Stock-Based Compensation

We maintain various compensation plans for officers, other employees, and non-employee members of our Board of Directors.

Stock-based compensation expense included in selling, general and administrative expenses related to stock options on a straight-line, single award basis, restricted stock awards and restricted stock units included in the accompanying Consolidated Statements of Income was as follows (U.S. dollars in millions, except per share data):



	Year ended
	December 27, 2013		December 28, 2012		December 30, 2011
Stock-based compensation expense	$	9.9	$	10.3	$	9.2

We realized an excess share-based payment deduction resulting from stock options exercised through a reduction in taxes currently payable and related effect on cash flows of less than $0.1 million, $3.6 million and $2.9 million for the years ended December 27, 2013, December 28, 2012 and December 30, 2011, respectively. Proceeds of $44.0 million, $10.1 million, and $22.8 million were received from the exercise of stock options for the years ended December 27, 2013, December 28, 2012 and December 30, 2011, respectively.

Stock Option Awards

On May 5, 2011, our shareholders approved and ratified the 2011 Omnibus Share Incentive Plan (the “2011 Plan”). The 2011 Plan allows the Company to grant equity-based compensation awards, including stock options, restricted stock awards and restricted stock units. Under the 2011 Plan, the Board of Directors is authorized to grant options to purchase up to 2,500,000 ordinary shares and grant up to 500,000 restricted stock units or other stock based awards that are not options. As of December 27, 2013, the 2011

Plan had 8,000 options and 175,000 restricted stock and unit awards available for grant.

On May 11, 1999, our shareholders approved and ratified the 1999 Share Incentive Plan (the “1999 Plan”). Under the 1999 Plan, as amended, the Board of Directors is authorized to grant options to purchase Ordinary Shares. As of December 27, 2013, there were no options available for grant under the 1999 Plan. Under both the 2011 and 1999 Plans, options have been granted to directors, officers and other key employees to purchase our Ordinary Shares at the fair market value of the Ordinary Shares at the date of grant.

Under both the 2011 Plan and the 1999 Plan, 20% of the options usually vest immediately, and the remaining options vest in equal installments over the next four years. Options under the 2011 and the 1999 Plans may be exercised over a period not in excess of 10 years from the date of the grant.

15. Stock-Based Compensation (continued)

The following table summarizes stock option activity for the years ended December 27, 2013, December 28, 2012 and December 30, 2011:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Fair Value
Options outstanding at December 31, 2010	4,882,901		$	22.82	$	8.44
Granted	1,081,000		24.19		8.65
Exercised	(1,166,849	)	19.52		7.19
Cancelled	(60,000	)	26.82		10.05

Options outstanding at December 30, 2011	4,737,052		23.90		8.74
Granted	986,000		23.99		8.40
Exercised	(475,918	)	21.29		7.86
Cancelled	(52,000	)	27.13		10.07

Options outstanding at December 28, 2012	5,195,134		24.12		8.77
Granted	756,000		27.74		8.11
Exercised	(1,975,339	)	22.26		8.22
Cancelled	(3,000	)	24.29		8.44

Options outstanding at December 27, 2013	3,972,795		$	25.74	$	8.37

Exercisable at December 30, 2011	2,908,052		$	24.48	$	9.00

Exercisable at December 28, 2012	3,460,134		$	24.43	$	8.96

Exercisable at December 27, 2013	2,349,795		$	26.00	$	9.32

The following table lists the various stock option grants occurring for the years ended December 27, 2013 and December 28, 2012:



Stock Option Grant	Number of Options Granted	Exercise Price		Fair Value
July 31, 2013 - Employees	446,000	$	28.09	$	8.46	⁽¹⁾
July 31, 2013 - Employees	149,000	28.01		6.79		⁽²⁾
February 20, 2013 - Chairman and Chief Executive Officer	161,000	26.52		8.38		⁽¹⁾
August 1, 2012 - Employees	825,000	24.29		8.44		⁽¹⁾
February 29, 2012 - Chairman and Chief Executive Officer	161,000	22.46		8.15		⁽¹⁾

⁽¹⁾ Option granted under the 2011 Plan based on daily closing stock prices.

⁽²⁾ Option granted under the 1999 Plan based on daily average of high and low stock prices.

The fair value for stock options was estimated at the date of grant using the Black-Scholes option pricing model, which requires us to make certain assumptions. Volatility is estimated based on the historical volatility of our stock over the past five years. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of grant. The dividend yield is estimated over the expected life based on our dividend policy, historical cash dividends and expected future cash dividends. The expected term of grant was based on the contractual term of the stock option and expected employee exercise and post-vesting employment termination trends. Forfeitures are estimated based on historical experience.

15. Stock-Based Compensation (continued)

The following are the weighted average assumptions used in the Black-Scholes option pricing model for the periods indicated:



	Year ended
	December 27, 2013		December 28, 2012		December 30, 2011
Volatility	37.98	%	46.18	%	45.40	%
Risk-free rate	1.27	%	0.67	%	1.39	%
Dividend yield	1.80	%	1.64	%	1.54	%
Expected term of grant	5.0 years		5.0 years		5.0 years

Information about stock options outstanding at December 27, 2013 was as follows:



Exercise Price		Remaining Contractual Life	Outstanding	Outstanding Intrinsic Value		Exercisable	Exercisable Intrinsic Value
$	14.77	5.3 years	30,000	$	0.4	30,000	$	0.4
$	15.78	2.6 years	52,000	0.7		52,000	0.7
$	17.35	3.2 years	6,250	0.1		6,250	0.1
$	18.31	2.3 years	6,000	0.1		6,000	0.1
$	19.76	2.2 years	6,250	0.1		6,250	0.1
$	19.83	5.2 years	18,750	0.2		18,750	0.2
$	20.13	6.2 years	32,200	0.3		—	—
$	21.72	5.6 years	330,400	2.2		330,400	2.2
$	22.25	4.6 years	306,994	1.9		306,994	1.9
$	22.46	8.2 years	96,600	0.6		—	—
$	23.76	7.6 years	597,400	2.7		255,400	1.2
$	24.29	8.6 years	690,400	2.8		207,400	0.8
$	26.52	9.1 years	161,000	0.3		32,200	0.1
$	26.67	7.2 years	161,000	0.3		96,600	0.2
$	28.01	9.6 years	149,000	0.1		29,800	—
$	28.09	9.6 years	446,000	0.1		89,200	—
$	29.84	1.3 years	635,051	—		635,051	—
$	30.59	3.9 years	24,000	—		24,000	—
$	32.28	1.1 years	25,000	—		25,000	—
$	33.97	4.2 years	161,000	—		161,000	—
$	33.97	4.2 years	37,500	—		37,500	—
			3,972,795	$	12.9	2,349,795	$	8.0

The total intrinsic value of options exercised during the years ended December 27, 2013 and December 28, 2012 was $7.8 million and $1.7 million, respectively. The total fair value of options granted for years ended December 27, 2013 and December 28, 2012 was $6.1 million and $8.3 million, respectively. The total fair value of options vesting during the years ended December 27, 2013 and December 28, 2012 was $7.1 million and $9.0 million, respectively, with a weighted-average fair value of $8.26 and $8.40 per option, respectively. As of December 27, 2013, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $10.5 million, which will be amortized over the weighted-average remaining requisite service period of 2.5 years.

15. Stock-Based Compensation (continued)

Restricted Stock Awards

On May 5, 2010, our shareholders approved and ratified the 2010 Non-Employee Directors Equity Plan (the “Directors Equity Plan”), which awards restricted stock to non-management members of our Board of Directors. Under the Directors Equity Plan, the initial award of restricted stock was made on May 5, 2010, the effective date of the plan, and future awards are made on January 1st of each calendar year beginning in 2011. A share of “restricted stock” is one ordinary share of the Company that has restrictions on transferability until certain vesting conditions have been met. The number of ordinary shares that may be covered by awards granted under the Directors Equity Plan are limited to a total of 150,000 ordinary shares. As of December 27, 2013, the Director's Equity Plan had 35,417 restricted stock available for grant.

We are able to award restricted stock under the 2011 Plan and the Director's Equity Plan. As of December 27, 2013, restricted stock awards had been awarded only out of the Director's Equity Plan. Under the Director's Equity Plan, fifty percent of each award of restricted stock granted will vest on the date on which it was granted. The remaining 50% of each award will vest upon the six-month anniversary of the date on which the recipient ceases to serve as a member of the Board of Directors. The provision in the Director’s Equity Plan that allows directors to retain all of their awards once they cease to serve as a member of the Board of Directors is considered a nonsubstantive service condition in accordance with the guidance provided by the ASC on “Compensation – Stock Compensation”. Accordingly, it is appropriate to recognize compensation cost immediately for restricted stock awards granted to non-management members of the Board of Directors.

The following table lists the various restricted stock awards and related compensation expense under the Director's Equity Plan for the years ended December 27, 2013 and December 28, 2012 (U.S. dollars in millions except share and per share data):



Date of Award	Number of Restricted Stock Awarded	Price Per Share		Compensation Expense
January 2, 2013	26,201	$	26.72	$	0.7
January 3, 2012	27,573	$	25.39	$	0.7

As a subsequent event, on January 2, 2014, we awarded 26,117 shares from our Directors Equity Plan at a price of $28.15 per share.

Restricted Stock Units

The 2011 Plan includes the ability to award Restricted Stock Units ("RSUs"). Each RSU represents a contingent right to receive one ordinary share. The RSUs are subject to meeting minimum performance criteria set by our Compensation Committee of the Board of Directors . The actual number of shares the recipient receives is determined based on the results achieved versus our performance goals. Those performance goals are based on exceeding a measure of our earnings in the current year compared to the previous. Depending on the results achieved, the actual number of shares that an award recipient receives at the end of the period may range from 0% to 100% of the award units granted. Provided such criteria are met, the RSU will vest in three equal annual installments on each of the next three anniversary dates provided that the recipient remains employed with us.

On November 2, 2011, we awarded 155,000 RSUs to officers of the Company at a grant date price of $24.68 per share, which represents the closing price on the grant date. RSUs are eligible to earn Dividend Equivalent Units ("DEUs") equal to the cash dividend paid to ordinary shareholders. DEUs are subject to the same performance and service conditions as the underlying RSUs and are forfeitable. However, shares underlying RSUs are included in the calculation of diluted earnings per share to the extent the performance criteria is met. As of December 27, 2013, the performance criteria had been met and the RSUs were dilutive.

15. Stock-Based Compensation (continued)

RSUs do not have the voting rights of ordinary shares, and the shares underlying the RSUs are not considered issued and outstanding. However, shares underlying RSUs are included in the calculation of diluted earnings per share to the extent the performance criteria are met.

RSUs are eligible to earn DEUs equal to the cash dividend paid to ordinary shareholders. DEUs are subject to the same performance and service conditions as the underlying RSUs and are forfeitable. On December 6, 2013, September 6, 2013, May 31, 2013 and March 29, 2013, we awarded 1,473, 1,408, 1,540 and 1,516 DEUs with a grant date price of $28.26, $29.41, $26.77 and $26.98 per share, respectively. As of December 27, 2013, there were 334,047 RSU's outstanding.

We expense the fair market value of RSUs, as determined on the date of grant, ratably over the three year vesting period provided the performance condition is probable. As of December 27, 2013, we accrued $2.4 million of compensation expense related to RSUs. As of December 27, 2013, the total remaining unrecognized compensation cost related to non-vested RSUs amounted to $4.2 million, which will be amortized over the weighted-average remaining requisite service period of 1.5 years provided that the performance and service conditions are met.