11.SHAREHOLDERS' EQUITY

Cash Dividend

Old Waste Connections authorized the initiation of a quarterly cash dividend in October 2010 and has increased it on an annual basis. In October 2016, New Waste Connections announced that its Board of Directors increased its regular quarterly cash dividend by $0.035, from $0.145 to $0.18 per share. Cash dividends of $92,547, $65,990 and $58,906 were paid during the years ended December 31, 2016, 2015 and 2014, respectively.

Normal Course Issuer Bid

On July 19, 2016, the Board of Directors of the Company approved, subject to receipt of regulatory approvals, undertaking a normal course issuer bid (the “NCIB”) to purchase up to 8,770,732 of the Company’s common shares for a one-year period that expires on August 7, 2017. The Company received TSX approval of the NCIB on August 3, 2016. Under the NCIB, the Company may make share repurchases only in the open market, including on the NYSE, the TSX, and 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 would be limited to a maximum of 60,150 common shares, which represents 25% of the average daily trading volume on the TSX of 240,601 common shares for the period from June 1, 2016 to July 31, 2016, being the whole calendar month periods that the Company's shares traded on the TSX from the June 1, 2016 closing of the Progressive Waste acquisition to the date the Company filed its NCIB application with the TSX. 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, 2016, the Company did not repurchase any common shares pursuant to the NCIB or other share repurchase programs. For the years ended December 31, 2015 and 2014, Old Waste Connections repurchased 1,962,989 and 167,100 shares of common stock at an aggregate cost of $91,165 and $7,317, respectively.

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 has been reclassified into common shares of New Waste Connections. 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, 2016, the Company has reserved the following common shares for issuance:


For outstanding RSUs, PSUs, DSUs and warrants		1,481,645
For future grants under the 2016 Incentive Award Plan		4,972,614
		6,454,259

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 490,112 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 as employees exercise restricted share units, which will be settled with cash, under the Progressive Waste share-based compensation plans that were continued by the Company. During the period of June 1, 2016 to December 31, 2016, the Company sold 265,183 common shares held in the trust as a result of employees exercising cash-settled restricted 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, 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, 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. The 2016 Plan 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 5,000,000 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). Directors, but not employees or consultants, 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,
	2016		2015		2014
Restricted share units granted		304,149		332,782		504,255
Weighted average grant-date fair value of restricted share units granted	$	57.57	$	45.13	$	42.54
Total fair value of restricted share units granted	$	17,510	$	15,019	$	21,449
Restricted share units becoming free of restrictions		431,174		478,686		563,117
Weighted average restriction period (in years)		3.9		3.9		3.9

A summary of activity related to RSUs during the year ended December 31, 2016, is presented below:


	Unvested Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2015	1,007,301	$	39.74
Granted	304,149		57.57
Forfeited	(45,642)		48.42
Vested and Issued	(403,812)		37.87
Vested and Deferred	(27,362)		32.92
Outstanding at December 31, 2016	834,634		42.11

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, the Company issues to recipients who deferred their RSUs common shares of the Company underlying the deferred RSUs. At December 31, 2016, 2015 and 2014, the Company had 243,796, 256,191 and 223,752 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,
	2016		2015		2014
PSUs granted		147,644		238,690		54,723
Weighted average grant-date fair value of PSUs granted	$	56.75	$	44.96	$	42.33
Total fair value of PSUs granted	$	8,379	$	10,732	$	2,316
PSUs becoming free of restrictions		122,960		-		-
Weighted average restriction period (in years)		4.0		3.8		2.8

A summary of activity related to PSUs during the year ended December 31, 2016, is presented below:


	Unvested Shares	Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2015	293,413	$	44.47
Granted	147,644		56.75
Forfeited	(33,335)		43.66
Vested and Issued	(122,960)		44.20
Outstanding at December 31, 2016	284,762		51.11

During the years ended December 31, 2015 and 2014, Old Waste Connections’ Compensation Committee granted PSUs to the Company’s executive officers and non-executive officers with three-year performance-based metrics that the Company had been required to meet before those awards were earned. However, as a result of the Progressive Waste acquisition, the Company’s Board of Directors accelerated the vesting of these PSUs at the target performance level, other than those PSUs held by Messrs. Mittelstaedt and Bouck, which were terminated.

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 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, 2015, Old Waste Connections’ Compensation Committee also 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.

Deferred Share Units

The Company granted 524 deferred share units (“DSUs”) under its 2016 Plan that remained outstanding at December 31, 2016.

Share Purchase Warrants

The Company has outstanding share purchase warrants issued under the Consultant Plan, which expired in 2012, as well as 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, 2016, expire between 2017 and 2021.

A summary of warrant activity during the year ended December 31, 2016, is presented below:


	Warrants	Weighted-Average Exercise Price
Outstanding at December 31, 2015	197,783	$	45.85
Granted	10,444		67.00
Forfeited	(55,474)		39.91
Exercised	(34,824)		38.05
Outstanding at December 31, 2016	117,929		52.82

The following table summarizes information about warrants outstanding as of December 31, 2016 and 2015:


	Warrants		Fair Value of Warrants	Outstanding at December 31,
Grant Date	Issued	Exercise Price	Issued	2016	2015
Throughout 2011	9,324	$27.53 to $33.14	79	-	6,226
Throughout 2012	71,978	$30.52 to $33.03	628	6,625	49,975
Throughout 2014	50,403	$45.62 to $49.06	276	14,365	50,403
Throughout 2015	91,179	$42.45 to $54.48	1,333	86,495	91,179
Throughout 2016	10,444	$63.33 to $77.33	189	10,444	-
				117,929	197,783

Restricted Share Units - Progressive Waste Plans

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 of restricted share units (“RSUs”). A summary of activity related to Progressive Waste RSUs during the year ended December 31, 2016, is presented below:


Outstanding at June 1, 2016 (acquisition date)		490,112
Cash settled		(265,183)
Outstanding at December 31, 2016		224,929

A summary of vesting activity related to Progressive Waste RSUs during the year ended December 31, 2016, is presented below:


Vested at June 1, 2016 (acquisition date)		418,242
Vested due to acceleration		25,972
Vested over remaining service period		14,757
Cash settled		(265,183)
Vested at December 31, 2016		193,788

During the period from June 1, 2016 to December 31, 2016, 25,972 Progressive Waste RSUs vested as a result of plan provisions requiring accelerated vesting to employees due to a change in control followed by termination of employment. No RSUs under the Progressive Waste share-based compensation plans were granted subsequent to June 1, 2016. During the period from June 1, 2016 to December 31, 2016, 9,621 Progressive Waste RSUs were forfeited and will be redistributed to other remaining active participants.

Performance-Based Restricted Share Units - Progressive Waste Plans

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 of performance-based restricted share units (“PSUs”) based on achieving target results. A summary of activity related to Progressive Waste PSUs during the year ended December 31, 2016, is presented below:


Outstanding at June 1, 2016 (acquisition date)		206,856
Cash settled, net of notional dividend		(144,862)
Outstanding at December 31, 2016		61,994

A summary of vesting activity related to Progressive Waste PSUs during the year ended December 31, 2016, is presented below:


Vested at June 1, 2016 (acquisition date)		38,409
Vested due to acceleration		75,282
Vested over remaining service period		54,989
Cash settled, net of notional dividend		(144,862)
Vested at December 31, 2016		23,818

During the period from June 1, 2016 to December 31, 2016, 75,282 Progressive Waste PSUs vested as a result of plan provisions requiring accelerated vesting to employees due to a change in control followed by termination of employment. No PSUs under the Progressive Waste share-based compensation plans were granted or forfeited subsequent to June 1, 2016.

Share Based Options – Progressive Waste Plans

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 of share based options. A summary of activity related to Progressive Waste share based options during the year ended December 31, 2016, is presented below:


Outstanding at June 1, 2016 (acquisition date)		456,110
Cash settled		(7,432)
Outstanding at December 31, 2016		448,678

A summary of vesting activity related to Progressive Waste share based options during the year ended December 31, 2016, is presented below:


Vested at June 1, 2016 (acquisition date)		325,045
Vested due to acceleration		63,475
Vested over remaining service period		19,844
Cash settled		(7,432)
Vested at December 31, 2016		400,932

During the period from June 1, 2016 to December 31, 2016, 63,475 Progressive Waste share based options vested as a result of plan provisions requiring accelerated vesting to employees due to a change in control followed by termination of employment. No share based options under the Progressive Waste share-based compensation plans were granted or forfeited subsequent to June 1, 2016.