accountability as the actual value (realized and realizable) for each fiscal year fluctuates with our share performance.

Fiscal year Total direct

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2019 $ 8,082,359 $ 9,857,985 July 1, 2018 to June 30, 2023

$ 121.97 $ 130.37

2020 $ 9,702,562 $ 6,277,263 July 1, 2019 to June 30, 2023

$ 64.70 $ 109.52

2021 $ 20,930,804 $ 8,608,640 July 1, 2020 to June 30, 2023

$ 41.13 $ 104.45

2022 $ 15,920,496 $ 9,789,848 July 1, 2021 to June 30, 2023

$ 61.49 $ 86.05

2023 $ 23,227,232 $ 14,663,667 July 1, 2022 to June 30, 2023

$ 63.13 $ 113.46

_________________________

(1) Includes salary, short-term incentive, stock awards and option awards, as reported in the summary compensation table each year.

For Fiscal 2021, the value of performance stock options included in total direct compensation awarded assumes that the maximum performance level is achieved;

if such options are measured assuming performance target, the total direct compensation awarded in Fiscal 2021 is $17,113,304.

For Fiscal 2021 and Fiscal 2023, the value of performance stock options included in total direct compensation awarded represents the grant date fair value as calculated in accordance with ASC Topic 718 as reported in the Summary Compensation Table for the applicable year.

(2) Represents the actual value to the CEO of compensation awarded each year, realized between grant and June 30, 2023 or still realizable on June 30, 2023.

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(3) Represents the actual value (realized and realizable) to the CEO for each $100 of total direct compensation awarded for each fiscal year.

(4) Represents the cumulative value of a $100 investment in common shares made on the first trading day of the period, assuming dividends are reinvested.

(4) Represents the cumulative value for each of the periods noted of a $100 investment in common shares made on the first trading day of the period, assuming dividends are reinvested.

Further, the value that our executives realize from our long-term incentive programs is a key driver of the pay for performance relationship.

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The actual value (realized and realizable) received by our CEO has been 46% lower than the grant date fair value of stock and option awards reported in the summary compensation table over the last five fiscal years.

Further, all option awards granted during the last four fiscal years remain subject to share price performance in order to be realized or realizable for actual value.

Grant date Number of stock awards (1)

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August 8, 2022 184,770 — $ — $ 9,189,844 $ 7,677,194

August 29, 2022 — 1,000,000 (4) $ 31.89 $ 8,090,000 $ 2,784,679

Total (Reported vs.

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All option awards granted remain outstanding and have not been exercised for value.

(2) Represents 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, as reported in the summary compensation table for the applicable year.

(2) 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, as reported in the summary compensation table for the applicable year.

(3) Based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on June 30, 2023 of $41.55.

(4) In Fiscal 2021, Mr.

Barrenechea received a one-time grant of performance stock options under the 2004 Stock Option Plan with vesting subject to certain performance conditions.

The amount in the table represents the maximum number of options that may vest if maximum performance level is achieved under such grant as reported in the Summary Compensation Table.

These are the only active performance stock options for Mr.

For Fiscal 2022, the Company did not award any one-time special grants to the CEO or any other Named Executive Officer.

(4) In Fiscal 2021 and Fiscal 2023, Mr.

Barrenechea was granted performance stock options with vesting subject to certain performance conditions.

The amount in the table represents the grant date fair value as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted, as reported in the summary compensation table for the applicable year.

The actual value of the performance stock options represents the number of performance stock options that have vested as of June 30, 2023, that have achieved certain performance criteria as discussed in “Long-Term Equity Grants to CEO” below.

Realizable Pay Analysis Relative to Peers

The following graph demonstrates the degree of alignment between our CEO realizable pay and OpenText TSR over the last three years relative to our current industry peer group.

Companies that fall within the diagonal bar are generally viewed as peers having pay for performance alignment.

Over the three-year period, our CEO realizable pay was aligned with TSR in the bottom quartile (and below all but three of our 21 peers), positioning our CEO within the zone of realizable alignment.

This demonstrates the effectiveness of the pay for performance design of our executive compensation program as per plan design to recognize relative TSR performance.

The realizable pay analysis compares our relative TSR performance for the period of June 30, 2020 to June 30, 2023 to our current peer group for the same period, using publicly disclosed information.

Realizable pay uses the values included in “Aligning CEO Pay with Shareholders’ Interests” table above.

Our Compensation Program

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(at 100% target)

(“At Risk”) Long-Term Incentive

(“At Risk”) Long-Term

(at 100% target)

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Muhi Majzoub 22% 21% 57%

Davies 17% 21% 62%

Paul Duggan 27% 26% 47%

Fixed pay includes:

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• Other benefits.

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 base salary review for each Named Executive Officer considers factors such as current competitive market conditions and the individual’s particular skills (such as leadership ability and management effectiveness, experience, responsibility and proven or expected performance).

The Compensation Committee obtains information regarding competitive market conditions through the assistance of management and our compensation consultants.

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• An annual executive medical physical examination;

• A base allowance to cover expenses such as financial planning, tax preparation or club memberships.

• An annual allowance to reimburse expenses to a pre-defined maximum related to financial planning, tax preparation or club memberships.

Other Benefits

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In Fiscal 2023, 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.

These short-term corporate goals are typically derived from our annual business plan which is prepared by management and approved by the Board at the start of the fiscal year.

Awards made under the short-term incentive plan are made using cash only.

The amount of the short-term incentive payable to each Named Executive Officer, in general, is based on the attainment of pre-established 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 with the exception of Mr.

Harrison, these objectives consist of worldwide revenues and worldwide adjusted operating income.

are reviewed and approved by the Compensation Committee and the Board.

Barrenechea, Mrs.

Ranganathan and Mr.

Majzoub’s objectives consist of worldwide revenues, AOI and the MF SPIP.

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 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.

Worldwide revenues are an important metric for measuring our growth and profitability to help us to assess our Named Executive Officers’ performance.

AOI, which is intended to reflect the operational effectiveness of our leadership by showing our ability to generate profits from our operational activities, 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.

AOI is also adjusted to remove the impact of foreign exchange.

Due to his responsibilities as Executive Vice President, Enterprise Sales, Mr.

Harrison's objectives consist of enterprise license revenue, first year maintenance (FYM), cloud minimum contract value (MCV), Enterprise professional services revenue (PS) primarily within North America and EMEA and worldwide adjusted operating income.

Harrison’s objectives consist of enterprise license revenue, first year maintenance (FYM), cloud new contract value (NCV), Enterprise professional services revenue (PS) primarily within North America and EMEA and AOI and MF SPIP.

Enterprise license revenues are a component of “License” revenue line of our audited income statement.

FYM is allocated for the first annual term of maintenance as invoiced for new license deals, which is a component of our Customer support line of our audited income statement.

MCV is the total projected commissionable incremental revenue in a signed and written agreement between the Company and its customer.

FYM is allocated for the first annual term of maintenance as invoiced for new license deals, which is a component of our “Customer support” revenue line of our audited income statement.

NCV 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 new 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.

For the purposes of calculating the achievement of this performance objective, we consider only NCV that is derived from new business.

Enterprise PS revenues are a component of our “Professional Services and Other” line of our audited income statement.

For Fiscal 2022, 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.

In Fiscal 2023, Mr.

Duggan held the role of Executive Vice President, Worldwide Renewals from July 2022 through December 2022.

Due to his responsibilities in this role, Mr.

Duggan’s objectives consisted of team cloud revenue and customer support revenue and AOI for this time period.

Duggan transitioned to the role of Executive Vice President, Chief Customer Officer in January 2023.

Due to his responsibilities as Executive Vice President, Chief Customer Officer, Mr.

Duggan’s objectives changed and consist of team cloud revenue, customer support revenue, and the addition of enterprise professional services revenue (PS) and AOI.

Team cloud revenues are a component of “Cloud services and subscriptions” revenue line of our audited income statement and customer support revenues are a component of our “Customer support” revenue line of our audited income statement, and enterprise professional services revenues are a component of our “Professional Services” revenue line of our audited income statement.

Duggan objectives also included the MF SPIP.

For Fiscal 2023, the following table illustrates the total short-term target awards, excluding the MF SPIP, for each Named Executive Officer, along with the associated weighting of the related performance measures.

Named Executive Officer Total Target

Award Worldwide Revenues Enterprise License, FYM, MCV and PS Revenue Worldwide Adjusted Operating Income

Barrenechea $ 1,425,000 50% N/A 50%

Madhu Ranganathan $ 600,000 50% N/A 50%

Simon Harrison $ 500,000 N/A 70% 30%

Muhi Majzoub $ 500,000 50% N/A 50%

Davies $ 454,204 50% N/A 50%

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 2022” below.

Award Worldwide Revenues Enterprise License, FYM, NCV and PS Revenue Team Cloud, Customer Support and PS Revenue Worldwide Adjusted Operating Income

Barrenechea $ 1,425,000 50% N/A N/A 50%

Madhu Ranganathan $ 660,000 50% N/A N/A 50%

Simon Harrison $ 550,000 N/A 70% N/A 30%

Muhi Majzoub $ 550,000 50% N/A N/A 50%

Paul Duggan $ 550,000 N/A N/A 70% (1) 30%

_______________________________

Duggan transitioned from the role of Executive Vice President, Worldwide Renewals to Executive Vice President, Chief Customer Officer in January 2023.

For Fiscal 2023, team cloud and customer support revenue were performance measures from July 2022 through December 2022 and team cloud, customer support and PS revenue were performance measures from January 2023 through June 2023.

Therefore, total short-term awards were prorated in accordance with the associated weighting in the table above.

For the short-term incentive award amounts that would be earned at each of threshold, target and maximum levels of performance, see “Grants of Plan-Based Awards for Fiscal 2023” 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.

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 2022.

In each case, performance targets for Fiscal 2022 were higher than the performance targets for Fiscal 2021.

The Fiscal 2022 performance target for worldwide adjusted operating income was set slightly below actual performance in Fiscal 2021 to account for targeted investments undertaken by the Company to reposition our business, products and talent capabilities for our accelerated migration to the Cloud and achieve our longer-term objective of accelerated revenue growth.

The performance target for worldwide adjusted operating income would have been higher than actual performance in Fiscal 2021, which was a record year for worldwide adjusted operating income, if not for the additional costs related to these investments planned for, and made in, Fiscal 2022.

The table below illustrates the percentage of the target awards paid to our Named Executive Officers in accordance with our actual results achieved during Fiscal 2022.

To the extent the performance goal 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 payouts as a percentage of targets achieved in Fiscal 2023.

The Fiscal 2023 performance goal for worldwide adjusted operating income was set slightly below actual performance in Fiscal 2022 as a result of our long-term strategic plan to increase organic growth through an $80 million investment in research and development and sales and marketing.

Without this strategic investment, which increased expenses and resulted in a reduction in the AOI target, the AOI goal would have been flat compared to the prior year actual results (excluding foreign currency headwinds for revenue).

The table below illustrates the percentage of the target awards paid to our Named Executive Officers in accordance with our actual results achieved during Fiscal 2023, with pre-established plan adjustments to remove the impact of foreign exchange as compared to plan (i.e.

use of budgeted foreign exchange rates), which are outside of the control of the executives.

Objectives (in millions) Threshold

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Worldwide Revenues $ 3,202 $ 3,558 $ 3,532 99 % 85 %

Enterprise License, FYM, MCV and PS Revenue $ 746 $ 839 $ 875 104 % 200 %

Enterprise License, FYM, NCV and PS Revenue $ 968 $ 1,076 $ 964 90 % 15 %

Team Cloud, Customer Support and PS Revenue $ 2,495 $ 2,772 $ 2,804 101 % 158 %

Worldwide Adjusted Operating Income (1)

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______________________________

(1) Adjusted to remove the impact of foreign exchange.

(2) This is a non-GAAP measure adjusted to remove the impact of foreign currency.

(1) This is a non-GAAP measure, 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.

In Fiscal 2023, we achieved 99% of our worldwide revenue target;

104% of our enterprise license, FYM, MCV and PS revenue;

and 105% of our worldwide adjusted operating income target.

90% of our enterprise license, FYM, NCV and PS revenue;

101% of our team cloud, customer support and PS revenue;

and 100% of our AOI target.

The table below illustrates under the “% Attainment” column that an achievement of 99% of target for the worldwide revenue performance criteria results in an award payment of 85% of the target award amount;

an achievement of 104% of target for the enterprise license, FYM, MCV and PS revenue performance criteria results in an award payment of 200% of the target award amount;

and an achievement of 105% of target for the worldwide adjusted operating income performance criterion results in an award payment of 200% of the target award amount.

Worldwide Revenues, Enterprise License, FYM, MCV and PS Revenue, and Worldwide Adjusted Operating Income - Attainment and Corresponding Payment

an achievement of 90% of target for the enterprise license, FYM, NCV and PS revenue performance criteria results in an award payment of 15% of the target award amount;

an achievement of 101% of target for the team cloud, customer support and PS revenue performance criteria results in an award payment of 158%;

and an achievement of 100% of target for the AOI performance criterion results in an award payment of 100% of the target award amount.

Our short-term incentive payout structure illustrated below is asymmetrical with the maximum attainment of 102%, resulting in a 200% payout, because this provides an incentive for significant revenue and AOI growth for the Company.

For example, in Fiscal 2023, if revenues and AOI achieved the maximum attainment of 102%, it would have equated to $3.7 million in additional short-term incentive payouts for our CEO and other Named Executive Officers but would have also resulted in approximately an additional $71 million in revenues and $23 million in AOI for OpenText and its shareholders.

Worldwide Revenues, Enterprise License, FYM, NCV and PS Revenue, Team Cloud and Customer Support Revenue, Team Cloud, Customer Support, and PS Revenue and Worldwide Adjusted Operating Income - Attainment and Corresponding Payment

% Attainment % Payment % Attainment % Payment

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(Linear x25 for every 0.5% over 100%)

The actual short-term incentive award earned by each Named Executive Officer for Fiscal 2022 was determined in accordance with the formulas described above and are reflective of the strong performance levels achieved by the Company in Fiscal 2022 related to this “at risk” compensation component.

We have set forth below for each Named Executive Officer the award amount actually paid for Fiscal 2022, and the percentage of target award amount represented by the actual award paid, broken out by performance measure as follows:

The actual short-term incentive award earned by each Named Executive Officer for Fiscal 2023 was determined in accordance with the formulas described above and reflects the strong performance levels achieved by the Company in Fiscal 2023 related to this “at risk” compensation component.

We have set forth below for each Named Executive Officer the award amount actually paid for Fiscal 2023, and the percentage of target award amount reflected by the actual award paid, broken out by performance measure as follows:

Performance Measure:

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(% of Target)

Enterprise License, FYM, MCV and PS Revenue $ 350,000 $ 52,500 $ 700,000 200 %

Enterprise License, FYM, NCV and PS Revenue $ 385,000 $ 57,750 $ 57,750 15 %

Worldwide Adjusted Operating Income $ 165,000 $ 24,750 $ 165,000 100 %

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(% of Target)

Worldwide Revenues $ 227,102 $ 34,065 $ 454,204 200 %

Team Cloud, Customer Support and PS Revenue $ 385,000 $ 57,750 $ 608,300 158 %

Worldwide Adjusted Operating Income $ 165,000 $ 24,750 $ 165,000 100 %

Total $ 550,000 $ 82,500 $ 773,300 141 %

Micro Focus Special Performance Incentive Plan (MF SPIP)

The Fiscal 2023 short-term incentive plan performance results and targets discussed above excluded the Micro Focus results for the five-month period from February 2023 to June 2023.

No adjustment was made to the expected performance of stand-alone OpenText operations.

This was to ensure line of sight to achievement and measurement of the performance objectives set for the OpenText operations, excluding the impact of the acquisition for the fiscal year commencing July 1, 2022.

The MF SPIP was added to our compensation program to account for the Micro Focus Acquisition on January 31, 2023.

Our CEO and other Named Executive Officers increased their responsibilities while leading the larger, integrated Company after the acquisition, so their short-term target incentives relating to Micro Focus revenues for the last five months ending June 30, 2023 were adjusted.

The core worldwide incentive plan in place prior to the acquisition focused on metrics attributable to OpenText stand-alone operations, so an incremental incentive plan was introduced with a new measure tied to the immediate five-month stabilization of Micro Focus revenues for the period of February 1, 2023 to June 30, 2023.

This met the total company objectives of continued focus on delivering on the OpenText business objectives for the year while also delivering on the Micro Focus integration plan and Micro Focus customer retention.

The MF SPIP is tied to Micro Focus revenues, which is included in the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable.

This is an important metric for measuring the stabilization of Micro Focus revenues.

The Committee approved this program to pay $1.6 million in bonuses to our Named Executive Officers for achieving the goal of between $864 million and $944 million in Micro Focus revenue (96% and 104.9%, respectively, of $900 million target).

We achieved $978 million in Micro Focus revenues, equating to 108.6% of target, which resulted in a total of $3.2 million in bonuses paid under the MF SPIP (200% payout).

This recognized the short-term business objective of stabilizing Micro Focus’ revenue and acknowledged the increased scope of the roles of the Named Executive Officers who assumed additional accountability for the combined OpenText and Micro Focus organizations.

The amount of the MF SPIP payable to each Named Executive Officer, in general, is based on the attainment of pre-established quantitative corporate objectives which were reviewed and approved by the Compensation Committee and the Board.

The table below illustrates the percentage of the target awards related to the MF SPIP paid to our Named Executive Officers in accordance with our actual results achieved during Fiscal 2023, with adjustments to remove the impact of foreign exchange as compared to budgeted rates, which are outside of the control of the executives.

Objective (in millions) Threshold

Target Target Fiscal 2023

% Target Actually Achieved % of Payment per Fiscal 2023 Payout Table

FY23 Micro Focus Revenues for the five months ended June 30, 2023 $ 846 $ 900 $ 978 109 % 200 %

In Fiscal 2023, we achieved 108.6% of our MF SPIP target.

The table below illustrates under the “% Attainment” column that an achievement of 108.6% of target for the MF SPIP performance criteria results in an award payment of 200% of the target award amount.

FY23 Micro Focus Special Performance Incentive Plan

% Attainment % Payment

94.0 - 95.9% 50%

96.0 - 104.9% 100%

105.0 - 106.9% 150%

107% and above 200% cap

Actual / Target = % of Attainment

For Fiscal 2023, the following table illustrates the MF SPIP award amount actually paid and the percentage of target award amount represented by the actual award paid for each Named Executive Officer.

Named Executive Officer Payable at

Target Payable at

Threshold Actual

(% of Target)

Barrenechea $ 590,000 $ 295,000 $ 1,180,000 200 %

Madhu Ranganathan $ 250,000 $ 125,000 $ 500,000 200 %

Simon Harrison $ 250,000 $ 125,000 $ 500,000 200 %

Muhi Majzoub $ 250,000 $ 125,000 $ 500,000 200 %

Paul Duggan $ 250,000 $ 125,000 $ 500,000 200 %

Long-Term Incentives

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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.

The target value of the annual grants are consistent with competitive market practice, set to ensure that annual total direct target compensation package is appropriately positioned relative to our industry peer group for each Named Executive Officers.

Grant amounts take into account the desired pay mix, competitive positioning and internal equity across our Named Executive Officers.

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.

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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.

The performance goals and the weightings of performance goals 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 for grants made during or prior to Fiscal 2022.

For grants made on or after Fiscal 2023, when cash dividends are paid by the Company on outstanding Common Shares, the Company will credit additional dividend equivalent PSUs and RSUs to the participant’s account.

No dividends were paid or accrued on PSUs or RSUs for grants made prior to Fiscal 2023.

For grants made during or after Fiscal 2023, when cash dividends are paid by the Company on outstanding Common Shares, the Company will credit additional dividend equivalent PSUs and RSUs to the participant’s account.

Dividend equivalent PSUs and RSUs will be subject to the same terms and conditions as the granted PSUs or RSUs, as applicable, and vest and are settled at the same time and in the same form as the PSUs or RSUs to which such dividend equivalent PSUs or RSUs relate.

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.

Performance Share Units (PSUs) 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 relative 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.

The number of PSUs to vest will be based on the Company’s relative TSR at the end of a three-year period as compared to the TSR of companies comprising the performance peer group.

For Fiscal 2023, Relative TSR was measured against the constituents of the S&P MidCap400 Software and Services Index and for Fiscal 2024, Relative TSR will be measured against the constituents of the NASDAQ Composite Index.

Cliff vesting in the third year following the determination by the Board that the performance criteria have been met.

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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.

Restricted Share Units (RSUs) 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.

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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;

• 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.

Grants made in Fiscal 2022 under the LTIP (collectively referred to as “LTIP 2024” because the PSUs and RSUs do not vest until Fiscal 2024) took effect on August 9, 2021, with the goal of measuring performance over the three-year period starting July 1, 2021.

The table below illustrates the target value of each element under LTIP 2024 for each Named Executive Officer.

Named Executive Officer Performance Share Units Restricted Share Units Stock Options Total

• May be subject to certain limitations in the event of early termination of employment or change in control of the Company;

• Are subject to mandatory repayment or “claw-back” in the event of fraud, willful misconduct or gross negligence by an employee, including a Named Executive Officer, affecting the financial performance or financial statements of the Company or the price of our Common Shares.

Grants made in Fiscal 2023 under the LTIP were granted on August 8, 2022 with the goal of measuring performance over a three-year period (from July 1, 2022 to September 15, 2025).

The table below illustrates the target value of each element under the LTIP for each Named Executive Officer.

Named Executive Officer Performance Share Units Value Restricted Share Units Value Stock Options Value Total

Barrenechea $ 5,000,000 $ 2,500,000 $ 2,500,000 $ 10,000,000

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Muhi Majzoub $ 742,500 $ 371,250 $ 371,250 $ 1,485,000

Davies $ 675,000 $ 337,500 $ 337,500 $ 1,350,000

The LTIP is an annual program, so LTIP awards granted in Fiscal 2022 under LTIP 2024 were in addition to the annual LTIP awards granted in Fiscal 2021, Fiscal 2020, and prior years.

Paul Duggan $ 500,000 $ 250,000 $ 250,000 $ 1,000,000

The LTIP is an annual program.

For details of our previous LTIPs, see Item 11 of our Annual Report on Form 10-K for the relevant year.

LTIP 2024 - 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 $1.6 billion to $17.9 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 2024 with respect to PSUs.

If the Company's relative cumulative TSR, compared to the cumulative TSR of the Index is:

With respect to our PSUs, we used 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 for the Fiscal 2023 award.

The S&P Mid Cap 400 Software & Services Index is comprised of a subset of software and services companies of the S&P Mid Cap 400, which consists of 400 U.S.

public companies with market capitalization of $1.4 billion to $17.8 billion and is a 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 with respect to PSUs.

PSUs granted for Fiscal 2024 will include a Relative TSR metric as part of their long-term incentive plan design.

Relative TSR will be calculated in comparison to the NASDAQ Composite Index which correlates better to our own market movement.

The NASDAQ Composite Index will replace the previous index for the Fiscal 2024 grant.

This change reflects our new size and scope of operations as a result of the Micro Focus Acquisition while providing for a larger peer group reflecting a wide range of shareholder alternatives for investment choices.

If the Company’s cumulative Relative 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:

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Any target percentile achieved between 25 th and 80 th 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 2024 are as follows, calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2022, and applied to the number of PSUs granted to the Named Executive Officers on August 9, 2021, based on the levels of achievement disclosed above.

External benchmarking shows that the threshold of the 25 th percentile with a 50% payout, is the majority practice among our peer group.

The amounts that may be realized for PSU awards are as follows, calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2023, and applied to the number of PSUs granted to the Named Executive Officers on August 8, 2022, based on the levels of achievement disclosed above.

See “Grants of Plan-Based Awards in Fiscal 2023” for the number of PSUs granted in Fiscal 2023.

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Muhi Majzoub $ 391,339 $ 782,677 $ 1,565,354

$ 245,393 $ 490,785 $ 981,570

______________________

(1) On January 24, 2022, the Company announced that Mr.

Davies would retire in September 2022.

As a result, Mr.

Davies will forfeit PSU awards granted to him under LTIP 2024.

LTIP 2024 - 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 2024 period.

The following RSU award values under LTIP 2024 have been calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2022, and applied to the number of RSUs granted to the Named Executive Officers on August 9, 2021.

Paul Duggan $ 263,593 $ 527,186 $ 1,054,372

RSUs vest after 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 will become vested RSUs at the end of the three year period.

The following RSU award values have been calculated based on the market price of our Common Shares on the NASDAQ as of June 30, 2023, and applied to the number of RSUs granted to the Named Executive Officers on August 8, 2022.

See “Grants of Plan-Based Awards in Fiscal 2023” for the number of RSUs granted in Fiscal 2023.

LTIP 2024 RSUs

Named Executive Officer Value as of June 30, 2023

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Muhi Majzoub $ 391,567

______________________

(1) On January 24, 2022, the Company announced that Mr.

Davies would retire in September 2022.

As a result, Mr.

Davies will forfeit RSU awards granted to him under LTIP 2024.

Paul Duggan $ 263,593

LTIP - Stock Options

The stock options granted in connection with LTIP 2024 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.

The stock options granted in connection with the annual LTIP program 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 realize value on these stock options only if there is 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.

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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 2022, we did not grant any special one-time grants to any of our Named Executive Officers.

In Fiscal 2023, we made a grant of stock options to our Named Executive Officers (excluding our CEO - see “ Long-Term Equity Grants to CEO ”), following the announcement of the Micro Focus Acquisition.

The stock option grants have a four-year vesting horizon and do not begin vesting until year two.

With the increased size of the organization, which includes the Named Executive Officers leading a larger combined OpenText organization for their respective functions, the objective of the one-time grants was to retain and engage the leadership team to successfully integrate Micro Focus and execute on the combined company’s operational goals over the next two to four years in order to achieve sustainable growth and long-term shareholder value.

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 “ Compensation Decisions for Fiscal 2023 ”, on August 29, 2022, Mr.

Barrenechea was awarded a grant of performance stock options with an exercise price of $31.89, a seven-year term, and vesting subject to certain performance conditions provided that Mr.

Barrenechea remains an employee.

The grant was made after the announcement of the Micro Focus Acquisition and was in recognition of the size, importance and need to achieve the stated benefits and synergies associated with the transaction.

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, 2022, 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 ($44.65 reflecting an increase of 40%) will result in 500,000 options vesting, with no options vesting below threshold performance ($38.27 reflecting an increase of 20%) and 1,000,000 options vesting if maximum performance is achieved ($51.02 reflecting an increase of 60%).

No more than 1,000,000 performance options (2x target) may vest under the award.

ACP Increase (%) Illustrative ACP ($)

Aggregate Number of Options to Vest

Threshold (20%) $38.27 200,000

30% $41.46 350,000

Target (40%) $44.65 500,000

50% $47.84 750,000

Maximum (60%) $51.02 1,000,000

To the extent that any performance options vest during the first five-year period, the options (or the underlying Common Shares upon exercise) 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.

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.

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 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, there is a change in relationship between the Company and the senior executive officer within one year after the transaction.

We have structured our senior executive officers’ change in control benefits as “double trigger” benefits, meaning that the benefits are paid only in the event of, first, a change in control transaction, and second, a change in relationship between the Company and the senior executive officer 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.

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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.

The Board originally 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 as long as they remain members of the executive leadership team.

Named Executive Officers

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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 2022, as they have met the share ownership guidelines.

Common Shares issuable pursuant to the unexercised options are not counted towards meeting the equity ownership target.

All Named Executive Officers had complied with the Share Ownership Guidelines for Fiscal 2023.

However, due to increases in responsibilities and related compensation in Fiscal 2023, Mr.

Duggan is currently below the requirements of the Share Ownership Guidelines and expects to be compliant in Fiscal 2024.

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 five times their annual retainer, with the exception of Ms.

Powell, who joined as a member of our Board in June 2021.

Powell has until November 3, 2026, to meet the applicable requirements of the Share Ownership Guidelines.

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 five times their annual retainer.

For further details, see the table below titled “Director Compensation for Fiscal 2023.”

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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.

Any Canadian dollar payments included herein have been converted to U.S.

dollars at an annual average rate of 0.792677 , 0.773416, and 0.746217, for Fiscal 2022, Fiscal 2021, and Fiscal 2020, respectively.

Incentive Plan

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2021 $ 398,437 — $ 1,377,238 $ 1,087,917 $ 796,904 $ — (8) $ 3,660,496

Davies 2022 $ 454,204 — $ 1,298,676 (11) $ 337,434 $ 908,408 $ 4,075 (7) $ 3,002,797

Executive Vice President, Special Advisor to the Chief Executive Officer 2021 $ 373,415 — $ 1,370,111 (12) $ 1,004,026 $ 746,856 $ — (8) $ 3,494,408

2020 $ 377,096 $ 17,530 $ 781,072 $ 275,201 $ 537,306 $ — (8) $ 1,988,205

Paul Duggan 2023 $ 575,000 — $ 919,134 $ 1,288,957 $ 1,273,300 $ 10,110 (12) $ 4,066,501

Executive Vice President, Chief Customer Officer 2022 N/A N/A N/A N/A N/A N/A (13) N/A

2021 N/A N/A N/A N/A N/A N/A (13) N/A

___________________________________

(1) Amounts reflect Fiscal 2021 and Fiscal 2020 COVID-19 compensation adjustments, which included a base salary reduction for each of the Named Executive Officers effective May 15, 2020, and the subsequent restoration of those adjustments which became effective December 1, 2020.

(1) Amounts reflect Fiscal 2021 COVID-19 compensation adjustments, which included a base salary reduction for each of the Named Executive Officers effective May 15, 2020, and the subsequent restoration of those adjustments which became effective December 1, 2020.

See Item 11 of our Annual Report on Form 10-K for Fiscal 2021 for further details on our COVID-19 compensation adjustments.

(2) Amounts set forth in this column for Fiscal 2021 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;

A 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.

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Grant date fair value may vary from the target value indicated in the table set forth above in the section “LTIP.” 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 2022 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 2022” table below.

For the maximum value that may be received under the PSU

awards granted in Fiscal 2023 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 2023” 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.

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The performance options granted to Mr.

Barrenechea in Fiscal 2021 have been reflected and valued here assuming achievement at the maximum performance level.

Barrenechea in Fiscal 2021 and Fiscal 2023 have been reflected and valued here, assuming all performance conditions are satisfied.

Please also see “Long-Term Equity Grants to CEO” and “Grants of Plan-Based Awards in Fiscal 2023” 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.

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“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.

(7) Represents amounts we paid, reimbursed or attributed for international tax and financial planning and travel related items.

(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, 2022 and June 30, 2021.

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(10) Represents amounts we paid or reimbursed for housing allowance inclusive of a related tax gross-up amount of $160,118, $160,118 and $160,118 for the fiscal years ended June 30, 2023, 2022 and 2021, respectively.

(11) Includes PSU and RSU awards granted to Mr.

Davies under LTIP 2024, which will be forfeited as a result of Mr.

Davies planned retirement from the Company in September 2022.

(12) Includes PSU and RSU awards granted to Mr.

Davies under LTIP 2023, which will be forfeited as a result of Mr.

Davies planned retirement from the Company in September 2022.

(11) Represents amounts we paid or reimbursed for tax, financial, and estate planning.

(12) Represents amounts we paid or reimbursed for medical examinations and life insurance.

(13) The executive officer was not a Named Executive Officer during the fiscal year, and therefore compensation details have been excluded.

Grants of Plan-Based Awards in Fiscal 2023

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Barrenechea August 8, 2022 $ 508,750 $ 2,015,000 $ 4,030,000 306,370 $ 39.09 $ 2,499,263

August 29, 2022 1,000,000 (6) $ 31.89 $ 8,090,000

Madhu Ranganathan August 8, 2022 $ 224,000 $ 910,000 $ 1,820,000 67,400 $ 39.09 $ 549,826

November 7, 2022 180,000 $ 26.81 $ 1,039,006

Simon Harrison August 8, 2022 $ 207,500 $ 800,000 $ 1,600,000 45,500 $ 39.09 $ 371,174

November 7, 2022 180,000 $ 26.81 $ 1,039,006

Muhi Majzoub August 8, 2022 $ 207,500 $ 800,000 $ 1,600,000 45,500 $ 39.09 $ 371,174

Davies August 9, 2021 $ 68,130 $ 454,204 $ 908,408 34,620 $ 52.62 $ 337,434

November 7, 2022 180,000 $ 26.81 $ 1,039,006

Paul Duggan August 8, 2022 $ 207,500 $ 800,000 $ 1,600,000 30,640 $ 39.09 $ 249,951

November 7, 2022 180,000 $ 26.81 $ 1,039,006

Estimated Future Payouts

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Muhi Majzoub August 8, 2022 9,145 18,290 36,580 9,150 $ 1,364,721

August 9, 2021 6,485 12,970 25,940 6,490 $ 1,298,676

Paul Duggan August 8, 2022 6,160 12,320 24,640 6,160 $ 919,134

____________________________

(1) Represents the threshold, target and maximum estimated payouts under our short-term incentive plan for Fiscal 2023.

For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Short-Term Incentives” above.

(2) For further information regarding our options granting procedures, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives” above.

For further information, see “Compensation Discussion and Analysis - Our Compensation Program - Short-Term Incentives” above.

(2) For further information regarding our options granting procedures, see “Compensation Discussion and Analysis - Our Compensation Program - 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.

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(4) Represents the threshold, target and maximum estimated payouts under our LTIP PSUs for all Named Executive Officers.

For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - LTIP 2024.”

For further information, see “Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - LTIP” and Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - Long-Term Equity Grants to CEO” above.

(5) Represents the estimated payouts under our LTIP RSUs.

For further information, see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Long-Term Incentives - LTIP 2024” above .

(6) PSU and RSU awards granted under LTIP 2024 will be forfeited by Mr.

Davies as a result of his planned retirement from the Company in September 2022.

For further information, see “Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - LTIP” above .

(6) Amount consists of the performance option award.

The threshold, target and maximum estimated payout for the performance options reflect the vesting of 200,000, 500,000 and 1,000,000 options, respectively.

The value of the performance option at the date of grant was as set forth herein, assuming the highest level of the performance condition is satisfied.

Outstanding Equity Awards at End of Fiscal 2023

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August 9, 2021 64,103 192,307 $ 52.62 August 9, 2028

August 8, 2022 — 306,370 $ 39.09 August 8, 2029

August 29, 2022 288,269 711,731 $ 31.89 August 29, 2029

August 10, 2020 98,270 $ 4,083,119

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August 9, 2021 12,820 38,460 $ 52.62 August 9, 2028

August 8, 2022 — 67,400 $ 39.09 August 8, 2029

November 7, 2022 — 180,000 $ 26.81 November 7, 2029

August 10, 2020 10,983 $ 456,344

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August 9, 2021 8,655 25,965 $ 52.62 August 9, 2028

August 8, 2022 — 45,500 $ 39.09 August 8, 2029

November 7, 2022 — 180,000 $ 26.81 November 7, 2029

August 10, 2020 8,839 $ 367,260

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Muhi Majzoub July 29, 2016 32,560 — $ 29.75 July 29, 2023

July 29, 2016 32,560 — $ 29.75 July 29, 2023

August 7, 2017 36,960 — $ 34.49 August 7, 2024

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August 9, 2021 8,655 25,965 $ 52.62 August 9, 2028

August 8, 2022 — 45,500 $ 39.09 August 8, 2029

November 7, 2022 — 180,000 $ 26.81 November 7, 2029

August 10, 2020 8,598 $ 357,247

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August 8, 2022 18,837 $ 782,670

Davies August 6, 2018 — 7,150 $ 39.27 August 6, 2025

Paul Duggan August 6, 2018 2,502 — $ 39.27 August 6, 2025

May 7, 2019 30,000 15,000 $ 40.20 May 7, 2026

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August 9, 2021 4,808 14,422 $ 52.62 August 9, 2028

August 8, 2022 — 30,640 $ 39.09 August 8, 2029

November 7, 2022 — 180,000 $ 26.81 November 7, 2029

August 10, 2020 3,438 $ 142,849

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______________________________

(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) 750,000 performance options granted to the CEO in Fiscal 2021 assuming achievement of maximum performance level 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.

For additional detail, see Item 11 of our Annual Report on Form 10-K for Fiscal 2021.

(2) Represents each Named Executive Officer's target number of RSUs granted pursuant to LTIP 2022, LTIP 2023, LTIP 2024, 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, 2022, based upon the closing price for the Company's Common Shares as traded on the NASDAQ on such date of $37.84.

(3) Represents each Named Executive Officer's target number of PSUs granted pursuant to the LTIP 2022, LTIP 2023, and LTIP 2024, 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, 2022, based upon the closing price for the Company's Common Shares as traded on the NASDAQ on such date of $37.84.

(4) 8,509 RSUs will be forfeited by Mr.

Davies as a result of his planned retirement from the Company in September 2022.

(5) Entire award will be forfeited by Mr.

Davies as a result of his planned retirement from the Company in September 2022.

As of June 30, 2022, options to purchase an aggregate of 8,820,662 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 2,892,889 Common Shares were vested.

(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) 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, (ii) options granted to certain of our executive officers on November 7, 2022 in recognition of their services which vest annually over a 4 year period, with the first vesting date being two years from the date of grant, and (iii) 750,000 performance options granted to the CEO in Fiscal 2021 and 1,000,000 performance options granted to the CEO in Fiscal 2023 both of which vest subject to the satisfaction of certain performance criteria.

For additional detail, see “Compensation Discussion and Analysis - Our Compensation Program - Long-

Term Incentives - Long-Term Grants to CEO”, Item 11 of our Annual Report on Form 10-K for Fiscal 2021 and “Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - Long-Term Grants to CEO” above.

(2) Represents each Named Executive Officer’s target number of RSUs granted pursuant to our LTIP program, and other non-LTIP related RSUs, which vest upon the schedules described above in “Compensation Discussion and Analysis - Our Compensation Program - Long Term Incentives.” These amounts illustrate the market value as of June 30, 2023, based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on such date of $41.55.

(3) Represents each Named Executive Officer’s target number of PSUs granted pursuant to our LTIP program, which vest upon the schedules described above in “Compensation Discussion and Analysis - Our Compensation Program - Long Term Incentives.” These amounts illustrate the market value as of June 30, 2023, based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on such date of $41.55.

As of June 30, 2023, options to purchase an aggregate of 12,219,439 Common Shares had been previously granted and are outstanding under our stock option plans, of which 4,292,254 Common Shares were vested.

Options to purchase an additional 5,950,832 Common Shares remain available for issuance pursuant to our stock option plans.

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Muhi Majzoub 37,840 $ 252,412 16,756 $ 470,133

Davies 99,280 $ 1,634,768 24,087 $ 1,244,389

Paul Duggan — $ — 7,457 $ 207,724

_______________________________

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(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 2021.

(3) Relates to the vesting of PSUs and RSUs under our LTIP program.

Potential Payments Upon Termination or Change in Control

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Muhi Majzoub Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months

Davies Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months

Paul Duggan Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months

____________________________

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Muhi Majzoub Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months

Davies Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months

Paul Duggan Termination without cause or Change in relationship 12 months 12 months 100% Vested 100% Vested 12 months

_____________________________

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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.

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 make such payments and provide such benefits, from the date of the event which triggered our obligation.

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 make such payments and provide such benefits, from the date of the event which triggered our obligation.

With respect to payments to Mr.

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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.

Also, each Named Executive Officer is bound by a confidentiality and non-solicitation agreement where the non-solicitation obligation lasts six 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.

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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, 2022, of 0.792677;

• 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, 2023;

• Payments under the LTIPs are calculated as though 100% of LTIP 2024 (granted in Fiscal 2022), LTIP 2023 (granted in Fiscal 2021), and LTIP 2022 (granted in Fiscal 2020) 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.

• Payments under the LTIPs are calculated as though 100% of outstanding LTIP awards 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.

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Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,125,000 $ 1,100,000 $ 2,896,409 $ 2,815,303 $ 8,657 $ 7,945,369

Davies Termination Without Cause / Change in Relationship with no Change in Control $ 360,037 $ 454,204 $ 1,317,794 $ — $ 4,075 $ 2,136,110

Paul Duggan Termination Without Cause / Change in Relationship with no Change in Control $ 575,000 $ 550,000 $ 636,060 $ — $ 10,110 $ 1,771,170

Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 575,000 $ 550,000 $ 1,610,063 $ 2,762,426 $ 10,110 $ 5,507,599

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(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.

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 Plans and Share-based Payments” to our consolidated financial statements.

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Sadler holds 125,209 DSUs.

(10) As of June 30, 2022, Mr.

Singh holds 29,761 DSUs.

Singh retired from the Board effective September 15, 2022.

(11) As of June 30, 2023, Mr.

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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 five times their annual retainer, other than Ms.

Powell, who has until November 3, 2026, to meet the applicable requirements of the Share Ownership Guidelines.

All non-management directors have exceeded the Share Ownership Guidelines applicable to them, which is five times their annual retainer.

For further details of our Share Ownership Guidelines as they relate to directors, see “Share Ownership Guidelines” above.

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Slaunwhite (Chair) and Mses.

Hamilton and Weinstein.

Hamilton, Powell 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.

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16,804,467 6.20%

245 Summer Street, Boston, MA 02210

Harris Associates LP (1)

111 South Wacker Drive, Chicago, IL 60606

14,572,307 5.38%

5 unchanged sentences

Randy Fowlie (8)

Simon Harrison (9)

Deborah Weinstein (10)

Stevenson (11)

Simon Harrison (12)

Hamilton (12)

Harmit Singh (14)

Paul Duggan (13)

David Fraser (14)

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(4) Includes 943,152 Common Shares owned and 139,118 DSUs which are exercisable.

(5) Includes 347,500 Common Shares owned and 116,366 DSUs which are exercisable.

(6) Includes 28,010 Common Shares owned, 344,701 options which are exercisable and 79,159 options which will become exercisable within 60 days of June 30, 2023.

1 unchanged sentence

(8) Includes 194,500 Common Shares owned and 119,110 DSUs which are exercisable.

(8) Includes 135,000 Common Shares owned and 105,137 DSUs which are exercisable.

(9) Includes 26,429 Common Shares owned, 118,768 options which are exercisable and 58,343 options which will become exercisable within 60 days of June 30, 2023.

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(11) Includes 25,630 Common Shares owned and 117,651 DSUs which are exercisable.

(12) Includes 10 Common Shares owned and 93,430 DSUs which are exercisable.

(13) Includes 8,789 Common Shares owned, 54,422 options which are exercisable and 29,579 options which will become exercisable within 60 days of June 30, 2023.

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(16) Includes 6,659 DSUs which are exercisable.

(16) Includes 6,091 DSUs which are exercisable.

(17) Includes 1,363 DSUs which are exercisable.

(17) Includes 6,152,996 Common Shares owned, 2,563,831 options which are exercisable, 624,343 options which will become exercisable within 60 days of June 30, 2023, and 903,662 DSUs which are exercisable.

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Additionally, Mr.

Sadler has direct or indirect control over a material interest in Enghouse Systems Limited, a publicly traded software company, which acquired

Dialogic Group Inc, (“Dialogic”) in 2020.

Prior to Dialogic being acquired by Enghouse Systems Limited, OpenText entered into a product supply and license agreement to purchase certain software licenses from a subsidiary of Dialogic under which the company makes payments in the normal course of business.

During Fiscal 2022, OpenText paid $2.0 million under such an agreement.

Sadler has direct or indirect control over a material interest in Enghouse Systems Limited ,a publicly traded software company, and its subsidiaries.

OpenText entered into product supply and license agreements to purchase certain software licenses from Enghouse Systems Limited and its subsidiaries, under which the company makes payments in the normal course of business.

During Fiscal 2023, OpenText paid $2.1 million under such agreements.

Principal Accountant Fees and Services

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(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, (d) fees associated with non-periodic securities filings, and (e) annual statutory audits where applicable.

(2) 2021 Audit fees includes a reclassification of fees for non-periodic filings with the SEC previously included within the audit-related fees category.

The increase in 2023 as compared to 2022 is primarily due to the Micro Focus Acquisition, including audit procedures over (a) the opening balance sheet and purchase equation, (b) the results of operations from the date of acquisition to year end, and (c) Micro Focus statutory audits.

(2) Audit related fees were primarily for assurance and related services, such as IT assurance engagements and accounting research services.

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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.

Audit services representing approximately $0.01 million were provided by KPMG LLP for which the foregoing pre-approval procedures were waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.

Exhibits and Financial Statement Schedules

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Company’s Form 8-K, filed November 12, 2019 Exhibit 2.1

Rule 2.7 Announcement, dated August 25, 2022.

Company’s Form 8-K/A, filed August 29, 2022 Exhibit 2.1

3.1 Articles of Amalgamation of the Company Company’s registration statement on Form F-1, filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively)

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4.2 Form of Common Share Certificate Company’s registration statement on Form F-1 (Registration Number 33-98858), filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively)

Amended and Restated Shareholder Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc.

dated September 4, 2019

Company’s Form 8-K filed September 4, 2019 Exhibit 4.1

Indenture, dated as of February 18, 2020, between Open Text Corporation and the Bank of NY Mellon, as U.S.

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Company’s Form 8-K filed November 24, 2021 Exhibit 4.3

Amended and Restated Shareholder Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc.

dated September 15, 2022.

Company’s Form 8-K, filed September 15, 2022 Exhibit 4.1

Form of Common Share Certificate

Company’s Form 10-Q, filed November 3, 2022

Indenture governing the Company’s 6.90% senior secured notes due 2027, dated as of December 1, 2022, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

trustee and Notes collateral agent, and BNY Trust Company of Canada, as Canadian trustee.

Company’s Form 8-K, filed December 1, 2022 Exhibit 4.1

10.1* 1998 Stock Option Plan Company’s Form 10-K filed August 20, 1999

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Company’s Registration Statement on Form S-8 filed September 30, 2020 Exhibit 4.2

Bridge Loan Agreement, dated August 25, 2022, by and between the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent, and certain financial institution parties thereto.

Company’s Form 8-K, filed August 25, 2022 Exhibit 10.3

Co-operation Agreement, dated August 25, 2022, by and between the Company, Bidco and Micro Focus International plc.

Company’s Form 8-K/A, filed August 29, 2022 Exhibit 10.1

Term Loan Credit Agreement, dated August 25, 2022, by and between the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent, and certain financial institution parties thereto.

Company’s Form 8-K/A, filed August 29, 2022 Exhibit 10.2

First Amendment to Credit Agreement, dated December 1, 2022, by and among the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and certain financial institution parties thereto.

Company’s Form 8-K, filed December 1, 2022 Exhibit 10.1

Amendment No.

1 to Amended and Restated Credit Agreement dated June 6, 2023, 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.

Amendment No.

1 to Fourth Amended and Restated Credit Agreement dated as of June 6, 2023, 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.

List of the Company ’ s Subsidiaries

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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 approach and the significant assumptions used to determine SSP for identified performance obligations in customer contracts

which include a software license.

We evaluated the approach 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 evaluated the approach 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.

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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.

Business combination - Valuation of acquired intangible assets

As discussed in Note 19 to the consolidated financial statements, on January 31, 2023, the Company acquired 100% of the outstanding shares of Micro Focus International plc (Micro Focus) for $6.2 billion.

The Company identified customer relationships and internally developed technology as acquired intangible assets and have determined the fair value of the customer relationships and internally developed technology to be $2.162 billion and $1.392 billion, respectively.

As discussed in note 2 to the consolidated financial statements, the Company estimated the fair value of the identified intangible assets acquired in the business combination based on the income approach.

The Company used the multi-period excess earnings methodology for customer relationships and the relief from royalty method for internally developed technology.

These valuation approaches involve significant subjectivity and estimation uncertainty, including the use of assumptions related to the future revenues attributable to the acquired customer relationships and to the internally developed technology asset, and discount rates.

We identified the valuation of customer relationships and internally developed technology acquired in the business combination with Micro Focus as a critical audit matter.

Significant auditor judgment and attention was required due to the significant measurement uncertainty in the assumptions related to future revenues attributable to the acquired customer relationships and to the internally developed technology asset, and discount rates used to determine the fair value.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s valuation of customer relationships and internally developed technology.

This included controls related to management’s determination of the assumptions identified above.

We evaluated the future revenues attributable to the acquired customer relationships and to the internally developed technology asset by comparing the forecasted revenues to the historical performance of the acquired business.

We involved valuation professionals with specialized skills and knowledge to assess the methodology applied in estimating the fair value of the identified intangible assets and assist in evaluating the discount rates by comparing the inputs to the discount rates to publicly available data for comparable entities and assessing the resulting discount rate.

Chartered Professional Accountants, Licensed Public Accountants

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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, 2023 and 2022, 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, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated August 2, 2023 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Zix Corporation on December 23, 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2022, Zix Corporation’s internal control over financial reporting associated with 2.5% of consolidated total revenues and 9.6% of consolidated total assets (of which $868 million, or 8.5% of consolidated total assets, represents goodwill and net intangible assets included within the scope of the assessment) included in the consolidated financial statements of the Company as of and for the year ended June 30, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Zix Corporation.

The Company acquired Micro Focus International plc (Micro Focus) on January 31, 2023, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2023, Micro Focus’ internal control over financial reporting associated with 21.8% of consolidated total revenues and 47.6% of consolidated total assets (of which $6.8 billion, or 39.6% of consolidated total assets, represents goodwill and net intangible assets that are included within the scope of management’s assessment of internal control over financial reporting as of June 30, 2023) included in the consolidated financial statements of the Company as of and for the year ended June 30, 2023.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Micro Focus.

Basis for Opinion

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Cash and cash equivalents $ 1,231,625 $ 1,693,741

Accounts receivable trade, net of allowance for credit losses of $ 16,473 as of June 30, 2022 and $ 22,151 as of June 30, 2021 (Note 4)

Accounts receivable trade, net of allowance for credit losses of $ 13,828 as of June 30, 2023

and $ 16,473 as of June 30, 2022 (Note 4)

682,517 426,652

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Share capital and additional paid-in capital (Note 13)

269,522,639 and 271,540,755 Common Shares issued and outstanding at June 30, 2022 and June 30, 2021, respectively;

270,902,571 and 269,522,639 Common Shares issued and outstanding at June 30, 2023 and

June 30, 2022, respectively;

authorized Common Shares:

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Retained earnings 2,048,984 2,160,069

Treasury stock, at cost ( 3,706,420 and 1,567,664 shares at June 30, 2022 and June 30, 2021, respectively)

Treasury stock, at cost ( 3,536,375 and 3,706,420 shares at June 30, 2023 and June 30, 2022,

respectively)

( 151,597 ) ( 159,966 )

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Related party transactions (Note 25)

Subsequent event (Note 26)

Subsequent events (Note 26)

See accompanying Notes to Consolidated Financial Statements

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Income from operations

516,292 644,773 740,903

Other income (expense), net (Note 23)

2 unchanged sentences

Income before income taxes

221,333 516,011 650,770

Provision for income taxes (Note 15)

70,767 118,752 339,906

Net income $ 397,259 $ 310,864 $ 234,368

Net (income) loss attributable to non-controlling interests ( 169 ) ( 192 ) ( 143 )

$ 150,566 $ 397,259 $ 310,864

Net (income) attributable to non-controlling interests

( 187 ) ( 169 ) ( 192 )

Net income attributable to OpenText

$ 150,379 $ 397,090 $ 310,672

Earnings per share—basic attributable to OpenText (Note 24)

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2023 2022 2021

Net income $ 397,259 $ 310,864 $ 234,368

$ 150,566 $ 397,259 $ 310,864

Other comprehensive income (loss)—net of tax:

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Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) - net of tax expense (recovery) effect of ($ 671 ), $ 1,532 , and ($ 599 ) for the year ended June 30, 2022, 2021 and 2020, respectively

Unrealized gain (loss) - net of tax (1)

( 941 ) ( 1,859 ) 4,246

(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $ 134 , ($ 1,182 ), and $ 355 for the year ended June 30, 2022, 2021 and 2020, respectively

(Gain) loss reclassified into net income - net of tax (2)

2,721 373 ( 3,280 )

Unrealized gain (loss) on available-for-sale financial assets:

Unrealized gain (loss) - net of tax (3)

Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss) - net of tax expense (recovery) effect of $ 1,866 , $ 990 and $ 1,219 for the year ended June 30, 2022, 2021 and 2020, respectively

Actuarial gain (loss) - net of tax (4)

( 6,605 ) 5,595 3,987

Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $ 290 , $ 379 and $ 520 for the year ended June 30, 2022, 2021 and 2020, respectively

Amortization of actuarial (gain) loss into net income - net of tax (5)

325 718 1,020

Total other comprehensive income (loss), net

( 45,900 ) ( 73,897 ) 48,413

Total comprehensive income

Comprehensive (income) loss attributable to non - controlling interests

104,666 323,362 359,277

Comprehensive income attributable to non - controlling interests

( 187 ) ( 169 ) ( 192 )

Total comprehensive income attributable to OpenText

$ 104,479 $ 323,193 $ 359,085

______________________________

(1) Net of tax expense (recovery) of ($ 339 ), ($ 671 ), and $ 1,532 for the year ended June 30, 2023, 2022 and 2021, respectively.

(2) Net of tax expense (recovery) of $ 981 , $ 134 , and ($ 1,182 ) for the year ended June 30, 2023, 2022 and 2021, respectively.

(3) Net of tax expense (recovery) of $ 159 , $ — , and $ — for the year ended June 30, 2023, 2022, and 2021, respectively.

(4) Net of tax expense (recovery) of ($ 1,961 ), $ 1,866 and $ 990 for the year ended June 30, 2023, 2022 and 2021, respectively.

(5) Net of tax expense (recovery) of $ 143 , $ 290 and $ 379 for the year ended June 30, 2023, 2022 and 2021, respectively.

See accompanying Notes to Consolidated Financial Statements

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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 — — — — ( 2,450 ) — — ( 2,450 )

Issuance of Common Shares

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Issuance of treasury stock — ( 12,379 ) 316 12,379 — — — —

Repurchase of Common Shares ( 2,500 ) ( 15,475 ) — — ( 103,630 ) — — ( 119,105 )

Dividends declared

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271,541 $ 1,947,764 ( 1,568 ) $ ( 69,386 ) $ 2,153,326 $ 66,238 $ 1,511 $ 4,099,453

Adoption of ASU 2016-13 - cumulative effect, net

— — — — ( 2,450 ) — — ( 2,450 )

Issuance of Common Shares

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Other comprehensive income (loss) - net — — — — — ( 73,897 ) — ( 73,897 )

Distribution to non-controlling interest — 142 — — — — ( 538 ) ( 396 )

Net income — — — — 397,090 — 169 397,259

7 unchanged sentences

Issuance of treasury stock — ( 31,355 ) 691 30,288 — — — ( 1,067 )

Repurchase of Common Shares ( 3,810 ) ( 24,295 ) — — ( 152,692 ) — — ( 176,987 )

Dividends declared

2 unchanged sentences

Other comprehensive income (loss) - net — — — — — ( 45,900 ) — ( 45,900 )

Distribution to non-controlling interest — 142 — — — — ( 538 ) ( 396 )

Net income — — — — 150,379 — 187 150,566

7 unchanged sentences

Cash flows from operating activities:

Net income $ 397,259 $ 310,864 $ 234,368

$ 150,566 $ 397,259 $ 310,864

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Pension expense 9,207 6,606 6,616

Amortization of debt issuance costs 5,422 4,548 4,633

Amortization of debt discount and issuance costs 16,753 5,422 4,548

Write-off of right of use assets 9,626 17,707 —

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Share in net (income) loss of equity investees 23,077 ( 58,702 ) ( 62,897 )

Changes in financial instruments 128,841 — —

Changes in operating assets and liabilities:

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Net cash provided by operating activities

779,205 981,810 876,120

Cash flows from investing activities:

Additions of property and equipment ( 123,832 ) ( 93,109 ) ( 63,675 )

Purchase of Micro Focus, net of cash acquired ( 5,657,963 ) — —

Purchase of Zix Corporation, net of cash acquired — ( 856,175 ) —

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Purchase of XMedius — — 444

Purchase of Carbonite, Inc., net of cash and restricted cash acquired — — ( 1,305,097 )

Purchase of Dynamic Solutions Group Inc.

— ( 971 ) ( 4,149 )

Realized gain on financial instruments 131,248 — —

Other investing activities ( 873 ) ( 3,922 ) ( 4,568 )

Net cash used in investing activities

( 5,651,420 ) ( 970,959 ) ( 68,770 )

Cash flows from financing activities:

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Payments of dividends to shareholders ( 259,549 ) ( 237,655 ) ( 210,662 )

Other financing activities ( 1,435 ) — —

Net cash provided by (used in) financing activities

4,403,053 138,456 ( 924,547 )

Foreign exchange gain (loss) on cash held in foreign currencies

7,203 ( 63,196 ) 29,734

Increase (decrease) in cash, cash equivalents and restricted cash during the year

( 461,959 ) 86,111 ( 87,463 )

Cash, cash equivalents and restricted cash at beginning of the year 1,695,911 1,609,800 1,697,263

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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.

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), which as of June 30, 2023, was 70 % owned by OpenText.

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During the first quarter of Fiscal 2022 (as defined below), we made a final cash distribution of $ 0.4 million to the non-controlling interest holder in GXS Singapore as part of the process to liquidate the subsidiary.

During the year ended June 30, 2022, the liquidation of GXS Singapore was completed.

Throughout this Annual Report on Form 10-K:

(i) the term “Fiscal 2023” means our fiscal year beginning on July 1, 2022 and ending June 30, 2023;

(ii) the term “Fiscal 2022” means our fiscal year beginning on July 1, 2021 and ended June 30, 2022;

(iii) the term “Fiscal 2021” means our fiscal year beginning on July 1, 2020 and ended June 30, 2021;

(iv) the term “Fiscal 2020” means our fiscal year beginning on July 1, 2019 and ended June 30, 2020;

(v) the term “Fiscal 2019” means our fiscal year beginning on July 1, 2018 and ended June 30, 2019;

(vi) the term “Fiscal 2018” means our fiscal year beginning on July 1, 2017 and ended June 30, 2018;

(vii) the term “Fiscal 2017” means our fiscal year beginning on July 1, 2016 and ended June 30, 2017;

(viii) the term “Fiscal 2016” means our fiscal year beginning on July 1, 2015 and ended June 30, 2016;

(ix) the term “Fiscal 2015” means our fiscal year beginning on July 1, 2014 and ended June 30, 2015;

(x) the term “Fiscal 2014” means our fiscal year beginning on July 1, 2013 and ended June 30, 2014;

and (xi) the term “Fiscal 2013” means our fiscal year beginning on July 1, 2012 and ended June 30, 2013.

During Fiscal 2022, the liquidation of GXS Singapore was completed.

The following Fiscal Year terms are used throughout this Annual Report on Form 10-K:

Fiscal Year Beginning Date Ending Date

June 30, 2025

June 30, 2024

June 30, 2023

June 30, 2022

June 30, 2021

June 30, 2020

June 30, 2019

June 30, 2018

June 30, 2017

June 30, 2016

June 30, 2015

June 30, 2014

June 30, 2013

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.

The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented.

The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the consolidated financial results of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus), with effect from February 1, 2023 (see below and Note 19 “Acquisitions”).

Use of estimates

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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 continues to impact 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, 2022, 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, “Risk Factors” within this Annual Report on Form 10-K.

Acquisition of Micro Focus

On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus (the Micro Focus Acquisition) for a total purchase price of $ 6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness, subject to final adjustments.

In connection with the financing of the Micro Focus Acquisition, concurrent with the announcement of the acquisition on August 25, 2022, the Company entered into the Acquisition Term Loan and Bridge Loan (each as defined below) as well as certain derivative transactions.

On December 1, 2022, the Company issued and sold $ 1.0 billion in aggregate principal amount of 6.90 % Senior Secured Notes due 2027 (Senior Secured Notes 2027), amended the Acquisition Term Loan and terminated the Bridge Loan.

On January 31, 2023, we drew down the entire aggregate principal amount of $ 3.585 billion of the Acquisition Term Loan, net of original issuance discount and other fees, and drew down $ 450 million under the Revolver (as defined below).

We used these proceeds and cash on hand to fund the purchase price consideration and repayment of Micro Focus’ outstanding indebtedness.

In conjunction with the closing of the Micro Focus Acquisition, the deal-contingent forward contracts and non-contingent forward contract, as described in Note 17 “Derivative Instruments and Hedging Activities,” were settled.

NOTE 2— ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

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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.

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.

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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.

During Fiscal 2023, as part of the Micro Focus Acquisition, we acquired certain finance leases primarily comprised of equipment leases, all of which are sublet.

Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets.

In accordance with ASC Topic 842, “Leases” (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.

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(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.

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.

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Any ineffective or excluded portion of a designated cash flow hedge, if applicable, was recognized in our Consolidated Statements of Income.

In Fiscal 2023, we entered into certain derivative financial instruments, a portion of which were designated as a net investment hedge.

In accordance with Topic 815, we recorded the effective portion of the gain or loss on derivative financial instruments that were designated as a net investment hedge within our currency translation adjustment component of “Accumulated other comprehensive income (loss),” in our accompanying Consolidated Balance Sheets.

Any ineffective or excluded portion of our net investment hedge, if applicable, is recognized in “Interest and other related expense, net” of our Consolidated Statements of Income.

See Note 17 “Derivative Instruments and Hedging Activities” for more details.

Asset retirement obligations

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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.

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.

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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 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 based on the relative SSP established for the respective performance obligations.

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.

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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 ASC Topic 606 are met.

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 ASC 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.

However, we do offer consumers who purchase certain of our products online directly from us an unconditional full 70-day money-back guarantee.

Distributors and resellers are also permitted to return the consumer products, subject to certain limitations.

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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.

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.

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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 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 do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the 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.

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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.

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.

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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 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.

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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 Topic 820, “Fair Value Measurement” (Topic 820), 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).

We apply the provisions of ASC Topic 820, “Fair Value Measurement” (Topic 820), to our available-for-sale financial assets and 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

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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.

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.

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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.

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), imputed interest on pension obligations and amortization of actuarial gain/loss.

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 (loss)”, 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.

Actuarial gains or losses in excess of the greater of (i) 10% of the projected benefit obligation, or (ii) 10% of the plan assets, are recognized as a component of “Other Comprehensive Income (Loss), net” and subsequently amortized as a component of net periodic benefit costs over the weighted average of future working life of the plan’s active employees.

See Note 12 “Pension Plans and Other Post Retirement Benefits” for more details.

Accounting Pronouncements Adopted in Fiscal 2023

During Fiscal 2022, we have adopted the following Accounting Standards Update (ASU) that did not have a material impact to our reported financial position, results of operations or cash flows:

• ASU 2019-12 “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes”

Business Combinations

In October 2021, the Financial Accounting Standards Board (FASB) issued ASU 2021-08 “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This standard requires contract assets and contract liabilities acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract in accordance with Accounting Standards Codification (ASC) Topic 606.

Previously, contract assets and contract liabilities were measured at fair value.

The standard is effective for us in our fiscal year ending June 30, 2024, with early adoption permitted.

We elected to early adopt the ASU during our second quarter of Fiscal 2022.

Early adoption required retrospective adoption to business combinations completed on or after July 1, 2021 and prospective adoption to business combinations occurring on or after the date of adoption.

There was no retrospective impact of early adoption as we did not have acquisitions during our first quarter of Fiscal 2022.

Acquisitions disclosed in Note 19 “Acquisitions” are in accordance with ASU 2021-08.

The adoption did not have a material impact to our reported financial position, results of operations or cash flows.

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board (FASB) issued ASU No.

2020-04 “Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In Fiscal 2023, we adopted this ASU and applied the optional practical expedients relating to contract modifications as a result of the transition away from London Interbank Offer Rate (LIBOR).

In the fourth quarter of Fiscal 2023, the Company’s debt instruments that referenced LIBOR were amended to replace the benchmark rate with the Secured Overnight Financing Rate (SOFR) in anticipation of the termination of published LIBOR rates.

The adoption did not have a material impact on our Consolidated Financial Statements and related disclosures.

See Note 11 “Long-Term Debt” for more details.

NOTE 3— REVENUES

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(1) Americas consists of countries in North, Central and South America.

(2) EMEA primarily consists of countries in Europe, the Middle East and Africa.

(2) EMEA 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.

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Long-term deferred revenues $ 217,771 $ 91,144

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.

_______________________________

(1) As of June 30, 2023, the deferred revenue and contract assets balances related to the Micro Focus Acquisition are $ 930.9 million and $ 87.7 million, respectively.

The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the Micro Focus Acquisition and from the timing difference between our performance and customer payments.

We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer.

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Balance as of June 30, 2020

Bad debt expense 11,461

Write-off /adjustments ( 7,566 )

Balance as of June 30, 2020 $ 20,906

Adoption of ASC Topic 326 - cumulative effect 3,025

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Balance as of June 30, 2022

Credit loss expense (recovery) ( 2,007 )

Write-off / adjustments ( 638 )

Balance as of June 30, 2023

Included in accounts receivable are unbilled receivables in the amount of $ 66.5 million as of June 30, 2023 (June 30, 2022—$ 47.9 million).

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Depreciation Net

Furniture, equipment and other $ 52,381 $ ( 39,643 ) $ 12,738

Computer hardware $ 386,400 $ ( 254,131 ) $ 132,269

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Land and buildings 62,041 ( 18,020 ) 44,021

Furniture, equipment and other 55,741 ( 41,821 ) 13,920

Total $ 1,023,450 $ ( 666,546 ) $ 356,904

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Depreciation Net

Furniture, equipment and other $ 41,074 $ ( 33,744 ) $ 7,330

Computer hardware $ 332,462 $ ( 226,341 ) $ 106,121

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Land and buildings 49,011 ( 16,633 ) 32,378

Furniture, equipment and other 52,381 ( 39,643 ) 12,738

Total $ 832,740 $ ( 588,031 ) $ 244,709

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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 our Consolidated Balance Sheets and we do not have any material finance leases.

Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets.

As part of the Micro Focus Acquisition, we acquired $ 165.1 million of operating lease liabilities along with the respective right of use assets and $ 13.0 million of finance lease liabilities along with the respective finance lease receivable.

The finance lease liabilities are comprised of equipment lease arrangements with an average duration of 4 to 5 years of which all are currently being sublet.

The following illustrates the Consolidated Balance Sheets information related to leases:

As of June 30, 2023 As of June 30, 2022

Operating Leases Balance Sheet Location

Operating lease right of use assets Operating lease right of use assets $ 285,723 $ 198,132

Operating lease liabilities (current) Operating lease liabilities $ 91,425 $ 56,380

Operating lease liabilities (noncurrent) Long-term operating lease liabilities 271,579 198,695

Total operating lease liabilities $ 363,004 $ 255,075

Finance Leases

Finance lease receivables (current) Prepaid expenses and other current assets $ 6,362 $ —

Finance lease receivables (noncurrent) Other assets 5,515 —

Total finance lease receivables $ 11,877 $ —

Finance lease liabilities (current) Accounts payable and accrued liabilities $ 5,281 $ —

Finance lease liabilities (noncurrent) Accrued liabilities 5,500 —

Total finance lease liabilities $ 10,781 $ —

The weighted average remaining lease term and discount rate for the periods indicated below were as follows:

As of June 30, 2023 As of June 30, 2022

Weighted-average remaining lease term

Operating leases 5.62 years 6.13 years

Finance leases 2.40 years 0 years

Weighted-average discount rate

Operating leases 4.66 % 2.95 %

Finance leases 5.60 % — %

Lease Costs and Other Information

The following illustrates the various components of operating lease costs for the period indicated:

The following illustrates the various components of lease costs for the period indicated:

Year Ended June 30,

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Total lease cost $ 68,142 $ 55,774 $ 60,234

The weighted average remaining lease term and discount rate for the periods indicated below were as follows:

As of June 30, 2022 As of June 30, 2021

Weighted-average remaining lease term 6.13 years 6.47 years

Weighted-average discount rate 2.95 % 2.82 %

Supplemental Cash Flow Information

The following table presents supplemental information relating to cash flows arising from lease transactions.

Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:

Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below:

Year Ended June 30,

2023 2022 2021

Cash paid for amounts included in the measurement of operating lease liabilities

$ 70,611 $ 72,871 $ 71,900

Right of use assets obtained in exchange for new operating lease liabilities (1) (2) (3)

Cash paid for amounts included in the measurement of lease liabilities:

Operating leases $ 93,556 $ 70,611 $ 72,871

Finance leases $ 2,473 $ — $ —

Right of use assets obtained in exchange for new lease liabilities:

Operating leases (1) (2) (3)

$ 29,551 $ 39,155 $ 82,718

___________________________

(1) The year ended June 30, 2022 excludes the impact of $ 8.1 million of right of use (ROU) assets obtained through the acquisition of Zix Corporation.

(1) The year ended June 30, 2023 excludes the impact of $ 129.7 million of right of use assets obtained through the Micro Focus Acquisition.

See Note 19 “Acquisitions” for further details including the finalization of the purchase price allocation for the Micro Focus Acquisition.

(2) The year ended June 30, 2022 excludes the impact of $ 8.1 million of right of use assets obtained through the acquisition of Zix Corporation.

See Note 19 “Acquisitions” for further details including expected finalization of preliminary purchase price allocation.

(2) The year ended June 30, 2021 excludes the release of $ 22.6 million of lease liabilities relating to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

(3) The year ended June 30, 2021 excludes the release of $ 22.6 million of lease liabilities relating to office space that was abandoned during the fourth quarter of Fiscal 2020 and was subsequently early terminated or assigned to a third party.

These recoveries were recorded in “Special charges (recoveries)” in the Consolidated Statements of Income.

Please see Note 18 “Special Charges (Recoveries).”

(3) The year ended June 30, 2020 excludes the impact of $ 60.1 million and $ 2.9 million of ROU assets acquired through the acquisitions of Carbonite and XMedius, respectively.

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under our operating leases liabilities as of June 30, 2022:

Fiscal years ending June 30,

The following table presents the future minimum lease payments under our lease liabilities as of June 30, 2023:

Fiscal years ending June 30, Operating Leases Finance Leases

2024 $ 105,685 $ 5,712

2025 83,123 3,370

2026 60,939 1,941

2027 50,605 459

2028 39,662 —

Thereafter 71,380 —

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Total $ 363,004 $ 10,781

Current operating lease liabilities $ 56,380

Non-current operating lease liabilities 198,695

Total $ 255,075

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.

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Balance as of June 30, 2021

Adjustments relating to acquisitions prior to Fiscal 2021 that had open measurement periods (Note 19)

Acquisition of Zix Corporation (Note 19)

Acquisition of Bricata Inc.

Impact of foreign exchange rate changes ( 37,695 )

Balance as of June 30, 2022

Acquisition of Micro Focus (Note 19)

Acquisition of Zix Corporation (Note 19) (1)

Acquisition of Bricata Inc.

Impact of foreign exchange rate changes ( 4,563 )

Balance as of June 30, 2023

______________________

(1) Adjustments relating to open measurement period.

NOTE 8— ACQUIRED INTANGIBLE ASSETS

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Technology assets (1)

$ 1,815,260 $ ( 385,868 ) $ 1,429,392

Customer assets (1)

3,691,252 ( 1,039,765 ) 2,651,487

Total $ 5,506,512 $ ( 1,425,633 ) $ 4,080,879

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Total $ 2,594,251 $ ( 1,519,043 ) $ 1,075,208

______________________

(1) The balances as of June 30, 2023 include $ 1.4 billion of technology assets and $ 2.2 billion of customer assets acquired through the Micro Focus Acquisition.

See Note 19 “Acquisitions” for further details including the finalization of the purchase price allocation for the Micro Focus Acquisition.

Where applicable, the above balances as of June 30, 2023 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the year ended June 30, 2023.

The impact of this resulted in a reduction of $ 91 million to technology assets cost and accumulated amortization.

The impact of this resulted in a reduction of $ 578 million to technology assets and accumulated amortization and $ 69 million to customer assets and accumulated amortization.

The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and eight years , respectively.

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Short-term prepaid expenses and other current assets 175,879 87,175

Derivative asset (1)

Total $ 221,732 $ 120,552

______________________________

(1) Represents the asset related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities”).

Other assets:

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Investments 147,974 173,205

Available-for-sale financial assets 39,858 —

Long-term prepaid expenses and other long-term assets 76,546 21,836

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During the year ended June 30, 2023, our share of income (loss) from these investments was $( 23.1 ) million (year ended June 30, 2022 and 2021 — $ 58.7 million and $ 62.9 million, respectively).

As part of the Micro Focus Acquisition, we acquired the rights to certain available-for-sale financial assets.

A portion of the available-for-sale financial assets relate to contractual arrangements under insurance policies held by the Company with guaranteed interest rates that are utilized to meet certain pension and post retirement obligations but do not meet the definition of a plan asset.

The remaining portion of available-for-sale financial assets are primarily comprised of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian.

These arrangements are treated as available-for-sale financial assets measured at fair value quarterly (see Note 16 “Fair Value Measurement”) with unrealized gains and losses recorded within “Other Comprehensive Income (Loss) Net” (see Note 20 “Accumulated Other Comprehensive Income (Loss)”).

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.

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Accrued sales and other tax liabilities 25,439 20,423

Accrued interest on Senior Notes 31,813 31,161

Derivative liability (1)

Accrued interest on long-term debt 37,563 31,813

Amounts payable in respect of restructuring and other special charges 30,073 3,589

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Total $ 996,261 $ 448,607

______________________________

(1) Represents the liability related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities”) .

Long-term accrued liabilities:

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As of June 30, 2023, the present value of this obligation was $ 31.3 million (June 30, 2022—$ 15.8 million), with an undiscounted value of $ 35.0 million (June 30, 2022—$ 16.4 million).

As of June 30, 2023, the present value of this obligation and the undiscounted value related to the Micro Focus Acquisition was $ 11.8 million and $ 14.1 million, respectively.

NOTE 11— LONG-TERM DEBT

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Senior Notes 2028 900,000 900,000

Senior Notes 2026 — 850,000

Senior Secured Notes 2027 1,000,000 —

Term Loan B 947,500 957,500

Acquisition Term Loan 3,567,075 —

Revolver 275,000 —

Total principal payments due 9,089,575 4,257,500

Premium on Senior Notes 2026 (1)

Debt issuance costs (1)

Unamortized debt discount and issuance costs (1)

( 206,629 ) ( 37,933 )

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Term Loan B 10,000 10,000

Acquisition Term Loan 35,850 —

Revolver 275,000 —

Total current portion of long-term debt 320,850 10,000

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___________________________

(1) During the year ended June 30, 2022, we recorded $ 17.2 million of debt issuance costs relating to the issuance of Senior Notes 2031 and Senior Notes 2029 (both defined below).

Additionally, upon redemption of Senior Notes 2026

(defined below), $ 6.2 million of unamortized debt issuance costs and ($ 3.8 ) million of the unamortized premium were included in the loss on debt extinguishment.

See Note 23 “Other Income (Expense), Net.”

(1) During the year ended June 30, 2023, we recorded $ 185.6 million of debt discount and issuance costs, relating to the issuance of Senior Secured Notes 2027 and Acquisition Term Loan.

Included in this amount was $ 107.6 million of original issue discount fees related to the Acquisition Term Loan.

Senior Unsecured Fixed Rate Notes

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On November 24, 2021, OpenText Holdings, Inc.

a wholly-owned indirect subsidiary of the Company, issued $ 650 million in aggregate principal amount of 4.125 % Senior Notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

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Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased.

For the year ended June 30, 2022, we recorded interest expense of $ 16.1 million relating to Senior Notes 2031.

For the year ended June 30, 2023, we recorded interest expense of $ 26.8 million relating to Senior Notes 2031 (year ended June 30, 2022 and 2021—$ 16.1 million and nil , respectively)

Senior Notes 2030

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Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased.

For the year ended June 30, 2022, we recorded interest expense of $ 19.8 million relating to Senior Notes 2029.

For the year ended June 30, 2023, we recorded interest expense of $ 32.9 million relating to Senior Notes 2029 (year ended June 30, 2022 and 2021—$ 19.8 million and nil , respectively).

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 non-U.S.

On February 18, 2020, we issued $ 900 million in aggregate principal amount of 3.875 % Senior Notes due 2028 (Senior Notes 2028, and together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029, and Senior Notes 2027, the Senior Notes) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

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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 non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2026 had interest at a rate of 5.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016.

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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 additional notes had identical terms, were fungible with and were 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, was $ 850 million as of December 9, 2021.

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See Note 23 “Other Income (Expense), Net.”

For the year ended June 30, 2022, we recorded interest expense of $ 21.9 million relating to Senior Notes 2026 (year ended June 30, 2021 and 2020—$ 49.9 million, respectively).

For the year ended June 30, 2023, we did not record any interest expense relating to Senior Notes 2026 (year ended June 30, 2022 and 2021—$ 21.9 million and $ 49.9 million, respectively).

Senior Secured Fixed Rate Notes

Senior Secured Notes 2027

On December 1, 2022, we issued $ 1 billion in aggregate principal amount of Senior Secured Notes 2027 in connection with the financing of the Micro Focus Acquisition in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S.

persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Secured Notes 2027 bear interest at a rate of 6.90 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023.

Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed, in accordance with their terms, or repurchased.

The Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries, and are secured with the same priority as the Company’s senior credit facilities.

The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the Collateral (as defined in the 2027 Indenture) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027.

As of June 30, 2023, the Senior Secured Notes 2027 bear an effective interest rate of 7.39 %.

The effective interest rate includes interest expense of $ 40.3 million and amortization of debt discount and issuance costs of $ 1.5 million.

For the year ended June 30, 2023, we recorded interest expense of $ 40.3 million, relating to Senior Secured Notes 2027 (year ended June 30, 2022 and 2021— nil , respectively).

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).

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 (as defined below), Acquisition Term Loan (as defined below) and Senior Secured Notes 2027.

On June 6, 2023, we amended the Term Loan B to replace the LIBOR benchmark rate applicable to borrowings under Term Loan B with a SOFR benchmark rate.

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.

Borrowings under the Term Loan B currently bear a floating rate of interest equal to Term SOFR plus the SOFR Adjustment (as defined in the Term Loan B) and applicable margin of 1.75 %.

As of June 30, 2023, the outstanding balance on the Term Loan B bears an interest rate of 6.90 %.

For more information regarding the impact and discontinuance 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, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2022.

As of June 30, 2023, the Term Loan B bears an effective interest rate of 7.19 %.

The effective interest rate includes interest expense of $ 54.0 million and amortization of debt discount and issuance costs of $ 1.6 million.

Under Term Loan B, we must maintain a “consolidated net leverage” ratio of no more than 4.00 :1.00 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, 2022, our consolidated net leverage ratio was 2.0 :1.

As of June 30, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.49 :1.00.

For the year ended June 30, 2023, we recorded interest expense of $ 54.0 million relating to Term Loan B (year ended June 30, 2022 and 2021—$ 19.7 million and $ 18.6 million, respectively).

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.

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 Acquisition Term Loan and Senior Secured Notes 2027.

On June 6, 2023, we entered into an amendment to replace the LIBOR benchmark rate applicable to borrowings under the Revolver with a SOFR benchmark rate.

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 %.

As of June 30, 2022, we had no outstanding balance under the Revolver (June 30, 2021— nil ).

For the year ended June 30, 2022 we did not record any interest expense relating to the Revolver (year ended June 30, 2021 and 2020—$ 3.6 million and $ 7.7 million, respectively, relating to amounts previously drawn).

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, Senior Notes 2029, Senior Notes 2030 and Senior Notes 2031 (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.

The premium on Senior Notes 2026 represented the excess of the proceeds received over the face value of Senior Notes 2026.

This premium was amortized as a reduction to interest expense over the term of Senior Notes 2026 using the effective interest method.

The unamortized debt issuance costs and unamortized premium on Senior Notes 2026 were included in the loss on debt extinguishment recognized during our second quarter of Fiscal 2022.

See Note 23 “Other Income (Expense), Net.”

Borrowings under the Revolver currently bear interest per annum at a floating rate of interest equal to Term SOFR plus the SOFR Adjustment (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25 % to 1.75 %.

As of June 30, 2023, the outstanding balance on the Revolver bears an interest rate of 6.91 %.

As of June 30, 2023, we had $ 275 million outstanding balance under the Revolver (June 30, 2022— nil ).

For the year ended June 30, 2023, we recorded interest expense of $ 10.1 million relating to the Revolver (year ended June 30, 2022 and 2021— nil and $ 3.6 million, respectively, relating to amounts previously drawn).

In July 2023, the Company subsequently repaid $ 175 million drawn under the Revolver.

Acquisition Term Loan

On December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $ 2.585 billion to an aggregate principal amount of $ 3.585 billion.

During the third quarter of Fiscal 2023, the Company drew down $ 3.585 billion from the Acquisition Term Loan, net of original issuance discount of 3 % and other fees (see Note 19 “Acquisitions” for more details).

The Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25 % of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity.

Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to Term SOFR plus the SOFR Adjustment (as defined in the Acquisition Term Loan) and applicable margin of 3.50 %.

As of June 30, 2023, the outstanding balance on the Acquisition Term Loan bears an interest rate of 8.75 %.

As of June 30, 2023, the Acquisition Term Loan bears an effective interest rate of 9.85 %.

The effective interest rate includes interest expense of $ 125.7 million and amortization of debt discount and issuance costs of $ 9.3 million.

The Acquisition Term Loan has incremental facility capacity of (i) $ 250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75 :1.00, in each case subject to certain conditions.

Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges.

Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter.

Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan.

As of June 30, 2023, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.49 :1.00.

The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver, Term Loan B and the Senior Secured Notes 2027.

For the year ended June 30, 2023, we recorded interest expense of $ 125.7 million relating to the Acquisition Term Loan (year ended June 30, 2022 and 2021— nil , respectively).

On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $ 2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt.

On December 1, 2022, we entered into an amendment to the Bridge Loan that reallocated commitments under the Bridge Loan to the Acquisition Term Loan.

In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $ 8.2 million relating to unamortized debt issuance costs (see Note 22 “Other Income (Expense), Net” for more details) .

For the year ended June 30, 2023, we did not have any borrowings or record any interest expense relating to the Bridge Loan (year ended June 30, 2022— nil ).

Debt Issuance Costs

Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes, Term Loan B and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver.

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, 2022 and 2021:

As of June 30, 2022

Total benefit

obligation Current portion of

benefit obligation (1)

Non-current portion of

benefit obligation

CDT defined benefit plan $ 24,562 $ 907 $ 23,655

GXS GER defined benefit plan 15,927 915 15,012

GXS PHP defined benefit plan 9,802 85 9,717

Other plans 13,189 622 12,567

Total $ 63,480 $ 2,529 $ 60,951

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

Defined Benefit Plans

The Company has 52 pension and other post retirement plans in multiple countries, including 38 defined benefit and other post retirement benefit plans which were assumed as part of the Micro Focus Acquisition (see Note 19 “Acquisitions” for more details).

All of our pension and other post retirement plans are located outside of Canada and the United States.

The plans are primarily located in Germany, which, as of June 30, 2023, make up approximately 64 % of the total net benefit pension obligations.

Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits.

Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death.

Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors.

Many of these plans are closed to new members.

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.

Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits.

Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements.

All of our defined benefit and other post retirement plans are included in the aggregate projected benefit obligation within “Pension liability” on our Consolidated Balance Sheets.

The Company does not intend to make any cash contributions to any defined benefit pension or post-retirement plans unless required by the local regulatory or statutory requirements.

For the year ended June 30, 2023, we made cash contributions of $ 6.5 million (year ended June 30, 2022 and 2021—$ 3.7 million and $ 2.6 million, respectively).

For Fiscal 2024, we expect to make cash contributions of $ 9.7 million to our defined benefit plans.

As part of the Micro Focus Acquisition (see Note 19 “Acquisitions” for more details), we assumed a total of 38 defined benefit plans, all located outside of Canada and the United States.

As of June 30, 2023, these assumed plans carried a net liability of $ 56.6 million and are funded at 73 % of the defined benefit obligations.

Plan assets that partially fund these assumed defined benefit obligations are primarily classified within Level 1 and Level 2 of the fair value hierarchy and consist primarily of investments in equity and debt funds.

Plan assets exclude insurance contracts with guaranteed interest rates classified as Level 3 available-for-sale financial assets of $ 24.6 million that do not meet the definition of a qualifying insurance policy, as they have not been pledged to the defined benefit and other post retirement plans (see Note 16 “Fair Value Measurement” for more details).

As of June 30, 2023, the fair value of these acquired plan assets was $ 155.3 million.

The following tables provides the details of the funded status of our defined benefit pension and other post-retirement plans:

As of June 30, 2023 As of June 30, 2022

Plan assets $ 208,363 $ 52,111

Projected benefit obligations ( 339,179 ) ( 115,591 )

Funded status $ ( 130,816 ) $ ( 63,480 )

The following tables provides details of the net benefit obligations of our defined benefit pension and other post-retirement plans:

As of June 30, 2023 As of June 30, 2022

Current portion of benefit obligation (1)

$ 4,504 $ 2,529

Non-current portion of benefit obligation 126,312 60,951

Total $ 130,816 $ 63,480

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(1) The current portion of the benefit obligation has been included within “Accrued salaries, incentives 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 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.

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.

No contributions have been made since the inception of the 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.

Aside from an initial contribution which has a fair value of $ 0.03 million as of June 30, 2022, no additional contributions have been made since the inception of the plan.

The following are the details of the change in the benefit obligation for each of the above-mentioned pension plans for the periods indicated:

The following tables provides the details of the change in the benefit obligation and plan assets for the periods indicated:

As of June 30, 2023 As of June 30, 2022

CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total

Benefit obligation—beginning of fiscal year $ 115,591 $ 141,698

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Benefits paid ( 3,293 ) ( 5,079 )

Company contributions 20 2

Employee contributions 1,393 50

Plan settlement ( 2,789 ) —

Plan amendment ( 221 ) —

Net transfers 205,556 —

Actuarial (gain) loss 6,199 ( 19,649 )

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Non-current portion of benefit obligation $ 334,675 $ 113,062

The following are details of net pension expense relating to the following pension plans:

As of June 30, 2023 As of June 30, 2022

Plan assets—beginning of fiscal year $ 52,111 $ 60,379

Benefit payments from plan assets ( 325 ) ( 2,436 )

Expected return on plan assets 5,502 1,299

Return on plan assets ( 3,174 ) ( 7,859 )

Company contributions 3,522 1,034

Employee contributions 1,515 50

Net transfers 150,058 —

Plan Settlement ( 2,789 ) —

Foreign exchange (gain) loss 1,943 ( 356 )

Plan assets—end of period $ 208,363 $ 52,111

The following table provides details of net pension expense for the periods indicated:

Year Ended June 30,

2022 2021 2020

Pension expense:

CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total

2023 2022 2021

Service cost $ 6,921 $ 4,404 $ 3,693

Interest cost 7,091 2,271 1,733

Expected return of plan assets ( 5,502 ) ( 1,299 ) ( 214 )

Amortization of actuarial (gains) losses 246 1,008 1,399

Settlement cost 451 — —

Net pension expense $ 9,207 $ 6,384 $ 6,611

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, 2022 and 2021, respectively, we used the following weighted-average key assumptions:

The following table provides details of amounts recognized in Other Comprehensive Income:

Year Ended June 30,

2023 2022 2021

Net actuarial gain (loss) $ ( 9,017 ) $ 7,461 $ 4,978

Amortization of actuarial loss (gain) 246 1,008 1,399

Settlement cost and plan amendments 673 — —

Total recognized in other comprehensive income $ ( 8,098 ) $ 8,469 $ 6,377

The following table provides details of the plan assets measured at fair value presented by asset category and fair value hierarchy for the periods indicated:

As of June 30, 2023 As of June 30, 2022

CDT GXS GER GXS PHP CDT GXS GER GXS PHP

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash $ 2,924 $ — $ — $ 2,924 $ 2 $ — $ — $ 2

Debt funds 73,053 14,765 — 87,818 15,869 — — 15,869

Equity funds 66,975 5,745 — 72,720 10,414 — — 10,414

Real estate funds 235 72 6,420 6,727 — — — —

Other 9,497 26,625 2,052 38,174 — 24,805 1,021 25,826

Total $ 152,684 $ 47,207 $ 8,472 $ 208,363 $ 26,285 $ 24,805 $ 1,021 $ 52,111

The Company’s investment objective with respect to its defined benefit plan assets is to achieve an optimal rate of return over the long term while managing an appropriate level of risk to meet adequate future benefit obligations.

Plan assets are managed by investment fiduciaries that determine the appropriate asset allocation, risk tolerance, fund diversification and investment strategies to achieve the long term investment objectives of the plan assets.

In determining the fair value of the defined benefit obligations as of June 30, 2023 and 2022, we used the following weighted-average key assumptions:

Year Ended June 30,

Salary increases 2.9 % 2.7 %

Pension increases 2.20 % 1.50 % N/A 1.50 % 1.50 % N/A

Pension increases 2.1 % 2.0 %

Discount rate 3.9 % 3.6 %

Expected return on plan assets 5.8 % 3.3 %

Normal retirement age 64 65

Employee fluctuation rate:

to age 20 — % — % 13.98 % — % — % 13.98 %

to age 25 — % — % 7.10 % — % — % 7.10 %

to age 30 1.00 % — % 3.00 % 1.00 % — % 3.00 %

to age 35 0.50 % — % 2.44 % 0.50 % — % 2.44 %

to age 40 — % — % 2.59 % — % — % 2.59 %

to age 45 0.50 % — % 1.15 % 0.50 % — % 1.15 %

to age 50 0.50 % — % — % 0.50 % — % — %

from age 51 1.00 % — % — % 1.00 % — % — %

Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows:

Anticipated pension payments under the defined benefit plans for the fiscal years indicated below are as follows:

Fiscal years ending June 30,

CDT GXS GER GXS PHP

2024 $ 13,115

2024 942 937 122

2025 990 926 170

2026 1,030 920 179

2027 1,078 911 544

2029 to 2033 102,196

Total $ 176,681

Other plans include defined benefit pension plans that are offered or statutorily required 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.

Defined Contribution Plans

The Company has various defined contribution retirement plans around the world covering many of its employees.

Under these plans, employees can contribute a portion of their salary to the plan and the Company makes minimum non-elective contributions, discretionary contributions, and matching contributions, depending on the terms of the specific plan.

The majority of the plans are primarily located in Canada, the United States, the United Kingdom and Germany.

For the year ended June 30, 2023, we made contributions of $ 40.0 million relating to the defined contribution retirement plans (year ended June 30, 2022 and 2021—$ 24.0 million and $ 16.4 million, respectively).

NOTE 13— SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS

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On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we were authorized to purchase in open market transactions, from time to time over the 12-month period commencing November 12, 2021, up to an aggregate of $ 350 million of our Common Shares.

On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12-month period commencing November 12, 2021, up to an aggregate of $ 350 million of our Common Shares.

During the year ended June 30, 2022, we repurchased and cancelled 3,809,559 Common Shares for $ 177.0 million (year ended June 30, 2021— 2,500,000 Common Shares for $ 119.1 million).

Share repurchases during the year ended June 30, 2022 were completed under our share repurchase plans authorized on both November 5, 2020 and November 4, 2021.

During the year ended June 30, 2023, we did not repurchase and cancel any Common Shares (year ended June 30, 2022— 3,809,559 Common Shares for $ 177.0 million).

Share-Based Payments

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

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

Year Ended June 30,

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We have not capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented.

A summary of unrecognized compensation cost for unvested shared-based payment awards is as follows:

As of June 30, 2023

Unrecognized Compensation Cost Weighted Average Recognition Period (years)

Stock Options (issued under Stock Option Plans) $ 47,731 2.5

Performance Share Units (issued under LTIP) 27,797 1.8

Restricted Share Units (issued under LTIP) 14,038 1.9

Restricted Share Units (other) 108,956 1.5

Total unrecognized share-based compensation cost $ 198,522

Stock 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

5 unchanged sentences

Options outstanding 12,219,439

Options available for issuance 5,950,832

Termination grace periods Immediately “for cause”;

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Expiration dates 7/29/2023 - 5/08/2030

Summary of Outstanding Stock Options

The following table summarizes information regarding stock options outstanding at June 30, 2022:

Options Outstanding Options Exercisable

Range of Exercise Prices Number of options Outstanding as of June 30, 2022

Life (years) Weighted

Price Number of options

Exercisable as of

June 30, 2022

$ 22.87 — $ 34.48 922,957 1.77 $ 32.04 874,366 $ 31.92

34.49 — 38.30 1,008,083 3.42 36.10 787,583 35.65

38.31 — 39.51 1,172,130 3.98 38.97 595,272 39.06

39.52 — 42.95 695,603 4.29 40.64 286,359 40.52

42.96 — 44.72 1,037,000 6.61 44.45 — —

44.73 — 45.40 307,375 4.60 44.99 156,375 44.99

45.41 — 46.88 2,177,724 5.11 45.81 124,809 45.81

46.89 — 52.11 579,750 6.08 50.03 68,125 48.24

52.12 — 52.62 920,040 6.11 52.62 — —

$ 22.87 — $ 52.62 8,820,662 4.68 $ 42.74 2,892,889 $ 36.94

As of June 30, 2022, an aggregate of 8,820,662 options to purchase Common Shares were outstanding and an additional 9,594,844 options to purchase Common Shares were available for issuance under our stock option plans.

Our stock options generally vest over four years and expire between seven and ten years from the date of the grant.

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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.

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.

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.

A summary of activity under our stock option plans for the year ended June 30, 2023 is as follows:

13 unchanged sentences

4,292,254 $ 39.30 3.09 $ 16,497

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:

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Performance Options

During the year ended June 30, 2022, we granted no performance options (during the year ended June 30, 2021 and 2020, 750,000 and nil performance options, respectively).

During the year ended June 30, 2023, we granted 1,000,000 performance options (year ended June 30, 2022 and 2021— nil and 750,000 performance options, respectively).

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,

2023 2022 2021

Weighted–average fair value of options granted $ 8.09 $ — $ 10.18

6 unchanged sentences

Summary of Stock Options and Performance Options

As of June 30, 2022, the total compensation cost related to the unvested stock option awards not yet recognized was $ 40.1 million, which will be recognized over a weighted-average period of 2.8 years.

The aggregate intrinsic value of options exercised during the year ended June 30, 2023 was $ 1.8 million (year ended June 30, 2022 and 2021—$ 17.0 million and $ 25.0 million, respectively).

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RSUs become vested when an eligible employee remains employed throughout the vesting period.

For the year ended June 30, 2023, we settled LTIP awards that vested by delivering to eligible participants 290,971 Common Shares that were purchased in the open market at a cost of $ 12.7 million.

PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan.

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 LTIP have been measured using the Black-Scholes option-pricing model, consistent with ASC Topic 718.

As of June 30, 2022, the total expected compensation cost related to the unvested LTIP awards not yet recognized was $ 35.0 million, which is expected to be recognized over a weighted average period of 1.9 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.

Grants made in Fiscal 2019 under the LTIP (collectively referred to as LTIP 2021), consisting of PSUs and RSUs, took effect in Fiscal 2019 starting on August 6, 2018.

The Performance Conditions for vesting of the PSUs are based solely upon market conditions.

The RSUs are employee service-based awards and vest over the life of the LTIP 2021.

We settled the LTIP 2021 awards by delivering to eligible participants 349,792 Common Shares that were purchased in the open market at a cost of $ 15.1 million.

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.

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.

Grants made in Fiscal 2022 under the LTIP (collectively referred to as LTIP 2024), consisting of PSUs and RSUs, took effect in Fiscal 2022 starting on August 9, 2021.

The Performance Conditions for vesting of the PSUs are based solely upon market conditions.

The RSUs are employee service-based awards and vest over the life of the LTIP 2024.

We expect to settle the LTIP 2024 awards in stock.

Beginning in Fiscal 2023 certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants.

Performance Share Units (Issued Under LTIP)

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(1) Performance share units are earned based on market conditions and the actual number of performance units earned, if any, is dependent upon performance and may range from 0 to 200 percent.

Performance share units granted and vested excludes 27,576 shares related to the performance unit payout under the LTIP 2021 plan.

For the periods indicated, the weighted-average fair value of PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:

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Aggregate intrinsic value of performance share units vested ($ in ‘000’s) $ 6,216 $ 10,370 $ 4,286

As of June 30, 2022, the total expected compensation cost related to the unvested PSU awards not yet recognized was $ 23.0 million, which is expected to be recognized over a weighted average period of 1.9 years.

We expect to settle PSU awards in stock.

Restricted Share Units (Issued Under LTIP)

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Aggregate intrinsic value of restricted share units vested ($ in 000’s) $ 3,947 $ 9,139 $ 7,832

As of June 30, 2022, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 11.9 million, which is expected to be recognized over a weighted average period of 1.3 years.

We expect to settle RSU awards in stock.

Restricted Share Units (Other)

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RSUs (other) vest in tranches over a specified contract date, typically two or three years from the respective date of grants.

A summary of activity under our restricted share units (other) issued for the year ended June 30, 2022 is as follows:

A summary of activity under our RSUs (other) issued for the year ended June 30, 2023 is as follows:

Units Weighted-Average

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Aggregate intrinsic value of restricted share units vested ($ in 000’s) $ 15,755 $ 7,406 $ —

As of June 30, 2022, the total expected compensation cost related to the unvested RSU awards not yet recognized was $ 91.3 million, which is expected to be recognized over a weighted average period of 2.0 years.

We expect to settle RSU awards in stock.

During the year ended June 30, 2022, we delivered to eligible participants 141,452 Common Shares that were purchased in the open market in connection with the settlement of vested RSUs, at a cost of $ 5.9 million (year ended June 30, 2021 and 2020— nil and 3,334 Common Shares, respectively, with a cost of nil and $ 0.1 million).

During the year ended June 30, 2023, we delivered to eligible participants 400,210 Common Shares that were purchased in the open market in connection with the settlement of vested RSUs, at a cost of $ 17.6 million (year ended June 30, 2022 and 2021— 141,452 and zero Common Shares, respectively, with a cost of $ 5.9 million and nil ).

Deferred Share Units (DSUs)

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885,701 $ 31.49 0.36 $ 33,515

139,140 29.72

Settled ( 30,273 ) $ 40.46

Outstanding at June 30, 2023 (2)

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Aggregate intrinsic value of deferred share units vested ($ in 000’s) $ 1,565 $ 4,133 $ 3,109

During the year ended June 30, 2022, we did not deliver to any eligible participants any of our Common Shares that were purchased in the open market in connection with the settlement of vested DSUs (year ended June 30, 2021 and 2020— 23,640 and nil Common Shares, respectively, with a cost of $ 1.1 million and nil , respectively).

During the year ended June 30, 2023, we settled 30,273 DSUs at a cost of $ 1.1 million (year ended June 30, 2022 and 2021— nil and 23,640 Common Shares, respectively, with a cost of nil and $ 1.1 million, respectively).

Employee Stock Purchase Plan (ESPP)

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Payments due between

Total July 1, 2022 -

June 30, 2023 July 1, 2023 -

June 30, 2025 July 1, 2025 -

June 30, 2027 July 1, 2027

Total July 1, 2023 - June 30, 2024 July 1, 2024 - June 30, 2026 July 1, 2026 - June 30, 2028 July 1, 2028 and beyond

Long-term debt obligations (1)

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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.

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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, and we are continuing to contest these reassessments.

On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including any penalties) in full.

On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including penalties) in full and the customary court process is ongoing.

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 has also audited Fiscal 2017 on a basis that we strongly disagree with and are contesting.

The CRA has audited Fiscal 2017 and Fiscal 2018 on a basis that we strongly disagree with and are contesting.

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 have made extensive submissions in support of our position.

CRA’s 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 position 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.

On January 27, 2022, the CRA issued a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter.

On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017.

CRA’s position for Fiscal 2017 and Fiscal 2018 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 position for Fiscal 2017 and Fiscal 2018 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position.

The CRA issued notices of reassessment in respect of Fiscal 2017 and Fiscal 2018 on a basis consistent with its proposal to reduce the available depreciable basis of these assets in Canada.

On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017 and on March 15, 2023, we filed our notice of objection regarding the reassessment in respect of Fiscal 2018.

If 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 are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 due to the utilization of available tax attributes;

We strongly disagree with the CRA’s position for Fiscal 2017 and Fiscal 2018 and intend to vigorously defend our original filing position.

We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 and Fiscal 2018 due to the utilization of available tax attributes;

however, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we expect to make certain minimum payments required under Canadian legislation, which may need to be provisionally made starting in Fiscal 2024 while the matter is in dispute.

We will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property.

We are confident that our original tax filing positions were appropriate.

We are confident that our original tax filing positions were

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 is currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019.

The CRA is auditing Fiscal 2019, and may reassess Fiscal 2019 on a similar basis as Fiscal 2017 and Fiscal 2018.

The CRA is also in preliminary stages of auditing Fiscal 2020.

Carbonite Class Action Complaint

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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.

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).

1:19-cv-11662-LTS) (the Luna Complaint).

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.

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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 district 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.

On December 21, 2021, the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings.

On October 22, 2020, the district 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 United States Court of Appeals for the First Circuit.

On December 21, 2021, the United States Court of Appeals for the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings.

The parties have completed discovery and defendants have filed a motion for summary judgment.

The defendants remain confident in their position, believe the Securities Actions are without merit, and will continue to vigorously defend the matter.

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On February 27, 2017, before 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.

District Court for the Eastern District of Texas captioned Realtime Data LLC v.

Carbonite, Inc.

et al (No 6:17-cv-00121-RWS-JDL).” Therein, it alleged that certain of Carbonite’s cloud storage services infringe upon certain patents held by Realtime Data.

et al (No 6:17-cv-00121-RWS-JDL).

Therein, it alleged 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.

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District Court for the District of Massachusetts has issued a claim construction order.

We anticipate motion practice based upon the result of that order.

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.

Please also see Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2022.

Other Matters

Please also see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for Fiscal 2023, as well as Note 15 “Income Taxes” related to certain historical matters arising prior to the Micro Focus Acquisition.

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 decreased to a provision of 23.0 % for the year ended June 30, 2022, compared to a provision of 52.2 % for the year ended June 30, 2021.

The effective tax rate increased to a provision of 32.0 % for the year ended June 30, 2023, compared to a provision of 23.0 % for the year ended June 30, 2022.

Tax expense decreased from $ 118.8 million during the year ended June 30, 2022 to $ 70.8 million during the year ended June 30, 2023.

This was primarily due to (i) a decrease of $ 300.6 million related to IRS settlements in Fiscal 2021, (ii) a decrease of $ 37.5 million related to lower net income before taxes, (iii) a decrease of $ 10.8 million related to passive income from foreign subsidiaries, (iv) a decrease of $ 9.6 million related to tax accruals on unremitted earnings and (v) a decrease of $ 8.0 million for BEAT.

These were partially offset by (i) an increase of $ 94.3 million for changes in unrecognized tax benefits, (ii) a net increase of $ 46.8 million related to internal reorganizations and (iii) an increase of $ 3.5 million for change in valuation allowance.

The remainder of the difference was due to normal course movements and non-material items.

The increase in the effective tax rate was driven by increases in withholding taxes, changes in valuation allowance, permanent differences related to foreign source income inclusions, and the impact of internal reorganizations, partially offset by lower pretax income, tax credits and permanent adjustments related to the preferential tax treatment of the mark-to-market gains on derivatives.

The tax rate for the year ended June 30, 2022 varied from the statutory rate due favorable permanent adjustments related to excess share-based compensation deductions, tax credits, and the reduction in the accrual on unremitted foreign earnings, partially offset by the impact of internal reorganizations and an increase in unrecognized tax benefits.

A reconciliation of the combined Canadian federal and provincial income tax rate with our effective income tax rate is as follows:

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Effect of withholding taxes 12,464 6,617 8,500

Effect of tax credits for research and development ( 12,330 ) ( 16,086 ) ( 14,947 )

Effect of tax credits ( 45,596 ) ( 12,330 ) ( 16,086 )

Effect of accrual for undistributed earnings 5,804 ( 6,343 ) 3,209

Effect of US BEAT 6,854 — 7,967

Effect of CARES Act — — ( 7,009 )

Effect of IRS Settlement — — 300,460

Impact of internal reorganization of subsidiaries 13,077 ( 33,676 ) 451

Impact of internal reorganizations 8,822 13,077 ( 33,676 )

Other items 6,912 ( 7,410 ) ( 4,658 )

$ 118,752 $ 339,906 $ 110,837

Provision for income taxes $ 70,767 $ 118,752 $ 339,906

The following is a geographical breakdown of income before the provision for income taxes:

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Domestic income (loss) 300,437 435,355 462,315

Foreign income 80,656 188,455 103,343

Foreign income (loss) ( 79,104 ) 80,656 188,455

Income before income taxes $ 221,333 $ 516,011 $ 650,770

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Foreign 204,708 137,412 ( 43,748 )

154,840 266,867 59,449

Total current income taxes (recoveries) 220,327 154,840 266,867

Deferred income taxes (recoveries):

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Foreign ( 167,021 ) ( 90,955 ) ( 38,193 )

( 36,088 ) 73,039 51,388

Provision for (recovery of) income taxes $ 118,752 $ 339,906 $ 110,837

As of June 30, 2022, we have $ 325.1 million of domestic non-capital loss carryforwards.

In addition, we have $ 746.0 million of foreign non-capital loss carryforwards, which includes $ 230.4 million of U.S.

state loss carryforwards.

$ 104.4 million of the foreign non-capital loss carryforwards have no expiry date, which includes $ 14.3 million of U.S.

state loss carryforwards.

The remainder of the domestic and foreign losses expire between 2023 and 2042.

In addition, investment tax credits of $ 66 million will expire between 2028 and 2042.

Total deferred income taxes (recoveries) ( 149,560 ) ( 36,088 ) 73,039

Provision for income taxes $ 70,767 $ 118,752 $ 339,906

The primary components of the deferred tax assets and liabilities are as follows, for the periods indicated below:

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Capital loss carryforwards 13,512 —

Interest expense carryforwards 156,832 —

Capitalized scientific research and development expenses 343,308 121,771

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Capitalized inventory and intangible expenses 52,345 43,129

Research and development and investment tax credits 104,183 97,157

Tax credits 171,536 126,920

Lease liabilities 48,378 40,486

Deferred revenue 90,312 9,288

Share-based compensation 37,692 29,239

Derivatives 42,716 —

Other 50,272 30,540

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Deferred tax liabilities

Right of use asset ( 31,452 ) ( 35,038 )

Depreciation and amortization ( 546,024 ) —

Right of use assets ( 31,933 ) ( 31,452 )

Other ( 109,465 ) ( 93,049 )

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Long-term liabilities ( 423,955 ) ( 65,887 )

$ 744,267 $ 688,514

Net deferred tax asset $ 502,764 $ 744,267

As of June 30, 2023, we have $ 364.2 million of domestic non-capital loss carryforwards.

In addition, we have $ 3.0 billion of foreign non-capital loss carryforwards, which includes $ 372.1 million of U.S.

state loss carryforwards.

$ 476.3 million of the foreign non-capital loss carryforwards have no expiry date, which includes $ 12.8 million of U.S.

state loss carryforwards.

The remainder of the domestic and foreign losses expire between 2024 and 2043.

In addition, investment tax credits of $ 74.1 million will expire between 2028 and 2043.

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.

As of June 30, 2023 and 2022, the Company had a valuation allowance on its domestic and foreign deferred tax assets of $ 605.9 million and $ 74.0 million, respectively.

The balance at June 30, 2023 consisted of $ 8.7 million and $ 597.2 million against the Company’s domestic and foreign deferred tax assets, respectively, which, the Company believes, are more likely than not to be utilized in future years.

The valuation allowance increased in Fiscal 2023 by $ 532.0 million primarily related to the Micro Focus Acquisition, which has significant losses that cannot be benefited.

The aggregate changes in the balance of our gross unrecognized tax benefits (including interest and penalties) were as follows:

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Increases on account of prior year positions 27,398

Decreases on account of prior year positions ( 694 )

Decreases due to settlements with tax authorities ( 3,830 )

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Unrecognized tax benefits as of June 30, 2023

Included in the above tabular reconciliation are unrecognized tax benefits of $ 23.4 million relating to tax attributes in which the unrecognized tax benefit has been recorded as a reduction to the deferred tax asset.

__________________________________

(1) The increase in unrecognized tax benefits is primarily driven by the assumption of unrecognized tax benefits related to the Micro Focus Acquisition.

Included in the above tabular reconciliation are unrecognized tax benefits of $ 66.1 million as of June 30, 2023 (June 30, 2022—$ 23.4 million) relating to tax attributes in which the unrecognized tax benefit has been recorded as a reduction to the deferred tax asset.

The net unrecognized tax benefit excluding these deferred tax assets is $ 112.6 million as of June 30, 2023 (June 30, 2022—$ 30.7 million).

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2023 2022 2021

Interest expense $ 419 $ 44,657 $ 5,764

Interest expense (income) $ ( 1,922 ) $ 419 $ 44,657

Penalties expense ( 21 ) 1,739 1,125

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We believe that it is reasonably possible that the gross unrecognized tax benefits, as of June 30, 2023, could decrease tax expense in the next 12 months by $ 9.9 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.

We are subject to income tax audits in all major taxing jurisdictions in which we operate.

Our four most significant tax jurisdictions are Canada, the United States, United Kingdom 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 Canada, 2016 for the United States and 2012 for Germany.

As of December 31, 2021, the Fiscal 2015 and Fiscal 2016 tax years for Luxembourg became statute barred.

We are subject to income tax audits in all major taxing jurisdictions in which we operate and currently have income tax audits open in Canada, the United States, Germany, India France, South Africa, Switzerland, and the Philippines.

We currently have income tax audits open in Canada, the United States, the United Kingdom, Germany and other immaterial jurisdictions.

The earliest fiscal years open for examination are 2012 for Canada, 2018 for the United States, 2015 for the United Kingdom and 2016 for Germany.

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.

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For more information relating to certain income tax audits, please refer to Note 14 “Guarantees and Contingencies.”

As of June 30, 2022, we have recognized a provision of $ 19.9 million (June 30, 2021—$ 27.5 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.

As of June 30, 2023, we have recognized a provision of $ 28.3 million (June 30, 2022—$ 15.1 million) in respect of 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.

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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.” 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.

As a result, we recorded charges of $ 300.5 million during the year ended June 30, 2021 to “Provision for income taxes.” 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.

State Aid Matter

In April 2019, the European Commission published its final decision on its State Aid investigation into the UK’s “Financing Company Partial Exemption” legislation and concluded that part of the legislation was in breach of EU State Aid rules.

The UK government and certain UK-based international companies, supported by Micro Focus, appealed to the General Court of the Court of Justice of the European Union (General Court of the CJEU) against the decision.

In February 2021, Micro Focus received and settled GBP denominated State Aid charging notices issued by HM Revenue and Customs, following the requirement for the UK government to start collection proceedings.

As a result, Micro Focus recorded a long-term income tax receivable of $ 43.2 million.

This reflects the payment that was made following the final decision published by the European Commission on its State Aid investigation into the UK’s ‘Financing Company Partial Exemption’ legislation.

Based on management’s assessment of the value of the underlying tax benefit under dispute, and as supported by external professional advice, Micro Focus believed they had no liability in respect of these matters and therefore no tax charge was recorded.

On June 8, 2022, the General Court of the CJEU found in favor of the European Commission’s decision that the UK’s ‘Financing Company Partial Exemption’ legislation is in breach of EU State Aid rules.

The UK Government and UK-based international companies, supported by Micro Focus, lodged an appeal against the judgement with the CJEU.

Micro Focus previously received and settled State Aid charging notices from HM Revenue and Customs (including historic interest) and given that an appeal would be expected to take more than a year, a long-term income tax recoverable continues to be recognized as part of non-current tangible assets as of June 30, 2023, in the preliminary purchase price allocation relating to the Micro Focus Acquisition, as described in Note 19 “Acquisitions.”

NOTE 16— FAIR VALUE MEASUREMENT

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The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques.

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, 2022 and 2021:

June 30, 2022 June 30, 2021

Fair Market Measurements using:

Quoted prices

(liabilities) Significant

inputs Significant

inputs Quoted prices

(liabilities) Significant

inputs Significant

(Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3)

Financial Assets (Liabilities):

Foreign currency forward contracts designated as cash flow hedges (Note 17)

Financial Assets and Liabilities Measured at Fair Value:

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 carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market.

See Note 11 “Long-Term Debt” for further details.

The following table summarizes the fair value of the Company’s financial instruments as of June 30, 2023 and 2022:

Fair Value Hierarchy June 30, 2023 June 30, 2022

Available-for-sale financial assets (Note 9)

Level 2 $ 15,231 $ —

Available-for-sale financial assets (Note 9)

Level 3 $ 24,627 $ —

Derivative asset (Note 17)

Level 2 $ 3,547 $ —

Derivative liability (Note 17)

Level 2 $ ( 161,191 ) $ ( 892 )

Senior Notes (Note 11) (1)

Level 2 $ ( 3,827,888 ) $ ( 2,835,810 )

__________________________________

Total $ ( 892 ) $ — $ ( 892 ) $ — $ 1,131 $ — $ 1,131 $ —

(1) Senior Notes are presented within the Consolidated Balance Sheets at amortized cost.

See Note 11 “Long-Term Debt” for further details.

Changes in Level 3 Fair Value Measurements

The following table provides a reconciliation of changes in the fair value of our Level 3 deal-contingent foreign currency forward contracts and available-for-sale financial assets between June 30, 2022 and June 30, 2023.

Deal-contingent foreign currency forward contracts Available-for-sale

financial assets

Balance as of June 30, 2022

Gain (loss) recognized in income 9,354 209

Purchases — 24,418

Settlements ( 9,354 ) —

Balance as of June 30, 2023

Our derivative liabilities and our derivative assets are classified as Level 2 and are comprised of foreign currency forward and swap contracts.

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.

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, 2022, the fair value was $ 2.8 billion (June 30, 2021—$ 2.7 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.

As part of the Micro Focus Acquisition, we acquired the rights to certain available-for-sale financial assets which are classified as Level 2 and Level 3.

Our Level 2 available-for-sale financial assets are comprised primarily of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian.

Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts.

Please see Note 9 “Prepaid Expenses and Other Assets” 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.

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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, 2022, is recorded within “Accounts payable and accrued liabilities” and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings with the next twelve months.

As of June 30, 2022, the notional amount of forward contracts we held to sell U.S.

dollars in exchange for Canadian dollars was $ 66.5 million (June 30, 2021—$ 66.9 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, 2022 As of June 30, 2021

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) $ ( 892 ) $ 1,131

Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) (Loss)

Year Ended June 30, 2022

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 $ ( 2,530 ) Operating expenses $ ( 507 )

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 )

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,

2022 2021 2020

Fiscal 2022 Restructuring Plan $ 25,778 $ — $ —

COVID-19 Restructuring Plan ( 3,625 ) ( 8,929 ) 53,616

Fiscal 2020 Restructuring Plan ( 128 ) 3,669 26,680

Restructuring Plans prior to Fiscal 2020 Restructuring Plan ( 139 ) ( 53 ) 1,371

Acquisition-related costs 6,872 5,906 13,750

Other charges (recoveries) 18,115 1,155 5,011

Total $ 46,873 $ 1,748 $ 100,428

Fiscal 2022 Restructuring Plan

During the third quarter of Fiscal 2022, as part of our return to office planning, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan).

The Fiscal 2022 Restructuring Plan charges will relate to facility costs and workforce reductions.

Facility costs will include 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.

During the year ended June 30, 2022, we recognized cost of $ 23.5 million related to abandoned office space that have been early terminated or assigned to a third party, of which $ 17.8 million was related to the write-off of right of use assets.

As of June 30, 2022, we expect total costs to be incurred in connection with the Fiscal 2022 Restructuring Plan to be approximately $ 32.0 million to $ 37.0 million, of which $ 25.8 million has been recorded within “Special charges (recoveries)” to date.

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, 2022 is shown below.

Fiscal 2022 Restructuring Plan Workforce reduction Facility charges Total

Balance payable as of June 30, 2021

Accruals and adjustments 2,138 5,690 7,828

Cash payments ( 1,117 ) ( 219 ) ( 1,336 )

Foreign exchange and other non-cash adjustments ( 32 ) ( 61 ) ( 93 )

Balance payable as of June 30, 2022

$ 989 $ 5,410 $ 6,399

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.

During the year ended June 30, 2022, we recorded net recoveries of $ 3.6 million, related primarily to abandoned facilities.

During the year ended June 30, 2021, we recorded net recoveries of $ 16.0 million, related to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

Included in these recoveries are $ 12.5 million, related to the reversal of lease liabilities (see Note 6 “Leases”), with the remainder related to other facility charges and recoveries.

Additionally, during the year ended June 30, 2021, we incurred $ 7.1 million of charges related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the COVID-19 Restructuring Plan, $ 41.1 million has been recorded within “Special charges (recoveries)” to date.

We do not expect to incur any further significant charges relating to the COVID-19 Restructuring Plan.

A reconciliation of the beginning and ending restructuring liability, which is included within “Accounts payable and accrued liabilities” and “Long-term accrued liabilities” in our Consolidated Balance Sheets, for the year ended June 30, 2022 is shown below.

COVID-19 Restructuring Plan Workforce reduction Facility charges Total

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

Accruals and adjustments ( 101 ) ( 2,254 ) ( 2,355 )

Cash payments ( 144 ) ( 877 ) ( 1,021 )

Foreign exchange and other non-cash adjustments ( 10 ) 130 120

Balance payable as of June 30, 2022

$ — $ 1,009 $ 1,009

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.

During the year ended June 30, 2022, we recorded immaterial charges and net recoveries of $ 0.1 million related to abandoned facilities and workforce reductions.

During the year ended June 30, 2021, we recorded net recoveries of $ 13.5 million related to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party.

Included in these recoveries are $ 10.1 million related to the reversal of lease liabilities (see note 6 “Leases”), with the remainder related to other facility charges and recoveries.

Additionally, during the year ended June 30, 2021, we recognized a net recovery of $ 17.2 million related to abandoned facilities, workforce reductions and the write-off of fixed assets.

Since the inception of the Fiscal 2020 Restructuring Plan, $ 30.2 million has been recorded within “Special charges (recoveries)” to date.

We do not expect to incur any further significant charges relating to the Fiscal 2020 Restructuring Plan.

Fiscal 2020 Restructuring Plan Workforce reduction Facility charges Total

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

Accruals and adjustments ( 226 ) 44 ( 182 )

Cash payments ( 1,864 ) ( 318 ) ( 2,182 )

Foreign exchange and other non-cash adjustments ( 127 ) 9 ( 118 )

Balance payable as of June 30, 2022

$ — $ 1,601 $ 1,601

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, 2022 were $ 6.9 million (year ended June 30, 2021 and 2020—$ 5.9 million and $ 13.8 million, respectively).

Other charges (recoveries)

For the year ended June 30, 2022, “Other charges” includes $ 15.4 million related to pre-acquisition equity incentives, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions”) and $ 2.7 million, respectively, related to other miscellaneous charges.

For the year ended June 30, 2021, “Other charges” includes $ 1.2 million related 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.

NOTE 19— ACQUISITIONS

Fiscal 2022 Acquisitions

Acquisition of Zix Corporation

On December 23, 2021, we acquired all of the equity interest in Zix Corporation (Zix), a leader in software as a service (SaaS) based email encryption, threat protection and compliance cloud solutions for small and medium-sized businesses (SMB).

Total consideration for Zix was $ 894.5 million paid in cash, inclusive of cash acquired and $ 18.6 million relating to the cash settlement of pre-acquisition vested share-based compensation that was previously accrued but since paid as of June 30, 2022.

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, threat management, email security and compliance solutions spaces.

The results of operations of Zix have been consolidated with those of OpenText beginning December 23, 2021.

Preliminary Purchase Price Allocation

The recognized amounts of identifiable assets acquired, and liabilities assumed, based on their preliminary fair values as of December 23, 2021, are set forth below:

Current assets (inclusive of cash acquired of $ 38.3 million)

Non-current tangible assets 13,557

Intangible customer assets 212,400

Intangible technology assets 92,650

Liabilities assumed ( 79,621 )

Total identifiable net assets 313,429

Goodwill 581,032

Net assets acquired $ 894,461

The goodwill of $ 581.0 million is primarily attributable to the synergies expected to arise after the acquisition.

There is $ 103.7 million of goodwill that is deductible for tax purposes.

The fair value of current assets acquired includes accounts receivable with a fair value of $ 28.4 million.

The gross amount receivable was $ 32.7 million, of which $ 4.3 million is expected to be uncollectible.

Acquisition-related costs for Zix included in “Special charges (recoveries)” in the Consolidated Financial Statements for the year ended June 30, 2022 were $ 2.9 million.

Pre-acquisition equity incentives of $ 26.3 million were replaced upon acquisition by equivalent value cash settlements to be settled in accordance with the original vesting dates, primarily over the next two years .

Of these equity incentives, $ 15.4 million for the year ended June 30, 2022 were included in “Special charges (recoveries).”

The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities.

We expect to finalize this determination on or before our quarter ending December 31, 2022.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2022.

Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations.

Acquisition of Bricata Inc.

On November 24, 2021, we acquired all of the equity interest in Bricata Inc.

(Bricata) for $ 17.8 million.

In accordance with Topic 805, this acquisition was accounted for as a business combination.

We believe the acquisition strengthens our OpenText Security and Protection Cloud with Network Detection and Response technologies.

The results of operations of Bricata have been consolidated with those of OpenText beginning November 24, 2021.

Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2022.

Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations.

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 was 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 was expected to be uncollectible.

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)

Non-current tangible assets (inclusive of restricted cash acquired of $ 2.4 million)

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.

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,

2022 2021 2020

Revenues (1) :

Canada $ 186,213 $ 166,430 $ 149,457

United States 1,968,597 1,870,620 1,719,877

United Kingdom 198,459 195,721 186,756

Germany 241,506 212,014 195,286

Rest of EMEA (2)

586,236 623,872 560,239

All other countries 312,833 317,458 298,121

Total revenues $ 3,493,844 $ 3,386,115 $ 3,109,736

________________________________

(1) Total revenues by geographic area are determined based on the location of our direct 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, 2022

As of June 30, 2021

Long-lived assets:

Canada $ 339,793 $ 530,830

United States 1,003,803 868,376

United Kingdom 13,359 14,629

Germany 39,554 60,470

Rest of EMEA (1)

76,440 116,429

All other countries 45,100 64,653

Total $ 1,518,049 $ 1,655,387

_______________________________

(1) EMEA primarily consists of countries in Europe, the Middle East and Africa.

NOTE 21— ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss)

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 ( 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 42,440 966 5,007 48,413

Balance as of June 30, 2021

75,408 830 ( 10,000 ) 66,238

Other comprehensive income (loss) before reclassifications, net of tax ( 78,724 ) ( 1,859 ) 5,595 ( 74,988 )

Amounts reclassified into net income, net of tax — 373 718 1,091

Total other comprehensive income (loss) net ( 78,724 ) ( 1,486 ) 6,313 ( 73,897 )

Balance as of June 30, 2022

$ ( 3,316 ) $ ( 656 ) $ ( 3,687 ) $ ( 7,659 )

NOTE 22— SUPPLEMENTAL CASH FLOW DISCLOSURES

Year Ended June 30,

2022 2021 2020

Cash paid during the period for interest $ 152,750 $ 147,996 $ 146,698

Cash received during the period for interest $ 4,637 $ 3,856 $ 11,768

Cash paid during the period for income taxes (1)

$ 116,583 $ 400,137 $ 94,733

_____________________________

(1) Included for the year ended June 30, 2021 is cash paid of $ 299.6 million relating to settlements with the IRS.

Please see Note 15 “Income Taxes” for additional details.

NOTE 23— OTHER INCOME (EXPENSE), NET

Year Ended June 30,

2022 2021 2020

Foreign exchange gains (losses) $ ( 2,670 ) $ ( 1,273 ) $ ( 4,184 )

OpenText share in net income of equity investees (1)

58,702 62,897 8,700

Loss on debt extinguishment (2)

( 27,413 ) — ( 17,854 )

Other miscellaneous income (expense) 499 ( 190 ) 1,392

Total other income (expense), net $ 29,118 $ 61,434 $ ( 11,946 )

____________________________

(1) Represents our share in net income of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, 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 December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $ 27.4 million.

Of this, $ 25.0 million related to the early termination call premium, $ 6.2 million related to unamortized debt issuance costs and ($ 3.8 ) million related to unamortized premium (see Note 11 “Long-Term Debt” for more details).

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,

2022 2021 2020

Basic earnings per share

Net income attributable to OpenText $ 397,090 $ 310,672 $ 234,225

Basic earnings per share attributable to OpenText $ 1.46 $ 1.14 $ 0.86

Diluted earnings per share

Net income attributable to OpenText $ 397,090 $ 310,672 $ 234,225

Diluted earnings per share attributable to OpenText $ 1.46 $ 1.14 $ 0.86

Weighted-average number of shares outstanding (in '000's)

Basic 271,271 272,533 270,847

Effect of dilutive securities 638 946 970

Diluted 271,909 273,479 271,817

Excluded as anti-dilutive (1)

4,927 4,147 3,001

____________________________________

(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, 2022, Mr.

Stephen Sadler, a member of the Board of Directors, earned $ 0.4 million (year ended June 30, 2021 and 2020 — $ 37 thousand and $ 0.7 million) in consulting fees from OpenText for assistance with acquisition-related business activities.

Sadler abstained from voting on all transactions from which he would potentially derive consulting fees.

NOTE 26— SUBSEQUENT EVENTS

Cash Dividends

As part of our quarterly, non-cumulative cash dividend program, we declared, on August 3, 2022, a dividend of $ 0.24299 per Common Share.

The record date for this dividend is September 2, 2022 and the payment date is September 23, 2022.

Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board.

Form 10-K Summary

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

August 4, 2022

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

Senior Vice President and Chief Accounting Officer

(Principal Accounting Officer)

Signature Title Date

BARRENECHEA Vice Chair, Chief Executive Officer and Chief Technology Officer

(Principal Executive Officer) August 4, 2022

THOMAS JENKINS Chairman of the Board August 4, 2022

Thomas Jenkins

/S/ RANDY FOWLIE Director August 4, 2022

/S/ DAVID FRASER Director August 4, 2022

HAMILTON Director August 4, 2022

/S/ ROBERT HAU Director August 4, 2022

POWELL Director August 4, 2022

/S/ STEPHEN J.

SADLER Director August 4, 2022

/S/ HARMIT SINGH Director August 4, 2022

/S/ MICHAEL SLAUNWHITE Director August 4, 2022

Michael Slaunwhite

/S/ KATHARINE B.

STEVENSON Director August 4, 2022

/S/ DEBORAH WEINSTEIN Director August 4, 2022

Deborah Weinstein

Non-designated Hedges

In connection with the Micro Focus Acquisition, in August 2022, we entered into certain derivative transactions to meet certain foreign currency obligations under UK cash confirmation requirements related to the purchase price of the Micro Focus Acquisition, mitigate the risk of foreign currency appreciation in the GBP denominated purchase price and mitigate the risk of foreign currency appreciation in the EUR denominated existing debt held by Micro Focus.

We entered into the following derivatives:

(i) three deal-contingent forward contracts, (ii) a non-contingent forward contract, and (iii) EUR/USD cross currency swaps.

The deal-contingent forward contracts had an aggregate notional amount of £ 1.475 billion.

The non-contingent forward contract had a notional amount of £ 350 million.

The cross currency swaps are comprised of 5-year EUR/USD cross currency swa

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures