Shareholders' Equity (Tables)

3.	The Company recognizes compensation expenses on these RSUs based on estimated grant date fair value, with the following assumptions:

	2014		2015
Expected dividend yield		2.06%		3.22%
Termination rate		4.35%		0%

The Company recognizes compensation expenses on these options based on estimated grant date fair value using the Binomial option-pricing model with the following assumptions:

Average Risk-free interest rate (a)			2.08%
Expected dividend yield			2.09%
Average expected volatility (b)			53.01%
Termination rate			9%
Suboptimal rate (c)			3.4%

(a)	Risk-free interest rate represents risk free US$ zero-coupon US Government Bonds at time of grant.
(b)	Expected average volatility represents a weighted average standard deviation rate for the price of the Company’s ordinary shares on the NASDAQ National Market.
(c)	Suboptimal rate represents the multiple of the increase in the market share price on the day of grant of the option which, should it come to pass, will lead to exercise of the option by the employee. It is the average suboptimal rate of the Company and similar companies.

E.	The following table summarizes information regarding stock options as at December 31, 2015:

	Options outstanding				Options exercisable
			Weighted average				Weighted average
			remaining				remaining
Exercise price	Number		contractual life		Number		contractual life
US$	of options		(in years)		of options		(in years)

15.28		129,044		4.7		129,044		4.7

26.91		85,657		7.6		-		-

		214,701				129,044

F.	The stock option activity under the abovementioned plans is as follows:

						Weighted
				Weighted		average
	Number			average		grant date
	of options			exercise price		fair value
				US$		US$

Balance at January 1, 2013		413,087

Exercised		(132,587	)		14.28		6.61
Forfeited		(7,750	)		15.28		6.54

Balance at December 31, 2013		272,750

Exercised		(78,620	)		17.19		7.70
Forfeited		(2,000	)		15.28		6.54

Balance at December 31, 2014		192,130

Granted		89,907			26.91		10.04
Exercised		(61,711	)		15.28		6.54
Forfeited		(5,625	)		24.07		9.19

Balance at December 31, 2015		214,701
Exercisable at December 31, 2015		129,044

The Restricted Share Units activity under the abovementioned plans is as follows:


				Weighted
	Number of			average
	Restricted			grant date
	Share Units			fair value
	US$			US$

Balance at January 1, 2014		-

Granted		74,000			46.07

Balance at December 31, 2014		74,000

Granted		8,000			29.09
Vested		(4,000	)		46.07

Balance at December 31, 2015		78,000

	Year ended December 31
	2013		2014		2015
	US$ thousands		US$ thousands		US$ thousands

Cost of sales		103		124		150
Research and development costs		193		340		455
Selling and marketing expenses		177		366		502
General and administrative expenses		195		436		806

		668		1,266		1,913