In May 2007, our shareholders approved the establishment of the AXIS Capital Holdings Limited 2007 Long-Term Equity Compensation Plan (“2007 Plan”). The 2007 Plan provides for, among other things, the grant of restricted stock, restricted stock units, non-qualified and incentive stock options, and other equity-based awards to our employees and directors. The 2007 Plan authorized the issuance of a total of 5,000,000 shares. In May of 2009 and 2012, our shareholders approved amendments to the 2007 Plan to increase the number of common shares authorized for issuance by 4,000,000 and 6,000,000 respectively, to bring the total number of common shares authorized for issuance to 15,000,000. As a result of the adoption of the 2007 Plan, the 2003 Long-Term Equity Compensation and 2003 Directors Long-Term Equity Compensation Plan were terminated, except that all related outstanding awards will remain in effect. At December 31, 2016, 5,714,048 equity-based awards remained available for grant under the 2007 Plan.

We currently issue restricted stock units to our employees with service conditions, vesting generally over a period of 3 or 4 years. The 3 year awards are subject to cliff vesting or a graded vesting schedule. With the 4 year awards, 25% of the award vests annually. We also grant performance-based stock awards to certain employees, which represent the right to receive a specified number of common shares in the future, based upon the achievement of established performance criteria during the applicable performance period. The awards have a scaled performance metric. At December 31, 2016, we anticipate that the established performance based criteria for these awards are likely to be achieved, and the related expense is based on a review of current and projected performance criteria.

Grants provided under the 2007 Plan generally allow for accelerated vesting provisions upon the employee’s death, permanent disability, or certain terminations following a change in control of the Company occurring within two years of the change in control event. Notwithstanding these vesting provisions, the Compensation Committee of our Board has broad authority to accelerate vesting at its own discretion.

The total fair value of restricted stock, restricted stock units and cash settled awards vested during 2016 was $67 million (2015: $75 million; 2014: $68 million). At December 31, 2016, we had unrecognized compensation costs of $85 million (2015: $95 million) which are expected to be recognized over the weighted average period of 2.3 years (2015: 2.2 years).

Between January 1, 2017 and February 24, 2017, a total of 892,574 service-based restricted stock units and 102,558 performance-based restricted stock units were approved for grant. Included in the total restricted stock awards approved for grant subsequent to December 31, 2016 were 420,070 awards which will be settled in cash upon vesting.

In 2016, the Company established the AXIS Executive RSU Retirement Plan (the “Plan”) to reward certain eligible long-term employees of the Company for their dedicated service. Subject to certain conditions being met, eligible employees will not forfeit all of their outstanding restricted stock units (“RSUs”) on or following their retirement. Absent the Plan, outstanding RSUs are generally forfeited upon termination of employment.


a)	Share-settled Awards

The following table provides a reconciliation of the beginning and ending balance of nonvested restricted stock (including restricted stock units) for the year ended December 31, 2016:




	Performance-based Stock Awards				Service-based Stock Awards
	Number of Restricted Stock		Weighted Average Grant Date Fair Value		Number of Restricted Stock		Weighted Average Grant Date Fair Value (1)

Nonvested restricted stock - beginning of year	201		$	49.24	1,954		$	43.34
Granted	104		53.80		589		53.87
Performance Adjustment	26		45.95		n/a		n/a
Vested	(48	)	45.38		(789	)	39.29
Forfeited	—		—		(161	)	47.33
Nonvested restricted stock - end of year	283		$	51.27	1,593		$	48.88

n/a – not applicable

(1) Fair value is based on the closing price of our common shares on the New York Stock Exchange on the grant approval date.

During 2016, we granted 692,316 restricted stock awards (2015: 661,398; 2014: 1,121,066) to our employees with a weighted average grant-date fair value per share of $53.86 (2015: $51.95; 2014: $44.46).

b) Cash-settled Awards

The following table provides a reconciliation of the beginning and ending balance of nonvested cash settled restricted stock units for the year ended December 31, 2016:



	Performance-based Cash Settled RSUs		Service-based Cash Settled RSUs
	Number of Restricted Stock Units		Number of Restricted Stock Units

Nonvested restricted stock units - beginning of period	70		1,433
Granted	18		497
Performance Adjustment	12		n/a
Vested	(32	)	(377	)
Forfeited	—		(161	)
Nonvested restricted stock units - end of period	68		1,392

n/a – not applicable

During 2016, we granted 515,122 restricted stock units that will settle in cash when the awards vest (2015: 487,758; 2014:1,018,083) of which 17,793 restricted stock units are performance based and 497,329 restricted stock units are service based. At December 31, 2016, there were 1,459,513 outstanding restricted stock units that will settle in cash when the awards vest (2015: 1,503,264; 2014: 1,503,380), and the corresponding liability for cash-settled units, included in other liabilities on the Consolidated Balance Sheets, was $48 million (2015: $33 million).

During 2016, we incurred a compensation cost of $74 million (2015: $59 million; 2014: $73 million) in respect of all restricted stock, restricted stock units, and cash awards, and recorded tax benefits thereon of $16 million (2015: $15 million; 2014: $14 million).