Note 7—Equity

Stock-Based Compensation:

In May 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 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. As of December 31, 2013, there were 2,356,150 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 and the 2009 Employee Option Plan generally vest ratably over a period of five years 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, 2013, there were 70,000 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 granted under the 2004 Directors Option Plan generally vest ratably over a period of three years and are generally exercisable over a period of ten years from the date of grant.

In May 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, 2013, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was 95,131. 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.

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 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 stock of the Company and implied volatility derived from related exchange traded options. The average expected life was 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.

Stock Options

Stock option activity for 2011, 2012 and 2013 was as follows:

					Weighted
					Average
			Weighted		Remaining	Aggregate
			Average		Contractual	Intrinsic
	Options		Exercise Price		Term (in years)	Value

Options outstanding at January 1, 2011	12,706,324		$	33.93	7.18
Options granted	2,551,350		53.45
Options exercised	(1,037,674	)	25.14
Options forfeited	(203,100	)	39.75
Options outstanding at December 31, 2011	14,016,900		38.00		6.89
Options granted	2,990,000		53.31
Options exercised	(3,252,961	)	29.33
Options forfeited	(307,220	)	42.84
Options outstanding at December 31, 2012	13,446,719		43.39		7.08
Options granted	2,788,000		78.00
Options exercised	(2,636,213	)	36.46
Options forfeited	(176,280	)	53.65
Options outstanding at December 31, 2013	13,422,226		51.80		7.08	$	501,706
Vested and non-vested expected to vest at December 31, 2013	12,159,914		51.20		6.98	$	461,873
Exercisable at December 31, 2013	5,405,305		$	41.09	5.55	$	259,938

A summary of the status of the Company’s non-vested options as of December 31, 2013 and changes during the year then ended is as follows:

	Options		Weighted Average Fair Value at Grant Date

Non-vested options at January 1, 2013	7,951,177		$	13.36
Options granted	2,788,000		17.42
Options vested	(2,545,976	)	13.33
Options forfeited	(176,280	)	13.95
Non-vested options at December 31, 2013	8,016,921		$	14.77

The weighted-average fair value at the grant date of options granted during 2012 and 2011 was $12.96 and $14.19, respectively.

During the years ended December 31, 2013, 2012 and 2011, the following activity occurred under the Company’s option plans:

	2013		2012		2011
Total intrinsic value of stock options exercised	$	105,756	$	95,891	$	29,697
Total fair value of stock options vested	33,932		30,964		28,563

On December 31, 2013, the total compensation cost related to non-vested options not yet recognized is approximately $84,230, with a weighted average expected amortization period of 3.35 years.

Restricted Shares

Prior to the third quarter of 2013, the Company issued 17,045 restricted shares with a weighted-average fair value at grant date of $53.78 per share, all of which became fully vested in 2013. Additionally, in the second quarter of 2013, the Company issued 12,824 restricted shares with a weighted-average fair value at grant date of $78.00. As of December 31, 2013, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $394 with a weighted average expected amortization period of 0.39 years.

Stock Repurchase Program:

In January 2013, the Board of Directors authorized a stock repurchase program under which the Company may repurchase up to 10,000,000 shares of its common stock during the two year period ending January 31, 2015 (the “2013 Stock Repurchase Program”). The price and timing of any such purchases under the 2013 Stock Repurchase Program after December 31, 2013 will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, economic and market conditions and stock price. During the twelve months ended December 31, 2013, the Company repurchased 4,285,695 shares of its common stock for $324,655. These treasury shares have been or will be retired by the Company and common stock and accumulated earnings were reduced accordingly.

Dividends:

Contingent upon declaration by the Board of Directors, the Company generally pays a quarterly dividend on its common stock. In July 2013, the Board of Directors approved an increase in the quarterly dividend rate from $0.105 to $0.20 per share effective with the third quarter 2013 dividend. Total dividends declared during 2013, 2012 and 2011 were $96,769, $67,677 and $10,097, respectively. Total dividends paid in 2013, 2012 and 2011 were $96,771, $70,122 and $10,282, 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, 2013, 2012 and 2011 are as follows:

	Foreign Currency Translation Adjustment			Revaluation of Derivatives			Defined Benefit Plan Liability Adjustment			Accumulated Other Comprehensive Income (Loss)

Balance at January 1, 2011	$	41,606		$	—		$	(126,363	)	$	(84,757	)
Translation adjustments	(10,154		)	—			—			(10,154		)
Revaluation rate derivatives, net of tax of $173	—			(287		)	—			(287		)
Defined benefit plan liability adjustment, net of tax of $18,380	—			—			(35,257		)	(35,257		)
Amounts reclassified from Accumulated Other Comprehensive Income (Loss), net of tax of ($5,421)	—			—			10,398			10,398
Balance at December 31, 2011	31,452			(287		)	(151,222		)	(120,057		)
Translation adjustments	25,858			—			—			25,858
Revaluation of derivatives, net of tax of $39	—			538			—			538
Defined benefit plan liability adjustment, net of tax of $14,598	—			—			(38,135		)	(38,135		)
Amounts reclassified from Accumulated Other Comprehensive Income (Loss), net tax of ($5,662)	—			—			14,792			14,792
Balance at December 31, 2012	57,310			251			(174,565		)	(117,004		)
Translation adjustments	14,894			—			—			14,894
Amounts reclassified from Accumulated Other Comprehensive Income (Loss)	(5,200		)	—			—			(5,200		)
Revaluation of derivatives, net of tax of $108	—			(282		)	—			(282		)
Defined benefit plan liability adjustment, net of tax of $20,594	—			—			35,938			35,938
Amounts reclassified from Accumulated Other Comprehensive Income (Loss), net tax of $9,570	—			—			16,703			16,703
Balance at December 31, 2013	$	67,004		$	(31	)	$	(121,924	)	$	(54,951	)

The amounts reclassified from Accumulated other comprehensive income (loss) for foreign currency translation are included within Cost of sales, for defined benefit plan liabilities, are included within Cost of sales and Selling, general and administrative expense and for revaluation of derivatives, are included in Other income, net within the Company’s Consolidated Statements of Income. The amounts reclassified from Accumulated other comprehensive income (loss) to Other income, net related to the revaluation of derivatives in the accompanying Consolidated Statements of Income during the years ended December 31, 2013, 2012 and 2011 were not material.