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 ("RSAs"), restricted stock units ("RSUs") and performance stock units ("PSUs") is included in the accompanying Consolidated Statements of Income was as follows (U.S. dollars in millions):



	Year ended
Types of Awards	December 26, 2014		December 27, 2013		December 28, 2012
Stock options	$	5.2	$	6.8	$	8.4
RSUs/PSUs	$	6.5	$	2.4	$	1.2
RSAs	$	0.7	$	0.7	$	0.7
Total	$	12.4	$	9.9	$	10.3

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 $0.1 million for the year ended December 26, 2014 and $3.6 million for the year ended December 28, 2012. There were no excess tax benefits for the year ended December 27, 2013. Proceeds received from the exercise of stock options was $48.9 million for the year ended December 26, 2014, $44.0 million for the year ended December 27, 2013, and $10.1 million for the year ended December 28, 2012.

On April 30, 2014, our shareholders approved and ratified the 2014 Omnibus Share Incentive Plan (the “2014 Plan”). The 2014 Plan allows the Company to grant equity-based compensation awards, including stock options, restricted stock awards, restricted stock units and performance stock units. Under the 2014 Plan, the Board of Directors is authorized to award up to 3,000,000 ordinary shares. The 2014 Plan replaces and supersedes the 2011 Omnibus Share Incentive Plan (the "2011 Plan"), the 2010 Non-Employee Directors Equity Plan, and the Amended and Restated 1999 Share Incentive Plan (the "1999 Plan"), collectively referred to as Prior Plans.

The 2011 Plan allowed the Company to grant equity-based compensation awards, including stock options, restricted stock awards and restricted stock units. The 2010 Non-Employee Directors Equity Plan allowed the Company to award RSAs to members of the Board of Directors on January 1st of each calendar year beginning in 2011 with initial award in 2010. The 1999 Plan allowed the Company to grant options to purchase Ordinary Shares. As of December 26, 2014, there were no options and awards available for grant under the Prior Plans.

Stock Option Awards

Under the 2014 Plan and Prior Plans, 20% of the options usually vest immediately, and the remaining options vest in equal installments over the next four years. Options under the 2014 Plan and Prior Plans may be exercised over a period not in excess of 10 years from the date of the grant. Prior Plan provisions are still applicable to outstanding options and awards under those plans.

15. Stock-Based Compensation (continued)

The following table lists the various stock option grants from our 2014 Plan and Prior Plans for the years ended December 26, 2014 and December 27, 2013:



Stock Option Grant	Number of Options Granted	Exercise Price		Fair Value
April 30, 2014 - Chairman and Chief Executive Officer	161,000	$	28.89	$	6.26	⁽¹⁾
February 20, 2013 - Chairman and Chief Executive Officer	161,000	26.52		8.38		⁽²⁾
July 31, 2013 - Employees	149,000	28.01		6.79		⁽³⁾
July 31, 2013 - Employees	446,000	28.09		8.46		⁽²⁾

⁽¹⁾Options granted under the 2014 Plan based on daily closing stock prices.

⁽²⁾Option granted under the 2011 Plan based on daily closing stock prices.

⁽³⁾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.

The following table summarizes stock option activity for the years ended December 26, 2014, December 27, 2013 and December 28, 2012:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Fair Value
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
Granted	161,000		28.89		6.26
Exercised	(1,945,939	)	25.14		8.96
Cancelled	(72,250	)	29.44		9.79

Options outstanding at December 26, 2014	2,115,606		$	26.41	$	8.65

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

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

Exercisable at December 26, 2014	994,606		$	26.82	$	9.29

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 26, 2014		December 27, 2013		December 28, 2012
Volatility	26.96	%	37.98	%	46.18	%
Risk-free rate	1.69	%	1.27	%	0.67	%
Dividend yield	1.73	%	1.80	%	1.64	%
Expected term of grant	5.0 years		5.0 years		5.0 years

Information about stock options outstanding at December 26, 2014 was as follows:



Exercise Price		Remaining Contractual Life	Outstanding	Outstanding Intrinsic Value		Exercisable	Exercisable Intrinsic Value
$	14.77	4.3 years	30,000	$	0.6	30,000	$	0.6
$	15.78	1.6 years	14,000	0.2		14,000	0.2
$	17.35	2.2 years	6,250	0.1		6,250	0.1
$	18.31	1.3 years	6,000	0.1		6,000	0.1
$	19.76	1.2 years	6,250	0.1		6,250	0.1
$	19.83	4.2 years	12,500	0.2		12,500	0.2
$	20.13	5.2 years	—	—		—	—
$	21.72	4.6 years	105,005	1.3		105,005	1.3
$	22.25	3.6 years	78,682	0.9		78,682	0.9
$	22.46	7.2 years	64,400	0.7		—	—
$	23.76	6.6 years	268,219	2.6		108,219	1.1
$	24.29	7.6 years	398,810	3.7		98,810	0.9
$	26.52	8.2 years	108,816	0.8		12,216	0.1
$	26.67	6.2 years	32,200	0.2		—	—
$	28.01	8.6 years	116,200	0.7		29,800	0.2
$	28.09	8.6 years	303,784	1.7		51,184	0.3
$	28.89	9.4 years	161,000	0.8		32,200	0.2
$	29.84	0.3 years	186,240	0.7		186,240	0.7
$	30.59	2.9 years	—	—		—	—
$	32.28	0.1 years	25,000	—		25,000	—
$	33.97	3.2 years	161,000	—		161,000	—
$	33.97	3.2 years	31,250	—		31,250	—
			2,115,606	$	15.4	994,606	$	7.0

The total intrinsic value of options exercised during the years ended December 26, 2014 and December 27, 2013 was $12 million and $11.8 million, respectively. The total fair value of options granted for years ended December 26, 2014 and December 27, 2013 was $1.0 million and $6.1 million, respectively. The total fair value of options vesting during the years ended December 26, 2014 and December 27, 2013 was $5.4 million and $7.1 million, respectively, with a weighted-average fair value of $8.26 and $8.26 per option, respectively. As of December 26, 2014, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $6.5 million, which will be amortized over the weighted-average remaining requisite service period of 1.9 years.

15. Stock-Based Compensation (continued)

Restricted Stock Awards

A share of “restricted stock” is one of our ordinary shares that has restrictions on transferability until certain vesting conditions are met. No RSAs have been issued under the 2014 Plan.

RSAs under Prior Plans, 50% of each award of our restricted stock vested on the date it was granted. The remaining 50% of each award vests upon the six-month anniversary of the date on which the recipient ceases to serve as a member of our Board of Directors. RSAs awarded during the years ended December 26, 2014 and December 27, 2013 allows directors to retain all of their awards once they cease to serve as a member of our Board of Directors and 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 RSAs and related compensation expense under the 2010 Non-Employee Director's Equity Plan for the years ended December 26, 2014 and December 27, 2013 (U.S. dollars in millions except share and per share data):

Restricted Stock Units / Performance Stock Units

Each RSU/PSU represents a contingent right to receive one of our ordinary shares. The PSUs are subject to meeting minimum performance criteria set by our Compensation Committee of our Board of Directors. The actual number of shares the recipient receives is determined based on the results achieved versus performance goals. Those performance goals are based on exceeding a measure of our earnings. 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 PSU will vest in three equal annual installments on each of the next three anniversary dates provided that the recipient remains employed with us.

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

15. Stock-Based Compensation (continued)

The fair market value for RSUs/PSUs is based on the closing price of our stock on the award date. Forfeitures are estimated based on population of employees and historical experience.

The following table lists the various RSUs/PSUs awarded under the 2014 Plan and Prior Plans for the year ended December 26, 2014 (U.S. dollars in millions except share and per share data):



Date of Award	Type of Award	Units Awarded	Price Per Share
July 30, 2014	RSU	311,000	$	29.99
February 19, 2014	PSU	165,000	25.52
February 20, 2013	PSU	175,000	26.52

RSUs are eligible to earn Dividends Equivalent Units ("DEUs") equal to the cash dividend paid to ordinary shareholders. DEUs are subject to the same performance and/or service conditions as the underlying RSUs/PSUs and are forfeitable.

15. Stock-Based Compensation (continued)

The following table summarizes RSUs/PSUs activity for the years ended December 26, 2014, December 27, 2013 and Dec 28, 2012:



	Number of Shares		Weighted Average Grant Date Fair Value
RSUs/PSUs outstanding at December 30, 2011	155,000		$	24.68
Granted	—		—
Converted	—		—
Cancelled	(5,000	)	24.68

RSUs/PSUs outstanding at December 28, 2012	150,000		24.68
Granted	175,000		26.52
Converted	—		—
Cancelled	—		—

RSUs/PSUs outstanding at December 27, 2013	325,000		25.67
Granted	476,000		28.44
Converted	(140,466	)	27.44
Cancelled	—		—

RSUs/PSUs outstanding at December 26, 2014	660,534		27.29

Vested at December 28, 2012	—		$	—

Vested at December 27, 2013	100,000		$	24.68

Vested at December 26, 2014	131,667		$	25.12

Information about RSUs/PSUs outstanding at December 26, 2014 was as follows:



Exercise Price		Outstanding	Outstanding Intrinsic Value		Vested	Vested Intrinsic Value
$	25.52	165,000	$	1.3	—	$	—
$	29.99	247,200	0.9		—	—
$	26.52	148,334	1.1		31,667	0.2
$	24.68	100,000	0.9		100,000	0.9
		660,534	$	4.2	131,667	$	1.1

15. Stock-Based Compensation (continued)

As of December 26, 2014, the total remaining unrecognized compensation cost related to non-vested RSUs/PSUs amounted to $10.7 million, which will be amortized over the weighted-average remaining requisite service period of 2.1 years.

We expense the fair market value of RSUs/PSUs, as determined on the date of grant, ratably over the vesting period provided the performance condition, if any, is probable of attaining.

Date of Award

Shares of
Restricted Stock
Awarded

Price Per Share

January 2, 2014

January 2, 2013