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 were as follows (U.S. dollars in millions, except per share data):



	Quarter ended				Nine months ended
	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
Stock-based compensation expense	$	3.3	$	3.5	$	8.6	$	7.4

Stock-based compensation expense per diluted share	$	0.06	$	0.06	$	0.15	$	0.12

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 $3.8 million for the nine months ended September 28, 2012. We were in a net operating loss carry-forward position in the relevant jurisdictions for the nine months ended September 30, 2011. Proceeds of $6.6 million and $21.8 million were received from the exercise of stock options for the nine months ended September 28, 2012 and September 30, 2011, respectively.

Stock Option Awards

On May 4, 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. We disclosed the significant terms of the 2011 Plan in our annual financial statements included in our Annual Report on Form 10-K for the year ended December 30, 2011.

The following table lists the various stock option grants from our 2011 Plan for the nine months ended September 28, 2012 and September 30, 2011:



Stock Option Grant	Number of Options Granted	Exercise Price		Fair Value
August 1, 2012 - Employees	825,000	$	24.29	$	8.44
February 29, 2012 - Chairman and Chief Executive Officer	161,000	22.46		8.15
August 3, 2011 - Employees	920,000	23.76		8.57
March 2, 2011 - Chairman and Chief Executive Officer	161,000	26.67		9.08

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.

8. 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 allows the Company to award restricted stock to non-management members of our Board of Directors. Under the Directors Equity Plan, awards are made on January 1st of each calendar year. A share of “restricted stock” is one ordinary share of the Company that has restrictions on transferability until certain vesting conditions are met. We disclosed the significant terms of the Directors Equity Plan in our annual financial statements included in our Annual Report on Form 10-K for the year ended December 30, 2011.

Under the Director's Equity Plan, 50% of each award of restricted stock granted will vest on the date on which it is 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 our 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 our 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 nine months ended September 28, 2012 and September 30, 2011 (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 3, 2012	27,573	$	25.39	$	0.7
January 3, 2011	27,853	25.14		0.7

Restricted Stock Units

The 2011 Plan includes the ability to award Restricted Stock Units ("RSUs"). Each RSU represents a contingent right to receive one of our ordinary shares. The RSUs 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 Company performance goals. Those performance goals are based on exceeding a measure of our earnings in 2012 compared to 2011. 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.

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 Dividend Equivalent Units ("DEU's") 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 March 30, 2012, June 8, 2012 and September 7, 2012, we awarded 660, 646 and 619 DEUs with a grant date price of $22.84, $23.45 and $24.51 per share, respectively.

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 of attaining. We recognized $0.3 million and $0.9 million of compensation expense related to RSUs for the quarter and nine months ended September 28, 2012. There was no compensation expense recognized related to RSU's during the quarter and nine months ended September 30, 2011.