And there are slightly different instructions for other than Small size:
For sizes Medium and Large ONLY: Row 3 (RS): K3, K2SP, k to end.
Row 4: Purl.
Row 5: K3, KSP, k to end.
Row 6: Purl. Rep Rows 5 and 6 21 times more.
[B]For ALL sizes:[/B] AT THE SAME TIME, when 11(11-12-12) sts remain on needle and armhole measures 7-1/2(8-8-8-1/2)", end on RS.
[B]Shape Neck (WS):[/B] Bind off 2(2-3-3) sts at beg of the next row then, continuing to work armhole decs, dec 1 st at neck edge EVERY row 5 times. Fasten off.
You do Rows 5 and 6 until you have 11 sts left, then start the neck BO and decs. You do the neck edge dec on every row, including purl rows. So, you have 11 sts by the time you're at the end of a knit row. Turn and BO 2 at the neck edge, purl across 9 sts, dec 2 on the knit row (at both the arm and neck edges) = 7 sts. Turn, dec 1 at neck edge, - 6 sts, turn and dec arm and neck edges - 4 sts, turn and dec 1 at neck edge and you're down to 3 sts. I'd just do a k3tog at that point and call it finished.