Under use strict, your $counter is initialized before it is declared:

$counter = 0;
use vars qw($counter);
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So you have to declare it (outside of while(<INPUT>)):

my $counter = 0;
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Note, that you don't need use vars qw($counter); afterwards.
Otherwise you would declare just another variable called $counter living in the symbol table:

my $counter = 0; # declare and initialize lexical variable
use vars qw($counter); # declare global variable living in symbol tabl
+e
                                                                      
+                                                                     
+   
$counter = 0; # initialize again, just to show that $counter in 'use v
+ars' is not affected

print "\$main::counter: $main::counter\n"; # $counter living in symbol
+ table: not initialized
$main::counter = 1; # initialize $counter in symbol table
print "\$main::counter: $main::counter\n"; # prints 1
print "\$counter: $counter\n"; # prints 0
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