Black & Decker Corp. Chairman and Chief Executive Officer Nolan D. Archibald has exercised options for 500,000 shares of his company's stock that were to have expired in May and sold the shares, the first stock he's sold outright since becoming CEO of the power tool company in 1986, the company confirmed yesterday.
Two-thirds of the money that came from the option exercise went to taxes and transaction costs, the company said.
Archibald, 55, who consistently speaks about "shareholder value" when he talks about Black & Decker, still holds 335,627 shares, and has another 1.1 million stock options that are exercisable but don't expire until 2001 and 2002, said the company and a service that tracks buying and selling by corporate "insiders."
The options were exercised at prices between $55 and $55.16 per share, according to the Washington Service, a firm that tracks insider transactions. Because they were awarded at a price of $21.187 -- the stock price the day the options were granted -- the sales netted Archibald about $16.9 million before transaction fees and taxes were figured. Archibald exercised the options and sold the shares between Nov. 6 and Nov. 23.
"This is the first time, ever, that he's not retained shares when he's exercised options," said Black & Decker spokeswoman Barbara Lucas.
nTC "He's always [before] retained the net shares that flowed out of an option exercise. This time he chose not to -- it's a diversification issue."
Had he opted to hold some of the shares -- but pay the fees and taxes out of the option proceeds -- Archibald would have been able to keep only about 150,000 shares, Lucas said.
Indeed, that's what he did earlier this year when he exercised another 500,000 options -- and used part of the proceeds to pay the taxes and brokerage fees -- and in the end held onto 143,800 shares. Those shares are part of Archibald's current holdings of 335,627 shares, worth $18.1 million at yesterday's closing price of $53.9375.
Black & Decker stock rose $1.0625 per share yesterday.
Archibald's stock sale is part of a plan to diversify his securities holdings, of which roughly 95 percent is tied up in Black & Decker stock, Lucas said.
Archibald has eight children, ranging from pre-teen to mid-20s, including one in medical school, she confirmed.
The 1.1 million options he still holds are worth $43 million before taxes and brokerage costs are figured in, the company said.
Like most major corporations, the Timonium-based Black & Decker requires its executives to hold shares worth several times their salary.
The objective is to make sure that top management has the interests of shareholders at heart by making its members stockholders, too.
For someone at Lucas' level -- she's a senior vice president -- Black & Decker's requirement is three times one's annual salary. For Archibald, it's five.
Archibald last year had a base salary of about $900,000.
The $18.1 million in stock he holds outright is 20 times that salary.
Pub Date: 12/16/98