Capital Stock

Activity in the Company’s common shares outstanding is set forth below for the three years ended December 31, 2015 (in thousands):



	Common Stock
	Class A		Class B		Common Stock
OUTSTANDING AT DECEMBER 31, 2012	7,167		52,069		—
Exercise of stock options/stock appreciation rights	—		157		—
Director compensation arrangements, net	—		16		—
Restricted/performance shares activity, net of forfeitures	—		138		—
Acquisition/surrender of shares	—		(375	)	—
OUTSTANDING AT DECEMBER 31, 2013	7,167		52,005		—
Exercise of stock options/stock appreciation rights	—		155		—
Director compensation arrangements, net	—		13		—
Restricted/performance shares activity, net of forfeitures	—		136		—
Acquisition/surrender of shares	—		(980	)	—
OUTSTANDING AT DECEMBER 31, 2014	7,167		51,329		—
Exercise of stock options/stock appreciation rights	—		29
Director compensation arrangements, net	—		17
Restricted/performance shares activity, net of forfeitures	—		122
Acquisition/surrender of shares	—		(708	)	(119	)
Share reclassification	(7,167	)	(50,789	)	57,956
OUTSTANDING AT DECEMBER 31, 2015	—		—		57,837

On December 23, 2015, the Company completed the reclassification of its dual-class common stock into a single class of Common Stock (the “Reclassification”).

The Reclassification, among other benefits, simplified the Company's capital structure, better aligned voting rights with economic interests of all shareholders, and has eliminated the ability of the Louie E. Roche Trust and the Harvey Hubbell Trust (collectively, the “Trusts”), which, prior to the Reclassification, collectively owned 3,488,460 shares of the Company’s Class A common stock, par value $0.01 per share (the “Class A common stock”), representing approximately 49% of Class A common stock then outstanding, and approximately 36% of the total voting power of the Company's shareholders, to effectively prevent the approval of any matter that comes before the shareholders that requires, under Connecticut law, the approval of holders of two-thirds of the Company's outstanding common stock.

Following the filing of the Amended and Restated Certificate of Incorporation of the Company with the Secretary of the State of the State of Connecticut, the Reclassification became effective at 11:59 p.m. on December 23, 2015 (the “Effective Time”), at which time (i) each holder of Class A common stock as of immediately prior to the Effective Time became entitled to receive cash in the amount of $28.00 for each share of Class A common stock held ("Class A Cash Consideration") and (ii) each share of Class A common stock issued and outstanding immediately prior to the Effective Time and each share of Class B common stock of the Company, par value $0.01 per share (the “Class B common stock”), issued and outstanding immediately prior to the Effective Time was reclassified into one share of common stock of the Company, par value $0.01 per share and having one vote per share upon all matters brought before any meeting of the shareholders (the “Common Stock”). Trading in the Class A Common Stock and Class B Common Stock ceased after markets closed on December 23, 2015 and trading in the Company's single class of Common Stock commenced on the NYSE on December 24, 2015, under the ticker “HUBB.”

Prior to the Reclassification, shares of Class A common stock had twenty votes per share, while shares of Class B common shares had one vote per share. Following the Reclassification, shares of the Company's Common Stock have one vote per share. In addition, the Company has 5.9 million authorized shares of preferred stock; no shares of preferred stock are outstanding.

The Company has accounted for the Reclassification by adjusting the Company’s capital stock accounts. The par value of the Class A common stock and the Class B common stock has been reclassified to Common Stock par value. Paid-in capital of the Class A Common Stock is zero at the time of the Reclassification and, therefore, the full amount of the Class A Cash Consideration paid in the Reclassification has been applied as a reduction to retained earnings.

In the third quarter of 2015 the Company incurred $7.4 million of costs related to the Reclassification (the "Reclassification Costs"), primarily consisting of professional fees. Reclassification Costs are recognized in Other expense, net in the Condensed Consolidated Statement of Income. Certain other Reclassification Costs of $12.3 million, including additional professional fees and the reimbursement of certain costs of the Trustee, were contingent upon closing the Reclassification and were recognized in the fourth quarter of 2015. Total Reclassification Costs incurred in 2015 were $19.7 million.

For accounting purposes, the Company treats repurchased shares as constructively retired when acquired and accordingly charges the purchase price against Common Stock par value, Additional paid-in capital and Retained earnings to the extent required. Shares may be repurchased through the Company’s stock repurchase program, acquired by the Company from employees under the Hubbell Incorporated Stock Option Plan for Key Employees (the “Option Plan”) or surrendered to the Company by employees in settlement of their minimum tax liability on vesting of restricted shares and performance shares under the Hubbell Incorporated 2005 Incentive Award Plan as amended and restated, (the “Award Plan”).

The Company is party to a Second Amended and Restated Rights Agreement, dated December 23, 2015 (the "Rights Agreement"), between the Company and Computershare Inc. (successor to Mellon Investor Services, L.L.C.), as rights agent, under which holders of Common Stock have a preferred share purchase right for each share of Common Stock (the “Rights”). These Rights become exercisable after a specified period of time upon the occurrence of specified trigger events, including if a person or group of affiliated persons obtains beneficial ownership of 15 percent or more of the outstanding Common Stock. Each Right entitles the holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock (“Preferred Stock”), without par value, at a price of $300.00 per one one-thousandth of a share. The Rights may be redeemed by the Company for one cent per Right, subject to the terms and conditions of the Rights Agreement. The Rights will expire at the close of business on December 17, 2016 (the “Final Expiration Date”), unless the Final Expiration Date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company.

The value of a one one-thousandth interest in a share of Preferred Stock should approximate the value of one share of Common Stock.

Each one one-thousandth of a share of Preferred Stock, if issued:


◦	will not be redeemable;


◦	will entitle holders to quarterly dividend payments of $0.01 per one one-thousandth share, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater;


◦	will entitle holders upon liquidation either to receive $0.10 per one one-thousandth share, or an amount equal to the payment made on one share of Common Stock, whichever is greater;


◦	will have the same voting power as one share of Common Stock;


◦	in the event that shares of the Common Stock are exchanged via share exchange, merger or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock.

These rights are protected by customary antidilution provisions.

Upon the occurrence of certain events or transactions specified in the Rights Agreement, each holder of a Right will have the right to receive, upon exercise, that number of shares of the Company’s common stock or the acquiring company’s shares having a market value equal to twice the exercise price.

Shares of the Company’s common stock were reserved at December 31, 2015 as follows (in thousands):



	Common Stock	Preferred Stock
	Common Stock	Preferred Stock
Future grant of stock-based compensation	3,756	—
Exercise of stock purchase rights	—	58
Shares reserved under other equity compensation plans	174	—
TOTAL	3,930	58