SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2016

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

10. SHAREHOLDERS’ EQUITY

Authorized common stock, par value $1.00 per share, was 800 million shares at December 31, 2016, 2015 and 2014. Treasury stock is stated at cost. Dividends declared per share of common stock were $1.420 for 2016, $1.340 for 2015 and $1.155 for 2014.

The Company has 15 million shares, without par value, of authorized but unissued and undesignated preferred stock. The Company’s former shareholder rights agreement was amended in December 2012 and the rights agreement was terminated as of December 31, 2012. Prior to termination of the rights agreement, 0.4 million shares of preferred stock were designated as Series A Junior Participating Preferred Stock and were reserved for issuance in connection with the rights agreement, with the remaining 14.6 million shares of preferred stock being undesignated. Following termination of the rights agreement, a Certificate of Elimination of the Series A Junior Participating Preferred Stock was filed on January 2, 2013 with the Delaware Secretary of State to restore the 0.4 million shares designated as Series A Junior Participating Preferred Stock to the status of undesignated preferred stock.

Share Repurchase Authorization

The Company has a share repurchase program and generally repurchases shares on the open market to offset the dilutive effect of its equity compensation plans, with repurchases above that level used to manage the Company’s capital structure and efficiently return capital to shareholders.

In August 2011, the Finance Committee of the Company’s Board of Directors, via delegation by the Company’s Board of Directors, authorized the repurchase of 10 million common shares, including shares to be repurchased under Rule 10b5-1, which was contingent upon completion of the merger with Nalco. This authorization was completed during the first quarter of 2016.

In February 2015, the Company’s Board of Directors authorized the repurchase of up to 20 million additional shares of its common stock, including shares to be repurchased under Rule 10b5-1. In February 2015, under the existing repurchase authorization, the Company announced a $1.0 billion share repurchase program, which was completed during the second quarter of 2016.

As of December 31, 2016, 16,772,526 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions.

Accelerated Stock Repurchase (“ASR”) Agreements

In February 2015, the Company entered into an ASR agreement with a financial institution to repurchase $300 million of its common stock and received 2,066,293 shares of its common stock, which was approximately 80% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. In February 2016, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,459,490 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time.

The final per share purchase price and the total number of shares to be repurchased under both 2016 and 2015 ASR agreements generally were based on the volume-weighted average price of the Company’s common stock during the term of the agreements. Upon final settlement of the two ASR agreements, under certain circumstances, the financial institutions were obligated to deliver additional shares to the Company or the Company was obligated to deliver additional shares of common stock or make a cash payment, at the Company’s election, to the financial institutions.

In connection with the finalization of the ASR agreement in April 2015, the Company received an additional 555,511 shares of common stock. In connection with the finalization of the ASR agreement in May 2016, the Company received an additional 232,012 shares of common stock.

All shares acquired under the ASR agreements were recorded as treasury stock.

During their respective open periods in 2015 and 2016, neither of the ASRs was dilutive to the Company’s earnings per share calculations, nor did they trigger the two-class earnings per share methodology. Additionally, the unsettled portion of ASRs during their respective open periods met the criteria to be accounted for as a forward contract indexed to the Company’s stock and qualified as equity transactions.

The initial delivery of shares, as well as the additional receipt of shares at settlement resulted in a reduction to the Company’s common stock outstanding used to calculate earnings per share, the impact of which was not material.

In February 2017, separate from the ASRs discussed above, the Company entered into an ASR agreement with a financial institution to repurchase $300 million of its common stock.

Share Repurchases

In accordance with its share repurchase program through open market or private purchases, including the ASR discussed above, the Company reacquired 6,126,033 shares, 6,267,699 shares and 3,547,334 shares of its common stock in 2016, 2015 and 2014, respectively.

The Company also reacquired 357,165,  398,704 and 489,854 shares withheld for taxes related to the exercise of stock options and the vesting of stock awards and units in 2016, 2015 and 2014, respectively.