Note 5—Equity

Stock-Based Compensation:

Stock Options

In 2009, the Company adopted the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and its Subsidiaries (the “2009 Employee Option Plan”). The Company also continues to maintain the 2000 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2000 Employee Option Plan”). No additional stock options can be granted under the 2000 Employee Option Plan. The 2009 Employee Option Plan authorizes the granting of additional stock options by a committee of the Company’s Board of Directors. The number of shares of the Company’s Class A Common Stock (“Common Stock”) reserved for issuance thereunder is 58,000,000 shares. As of December 31, 2015, there were 18,911,280 shares of Common Stock available for the granting of additional stock options under the 2009 Employee Option Plan. Options granted under the 2000 Employee Option Plan are fully vested and are generally exercisable over a period of ten years from the date of grant and options granted under the 2009 Employee Option Plan generally vest ratably over a period of five years from the date of grant and are generally exercisable over a period of ten years from the date of grant.

In 2004, the Company adopted the 2004 Stock Option Plan for Directors of Amphenol Corporation (the “2004 Directors Option Plan”). The 2004 Directors Option Plan is administered by the Company’s Board of Directors. As of December 31, 2015, there were 140,000 shares of Common Stock available for the granting of additional stock options under the 2004 Directors Option Plan, although no additional stock options are expected to be granted under this plan. Options were last granted under the 2004 Directors Option Plan in May 2011. Options granted under the 2004 Directors Option Plan are fully vested and are generally exercisable over a period of ten years from the date of grant.

Stock option activity for 2013, 2014 and 2015 was as follows:

					Weighted
					Average	Aggregate
			Weighted		Remaining	Intrinsic
			Average		Contractual	Value
	Options		Exercise Price		Term (in years)	(in millions)
Options outstanding at January 1, 2013	26,893,438		$	21.70	7.08
Options granted	5,576,000		39.00
Options exercised	(5,272,426	)	18.23
Options forfeited	(352,560	)	26.83

Options outstanding at December 31, 2013	26,844,452		25.90		7.08
Options granted	6,220,000		47.70
Options exercised	(4,790,252	)	20.27
Options forfeited	(486,280	)	34.55

Options outstanding at December 31, 2014	27,787,920		31.60		7.09
Options granted	6,490,200		57.85
Options exercised	(2,718,745	)	23.71
Options forfeited	(422,900	)	41.73

Options outstanding at December 31, 2015	31,136,475		37.62		6.92	$	491.0

Vested and non-vested options expected to vest at December 31, 2015	28,749,963		37.04		6.82	$	468.4
Exercisable options at December 31, 2015	13,813,435		$	26.84	5.33	$	350.7

A summary of the status of the Company’s non-vested options as of December 31, 2015 and changes during the year then ended is as follows:

	Options		Weighted Average Fair Value at Grant Date
Non-vested options at January 1, 2015	16,440,560		$	7.98
Options granted	6,490,200		8.47
Options vested	(5,184,820	)	7.70
Options forfeited	(422,900	)	8.18

Non-vested options at December 31, 2015	17,323,040		$	8.24

The weighted-average fair value at the grant date of options granted during 2014 and 2013 was $8.64 and $8.71, respectively.

During the years ended December 31, 2015, 2014 and 2013, the following activity occurred under the Company’s option plans:

	2015		2014		2013
Total intrinsic value of stock options exercised	$	88.1	$	136.8	$	105.8
Total fair value of stock options vested	39.9		37.2		33.9

As of December 31, 2015, the total compensation cost related to non-vested options not yet recognized was approximately $104.9, with a weighted average expected amortization period of 3.36 years.

The grant-date fair value of each option grant under the 2000 Employee Option Plan, the 2009 Employee Option Plan and the 2004 Directors Option Plan is estimated using the Black-Scholes option pricing model. The grant-date fair value of each restricted share grant is determined based on the closing share price of the Company’s Common Stock on the date of the grant. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Use of a valuation model for option grants requires management to make certain assumptions with respect to selected model inputs. Expected share price volatility is calculated based on the historical volatility of the Common Stock and implied volatility derived from related exchange traded options. The average expected life is based on the contractual term of the option and expected exercise and historical post-vesting termination experience. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The expected annual dividend per share is based on the Company’s dividend rate.

Restricted Stock

In 2012, the Company adopted the 2012 Restricted Stock Plan for Directors of Amphenol Corporation (the “2012 Directors Restricted Stock Plan”). The 2012 Directors Restricted Stock Plan is administered by the Company’s Board of Directors. As of December 31, 2015, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 153,974. Restricted shares granted under the 2012 Directors Restricted Stock Plan generally vest on the first anniversary of the grant date. Grants under the 2012 Directors Restricted Stock Plan entitle the holder to receive shares of the Company’s common stock without payment.

Restricted stock activity for 2013, 2014 and 2015 was as follows:

					Weighted
					Average
			Fair Value		Remaining
	Restricted		at Grant		Amortization
	Shares		Date		Term (in years)
Restricted shares outstanding at January 1, 2013	32,858		$	26.63
Restricted shares granted	26,880		38.76
Shares vested and issued	(32,858	)	26.63

Restricted shares outstanding at December 31, 2013	26,880		38.76		0.39
Restricted shares granted	18,340		47.72
Shares vested and issued	(26,880	)	38.76

Restricted shares outstanding at December 31, 2014	18,340		47.72		0.39
Restricted shares granted	17,948		57.85
Shares vested and issued	(19,032	)	47.98

Restricted shares outstanding at December 31, 2015	17,256		57.97		0.39

The total fair value of restricted share awards that vested during 2015, 2014, and 2013 was $0.9, $1.0, and $0.9, respectively. As of December 31, 2015, the total compensation cost related to non-vested restricted stock not yet recognized was approximately $0.4 with a weighted average expected amortization period of 0.39 years.

Authorized Shares for Issuance:

Effective May 20, 2015, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to increase the number of shares of Common Stock which the Company is authorized to issue by 500 million to 1 billion.

Stock Repurchase Program:

In January 2013, the Board of Directors authorized a stock repurchase program under which the Company could repurchase up to 20 million shares of its common stock during the two-year period ending January 31, 2015 (the “2013 Stock Repurchase Program”). During the year ended December 31, 2014, the Company repurchased 11,428,610 shares of its Common Stock for $539.4. These treasury shares have been retired by the Company and common stock and retained earnings were reduced accordingly. At December 31, 2014, the Company had repurchased all shares authorized under the 2013 Stock Repurchase Program.

In January 2015, the Board of Directors authorized a stock repurchase program under which the Company could repurchase up to 10 million shares of Common Stock during the two-year period ending January 20, 2017 (the “2015 Stock Repurchase Program”). During the year ended December 31, 2015, the Company repurchased 4.5 million shares of its Common Stock for $248.9. These treasury shares have been retired by the Company and common stock and retained earnings were reduced accordingly. The price and timing of any future purchases under the 2015 Stock Repurchase Program will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price. The Company did not repurchase any additional shares of Common Stock through January 31,

2016. At January 31, 2016, approximately 5.5 million additional shares of Common Stock may be repurchased under the 2015 Stock Repurchase Program.

Dividends:

Contingent upon declaration by the Board of Directors, the Company generally pays a quarterly dividend on shares of Common Stock. In July 2014, the Board of Directors approved an increase in the quarterly dividend rate from $0.10 to $0.125 per share effective with the third quarter 2014 dividend and in July 2015 approved a further increase in the quarterly dividend rate from $0.125 to $0.14 per share effective with the third quarter 2015 dividend. Total dividends declared during 2015, 2014 and 2013 were $163.7, $140.6 and $96.8, respectively. Total dividends paid in 2015, 2014 and 2013 were $159.3, $101.9 and $96.8, respectively, including those declared in the prior year and paid in the current year.

Accumulated Other Comprehensive Income (Loss):

Balances of related after-tax components comprising Accumulated other comprehensive income (loss) included in equity at December 31, 2015, 2014 and 2013 are as follows:

	Foreign Currency Translation Adjustments			Unrealized Gain (Loss) on Cash Flow Hedges			Defined Benefit Plan Liability Adjustment			Accumulated Other Comprehensive Income (Loss)

Balance at January 1, 2013	$	57.3		$	0.2		$	(174.5	)	$	(117.0	)
Translation adjustments	14.9			—			—			14.9
Unrealized loss on cash flow hedges, net of tax of $0.1	—			(0.3		)	—			(0.3		)
Amounts reclassified from Accumulated other comprehensive income (loss)	(5.2		)	—			—			(5.2		)
Defined benefit plan adjustment, net of tax of ($20.6)	—			—			35.9			35.9
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax of ($9.6)	—			—			16.7			16.7

Balance at December 31, 2013	67.0			(0.1		)	(121.9		)	(55.0		)
Translation adjustments	(80.4		)	—			—			(80.4		)
Unrealized loss on cash flow hedges, net of tax of $0.2	—			(1.2		)	—			(1.2		)
Defined benefit plan adjustment, net of tax of $39.9	—			—			(82.0		)	(82.0		)
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax of ($6.2)	—			—			12.8			12.8

Balance at December 31, 2014	(13.4		)	(1.3		)	(191.1		)	(205.8		)
Translation adjustments	(151.5		)	—			—			(151.5		)
Unrealized loss on cash flow hedges, net of tax of $0.1	—			(0.4		)	—			(0.4		)
Defined benefit plan adjustment, net of tax of $5.5	—			—			(10.0		)	(10.0		)
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax of ($10.1)	—			—			18.2			18.2

Balance at December 31, 2015	$	(164.9	)	$	(1.7	)	$	(182.9	)	$	(349.5	)

The amounts reclassified from Accumulated other comprehensive income (loss) for defined benefit plan liabilities, are included within Cost of sales and Selling, general and administrative expenses and for unrealized gain (loss) on cash flow hedges, are included in Cost of sales within the Company’s Consolidated Statements of Income. The amounts reclassified from Accumulated other comprehensive income (loss) for foreign currency translation in 2013 are included in Cost of sales within the Company’s Consolidated Statements of Income.