Equity and Long-Term Incentive Plans

On June 8, 2016, the Company's shareholders approved the AMC Networks Inc. 2016 Employee Stock Plan (the "2016 Employee Stock Plan") and the AMC Networks Inc. 2016 Executive Cash Incentive Plan (the "2016 Cash Incentive Plan"). On June 5, 2012, the Company's shareholders approved the AMC Networks Inc. 2011 Stock Plan for Non-Employee Directors (the "2011 Non-Employee Director Plan").

Equity Plans

The 2016 Employee Stock Plan provides for the grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units and other equity-based awards (collectively, "awards"). Under the 2016 Employee Stock Plan, the Company may grant awards for up to 6,000,000 shares of AMC Networks Class A Common Stock (subject to certain adjustments). Equity-based awards granted under the 2016 Employee Stock Plan must be granted with an exercise price of not less than the fair market value of a share of AMC Networks Class A Common Stock on the date of grant and must expire no later than 10 years from the date of grant. The terms and conditions of awards granted under the 2016 Employee Stock Plan, including vesting and exercisability, are determined by the Compensation Committee of the Board of Directors ("Compensation Committee") and may include terms or conditions based upon performance criteria.

Awards issued to employees under the 2016 Employee Stock Plan will settle in shares of the Company's Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash. As of December 31, 2018, there are 2,515,761 share awards available for future grant under the 2016 Employee Stock Plan. For the purpose of calculating the remaining shares available for issuance under the 2016 Employee Stock Plan, awards containing performance criteria are excluded based on the maximum potential performance target that can be achieved.

Under the 2011 Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, restricted stock units, restricted shares, stock appreciation rights and other equity-based awards. The Company may grant awards for up to 465,000 shares of AMC Networks Class A Common Stock (subject to certain adjustments). Stock options under the 2011 Non-Employee Director Plan must be granted with an exercise price of not less than the fair market value of a share of AMC Networks Class A Common Stock on the date of grant and must expire no later than 10 years from the date of grant. The terms and conditions of awards granted under the 2011 Non-Employee Director Plan, including vesting and exercisability, are determined by the Compensation Committee. Unless otherwise provided in an applicable award agreement, stock options granted under this plan will be fully vested and exercisable, and restricted stock units granted under this plan will be fully vested, upon the date of grant and will settle in shares of the Company's Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash, on the first business day after ninety days from the date the director's service on the Board of Directors ceases or, if earlier, upon the director's death. As of December 31, 2018, there are 156,023 shares available for future grant under the 2011 Non-Employee Director Plan.

Restricted Stock Unit Activity

The following table summarizes activity relating to Company employees who held AMC Networks restricted stock units for the year ended December 31, 2018:



	Number of Restricted Stock Units		Number of Performance Restricted Stock Units		Weighted Average Fair Value Per Stock Unit at Date of Grant
Unvested award balance, December 31, 2016	982,298		1,354,461		$	66.23
Granted	586,600		642,139		$	59.78
Released/Vested	(392,892	)	(164,926	)	$	71.48
Canceled/Forfeited	(55,965	)	(15,527	)	$	68.15
Unvested award balance, December 31, 2017	1,120,041		1,816,147		$	62.53
Granted	587,471		887,807		$	52.76
Released/Vested	(531,655	)	(227,852	)	$	66.58
Canceled/Forfeited	(294,380	)	(91,335	)	$	59.80
Unvested award balance, December 31, 2018	881,477		2,384,767		$	57.49

All restricted stock units granted vest ratably over a three or four year period.

The target number of PRSUs granted represents the right to receive a corresponding number of shares, subject to adjustment based on the performance of the Company against target performance criteria for a three year period. The number of shares issuable at the end of the applicable measurement period ranges from 0% to 200% of the target PRSU award.

The following table summarizes activity relating to Non-employee Directors who held AMC Networks restricted stock units for the year ended December 31, 2018:



	Number of Restricted Stock Units	Weighted Average Fair Value Per Stock Unit at Date of Grant
Vested award balance, December 31, 2016	154,621	$	53.15
Granted	32,825	$	53.48
Released/Vested	—	$	—
Vested award balance, December 31, 2017	187,446	$	53.20
Granted	32,210	$	61.38
Released/Vested	—	$	—
Vested award balance, December 31, 2018	219,656	$	54.40

Stock Option Award Activity

The following table summarizes activity relating to employees of the Company who held unvested AMC Networks stock options for the year ended December 31, 2018:



	Shares Under Option		Weighted Average Exercise Price Per Share		Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value(a)
	Time Vesting Options		Weighted Average Exercise Price Per Share		Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value(a)
Balance, December 31, 2016	388,385		$	48.26	9.79	$	1,585
Granted	—		$	—
Balance, December 31, 2017	388,385		$	48.26	8.79	$	2,260
Exercised	(89,462	)	$	—
Balance, December 31, 2018	298,923		$	48.26	7.79	$	1,979
Options exercisable at December 31, 2018	169,462		$	48.26	7.79	$	1,122
Options expected to vest in the future	129,461		$	48.26	7.79	$	857


(a)	The aggregate intrinsic value is calculated as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of AMC Networks Class A Common Stock on the reporting date, as indicated.

Share-based Compensation Expense

The Company recorded share-based compensation expense of $61.0 million, $53.5 million and $38.9 million, reduced for forfeitures, for the years ended December 31, 2018, 2017 and 2016, respectively. Forfeitures are estimated based on historical experience. To the extent actual results of forfeitures differ from those estimates, such amounts are recorded as an adjustment in the period the estimates are revised.

Share-based compensation expense is recognized in the consolidated statements of income as part of selling, general and administrative expenses. As of December 31, 2018, there was $88.9 million of total unrecognized share-based compensation costs related to Company employees who held unvested AMC Networks restricted stock units and options. The unrecognized compensation cost is expected to be recognized over a weighted-average remaining period of approximately 2.25 years. There were no costs related to share-based compensation that were capitalized.

The Company receives income tax deductions related to restricted stock units, stock options or other equity awards granted to its employees by the Company. The Company uses the 'with-and-without' approach to determine the recognition and measurement of excess tax benefits and deficiencies.

Cash flows resulting from excess tax benefits and deficiencies are classified along with other income tax cash flows as an operating activity for the year ended December 31, 2018 and as cash flows from financing activities for the years ended December 31, 2017 and 2016. Excess tax benefits are realized tax benefits from tax deductions for options exercised and restricted shares issued, in excess of the deferred tax asset attributable to stock compensation costs for such awards. Excess tax deficiencies are realized deficiencies from tax deductions being less than the deferred tax asset. Excess tax deficiencies of $2.0 million and $2.2 million, and $0.8 million of a tax benefit were recorded for the years ended December 31, 2018, 2017 and 2016, respectively.

Long-Term Incentive Plans

Under the terms of the 2016 Cash Incentive Plan, the Company is authorized to grant a cash or equity based award to certain employees. The terms and conditions of such awards are determined by the Compensation Committee of the Company's Board of Directors, may include the achievement of certain performance criteria and may extend for a period not to exceed ten years. Beginning in 2016, the Company has granted long-term incentive awards in the form of PRSUs whereas cash awards were issued in prior years.

In connection with the long-term incentive awards outstanding, the Company recorded expense of $1.3 million, $7.5 million and $15.1 million for the years ended December 31, 2018, 2017 and 2016 respectively.