11.SHAREHOLDERS’ EQUITY

Share split

On April 26, 2017, the Company announced that its Board of Directors approved a split of its common shares on a three-for-two basis, which was approved by its shareholders at the Company’s Annual and Special Meeting of Shareholders on May 23, 2017. Shareholders of record on June 7, 2017 received from the Company’s transfer agent on June 16, 2017, one additional common share for every two common shares held. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the share split.

Cash Dividend

The Board of Directors of Old Waste Connections authorized the initiation of a quarterly cash dividend in October 2010 and has increased it on an annual basis. In October 2018, the Company announced that its Board of Directors increased its regular quarterly cash dividend by $0.02, from $0.14 to $0.16 per Company common share. Cash dividends of $152,550, $131,975 and $92,547 were paid during the years ended December 31, 2018, 2017 and 2016, respectively.

Normal Course Issuer Bid

On July 24, 2018, the Board of Directors of the Company approved, subject to receipt of regulatory approvals, the annual renewal, of the Company’s normal course issuer bid (the “NCIB”) to purchase up to 13,174,976 of the Company’s common shares during the period of August 8, 2018 to August 7, 2019 or until such earlier time as the NCIB is completed or terminated at the option of the Company. The renewal followed the conclusion of the Company’s NCIB that expired August 7, 2018. The Company received Toronto Stock Exchange (the “TSX”) approval for its annual renewal of the NCIB on August 2, 2018. Under the NCIB, the Company may make share repurchases only in the open market, including on the NYSE, the TSX, and/or alternative Canadian trading systems, at the prevailing market price at the time of the transaction.

In accordance with TSX rules, any daily repurchases made through the TSX and alternative Canadian trading systems is limited to a maximum of 71,114 common shares, which represents 25% of the average daily trading volume on the TSX of 284,459 common shares for the period from February 1, 2018 to July 31, 2018. The TSX rules also allow the Company to purchase, once a week, a block of common shares not owned by any insiders, which may exceed such daily limit. The maximum number of shares that can be purchased per day on the NYSE will be 25% of the average daily trading volume for the four calendar weeks preceding the date of purchase, subject to certain exceptions for block purchases.

The timing and amounts of any repurchases pursuant to the NCIB will depend on many factors, including the Company’s capital structure, the market price of the common shares and overall market conditions. All common shares purchased under the NCIB shall be immediately cancelled following their repurchase.

For the year ended December 31, 2018, the Company repurchased 831,704 common shares pursuant to its NCIB in effect during such period at an aggregate cost of $58,928. For the year ended December 31, 2017, the Company did not repurchase any common shares pursuant to the NCIB in effect during that period. For the year ended December 31, 2016, the Company did not repurchase any common shares pursuant to the NCIB in effect during that period nor did Old Waste Connections repurchase shares of its common stock pursuant to its share repurchase program. As of December 31, 2018, the remaining maximum number of shares available for repurchase under the current NCIB was 12,937,746.

Common Shares

Shares of Old Waste Connections common stock were converted into common shares of New Waste Connections, which do not have a stated par value; therefore, the portion of additional paid-in capital representing the amount of common shares issued above par for Old Waste Connections was reclassified into common shares of New Waste Connections during the year ended December 31, 2016. The Company is authorized to issue an unlimited number of common shares, and uses reserved but unissued common shares to satisfy its obligations under its equity-based compensation plans. As of December 31, 2018, the Company has reserved the following common shares for issuance:


For outstanding RSUs, PSUs and warrants		2,052,234
For future grants under the 2016 Incentive Award Plan		6,033,454
		8,085,688

Common Shares Held in Trust

Common shares held in trust consist of shares of New Waste Connections held in a trust that were acquired by Progressive Waste prior to June 1, 2016 for the benefit of its U.S. and Canadian employees participating in certain share-based compensation plans. A total of 735,171 common shares were held in the trust on June 1, 2016 when it was acquired by the Company in the Progressive Waste acquisition. Common shares held in trust are classified as treasury shares in the Company’s Consolidated Balance Sheets. The Company will sell shares out of the trust and remit cash or shares to employees and non-employee directors as restricted share units vest and deferred share units settle, under the Progressive Waste share-based compensation plans that were continued by the Company. During the years ended December 31, 2018 and 2017 and during the period of June 1, 2016 to December 31, 2016, the Company sold 36,244, 171,264 and 397,774 common shares held in the trust, respectively, to settle vested restricted share units and deferred share units.

Special Shares

The Company is authorized to issue an unlimited number of special shares. Holders of special shares are entitled to one vote in matters of the Company for each special share held. The special shares carry no right to receive dividends or to receive the remaining property or assets of the Company upon dissolution or wind-up. At December 31, 2018, 2017 and 2016, no special shares were issued.

Preferred Shares

The Company is authorized to issue an unlimited number of preferred shares, issuable in series. Each series of preferred shares issued shall have rights, privileges, restrictions and conditions as determined by the Board of Directors prior to their issuance. Preferred shareholders are not entitled to vote, but take preference over the common shareholders rights in the remaining property and assets of the Company in the event of dissolution or wind-up. At December 31, 2018, 2017 and 2016, no preferred shares were issued.

Restricted Share Units, Performance-Based Restricted Share Units, Share Options and Share Purchase Warrants

As a result of the Progressive Waste acquisition, each Old Waste Connections restricted stock unit award, deferred restricted stock unit award and warrant outstanding immediately prior to the Progressive Waste acquisition was automatically converted into a restricted share unit award, deferred restricted share unit award or warrant, as applicable, relating to an equal number of common shares of New Waste Connections, on the same terms and conditions as were applicable immediately prior to the Progressive Waste acquisition under such Old Waste Connections equity award. Such conversion of Old Waste Connections equity awards was approved by the Company’s shareholders at its shareholder meeting as part of the shareholders’ approval of the Progressive Waste acquisition. At its meeting on June 1, 2016, the Company’s Board of Directors approved the assumption by the Company of the Old Waste Connections 2014 Incentive Plan Award (the “2014 Plan”), the Old Waste Connections Third Amended and Restated 2004 Equity Incentive Plan (the “2004 Plan”), and the Old Waste Connections Consultant Incentive Plan (the “Consultant Plan,” and, together with the 2014 Plan and the 2004 Plan, the “Assumed Old Waste Connections Plans”) for the purposes of administering the Assumed Old Waste Connections Plans and the awards issued thereunder. No additional awards will be made under any of the Assumed Old Waste Connections Plans. Upon the vesting, expiration, exercise in accordance with their terms or other settlement of all of the awards made pursuant to an Assumed Old Waste Connections Plan, such Assumed Old Waste Connections Plan shall automatically terminate.

Participation in the 2004 Plan was limited to employees, officers, directors and consultants. Restricted share units (“RSUs”) granted under the 2004 Plan generally vest in installments pursuant to a vesting schedule set forth in each agreement. Old Waste Connections’ Board of Directors authorized the granting of awards under the 2004 Plan, and determined the employees and consultants to whom such awards were to be granted, the number of shares subject to each award, and the exercise price, term, vesting schedule and other terms and conditions of each award. RSU awards granted under the plan did not require any cash payment from the participant to whom an award was made. No grants have been made under the 2004 Plan since May 16, 2014 pursuant to the approval by Old Waste Connections’ stockholders of the 2014 Plan on such date.

The 2014 Plan also authorized the granting of RSUs, as well as performance awards payable in the form of the Company’s common shares or cash, including equity awards and incentive cash bonuses that may have been intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). Participation in the 2014 Plan was limited to employees and consultants of the Company and its subsidiaries and non-employee directors. The 2014 Plan is administered by the Company’s Board of Directors with respect to awards to non-employee directors and by its Compensation Committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of the Company’s directors and/or officers, subject to certain limitations (collectively, the “administrator”).

RSUs granted under the 2014 Plan generally vest in installments pursuant to a vesting schedule set forth in each award agreement. RSU awards under the 2014 plan do not require any cash payment from the participant to whom an award was made. The vesting of performance awards, including performance-based restricted share units (“PSUs”), was dependent on one or more performance criteria determined by the administrator on a specific date or dates or over any period or periods determined by the administrator.

On June 1, 2016, the Company’s Board of Directors adopted the 2016 Incentive Award Plan (the “2016 Plan”), which was approved by Progressive Waste’s shareholders on May 26, 2016. On July 24, 2017, the Board of Directors approved certain housekeeping amendments to the 2016 Plan. The 2016 Plan, as amended, is administered by the Company’s Compensation Committee and provides that the aggregate number of common shares which may be issued from treasury pursuant to awards made under the 2016 Plan is 7,500,000 common shares. Awards under the 2016 Plan may be made to employees, consultants and non-employee directors and may be made in the form of options, warrants, restricted shares, restricted share units, performance awards (which may be paid in cash, common shares, or a combination thereof), dividend equivalent awards (representing a right of the holder thereof to receive the equivalent value (which may be paid in cash or common shares) of dividends paid on common shares), and share payments (a payment in the form of common shares or an option or other right to purchase common shares as part of a bonus, defined compensation or other arrangement). Non-employee directors are also eligible to receive deferred share units, which represent the right to receive a cash payment or its equivalent in common shares (or a combination of cash and common shares), or which may at the time of grant be expressly limited to settlement only in cash and not in common shares.

Restricted Share Units

A summary of the Company’s RSU activity is presented below:


	Years Ended December 31,
	2018		2017		2016
Restricted share units granted		496,217		415,954		456,223
Weighted average grant-date fair value of restricted share units granted	$	69.22	$	57.09	$	38.38
Total fair value of restricted share units granted	$	34,348	$	23,748	$	17,510
Restricted share units becoming free of restrictions		486,885		571,258		646,761
Weighted average restriction period (in years)		3.5		3.8		3.9

A summary of activity related to RSUs during the year ended December 31, 2018, is presented below:


	Unvested Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2017	1,042,014	$	41.97
Granted	496,217		69.22
Forfeited	(63,783)		55.88
Vested and issued	(483,232)		38.68
Vested and deferred	(3,653)		28.28
Outstanding at December 31, 2018	987,563		56.43

Recipients of the Company’s RSUs who participate in the Company’s Nonqualified Deferred Compensation Plan may have elected in years prior to 2015 to defer some or all of their RSUs as they vest until a specified date or dates they choose. At the end of the deferral periods, unless a qualified participant makes certain other elections, the Company issues to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs. At December 31, 2018, 2017 and 2016, the Company had 264,374, 351,570 and 365,694 vested deferred RSUs outstanding, respectively.

Performance-Based Restricted Share Units

A summary of the Company’s PSU activity is presented below:


	Years Ended December 31,
	2018		2017		2016
PSUs granted		178,377		210,103		221,466
Weighted average grant-date fair value of PSUs granted	$	68.77	$	56.55	$	37.83
Total fair value of PSUs granted	$	12,266	$	11,881	$	8,379
PSUs becoming free of restrictions		154,181		122,786		184,440
Weighted average restriction period (in years)		3.6		3.6		4.0

A summary of activity related to PSUs during the year ended December 31, 2018, is presented below:


	Unvested Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2017	514,461	$	43.42
Granted	178,377		68.77
Forfeited	(6,571)		63.38
Vested and Issued	(154,181)		38.18
Outstanding at December 31, 2018	532,086		53.43

During the year ended December 31, 2018, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2020. During the same period, the Company’s Compensation Committee also granted PSUs with a one-year performance-based metric that the Company must meet before those awards may be earned, with the awards then subject to time-based vesting for the remaining three years of their four-year vesting period. During the year ended December 31, 2017, the Company’s Compensation Committee granted PSUs with three-year performance-based metrics that the Company must meet before those awards may be earned, and the performance period for those grants ends on December 31, 2019. During the same period, the Company’s Compensation Committee also granted PSUs with a one-year performance-based metric that the Company must meet before those awards may be earned, with the awards then subject to time-based vesting for the remaining three years of their four-year vesting period. During the year ended December 31, 2016, Old Waste Connections’ Compensation Committee granted PSUs to the Company’s executive officers and non-executive officers with a one-year performance-based metric that the Company was required to meet before those awards were earned, with the awards then subject to time-based vesting for the remaining three years of their four-year vesting period. The Compensation Committee determines the achievement of performance results and corresponding vesting of PSUs for each performance period.

Share Purchase Warrants

The Company has outstanding share purchase warrants issued under the 2014 Plan and the 2016 Plan. Warrants to purchase the Company’s common shares were issued to certain consultants to the Company. Warrants issued were fully vested and exercisable at the date of grant. Warrants outstanding at December 31, 2018, expire between 2019 and 2023.

A summary of warrant activity during the year ended December 31, 2018, is presented below:


	Warrants	Weighted-Average Exercise Price
Outstanding at December 31, 2017	137,906	$	42.43
Granted	163,995		75.62
Forfeited	(16,119)		36.45
Exercised	(17,571)		36.30
Outstanding at December 31, 2018	268,211		63.49

The following table summarizes information about warrants outstanding as of December 31, 2018 and 2017:


	Warrants		Fair Value of Warrants	Outstanding at December 31,
Grant Date	Issued	Exercise Price	Issued	2018	2017
Throughout 2014	75,604	$30.41 to $32.71	276	15,416	17,521
Throughout 2015	136,768	$28.30 to $36.32	1,333	45,978	75,978
Throughout 2016	15,666	$42.22 to $51.55	189	7,440	9,025
Throughout 2017	35,382	$53.65 to $69.96	595	35,382	35,382
Throughout 2018	163,995	$70.91 to $80.90	2,591	163,995	-
				268,211	137,906

Deferred Share Units

A summary of the Company’s deferred share units (“DSUs”) activity is presented below:


	Years Ended December 31,
	2018		2017		2016
DSUs granted		4,038		4,722		786
Weighted average grant-date fair value of DSUs granted	$	70.47	$	57.65	$	47.46
Total fair value of DSUs granted	$	285	$	272	$	37

The DSUs consist of a combination of DSU grants outstanding under the Progressive Waste share-based compensation plans that were continued by the Company following the Progressive Waste acquisition and DSUs granted by the Company since the Progressive Waste acquisition.

A summary of activity related to DSUs during the year ended December 31, 2018, is presented below:


	Vested Shares		Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2017	13,138	$	41.40
Granted	4,038		70.47
Outstanding at December 31, 2018	17,176		48.24

Other Restricted Share Units

RSU grants outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting. A summary of activity related to Progressive Waste RSUs during the year ended December 31, 2018, is presented below:


Outstanding at December 31, 2017		158,510
Cash settled		(33,816)
Forfeited		(2,435)
Outstanding at December 31, 2018		122,259

A summary of vesting activity related to Progressive Waste RSUs during the year ended December 31, 2018, is presented below:


Vested at December 31, 2017		138,054
Vested over remaining service period		18,350
Cash settled		(33,816)
Forfeited		(2,435)
Vested at December 31, 2018		120,153

No RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016.

Other Performance-Based Restricted Share Units

PSU grants outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for cash settlement only to employees upon vesting based on achieving target results. A summary of activity related to Progressive Waste PSUs during the year ended December 31, 2018, is presented below:


Outstanding at December 31, 2017		55,602
Cash settled, net of notional dividend		(30,902)
Forfeited		(1,909)
Outstanding at December 31, 2018		22,791

A summary of vesting activity related to Progressive Waste PSUs during the year ended December 31, 2018, is presented below:


Vested at December 31, 2017		28,407
Vested over remaining service period		27,195
Cash settled, net of notional dividend		(30,902)
Forfeited		(1,909)
Vested at December 31, 2018		22,791

No PSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016. All outstanding PSUs were vested as of December 31, 2018.

Share Based Options

Share based options outstanding under the Progressive Waste share-based compensation plans were continued by the Company following the Progressive Waste acquisition and allow for the issuance of shares or cash settlement to employees upon vesting. A summary of activity related to Progressive Waste share based options during the year ended December 31, 2018, is presented below:


Outstanding at December 31, 2017		236,616
Cash settled		(71,460)
Outstanding at December 31, 2018		165,156

No share based options under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016. All outstanding share based options were vested as of December 31, 2017.