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stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated
Statement of Cash Flows of the tax effects of employee stock-based compensation awards that are
outstanding upon the adoption of the share-based payment guidance.
15. STOCKHOLDERS’ EQUITY AND OTHER COMPREHENSIVE EARNINGS (LOSS)
The Class A Common Stock is voting and exchangeable for Class B Common Stock in very limited
circumstances. The Class B Common Stock is non-voting and is convertible, subject to certain limitations,
into Class A Common Stock.
At December 31, 2010, there were 806.2 million shares of authorized, unissued Class A Common Stock.
Of this amount, approximately 18 million shares of Class A Common Stock have been reserved under
employee stock incentive plans and nonemployee director plans. There were also 1.8 million of unissued
and unreserved Class B Common Stock at December 31, 2010. These shares are available for a variety of
general corporate purposes, including future public offerings to raise additional capital and for facilitating
acquisitions.
In 1998, the Company’s Board of Directors adopted a stockholder rights plan (the “Rights Plan”) which
provides existing stockholders with the right to purchase one one-thousandth (0.001) of a share of Series A
Junior Participating preferred stock for each share of Class A and Class B Common Stock held in the event
of certain changes in the Company’s ownership. The Rights Plan expired on January 31, 2009 without
modification.
In May 2008, the Company received authorization from the Board of Directors to repurchase an additional
$750 million of its Class A Common Stock for a total repurchase authority of $4.65 billion. As of
December 31, 2010, there was approximately $491 million of share repurchase authority remaining.
This repurchase authority allows the Company, at management’s discretion, to selectively repurchase its
stock from time to time in the open market or in privately negotiated transactions depending upon market
price and other factors. The Company did not repurchase any shares of its Class A Common Stock in 2010
or 2009. During 2008, the Company repurchased approximately 17.5 million shares of its Class A Common
Stock at a cost of approximately $0.6 billion, including two accelerated share repurchase agreements
discussed below. As of December 31, 2010, since the inception of the program in April 1996, the Company
had repurchased approximately 91.6 million shares for an aggregate cost of approximately $4.16 billion.
As of December 31, 2010, the Company had reissued approximately 0.5 million shares of previously
repurchased shares in connection with certain of its employee benefit programs. As a result of these
issuances as well as the retirement of 44.0 million, 16.0 million and 16.0 million shares of treasury stock in
2005, 2006 and 2008, respectively, the net treasury shares outstanding at December 31, 2010, were
15.1 million.
In December 2005, October 2006 and October 2008, the Company received authorization from the Board
of Directors to retire 44.0 million, 16.0 million and 16.0 million shares, respectively, of the Company’s
Class A Common Stock held in the Company’s treasury as treasury stock. The retired shares resumed the
status of authorized but unissued shares of Class A Common Stock. Refer to the Consolidated Statements
of Stockholders’ Equity and Comprehensive Earnings for the effects on Common stock,Capital in excess
of par,Retained earnings and Treasury stock from the retirement of 16.0 million shares of Class A
Common Stock in 2008.
Accelerated Share Repurchase Agreements
The Company executed two accelerated share repurchase agreements (“ASR”) with financial institution
counterparties in 2008, resulting in a total of 8.7 million shares repurchased at a cost of $250.0 million over
the third and fourth quarter of 2008. The impact of the two ASRs is included in the share repurchase totals
provided in the preceding paragraphs. The settlement provisions of both ASRs were essentially forward
contracts, and were accounted for under the provisions of guidance on accounting as equity instruments
for derivative financial instruments indexed to, and potentially settled in, a company’s own stock. The
details of each ASR are provided in the following paragraphs.
108