NYSE forces Black & Decker to backtrack

Posted: 2:33 pm Wed, March 10, 2010
By Danielle Ulman
Daily Record Business Writer

The New York Stock Exchange weighed in Wednesday on the standards Black & Decker Corp. used to establish the independence of one of its board members, forcing the Towson-based company to backtrack from a statement it released Tuesday.

NYSE officials contacted Black & Decker after the company issued its statement, saying that under the exchange’s corporate governance rules, a real estate business partnership between Black & Decker CEO and Chairman Nolan D. Archibald, and board member M. Anthony Burns did not affect Burns’ ability to vote independently on company issues because the relationship was between two individuals and not with the company.

Black & Decker revealed the dialogue with the NYSE in a statement Wednesday.

“In discussions between representatives of the New York Stock Exchange (“NYSE”) and Black & Decker after the issuance of the press release, representatives of the NYSE advised Black & Decker that, in interpreting its rules, the NYSE believes relationships between a director and a member of senior management that are material to either party should be considered by a board of directors in its evaluation of a director’s independence,” the release said.

Archibald and Burns are co-partners in Red Ledges, an exclusive golf resort in Utah, where the cost of building a cottage begins at $900,000, and residents can play golf on a Jack Nicklaus Signature Course.

Black & Decker said it had received inquiries into the relationship after it was discovered that Burns was one of three independent board members to sit on a specially formed transaction committee to review the $4.5 billion all-stock merger offer from The Stanley Works, which shareholders will vote to approve on Friday.

The deal could net Archibald, who will serve at executive chairman of the merged firm, $45 million in bonuses if he manages to create “cost synergies” of $350 million over the next few years.

The company said in its release that although the transaction committee gave the deal the initial OK, it was later approved by the whole board.

Black & Decker did not respond to a request for comment.