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



	Year ended
Types of Awards	December 30, 2016		January 1, 2016		December 26, 2014
Stock options	$	2.4	$	3.9	$	5.2
RSUs/PSUs	$	21.6	$	12.2	$	6.5
RSAs	$	0.9	$	0.7	$	0.7
Total	$	24.9	$	16.8	$	12.4

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 $3.6 million for the year ended December 30, 2016, $1.4 million for the year ended January 1, 2016, and $0.1 million for the year ended December 26, 2014. Proceeds of $12.2 million were received from the exercise of stock options for 2016, $35.3 million for 2015 and $48.9 million for 2014.

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 The 2014 Plan replaced and superseded the 2011 Omnibus Share Incentive Plan (the "2011 Plan"), and the 2010 Non-Employee Directors Equity Plan, collectively referred to as Prior Plans.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. As of December 30, 2016, there were no options and awards available for grant under the Prior Plans.

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)

Stock Options Awards

There were no stock option grants for the year ended December 30, 2016. The following table lists the stock option grant from our 2014 Plan for the year ended January 1, 2016.



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

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 30, 2016, January 1, 2016 and December 26, 2014:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Fair Value
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
Exercised	(1,320,103	)	26.76		9.05
Cancelled	(35,000	)	29.63		11.43

Options outstanding at January 1, 2016	760,503		25.65		7.84
Exercised	(471,653	)	25.77		8.04
Cancelled	(6,000	)	15.78		5.53

Options outstanding at December 30, 2016	282,850		$	25.64	$	7.55

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

Exercisable at January 1, 2016	202,303		$	22.66	$	7.69

Exercisable at December 30, 2016	126,250		$	22.61	$	7.86

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
Volatility	26.96	%
Risk-free rate	1.69	%
Dividend yield	1.73	%
Expected term of grant	5.0 years

Information about stock options outstanding at December 30, 2016 was as follows:



Exercise Price		Remaining Contractual Life	Outstanding	Outstanding Intrinsic Value		Exercisable	Exercisable Intrinsic Value
$	14.77	2.3 years	27,000	$	1.2	27,000	$	1.2
$	19.83	2.1 years	6,250	0.3		6,250	0.3
$	21.72	2.6 years	13,000	0.5		13,000	0.5
$	22.25	1.6 years	21,000	0.8		21,000	0.8
$	23.76	4.6 years	11,000	0.4		11,000	0.4
$	24.29	5.6 years	26,375	1.0		26,375	1.0
$	26.52	6.1 years	32,200	1.1		—	—
$	28.01	6.6 years	31,925	1.0		9,125	0.3
$	28.09	6.6 years	37,200	1.2		—	—
$	28.89	7.3 years	64,400	2.0		—	—
$	33.97	1.2 years	12,500	0.3		12,500	0.3
			282,850	$	9.8	126,250	$	4.8

The total intrinsic value of options exercised during the year ended December 30, 2016 was $13.6 million and $14.7 million for the year ended January 1, 2016. There were no options granted for the year ended December 30, 2016 and no options granted for the year ended January 1, 2016. The total fair value of options vesting during the years ended December 30, 2016 was $3.3 million with a weighted-average fair value of $8.13 and $4.7 million for 2015 with a weighted-average fair value of $8.27 per option. As of December 30, 2016, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $0.6 million, which will be amortized over the weighted-average remaining requisite service period of 0.8 years.

15. Stock-Based Compensation (continued)

Restricted Stock Awards (RSA)

A share of “restricted stock” is one of our ordinary shares that has restrictions on transferability until certain vesting conditions are met.

For RSAs under the 2014 Plan and 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 30, 2016 and January 1, 2016 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 RSA for the years ended December 30, 2016 and January 1, 2016 (U.S. dollars in millions except share and per share data):



Date of Award	Shares of Restricted Stock Awarded	Price Per Share
January 4, 2016	22,946	$	38.13
January 2, 2015	21,875	$	33.60

Restricted Stock Units (RSU)/ Performance Stock Units (PSU)

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. The RSUs will vest 20% on the award date and 20% on each of the next four anniversaries.

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 years ended December 30, 2016 and January 1, 2016 (U.S. dollars in millions except share and per share data):



Date of Award		Type of Award	Units Awarded	Price Per Share
September 2, 2016	¹	RSU	50,000	$	58.94
August 3, 2016		RSU	226,500	59.83
February 24, 2016		PSU	140,000	38.99
February 24, 2016		RSU	50,000	38.99
July 29, 2015		RSU	237,000	40.03
February 18, 2015		PSU	175,000	33.44
February 18, 2015		RSU	50,000	33.44

⁽¹⁾ New grant related to the former President/COO transition

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 30, 2016, January 1, 2016, December 26, 2014:



	Number of Shares		Weighted Average Grant Date Fair Value
RSUs/PSUs outstanding at December 27, 2013	325,000		$	25.67
Granted	491,398		28.44
Converted	(140,466	)	27.44
Cancelled	—		—

RSUs/PSUs outstanding at December 26, 2014	675,932		27.29
Granted	471,767		36.44
Converted	(157,933	)	32.38
Cancelled	(1,224	)	29.99

RSUs/PSUs outstanding at January 1, 2016	988,542		30.94
Granted	427,624		49.91
Converted	(472,841	)	37.77
Cancelled	(11,289	)	37.89

RSUs/PSUs outstanding at December 30, 2016	932,036		36.09

Vested at December 26, 2014	131,667		$	25.12

Vested at January 1, 2016	249,797		$	25.53

Vested at December 30, 2016	304,940		$	26.49

Information about RSUs/PSUs outstanding at December 30, 2016 was as follows:



Grant Date Market Value		Outstanding	Outstanding Intrinsic Value		Vested	Vested Intrinsic Value
$	40.03	103,679	$	2.1	—	$	—
$	59.83	141,113	0.1		—	—
$	38.99	101,133	2.2		—	—
$	38.99	40,413	0.9		—	—
$	33.44	117,154	3.2		33,711	2.0
$	33.44	30,694	0.8		—	—
$	25.52	110,211	3.9		73,475	4.5
$	29.99	89,885	2.8		—	—
$	26.52	105,885	3.6		105,885	6.4
$	24.68	91,869	3.3		91,869	5.6
		932,036	$	22.9	304,940	$	18.5

15. Stock-Based Compensation (continued)

As of December 30, 2016, the total remaining unrecognized compensation cost related to non-vested RSUs/PSUs amounted to $21.4 million, which will be amortized over the weighted-average remaining requisite service period of 1.6 years.

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