16. Share-Based Awards

Employee Equity Plan

The Company's Employee Equity Plan (EEP) expired in May 2015 and the Company has ceased granting any new awards to employees under the plan. The EEP, which was approved by the Company’s shareholders, permitted the grant of share options, RS, RSUs, SSARs or other share-based awards to employees of the Company. The EEP has been administered by the Compensation and Management Development Committee of the Board (the Committee). From 2013, the Company also granted PSUs to employees of the Company.

Under the EEP, the exercise price of the award would not be less than the fair value of the award at the time of grant. The fair value was defined in the EEP as the closing price reported on the grant date. RSU and PSU awards granted under the EEP generally cliff vest after three years of continuous service. Share options and SSARs vest ratably over three years of continuous service and have a ten year contractual term. Participants in the EEP are eligible to receive dividend equivalents, which the Company records as an expense, on RSUs and PSUs that are unvested. At December 31, 2015, no shares remain available for issuance under this plan given it expired in May 2015.

Non-Employee Directors Share Plan

The Company’s Non-Employee Directors Share Plan (Directors Share Plan), which was approved by the Company’s shareholders, permits the grant of up to 1.2 million shares, of which a total of 0.8 million shares can be issued as either RS or RSUs and 0.4 million shares can be issued as share options or SSARs. Under the Directors Share Plan, the exercise price of the award will not be less than the fair value of the award at the time of grant. The fair value is defined in the Directors Share Plan as the closing price reported on the grant date.

Prior to 2013, options and RSUs were awarded under the Directors Share Plan. Since 2013, only RSUs have been awarded. Options generally vest and are expensed ratably over three years and have a ten year contractual term. RSUs have a five year cliff vest with no delivery restrictions and are expensed over the vesting period. Prior to the RSU grant, directors have the ability to elect to receive their awards in the form of either 100% RSUs, or split, with 60% of the award being RSUs and 40% of the award being cash upon delivery.

At December 31, 2015, 0.3 million shares remained available for issuance under this plan.

Employee Share Purchase Plan

The PartnerRe Ltd. Employee Share Purchase Plan (ESPP), which was approved by the Company’s shareholders, was suspended effective June 1, 2015. The ESPP had a twelve month offering period with two purchase periods of six months each. All employees were eligible to participate in the ESPP and could contribute between 1% and 10% of their base salary towards the purchase of the Company’s shares up to the limit set by the Internal Revenue Code of the United States. Employees who enrolled in the ESPP could purchase the Company’s shares at a 15% discount of the lower fair value on either the enrolment date or purchase date. Participants in the ESPP were eligible to receive dividends on their shares as of the purchase date.

Swiss Share Purchase Plan

The Swiss Share Purchase Plan (SSPP) was suspended effective June 1, 2015. The SSPP had two offering periods per year with two purchase periods of six months each. Swiss employees, who worked at least 20 hours per week, were eligible to participate in the SSPP and could contribute between 1% and 8% of their base salary towards the purchase of the Company’s shares up to a maximum of 5,000 Swiss francs per annum. Employees who enrolled in the SSPP could purchase the Company’s shares at a 40% discount of the fair value on the purchase date. There is a restriction on transfer or sale of these shares for a period of two years following purchase. Participants in the SSPP were eligible to receive dividends on their shares as of the purchase date.

Share-Based Compensation

Under each of the Company’s equity plans, the Company re-issues treasury shares or issues new shares upon the exercise of share options and SSARs or the conversion of RSUs into shares.

For the years ended December 31, 2015, 2014 and 2013, the Company’s share-based compensation expense was $41.6 million, $34.4 million and $29.8 million, respectively, with a tax benefit of $7.4 million, $6.9 million and $3.3 million, respectively. Included within these tax benefits are amounts related to the exercise of share options and the conversion of RSUs and SSARs into shares by employees of the Company of $10.2 million, $6.2 million and $7.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Share Options

The activity related to share options exercised for the years ended December 31, 2015, 2014 and 2013 was as follows:



	2015		2014		2013
Options exercised	142,429		225,329		819,764
Total intrinsic value of options exercised (in millions of U.S. dollars)	$	8.5	$	8.7	$	24.8
Proceeds from option exercises (in millions of U.S. dollars)	$	9.8	$	14.7	$	49.6

The activity related to the Company’s share options for the year ended December 31, 2015 was as follows:



	Options		Weighted Average Exercise Price
Outstanding at January 1, 2015	410,347		$	71.55
Exercised	(142,429	)	70.47
Outstanding at December 31, 2015	267,918		$	72.13
Options exercisable at December 31, 2015	267,918		$	72.13
Options vested and expected to vest at December 31, 2015	267,918		$	72.13

The weighted average remaining contractual term and the aggregate intrinsic value of share options outstanding, exercisable, vested and expected to vest at December 31, 2015, was 4.2 years and $18.1 million, respectively.

The Company valued share options issued with a Black-Scholes valuation model. No share options have been issued since December 31, 2012.

Restricted Share Units and Performance Share Units

During the years ended December 31, 2015, 2014 and 2013, the Company issued 264,018 RSUs and PSUs, 333,358 RSUs and PSUs and 329,174 RSUs and PSUs with a weighted average grant date fair value of $119.06, $98.86 and $89.44, respectively. The Company values RSUs and PSUs issued under all plans at the fair value of its common shares at the date of grant date.

The activity related to the Company’s RSUs and PSUs for the year ended December 31, 2015 was as follows:



	RSUs and PSUs
Outstanding at January 1, 2015	932,622
Granted	264,018
Performance based adjustment	10,142
Vested	(313,078	)
Forfeited	(32,096	)
Outstanding at December 31, 2015	861,608

The RSUs and PSUs that vested during the years ended December 31, 2015, 2014 and 2013 had a fair value of $22.4 million, $20.6 million and $22.8 million, respectively.

The total unrecognized share-based compensation expense related to unvested RSUs and PSUs was approximately $27.6 million at December 31, 2015, which is expected to be recognized over a weighted-average period of 1.7 years.

Share-Settled Share Appreciation Rights (SSARs)

During the years ended December 31, 2015, 2014 and 2013, the Company issued 72,918 SSARs, 153,797 SSARs and 125,561 SSARs with a weighted average grant date fair value of $17.03, $14.62 and $11.25, respectively.

The activity related to the Company’s SSARs for the year ended December 31, 2015 was as follows:



	SSARs
Outstanding at January 1, 2015	1,492,926
Granted	72,918
Exercised	(574,120	)
Outstanding at December 31, 2015	991,724
Exercisable at December 31, 2015	820,380

The total unrecognized share-based compensation expense related to unvested SSARs was approximately $1.1 million at December 31, 2015, which is expected to be recognized over a weighted-average period of 1.7 years.

The Company values SSARs issued with a Black-Scholes valuation model and used the following assumptions for the years ended December 31, 2015, 2014 and 2013:



	2015		2014		2013
Expected life	6 years		6 years		6 years
Expected volatility	17.7	%	18.1	%	18.3	%
Risk-free interest rate	1.9	%	1.9	%	1.0	%
Dividend yield	2.2	%	2.2	%	2.3	%

Expected volatility is based on the historical volatility of the Company’s common shares over a period equivalent to the expected life of the Company’s SSARs. The risk-free interest rate is based on the market yield of U.S. treasury securities with maturities equivalent to the expected life of the Company’s SSARs. The dividend yield is based on the average dividend yield of the Company’s shares over the expected life of the Company’s SSARs.

Warrants

In 2009, the Company issued 27,655 replacement warrants as part of the acquisition of Paris Re. At December 31, 2015, 557 warrants are outstanding and fully vested with a weighted average remaining contractual life of 1.0 years and a weighted average exercise price of $30.86. During the year ended December 31, 2015, 8,110 warrants were exercised with a weighted average exercise price of $31.25.