Share Capital

(a) Authorized and Issued

Buybacks of Ordinary Shares

On February 21, 2014, XL-Ireland announced that its Board of Directors approved an increase to the Share Buyback Program, authorizing the purchase of up to $1.0 billion of our ordinary shares, which included the amounts that remained under the previous Share Buyback Program. The Company suspended active share buybacks during the quarter ended March 31, 2015 through the close of the Acquisition; however, with the close of the Acquisition, the Company continues to see share buybacks as a valuable capital management tool. As of March 31, 2015, $267.6 million remained available for purchase under the Share Buyback Program.

(b) Stock Plans

The Company's performance incentive programs provide for grants of stock options, restricted stock, restricted stock units, performance units and stock appreciation rights. Share-based compensation granted by the Company generally contains a vesting period of three or four years, and certain awards also contain performance conditions. The Company records compensation expense related to each award over its vesting period, incorporating the best estimate of the expected outcome of performance conditions where applicable. Compensation expense is generally recorded on a straight line basis over the vesting period of an award. See Item 8, Note 20, “Share Capital,” to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for further information on the Company's performance incentive programs and associated accounting.

During the three months ended March 31, 2015, the Company granted approximately 1.3 million stock options with a weighted-average grant date fair value of $6.57 per option. The fair value of the options issued was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:



Dividend yield	2.00	%
Risk free interest rate	1.70	%
Volatility	21.9	%
Expected lives	6.0 years

During the three months ended March 31, 2015, the Company granted approximately 1.5 million restricted stock units to certain employees of the Company and its subsidiaries with an aggregate grant date fair value of approximately $55.1 million. Each restricted stock unit represents the Company's obligation to deliver to the holder one ordinary share, and grants vest in three equal installments upon the first, second and third anniversaries of the date of grant. Restricted stock units are granted at the closing market price on the day of grant and entitle the holder to receive dividends declared and paid in the form of additional ordinary shares contingent upon vesting.