Black & Decker 2012 Annual Report Download - page 92

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As of December 31, 2011 and January 1, 2011, there were no shares related to the Convertible Preferred Units included in the
calculation of diluted earnings per share because the effect of the conversion option was not dilutive. These Convertible
Preferred Units, as well as the equity purchase contracts and convertible note hedge, are discussed more fully in Note H, Long-
Term Debt and Financing Arrangements.
COMMON STOCK SHARE ACTIVITY — Common stock share activity for 2012, 2011 and 2010 was as follows:
2012 2011 2010
Outstanding, beginning of year………………………………….. 169,046,961 166,347,430 80,478,624
Shares issued as part of the merger………………………………
—
—
78,497,261
Shares issued from Equity Units Offering……………………….
—
—
5,180,776
Shares issued, other……………………………………………… 814,693
—
—
Issued from treasury……………………………………………... 3,344,163 2,864,564 2,298,603
Returned to treasury……………………………………………... (13,253,790) (165,033) (107,834)
Outstanding, end of year………………………………………… 159,952,027 169,046,961 166,347,430
Shares subject to the forward share purchase contract…………... (5,581,400) (5,581,400)
—
Outstanding, less shares subject to the forward share purchase
contract…………………………………………………………...
154,370,627 163,465,561 166,347,430
In December 2012, upon executing an accelerated share repurchase contract, the Company received 9,345,794 shares. For
further detail on this transaction, see "Other Equity Arrangements" below. Additionally, the Company repurchased
approximately three million shares of common stock during the second quarter of 2012.
In 2011 the Company entered into a forward share purchase contract on its common stock. This contract obligates the
Company to pay $350.0 million, plus an additional amount related to the forward component of the contract, to the financial
institution counterparty not later than August 2013, or earlier at the Company’s option, for the 5,581,400 shares purchased. The
Company elected to prepay the forward share purchase contract for $362.7 million during January 2013. The reduction of
common shares outstanding was recorded at the inception of the forward share purchase contract and factored into the
calculation of weighted average shares outstanding.
COMMON STOCK RESERVED — Common stock shares reserved for issuance under various employee and director stock
plans at December 29, 2012 and December 31, 2011 are as follows:
2012 2011
Employee stock purchase plan……………………………………………………….. 2,586,768 2,808,891
Other stock-based compensation plans………………………………………………. 505,851 2,643,113
Total shares reserved………………………………………………………………… 3,092,619 5,452,004
PREFERRED STOCK PURCHASE RIGHTS — Each outstanding share of common stock has a 1 share purchase right.
Each purchase right may be exercised to purchase one two-hundredth of a share of Series A Junior Participating Preferred
Stock at an exercise price of $220.00, subject to adjustment. The rights, which do not have voting rights, expire on March 10,
2016, and may be redeemed by the Company at a price of $0.01 per right at any time prior to the tenth day following the public
announcement that a person has acquired beneficial ownership of 15% or more of the outstanding shares of common stock. In
the event that the Company is acquired in a merger or other business combination transaction, provision shall be made so that
each holder of a right (other than a holder who is a 14.9%-or-more shareowner) shall have the right to receive, upon exercise
thereof, that number of shares of common stock of the surviving Company having a market value equal to two times the
exercise price of the right. Similarly, if anyone becomes the beneficial owner of more than 15% of the then outstanding shares
of common stock (except pursuant to an offer for all outstanding shares of common stock which the independent directors have
deemed to be fair and in the best interest of the Company), provision will be made so that each holder of a right (other than a
holder who is a 14.9%-or-more shareowner) shall thereafter have the right to receive, upon exercise thereof, common stock (or,
in certain circumstances, cash, property or other securities of the Company) having a market value equal to two times the
exercise price of the right. At December 29, 2012, there were 154.370627 outstanding rights.
STOCK-BASED COMPENSATION PLANS — The Company has stock-based compensation plans for salaried employees
and non-employee members of the Board of Directors. The plans provide for discretionary grants of stock options, restricted
stock units, and other stock-based awards.
The plans are generally administered by the Compensation and Organization Committee of the Board of Directors, consisting
of non-employee directors.