Capital Stock

(a) Common Shares

The Company had 500 million authorized Class A voting shares and 500 million authorized Class B non-voting shares at June 30, 2018 and March 31, 2018. The table below outlines common shares reserved for future issuance:



	June 30, 2018	March 31, 2018
	(Amounts in millions)
Stock options and equity-settled SARs outstanding	32.7	32.1
Restricted stock and restricted share units — unvested	2.0	2.2
Common shares available for future issuance under the 2017 Plan (as defined below)	10.0	10.3
Shares issuable upon conversion of April 2013 1.25% Notes	—	2.1
Shares reserved for future issuance	44.7	46.7

On September 12, 2017, the Company’s shareholders approved the Lions Gate Entertainment Corp. 2017 Performance Incentive Plan (the “2017 Plan”) previously adopted by the Board of Directors (the “Board”) of the Company. The types of awards that may be granted under the 2017 Plan include stock options, SARs, restricted stock, restricted share units, stock bonuses and other forms of awards granted or denominated in Class A voting shares and Class B non-voting shares ("Common Shares") or units of Common Shares, as well as certain cash bonus awards. Persons eligible to receive awards under the 2017 Plan include directors of the Company, officers or employees of the Company or any of its subsidiaries, and certain consultants and advisors to the Company or any of its subsidiaries.

(b) Share-based Compensation

The Company recognized the following share-based compensation expense during the three months ended June 30, 2018, and 2017:



	Three Months Ended
	June 30,
	2018			2017
	(Amounts in millions)
Compensation Expense:
Stock options	$	6.8		$	12.3
Restricted share units and other share-based compensation	6.7			10.4
Share appreciation rights	1.6			1.1
	15.1			23.8
Tax impact⁽¹⁾	(3.7		)	(8.5		)
Reduction in net income	$	11.4		$	15.3

___________________


(1)	Represents the income tax benefit recognized in the statements of operations for share-based compensation arrangements.

Share-based compensation expense, by expense category, consisted of the following:



	Three Months Ended
	June 30,
	2018		2017
	(Amounts in millions)
Share-Based Compensation Expense:
Direct operating	$	0.2	$	0.2
Distribution and marketing	—		0.2
General and administration	14.9		23.4
	$	15.1	$	23.8

The following table sets forth the stock option, equity-settled SARs, restricted stock and restricted share unit activity during the three months ended June 30, 2018:



	Stock Options and Equity-Settled SARs						Restricted Stock and Restricted Share Units
	Class A Voting Shares			Class B Non-Voting Shares			Class A Voting Shares			Class B Non-Voting Shares
	Number of Shares		Weighted-Average Exercise Price	Number of Shares		Weighted-Average Exercise Price	Number of Shares		Weighted-Average Grant-Date Fair Value	Number of Shares		Weighted-Average Grant-Date Fair Value
Outstanding at March 31, 2018	8,636,437		$26.93	23,463,115		$20.56	230,561		$28.49	2,001,049		$27.97
Granted	52,467		$30.47	1,168,761		$24.58	3,582		$25.04	28,764		$23.43
Options exercised or restricted stock or RSUs vested	(15,009	)	$22.21	(15,052	)	$21.43	(66,441	)	$29.53	(158,170	)	$28.32
Forfeited or expired	(220,183	)	$35.45	(382,623	)	$31.77	(10,106	)	$25.87	(62,561	)	$27.44
Outstanding at June 30, 2018	8,453,712		$26.74	24,234,201		$20.59	157,596		$28.14	1,809,082		$27.89

The Company wrote off tax deficiencies of $1.1 million associated with its equity awards in its tax benefit during the three months ended June 30, 2018 (2017 - $0.4 million).

On June 8, 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.09 per each of the Company’s Class A voting shares and the Company’s Class B non-voting shares, payable August 9, 2018, to shareholders of record as of June 30, 2018. As of June 30, 2018, the Company had $19.2 million of cash dividends payable included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheet.

(d) Other

In connection with an amendment of an affiliation agreement with a customer and effective upon the close of the Starz merger (December 8, 2016), Lionsgate agreed to issue to the customer three $16.67 million annual installments of equity (or cash at Lionsgate's election). The total value of the contract of $50 million is being amortized as a reduction of revenue over the period from December 8, 2016 to August 31, 2019. During the year ended March 31, 2018, Lionsgate issued to the customer 266,667 Class A voting shares valued at $8.3 million and 278,334 Class B non-voting shares valued at $8.3 million.