Capital Stock

(a) Common Shares

The Company had 500 million authorized common shares at December 31, 2012 and March 31, 2012. The table below outlines common shares reserved for future issuance:



	December 31, 2012	March 31, 2012
	(Amounts in thousands)
Stock options outstanding, average exercise price $12.94 (March 31, 2012 - $10.20)	5,682	3,157
Restricted share units — unvested	2,240	1,867
Share purchase options and restricted share units available for future issuance	15,010	1,984
Shares issuable upon conversion of October 2004 2.9375% Notes at conversion price of $11.50 per share	30	30
Shares issuable upon conversion of February 2005 3.625% Notes at conversion price of $14.28 per share	—	1,643
Shares issuable upon conversion of April 2009 3.625% Notes at conversion price of $8.25 per share	7,948	8,070
Shares issuable upon conversion of January 2012 4.00% Notes at conversion price of $10.50 per share	4,286	4,286
Shares reserved for future issuance	35,196	21,037

In September 2012, the Company adopted the 2012 Performance Incentive Plan (the "2012 Plan"). The 2012 Plan provides for the issuance of up to an additional 18.3 million shares of common shares of the Company, stock options, share appreciation rights, restricted stock, stock bonuses and other forms of awards granted or denominated in common shares or units of common shares, as well as certain cash bonus awards to eligible 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) Retirement of Treasury Shares

During the three months ended December 31, 2012, the Company retired the 11,040,493 shares held in treasury.

The Company recognized the following share-based compensation expense during the three and nine months ended December 31, 2012, and 2011:



	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
	(Amounts in thousands)
Compensation Expense:
Stock Options	$	1,184	$	29	$	1,839	$	89
Restricted Share Units and Other Share-based Compensation	4,575		2,531		16,203		7,286
Stock Appreciation Rights	3,238		2,185		7,603		2,357
Total	$	8,997	$	4,745	$	25,645	$	9,732

There was no income tax benefit recognized in the statements of operations for share-based compensation arrangements during the three and nine months ended December 31, 2012 and 2011.

During the nine months ended December 31, 2012, the Company granted 2,950,796 and 1,383,472 stock options and restricted share units, respectively, at a weighted-average grant-date fair value of $15.48 and $13.62, respectively.

The total intrinsic value of options exercised as of each exercise date during the nine months ended December 31, 2012 and 2011 was $2.1 million and nil, respectively.

Total unrecognized compensation cost related to unvested stock options and restricted share unit awards at December 31, 2012 are $17.3 million and $15.7 million, respectively, and are expected to be recognized over a weighted average period of 3.2 and 1.5 years, respectively.

Stock Appreciation Rights

The Company has the following stock appreciation rights (“SARs”) outstanding as of December 31, 2012:



Grant Date	SARs Outstanding	Vested and Exercisable	Exercise Price		Original Vesting Period (see below)	Expiration Date	Fair Value December 31, 2012		Liability December 31, 2012
									(in thousands)
February 5, 2009	150,000	150,000	$	5.45	3 years	February 5, 2014	$	10.97	$	1,646
April 6, 2009	75,000	75,000	$	5.17	4 years	April 6, 2014	$	11.26	$	844
March 17, 2010	500,000	500,000	$	5.95	4 years	March 17, 2015	$	10.58	$	5,291
January 19, 2012	2,400,000	—	$	9.48	3 years	January 19, 2017	$	8.32	$	6,328
February 9, 2012	350,000	—	$	11.01	3 years	February 9, 2017	$	7.44	$	776

At December 31, 2012, the Company has a stock-based compensation liability accrual in the amount of $14.9 million (March 31, 2012 — $32.4 million) included in accounts payable and accrued liabilities on the consolidated balance sheets relating to these SARs.

During the year ended March 31, 2012, certain individuals exercised 700,000 and 625,000 SARs granted on February 5, 2009 and April 6, 2009, respectively. During the nine months ended December 31, 2012, a certain third-party producer exercised 1,750,000 SARs granted on July 14, 2008 and February 15, 2011.

SARs require that upon their exercise, the Company pay the holder the excess of the market value of the Company’s common stock at that time over the exercise price of the SAR multiplied by the number of SARs exercised. SARs can be exercised at any time subsequent to vesting and prior to expiration. The fair value of all unexercised SARs are determined at each reporting period under a Black-Scholes option pricing methodology based on the inputs in the table below and are recorded as a liability over the vesting period. The fair value of the SARs is expensed on a pro rata basis over the vesting period or service period, if shorter. Changes in the fair value of vested SARs are expensed in the period of change.

At December 31, 2012, the following assumptions were used in the Black-Scholes option-pricing model:



Grant Date	Risk-Free Interest Rate	Expected Option Lives (in years)	Expected Volatility for Options	Expected Dividend Yield
February 5, 2009	0.2%	1.1 years	45%	—%
April 6, 2009	0.2%	1.3 years	45%	—%
March 17, 2010	0.3%	2.2 years	40%	—%
January 19, 2012	0.5%	4.1 years	38%	—%
February 9, 2012	0.5%	4.1 years	38%	—%