10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 2, 2016.

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [            ] to [            ]

Commission File Number 001-05224

STANLEY BLACK & DECKER, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CONNECTICUT	06-0548860
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)	(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
1000 STANLEY DRIVE NEW BRITAIN, CONNECTICUT	06053
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)	(ZIP CODE)

(860) 225-5111

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	þ		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

150,425,951 shares of the registrant’s common stock were outstanding as of July 18, 2016

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	3
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
ITEM 4. CONTROLS AND PROCEDURES	31
PART II — OTHER INFORMATION	33
ITEM 1. LEGAL PROCEEDINGS	33
ITEM 1A. RISK FACTORS	33
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
ITEM 6. EXHIBITS	34
SIGNATURE	35

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

THREE AND SIX MONTHS ENDED JULY 2, 2016 AND JULY 4, 2015

(Unaudited, Millions of Dollars, Except Per Share Amounts)

	Second Quarter						Year-to-Date
	2016			2015			2016			2015
Net Sales	$	2,932.4		$	2,866.9		$	5,604.5		$	5,496.9
Costs and Expenses
Cost of sales	$	1,803.5		$	1,809.7		$	3,498.0		$	3,466.1
Selling, general and administrative	659.7			631.5			1,280.1			1,245.2
Provision for doubtful accounts	7.2			13.0			14.6			22.3
Other, net	47.6			50.5			93.8			114.2
Restructuring charges	10.2			5.0			18.2			29.9
Interest expense	47.7			46.2			95.0			90.6
Interest income	(5.5		)	(3.0		)	(11.3		)	(6.7		)
	$	2,570.4		$	2,552.9		$	4,988.4		$	4,961.6
Earnings from continuing operations before income taxes	362.0			314.0			616.1			535.3
Income taxes on continuing operations	90.5			78.5			156.0			133.8
Earnings from continuing operations	$	271.5		$	235.5		$	460.1		$	401.5
Less: Net loss attributable to non-controlling interests	—			(0.2		)	(0.8		)	(1.0		)
Net earnings from continuing operations attributable to common shareowners	$	271.5		$	235.7		$	460.9		$	402.5
Net loss from discontinued operations	—			(8.5		)	—			(13.0		)
Net Earnings Attributable to Common Shareowners	$	271.5		$	227.2		$	460.9		$	389.5
Total Comprehensive Income Attributable to Common Shareowners	$	174.7		$	299.4		$	443.9		$	204.4
Basic earnings (loss) per share of common stock:
Continuing operations	$	1.87		$	1.59		$	3.17		$	2.68
Discontinued operations	—			(0.06		)	—			(0.09		)
Total basic earnings per share of common stock	$	1.87		$	1.53		$	3.17		$	2.59
Diluted earnings (loss) per share of common stock:
Continuing operations	$	1.84		$	1.54		$	3.12		$	2.60
Discontinued operations	—			(0.06		)	—			(0.08		)
Total diluted earnings per share of common stock	$	1.84		$	1.49		$	3.12		$	2.51
Dividends per share of common stock	$	0.55		$	0.52		$	1.10		$	1.04
Weighted Average Shares Outstanding (in thousands):
Basic	145,135			148,059			145,583			150,339
Diluted	147,263			152,663			147,543			154,881

See Notes to (Unaudited) Condensed Consolidated Financial Statements.

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

JULY 2, 2016 AND JANUARY 2, 2016

(Unaudited, Millions of Dollars, Except Per Share Amounts)

	July 2, 2016			January 2, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	568.2		$	465.4
Accounts and notes receivable, net	1,571.0			1,331.8
Inventories, net	1,688.6			1,526.4
Other current assets	465.4			338.5
Total Current Assets	4,293.2			3,662.1
Property, Plant and Equipment, net	1,462.5			1,450.2
Goodwill	7,108.7			7,084.3
Intangibles, net	2,483.9			2,541.5
Other Assets	392.5			389.7
Total Assets	$	15,740.8		$	15,127.8
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Short-term borrowings	$	351.1		$	2.5
Current maturities of long-term debt	6.8			5.1
Accounts payable	1,739.0			1,533.1
Accrued expenses	1,613.0			1,261.9
Total Current Liabilities	3,709.9			2,802.6
Long-Term Debt	3,814.1			3,792.1
Deferred Taxes	776.7			825.9
Post-Retirement Benefits	637.2			669.4
Other Liabilities	952.8			1,178.6
Commitments and Contingencies (Note Q)
Shareowners’ Equity
Stanley Black & Decker, Inc. Shareowners’ Equity
Preferred stock, without par value:         Authorized and unissued 10,000,000 shares	—			—
Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2016 and 2015 Issued 176,902,738 shares in 2016 and 2015	442.3			442.3
Retained earnings	4,793.8			4,491.7
Additional paid in capital	4,464.5			4,421.7
Accumulated other comprehensive loss	(1,711.2		)	(1,694.2		)
ESOP	(28.4		)	(34.9		)
	7,961.0			7,626.6
Less: cost of common stock in treasury	(2,157.5		)	(1,815.0		)
Stanley Black & Decker, Inc. Shareowners’ Equity	5,803.5			5,811.6
Non-controlling interests	46.6			47.6
Total Shareowners’ Equity	5,850.1			5,859.2
Total Liabilities and Shareowners’ Equity	$	15,740.8		$	15,127.8

See Notes to (Unaudited) Condensed Consolidated Financial Statements.

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE AND SIX MONTHS ENDED JULY 2, 2016 AND JULY 4, 2015

(Unaudited, Millions of Dollars)

	Second Quarter						Year-to-Date
	2016			2015			2016			2015
OPERATING ACTIVITIES
Net Earnings Attributable to Common Shareowners	$	271.5		$	227.2		$	460.9		$	389.5
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization of property, plant and equipment	65.6			62.5			129.8			125.4
Amortization of intangibles	36.4			39.5			72.3			79.1
Changes in working capital	57.6			(50.5		)	(210.4		)	(428.4		)
Changes in other assets and liabilities	65.3			33.9			(49.3		)	(50.5		)
Cash provided by operating activities	496.4			312.6			403.3			115.1
INVESTING ACTIVITIES
Capital expenditures	(78.7		)	(65.7		)	(143.6		)	(111.6		)
Business acquisitions, net of cash acquired	(8.0		)	—			(21.0		)	(0.4		)
Proceeds from sale of assets	5.5			13.2			7.6			14.2
Proceeds on net investment hedge settlements	7.9			33.5			5.5			63.9
Other	(8.7		)	(10.9		)	(12.2		)	(20.6		)
Cash used in investing activities	(82.0		)	(29.9		)	(163.7		)	(54.5		)
FINANCING ACTIVITIES
Payments on long-term debt	—			(0.3		)	—			(0.6		)
Stock purchase contract fees	(3.4		)	(4.2		)	(6.9		)	(8.5		)
Net short-term (repayments) borrowings	(132.9		)	(180.2		)	348.3			418.7
Cash dividends on common stock	(79.8		)	(76.8		)	(159.4		)	(159.5		)
Termination of interest rate swaps	27.0			—			27.0			—
Proceeds from issuances of common stock	23.7			31.7			32.2			74.7
Purchases of common stock for treasury	(0.7		)	(100.0		)	(362.1		)	(448.0		)
Other	0.2			—			(0.5		)	—
Cash used in financing activities	(165.9		)	(329.8		)	(121.4		)	(123.2		)
Effect of exchange rate changes on cash and cash equivalents	(32.5		)	3.5			(15.4		)	(42.1		)
Change in cash and cash equivalents	216.0			(43.6		)	102.8			(104.7		)
Cash and cash equivalents, beginning of period	352.2			435.5			465.4			496.6
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	568.2		$	391.9		$	568.2		$	391.9

See Notes to (Unaudited) Condensed Consolidated Financial Statements.

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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 2, 2016

A. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (hereinafter referred to as “generally accepted accounting principles”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations for the interim periods have been included and are of a normal, recurring nature. Operating results for the three and six months ended July 2, 2016 are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the consolidated financial statements and footnotes included in Stanley Black & Decker, Inc.’s (the “Company”) Form 10-K for the year ended January 2, 2016, and subsequent related filings with the Securities and Exchange Commission.

During the fourth quarter of 2014, the Company classified the Security segment’s Spain and Italy operations as held for sale based on management's intention to sell these businesses. In July 2015, the Company completed the sale of these businesses. The operating results of Security Spain and Italy have been reported as discontinued operations for the three and six months ended July 4, 2015. Net sales for discontinued operations totaled $17.6 million and $35.5 million for the three and six months ended July 4, 2015, respectively.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Certain amounts reported in the previous year have been reclassified to conform to the 2016 presentation.

B. New Accounting Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adopting the new guidance as well as the impact it may have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The objective of this update is to simplify the presentation of deferred income taxes by requiring all deferred tax assets and liabilities to be classified as noncurrent in the statement of financial position. The amendments in this update do not affect

6

the current requirement to offset deferred tax assets and liabilities for each tax-paying component within a tax jurisdiction. This ASU is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods, and can be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This ASU is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard in the first quarter of 2016.

In August 2015, the FASB issued ASU 2015-15, "Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements." This ASU provides additional guidance to ASU 2015-03, discussed further below, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this standard in the first quarter of 2016.

In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." This ASU changes the measurement principle for certain inventory methods from the lower of cost or market to the lower of cost and net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU does not apply to inventory that is measured using Last-in First-out ("LIFO") or the retail inventory method. The provisions of ASU 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The new standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also indicates that debt issuance costs do not meet the definition of an asset because they provide no future economic benefit. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted this standard in the first quarter of 2016 on a retrospective basis.

In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." The new standard amends the consolidation guidance in ASC 810 and significantly changes the consolidation analysis required under current generally accepted accounting principles. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company adopted this standard in the first quarter of 2016 and it did not have an impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenue recognition standard outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model provides a five-step analysis in determining when and how revenue is recognized. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB affirmed its proposal to defer the effective date of the standard to annual reporting periods (and interim reporting periods within those years) beginning after December 15, 2017. Entities are permitted to apply the new revenue standard early, but not before the original effective date of annual periods beginning after December 15, 2016. The standard shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In March, April and May 2016, the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, and collectibility. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

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C. Earnings Per Share

The following table reconciles net earnings attributable to common shareowners and the weighted average shares outstanding used to calculate basic and diluted earnings per share for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Numerator (in millions):
Net earnings from continuing operations attributable to common shareowners	$	271.5	$	235.7		$	460.9	$	402.5
Net loss from discontinued operations	—		(8.5		)	—		(13.0		)
Net Earnings Attributable to Common Shareowners	$	271.5	$	227.2		$	460.9	$	389.5

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Denominator (in thousands):
Basic earnings per share — weighted average shares	145,135		148,059			145,583		150,339
Dilutive effect of stock options, awards and other equity arrangements	2,128		4,604			1,960		4,542
Diluted earnings per share — weighted average shares	147,263		152,663			147,543		154,881
Earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock:
Continuing operations	$	1.87	$	1.59		$	3.17	$	2.68
Discontinued operations	—		(0.06		)	—		(0.09		)
Total basic earnings per share of common stock	$	1.87	$	1.53		$	3.17	$	2.59
Diluted earnings (loss) per share of common stock:
Continuing operations	$	1.84	$	1.54		$	3.12	$	2.60
Discontinued operations	—		(0.06		)	—		(0.08		)
Total dilutive earnings per share of common stock	$	1.84	$	1.49		$	3.12	$	2.51

The following weighted average stock options were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive (in thousands):

	Second Quarter		Year-to-Date
	2016	2015	2016	2015
Number of stock options	972	642	1,281	808

As described in detail in Note I, Equity Arrangements, the Company issued Equity Units comprised of $345.0 million of Notes and Equity Purchase Contracts, which obligate the holders to purchase on November 17, 2016, for $100, between 1.0122 and 1.2399 shares of the Company’s common stock. The shares related to the Equity Purchase Contracts were anti-dilutive during January and February of 2016, and from January through April of 2015. Upon the November 17, 2016 settlement date, the Company will issue approximately 3.5 to 4.3 million shares of common stock, subject to customary anti-dilution adjustments, and expects to receive additional cash proceeds of $345.0 million.

D.    Financing Receivables

Long-term trade financing receivables of $185.7 million and $182.1 million at July 2, 2016 and January 2, 2016, respectively, are reported within Other Assets in the Condensed Consolidated Balance Sheets. Financing receivables and long-term financing receivables are predominantly related to certain security equipment leases with commercial businesses. Generally, the Company retains legal title to any equipment under lease and bears the right to repossess such equipment in an event of default. All financing receivables are interest bearing and the Company has not classified any financing receivables as held-for-sale. Interest income earned from financing receivables that are not delinquent is recorded on the effective interest method. The Company considers any financing receivable that has not been collected within 90 days of original billing date as past-due or delinquent. Additionally, the Company considers the credit quality of all past-due or delinquent financing receivables as non-performing.

8

The Company has an accounts receivable sale program that expires on January 5, 2018. According to the terms of that program, the Company is required to sell certain of its trade accounts receivables at fair value to a wholly-owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS”). The BRS, in turn, must sell such receivables to a third-party financial institution (“Purchaser”) for cash and a deferred purchase price receivable. The Purchaser’s maximum cash investment in the receivables at any time is $100.0 million. The purpose of the program is to provide liquidity to the Company. The Company accounts for these transfers as sales under ASC 860, Transfers and Servicing. Receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities and its right to the deferred purchase price receivable. At July 2, 2016, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold.

At July 2, 2016 and January 2, 2016, $100.5 million and $100.4 million, respectively, of net receivables were derecognized. Gross receivables sold amounted to $488.8 million ($404.9 million, net) and $873.5 million ($746.2 million, net) for the three and six months ended July 2, 2016, respectively. These sales resulted in a pre-tax loss of $1.4 million and $2.4 million, respectively, and included servicing fees of $0.2 million and $0.4 million, respectively, for the three and six months ended July 2, 2016. Proceeds from transfers of receivables to the Purchaser totaled $400.0 million and $677.6 million for the three and six months ended July 2, 2016, respectively. Collections of previously sold receivables, including deferred purchase price receivables, and all fees, which are settled one month in arrears, resulted in payments to the Purchaser of $383.4 million and $677.6 million for the three and six months ended July 2, 2016, respectively.

Gross receivables sold amounted to $395.9 million ($341.4 million, net) and $732.0 million ($640.8 million, net) for the three and six months ended July 4, 2015, respectively. These sales resulted in a pre-tax loss of $1.0 million and $1.8 million, respectively, and included servicing fees of $0.2 million and $0.3 million, respectively, for the three and six months ended July 4, 2015. Proceeds from transfers of receivables to the Purchaser totaled $348.3 million and $593.3 million for the three and six months ended July 4, 2015, respectively. Collections of previously sold receivables, including deferred purchase price receivables, and all fees, which are settled one month in arrears, resulted in payments to the Purchaser of $325.0 million and $593.3 million for the three and six months ended July 4, 2015, respectively.

The Company’s risk of loss following the sale of the receivables is limited to the deferred purchase price receivable, which was $122.1 million at July 2, 2016 and $41.1 million at January 2, 2016. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within 30 days, and as such the carrying value of the receivable recorded approximates fair value. There were no delinquencies or credit losses for the three and six months ended July 2, 2016 or July 4, 2015. Cash inflows related to the deferred purchase price receivable totaled $128.7 million and $219.5 million for the three and six months ended July 2, 2016, respectively, and $102.3 million and $191.3 million for the three and six months ended July 4, 2015, respectively. All cash flows under the program are reported as a component of changes in accounts receivable within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is either: 1) received upon the initial sale of the receivable or 2) from the ultimate collection of the underlying receivables and the underlying receivables are not subject to significant risks, other than credit risk, given their short-term nature.

E. Inventories

The components of Inventories, net at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	July 2, 2016		January 2, 2016
Finished products	$	1,211.0	$	1,085.0
Work in process	135.3		136.1
Raw materials	342.3		305.3
Total	$	1,688.6	$	1,526.4

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F.    Goodwill

Changes in the carrying amount of goodwill by segment are as follows:

(Millions of Dollars)	Tools & Storage			Security		Industrial		Total
Balance January 2, 2016	$	3,343.4		$	2,317.2	$	1,423.7	$	7,084.3
Acquisition adjustments	—			11.8		—		11.8
Foreign currency translation and other	(31.7		)	14.7		29.6		12.6
Balance July 2, 2016	$	3,311.7		$	2,343.7	$	1,453.3	$	7,108.7

G. Long-Term Debt and Financing Arrangements

Long-term debt and financing arrangements at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	Interest Rate	July 2, 2016			January 2, 2016
Notes payable due in 2018	2.45%	$	628.5		$	627.5
Notes payable due in 2018 (junior subordinated)	2.25%	344.0			343.8
Notes payable due 2021	3.40%	416.7			405.9
Notes payable due 2022	2.90%	749.9			749.6
Notes payable due 2028	7.05%	175.8			167.0
Notes payable due 2040	5.20%	360.9			360.1
Notes payable due 2052 (junior subordinated)	5.75%	730.2			729.9
Notes payable due 2053 (junior subordinated)	5.75%	396.5			394.2
Other, payable in varying amounts through 2022	0.00% – 2.47%	18.4			19.2
Total long-term debt, including current maturities		$	3,820.9		$	3,797.2
Less: Current maturities of long-term debt		(6.8		)	(5.1		)
Long-term debt		$	3,814.1		$	3,792.1

In the first quarter of 2016, the Company adopted ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires debt issuance costs related to recognized debt liabilities to be presented in the balance sheet as a direct deduction from the debt liability rather than an asset. Accordingly, at July 2, 2016, approximately $42 million of deferred debt issuance costs were presented as a direct deduction within Long-Term Debt on the Company's Condensed Consolidated Balance Sheets. Furthermore, the Company reclassified approximately $45 million of deferred debt issuance costs from Other Assets to Long-Term Debt as of January 2, 2016.

At July 2, 2016, the Company's carrying value on its $632.5 million notes payable due 2018 includes $4.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $345.0 million notes payable due 2018 includes $1.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $400.0 million notes payable due 2021 includes $18.7 million pertaining to the unamortized gain on previously terminated swaps, $0.2 million of unamortized discount on the notes and $1.8 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $754.3 million notes payable due 2022 includes $0.4 million of unamortized discount on the notes and $4.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $150.0 million notes payable due 2028 includes a gain of $12.7 million pertaining to fair value adjustments made in purchase accounting and $13.1 million pertaining to the unamortized gain on previously terminated swaps.

At July 2, 2016, the Company's carrying value of its $400.0 million notes payable due 2040 includes $35.6 million pertaining to the unamortized loss on previously terminated swaps, $0.2 million of unamortized discount on the notes and $3.3 million pertaining to deferred financing fees.

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At July 2, 2016, the Company's carrying value on its $750.0 million notes payable due 2052 includes $19.8 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $400.0 million notes payable due 2053 includes a gain of $4.9 million pertaining to the unamortized gain on previously terminated swaps and $8.4 million pertaining to deferred financing fees.

Unamortized gains and fair value adjustments associated with interest rate swaps and the impact of terminated swaps are more fully discussed in Note H, Derivative Financial Instruments.

As of July 2, 2016, the Company had $343.8 million of borrowings outstanding against the Company’s $2.0 billion commercial paper program and at January 2, 2016, the Company had no commercial paper borrowings outstanding. As of July 2, 2016, the Company has not drawn on its $1.75 billion committed credit facility.

H.    Derivative Financial Instruments

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. As part of the Company’s risk management program, a variety of financial instruments such as interest rate swaps, currency swaps, purchased currency options, foreign exchange contracts and commodity contracts may be used to mitigate interest rate exposure, foreign currency exposure and commodity price exposure.

Financial instruments are not utilized for speculative purposes. If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges. Generally, commodity price exposures are not hedged with derivative financial instruments and instead are actively managed through customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects.

A summary of the fair value of the Company’s derivatives recorded in the Condensed Consolidated Balance Sheets at July 2, 2016 and January 2, 2016 follows: 

(Millions of Dollars)	Balance Sheet Classification	July 2, 2016		January 2, 2016		Balance Sheet Classification	July 2, 2016		January 2, 2016
Derivatives designated as hedging instruments:
Interest Rate Contracts Cash Flow	LT other assets	$	—	$	—	LT other liabilities	$	95.1	$	41.1
Interest Rate Contracts Fair Value	Other current assets	—		14.9		Accrued expenses	—		2.5
	LT other assets	—		1.4		LT other liabilities	—		5.2
Foreign Exchange Contracts Cash Flow	Other current assets	11.6		21.9		Accrued expenses	4.3		1.8
	LT other assets	4.6		3.7		LT other liabilities	0.4		—
Net Investment Hedge	Other current assets	92.3		30.3		Accrued expenses	1.5		4.8
	LT other assets	—		—		LT other liabilities	20.5		—
Total Designated		$	108.5	$	72.2		$	121.8	$	55.4
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other current assets	$	37.3	$	7.1	Accrued expenses	$	85.2	$	40.7
Total Undesignated		$	37.3	$	7.1		$	85.2	$	40.7

The counterparties to all of the above mentioned financial instruments are major international financial institutions. The Company is exposed to credit risk for net exchanges under these agreements, but not for the notional amounts. The credit risk is limited to the asset amounts noted above. The Company limits its exposure and concentration of risk by contracting with diverse financial institutions and does not anticipate non-performance by any of its counterparties. Further, as more fully discussed in Note L, Fair Value Measurements, the Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly. The risk of default is considered remote.

During the six months ended July 2, 2016 and July 4, 2015, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash received of $26.6 million and $48.3 million, respectively.

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CASH FLOW HEDGES

As of July 2, 2016 and January 2, 2016, there was an after-tax mark-to-market loss of $105.3 million and $52.1 million, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax loss of $6.6 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months. The ultimate amount recognized will vary based on fluctuations of the hedged currencies and interest rates through the maturity dates.

The tables below detail pre-tax amounts reclassified from Accumulated other comprehensive loss into earnings for active derivative financial instruments during the periods in which the underlying hedged transactions affected earnings for the three and six months ended July 2, 2016 and July 4, 2015 (in millions): 

Second Quarter 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(22.5	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	17.5		Cost of sales	$	5.0	$	—

Year-to-Date 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(54.1	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(4.4	)	Cost of sales	$	23.6	$	—

Second Quarter 2015	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	35.0		Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(3.6	)	Cost of sales	$	16.2	$	—

Year-to-Date 2015	Gain (Loss) Recorded in  OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	19.5	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	34.4	Cost of sales	$	22.9	$	—

 * Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

For the three and six months ended July 2, 2016, the hedged items' impact to the Consolidated Statements of Operations and Comprehensive Income was a loss of $5.0 million and $23.6 million, respectively, in Cost of sales, which is offsetting the amounts shown above. For the three and six months ended July 4, 2015, the hedged items’ impact to the Consolidated Statements of Operations and Comprehensive Income was a loss of $16.2 million and $22.9 million, respectively. There was no impact related to the interest rate contracts' hedged items for all periods presented.

For the three and six months ended July 2, 2016, an after-tax gain of $0.5 million and $9.8 million, respectively, was reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings. For the three and six months ended July 4, 2015, an after-tax gain of $4.9 million and $6.0 million, respectively, was reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings.

Interest Rate Contracts

The Company enters into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-debt proportions. At July 2, 2016 and January 2, 2016, the Company had $400 million of forward starting swaps outstanding which were executed in 2014. The objective of the hedges is to offset the expected variability on future payments associated with the interest rate on debt instruments expected to be issued in 2018. Gains or losses on the

12

swaps are recorded in Accumulated other comprehensive income (loss) and will be subsequently reclassified into earnings as the future interest expense is recognized in earnings or as ineffectiveness occurs.

Foreign Currency Contracts

Forward Contracts: Through its global businesses, the Company enters into transactions and makes investments denominated in multiple currencies that give rise to foreign currency risk. The Company and its subsidiaries regularly purchase inventory from subsidiaries with non-U.S. dollar functional currencies which creates currency-related volatility in the Company’s results of operations. The Company utilizes forward contracts to hedge these forecasted purchases and sales of inventory. Gains and losses reclassified from Accumulated other comprehensive income (loss) for the effective and ineffective portions of the hedge, as well as any amounts excluded from effectiveness testing, are recorded in Cost of sales. Gains and losses incurred after a hedge has been de-designated are not recorded in Accumulated other comprehensive income (loss), but are recorded directly to the Consolidated Statements of Operations in Other-net. At July 2, 2016, the notional value of forward currency contracts outstanding was $673.2 million, maturing on various dates through 2017. At January 2, 2016, the notional value of forward currency contracts outstanding was $439.3 million, maturing on various dates through 2017.

Purchased Option Contracts: The Company and its subsidiaries have entered into various intercompany transactions whereby the notional values are denominated in currencies other than the functional currencies of the party executing the trade. In order to better match the cash flows of its intercompany obligations with cash flows from operations, the Company enters into purchased option contracts. Gains and losses reclassified from Accumulated other comprehensive income (loss) for the effective and ineffective portions of the hedge as well as any amounts excluded from effectiveness testing are recorded in Cost of sales. At July 2, 2016, the notional value of purchased option contracts was $109.5 million maturing on various dates through 2016. As of January 2, 2016, the notional value of purchased option contracts was $197.4 million, maturing on various dates through 2016.

FAIR VALUE HEDGES

Interest Rate Risk: In an effort to optimize the mix of fixed versus floating rate debt in the Company’s capital structure, the Company enters into interest rate swaps. In previous years, the Company entered into interest rate swaps on the first five years of the Company's $400 million5.75% notes due 2053 and interest rate swaps with notional values which equaled the Company's $400 million3.40% notes due 2021 and the Company's $150 million7.05% notes due 2028. These interest rate swaps effectively converted the Company's fixed rate debt to floating rate debt based on LIBOR, thereby hedging the fluctuation in fair value resulting from changes in interest rates. In the second quarter of 2016, the Company terminated all of the above interest rate swaps. The terminations resulted in cash receipts of $27.0 million. This gain was deferred and will be amortized to earnings over the remaining life of the notes.

The changes in fair value of the interest rate swaps during the period were recognized in earnings as well as the offsetting changes in fair value of the underlying notes. There were no open contracts as of July 2, 2016. The notional value of open contracts was $950.0 million as of January 2, 2016. A summary of the fair value adjustments relating to these swaps is as follows (in millions):

	Second Quarter 2016					Year-to-Date 2016
Income Statement Classification	Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(28.6	)	$	29.0	$	(3.3	)	$	3.8

	Second Quarter 2015					Year-to-Date 2015
Income Statement Classification	Gain/(Loss)  on Swaps*			Gain /(Loss)  on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(18.6	)	$	18.3	$	(1.4	)	$	1.5

*Includes ineffective portion and amount excluded from effectiveness testing.

In addition to the fair value adjustments in the table above, the net swap accruals for each period and amortization of the gains on terminated swaps are also reported as a reduction of interest expense and totaled $2.3 million and $5.3 million for the three and six months ended July 2, 2016, respectively, and $3.6 million and $7.4 million for the three and six months ended July 4, 2015, respectively. Interest expense on the underlying debt was $8.1 million and $19.9 million for the three and six months ended July 2, 2016, respectively, and $11.8 million and $23.7 million for the three and six months ended July 4, 2015, respectively.

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NET INVESTMENT HEDGES

Foreign Exchange Contracts: The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment in the assets and liabilities of its foreign subsidiaries. The total after-tax amounts in Accumulated other comprehensive loss were gains of $35.5 million and $11.8 million at July 2, 2016 and January 2, 2016, respectively. As of July 2, 2016, the Company had foreign exchange forward contracts maturing on various dates through 2017 with notional values totaling $1.4 billion outstanding hedging a portion of its British pound sterling, Mexican peso, Swedish krona, Euro and Canadian dollar denominated net investments and a cross currency swap with a notional value totaling $250.0 million maturing in 2023 hedging a portion of its Japanese yen denominated net investment. As of January 2, 2016, the Company had foreign exchange contracts maturing on various dates through 2016 with notional values totaling $1.9 billion outstanding hedging a portion of its British pound sterling, Mexican peso, Swedish krona, Japanese yen, Euro and Canadian dollar denominated net investments. For the six months ended July 2, 2016 and July 4, 2015, maturing foreign exchange contracts resulted in net cash receipts of $5.5 million and $63.9 million, respectively. Gains and losses on net investment hedges remain in Accumulated other comprehensive income (loss) until disposal of the underlying assets.

The pre-tax gain or loss from fair value changes recorded in Accumulated other comprehensive loss was as follows (in millions):

	Second Quarter 2016						Year-to-Date 2016
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	35.2	$	—	$	—	$	37.8	$	—	$	—

	Second Quarter 2015							Year-to-Date 2015
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	(39.4	)	$	—	$	—	$	(2.5	)	$	—	$	—

*Includes ineffective portion and amount excluded from effectiveness testing.

UNDESIGNATED HEDGES

Foreign Exchange Contracts: Currency swaps and foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables). The objective of these practices is to minimize the impact of foreign currency fluctuations on operating results. The total notional amount of the forward contracts outstanding at July 2, 2016 was $2.3 billion, maturing on various dates through 2017. The total notional amount of the forward contracts outstanding at January 2, 2016 was $2.0 billion, maturing at various dates in 2016. The income statement impacts related to derivatives not designated as hedging instruments for the three and six months ended July 2, 2016 and July 4, 2015 are as follows (in millions): 

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2016 Amount of Gain (Loss) Recorded in Income on Derivative			Year-to-Date 2016 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	(31.0	)	$	(37.0	)

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2015 Amount of Gain (Loss) Recorded in Income on Derivative		Year-to-Date 2015 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	50.1	$	20.7

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I.    Equity Arrangements

In February 2016, the Company repurchased 3,763,145 shares of common stock. Additionally, the Company net-share settled capped call options on its common stock and received 293,142 shares. See further discussion below.

During 2015, the Company repurchased a total of 6,623,709 shares of common stock. Additionally, the Company net-share settled capped call options on its common stock and received 2,603,855 shares during 2015.

In March 2015, the Company entered into a forward share purchase contract on its common stock. The contract obligates the Company to pay $350.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than March 2017, or earlier at the Company’s option, for the 3,645,510 shares purchased. The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract and factored into the calculation of weighted average shares outstanding at that time.

In October 2014, the Company entered into a forward share purchase contract on its common stock. The contract obligates the Company to pay $150.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than October 2016, or earlier at the Company’s option, for the 1,603,822 shares purchased. The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract and factored into the calculation of weighted average shares outstanding at that time.

In November 2013, the Company purchased from certain financial institutions “out-of-the-money” capped call options on 12.2 million shares of its common stock (subject to customary anti-dilution adjustments) for an aggregate premium of $73.5 million, or an average of $6.03 per share. The purpose of the capped call options was to hedge the risk of stock price appreciation between the lower and upper strike prices of the capped call options for a future share repurchase. In accordance with ASC 815-40, the premium paid was recorded as a reduction to equity. The contracts for the options provide that they may, at the Company’s election, subject to certain conditions, be cash settled, physically settled, modified-physically settled, or net-share settled (the default settlement method). The capped call options had various expiration dates and initially had an average lower strike price of $86.07 and an average upper strike price of $106.56, subject to customary market adjustments. In February 2015, the Company net-share settled 9.1 million of the 12.2 million capped call options on its common stock and received 911,077 shares using an average reference price of $96.46 per common share. Additionally, the Company purchased directly from the counterparties participating in the net-share settlement, 3,381,162 shares for $326.1 million, equating to an average price of $96.46 per share. In February 2016, the Company net-share settled the remaining 3.1 million capped call options on its common stock and received 293,142 shares using an average reference price of $94.34 per common share. Additionally, the Company purchased 1,316,858 shares directly from the counterparty participating in the net-share settlement for $124.2 million.

Equity Units and Capped Call Transactions

In December 2013, the Company issued Equity Units comprised of $345.0 million of Notes and Equity Purchase Contracts as described more fully in Note H, Long-Term Debt and Financing Arrangements, of the Company’s Form 10-K for the year ended January 2, 2016. The Equity Purchase Contracts obligate the holders to purchase on November 17, 2016, for $100.00, between 1.0122 and 1.2399 shares of the Company’s common stock, which are equivalent to an initial settlement price of $98.80 and $80.65, respectively, per share of common stock. As of July 2, 2016, due to the customary anti-dilution provisions, the settlement rate on the Equity Units Stock was 1.0150 (equivalent to a conversion price of approximately $98.52 per common share). Upon the November 17, 2016 settlement date, the Company will issue approximately 3.5 to 4.3 million shares of common stock, subject to customary anti-dilution adjustments, and expects to receive additional cash proceeds of $345.0 million. If a fundamental change occurs, in certain circumstances, the number of shares of common stock deliverable upon settlement of the Equity Purchase Contracts will be increased by the make-whole amount, resulting in the issuance of a maximum of approximately 4.9 million shares of common stock. Holders may elect to settle their Equity Purchase Contracts early in cash prior to November 17, 2016.

Contemporaneously with the issuance of the Equity Units described above, the Company paid $9.7 million, or an average of $2.77 per option, to enter into capped call transactions on 3.5 million shares of common stock with a major financial institution. The purpose of the capped call transactions is to offset the potential economic dilution associated with the common shares issuable upon the settlement of the Equity Purchase Contracts. With respect to the impact on the Company, the capped call transactions and the Equity Units, when taken together, result in the economic equivalent of having the conversion price on the Equity Units at $112.60, the upper strike price of the capped call as of July 2, 2016. Refer to Note H, Long-Term Debt and Financing Arrangements, of the Company’s Form 10-K for the year ended January 2, 2016. In accordance with ASC 815-40, the $9.7 million premium paid was recorded as a reduction to equity.

15

The capped call transactions cover, subject to customary anti-dilution adjustments, the number of shares equal to the number of shares issuable upon settlement of the Equity Purchase Contracts at the 1.0122 minimum settlement rate. The capped call transactions have a term of approximately three years and initially had a lower strike price of $98.80, which corresponds to the minimum settlement rate of the Equity Purchase Contracts, and an upper strike price of $112.91, which is approximately 40% higher than the closing price of the Company’s common stock on November 25, 2013, and are subject to customary anti-dilution adjustments. The capped call transactions may be settled by net-share settlement (the default settlement method) or, at the Company’s option and subject to certain conditions, cash settlement, physical settlement or modified physical settlement. The aggregate fair value of the options at July 2, 2016 was $35.3 million.

J.    Accumulated Other Comprehensive Loss

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive loss:

(Millions of Dollars)	Currency translation adjustment and other			Unrealized losses on cash flow hedges, net of tax			Unrealized gains on net investment hedges, net of tax		Pension (losses) gains, net of tax			Total
Balance - January 2, 2016	$	(1,300.9	)	$	(52.1	)	$	11.8	$	(353.0	)	$	(1,694.2	)
Other comprehensive (loss) income before reclassifications	$	(5.1	)	$	(43.4	)	$	23.7	$	11.8		$	(13.0	)
Reclassification adjustments to earnings	—			(9.8		)	—		5.8			(4.0		)
Net other comprehensive (loss) income	$	(5.1	)	$	(53.2	)	$	23.7	$	17.6		$	(17.0	)
Balance - July 2, 2016	$	(1,306.0	)	$	(105.3	)	$	35.5	$	(335.4	)	$	(1,711.2	)

(Millions of Dollars)	Currency translation adjustment and other			Unrealized (losses) gains on cash flow hedges, net of tax			Unrealized losses on net investment hedges, net of tax			Pension (losses) gains, net of tax			Total
Balance - January 3, 2015	$	(796.8	)	$	(50.9	)	$	(37.2	)	$	(385.3	)	$	(1,270.2	)
Other comprehensive (loss) income before reclassifications	$	(225.4	)	$	32.1		$	(1.5	)	$	9.8		$	(185.0	)
Reclassification adjustments to earnings	—			(6.0		)	—			5.9			(0.1		)
Net other comprehensive (loss) income	$	(225.4	)	$	26.1		$	(1.5	)	$	15.7		$	(185.1	)
Balance - July 4, 2015	$	(1,022.2	)	$	(24.8	)	$	(38.7	)	$	(369.6	)	$	(1,455.3	)

The reclassifications out of accumulated other comprehensive loss for the six months ended July 2, 2016 and July 4, 2015 were as follows (in millions):

Reclassifications from Accumulated other comprehensive loss to earnings	2016			2015			Affected line item in Consolidated Statements of Operations And Comprehensive Income
Realized gains on cash flow hedges	$	23.6		$	22.9		Cost of sales
Realized losses on cash flow hedges	(7.5		)	(7.6		)	Interest expense
Tax effect	(6.3		)	(9.3		)	Income taxes on continuing operations
Realized gains on cash flow hedges, net of tax	$	9.8		$	6.0
Amortization of defined benefit pension items:
Actuarial losses and prior service costs / credits	$	(5.3	)	$	(5.2	)	Cost of sales
Actuarial losses and prior service costs / credits	(3.5		)	(3.5		)	Selling, general and administrative
Total before taxes	$	(8.8	)	$	(8.7	)
Tax effect	3.0			2.8			Income taxes on continuing operations
Amortization of defined benefit pension items, net of tax	$	(5.8	)	$	(5.9	)

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K.    Net Periodic Benefit Cost — Defined Benefit Plans

Following are the components of net periodic pension (benefit) expense for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	2.4		$	1.9		$	3.2		$	3.6		$	0.1		$	0.2
Interest cost	11.4			13.6			9.8			12.0			0.4			0.5
Expected return on plan assets	(17.0		)	(18.7		)	(11.8		)	(14.2		)	—			—
Amortization of prior service cost (credit)	1.3			0.2			—			0.1			(0.3		)	(0.3		)
Amortization of net loss	1.8			2.2			1.6			2.1			—			—
Net periodic pension (benefit) expense	$	(0.1	)	$	(0.8	)	$	2.8		$	3.6		$	0.2		$	0.4

	Year-to-Date
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	4.7		$	3.5		$	6.4		$	7.2		$	0.3		$	0.3
Interest cost	22.7			26.9			19.4			23.8			0.8			1.1
Expected return on plan assets	(33.9		)	(37.4		)	(23.5		)	(28.2		)	—			—
Amortization of prior service cost (credit)	2.6			0.4			0.1			0.2			(0.6		)	(0.6		)
Amortization of net loss	3.5			3.9			3.1			4.2			—			—
Settlement / curtailment loss	—			—			0.1			0.3			—			—
Net periodic pension (benefit) expense	$	(0.4	)	$	(2.7	)	$	5.6		$	7.5		$	0.5		$	0.8

In the first quarter of 2016, the Company changed the method used to estimate the service and interest cost components of net periodic pension (benefit) expense. The new estimation method uses a full yield curve approach by applying specific spot rates along the yield curve used in the determination of the pension benefit obligation, to their underlying projected cash flows, and provides a more precise measurement of the service and interest cost components. Previously, the Company used a single weighted average discount rate derived from the corresponding yield curve used to measure the pension benefit obligation. The change is applied prospectively as a change in estimate that is inseparable from a change in accounting principle and reduced service and interest cost for the three and six months ended July 2, 2016 by approximately $3.5 million and $7.1 million, respectively.

L.    Fair Value Measurements

FASB ASC 820, "Fair Value Measurement," defines, establishes a consistent framework for measuring, and expands disclosure requirements about fair value. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs and significant value drivers are observable.

Level 3 — Instruments that are valued using unobservable inputs.

The Company holds various derivative financial instruments that are employed to manage risks, including foreign currency and interest rate exposures. These financial instruments are carried at fair value and are included within the scope of ASC 820. The Company determines the fair value of derivatives through the use of matrix or model pricing, which utilizes observable inputs

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such as market interest and currency rates. When determining the fair value of these financial instruments for which Level 1 evidence does not exist, the Company considers various factors including the following: exchange or market price quotations of similar instruments, time value and volatility factors, the Company’s own credit rating and the credit rating of the counter-party.

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis for each of the hierarchy levels:

(Millions of Dollars)	Total Carrying Value		Level 1		Level 2
July 2, 2016
Money market fund	$	5.6	$	5.6	$	—
Derivative assets	$	145.8	$	—	$	145.8
Derivative liabilities	$	207.0	$	—	$	207.0
January 2, 2016
Money market fund	$	7.0	$	7.0	$	—
Derivative assets	$	79.3	$	—	$	79.3
Derivative liabilities	$	96.1	$	—	$	96.1

The following table presents the carrying values and fair values of the Company's financial assets and liabilities, as well as the Company's debt, as of July 2, 2016 and January 2, 2016:

	July 2, 2016				January 2, 2016
(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	$	10.3	$	10.7	$	11.7	$	11.7
Derivative assets	$	145.8	$	145.8	$	79.3	$	79.3
Derivative liabilities	$	207.0	$	207.0	$	96.1	$	96.1
Long-term debt, including current portion	$	3,820.9	$	4,193.2	$	3,797.2	$	4,034.4

The Company had no significant non-recurring fair value measurements, nor any financial assets or liabilities measured using Level 3 inputs, during the first six months of 2016 or 2015.

The money market fund and other investments outlined in the tables above relate to the West Coast Loading Corporation ("WCLC") trust and are considered Level 1 instruments within the fair value hierarchy. The long-term debt instruments are considered Level 2 instruments and are measured using the stated cash flows in each obligation discounted at the Company’s marginal borrowing rates. The differences between the carrying values and fair values of long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing rates. The fair values of the Company's variable rate short-term borrowings approximate their carrying values at July 2, 2016 and January 2, 2016. The fair values of foreign currency and interest rate swap agreements, comprising the derivative assets and liabilities in the table above, are based on current settlement values.

As discussed in Note D, Financing Receivables, the Company has a deferred purchase price receivable related to sales of trade receivables. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within 30 days, and as such the carrying value of the receivable approximates fair value.

Refer to Note H, Derivative Financial Instruments, for more details regarding derivative financial instruments, Note Q, Commitments and Contingencies, for more details regarding the other investments related to the WCLC trust, and Note G, Long-Term Debt and Financing Arrangements, for more information regarding the carrying values of the long-term debt.

M. Other Costs and Expenses

Other, net is primarily comprised of intangible asset amortization expense, currency related gains or losses, and environmental remediation expense.

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N.    Restructuring Charges

A summary of the restructuring reserve activity from January 2, 2016 to July 2, 2016 is as follows:

(Millions of Dollars)	January 2, 2016		Net Additions		Usage			Currency			July 2, 2016
Severance and related costs	$	44.3	$	9.7	$	(27.6	)	$	0.3		$	26.7
Facility closures and asset impairments	14.4		8.5		(18.0		)	(0.1		)	4.8
Total	$	58.7	$	18.2	$	(45.6	)	$	0.2		$	31.5

For the six months ended July 2, 2016, the Company recognized net restructuring charges of $18.2 million. This amount reflects $9.7 million of net severance charges associated with the reduction of approximately 602 employees. The Company also recognized $4.2 million of facility closure costs and $4.3 million of asset impairments.

For the three months ended July 2, 2016, the Company recognized net restructuring charges of $10.2 million. This amount reflects $6.0 million of net severance charges associated with the reduction of approximately 305 employees. The Company also recognized $4.2 million of facility closure costs.

The majority of the $31.5 million of reserves remaining as of July 2, 2016 is expected to be utilized within the next 12 months.

Segments: The $18 million net restructuring charge for the six months ended July 2, 2016 includes: $1 million of net charges pertaining to the Tools & Storage segment; $8 million of net charges pertaining to the Security segment; $4 million of net charges pertaining to the Industrial segment; and $5 million of net charges pertaining to Corporate.

The $10 million net restructuring charge for the three months ended July 2, 2016 includes: $7 million of net charges pertaining to the Security segment; $2 million of net charges pertaining to the Industrial segment; and $1 million of net charges pertaining to Corporate.

O. Income Taxes

The Company recognized income tax expense of $90.5 million and $156.0 million for the three and six months ended July 2, 2016, respectively, resulting in effective tax rates of 25.0% and 25.3%, respectively. The effective tax rates differ from the U.S. statutory tax rate during these periods primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions, the finalization of audit settlements during the first quarter of 2016, and adjustments to tax positions relating to undistributed foreign earnings during the second quarter of 2016.

The Company recognized income tax expense of $78.5 million and $133.8 million for the three and six months ended July 4, 2015, respectively, resulting in an effective tax rate of 25.0% for each period. The effective tax rate differed from the U.S. statutory tax rate primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions and the reversal of valuation allowances during the second quarter of 2015 for certain foreign deferred tax assets which had become realizable.

The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other taxing authorities both domestically and internationally. The final outcome of the future tax consequences of these examinations and legal proceedings, as well as the outcome of competent authority proceedings, changes and interpretation in regulatory tax laws, or expiration of statute of limitations could impact the Company’s financial statements. Accordingly, the Company has tax reserves recorded for which it is reasonably possible that the amount of the unrecognized tax benefit will increase or decrease which could have a material effect on the financial results for any particular fiscal quarter or year. However, based on the uncertainties associated with litigation and the status of examinations, including the protocols of finalizing audits by the relevant tax authorities which could include formal legal proceedings, it is not possible to estimate the impact of any such change.

P.    Business Segments

The Company's operations are classified into three reportable business segments, which also represent its operating segments: Tools & Storage, Security and Industrial.

The Tools & Storage segment is comprised of the Power Tools and Hand Tools & Storage businesses. The Power Tools business includes professional products, consumer products and power tool accessories. Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers,

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grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the BLACK+DECKER brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, and home products such as hand-held vacuums, paint tools and cleaning appliances. Power tool accessories include drill bits, router bits, abrasives and saw blades.

The Hand Tools & Storage business sells measuring, leveling and layout tools, planes, hammers, demolition tools, knives, saws, chisels and industrial and automotive tools. Storage products include tool boxes, sawhorses, medical cabinets and engineered storage solution products.

The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. The CSS business designs, supplies and installs electronic security systems and provides electronic security services, including alarm monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which include asset tracking solutions, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems, tubular and mortise door locksets.

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides pipeline inspection services. The Hydraulics business sells hydraulic tools and accessories.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, interest income, interest expense, other, net (inclusive of intangible asset amortization expense), restructuring charges, and income taxes. Refer to Note N, Restructuring Charges, for the amount of net restructuring charges by segment. Corporate overhead is comprised of world headquarters facility expense, cost for the executive management team and cost for certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Transactions between segments are not material. Segment assets primarily include cash, accounts receivable, inventory, other current assets, property, plant and equipment, intangible assets and other miscellaneous assets.

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
NET SALES
Tools & Storage	$	1,931.6		$	1,839.5		$	3,638.5		$	3,471.6
Security	537.7			533.3			1,041.9			1,042.9
Industrial	463.1			494.1			924.1			982.4
Total	$	2,932.4		$	2,866.9		$	5,604.5		$	5,496.9
SEGMENT PROFIT
Tools & Storage	$	362.5		$	301.6		$	624.5		$	558.4
Security	67.7			55.2			127.9			110.0
Industrial	78.8			94.3			154.8			169.0
Segment profit	509.0			451.1			907.2			837.4
Corporate overhead	(47.0		)	(38.4		)	(95.4		)	(74.1		)
Other, net	(47.6		)	(50.5		)	(93.8		)	(114.2		)
Restructuring charges	(10.2		)	(5.0		)	(18.2		)	(29.9		)
Interest expense	(47.7		)	(46.2		)	(95.0		)	(90.6		)
Interest income	5.5			3.0			11.3			6.7
Earnings from continuing operations before income taxes	$	362.0		$	314.0		$	616.1		$	535.3

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The following table is a summary of total assets by segment as of July 2, 2016 and January 2, 2016:

(Millions of Dollars)	July 2, 2016			January 2, 2016
Tools & Storage	$	8,798.2		$	8,492.9
Security	3,775.4			3,741.6
Industrial	3,482.8			3,438.7
	16,056.4			15,673.2
Corporate assets	(315.6		)	(545.4		)
Consolidated	$	15,740.8		$	15,127.8

Corporate assets primarily consist of cash, deferred taxes and property, plant and equipment. Based on the nature of the Company's cash pooling arrangements, at times corporate-related cash accounts will be in a net liability position.

Q. Commitments and Contingencies

The Company is involved in various legal proceedings relating to environmental issues, employment, product liability, workers’ compensation claims and other matters. The Company periodically reviews the status of these proceedings with both inside and outside counsel, as well as an actuary for risk insurance. Management believes that the ultimate disposition of these matters will not have a material adverse effect on operations or financial condition taken as a whole.

In connection with the 2010 merger with Black & Decker, the Company assumed certain commitments and contingent liabilities. Black & Decker is a party to litigation and administrative proceedings with respect to claims involving the discharge of hazardous substances into the environment. Some of these assert claims for damages and liability for remedial investigations and clean-up costs with respect to sites that have never been owned or operated by Black & Decker but at which Black & Decker has been identified as a potentially responsible party ("PRP"). Other matters involve current and former manufacturing facilities.

The Environmental Protection Agency (“EPA”) has asserted claims in federal court in Rhode Island against certain current and former affiliates of Black & Decker related to environmental contamination found at the Centredale Manor Restoration Project Superfund ("Centredale") site, located in North Providence, Rhode Island. The EPA has discovered a variety of contaminants at the site, including but not limited to, dioxins, polychlorinated biphenyls, and pesticides. The EPA alleges that Black & Decker and certain of its current and former affiliates are liable for site clean-up costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") as successors to the liability of Metro-Atlantic, Inc., a former operator at the site, and demanded reimbursement of the EPA’s costs related to this site. Black & Decker and certain of its current and former affiliates contest the EPA's allegation that they are responsible for the contamination, and have asserted contribution claims, counterclaims and cross-claims against a number of other PRPs, including the federal government as well as insurance carriers. The EPA released its Record of Decision ("ROD") in September 2012, which identified and described the EPA's selected remedial alternative for the site. Black & Decker and certain of its current and former affiliates are contesting the EPA's selection of the remedial alternative set forth in the ROD, on the grounds that the EPA's actions were arbitrary and capricious and otherwise not in accordance with law, and have proposed other equally-protective, more cost-effective alternatives. On June 10, 2014, the EPA issued an Administrative Order under Sec. 106 of CERCLA, instructing Emhart Industries, Inc. and Black & Decker to perform the remediation of Centredale pursuant to the ROD. Black & Decker and Emhart Industries, Inc. dispute the factual, legal and scientific bases cited by the EPA for such an Order and have provided the EPA with numerous good-faith bases for Black & Decker’s and Emhart Industries, Inc.’s declination to comply with the Order at this time. Black & Decker and Emhart Industries, Inc. continue to vigorously litigate the issue of their liability for environmental conditions at the Centredale site, including the completion of the Phase 1 trial in late July, 2015. The Court in this initial phase of trial found that dioxin contamination at the Centredale site was not “divisible”, and that Emhart was jointly and severally liable for dioxin contamination at the Site. The next two phases of trial will address whether the EPA’s proposed remedy for the Site is “arbitrary and capricious”, and if necessary, the allocation of liability to other parties who may have contributed to contamination of the Site with dioxins, PCB’s and other contaminants of concern. The second phase of the trial addressing the remedy and certain other issues is scheduled to commence on September 26, 2016. The Company's estimated remediation costs related to the Centredale site (including the EPA’s past costs as well as costs of additional investigation, remediation, and related costs such as EPA’s oversight costs, less escrowed funds contributed by primary PRPs who have reached settlement agreements with the EPA), which the Company considers to be probable and reasonably estimable, range from approximately $68.1 million to $139.7 million, with no amount within that range representing a more likely outcome until such time as the litigation is resolved through judgment or compromise. The Company’s reserve for this environmental

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remediation matter of $68.1 million reflects the fact that the EPA considers Metro-Atlantic, Inc. to be a primary source of contamination at the site. As the specific nature of the environmental remediation activities that may be mandated by the EPA at this site have not yet been finally determined through the on-going litigation, the ultimate remedial costs associated with the site may vary from the amount accrued by the Company at July 2, 2016.

In the normal course of business, the Company is involved in various lawsuits and claims. In addition, the Company is a party to a number of proceedings before federal and state regulatory agencies relating to environmental remediation. Also, the Company, along with many other companies, has been named as a PRP in a number of administrative proceedings for the remediation of various waste sites, including 31 active Superfund sites. Current laws potentially impose joint and several liabilities upon each PRP. In assessing its potential liability at these sites, the Company has considered the following: whether responsibility is being disputed, the terms of existing agreements, experience at similar sites, and the Company’s volumetric contribution at these sites.

The Company’s policy is to accrue environmental investigatory and remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. The amount of liability recorded is based on an evaluation of currently available facts with respect to each individual site and includes such factors as existing technology, presently enacted laws and regulations, and prior experience in remediation of contaminated sites. The liabilities recorded do not take into account any claims for recoveries from insurance or third parties. As assessments and remediation progress at individual sites, the amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. As of July 2, 2016 and January 2, 2016 the Company had reserves of $165.9 million and $170.7 million, respectively, for remediation activities associated with Company-owned properties, as well as for Superfund sites, for losses that are probable and estimable. Of the 2016 amount, $17.8 million is classified as current and $148.1 million as long-term which is expected to be paid over the estimated remediation period. As of July 2, 2016, the Company has recorded $15.9 million in other assets related to funding received by the EPA and placed in a trust in accordance with the final settlement with the EPA, embodied in a Consent Decree approved by the United States District Court for the Central District of California on July 3, 2013. Per the Consent Decree, Emhart Industries, Inc. (a dissolved, former indirectly wholly-owned subsidiary of The Black & Decker Corporation) (“Emhart”) has agreed to be responsible for an interim remedy at a site located in Rialto, California and formerly operated by West Coast Loading Corporation (“WCLC”), a defunct company for which Emhart was alleged to be liable as a successor. The remedy will be funded by (i) the amounts received from the EPA as gathered from multiple parties, and, to the extent necessary, (ii) Emhart's affiliate.  The interim remedy requires the construction of a water treatment facility and the filtering of ground water at or around the site for a period of approximately 30 years or more. Accordingly, as of July 2, 2016, the Company's cash obligation associated with the aforementioned remediation activities including WCLC is $150.0 million. The range of environmental remediation costs that is reasonably possible is $132.2 million to $273.0 million which is subject to change in the near term. The Company may be liable for environmental remediation of sites it no longer owns. Liabilities have been recorded on those sites in accordance with policy.

The Company and approximately 60 other companies comprise the Lower Passaic Cooperating Parties Group (the “CPG”). The CPG members and other companies are parties to a May 2007 Administrative Settlement Agreement and Order on Consent (“AOC”) with the EPA to perform a remedial investigation/feasibility study (“RI/FS”) of the lower seventeen miles of the Lower Passaic River in New Jersey (the “River”). The Company’s potential liability stems from former operations in Newark, New Jersey. As an interim step related to the 2007 AOC, the CPG members voluntarily entered into an AOC on June 18, 2012 with the EPA for remediation actions focused solely at mile 10.9 of the River. The Company’s estimated costs related to the RI/FS and focused remediation action at mile 10.9, based on an interim allocation, are included in environmental reserves as of July 2, 2016 and January 2, 2016. On April 11, 2014, the EPA issued a Focused Feasibility Study (“FFS”) and proposed plan which addressed various early action remediation alternatives for the lower 8.3 miles of the River. The EPA received public comment on the FFS and proposed plan (including comments from the CPG and other entities asserting that the FFS and proposed plan do not comply with CERCLA) which public comment period ended on August 20, 2014. On March 4, 2016, the EPA issued a Record of Decision selecting the remedy for the lower 8.3 miles of the River. The cleanup plan adopted by the EPA is now considered a final action for the lower 8.3 miles of the River and will include the removal of 3.5 million cubic yards of sediment, placement of a cap over the entire lower 8.3 miles of the River, will cost approximately $1.4 billion and take 6 years to implement after the remedial design is completed according to the EPA. The Company and 105 other parties received a letter dated March 31, 2016 from the EPA notifying such parties of potential liability for the costs of the cleanup of the lower 8.3 miles of the River. The CPG submitted to the EPA the draft RI report in February 2015 and draft FS report in April 2015 for the entire lower seventeen miles of the River. There has been no determination as to how the RI/FS will be modified in light of the EPA decision to implement a final action for the lower 8.3 miles of the River. At this time, the Company cannot reasonably estimate its liability related to the remediation efforts, excluding the RI/FS and remediation actions at mile 10.9, as the RI/FS is ongoing, the ultimate remedial approach and associated cost for the upper portion of the River has not yet been determined, and the parties that will participate in funding the remediation and their respective allocations are not yet known. 

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The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

R.    Guarantees

The Company’s financial guarantees at July 2, 2016 are as follows:

(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased properties	One to five years	$	39.3	$	—
Standby letters of credit	Up to three years	78.3		—
Commercial customer financing arrangements	Up to six years	60.6		16.3
Total		$	178.2	$	16.3

The Company has guaranteed a portion of the residual values of leased properties arising from its synthetic lease program. The lease guarantees are for an amount up to $39.3 million while the fair value of the underlying buildings is estimated at $43.7 million. The related assets would be available to satisfy the guarantee obligations and therefore it is unlikely the Company will incur any future loss associated with these guarantees.

The Company has issued $78.3 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs.

The Company provides various limited and full recourse guarantees to financial institutions that provide financing to U.S. and Canadian Mac Tool distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee. In addition, the Company provides limited and full recourse guarantees to financial institutions that extend credit to certain end retail customers of its U.S. Mac Tool distributors and franchisees. The gross amount guaranteed in these arrangements is $60.6 million and the $16.3 million carrying value of the guarantees issued is recorded in debt and other liabilities as appropriate in the Condensed Consolidated Balance Sheets.

The Company provides product and service warranties which vary across its businesses. The types of warranties offered generally range from one year to limited lifetime, while certain products carry no warranty. Further, the Company sometimes incurs discretionary costs to service its products in connection with product performance issues. Historical warranty and service claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes available.

The changes in the carrying amount of product and service warranties for the six months ended July 2, 2016 and July 4, 2015 are as follows:

(Millions of Dollars)	2016			2015
Balance beginning of period	$	105.4		$	109.6
Warranties and guarantees issued	46.2			47.7
Warranty payments and currency	(44.6		)	(47.8		)
Balance end of period	$	107.0		$	109.5

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains statements reflecting the Company's views about its future performance that constitute “forward-looking statements” under the Private Securities Litigation Act of 1995. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Please read the information under the caption entitled “Cautionary Statement under the Private Securities Litigation Reform Act of 1995.”

Throughout this Management's Discussion and Analysis (“MD&A”), references to Notes refer to the "Notes To (Unaudited) Condensed Consolidated Financial Statements" in Part 1, Item 1 of this Form 10-Q, unless otherwise indicated.

BUSINESS OVERVIEW

Strategy

The Company is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions (i.e. automatic doors and commercial locking systems), electronic security and monitoring systems, healthcare solutions, engineered fastening systems and products and services for various industrial applications. The Company is continuing to pursue a growth and acquisition strategy that involves industry, geographic and customer diversification to foster sustainable revenue, earnings and cash flow growth. The Company is focused on growing organically, including increasing its presence in emerging markets, with a goal of generating greater than 20% of annual revenues from those markets, and leveraging the Stanley Fulfillment System, a now expanded program ("SFS2.0") focused on upgrading innovation and digital capabilities while maintaining commercial and supply chain excellence, and funding required investments through functional transformation. In June 2016, the Company announced the launch of its DEWALT FLEXVOLT ™ battery system representing the first major output of the SFS2.0 Breakthrough Innovation initiative. This new battery technology changes voltages as the user changes tools, allowing for 20V - 60V - 120V (when two batteries are combined) power all within the same battery system, which is fully backward compatible with the Company's existing 20V line of cordless tools.

In regards to acquisitions in the near-term, the Company intends to pursue targets that consolidate the tool industry and expand the Industrial platform in Engineered Fastening and Infrastructure. The Company remains focused on improving the operating results of the Security business and plans to communicate its strategic fit during the second half of 2016.

In terms of capital allocation, the Company remains committed, over time, to returning approximately 50% of free cash flow to shareholders through a strong and growing dividend as well as opportunistically repurchasing shares. The remaining free cash flow (approximately 50%) will be deployed towards acquisitions. Since the beginning of the fourth quarter of 2014, the Company has reduced its share count by the equivalent of approximately $1.5 billion worth of shares by utilizing both cash and equity derivatives.

Refer to the “Strategic Objectives” section of Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the year ended January 2, 2016 for additional strategic discussions.

Segments

The Company's operations are classified into three reportable business segments, which also represent its operating segments: Tools & Storage, Security and Industrial.

Tools & Storage

The Tools & Storage segment is comprised of the Power Tools and Hand Tools & Storage businesses. Revenues in the Tools & Storage segment were $7.1 billion in 2015, representing 64% of the Company’s total revenues.

The Power Tools business includes professional products, consumer products and power tool accessories. Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the BLACK+DECKER brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, and home products such as hand-held vacuums, paint tools and cleaning appliances. Power tool accessories include drill bits, router bits, abrasives and saw blades.

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The Hand Tools & Storage business sells measuring, leveling and layout tools, planes, hammers, demolition tools, knives, saws, chisels and industrial and automotive tools. Storage products include tool boxes, sawhorses, medical cabinets and engineered storage solution products.

Security

The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. Revenues in the Security segment were $2.1 billion in 2015, representing 19% of the Company’s total revenues.

The CSS business designs, supplies and installs electronic security systems and provides electronic security services, including alarm monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which include asset tracking solutions, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products.

The MAS business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems, tubular and mortise door locksets.

Industrial

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. Industrial segment revenues totaled $1.9 billion in 2015, representing 17% of the Company’s total revenues.

The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners.

The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides pipeline inspection services. The Hydraulics business sells hydraulic tools and accessories.

2016 Outlook

This outlook discussion is intended to provide broad insight into the Company’s near-term earnings and cash flow generation prospects. The Company is raising its previously communicated guidance on diluted earnings per share to $6.30 to $6.50 from $6.20 to $6.40, and is maintaining its free cash flow conversion estimate, defined as free cash flow divided by net income, of approximately 100%. The revised EPS outlook reflects the net favorable impact of stronger organic growth within the Tools & Storage business, which is expected to more than offset weaker Industrial growth, combined with incremental cost and productivity actions, which in the aggregate more than offset higher currency headwinds and other incremental costs. As such, the Company is increasing its organic sales growth outlook for the year from approximately 3-4% to approximately 4%.

RESULTS OF OPERATIONS

Net Sales: Net sales were $2.932 billion in the second quarter of 2016 compared to $2.867 billion in the second quarter of 2015, representing an increase of 2%. Volume and price increased 3% and 1%, respectively, and were partially offset by a 2% decrease due to negative impacts from foreign currency. Tools & Storage net sales increased 5% compared to the second quarter of 2015 with strong organic growth of 8%, driven by continued solid growth across all regions, partially offset by foreign currency pressure of 3%. Net sales in the Security segment increased 1% compared to the second quarter of 2015 driven by organic growth of 1%, mainly due to strong results in Europe, and bolt-on, recurring revenue acquisitions of 1%, which were partially offset by foreign currency declines of 1%. Industrial net sales decreased 6% compared to the second quarter of 2015 primarily due to volume declines in each of its businesses as a result of challenging industrial market conditions combined with lower electronics volumes attributable to one major customer in the Engineered Fastening business.

Net sales were $5.605 billion in the first half of 2016 compared to $5.497 billion in the first half of 2015, representing an increase of 2%. Volume and price increased 3% and 1%, respectively, and were partially offset by a 2% decrease due to negative impacts from foreign currency. Tools & Storage net sales increased 5% compared to the first half of 2015 due to strong organic growth of 8%, driven by solid growth across all regions, partially offset by foreign currency pressure of 3%. Net sales in the Security segment were flat compared to the first half of 2015 as modest organic growth was offset by foreign currency declines. Industrial net sales declined 6% compared to the first half of 2015 primarily due to a 5% decrease in volume,

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which was mainly driven by anticipated organic declines in Engineered Fastening as a result of lower industrial and electronics volumes and within the Infrastructure businesses due to a slowdown in Oil & Gas off-shore project activity and a difficult scrap steel market, and a 1% decrease from foreign currency pressures.

Gross Profit: Gross profit was $1,128.9 million, or 38.5% of net sales, in the second quarter of 2016 compared to $1,057.2 million, or 36.9% of net sales, in the second quarter of 2015. Gross profit was $2,106.5 million, or 37.6% of net sales, in the first half of 2016 compared to $2,030.8 million, or 36.9% of net sales, in the first half of 2015. The year-over-year increase in the profit rate in each period was driven by price, productivity, cost actions and commodity deflation, which more than offset unfavorable currency.

SG&A Expenses: SG&A, inclusive of the provision for doubtful accounts, was $666.9 million, or 22.7% of net sales, in the second quarter of 2016 compared to $644.5 million, or 22.5% of net sales, in the second quarter of 2015. On a year-to-date basis, SG&A, inclusive of the provision for doubtful accounts, was $1,294.7 million, or 23.1% of net sales, in 2016 compared to $1,267.5 million, or 23.1% of net sales, in 2015. The rate in each period was consistent year-over-year reflecting continued tight cost management while making operating cost investments in key SFS2.0 initiatives.

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable.

Corporate Overhead: The corporate overhead element of SG&A, which is not allocated to the business segments, amounted to $47.0 million, or 1.6% of net sales, and $38.4 million, or 1.3% of net sales, in the second quarter of 2016 and 2015, respectively. On a year-to-date basis, the corporate overhead element of SG&A amounted to $95.4 million, or 1.7% of net sales, in 2016 compared to $74.1 million, or 1.3% of net sales, in the corresponding period of 2015. The year-over-year change in each period was primarily due to increased investments in SFS2.0 initiatives and higher employee-related costs.

Other, net: Other, net expense amounted to $47.6 million in the second quarter of 2016 compared to $50.5 million in the second quarter of 2015. On a year-to-date basis, Other, net expense amounted to $93.8 million in 2016 compared to $114.2 million in 2015. The year-over-year decrease in each period was primarily driven by reduced negative impacts of foreign currency and lower amortization expense.

Interest, net: Net interest expense was $42.2 million in the second quarter of 2016 compared to $43.2 million in the second quarter of 2015. On a year-to-date basis, net interest expense of $83.7 million in 2016 was relatively consistent with net interest expense of $83.9 million in 2015.

Income Taxes:The Company recognized income tax expense of $90.5 million and $156.0 million for the three and six months ended July 2, 2016, respectively, resulting in effective tax rates of 25.0% and 25.3%, respectively. The effective tax rates differ from the U.S. statutory tax rate during these periods primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions, the finalization of audit settlements during the first quarter of 2016, and adjustments to tax positions relating to undistributed foreign earnings during the second quarter of 2016.

The Company recognized income tax expense of $78.5 million and $133.8 million for the three and six ended July 4, 2015, respectively, resulting in an effective tax rate of 25.0% for each period. The effective tax rate differed from the U.S. statutory tax rate during these periods primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions and the reversal of valuation allowances during the second quarter of 2015 for certain foreign deferred tax assets which had become realizable.

Business Segment Results

The Company’s reportable segments are aggregations of businesses that have similar products, services and end markets, among other factors. The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, other, net (inclusive of intangible asset amortization expense), restructuring charges, interest income, interest expense, and income tax expense. Corporate overhead is comprised of world headquarters facility expense, cost for the executive management team and the expense pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Refer to Note N, Restructuring Charges, for the amount of net restructuring charges attributable to each segment. The Company's operations are classified into three reportable business segments, which also represent its operating segments: Tools & Storage, Security and Industrial.

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Tools & Storage:

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
Net sales	$	1,931.6		$	1,839.5		$	3,638.5		$	3,471.6
Segment profit	$	362.5		$	301.6		$	624.5		$	558.4
% of Net sales	18.8		%	16.4		%	17.2		%	16.1		%

Tools & Storage net sales increased $92.1 million, or 5%, in the second quarter of 2016 compared to the second quarter of 2015. Organic sales were strong, up 8% as all regions posted solid organic growth with North America +7%, Europe +14%, and emerging markets +4%, while unfavorable effects of foreign currency decreased net sales by 3%. Share gains in North America continued amidst a still healthy underlying U.S. construction tool market aided by solid commercial execution and new products, overcoming modest pressure within industrial channels. Organic growth momentum in Europe continued with most markets up double digits, as new products, targeted growth investments and an expanded retail footprint generated share gains across the region. Organic growth within the emerging markets, which continue to remain challenging, reflects successful commercial execution surrounding the Company's mid-price-point product releases as well as regional pricing actions.

On a year-to-date basis, net sales increased$166.9 million, or 5%, in the first half of 2016 compared to the first half of 2015. Organic sales increased 8% primarily due to organic growth of 8% in North America, 9% in Europe, and 6% in emerging markets, while negative impacts from foreign currency decreased net sales by 3%.

Segment profit for the second quarter of 2016 was $362.5 million, or 18.8% of net sales, compared to $301.6 million, or 16.4% of net sales, in the second quarter of 2015. The increase in the segment profit rate was mainly due to volume leverage, price, productivity, cost management, and lower commodity prices, which more than offset currency.

Year-to-date segment profit for the Tools & Storage segment was $624.5 million, or 17.2% of net sales, in 2016 compared to $558.4 million, or 16.1% of net sales, in the corresponding 2015 period. The increase in the segment profit rate was primarily due to the same factors that impacted the second quarter as discussed above.

Security:

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
Net sales	$	537.7		$	533.3		$	1,041.9		$	1,042.9
Segment profit	$	67.7		$	55.2		$	127.9		$	110.0
% of Net sales	12.6		%	10.4		%	12.3		%	10.5		%

Security net sales increased $4.4 million, or 1%, in the second quarter of 2016 compared to the second quarter of 2015, as 1% increases in both price and bolt-on, recurring revenue acquisitions were partially offset by a 1% decline due to foreign currency. Europe continued its momentum posting 3% organic growth on higher installation revenues across much of the region, while North America organic revenues declined 2% due primarily to lower volumes within the commercial electronic business which more than offset higher automatic door revenues.

On a year-to-date basis, net sales decreased $1.0 million in the first half of 2016 compared to the first half of 2015, as strong organic growth in Europe was offset by organic declines in North America and a 1% decrease due to foreign currency.

Security segment profit for the second quarter of 2016 was $67.7 million, or 12.6% of net sales, compared to $55.2 million, or 10.4% of net sales, in the second quarter of 2015, as improved operating performance continued in both North America and Europe.

Year-to-date segment profit for the Security segment was $127.9 million, or 12.3% of net sales, in 2016 compared to $110.0 million, or 10.5% of net sales, in the corresponding 2015 period. The year-over-year increase in the segment profit rate was mainly driven by improved operating performance in both North America and Europe.

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Industrial:

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
Net sales	$	463.1		$	494.1		$	924.1		$	982.4
Segment profit	$	78.8		$	94.3		$	154.8		$	169.0
% of Net sales	17.0		%	19.1		%	16.8		%	17.2		%

Industrial net sales decreased $31.0 million, or 6%, in the second quarter of 2016 compared to the second quarter of 2015, due to lower volumes. Engineered Fastening organic revenues declined 4% due primarily to lower electronics volumes relating to one major customer as well as lower general industrial volumes. Infrastructure organic revenues decreased 11% due to a slowdown in Oil & Gas off-shore project activity as well as the impact of a difficult scrap steel market on Hydraulic Tools volumes.

On a year-to-date basis, net sales decreased $58.3 million, or 6%, in the first half of 2016 compared to the first half of 2015, due to a 5% decline in volumes and a 1% decline from foreign currency pressures. Engineered Fastening organic revenues declined 4% due primarily to lower electronics and industrial volumes. Infrastructure organic revenues declined 6%, which was primarily due to the same factors that impacted the second quarter as discussed above.

Industrial segment profit for the second quarter of 2016 was $78.8 million, or 17.0% of net sales, compared to $94.3 million, or 19.1% of net sales, in the second quarter of 2015, as lower volumes and currency more than offset productivity gains and cost control.

Year-to-datesegment profit for the Industrial segment was $154.8 million, or 16.8% of net sales, in 2016 compared to $169.0 million, or 17.2% of net sales, in the corresponding 2015 period. The year-over-year decrease in the rate was primarily driven by the same factors that impacted the second quarter as discussed above.

RESTRUCTURING ACTIVITIES

A summary of the restructuring reserve activity from January 2, 2016 to July 2, 2016 is as follows:

(Millions of Dollars)	January 2, 2016		Net Additions		Usage			Currency			July 2, 2016
Severance and related costs	$	44.3	$	9.7	$	(27.6	)	$	0.3		$	26.7
Facility closures and asset impairments	14.4		8.5		(18.0		)	(0.1		)	4.8
Total	$	58.7	$	18.2	$	(45.6	)	$	0.2		$	31.5

For the six months ended July 2, 2016, the Company recognized net restructuring charges of $18.2 million. This amount reflects $9.7 million of net severance charges associated with the reduction of approximately 602 employees. The Company also recognized $4.2 million of facility closure costs and $4.3 million of asset impairments. For the three months ended July 2, 2016, the Company recognized net restructuring charges of $10.2 million. This amount reflects $6.0 million of net severance charges associated with the reduction of approximately 305 employees. The Company also recognized $4.2 million of facility closure costs. The Company expects these restructuring actions to result in annual net cost savings of approximately $16 million by the end of 2017.

The majority of the $31.5 million of reserves remaining as of July 2, 2016 is expected to be utilized within the next 12 months.

Segments: The $18 million net restructuring charge for the six months ended July 2, 2016 includes: $1 million of net charges pertaining to the Tools & Storage segment; $8 million of net charges pertaining to the Security segment; $4 million of net charges pertaining to the Industrial segment; and $5 million of net charges pertaining to Corporate.

The $10 million net restructuring charge for the three months ended July 2, 2016 includes: $7 million of net charges pertaining to the Security segment; $2 million of net charges pertaining to the Industrial segment; and $1 million of net charges pertaining to Corporate.

The anticipated annual net cost savings of approximately $16 million relating to the 2016 restructuring actions include: $4 million pertaining to the Tools & Storage segment; $5 million relating to the Security segment; and $7 million pertaining to the Industrial segment.

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FINANCIAL CONDITION

Liquidity, Sources and Uses of Capital: The Company’s primary sources of liquidity are cash flows generated from operations and available lines of credit under various credit facilities. The Company's cash flows are presented on a consolidated basis and include cash flows from discontinued operations in the first half of 2015.

Operating Activities: Cash flows provided by operations were $496.4 million in the second quarter of 2016 compared to $312.6 million in the second quarter of 2015. The year-over-year improvement was primarily driven by higher earnings and changes in working capital (accounts receivable, inventory, accounts payable and deferred revenue). Working capital resulted in cash inflows of $57.6 million in the second quarter of 2016 compared to cash outflows of $50.5 million in the second quarter of 2015. The improvement in working capital cash flows was mainly driven by a continued focus on inventory and receivables levels.

Year-to-date cash flows provided by operations were $403.3 million in the first half of 2016 compared to $115.1 million in the corresponding period of 2015. The increase in operating cash flows in the first half of 2016 was primarily driven by higher earnings and improved working capital cash flows due to improved inventory and receivables levels.

Free Cash Flow: Free cash flow, as defined in the following table, was $417.7 million in the second quarter of 2016 compared to $246.9 million in the second quarter of 2015. Free cash flow on a year-to-date basis was $259.7 million in 2016 compared to $3.5 million in 2015. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and provide a dividend to shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items.

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
Net cash provided by operating activities	$	496.4		$	312.6		$	403.3		$	115.1
Less: capital expenditures	(78.7		)	(65.7		)	(143.6		)	(111.6		)
Free cash flow	$	417.7		$	246.9		$	259.7		$	3.5

Based on its potential to generate cash flow from operations on an annual basis and credit position at July 2, 2016, the Company continues to believe over the long term it has the financial flexibility to deploy capital to its shareowners’ advantage through a combination of acquisitions, dividends and potential future share repurchases.

Investing Activities: Cash flows used in investing activities were $82.0 million in the second quarter of 2016, which mainly consisted of capital and software expenditures of $78.7 million. Cash flows used in investing activities totaled $29.9 million in the second quarter of 2015 primarily due to capital and software expenditures of $65.7 million, which were partially offset by cash proceeds from net investment hedge settlements of $33.5 million.

Year-to-date cash flows used in investing activities were $163.7 million in 2016, which mainly consisted of capital and software expenditures of $143.6 million and bolt-on, recurring revenue acquisitions of $21.0 million. Cash flows used in investing activities totaled $54.5 million in 2015 primarily due to capital and software expenditures of $111.6 million, which were partially offset by cash proceeds from net investment hedge settlements of $63.9 million.

Financing Activities: Cash flows used in financing activities totaled $165.9 million in the second quarter of 2016 primarily due to $132.9 million in net repayments of short-term borrowings under the Company's commercial paper program and $79.8 million of cash dividend payments, partially offset by $27.0 million of cash proceeds relating to the termination of interest rate swaps and $23.7 million of proceeds from issuances of common stock. Cash flows used in financing activities in the second quarter of 2015 were $329.8 million due to $180.2 million in net repayments of short-term borrowings, $100.0 million of share repurchases and $76.8 million of cash payments for dividends, partially offset by $31.7 million of proceeds from issuances of common stock.

Year-to-date cash flows used in financing activities were $121.4 million in 2016 primarily due to repurchases of approximately 3.8 million common shares for $362.1 million and cash dividend payments of $159.4 million, partially offset by net proceeds of $348.3 million from short-term borrowings, $32.2 million from issuances of common stock, and $27.0 million relating to the termination of interest rate swaps. Cash flows used in financing activities in 2015 were $123.2 million resulting primarily from repurchases of common stock of $448.0 million and cash dividend payments of $159.5 million, partially offset by net proceeds from short-term borrowings of $418.7 million and cash proceeds from the issuances of common stock of $74.7 million.

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Credit Ratings & Liquidity:

The Company maintains strong investment grade credit ratings from the major U.S. rating agencies on its senior unsecured debt (S&P A, Fitch A-, Moody's Baa1), as well as its commercial paper program (S&P A-1, Fitch F2, Moody's P-2). There have been no changes to any of the ratings during the second quarter of 2016. Failure to maintain strong investment grade rating levels could adversely affect the Company’s cost of funds, liquidity and access to capital markets, but would not have an adverse effect on the Company’s ability to access committed credit facilities.

Cash and cash equivalents totaled $568 million as of July 2, 2016, comprised of $56 million in the U.S. and $512 million in foreign jurisdictions. As of January 2, 2016, cash and cash equivalents totaled $465 million, comprised of $131 million in the U.S. and $334 million in foreign jurisdictions. Concurrent with the Black & Decker merger, the Company made a determination to repatriate certain legacy Black & Decker foreign earnings, on which U.S. income taxes had not previously been provided. As a result of this repatriation decision, the Company has recorded approximately $298 million and $320 million of associated deferred tax liabilities at July 2, 2016 and January 2, 2016, respectively. Current plans and liquidity requirements do not demonstrate a need to repatriate other foreign earnings. Accordingly, all other undistributed foreign earnings of the Company are considered to be permanently reinvested, or will be remitted substantially free of additional tax, consistent with the Company’s overall growth strategy internationally, including acquisitions and long-term financial objectives. No provision has been made for taxes that might be payable upon remittance of these undistributed foreign earnings. However, should management determine at a later point to repatriate additional foreign earnings, the Company would be required to accrue and pay taxes at that time.

The Company has a five-year $1.75 billion committed credit facility (the “Credit Agreement”). Borrowings under the Credit Agreement may include U.S. Dollars up to the $1.75 billion commitment or in Euro or Pounds Sterling subject to a foreign currency sub-limit of $400.0 million and bear interest at a floating rate dependent upon the denomination of the borrowing. Repayments must be made on December 18, 2020 or upon an earlier termination date of the Credit Agreement, at the election of the Company. The Credit Agreement is designated to be a liquidity back-stop for the Company's $2.0 billion commercial paper program. As of July 2, 2016, the Company has not drawn on this commitment. In addition, the Company has short-term lines of credit that are primarily uncommitted, with numerous banks, which are reviewed annually for renewal.

In March 2015, the Company entered into a forward share purchase contract on its common stock. The contract obligates the Company to pay $350.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than March 2017, or earlier at the Company’s option, for the 3,645,510 shares purchased. In October 2014, the Company entered into a forward share purchase contract on its common stock that obligates the Company to pay $150.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than October 2016, or earlier at the Company’s option, for the 1,603,822 shares purchased.

On February 10, 2015, the Company net-share settled 9.1 million of the 12.2 million capped call options on its common stock and received 911,077 shares using an average reference price of $96.46 per common share. Additionally, the Company purchased 3,381,162 shares directly from the counterparties participating in the net-share settlement of the capped call options for $326.1 million, equating to an average price of $96.46 per share. In February 2016, the Company net-share settled the remaining 3.1 million capped call options on its common stock and received 293,142 shares using an average reference price of $94.34 per common share. Additionally, the Company purchased 1,316,858 shares directly from the counterparty participating in the net-share settlement for $124.2 million. The Company also repurchased 2,446,287 shares of common stock in February 2016 for $230.9 million, equating to an average price of $94.34.

On December 3, 2013, the Company issued $400.0 million 5.75% fixed-to-floating rate junior subordinated debentures maturing December 15, 2053 (“2053 Junior Subordinated Debentures”) that bear interest at a fixed rate of 5.75% per annum, up to, but excluding December 15, 2018. From and including December 15, 2018, the 2053 Junior Subordinated Debentures will bear interest at an annual rate equal to three-month LIBOR plus 4.304%. The debentures subordination and long tenor provides significant credit protection measures for senior creditors and as a result, the debentures were awarded a 50% equity credit by S&P and Fitch, and 25% equity credit by Moody's. The net proceeds of $392.0 million from the offering were primarily used to repay commercial paper borrowings.

On December 3, 2013, the Company issued 3,450,000 Equity Units (the “Equity Units”), each with a stated value of $100 which are initially comprised of a 1/10, or 10%, undivided beneficial ownership in a $1,000 principal amount 2.25% junior subordinated note due 2018 and a forward common stock purchase contract (the “Equity Purchase Contract”). Each Equity Purchase Contract obligates the holders to purchase on November 17, 2016 approximately 3.5 to 4.3 million common shares. The subordination of the notes in the Equity Units combined with the Equity Purchase Contracts resulted in the Equity Units being awarded a 100% equity credit by S&P, and 50% equity credit by Moody's. The Company received $334.7 million in cash

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proceeds from the Equity Units, net of underwriting discounts and commission, before offering expenses, and recorded $345.0 million in long-term debt. The proceeds were used primarily to repay commercial paper borrowings. Upon settlement of the Equity Purchase Contracts on November 17, 2016, the Company expects to receive additional cash proceeds of $345.0 million.

Refer to Note G, Long-Term Debt and Financing Arrangements, and Note I, Equity Arrangements, for further discussion of the Company's financing arrangements.

OTHER MATTERS

Critical Accounting Estimates: There have been no significant changes in the Company’s critical accounting estimates during the second quarter of 2016. Refer to the “Other Matters” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Form 10-K for the year ended January 2, 2016 for a discussion of the Company’s critical accounting estimates.

CEO Transition: The Board of Directors of Stanley Black & Decker announced that Mr. Lundgren, who will turn 65 in September, will retire as CEO after more than 12 years with the Company, effective July 31, 2016.  Mr. Lundgren will continue as Chairman of the Board until the end of the year and serve as Special Advisor to the Company through April 30, 2017.  James M. Loree, currently President and Chief Operating Officer, will succeed Mr. Lundgren as President and CEO on August 1, 2016 and join the Board at that time.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no significant change in the Company’s exposure to market risk during the second quarter of 2016. Refer to the “Market Risk” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Form 10-K for the year ended January 2, 2016 for further discussion.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, including the Company’s Chairman and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, the Company has, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined under Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s Chairman and Chief Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that, as of July 2, 2016, the Company’s disclosure controls and procedures are effective. There has been no change in the Company’s internal control over financial reporting that occurred during the second quarter of 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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CAUTIONARY STATEMENT

Under the Private Securities Litigation Reform Act of 1995

Statements in this Quarterly Report on Form 10-Q that are not historical, including but not limited to those regarding the Company’s ability to: (i) generate greater than 20% of annual revenues from emerging markets; (ii) achieve full year 2016 diluted EPS of approximately $6.30 to $6.50; (iii) achieve free cash flow conversion of approximately 100% for 2016; and (iv) return approximately 50% of free cash flow to shareholders through a strong and growing dividend, as well as opportunistically repurchasing its shares, with the remaining 50% deployed toward acquisitions; (collectively, the “Results”) are “forward-looking statements” and subject to risk and uncertainty.

The Company’s ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this Quarterly Report, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward-looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company’s Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company’s other filings with the Securities and Exchange Commission, and those set forth below.

The Company’s ability to deliver the Results is dependent, or based, upon: (i) the Company’s ability to deliver organic growth of approximately 4% and generate savings from incremental productivity and cost actions of approximately $0.55 - $0.60 of EPS for 2016; (ii) the Company’s ability to deliver sufficient working capital turns expansion to achieve free cash flow conversion of approximately 100% in 2016; (iii) the Company’s ability to keep the impact to EPS of restructuring charges in 2016 to approximately $0.25; (iv) foreign currency exchange headwinds being at approximately $150 million in 2016; (v) the Company’s ability to achieve a tax rate relatively consistent with the 2015 tax rate; (vi) the Company’s ability to keep the impact to EPS of incremental costs associated with the new DEWALT FLEXVOLT ™ product launch to approximately $0.05; (vii) the successful identification and integration of, and realization of revenue synergies associated with, acquisitions, as well as integration of existing businesses and formation of new business platforms; (viii) the continued acceptance of technologies used in the Company’s products and services (including the new DEWALT FLEXVOLT ™ product); (ix) the Company’s ability to manage existing Sonitrol franchisee and Mac Tools relationships; (x) the Company’s ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xi) the proceeds realized with respect to any business or product line disposals; (xii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiii) the success of the Company’s efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xiv) the Company’s ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xv) the Company’s ability to generate free cash flow and maintain a strong debt to capital ratio; (xvi) the Company’s ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xvii) the Company’s ability to obtain favorable settlement of tax audits; (xviii) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible, including realizing tax credit carry forward amounts within the allowable carry forward periods; (ix) the continued ability of the Company to access credit markets under satisfactory terms; (xx) the Company’s ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxi) the Company’s ability to successfully develop, market and achieve sales from new products and services; and (xxii) the availability of cash to repurchase shares when conditions are right.

The Company’s ability to deliver the Results is also dependent upon: (i) the success of the Company’s marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company’s manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company’s ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company’s efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi, Canadian Dollar, Euro, British Pound, Brazilian Real, or other currency fluctuations; (vi) the geographic distribution of the Company’s earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.

The Company’s ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment, possibly including impact from "Brexit" or other similar actions by other EU member states; the economic environment of emerging markets, particularly Latin America, Russia, China and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company’s customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company’s debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company’s supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.

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PART II — OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors as disclosed in the Company’s Form 10-K for the year ended January 2, 2016 filed with the Securities and Exchange Commission on February 19, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information about the Company’s purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the three months ended July 2, 2016:

2016	(a) Total Number Of Shares Purchased	Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of A Publicly Announced Program	Maximum Number Of Shares That May Yet Be Purchased Under The Program
April 3 - May 7	5,041	$	105.62	—	—
May 8 - June 4	1,178	113.00		—	—
June 5 - July 2	708	111.76		—	—
	6,927	$	107.50	—	—

(a) The shares of common stock in this column were deemed surrendered to the Company by participants in various benefit plans of the Company to satisfy the participants’ taxes related to vesting or delivery of time-vesting restricted share units under those plans.

On July 23, 2014, the Board of Directors approved a new repurchase of up to 25 million shares of the Company's common stock. As of July 2, 2016, the remaining authorized shares for repurchase is 12.0 million shares. Furthermore, approximately 5.2 million shares are reserved for purchase in connection with the forward share purchase contracts entered into in October 2014 and March 2015, which obligate the Company to pay $150.0 million and $350.0 million, respectively, plus additional amounts related to the forward component of the contracts to the financial institution counterparties not later than October 2016 and March 2017, respectively, or earlier at the Company's option. For further detail on these transactions, refer to Note I, Equity Arrangements, of the Notes to (Unaudited) Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

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ITEM 6. EXHIBITS

(10.1	)	Letter Agreement, dated July 21, 2016, between Stanley Black & Decker, Inc. and James M. Loree.
(10.2	)	Second Amended and Restated Change in Control Severance Agreement, dated July 21, 2016, between Stanley Black & Decker, Inc. and James M. Loree.
(10.3	)	Executive Retirement Agreement, dated July 21, 2016, between Stanley Black & Decker, Inc. and John F. Lundgren.
(10.4	)	Second Amended and Restated Change in Control Severance Agreement, dated July 21, 2016, between Stanley Black & Decker, Inc. and John F. Lundgren.
(11	)	Statement re-computation of per share earnings (the information required to be presented in this exhibit appears in Note C to the Company’s (Unaudited) Condensed Consolidated Financial Statements set forth in this Quarterly Report on Form 10-Q).
(31)(i)(a)		Certification by Chairman and Chief Executive Officer pursuant to Rule 13a-14(a).
(i)(b)		Certification by Senior Vice President and Chief Financial Officer pursuant to Rule 13a-14(a).
(32)(i)		Certification by Chairman and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(ii)		Certification by Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(101	)	The following materials from Stanley Black & Decker Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 2, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Statements of Operations and Comprehensive Income for the three and six months ended July 2, 2016 and July 4, 2015; (ii) Condensed Consolidated Balance Sheets at July 2, 2016 and January 2, 2016; (iii) Condensed Consolidated Statements of Cash Flows for the three and six months ended July 2, 2016 and July 4, 2015; and (iv) Notes to (Unaudited) Condensed Consolidated Financial Statements**.

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		STANLEY BLACK & DECKER, INC.
Date:	July 25, 2016	By:	/s/ DONALD ALLAN, JR.
			Donald Allan, Jr.
			Senior Vice President and Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

July 21, 2016

James M. Loree

Stanley Black & Decker, Inc.

1000 Stanley Drive

New Britain, Connecticut 06053

Dear Jim:

The Board of Directors of Stanley Black & Decker, Inc. (the “Company”) has determined that it is in the best interests of the Company and its shareholders for you to be appointed as the Company’s Chief Executive Officer (“CEO”). We are pleased to summarize the terms of your new position in this letter:

1.You will become CEO, and a member of the Board of Directors of the Company (“Board”), on August 1, 2016. You will also continue to serve as President of the Company (“President”).

2.Your initial compensation as CEO will consist of the following:

• Your annual salary rate will be increased to $1,200,000.

• The 2016 annual cash bonus award granted to you in March 2016 pursuant to the Management Incentive Compensation Plan (“MICP”) will continue to remain in effect and your target bonus opportunity under such award will continue to be 100% of your base salary on January 1, 2016. Your target bonus opportunity for fiscal year 2017 will be 150% of your annual base salary in effect on January 1, 2017. Your annual cash bonus opportunities for subsequent fiscal years will be determined by the Board.

• In connection with your promotion, you will receive a special grant of stock options with an aggregate grant date value (as determined for financial reporting purposes) equal to $3 million, vesting ratably based on your continued employment with the Company (but not based on the attainment of performance conditions) over a four-year period on each anniversary of the grant date, and having other terms determined by the Board. Such stock options (along with your annual equity compensation awards described below) will be granted pursuant to the Company’s 2013 Long-Term Incentive Plan or a successor thereto.

• Following your promotion, you will be eligible to receive annual equity compensation awards as determined by the Board. Such annual equity compensation awards will be granted to you at the same time that annual equity grants are made to senior executives of the Company. In December 2016, you will receive awards of stock options and restricted stock units with an aggregate grant date value (as determined for financial reporting purposes) ranging from

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approximately $3.7 million to approximately $4.0 million. With respect to fiscal year 2017, it is expected that you will receive equity awards with a target aggregate grant date value (as determined for financial reporting purposes) of approximately $8 million. At least 50% of the grant date value of annual equity awards granted each year will consist of performance share units, while the balance will consist of a mix of stock options and restricted stock units or other instruments determined by the Board in its sole discretion from time to time.

• You will be eligible to participate in the employee benefit plans and perquisite programs (including paid time off) provided to other senior executives in accordance with the Company’s plans and policies. In addition, you will continue to participate in the Company’s Supplemental Executive Retirement Plan.

• The benefits, policies and compensation programs referenced in this Section 2 may be terminated or amended from time to time.

3.Your employment as CEO of the Company is “at will” and may be terminated by the Company or you at any time for any reason. Upon your termination of employment, the Company will pay you any earned but unpaid base salary, as well as any earned annual bonus with respect to a prior fiscal year that has not been paid.

If the Company terminates your employment for any reason other than for Cause (each capitalized term used but not defined in this letter has the meaning given in Exhibit A), death or Disability, or you terminate your employment for Good Reason, then (A) on the sixtieth (60^th) day following your termination date, the Company will pay to you a lump sum in cash equal to two times the sum of (i)  your then-current annual salary plus (ii) your annual bonus target amount for the year in which your termination occurs and (B) the Company will provide or arrange to provide you and your eligible dependents, at no greater cost to you than if you were an active employee of the Company, medical, dental, life, vision and prescription drug insurance benefits no less favorable than those provided to senior executives of the Company and their eligible dependents, in each case for twenty-four (24) months following your termination, or, if sooner, until you become eligible for such benefits from a new employer (of which you will promptly notify the Company).

The severance benefits described above are subject to your (i) executing and delivering a customary mutual waiver and release of claims specified by the Company, and such waiver and release becoming irrevocable, not later than 60 days after your date of termination and (ii) compliance with the noncompetition and other restrictive covenants set forth in Exhibit B.

Notwithstanding anything herein to the contrary, unless your employment is earlier terminated by you or the Company, (A) you will be deemed to have given notice to the Board, on the date that you attain age 65, that you intend to retire from all positions with the Company and its subsidiaries on the 30th day following the date of such deemed notice (the “Retirement Date”) and (B) your employment as CEO and President, along with all other positions that you hold with the Company and its subsidiaries and affiliates (including, unless otherwise mutually agreed by you and the Board, as a member of the Board), will automatically terminate, effective as of the Retirement Date, without any further action on your part.

Upon termination of your employment with the Company for any reason, you will be deemed to have resigned, effective as of your date of termination, from all positions with the Company

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and its subsidiaries (including, unless otherwise mutually agreed by you and the Board, as a member of the Board), and you will execute any additional documentation that is requested by the Company.

4.You agree to comply with the confidentiality, nonsolicitation and other restrictive covenants in Exhibit B. The Section 409A compliance principles in Exhibit C will also apply to this letter.

5.The Company will provide you with the indemnification protections described in Exhibit D.

6.You agree that (A) you will be subject to the Company’s Stock Ownership Guidelines for Executive Officers, as amended from time to time (the “Stock Ownership Guidelines”) and (B) the initial target ownership requirement applicable to you under the Stock Ownership Guidelines will be six (6) times your annual base salary (as in effect from time to time). The target ownership requirement applicable to you under the Stock Ownership Guidelines may be adjusted from time to time by the Board in its sole discretion.

7.This letter will be governed by, and construed in accordance with, the laws of the State of Connecticut, without reference to principles of conflict of laws. Except for the Company’s right to seek injunctive relief, all disputes arising in connection with this letter will be settled by expedited arbitration conducted before a panel of three (3) arbitrators sitting in Hartford, Connecticut, in accordance with the rules of the American Arbitration Association then in effect. The decision of the arbitrators in that proceeding will be binding on you and the Company. Judgment may be entered on the award of the arbitrators in any court having jurisdiction.

8.The Company and you acknowledge that this letter (together with the Exhibits hereto) constitutes the entire understanding between the Company and you with respect to the subject matter hereof and supersedes any other prior agreement or other understanding, whether oral or written, express or implied, concerning the same. This letter supersedes in its entirety the Employment Agreement, dated November 2, 2009, between the Company and you. This letter is personal to you and is not assignable by you, and will be binding upon the Company and its successors.

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Sincerely,

STANLEY BLACK & DECKER, INC.
By:
	Name: Bruce H. Beatt
	Title: Senior Vice President, General Counsel & Secretary

JAMES M. LOREE

By:

[SIGNATURE PAGE TO EMPLOYMENT LETTER]

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EXHIBIT A

DEFINITIONS

“Cause” means (A) your willful and continued failure to substantially perform your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness) that has not been cured within thirty (30) calendar days after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (B) the willful engaging by you in conduct which is demonstrably and materially injurious to the Company or its affiliates, (C) your conviction of (or plea of nolo contendere to) any felony or any other crime involving dishonesty, fraud or moral turpitude, (D) any violation of the Company’s policies relating to compliance with applicable laws that has a material adverse effect on the Company or its affiliates or (E) your material breach of any restrictive covenant set forth in this letter.

“Change in Control Severance Agreement” means the Second Amended and Restated Change in Control Severance Agreement, dated as of the date hereof, between the Company and you, as further amended.

“Disability” means you are disabled within the meaning of the Company’s long-term disability policy for salaried employees (or any successor thereto) or, if there is no such policy in effect, if (A) you are unable to substantially perform your duties hereunder for 120 business days within a period of 180 consecutive business days as a result of physical or mental illness or injury, and (B) a physician selected by the Company and you (or your estate) has determined that you are totally and permanently disabled.

“Good Reason” means the occurrence, without your consent, of any of the following circumstances: (A) the assignment to you of any duties materially inconsistent with your status as the Company’s Chief Executive Officer or a material adverse alteration in the nature or status of your responsibilities, unless the Company has cured such events within thirty (30) calendar days after the receipt of written notice thereof, (B) failure of the Company to nominate you to, or your removal by the Company from, the Board (in each case, prior to the date you attain age 65), (C) a material breach by the Company of this letter, (D) a reduction in your annual salary or annual bonus target amount, except for across-the-board salary reductions similarly affecting all senior executives of the Company or (E) the Company’s election not to renew the Change in Control Severance Agreement; providedthat, for the avoidance of doubt, the Company’s amendment of the Change in Control Severance Agreement in a manner that does not materially and adversely affect your rights thereunder shall not constitute Good Reason.

A termination of employment by you for Good Reason will be effectuated by giving the Company written notice of the termination, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason, except that no termination by you will be treated as a termination for Good Reason unless the notice is given within forty-five (45) calendar days following the date you first have knowledge of the event or circumstance alleged to constitute Good Reason. A termination of employment by you for Good Reason will be effective thirty (30) calendar days following the date when the notice is given, unless the event or circumstance constituting Good Reason is remedied by the Company in accordance with the foregoing.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulation and other Internal Revenue Service guidance promulgated thereunder.

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EXHIBIT B

RESTRICTIVE COVENANTS

(a)During your employment with the Company and its subsidiaries and at all times thereafter, you will hold in a fiduciary capacity for the benefit of the Company any and all information of the Company and its subsidiaries that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business and any and all information not readily available to the public, which, if disclosed by the Company or its subsidiaries could reasonably be of benefit to such person or business in competing with or doing business with the Company (“Confidential Information”). Confidential Information includes, without limitation, such information relating to the (i) development, research, testing, manufacturing, operational processes, marketing and financial activities, including costs, profits and sales, of the Company and its subsidiaries, (ii) techniques, know how, processes, strategies, systems, databases, applications, programs, software, products and all formulas therefor, (iii) costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) identity and special needs of actual and potential customers and suppliers of the Company and its subsidiaries, (v) people and organizations with whom the Company and its subsidiaries have business relationships and those relationships and (vi) employee identity and lists, and employee compensation and benefits. “Confidential Information” also includes comparable information that the Company or any of its subsidiaries have received belonging to others or which was received by the Company or any of its subsidiaries pursuant to an agreement by the Company that it would not be disclosed.

You hereby acknowledge and agree that (A) Confidential Information is a valuable, special and unique asset of the Company and its subsidiaries and (B) you will not, directly or indirectly, during or at any time after your employment with the Company and its subsidiaries, use or disclose Confidential Information or any part of such Confidential Information in a manner that is inconsistent with your fiduciary responsibilities with respect to the Company and its subsidiaires. You also agree that you will not, at any time during or after your employment with the Company and its subsidiaries, render any services to any person, business, or entity to which Confidential Information will inevitably be disclosed as a result of your rendering of such services.

Notwithstanding the foregoing, this letter is not intended to and shall be interpreted in a manner that does not limit or restrict you from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the U.S. Securities Exchange Act of 1934, as amended).

(b)During your employment with the Company and its subsidiaries and for a period of two (2) years after the date you terminate such employment for any reason (the “Restriction Period”), you will not, without the written consent of the Board, directly or indirectly, as employee, agent, consultant, stockholder, director, manager, co-partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist any person or entity (other than the Company) that engages in or owns, invests in, operates, manages or controls any venture or enterprise that directly or indirectly engages or proposes to engage in any Competitive Business. “Competitive Business” means any line of business that is (i) for purposes of the portion of the Restriction Period that occurs during your employment with the Company and its subsidiaries, substantially the same as any line of any operating business that the Company and its subsidiaries are then engaged in and (ii) with respect to the portion of the Restriction Period that

6

commences on your termination of employment with the Company and its subsidiaries, substantially the same as any line of any operating business that the Company and its subsidiaries are engaged in on the date of termination, in the case of clause (ii), that during the Company’s four preceding fiscal quarters constituted at least 10% of the “net sales” of the Company and its subsidiaries.

(c)During the Restriction Period, you will not, without the written consent of the Board, directly or indirectly, (i) solicit, encourage or induce or attempt to solicit, encourage or induce, any person who provides services to the Company and its subsidiaries, whether as an employee, consultant, independent contractor or agent, or any entity which provides services to the Company and its subsidiaries under an agency relationship, to terminate his, her or its employment, services or other relationship with the Company and its subsidiaries or affiliates or (ii) hire or offer employment or retain the services of any person who was employed by, or provided services to, the Company or any of its subsidiaries within the six (6) month period preceding the date of such hiring or offer of employment or offer to retain services; or (iii) solicit, entice, persuade or induce (in each case, other than pursuant to non-targeted, general advertisements) any person or entity doing business with the Company and its subsidiaries or affiliates, to terminate such relationship or to refrain from extending or renewing the same.

(d)During the Restriction Period, you will not, directly or indirectly, solicit or do business with or attempt to solicit or do business with any customer or prospective customer of the Company and its subsidiaries, whether or not you knew of or had personal contact with such customer or prospective customer while employed by the Company, with respect to activities which compete in whole or in part with the activities of the Company and its subsidiaries. For purposes of this clause (d), (i) “customer” means any person, business, or entity with whom the Company and its subsidiaries transacts business during your employment with the Company or, for purposes of the portion of the Restriction Period occurring after your termination of employment with the Company and its subsidiaries, who transacted business with the Company and its subsidiaries within the twelve (12) month period immediately preceding your date of termination and (ii) “prospective customer” means any person, business, or entity with whom the Company and its subsidiaries makes contact during your employment with the Company and it s subsidiaries or, for purposes of the portion of the Restriction Period occurring after your termination of employment with the Company and its subsidiaries, who made contact within the twelve (12) month period immediately preceding your termination of employment for the purpose of soliciting the sale of goods and/or services of the Company and its subsidiaries.

(e)You will be required to promptly return to the Company upon your date of termination or at any other time the Company may so request, all notes, records, documents, files and memoranda (including in electronic format and all copies of such materials) constituting Confidential Information you may then possess or have under your control; provided, however, that you may retain your personal correspondence, diaries and other items of a personal nature. You may not retain any copies of any Confidential Information or other Company property. You agree not to remove any Company Property or tangible Confidential Information from the premises of the Company and its subsidiaries, except as required in the performance of your work for the Company and its subsidiaries. For purposes of this Agreement, “Company Property” means any property (i) owned by the Company, (ii) situated on the Company’s premises, or (iii) provided to you by the Company and its subsidiaries.

(f)You agree that, in addition to any other remedies available to the Company, the Company will be entitled to injunctive relief in the event of any actual or threatened breach of the restrictive covenants in this Exhibit B without the necessity of posting any bond, it being acknowledged and agreed that any breach or threatened breach such covenants will cause irreparable injury to the Company and that money damages alone will not provide an adequate remedy to the Company. You also

7

agree that the Company will be entitled to recover from you all attorney’s fees, expenses and costs incurred by the Company in connection with your breach or threatened breach of the restrictive covenants in this Exhibit B. If a court of competent jurisdiction determines that any provision or restriction in thisExhibit B is unreasonable or unenforceable, the Company and you agree that such court will modify such restriction or provision so that it becomes a reasonable and enforceable restriction on your activities. If any provision or restriction of this Exhibit B is determined to be unenforceable, the remaining provisions and restrictions shall not be affected by such determination.

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EXHIBIT C

SECTION 409A COMPLIANCE

(a)A termination of employment will not be deemed to have occurred for purposes of any provision of this letter providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” (within the meaning of Section 409A).

(b)Notwithstanding anything to the contrary, if you are a “specified employee” (within the meaning of Section 409A and determined pursuant to procedures adopted by the Company) at the time of your separation from service and if any portion of the payments or benefits to be received by you upon separation from service would be considered deferred compensation under Section 409A, any such portion that would otherwise be payable pursuant to this letter during the six-month period immediately following your separation from service (the “Delayed Payments”) or provided pursuant to this letter (the “Delayed Benefits”) during the six-month period immediately following your separation from service (such period, the “Delay Period”) will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date of your separation from service or (ii) your death (the applicable date, the “Permissible Payment Date”). The Company will reimburse you for the after-tax cost incurred by you in independently obtaining any Delayed Benefits (the “Additional Delayed Payments”); provided, that with respect to reimbursement relating to such Additional Delayed Payments, such reimbursement will be made on the Permissible Payment Date and will be subject to this Exhibit C. Any Delayed Payments will bear interest at the United States 5-year Treasury Rate plus 2%, which accumulated interest will be paid to you on the Permissible Payment Date.

(c)With respect to any amount of expenses eligible for reimbursement under this letter, such expenses will be reimbursed by the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from you but in no event later than December 31 of the year following the year in which you incurs the related expenses.

(d)Any amount of expenses eligible for reimbursement shall be made (A) in accordance with the reimbursement payment date set forth in this letter or (B) where the applicable provision does not provide for a reimbursement date, thirty (30) calendar days following the date on which the expenses are incurred, but, in each case, no later than December 31 of the year following the year in which you incur the related expenses; provided, that in no event will the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor will your right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(e)Each amount payable hereunder shall be considered a “separate payment” and not a series of payments for purposes of Section 409A. The parties intend that each such amount that qualifies for the exception from the definition of “deferred compensation” under Section 1.409A-1(b)(4) (concerning short-term deferrals) and 1.409A-1(b)(9) (concerning separation pay plans) shall be treated as exempt for purposes of paragraph (b) hereof.

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EXHIBIT D

INDEMNIFICATION

To the fullest extent permitted by the Company’s certificate of incorporation and by-laws, or, if greater, by the laws of the State of Connecticut, the Company will promptly indemnify and hold you harmless for all amounts (including, without limitation, judgments, fines, settlement payments, losses, damages, costs, expenses (including reasonable attorneys’ fees), ERISA excise taxes, or other liabilities or penalties and amounts paid or to be paid in settlement) incurred or paid by you in connection with any action, proceeding, suit or investigation (the “Proceeding”) to which you are made a party, or are threatened to be made a party, by reason of the fact that you are or were a director, officer or employee of the Company or you are or were serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, programs or arrangements, whether or not the basis of such Proceeding is your alleged action in an official capacity. Such indemnification will continue even if you have ceased to be a director, employee or agent of the Company or other affiliated entity and will inure to the benefit your heirs, executors and administrators. The Company will advance to you all reasonable costs and expenses incurred by you in connection with a Proceeding within fifteen (15) calendar days after receipt by the Company of a written request from you for such advance. Such request shall include an undertaking by you to timely repay the amount of such advance if it shall ultimately be determined that you are not entitled to be indemnified against such costs and expenses. The Company also agrees to maintain a director’s and officers’ liability insurance policy covering you to the extent the Company provides such coverage for its other senior executive officers. Following your employment with the Company, the Company shall continue to maintain a directors’ and officers’ liability insurance policy for your benefit which is no less favorable than the policy covering other senior officers of the Company.

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EX-10.2

EXECUTION COPY

EXHIBIT 10.2

SECOND AMENDED AND RESTATED
CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS SECOND AMENDED AND RESTATED AGREEMENT (the “Agreement”), dated July 21, 2016 is made by and between Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”), and James M. Loree (the “Executive”).

WHEREAS, the Company is currently a party to an Amended and Restated Change in Control Severance Agreement with the Executive dated December 10, 2008 (the “Prior Agreement”);

WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareowners; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;

WHEREAS, the parties wish to amend and restate the Prior Agreement to replace the provision thereunder providing the Executive with a gross-up payment for any golden parachute excise taxes payable in connection with a Change in Control with a “best net after-tax cutback” provision which requires any payments and benefits that could constitute “parachute payments” (within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) to be reduced to avoid the golden parachute excise tax, but only if doing so would result in the Executive receiving a greater amount of payments and benefits in connection with a Change in Control than would be the case if such payments and benefits were not reduced and the Executive were instead subject to the golden parachute excise tax; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1.Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2.Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the first anniversary hereof; provided, however, that commencing on July 21, 2017 and on each July 21 thereafter, the Term shall automatically be extended for one additional year unless, not later than ninety (90) calendar days prior to such July 21, the Company or the Executive shall have given notice not to extend the Term; and

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further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control occurred.

3.Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 10.1 hereof, no Severance Payments shall be payable under this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive’s employment with the Company following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

4.The Executive’s Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive’s employment for any reason.

5.Compensation Other Than Severance Payments.

5.1Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive’s full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive’s full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executive’s employment is terminated by the Company for Disability.

5.2If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay the Executive’s full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

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5.3If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay to the Executive the Executive’s normal post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason. Notwithstanding anything herein to the contrary and for the avoidance of doubt, “normal post-termination compensation and benefits” shall not include disability insurance coverage after the Executive’s termination of employment with the Company.

6.Severance Payments.

6.1If the Executive incurs a “separation from service” (within the meaning of section 409A) following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the Executive the amounts, and provide the Executive the benefits described in this Section 6.1 (“Severance Payments”), in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive shall be deemed to have incurred a separation from service following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control occurs). For purposes of Sections 5 and 6 of this Agreement, no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment will be made or provided unless and until such termination of employment is also a “separation from service,” as determined in accordance with section 409A.

(A)In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to three times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the average annual bonus earned by the Executive pursuant to any annual bonus or incentive plan maintained by the Company in respect of the three fiscal years ending

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immediately prior to the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to the fiscal year in which occurs the first event or circumstance constituting Good Reason.

(B)For the thirty-six (36) month period immediately following the Date of Termination, the Company shall provide, or shall arrange to provide, to the Executive and his dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the thirty-six (36) month period following the Executive’s termination of employment, such as pursuant to the benefit plans of a subsequent employer (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall promptly reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.

(C)In addition to the retirement benefits, if any, to which the Executive is entitled under each DB Pension Plan or any successor plan thereto, the Company shall pay the Executive a lump sum amount, in cash, equal to the excess of (i) the actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the third anniversary of the Date of Termination) as of which the actuarial equivalent of such annuity is greatest) which the Executive would have accrued under the terms of all DB Pension Plans (without regard to any amendment to any DB Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if the Executive were fully vested thereunder and had accumulated (after the Date of Termination) thirty-six (36) additional months of age and service credit thereunder and had been credited under each DB Pension Plan during such period with compensation equal to the Executive’s compensation (as defined in such DB Pension Plan) during the twelve (12) months immediately preceding Date of Termination or, if higher, during the twelve (12) months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, over (ii) the actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the Date of Termination) as of which the actuarial equivalent of such annuity is greatest) which the Executive had accrued pursuant to the provisions of the DB Pension Plans as of the Date of Termination. For purposes of this Section 6.1(C), “actuarial equivalent” shall be determined using the

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same assumptions utilized under The Stanley Works Retirement Plan or any successor plan immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason. The payments provided in this Section 6.1(C) are in addition to any payment the Executive would otherwise receive under the applicable DB Plan and are not intended to offset or reduce any payment under such DB Plan.

(D)In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive’s behalf during the thirty-six (36) months immediately following the Date of Termination, determined (x) as if the Executive made the maximum permissible contributions thereto during such period, (y) as if the Executive earned compensation during such period at a rate equal to the Executive’s compensation (as defined in the DC Pension Plan) during the twelve (12) months immediately preceding the Date of Termination or, if higher, during the twelve (12) months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (z) without regard to any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the excess, if any, of (x) the Executive’s account balance under the DC Pension Plan as of the Date of Termination over (y) the portion of such account balance that is nonforfeitable under the terms of the DC Pension Plan. The payments provided in this Section 6.1(D) are in addition to any payment the Executive would otherwise receive under the applicable DC Plan and are not intended to offset or reduce any payment under such DC Plan.

(E)If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans, as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of thirty-six (36) months after the Date of Termination, the Company shall provide such post-retirement health care and/or life insurance benefits to the Executive and the Executive’s dependents commencing on the later of (i) the date on which such coverage would have first become available and (ii) the date on which benefits described in subsection (B) of this Section 6.1 terminate.

(F)The Company shall provide the Executive with third-party outplacement services suitable to the Executive’s position for the period following the Executive’s Date of Termination and ending on December 31 of the second year following such Date of Termination or, if earlier, until the first acceptance by the Executive of an offer of employment, provided, however, that in no case shall the Company be required to pay in excess of $50,000 over such period in providing outplacement services and that all reimbursements hereunder shall be paid to the Executive within thirty (30) calendar days following the date on which the Executive submits the invoice but no later than

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December 31 of the third calendar year following the year of the Executive’s Date of Termination.

(G)For the thirty-six (36) month period immediately following the Date of Termination or until the Executive becomes eligible for substantially similar benefits from a new employer, whichever occurs earlier, the Company shall continue to provide the Executive with all perquisites provided by the Company immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason (including, without limitation, automobile, financial planning, annual physical and executive whole life insurance).

6.2(A)    Notwithstanding any other provisions in this Agreement, if any of the payments or benefits received or to be received by the Executive (including any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

(B)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash

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benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to section 409A as deferred compensation.

(C)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the Executive and reasonably acceptable to the Company, does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation; and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”) in accordance with the principles of sections 280G(d)(3) and (4) of the Code.

(D)All determinations required by this Section 6.2 (or requested by either the Executive or the Company in connection with this Section 6.2) will be at the expense of the Company. The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 6.2 will not of itself limit or otherwise affect any other rights of the Executive under this Agreement. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments.

6.3Subject to Section 6.4, the payments provided in subsections (A), (C) and (D) of Section 6.1 hereof shall be made not later than the fifth (5^th) business day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company in accordance with Section 6.2 hereof, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) calendar day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall be payable by the Executive to the Company on the fifth (5th)

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business day after demand by the Company (together with interest at 120% of the rate provided in section 1274(b)(2)(B) of the Code). At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

6.4(A)    Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service and if any portion of the payments or benefits to be received by the Executive upon separation from service would be considered deferred compensation under section 409A, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the “Delayed Payments”) and benefits that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during the six-month period immediately following the Executive’s separation from service (such period, the “Delay Period”) shall instead be paid or made available on the earlier of (i) the first (1^st) business day of the seventh month following the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date, the “Permissible Payment Date”). The Company shall also reimburse the Executive for the cost incurred by the Executive in independently obtaining any Delayed Benefits (the “Additional Delayed Payments”).

(B)    With respect to any amount of expenses eligible for reimbursement under Sections 6.1 (B), (E) and (G), such expenses shall be reimbursed by the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from the Executive but in no event later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(C)    For purposes of section 409A, the Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

6.5The Company shall deposit the estimated Delayed Payments and estimated Additional Delayed Payments into an irrevocable grantor trust (for purposes of this Section 6, the “Grantor Trust”) not later than the fifth (5^th) business day following the occurrence of a Potential Change in Control. The Company shall deposit additional amounts into the Grantor Trust on a monthly basis equal to the interest accrued on the Delayed Payments (and any earlier interest payments) at the United States 5-year Treasury Rate plus 2%, and the amount held in the Grantor

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Trust shall be paid to the Executive (in accordance with the terms of the Grantor Trust) on the Permissible Payment Date.

6.6The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement. Such payments shall be made within five (5) business days (but in any event no later than December 31 of the year following the year in which the Executive incurs the expenses) after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, provided that (i) the amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, (ii) the Executive’s right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit, and (iii) the Executive shall not be entitled to reimbursement unless he has submitted an invoice for such fees and expenses at least ten (10) business days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred. The Company shall also pay all legal fees and expenses incurred by the Executive in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit hereunder. Payment pursuant to the preceding sentence will be made within fifteen (15) business days after delivery of the Executive’s written request for payment but in no event later than the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or proceeding are remitted to the taxing authority, or where as a result of the audit or proceeding no taxes are remitted, the end of the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the matter.

7.Termination Procedures and Compensation During Dispute.

7.1Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.

7.2Date of Termination. “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in Control and during the Term, shall

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mean (i) if the Executive incurs a separation from service due to Disability, thirty (30) calendar days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) calendar day period), and (ii) if the Executive incurs a separation from service for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall be the thirtieth (30^th) calendar day after the Notice of Termination is given (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) calendar days nor more than sixty (60) calendar days, respectively, from the date such Notice of Termination is given).

8.No Mitigation. The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof. Further, except as specifically provided in Sections 6.1(B) and 6.1(G) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

9.Restrictive Covenants.

9.1The Executive agrees that restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its Subsidiaries, and that the agreed restrictions set forth below will not deprive the Executive of the ability to earn a livelihood:

(A)While the Executive is in the employment of the Company and, if the Executive is entitled to benefits under Section 6.1 hereof upon termination of employment, for a period of twenty-four (24) months after such termination of employment (the “Non-Competition Period”), the Executive shall not, without the express written consent of the Company, in the United States of America, directly or indirectly (i) enter into the employ of or render any services to any person, firm or corporation engaged in any Competitive Business; (ii) engage in any Competitive Business for his own account or (iii) become interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal, agent, employee, consultant, advisor or in any other relationship or capacity; provided, however, that nothing contained in this Section shall be deemed to prohibit the Executive from acquiring, solely as an investment through market purchases, securities of any corporation which are registered under Section 12 of the Exchange Act and which are publicly traded so long as he is not part of any group in control of such corporation.

(B)The Executive agrees that during the Non-Competition Period or in connection with any termination of employment pursuant to which the Executive is entitled to benefits under Section 6.1, the Executive will not, either directly or through any agent or employee, Solicit any employee of the Company or any of its Subsidiaries to terminate his or her relationship with the Company or any of its Subsidiaries or to apply

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for or accept employment with any enterprise competitive with the business of the Company, or Solicit any customer, supplier, licensee or vendor of the Company or any of its Subsidiaries to terminate or materially modify its relationship with them, or, in the case of a customer, to conduct with any person any business or activity which such customer conducts or could conduct with the Company or any of its Subsidiaries.

(C)The Executive acknowledges that the Company and its Subsidiaries continually develop Confidential Information, that the Executive may develop Confidential Information for the Company or its Subsidiaries and that the Executive may learn of Confidential Information during the course of his employment under this Agreement. The Executive will comply with the policies and procedures of the Company and its Subsidiaries for protecting Confidential Information and shall never disclose to any person (except as required by applicable law or legal process or for the proper performance of his duties and responsibilities to the Company and its Subsidiaries, or in connection with any litigation between the Company and the Executive (provided that the Company shall be afforded a reasonable opportunity in each case to obtain a protective order)), or use for his own benefit or gain, any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any of its Subsidiaries. The Executive understands that this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its Subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company and its Subsidiaries. The Executive shall safeguard all Documents and shall surrender to the Company at the time his employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the Executive’s possession or control.

(D)Without limiting the foregoing, it is understood that the Company shall not be obligated to make any of the payments or to provide for any of the benefits specified in Sections 6.1 and 6.2 hereof, and shall be entitled to recoup the pro rata portion of any such payments and of the value of any such benefits previously provided to the Executive in the event of a material breach by the Executive of the provisions of this Section 9 (such pro ration to be determined as a fraction, the numerator of which is the number of days from such breach to the second anniversary of the date on which the Executive terminates employment and the denominator of which is 730), which breach continues without having been cured within fifteen (15) calendar days after written notice to the Executive specifying the breach in reasonable detail.

10.Successors; Binding Agreement.

10.1In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to

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the same extent that the Company would be required to perform it if no such succession had taken place.

10.2This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

11.Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address inserted below the Executive’s signature on the final page hereof and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company:	Stanley Black & Decker, Inc.
	1000 Stanley Drive
	New Britain, Connecticut 06053
	Attention: Corporate Secretary

12.Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board; provided that, nothing in this Agreement shall prohibit the Company from amending this Agreement in a manner that does not materially or adversely affect the rights of the Executive hereunder. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes the agreement by and between the Company and the Executive dated December 10, 2008 and any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party; provided, however, that (1) this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company only in the event that the Executive’s employment with the Company is terminated on or following a Change in Control (or deemed to have been so terminated), by the Company other than for Cause or by the Executive for Good Reason and (2) to extent this Agreement does not supersede any agreement referred to in clause (1), it shall not result in any duplication of benefits to the Executive. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Connecticut, without regard to its conflicts of law principles. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any

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payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7 hereof) shall survive such expiration. To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with section 409A. This Agreement shall be construed in a manner to give effect to such intention.

13.Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

15.Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) calendar days after notification by the Board that the Executive’s claim has been denied. Notwithstanding the above, in the event of any dispute, any decision by the Board hereunder shall be subject to a de novo review by a court of competent jurisdiction.

Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

16.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)“Additional Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(B)“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C)“Auditor” shall have the meaning set forth in Section 6.2 hereof.

(D)“Base Amount” shall have the meaning set forth in section 280G(b)(3) of the Code.

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(E)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

(F)“Board” shall mean the Board of Directors of the Company.

(G)“Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured within thirty (30) calendar days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists.

(H)A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or

(II)the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareowners was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or;

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(III)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (i) a merger or consolidation which results in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company’s then outstanding securities; or

(IV)the shareowners of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareowners of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

(I)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J)“Company” shall mean Stanley Black & Decker, Inc. and, except in determining under Section 15(G) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K)“Competitive Business” shall mean any line of business that is substantially the same as any line of any operating business engaged in by the Company during the term of this Agreement and which at the termination of the Executive’s employment the Company was engaged in or conducting and which during the fiscal year of the Company next preceding the date as of which the determination of competitive status is to be made constituted at least 5% of the gross sales of the Company and its Subsidiaries. The Executive may, without being deemed in violation of this section, become a partner or employee of, or otherwise acquire an interest in, a stock or business brokerage firm, consulting or advisory firm, investment banking firm or similar organization which, as part of its business, trades or invests in securities of Competitive Businesses or which represents or acts as agent or advisor for Competitive Businesses, but only on condition that the Executive shall not personally render any services in

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connection with such Competitive Business either directly to such Competitive Business or other persons or to his firm in connection therewith.

(L)“Confidential Information” means any and all information of the Company and its Subsidiaries that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business and any and all information not readily available to the public, which, if disclosed by the Company or its Subsidiaries could reasonably be of benefit to such person or business in competing with or doing business with the Company. Confidential Information includes without limitation such information relating to (1) the development, research, testing, manufacturing, store operational processes, marketing and financial activities, including costs, profits and sales, of the Company and its Subsidiaries, (2) the products and all formulas therefor, (3) the costs, sources of supply, financial performance and strategic plans of the Company and its Subsidiaries, (4) the identity and special needs of the customers and suppliers of the Company and its Subsidiaries and (5) the people and organizations with whom the Company and its Subsidiaries have business relationships and those relationships. Confidential Information also includes comparable information that the Company or any of its Subsidiaries have received belonging to others or which was received by the Company or any of its Subsidiaries with an agreement by the Company that it would not be disclosed. Confidential Information does not include information which (i) is or becomes available to the public generally (other than as a result of a disclosure by the Executive), (ii) was within the Executive’s possession prior to the date hereof or prior to its being furnished to the Executive by or on behalf of the Company, provided that the source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, (iii) becomes available to the Executive on a non-confidential basis from a source other than the Company, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, or (iv) was independently developed the Executive without reference to the Confidential Information.

(M)“DB Pension Plan” shall mean any tax-qualified, supplemental or excess defined benefit pension plan maintained by the Company and any other defined benefit plan or agreement entered into between the Executive and the Company which is designed to provide the Executive with supplemental retirement benefits. For purposes of Section 6.1(C) hereof, if the Executive would have satisfied the condition for participation in a DB Plan (or any successor thereto) within thirty-six (36) months following the Date of Termination (i.e., assuming the Executive accrued additional age and service credit over such period), the Executive shall be deemed to have been a participant in such plan immediately prior to the Date of Termination and shall be entitled to the benefits provided under Section 6.1(C) relating thereto.

(N)“DC Pension Plan” shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and any other defined contribution

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plan or agreement entered into between the Executive and the Company which is designed to provide the executive with supplemental retirement benefits.

(O)“Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

(P)“Delayed Benefits” shall have the meaning set forth in Section 6.4 hereof.

(Q)“Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(R)“Delay Period” shall have the meaning set forth in Section 6.4 hereof.

(S)“Disability” shall be deemed the reason for the termination by the Company of the Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) calendar days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive’s duties.

(T)“Employment Letter” means the employment letter, dated as of the date hereof, between the Company and the Executive and any amendment thereto.

(U)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(V)“Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

(W)“Executive” shall mean the individual named in the first paragraph of this Agreement.

(X)“Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VII) below to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

(I)the assignment to the Executive of any duties inconsistent with the Executive’s status as a senior executive officer of the Company or a substantial

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adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior to the Change in Control including, without limitation, if the Executive was, immediately prior to the Change in Control, an executive officer of a public company, the Executive ceasing to be an executive officer of a public company;

(II)a reduction by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same may be increased from time to time except for across-the-board salary reductions similarly affecting all senior executives of the Company and all senior executives of any Person in control of the Company;

(III)the relocation of the Executive’s principal place of employment to a location more than thirty-five (35) miles from the Executive’s principal place of employment immediately prior to the Change in Control or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(IV)the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) calendar days of the date such compensation is due;

(V)the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive’s total compensation, including but not limited to the Company’s 2013 Long-Term Incentive Plan and Management Incentive Compensation Plan or any substitute plans adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control;

(VI)the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control (except for across the board changes similarly affecting all senior executives of the Company and all senior executives of any Person in control of the Company), the taking of any other action by the Company which

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would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of “paid time off” days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company’s normal “paid time off” policy in effect at the time of the Change in Control;

(VII)any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness;

(VIII)a material breach by the Company of any agreement with the Executive, including this Agreement (including, for the avoidance of doubt, Section 10.1 hereunder) and the Employment Letter; or

(IX)failure of the Executive to be nominated to, or the Executive’s removal from, the Board or the board of directors of a successor to the Company, in each case prior to the date that the Executive attains age sixty-five (65);

(X)failure of the Company to require any direct or indirect successor to all or substantially all of its business and/or assets to expressly assume and agree to perform the Employment Letter in the same manner and to the same extent that that the Company would be required to perform the Employment Letter if no succession had taken place.

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

For purposes of any determination regarding the existence of Good Reason in connection with a termination of employment other than as described in the second sentence of Section 6.1 hereof, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist.

(Y)“Grantor Trust” shall have the meaning set forth in Section 6.5 hereof.

(Z)“Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

(AA)“Permissible Payment Date” shall have the meaning set forth in Section 6.4 hereof.

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(BB)“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of the Company in substantially the same proportions as their ownership of stock of the Company.

(CC)“Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(II)the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control;

(III)any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates); or

(IV)the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(DD)“Prior Agreement” shall have the meaning set forth in the second paragraph of this Agreement.

(EE)“Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is terminated in accordance with the Company’s retirement policy, including early retirement, generally applicable to its salaried employees.

(FF)“section 409A” shall mean section 409A of the Code and any proposed, temporary or final regulation, or any other guidance, promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(GG)“Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

(HH)“Solicit” means any direct or indirect communication of any kind whatsoever (other than non-targeted general advertisements), regardless of by whom

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initiated, inviting, advising, encouraging or requesting any person or entity, in any manner, with respect to any action.

(II)“Subsidiary” means any corporation or other business organization of which the securities having a majority of the normal voting power in electing the board of directors or similar governing body of such entity are, at the time of determination, owned by the Company directly or indirectly through one or more Subsidiaries.

(JJ)“Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

(KK)“Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(LL)“Total Payments” shall mean those payments so described in Section 6.2 hereof.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

By: _______________________________

Name: Bruce H. Beatt

Title: Senior Vice President, General Counsel & Secretary

____________________________________

EXECUTIVE

Address: ____________________________

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE AGREEMENT]

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EX-10.3

EXECUTION COPY

EXHIBIT 10.3

EXECUTIVE RETIREMENT AGREEMENT

EXECUTIVE RETIREMENT AGREEMENT (the “Agreement”) by and between Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”), and John F. Lundgren (the “Executive”), dated July 21, 2016 and effective as of the Effective Date (as defined in Section 1 below).

WITNESSETH:

WHEREAS, the Company and the Executive are parties to a Second Amended and Restated Employment Agreement, dated November 2, 2009 (the “Prior Agreement”), pursuant to which the Executive provides services to the Company and the Company provides certain compensation and benefits to the Executive;

WHEREAS, the Executive currently serves as the Chief Executive Officer and Chairman of the Board of Directors of the Company (the “Board”);

WHEREAS, the Executive and the Board have determined that it is in the Executive’s and the Company’s best interests for the Executive to resign from his position as Chief Executive Officer of the Company but to remain employed by the Company thereafter for a transitional period during which the Executive will be employed as a special advisor to the Company (“Special Advisor”) prior to retiring from all of his positions with the Company;

WHEREAS, simultaneously with the execution of this Agreement, the Company and the Executive have entered into a Second Amended and Restated Change in Control Severance Agreement, dated as of the date hereof (“CIC Severance Agreement”); and

WHEREAS, the Company and the Executive mutually desire to enter into this Agreement, which shall replace and supersede the Prior Agreement in its entirety as of the Effective Date (except as specifically set forth in this Agreement) and pursuant to which the Executive shall continue to provide services to the Company from and after the Effective Date in exchange for certain compensation and benefits as provided in this Agreement.

NOW, THEREFORE, it is hereby agreed as follows:

1.EFFECTIVENESS; TERM.

(a)EFFECTIVENESS; TERM. This Agreement shall become effective on July 31, 2016 (the “Effective Date”). The term of employment of the Executive by the Company hereunder shall commence on the Effective Date and shall continue until April 30, 2017 (the “Retirement Date” and, the Executive’s termination of employment on such date, “Retirement”), unless terminated earlier in accordance with Section 6 of this Agreement (such period of employment hereunder, the “Term”).

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(b)RESIGNATION AS CEO; ANNOUNCEMENT.

(i)RESIGNATION AS CEO. Effective as of the Effective Date, the Executive shall resign from his position as Chief Executive Officer of the Company. Such resignation shall be automatic and without any further action on the part of the Executive or the Company, and the Executive shall execute such additional documentation with respect thereto as reasonably requested by the Company. The Executive and the Company intend and anticipate that the Executive’s resignation from his position as the Chief Executive Officer of the Company and transition to the position of Special Advisor shall not constitute a “separation from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), and the regulations promulgated thereunder (“Section 409A”).

(ii)ANNOUNCEMENT. The contents of the Company’s press release announcing the Executive’s resignation as the Chief Executive Officer of the Company and transitional role as Special Advisor shall be mutually agreed by the Company and the Executive.

2.POSITION AND DUTIES; LOCATION.

(a)CONTINUATION AS CHAIRMAN. From and after the Effective Date and until December 31, 2016, the Executive shall continue to serve as a member of the Board and as the Chairman of the Board (“Chairman”). In his capacity as Chairman, the Executive shall continue to have the duties and responsibilities designated for such position in the Amended and Restated By-Laws of the Company and such other duties as may be specified by the Board from time to time which, in each case, shall be consistent with the Executive’s duties as Chairman prior to the Effective Date. Effective as of the earlier of the date that the Executive’s employment with the Company is terminated in accordance with Section 6 of this Agreement and December 31, 2016, the Executive shall be deemed to have resigned as Chairman and as a member of the Board, and such resignation shall be automatic and without any further action on the part of the Company or the Executive, and the Executive shall execute such additional documentation with respect thereto as reasonably requested by the Company.

(b)SPECIAL ADVISOR. From and after the Effective Date and until the Retirement Date (or, if earlier, the Date of Termination of the Executive’s employment in accordance with Section 6 of this Agreement), the Executive shall continue employment with the Company in the position of a Special Advisor. In such capacity, the Executive shall report directly to the Board and, to the extent requested by the Board, shall advise and assist the Chief Executive Officer of the Company and other senior executives of the Company on matters relating to the operation and strategic initiatives of the Company, and shall have such other duties and responsibilities as the Board may specify from time to time. The Executive shall, unless his services are earlier terminated pursuant to Section 6 of the Agreement, be deemed to retire from all positions of any kind with the Company and its subsidiaries and affiliates on the Retirement Date, and such retirement shall be automatic and without any further action on the part of the Company or the Executive, and the Executive shall execute such other documentation with respect thereto as reasonably requested by the Company.

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(c)LOCATION. During the Term, the Executive shall be based at the Company’s principal headquarters in New Britain, Connecticut, except for travel reasonably required for the performance of the Executive’s duties hereunder.

(d)AVAILABILITY. During the Term, the Executive shall devote the time and effort reasonably required to fulfill his duties and responsibilities hereunder; provided that the Executive’s availability to perform services as a Special Advisor shall be no less than the Executive’s availability to perform services prior to the Effective Date. It shall not be considered a violation of the foregoing for the Executive to manage his personal investments or, subject to the approval of the Board with respect to the period prior to January 1, 2017, to serve on corporate, industry, civic or charitable boards or committees, so long as such activities do not significantly interfere with the performance of the Executive’s duties hereunder; provided, however, that, notwithstanding the foregoing, it is expressly understood and agreed that, with respect to a board or committee on which the Executive serves on the date hereof, the continued conduct of such activities by the Executive subsequent to the Effective Date on the same basis as prior to the Effective Date, shall be permitted without any further approval and shall be deemed not to interfere with the performance of the Executive’s responsibilities to the Company.

3.COMPENSATION AND BENEFITS.

(a)BASE SALARY. During the Term, the Executive shall receive a base salary at an annualized rate of $1,400,000 (such annualized amount, the “Base Salary”), payable in accordance with the Company’s regular payroll practice for its senior executives, as in effect from time to time.

(b)ANNUAL CASH BONUS. During the Term, the Executive shall continue to participate in the Company’s Management Incentive Compensation Plan, as amended, or any successor thereto (the “MICP”) as set forth below:

(i)2016 ANNUAL CASH BONUS. The Executive’s annual cash bonus award under the MICP for the Company’s 2016 fiscal year (“FY 2016”) shall be determined and settled in accordance with its terms and the terms of the MICP, based on the level of attainment of applicable performance goals for FY 2016, in each case, on a basis no less favorable than applicable to the most senior executives of the Company.

(ii)2017 ANNUAL CASH BONUS. With respect to the Company’s 2017 fiscal year (“FY 2017”), the Executive shall be awarded an annual target bonus opportunity under the MICP (“2017 MICP Award”) equal to the Executive’s annual target bonus opportunity under the MICP for FY 2016 (as described below) and the applicable performance goals shall be the corporate performance goals under the MICP for FY 2017 that are applicable to most senior executives of the Company. The determination and settlement of the 2017 MICP Award shall be in accordance with the terms of the MICP and shall be based on the level of attainment of applicable performance goals, as determined by the Compensation and Organization Committee of the Board; provided that the attainment of such performance goals shall be determined on a basis no less favorable than applicable to 2017 MICP Awards held by the most senior

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executives of the Company. The Executive’s target bonus opportunity pursuant to the MICP with respect to FY 2017 shall equal 150% (the “Target Bonus Percentage”) of the Base Salary in effect for the Executive at the beginning of FY 2017, with a threshold potential award equal to 75% of such Base Salary and a maximum potential award equal to 300% of such Base Salary.

(iii)TIMING OF PAYMENTS. Any cash bonuses payable to the Executive shall be paid at the time the Company normally pays such bonuses to its senior executives in accordance with the terms of the MICP, but in no event later than March 15 of the calendar year following the calendar year in which such cash bonuses are earned. In the event that the Executive participates in the MICP for less than a full fiscal year of the Company for any reason (including FY 2017), the annual cash bonus award for such partial year shall be pro-rated to reflect the number of complete months that the Executive was an active employee during such fiscal year.

(c)EQUITY AWARDS.

(i)OUTSTANDING AWARDS. All equity awards granted to the Executive under the Company’s 2013 Long-Term Incentive Plan and any predecessor or successor plan thereto (collectively, the “Company Stock Plans”) and outstanding on the Effective Date shall be forfeited or vested and settled in accordance with the terms of the applicable Company Stock Plan and award agreement (including the retirement provisions thereunder, which the Executive satisfies as of the date hereof) as in effect immediately prior to the Effective Date. Schedule A attached hereto sets forth each equity award outstanding as of the date hereof, the number of shares of Company common stock (“Common Stock”) underlying such equity award, the vesting dates and the settlement dates (if different) for each such equity award, the exercise price and expiration date, in the case of any stock option.

(ii)FY 2016 AWARDS. The Company shall grant to the Executive, at the time in 2016 that annual awards of stock options and time vesting restricted stock units are granted to senior executives of the Company, (A) restricted stock units (“FY 2016 RSUs”), which number of FY 2016 RSUs shall be determined by the Board such that the aggregate grant date value (as determined for purposes of the Company’s financial reporting (“Grant Date Value”)) of the shares of Common Stock underlying the FY 2016 RSUs shall equal the Grant Date Value of the restricted stock units granted to the Executive in 2015 (“FY 2015 RSUs”) and (B) stock options (“FY 2016 Options” and, together with FY 2016 RSUs, “FY 2016 Equity Awards”) to purchase Common Stock, which number of FY 2016 Options shall be determined by the Board such that the aggregate Grant Date Value of such FY 2016 Options shall equal the Grant Date Value of the stock options granted to the Executive in 2015 (“FY 2015 Options”). The FY 2016 Equity Awards shall be granted under, and subject to the terms and conditions of, the Company’s 2013 Long-Term Incentive Plan or a successor thereto, and shall be subject to the terms and conditions set forth in the Company’s customary award agreements with terms and conditions no less favorable than those applicable to the most senior executives

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of the Company, except that (1) the FY 2016 Equity Awards shall become vested and nonforfeitable 50% on the first anniversary of the Retirement Date and 50% on the second anniversary of the Retirement Date (each such vesting date, an “Anniversary Date”), conditioned on the Executive’s continued employment through the Retirement Date and compliance in all material respects with the noncompetition and nondisparagement covenants set forth in Sections 10(b) and 10(d), respectively, of this Agreement (the “Covenants”) through the applicable Anniversary Date (except as provided in the following clause (2)), (2) upon termination of the Executive’s employment hereunder prior to the Retirement Date (x) without Cause or for Good Reason (excluding retirement), any unvested FY 2016 Equity Awards shall vest in full on the Retirement Date, subject solely to the Executive’s compliance in all material respects with the Covenants prior to the Retirement Date or (y) due to the Executive’s death or Disability, any unvested FY 2016 Equity Awards shall vest in full on the date of death or Disability Effective Time (as applicable), (3) notwithstanding the foregoing, in the event (x) the Executive’s employment hereunder is terminated by the Company for Cause or by Executive without Good Reason (including a retirement) prior to the Retirement Date or (y) the Executive fails to comply in all material respects with the Covenants prior to an Anniversary Date (or, in the case of a termination of employment set forth in item (x) of clause (2) above, prior to the Retirement Date), then any unvested FY 2016 Equity Awards shall be immediately forfeited, (4) vested FY 2016 RSUs shall be settled on the applicable Anniversary Date, except in the case of FY 2016 RSUs that vest due to the Executive’s death or Disability, which shall be settled on or before the 30th day following such event, (5) for the avoidance of doubt, except as provided in clause (6) below, the FY 2016 Equity Awards shall not be subject to the provisions under the Company’s outstanding equity award agreements relating to retirement, and (6) the FY 2016 Options shall, to the extent vested, remain exercisable until the tenth anniversary of the grant date following the termination of the Executive’s employment for any reason other than by the Company for Cause. The FY 2016 RSUs shall accrue dividends, which shall vest at the same time as the related FY 2016 RSUs and shall be payable as soon as practicable, but within 15 days of the date that the related FY 2016 RSUs are settled.

(d)OTHER BENEFITS. While the Executive is employed during the Term: (i) the Executive shall be entitled to participate in all tax-qualified and non-qualified savings, employee stock ownership, employee stock purchase, deferred compensation and retirement and supplemental retirement plans that are generally made available to the Company’s senior executives, and shall be entitled to participate in all fringe benefit and perquisite practices, policies and programs of the Company made available to the senior executives of the Company, including but not limited to the Company’s executive car program, financial planning services, executive life insurance program, executive long-term disability program and executive physical program (provided that, in each case, such participation and the level of benefits shall be no less favorable than that available to senior executives of the Company); and (ii) the Executive and/or the Executive’s eligible dependents, as the case may be, shall be eligible for participation in, and shall receive all benefits under, all welfare benefit plans, practices, policies and programs provided by the Company, including, any medical, flexible spending, prescription, dental, short- and long-term disability, employee life insurance, group life insurance, accidental death and

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travel accident insurance plans and programs, in each case, to the same extent, at the same level, and subject to the same terms and conditions, as are made available to the senior executives of the Company.

(e)VACATION. The Executive shall be entitled to (i) with respect to the period commencing on the Effective Date and ending on December 31, 2016, four (4) weeks paid vacation, which shall be subject to reduction for the number of vacation days accrued and used by the Executive during the portion of FY 2016 that elapses prior to the Effective Date and (ii) with respect to the period commencing on January 1, 2017 and ending on the Retirement Date, four (4) weeks paid vacation, pro-rated for the portion of FY 2017 that elapses prior to the Retirement Date.

(f)EXPENSES. The Company shall pay or reimburse the Executive for reasonable out-of-pocket expenses incurred by the Executive during the Term in the performance of the Executive’s services under this Agreement, in accordance with Company policy for its senior executives and subject to the Reimbursement Rules (as defined in Section 6(e) below); provided that the Company shall also pay or reimburse the Executive (in accordance with Company policy for its senior executives and subject to the Reimbursement Rules) for reasonable out-of-pocket expenses incurred by the Executive during the period commencing on the Effective Date and ending on December 31, 2018 in connection with the Executive’s attendance at meetings of the Board of Directors of the National Association of Manufacturers (“NAM”), while the Executive serves as such Board’s Vice Chair and/or Chair (such benefit, the “NAM Benefit”)); providedfurther, that the Company shall continue to be a participating member of NAM until December 31, 2018.

(g)INDEMNIFICATION. To the fullest extent permitted by the Company’s certificate of incorporation and by-laws, or, if greater, by the laws of the State of Connecticut, the Company shall promptly indemnify and hold harmless the Executive for all amounts (including, without limitation, judgments, fines, settlement payments, losses, damages, costs, expenses (including reasonable attorneys’ fees), ERISA excise taxes, or other liabilities or penalties and amounts paid or to be paid in settlement) incurred or paid by the Executive in connection with any action, proceeding, suit or investigation (the “Proceeding”) to which the Executive is made a party, or is threatened to be made a party, by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, programs or arrangements, whether or not the basis of such Proceeding is the Executive’s alleged action in an official capacity. Such indemnification shall continue even if the Executive has ceased to be a director, employee or agent of the Company or other affiliated entity and shall inure to the benefit of the Executive’s heirs, executors and administrators. The Company shall advance to the Executive all reasonable costs and expenses incurred by him in connection with a Proceeding within fifteen (15) calendar days after receipt by the Company of a written request from the Executive for such advance. Such request shall include an undertaking by the Executive to timely repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses. The Company also agrees to

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maintain a director’s and officers’ liability insurance policy covering the Executive to the extent the Company provides such coverage for its other senior executive officers. Following the Term, the Company shall continue to maintain a directors’ and officers’ liability insurance policy for the benefit of the Executive which is no less favorable than the policy covering other senior executives of the Company.

(h)RETIREE MEDICAL. The Company shall ensure that the Executive and his eligible dependents shall have access to retiree medical insurance coverage from a reputable carrier until the Executive shall first become eligible for Medicare (or in the event of his death, until he would have first become eligible). Such coverage shall be on terms and conditions no less favorable than generally made available to other Company retirees (or if there are no other such retirees, on terms and conditions no less favorable than in effect immediately prior to Date of Termination). The cost of such coverage shall be borne solely by the Executive (or in the event of his death, his eligible dependents), except to the extent that the Company generally bears such costs for its senior executives, in which case, such payment or reimbursement by the Company shall be subject to the Reimbursement Rules, if applicable.

4.PAYMENTS AND BENEFITS AT RETIREMENT.

(a)ACCRUED BENEFITS. Upon the Executive’s Retirement on the Retirement Date, (1) the Company shall pay to the Executive (or his estate, beneficiary or legal representative, as applicable) in a lump sum in cash within ten (10) business days after the Retirement Date, (i) any portion of the Executive’s Base Salary through the Retirement Date that has not yet been paid, (ii) any earned annual bonus that has not been paid (or previously deferred) for any previous fiscal year of the Company, including with respect to the FY 2016 as provided under Section 3(b)(i) and (iii), and (iii) any amount needed to reimburse the Executive for any unreimbursed business expenses properly incurred by the Executive in accordance with Company policy prior to the Retirement Date and subject to the Reimbursement Rules, (2) the Company shall also pay or provide to the Executive (or the Executive’s estate, beneficiary, or legal representative, as the case may be) all compensation and benefits payable to the Executive under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Retirement Date, in accordance with the terms of such plans, programs or arrangements, (3) the 2017 MICP Award determined and paid as set forth in Section 3(b)(ii) and (iii), and (4) all outstanding equity awards will vest and be settled in the manner described under Section 3(c) of this Agreement, with (x) equity awards outstanding on the date hereof vesting and being settled in accordance with Section 3(c)(i), and (y) FY 2016 Equity Awards vesting and being settled in accordance with Section 3(c)(ii). The Company shall also provide the Executive and/or his eligible dependents with access to retiree medical coverage in accordance with Section 3(h) following the provision of the Continued Welfare Benefit Coverage as pursuant to Section 4(b).

(b)CONTINUATION OF BENEFITS. During the twenty-four (24) month period (the “Continuation Period”) following the Executive’s Retirement on the Retirement Date, the Company shall reimburse the Executive for the cost of any premiums paid by the Executive to obtain continued medical, dental, vision and prescription drug coverage (“Continued Welfare

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Benefit Coverage”) or shall directly pay the cost of such coverage; provided that any such reimbursement shall be subject to the Reimbursement Rules and shall be for coverage levels (single vs. family coverage) that are substantially the same as the Executive’s level of coverage under the applicable Company benefit plan immediately prior to the Retirement Date. The Continued Welfare Benefit Coverage received by the Executive during the Continuation Period may be provided, at the Executive’s written election no later than thirty (30) days prior to the Retirement Date, pursuant to (i) the Company’s benefit plans providing such coverage to senior executives of the Company (including, if permitted under the applicable Company plan, pursuant to the continuation of coverage requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)), (ii) Medicare (including Parts A, B, C (Medicare Advantage) and D thereunder) or a Medicare supplement (Medigap), (iii) the group medical health plan that is provided to the Executive’s spouse by the spouse’s employer or (iv) a combination of the coverages described in the foregoing clauses (i)-(iii).

(c)CONTINUATION OF LIFE INSURANCE COVERAGE. During the Continuation Period, the Company shall provide the Executive with life insurance coverage with an aggregate death benefit that is at least equal to the aggregate death benefit under the life insurance plans, policies and programs provided to the Executive immediately prior to the Retirement Date, on terms and conditions no less favorable than as applicable to the Executive immediately prior to the Retirement Date.

(d)COMPANY AUTOMOBILE. As soon as practicable after the Executive’s Retirement on the Retirement Date (but not later than thirty (30) days thereafter), the Company shall transfer to the Executive ownership and title to the Company-provided automobile made available to, and used by, the Executive immediately prior to the Retirement Date.

(e)OFFICE SPACE; ADMINISTRATIVE SUPPORT. Upon the Executive’s Retirement on the Retirement Date and until the third anniversary thereof, the Company shall make available to the Executive (i) reasonably furnished office space at the Company’s headquarters in New Britain, CT (or at a location outside of the Company’s headquarters reasonably chosen by the Executive) that is commensurate with the Executive’s status as the former Chief Executive Officer of the Company and (ii) executive secretarial services at levels reasonably requested by the Executive but in no event greater than the level of executive secretarial services provided to the Executive prior to the Retirement Date.

(f)NAM BENEFIT. Following the Executive’s Retirement on the Retirement Date, the Company shall continue to provide the Executive with the NAM Benefit through December 31, 2018.

(g)EXECUTION OF RELEASE. As a condition of receiving the payments and benefits provided under this Section 4 (other than those under Sections 4(a)(1), (2), (3) and (4)(x)), the Executive shall be required to execute, deliver and not revoke, the mutual release attached hereto as Exhibit A (the “Release”), such Release to be delivered by the Executive and become irrevocable no later than sixty (60) calendar days following the Retirement Date. If the Release has not been executed, delivered and become irrevocable by the Executive within the statutory revocation period and on or prior to the sixtieth (60th) day following the Retirement

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Date, all benefits provided under this Section 4 (other than those under Sections 4(a)(1), (2), (3) and (4)(x)) shall cease or be forfeited. Notwithstanding the foregoing, if the Company does not execute and deliver the Release to the Executive within two (2) business days following the Executive’s delivery of the Release to the Company, then any requirement for the Executive to execute, deliver and not revoke the Release as a condition of receiving any benefits under this Section 4 will have no effect, and the Executive shall be entitled to receive any benefits for which the Executive otherwise qualifies under this Section 4, and the prior execution of the Release by the Executive shall be void and of no force or effect.

5.POST-RETIREMENT AVAILABILITY. During the Term and after the Retirement Date , if reasonably requested by the Company, the Executive shall use reasonable best efforts, subject to his other commitments, to make himself available to assist at mutually agreeable times in connection with any pending or future lawsuit, arbitration or proceeding between the Company or any of its subsidiaries and any third party, any pending or future regulatory or governmental inquiry or investigation concerning the Company or any of its subsidiaries and any other legal, internal or business matter of or concerning the Company or any of its subsidiaries that relates to events occurring during the period of the Executive’s employment with the Company both under this Agreement and the Prior Agreement and about which the Executive could reasonably be expected to have relevant knowledge, other than a suit between the Executive, on the one hand, and the Company or its subsidiaries, on the other hand. Such cooperation shall include meeting with and providing information to the Company or any of its subsidiaries or their respective attorneys, auditors or other representatives as reasonably requested by the Company. The Company shall reimburse the Executive for all reasonable costs and expenses incurred by the Executive in order to comply with this Section 5.

6.TERMINATION OF EMPLOYMENT.

(a)DEATH OR DISABILITY. The Executive’s employment shall terminate automatically upon the Executive’s death during the Term. The Company shall be entitled to terminate the Executive’s employment because of the Executive’s Disability during the Term. “Disability” means (i) for purposes of the FY 2016 Equity Awards, “Disability” as defined under Section 409A of the Code and (ii) for all other purposes under this Agreement, that the Executive is disabled within the meaning of the Company’s long-term disability policy for salaried employees (or any successor thereto) or, if there is no such policy in effect, that (A) the Executive has been substantially unable, for 120 business days within a period of 180 consecutive business days, to perform the Executive’s duties under this Agreement, as a result of physical or mental illness or injury, and (B) a physician selected by the Company and the Executive or the Executive’s legal representative has determined that the Executive is totally and permanently disabled. In the event that the Executive and the Company cannot agree as to a physician to make such a determination, each shall appoint a physician and those two (2) physicians shall select a third who shall make such determination in writing. A termination of the Executive’s employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Time”), unless the Executive returns to full-time performance of the Executive’s duties before the Disability Effective Time. Notwithstanding the

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foregoing, in the event that as a result of absence because of mental or physical incapacity the Executive incurs a “separation from service” within the meaning of such term under Section 409A, the Executive shall on such date automatically be terminated from employment because of Disability.

(b)TERMINATION BY THE COMPANY. The Company may terminate the Executive’s employment during the Term for Cause or without Cause.

(i)“Cause” is defined as (A) the Executive’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from his incapacity due to physical or mental illness) that has not been cured within thirty (30) calendar days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties, (B) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, (C) the Executive’s conviction of (or plea of nolo contendere to) any felony or any other crime involving dishonesty, fraud or moral turpitude, (D) any violation of the Company’s policies relating to compliance with applicable laws that has a material adverse effect on the Company or its subsidiaries or (E) the Executive’s breach of any restrictive covenant set forth in Section 10 hereof. For purposes of clauses (A) and (B) of this definition, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his act, or failure to act, was in the best interest of the Company.

(ii)A termination of the Executive’s employment for Cause or without Cause shall not be effective unless it is accomplished in accordance with the following procedures. The Board shall give the Executive written notice (“Notice of Termination by the Board”) of its intention to terminate the Executive’s employment, which shall (A) in the case of termination for Cause, set forth in detail the specific conduct (including any failure to act) of the Executive that it considers to constitute Cause and (B) propose the date, time and place (which, in each case, shall be subject to the Executive’s approval; provided that such approval shall not be unreasonably withheld) of the Special Board Meeting for Termination. The “Special Board Meeting for Termination” means a meeting of the Board called and held specifically and exclusively for the purpose of considering the Executive’s termination of employment, that takes place not less than forty-five (45) business days after the Executive receives the Notice of Termination by the Board. The Board shall provide the Executive an opportunity, together with counsel, to be heard at the Special Board Meeting for Termination. The Executive’s termination of employment shall be effective when and if a resolution is duly adopted at the Special Board Meeting for Termination stating that, in the good faith opinion of at least a majority of the members of the Board (other than the Executive), the Executive’s employment should be terminated and, in the case of a termination for Cause, that such conduct constitutes Cause under this Agreement.

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(c)GOOD REASON. The Executive may terminate employment for Good Reason or without Good Reason.

(i)“Good Reason” is defined as, without the Executive’s consent, (A) the assignment to the Executive of any duties inconsistent with his status as a Special Advisor to the Company, the removal of the Executive from the position of Chairman of the Board prior to December 31, 2016 or a material adverse alteration in the nature or status of the Executive’s responsibilities, unless the Company has cured such events within ten (10) business days after the receipt of written notice thereof from the Executive, (B) a reduction in the Executive’s Base Salary or Target Bonus Percentage, except for across-the-board salary reductions similarly affecting all senior executives of the Company or (C) the relocation of the Company’s headquarters to a location more than thirty-five (35) miles from the location of such headquarters on the Effective Date. For the avoidance of doubt, Good Reason does not exist for purposes of the Prior Agreement or this Agreement as a result of the Executive’s (x) resignation as Chief Executive Officer of the Company on the Effective Date, (y) transition to the position of Special Advisor on the Effective Date or (z) ceasing to serve as Chairman of the Board effective December 31, 2016.

(ii)A termination of employment by the Executive for Good Reason shall be effectuated by giving the Company written notice (“Notice of Termination for Good Reason”) of the termination, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason; provided, however, that no termination by the Executive shall be treated as a termination for Good Reason unless the Notice of Termination for Good Reason is given within forty-five (45) business days following the date the Executive first has knowledge of the event or circumstance alleged to constitute Good Reason. A termination of employment by the Executive for Good Reason shall be effective fifteen (15) business days following the date when the Notice of Termination for Good Reason is given, unless the event or circumstance constituting Good Reason is remedied by the Company in accordance with the foregoing.

(iii)A termination of the Executive’s employment by the Executive without Good Reason shall be effected by giving the Company thirty (30) calendar days advance written notice of the termination.

(d)DATE OF TERMINATION. The “Date of Termination” means the date of the Executive’s death, the Disability Effective Time or the date on which the termination of the Executive’s employment by the Company for Cause or without Cause or by the Executive for Good Reason or without Good Reason is effective. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” (within the meaning of Section 409A).

(e)REIMBURSEMENT RULES. The “Reimbursement Rules” means the requirement that any amount of expenses eligible for reimbursement under this Agreement be

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made (i) in accordance with the reimbursement payment date set forth in the applicable provision of this Agreement providing for the reimbursement or (ii) where the applicable provision does not provide for a reimbursement date, thirty (30) calendar days following the date on which the Executive incurs the expenses, but, in each case, no later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

7.OBLIGATIONS OF THE COMPANY UPON TERMINATION.

(a)OBLIGATIONS ON ANY TERMINATION. If the Executive’s employment hereunder terminates for any reason, then the Executive shall be entitled to the payments and benefits described in Section 4(a) of this Agreement (other than, except as provided under Sections 7(c) and 7(d), Section 4(a)(3)), in each case, based on the Executive’s service through the Date of Termination. The Company shall also provide the Executive and/or his eligible dependents with access to retiree medical coverage in accordance with Section 3(h).

(b)OBLIGATIONS ON A TERMINATION DUE TO DEATH OR DISABILITY. If the Executive’s employment hereunder terminates by reason of death or Disability, then the Company, in addition to making the payments and benefits in Section 7(a), shall pay to the Executive, or his estate, beneficiary or legal representative, as applicable, in a lump sum in cash within thirty (30) business days following the Date of Termination, a pro-rata portion of the Executive’s target bonus percentage (150%) of Base Salary at the rate in effect at the beginning of the Fiscal Year in which the Date of Termination occurs (the “Pro-Rata Bonus”). The Pro-Rata Bonus shall be calculated by multiplying the target bonus percentage of Base Salary by a fraction, the numerator of which is the number of days in the Fiscal Year that have elapsed as of the Date of Termination and the denominator of which is the number of days in such Fiscal Year.

(c)OTHER THAN FOR CAUSE, DISABILITY, OR DEATH, OR FOR GOOD REASON. If, during the Term, the Company terminates the Executive’s employment for any reason other than for Cause, death or Disability, or the Executive terminates his employment for Good Reason, then, in addition to making the payments and providing the benefits pursuant to Section 7(a) (with the provisions applicable to the FY 2016 Equity Awards (if then outstanding) upon a termination without Cause or for Good Reason to apply as set forth in Section 3(c)(ii)), (i) the Executive shall be treated as having been employed through the Retirement Date for purposes of Sections 4(b),(c),(d),(e) and (f) of this Agreement, (ii) subject to Section 7(e) and the Executive’s compliance in all material respects with the noncompetition covenant set forth in Section 10(b) during the applicable Non-Competition Period, (A) on the sixtieth (60^th) day following the Date of Termination, the Company shall pay to the Executive a lump sum in cash equal to the Base Salary that the Executive would have been paid during the period commencing on the Date of Termination and ending on the Retirement Date (“Cash Severance”); (B) during the period commencing on the Date of Termination and ending on the Retirement Date, the Executive shall continue to participate in the Company’s health and welfare plans on the same

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terms as immediately prior to the Date of Termination; and (C) the Company shall pay the Executive, (x) the annual cash bonus award under the MICP for FY 2016 as determined under Section 3(b) as though the Executive had remained employed until the Retirement Date and (y) the annual cash bonus award under the MICP with respect to FY 2017 that the Executive would have received under Section 3(b) if he had remained employed until the Retirement Date (for the avoidance of doubt, in each of clauses (x) and (y), based on the extent to which applicable performance goals have been attained and not subject to proration due to a termination of employment prior to the Retirement Date) and (iii) if the FY 2016 Equity Awards have not been granted prior to the Date of Termination, the Company shall pay (A) an amount in cash equal to the Grant Date Value of the FY 2015 Options, to be paid in a single lump sum within thirty (30) days following the Date of Termination and (B) subject solely to the Executive’s compliance in all material respects with the Covenants prior to the Retirement Date, an amount in cash equal to the Grant Date Value of the FY 2015 RSUs, which shall be paid 50% on the first Anniversary Date and 50% on the second Anniversary Date.

(d)VOLUNTARY RESIGNATION PRIOR TO RETIREMENT DATE. If, during the Term, the Executive voluntarily resigns prior to the Retirement Date, then, in addition to making payments and providing benefits pursuant to Section 7(a), the Company shall pay to the Executive the annual cash bonus award under the MICP for the Company’s fiscal year in which the Date of Termination occurs, as determined under the MICP and Section 3(b) of this Agreement, based on the extent to which the applicable performance goals have been attained, and such amount shall be prorated, as described in Section 3(b)(iii).

(e)SECTION 409A.

(i)Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of Section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service and if any portion of the payments or benefits to be received by the Executive upon separation from service would be considered deferred compensation under Section 409A, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the “Delayed Payments”) and benefits that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during the six-month period immediately following the Executive’s separation from service (such period, the “Delay Period”) on account of the Executive’s separation from service shall instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date, the “Permissible Payment Date”). The Company shall also reimburse the Executive for the after-tax cost incurred by the Executive in independently obtaining any Delayed Benefits (the “Additional Delayed Payments”).

(ii)With respect to any amount of expenses eligible for reimbursement under Section 4(a)(1)(iii), such expenses shall be reimbursed by the Company within thirty (30) calendar days following the date on which the Company receives the applicable

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invoice from the Executive but in no event later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(iii)Each payment under this Agreement shall be considered a “separate payment” and not of a series of payments for purposes of Section 409A.

(iv)Any Delayed Payments shall bear interest at the United States 5-year Treasury Rate, plus 2%, which accumulated interest shall be paid to the Executive on the Permissible Payment Date.

(f)EXECUTION OF RELEASE. As a condition of receiving any payments for which the Executive otherwise qualifies under Section 7(c)(ii), the Executive shall be required to execute, deliver and not revoke, a mutual Release in the form attached hereto as Exhibit A, such Release to be delivered by the Executive and become irrevocable no later than sixty (60) calendar days following the Executive’s separation from service. If the Release has not been executed, delivered and become irrevocable by the Executive within the statutory revocation period and on or prior the sixtieth (60th) day following the separation from service, all payments under Section 7(c)(ii) shall be forfeited. Notwithstanding the foregoing, if the Company does not execute and deliver the Release to the Executive within two (2) business days following the Executive’s delivery of the Release to the Company, then any requirement for the Executive to execute, deliver and not revoke the Release as a condition of receiving any payments under Section 7(c)(ii) will have no effect, and the Executive shall be entitled to receive any payments to which the Executive otherwise qualifies under Section 7(c)(ii), and the prior execution of the Release by the Executive shall be void and of no force or effect.

8.NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation during the Term in any plan, program, policy or practice provided by the Company or any of its affiliated companies for which the Executive may qualify nor shall anything in this Agreement limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Vested benefits and other amounts that the Executive is otherwise entitled to receive under any plan, policy, practice or program of, or any contract of agreement with, the Company or any of its affiliated companies on or after the Date of Termination shall be payable in accordance with the terms of each such plan, policy, practice, program, contract or agreement, as the case may be, except as explicitly modified by this Agreement.

9.FULL SETTLEMENT. Except as provided herein, the Company’s obligation to make the payments provided for in, and otherwise to perform its obligations under, this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against the Executive or others. In no event shall the Executive be

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obligated to seek other employment or take any other action to mitigate the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced, regardless of whether the Executive obtains other employment.

10.CONFIDENTIAL INFORMATION; NON-COMPETITION; SOLICITATION.

(a)CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity for the benefit of the Company any and all information of the Company and its subsidiaries that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business and any and all information not readily available to the public, which, if disclosed by the Company or its subsidiaries could reasonably be of benefit to such person or business in competing with or doing business with the Company (“Confidential Information”). Confidential Information includes, without limitation, such information relating to the (i) development, research, testing, manufacturing, engineering and distribution operational processes, marketing and financial activities, including costs, profits and sales, of the Company and its subsidiaries, (ii) products and all formulas therefor, (iii) costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) identity and special needs of the customers and suppliers of the Company and its subsidiaries and (v) people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. “Confidential Information” also includes comparable information that the Company or any of its subsidiaries have received belonging to others or which was received by the Company or any of its subsidiaries pursuant to an agreement by the Company that it would not be disclosed. “Confidential Information” does not include information which (A) is or becomes available to the public generally (other than as a result of the Executive’s unauthorized disclosure), (B) was within the Executive’s possession prior to its being furnished to the Executive by or on behalf of the Company, provided that the source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, (C) becomes available to the Executive on a non-confidential basis from a source other than the Company or its subsidiaries, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, (D) was independently developed by the Executive without reference to the Confidential Information or (E) is required by law to be disclosed. Notwithstanding the foregoing, this Agreement is not intended to and shall be interpreted in a manner that does not limit or restrict the Executive from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the U.S. Securities Exchange Act of 1934).

(b)NON-COMPETITION. During the period commencing on the Effective Date and ending on (i) April 30, 2019 or (ii) in the event of the Executive’s termination of employment by the Company other than for Cause or by the Executive for Good Reason prior to the Retirement Date, April 30, 2017 (such period, the “Non-Competition Period”), the Executive shall not, without the written consent of the Board, serve in an executive role with respect to, any person or entity (other than the Company) that is primarily engaged in any Competitive Business (as defined below). “Competitive Business” shall mean any business that

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materially competes with a significant operating business which the Company (x) while the Executive is employed during the Term, is engaged in or conducting during the Term or (y) to the extent that this Section 10(b) applies after the Term, engaged in or conducted during the Company’s last completed fiscal year preceding the last day of the Term and which constituted at least 30% of the net sales of the Company and its subsidiaries for such completed fiscal year. Notwithstanding the foregoing, the Executive may become a partner or employee of, or otherwise acquire an interest in, a stock or business brokerage firm, consulting or advisory firm, investment banking firm or similar organization which, as part of its business, trades or invests in securities of Competitive Businesses or which represents or acts as agent or advisor for Competitive Businesses, but only on condition that the Executive shall not personally render any services either directly to such Competitive Business or other persons or to the Executive’s firm in connection therewith, in each case that would otherwise be prohibited under this Section 10(b).

(c)RETURN OF PROPERTY. The Executive shall promptly return to the Company upon the Retirement Date (or, if earlier, Date of Termination) or at any other time the Company may so request, all notes, records, documents, files and memoranda (including in electronic format and all copies of such materials) constituting Confidential Information he may then possess or have under his control; provided, however, that he may retain his personal correspondence, diaries, rolodex (paper and electronic) and other items of a personal nature.

(d)MUTUAL NONDISPARAGEMENT. During the Non-Competition Period, (i) the Executive shall not make, either directly or indirectly, any oral or written negative, disparaging or adverse statements or representations of or concerning the Company or its subsidiaries, any of their businesses, or the business reputations or character of any of their current or former officers, directors or management level employees and (ii) the Company shall not issue, and the Company Parties (as defined below) shall not make, any oral or written negative, disparaging or adverse statements or representations of or concerning the business reputation or character of the Executive; provided, however, that nothing herein shall prohibit (A) critical communications between the Executive and the Company in connection with the Executive’s employment, (B) the Executive or any Company Party from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) or (C) either party from acting in good faith to enforce such party’s rights under this Agreement. For purposes of this Agreement, the term “Company Parties” shall mean the executive officers, directors and designated spokespersons of the Company.

(e)REASONABLENESS. The Executive acknowledges that in his capacity as the Chairman and Special Advisor to the Company under this Agreement, and as the Chief Executive Officer of the Company under the Prior Agreement, the Executive has had and will have significant exposure and access to the Confidential Information of the Company and its subsidiaries. Therefore, the Executive acknowledges that the limitations and obligations contained in this Section 10 are, individually and in the aggregate, reasonable, valid, enforceable and properly required by the Company and its subsidiaries, and the Company acknowledges the same with respect to the obligations under Section 10(d).

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(f)INJUNCTIVE RELIEF. The Executive acknowledges that a violation by the Executive of any of the covenants contained in this Section 10 would cause immeasurable and irreparable damage to the Company and its subsidiaries in an amount that would be material but not readily ascertainable, and that any remedy at law would be inadequate, and the Company acknowledges that any violation of Section 10(d) would similarly cause immeasurable and irreparable damage to the Executive. Accordingly, each party (in addition to any other rights it may have under this Agreement) shall be entitled (without the necessity of showing economic loss or other actual damage or posting band) to injunctive relief in any court of competent jurisdiction for any actual or threatened violation of any such covenant in addition to any other remedies it may have. The parties agree that in the event that any court of competent jurisdiction shall finally hold that any provision of Section 10 hereof is void or constitutes an unreasonable restriction against the other party, the provisions of this Section 10 shall not be rendered void but shall be deemed to be modified to the minimum extent necessary to remain in force and effect for the greatest period and to such extent as such arbitrator or court may determine constitutes a reasonable restriction under the circumstances.

11.DISPUTE RESOLUTION. Except for the Executive’s and the Company’s right to seek injunctive relief as set forth in Section 10(f), all disputes arising under, related to, or in connection with this Agreement shall be settled by expedited arbitration conducted before a panel of three (3) arbitrators sitting in Hartford, Connecticut, in accordance with the rules of the American Arbitration Association then in effect. The decision of the arbitrators in that proceeding shall be binding on the Company and the Executive. Judgment may be entered on the award of the arbitrators in any court having jurisdiction. Each party shall bear its own costs and expenses (including legal fees) in connection with any arbitration proceeding instituted hereunder; provided, however, that if the Executive prevails in the arbitration, his costs and expenses shall be promptly reimbursed by the Company. The reimbursement provided for in this Section 11 shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company received reasonable written evidence of such fees and expenses, but in any event no later than within thirty (30) calendar days following the date on which such consent or dispute (whether or not appealed) is resolved.

12.ASSIGNMENT; SUCCESSORS. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession and benefits had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive’s employment for Good Reason.

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13.MISCELLANEOUS.

(a)GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Connecticut, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b)NOTICES. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

At his address on file with the Company

If to the Company:

Stanley, Black & Decker, Inc.

1000 Stanley Drive

New Britain, Connecticut 06053

Facsimile: 860-827-3911

Attention: Bruce H. Beatt, Senior Vice President, General Counsel and Secretary

With a copy to:

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, New York 10019

Attention: Eric W. Hilfers, Esq.

or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of Section 13. Notices and communications shall be effective when actually received by the addressee.

(c)SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law.

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(d)LEGAL FEES. The Company shall pay directly or reimburse the Executive for reasonable legal fees and expenses incurred in connection with the negotiation and preparation of this Agreement. Such payment or reimbursement by the Company shall be subject to the Reimbursement Rules.

(e)WITHHOLDING. Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations.

(f)WAIVER. The Executive’s or the Company’s failure to insist upon strict compliance with any provisions of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement.

(g)ENTIRE AGREEMENT. The Executive and the Company acknowledge that this Agreement (together with the Exhibit A hereto) constitutes the entire understanding of the parties with respect to the subject matter hereof and supersede any other prior agreement or other understanding, whether oral or written, express or implied, between them concerning, related to or otherwise in connection with, the subject matter hereof and that, following the date hereof, no such agreement or understanding shall be of any further force or effect; provided that the CIC Severance Agreement shall remain in full force and effect.

(h)SECTION 409A. To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with Section 409A. This Agreement shall be construed in a manner to give effect to such intention. The subject matter of this Agreement involves complex and substantial tax considerations. The Executive acknowledges that he has been afforded adequate opportunity to consult and that he has consulted with his own tax adviser with respect to this Agreement. The Company makes no warranties or representations whatsoever to the Executive regarding the tax consequences of any item of compensation subject to this Agreement and which is paid in accordance with the terms of this Agreement.

(i)SURVIVAL OF TERMS. To the extent necessary to effectuate the terms of this Agreement, terms of this Agreement which must survive the termination of the Executive’s employment or the termination of this Agreement shall so survive.

(j)COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument.

(k)EACH PARTY THE DRAFTER. This Agreement and the provisions contained in it shall not be construed or interpreted for or against any party to this Agreement because that party drafted or caused that party’s legal representative to draft any of its provisions.

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization of its Board, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written, to become effective as of the Effective Date.

STANLEY BLACK & DECKER, INC.
By:
	Name: Bruce H. Beatt
	Title: Senior Vice President, General Counsel & Secretary

JOHN F. LUNDGREN
By:
	Name: John F. Lundgren

[SIGNATURE PAGE TO EXECUTIVE RETIREMENT AGREEMENT]

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John F. Lundgren – Outstanding Equity Awards
(as of July 12, 2016)

Grant Type with Subtype	Grant Date	Grant Size (Shares)	Grant Price		Vesting (1)	Exercisable Amount	Outstanding Amount	Grant Expiration Date (2)
NQ Options	12/08/2011	75,000		$64.785	vested	75,000	75,000	12/08/2021
NQ Options	12/06/2012	75,000		$70.610	4 year SL	56,250	75,000	12/06/2022
NQ Options	12/05/2013	75,000		$79.700	4 year SL	37,500	75,000	12/05/2023
NQ Options	12/05/2014	75,000		$95.180	4 year SL	18,750	75,000	12/05/2024
NQ Options	12/04/2015	75,000		$109.245	4 year SL	0	75,000	12/04/2025
RSU	12/06/2012	25,000	N/A		4 year SL		6,250	N/A
RSU	12/05/2013	21,429	N/A		4 year SL	N/A	10,715	N/A
RSU	12/05/2014	21,429	N/A		4 year SL	N/A	16,072	N/A
RSU	12/04/2015	18,750	N/A		4 year SL	N/A	18,750	N/A
Performance Share Units	02/17/2014	47,959	N/A		Cliff on settlement date, following 3 year performance period based on performance	N/A	47,959	N/A
Performance Share Units	02/17/2015	41,284	N/A			N/A	41,284	N/A
Performance Share Units	02/17/2016	43,490	N/A			N/A	43,490	N/A

(1) Stock options and restricted stock units (RSUs) are subject to 4-year straight-line (SL) vesting (i.e., vest 25% on each anniversary date of grant). Vesting for stock options and RSUs also occurs upon death, Disability, or Retirement (as defined in the applicable award agreement), as indicated in the applicable award agreement. In the case of Performance Share Units (PSUs), the above Table reflects the target shares granted. The pro rata payout of PSUs will be based on the number of complete months of service during the 3-year performance period. The foregoing description is qualified in all respects by reference to the award agreement pursuant to which the applicable award has been granted to the Executive.

(2) Stock options will remain exercisable until the grant expiration date set forth in this column following the termination of the Executive’s employment for any reason other than by the Company for Cause.

Schedule A

EXHIBIT A
EXECUTIVE RETIREMENT AGREEMENT

MUTUAL RELEASE

(a)John F. Lundgren (“Releasor”) for and in consideration of benefits provided pursuant to an Executive Retirement Agreement Stanley Black & Decker, Inc. entered into on July 21, 2016 (the “Retirement Agreement”), does for himself and his heirs, executors, administrators, successors and assigns, hereby now and forever, voluntarily, knowingly and willingly release and discharge Stanley Black & Decker, Inc. and its parents, subsidiaries and affiliates (collectively, the “Company Group”), together with their respective present and former partners, officers, directors, employees and agents, and each of their predecessors, heirs, executors, administrators, successors and assigns (but as to any partner, officer, director, employee or agent, only in connection with, or in relationship to, his to its capacity as a partner, officer, director, employee or agent of the Company and its subsidiaries or affiliates and not in connection with, or in relationship to, his or its personal capacity unrelated to the Company or its subsidiaries or affiliates) (collectively, the “Company Releasees”) from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever, known or unknown, suspected or unsuspected, which against the Company Releasees, jointly or severally, Releasor or Releasor’s heirs, executors, administrators, successors or assigns ever had or now have by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time Releasor executes this release arising out of or relating in any way to Releasor’s employment or director relationship with the Company, or the termination thereof, including but not limited to, any rights or claims arising under any statute or regulation, including the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, or the Family and Medical Leave Act of 1993, each as amended, or any other federal, state or local law, regulation, ordinance or common law, or under any policy, agreement, understanding or promise, written or oral, formal or informal, between any Company Releasee and Releasor. Releasor shall not seek or be entitled to any recovery, in any action or proceeding that may be commenced on Releasor’s behalf in any way arising out of or relating to the matters released under this Release. Notwithstanding the foregoing, nothing herein shall release any Company Releasee from any claim or damages based on (i) the Releasor’s rights under the Retirement Agreement, (ii) any right or claim that arises after the date the Releasor executes this release, (iii) the Releasor’s eligibility for indemnification in accordance with applicable laws or the certificate of incorporation or by-laws of the Company (or any affiliate or subsidiary) or any applicable insurance policy, with respect to any liability the Releasor incurs or incurred as a director, officer or employee of the Company or any affiliate or subsidiary (including as a trustee, director or officer of any employee benefit plan) or (iv) any right the Releasor may have to obtain contribution as permitted by law in the event of entry of judgment against the Releasor as a result of any act or failure to act for which the Releasor and the Company or any affiliate or subsidiary are held jointly liable.

(b)Releasor has been advised to consult with an attorney of Releasor’s choice prior to signing this release, has done so and enters into this release freely and voluntarily.

A-1

(c)Releasor has had in excess of twenty-one (21) calendar days to consider the terms of this release. Once Releasor has signed this release, Releasor has seven (7) additional days to revoke Releasor’s consent and may do so by writing to the Company as provided in Section 13(b) of the Retirement Agreement. Releasor’s release shall not be effective, and no payments or benefits shall be due under Section 7(c) of the Retirement Agreement, until the eighth day after Releasor shall have executed this release (the “Revocation Date”) and returned it to the Company, assuming that Releasor has not revoked Releasor’s consent to this release prior to the Revocation Date.

(d)The Company, for and in consideration of the Releasor’s covenants under the Retirement Agreement, on behalf of itself and the other members of the Company Group and any other Company Releasee, their respective successors and assigns, and any and all other persons claiming through any member of the Company Group or such other Company Releasee, and each of them, does hereby now and forever, voluntarily, knowingly and willingly release and discharge, the Releasor and dependents, administrators, agents, executors, successors, assigns, and heirs, from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever, known or unknown, suspected or unsuspected, which against the Releasor, jointly or severally, the Company and each other member of the Company Group or any other Company Releasee, their respective successors and assigns, and any and all other persons claiming through any member of the Company Group or such other Company Releasee ever had or now have by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time the Company executes this release arising out of or relating to the Releasor’s employment or director relationship with the Company or the termination thereof, including, but not limited to, any claim, demand, obligation, liability or cause of action arising under any federal, state or local employment law or ordinance, tort, contract or breach of public policy theory or alleged violation of any other legal obligation. Notwithstanding the foregoing, nothing herein shall release the Releasor and his dependents, administrators, agents, executors, successors, assigns, and heirs, (i) in respect of the Company’s rights under the Retirement Agreement, or (ii) from any claims or damages based on any right or claim that arises after the date the Company executes this release.

(e)The Company’s release shall become effective on the Revocation Date, assuming that Releasor shall have executed this release and returned it to the Company and has not revoked Releasor’s consent to this release prior to the Revocation Date.

(f)In the event that any one or more of the provisions of this release shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this release shall not in any way be affected or impaired thereby.

A-2

This release shall be governed by the law of the State of Connecticut without reference to its choice of law rules.

STANLEY BLACK & DECKER, INC.
By:
	Name:
	Title:

Signed as of this ____ day of _____________.

RELEASOR

John F. Lundgren

Signed as of this ____ day of _____________

A-3

EX-10.4

EXECUTION COPY

EXHIBIT 10.4

SECOND AMENDED AND RESTATED
CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS SECOND AMENDED AND RESTATED AGREEMENT (the “Agreement”), dated July 21, 2016, is made by and between Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”), and John F. Lundgren (the “Executive”).

WHEREAS, the Company is currently a party to an Amended and Restated Change in Control Severance Agreement with the Executive, dated December 10, 2008 (the “Prior Agreement”);

WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management and other key employees, may result in the departure or distraction of management personnel and other key employees to the detriment of the Company and its shareowners;

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management and other key employees, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;

WHEREAS, the parties wish to amend and restate the Prior Agreement to replace the provision thereunder providing the Executive with a gross-up payment for any golden parachute excise taxes payable in connection with a Change in Control with a “best net after-tax cutback” provision which requires any payments and benefits that could constitute “parachute payments” (within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) to be reduced to avoid the golden parachute excise tax, but only if doing so would result in the Executive receiving a greater amount of payments and benefits in connection with a Change in Control than would be the case if such payments and benefits were not reduced and the Executive were instead subject to the golden parachute excise tax; and

WHEREAS, simultaneously with the execution of this Agreement, the Company and the Executive have entered into an Executive Retirement Agreement, dated as of the date hereof (“Retirement Agreement”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1.Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2.Term of Agreement. The Term of this Agreement commenced on March 1, 2004 and shall end on April 30, 2017 (the “End Date”).

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3.Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 10.1 hereof, no Severance Payments shall be payable under this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive’s employment with the Company following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

4.The Executive’s Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive’s employment for Good Reason or by reason of death, Disability or Retirement, (iv) the termination by the Company of the Executive’s employment for any reason or (v) the End Date.

5.Compensation Other Than Severance Payments.

5.1Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executive’s full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive’s Base Salary at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executive’s employment is terminated by the Company for Disability.

5.2If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay, in addition to the payments and benefits due under Section 4(a) of the Retirement Agreement (with any outstanding equity awards, including the FY 2016 Equity Awards, to receive the more favorable of the treatment applicable to such awards on a Change in Control and that otherwise applicable) and subject to the nonduplication of benefits provisions set forth in Section 12 of this Agreement, the Executive’s Base Salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

5.3If the Executive’s employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall, in addition to the payments and benefits due under Section 4(a) of the Retirement Agreement (with any outstanding equity awards, including the FY 2016 Equity Awards, to receive the more favorable of the treatment applicable to such awards on a Change in

2

Control and that otherwise applicable) and Section 7(b) of the Retirement Agreement in the case of the Executive’s termination due to death or Disability, and subject to the nonduplication of benefits provisions set forth in Section 12 of this Agreement, pay to the Executive the Executive’s post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason. In addition, if the Executive’s employment continues through April 30, 2017, the Executive shall be provided with the benefits under Sections 4(b) through 4(f) of the Retirement Agreement.

6.Severance Payments.

6.1If the Executive incurs a “separation from service” (within the meaning of Section 409A) following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”) and Section 6.2, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive shall be deemed to have incurred a separation from service following a Change in Control by the Company without Cause or by the Executive with Good Reason if (i) the Executive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control occurs). For purposes of Sections 5 and 6 of this Agreement (other than the last sentence of Section 6.2(A)), no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment will be made or provided unless and until such termination of employment is also a “separation from service,” as determined in accordance with Section 409A.

(A)In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of the “Cash Severance” otherwise payable to the Executive pursuant to Section 7(c)(ii)(A) of the Retirement Agreement, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to three (3) times the sum of the (i) Executive’s Base Salary or, if higher, the Base Salary in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the average annual bonus earned by the Executive pursuant to Section 3(b) of the Employment Agreement or Section 3(b) of the Retirement Agreement and any other annual bonus or incentive plan maintained by the Company in respect of the three (3) fiscal years ending immediately prior to

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the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to the fiscal year in which the first event or circumstance constituting Good Reason occurs.

(B)For the thirty-six (36) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater after tax cost to the Executive than the after tax cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method, such health insurance benefits shall be provided through a third-party insurer; provided, further, that if the Executive requests, such benefits shall be provided in the manner contemplated by Section 4(b) of the Retirement Agreement. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive from another employer of the Executive during the thirty-six (36) month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall promptly reimburse the Executive for the excess, if any, of the after tax cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.

(C)In addition to the retirement benefits, if any, to which the Executive is entitled under each DB Pension Plan or any successor plan thereto, the Company shall pay the Executive a lump sum amount, in cash, equal to the excess of (i) the actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the third anniversary of the Date of Termination) as of which the actuarial equivalent of such annuity is greatest) which the Executive would have accrued under the terms of all DB Pension Plans (without regard to any amendment to any DB Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if the Executive were fully vested thereunder and had accumulated (after the Date of Termination) thirty-six (36) additional months of age and service credit thereunder and had been credited under each DB Pension Plan during such period with compensation equal to the Executive’s compensation (as defined in such DB Pension Plan) during the twelve (12) months immediately preceding Date of Termination or, if higher, during the twelve (12) months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, over (ii) the actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the Date of Termination) as of which the actuarial equivalent of such annuity is greatest) which the Executive had accrued pursuant to the provisions of the DB Pension Plans as of the Date of Termination. For purposes of this Section 6.1(C), “actuarial equivalent” shall be determined using the same assumptions utilized under The Stanley Works Retirement Plan or

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any successor plan immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason. Notwithstanding the foregoing, the calculation of the lump sum amount payable with respect to the DB Pension Plan that arises pursuant to Section 3(g) (“Pension Make-Whole”) of the Employment Agreement shall be determined based on the projected increase in the Executive’s Historical Average Compensation (as defined in Exhibit D to the Employment Agreement). The payments provided in this Section 6.1(C) are in addition to any payment the Executive would otherwise receive under the applicable DB Plan and are not intended to offset or reduce any payment under such DB Plan or the Pension Make Whole.

(D)In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive’s behalf during the thirty-six (36) months immediately following the Date of Termination, determined (x) as if the Executive made the maximum permissible contributions thereto during such period, (y) as if the Executive earned compensation during such period at a rate equal to the Executive’s compensation (as defined in the DC Pension Plan) during the twelve (12) months immediately preceding the Date of Termination or, if higher, during the twelve (12) months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (z) without regard to any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the excess, if any, of (x) the Executive’s account balance under the DC Pension Plan as of the Date of Termination over (y) the portion of such account balance that is nonforfeitable under the terms of the DC Pension Plan. The payments provided in this Section 6.1(D) are in addition to any payment the Executive would otherwise receive under the applicable DC Plan and are not intended to offset or reduce any payment under such DC Plan or the Pension Make-Whole.

(E)If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans, as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of thirty-six (36) months after the Date of Termination, the Company shall provide such post-retirement health care and/or life insurance benefits to the Executive and the Executive’s dependents commencing on the later of (i) the date on which such coverage would have first become available and (ii) the date on which benefits described in subsection (B) of this Section 6.1 terminate.

(F)The Company shall provide the Executive with third-party outplacement services suitable to the Executive’s position for the period following the Executive’s Date of Termination and ending on December 31 of the second calendar year following such Date of Termination or, if earlier, until the first acceptance by the Executive of an offer of employment, provided, however, that in no case shall the Company be required to pay in excess of $50,000 over such period in providing outplacement services and that all reimbursements hereunder shall be paid to the Executive within thirty (30) calendar days following the date on which the Executive submits

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the invoice but no later than December 31 of the third calendar year following the year of the Executive’s Date of Termination.

(G)For the thirty-six (36) month period immediately following the Date of Termination or until the Executive becomes eligible for substantially similar benefits from a new employer, whichever occurs earlier, the Company shall continue to provide the Executive with all perquisites provided by the Company (i) to the Executive pursuant to the Retirement Agreement (including, without limitation, automobile, financial planning, annual physical and executive whole life insurance) and the benefits under Sections 4(d), 4(e) and 4(f) of the Retirement Agreement (as if the Executive had been employed through April 30, 2017), and (ii) immediately prior to the Date of Termination or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

6.2(A) Notwithstanding any other provisions in this Agreement, if any of the payments or benefits received or to be received by the Executive (including any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out, if any, of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

(B)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata

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reduction of cash payment and payments and benefits due in respect of any equity not subject to section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to section 409A as deferred compensation.

(C)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code, taking into account the value attributable to the Executive agreeing to refrain from performing services pursuant to a covenant not to compete, with such valuation to be determined by an independent valuation firm with expertise in such matters) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation; and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code.

(D)All determinations required by this Section 6.2 (or requested by either the Executive or the Company in connection with this Section 6.2) will be at the expense of the Company. The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 6.2 will not of itself limit or otherwise affect any other rights of the Executive under this Agreement. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments.

6.3Subject to Section 6.4, the payments provided in subsections (A), (C) and (D) of Section 6.1 hereof shall be made not later than the fifth (5th) business day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in Section 1274 (b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) calendar day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall be payable by the Executive to the Company on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in Section 1274(b)(2)(B) of the Code). At the time that payments are made under this Agreement, the Company shall provide the Executive

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with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

6.4(A) Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of Section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service and if any portion of the payments or benefits to be received by the Executive upon separation from service would be considered deferred compensation under Section 409A, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the “Delayed Payments”) and benefits that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during the six-month period immediately following the Executive’s separation from service (such period, the “Delay Period”) shall instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date, the “Permissible Payment Date”). The Company shall also reimburse the Executive for the after-tax cost incurred by the Executive in independently obtaining any Delayed Benefits (the “Additional Delayed Payments”).

(B)With respect to any amount of expenses eligible for reimbursement under Sections 6.1 (B), (E) and (G), such expenses shall be reimbursed by the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from the Executive but in no event later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(C)For purposes of Section 409A, the Executive’s right to receive any “installment” payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

6.5The Company shall deposit the estimated Delayed Payments and estimated Additional Delayed Payments into an irrevocable grantor trust (for purposes of this Section 6, the “Grantor Trust”) not later than the fifth business day following the occurrence of a Potential Change in Control. The Company shall deposit additional amounts into the Grantor Trust on the monthly basis equal to the interest accrued on the Delayed Payments (and any earlier interest payments) at the United States 5-year Treasury Rate plus 2%, and the amount held in the Grantor Trust shall be paid to the Executive (in accordance with the terms of the Grantor Trust) on the Permissible Payment Date.

6.6The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement. Such payments shall be made within five (5) business days (but in any event no later than

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December 31 of the year following the year in which the Executive incurs the expenses) after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, provided that (i) the amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, (ii) the Executive’s right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit, and (iii) the Executive shall not be entitled to reimbursement unless he has submitted an invoice for such fees and expenses at least ten (10) business days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred. The Company shall also pay all legal fees and expenses incurred by the Executive in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit hereunder. Payment pursuant to the preceding sentence will be made within fifteen (15) business days after delivery of the Executive’s written request for payment but in no event later than the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or proceeding are remitted to the taxing authority, or where as a result of the audit or proceeding no taxes are remitted, the end of the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the matter.

7.Termination Procedures and Compensation During Dispute.

7.1Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Further, a Notice of Termination for Cause (and the subsequent special Board meeting to determine whether Cause exists) shall be in accordance with the provisions set forth in Section 6(b) of the Retirement Agreement.

7.2Date of Termination. “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in Control and during the Term, shall mean (i) if the Executive incurs a separation from service due to Disability, thirty (30) calendar days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) calendar day period), and (ii) if the Executive incurs a separation from service for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall be the 30th calendar day after Notice of Termination is given (except in the case of a termination for Cause, in which case the Date of Termination will be determined in accordance with Sections 6(b)(ii) and 6(d) of the Retirement Agreement) and, in the case of a termination by the Executive, shall not be less than fifteen (15) calendar days nor more than sixty (60) calendar days, respectively, from the date such Notice of Termination is given).

8.No Mitigation. The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to

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Section 6 hereof. Further, except as specifically provided in Sections 6.1(B) and 6.1(G) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

9.Restrictive Covenants.

9.1The Executive agrees that restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its Subsidiaries, and that the agreed restrictions set forth below will not deprive the Executive of the ability to earn a livelihood:

(A)In the event that, during the twenty-four (24) months following termination of employment during the Term by the Executive for Good Reason or by the Company other than for Cause, death, or Disability (the “Non-Competition Period”), the Executive shall, without the written consent of the Board, directly or indirectly, as employee, agent, consultant, stockholder, director, manager, co-partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist any person or entity (other than the Company) that engages in or owns, invests in, operates, manages or controls any venture or enterprise that directly or indirectly engages or proposes to engage in any Competitive Business, then the Company’s obligations to make any further payments or provide any further benefits under Section 6.1 shall immediately terminate.

(B)The Executive agrees that during the Term and thereafter, he will remain bound by Sections 10(a) and 10(c) of the Retirement Agreement.

(C)Without limiting the foregoing, it is understood that the Company shall not be obligated to make any of the payments or to provide for any of the benefits specified in Sections 6.1 and 6.2 hereof, and shall be entitled to recoup the pro rata portion of any such payments and of the value of any such benefits previously provided to the Executive in the event of a material breach by the Executive of the provisions of this Section 9 (such pro ration to be determined as a fraction, the numerator of which is the number of days from such breach to the second anniversary of the date on which the Executive terminates employment and the denominator of which is 730), which breach continues without having been cured within fifteen (15) calendar days after written notice to the Executive specifying the breach in reasonable detail.

10.Successors; Binding Agreement.

10.1In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

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10.2This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

11.Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address on file with the Company and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company:	Stanley Black & Decker, Inc.
	1000 Stanley Drive
	New Britain, Connecticut 06053
	Attention: General Counsel

12.Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company (including, without limitation, the Retirement Agreement) only in the event that the Executive’s employment with the Company is terminated during the Term on or following a Change in Control (or deemed to have been so terminated), by the Company other than for Cause, death or Disability or by the Executive for Good Reason. Notwithstanding the foregoing, this Agreement shall not supersede Sections 3(b), 3(c), 3(d), 3(e), 3(g), 3(h) or 4(a)-4(f) of the Retirement Agreement, which provisions shall apply as if set forth herein (it being agreed that the Executive shall be treated as having remained employed until April 30, 2017 if his employment is terminated by the Company other than for Cause, death or Disability or by the Executive for Good Reason in connection with a Change in Control). To the extent that this Agreement does not supersede the Retirement Agreement but provides payments or benefits in excess of those to which the Executive is entitled under the Retirement Agreement, the Executive shall be entitled to (i) such excess payments and benefits and (ii) payments and benefits due pursuant to the Retirement Agreement. Further, to the extent this Agreement does not supersede the Retirement Agreement or any other agreement setting forth the terms and conditions of the Executive’s employment with the Company, it shall not result in any duplication of benefits to the Executive. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Connecticut, without regard to its conflicts of law principles. All references to sections of the

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Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7 hereof) shall survive such expiration. To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with Section 409A. This Agreement shall be construed in a manner to give effect to such intention.

13.Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

15.Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) calendar days after notification by the Board that the Executive’s claim has been denied. Notwithstanding the above, in the event of any dispute, any decision by the Board hereunder shall be subject to a de novo review by a court of competent jurisdiction.

Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

16.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)“Additional Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(B)“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C)“Auditor” shall have the meaning set forth in Section 6.2 hereof.

(D)“Base Salary” shall have the meaning set forth in Section 3(a) of the Retirement Agreement.

(E)“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

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(F)“Board” shall mean the Board of Directors of the Company.

(G)“Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured within thirty (30) calendar days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists.

(H)A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or

(II)the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareowners was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or;

(III)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (i) a merger or consolidation which results in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of

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the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company’s then outstanding securities; or

(IV)the shareowners of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareowners of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

(I)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J)“Company” shall mean Stanley Black & Decker, Inc. and, except in determining under Section 15(H) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K)“Competitive Business” shall have the meaning set forth in Section 10(b) of the Retirement Agreement.

(L)“Confidential Information” shall have the meaning set forth in Section 10(a) of the Retirement Agreement.

(M)“DB Pension Plan” shall mean any tax-qualified, supplemental or excess defined benefit pension plan maintained by the Company and any other defined benefit plan, agreement, or pension make-whole arrangement entered into between the Executive and the Company which is designed to provide the Executive with supplemental retirement benefits. For purposes of Section 6.1(C) hereof, if the Executive would have satisfied the condition for participation in a DB Plan (or any successor thereto) within thirty-six (36) months following the Date of Termination (i.e., assuming the Executive accrued additional age and service credit over such period), the Executive shall be deemed to have been a participant in such plan immediately prior to the Date of Termination and shall be entitled to the benefits provided under Section 6.1(C) relating thereto.

(N)“DC Pension Plan” shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and any other defined contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive with supplemental retirement benefits.

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(O)“Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

(P)“Delayed Benefits” shall have the meaning set forth in Section 6.4 hereof.

(Q)“Delayed Payments” shall have the meaning set forth in Section 6.4 hereof.

(R)“Delay Period” shall have the meaning set forth in Section 6.4 hereof.

(S)“Disability” shall have the meaning set forth in Section 6(a) of the Retirement Agreement.

(T)“Employment Agreement” shall mean the Second Amended and Restated Employment Agreement by and between The Stanley Works and the Executive, dated November 9, 2009, and any subsequent amendments thereto.

(U)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(V)“Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

(W)“Executive” shall mean the individual named in the first paragraph of this Agreement.

(X)“Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VII) below to a “Change in Control” as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

(I)the assignment to the Executive of any duties inconsistent with the Executive’s status as a senior executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior to the Change in Control including, without limitation, if the Executive was, immediately prior to the Change in Control, an executive officer of a public company, the Executive ceasing to be an executive officer of a public company;

(II)a reduction by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same may be increased from time to time except for across-the-board salary reductions similarly affecting all senior executives of the Company and all senior executives of any Person in control of the Company;

(III)the relocation of the Executive’s principal place of employment to a location more than thirty-five (35) miles from the Executive’s principal place of

15

employment immediately prior to the Change in Control or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(IV)the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) calendar days of the date such compensation is due;

(V)the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive’s total compensation, including but not limited to the Company’s 2001 Long-Term Incentive Plan and Management Incentive Compensation Plan and Section 3(j) (“Pension Make-Whole”) of the Employment Agreement, or any substitute plans adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control;

(VI)the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control (except for across the board changes similarly affecting all senior executives of the Company and all senior executives of any Person in control of the Company), the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the Change in Control;

(VII)any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness;

(VIII)Breach by the Company of the provisions of Section 10.1 hereof; or

16

(IX)any event that would constitute “Good Reason” pursuant to the Retirement Agreement.

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

For purposes of any determination regarding the existence of Good Reason in connection with a termination of employment other than as described in the second sentence of Section 6.1 hereof, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist.

(Y)“Grantor Trust” shall have the meaning set forth in Section 6.5 hereof.

(Z)“Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

(AA)“Permissible Payment Date” shall have the meaning set forth in Section 6.4 hereof.

(BB)“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of the Company in substantially the same proportions as their ownership of stock of the Company.

(CC)“Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(II)the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control;

(III)any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates); or

(IV)the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(DD)“Prior Agreement” shall have the meaning set forth in the second paragraph of this Agreement.

17

(EE)“Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment if such employment is terminated in accordance with the Company’s retirement policy, including early retirement, generally applicable to its salaried employees.

(FF)“Section 409A” shall mean section 409A of the Code and any proposed, temporary or final regulation, or any other guidance, promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(GG)“Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

(HH)“Subsidiary” means any corporation or other business organization of which the securities having a majority of the normal voting power in electing the board of directors or similar governing body of such entity are, at the time of determination, owned by the Company directly or indirectly through one or more Subsidiaries.

(II)“Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

(JJ)“Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(KK)“Total Payments” shall mean those payments so described in Section 6.2 hereof.

18

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

STANLEY BLACK & DECKER, INC.

By:_____________________________________

Name:    Bruce H. Beatt

Title:    Senior Vice President, General

Counsel and Secretary

EXECUTIVE

By:_____________________________________

Name:John F. Lundgren

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE AGREEMENT]

19

EX-31.A

EXHIBIT 31(i)(a)

CERTIFICATIONS

I, John F. Lundgren, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Stanley Black & Decker, Inc. and subsidiaries;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 25, 2016	/s/ John F. Lundgren
		John F. Lundgren
		Chairman and Chief Executive Officer

EX-31.B

EXHIBIT 31(i)(b)

CERTIFICATIONS

I, Donald Allan Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Stanley Black & Decker, Inc. and subsidiaries;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 25, 2016	/s/ Donald Allan Jr.
		Donald Allan Jr.
		Senior Vice President and Chief Financial Officer

EX-32.I

EXHIBIT 32 (i)

STANLEY BLACK & DECKER, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Stanley Black & Decker, Inc. (the “Company”) on Form 10-Q for the period ending July 2, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John F. Lundgren, Chairman and Chief Executive Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John F. Lundgren

John F. Lundgren

Chairman and Chief Executive Officer

Date: July 25, 2016

EX-32.II

EXHIBIT 32 (ii)

STANLEY BLACK & DECKER, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Stanley Black & Decker, Inc. (the “Company”) on Form 10-Q for the period ending July 2, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald Allan, Jr., Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Donald Allan, Jr.

Donald Allan, Jr.

Senior Vice President and Chief Financial Officer

Date: July 25, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 02, 2016	Jul. 18, 2016
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Jul. 02, 2016
Amendment Flag	false
Entity Common Stock, Shares Outstanding		150,425,951
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	SWK
Entity Registrant Name	STANLEY BLACK & DECKER, INC.
Entity Central Index Key	0000093556
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Net Sales	$ 2,932.4	$ 2,866.9	$ 5,604.5	$ 5,496.9
Costs and Expenses
Cost of sales	1,803.5	1,809.7	3,498.0	3,466.1
Selling, general and administrative	659.7	631.5	1,280.1	1,245.2
Provision for doubtful accounts	7.2	13.0	14.6	22.3
Other-net	47.6	50.5	93.8	114.2
Restructuring charges	10.2	5.0	18.2	29.9
Interest expense	47.7	46.2	95.0	90.6
Interest income	(5.5)	(3.0)	(11.3)	(6.7)
Costs and Expenses, Total	2,570.4	2,552.9	4,988.4	4,961.6
Earnings from continuing operations before income taxes	362.0	314.0	616.1	535.3
Income taxes on continuing operations	90.5	78.5	156.0	133.8
Earnings from continuing operations	271.5	235.5	460.1	401.5
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest	0.0	(0.2)	(0.8)	(1.0)
Net earnings from continuing operations attributable to common shareowners	271.5	235.7	460.9	402.5
Net (loss) earnings from discontinued operations	0.0	8.5	0.0	13.0
Net Earnings Attributable to Common Shareowners	271.5	227.2	460.9	389.5
Total Comprehensive (Loss) Income Attributable to Common Shareowners	$ 174.7	$ 299.4	$ 443.9	$ 204.4
Basic earnings per share of common stock:
Continuing operations (in dollars per share)	$ 1.87	$ 1.59	$ 3.17	$ 2.68
Discontinued operations (in dollars per share)	0.00	(0.06)	0.00	(0.09)
Total basic earnings per share of common stock	1.87	1.53	3.17	2.59
Diluted earnings per share of common stock:
Continuing operations (in dollars per share)	1.84	1.54	3.12	2.60
Discontinued operations (in dollars per share)	0.00	(0.06)	0.00	(0.08)
Total diluted earnings per share of common stock	1.84	1.49	3.12	2.51
Dividends per shares of common stock	$ 0.55	$ 0.52	$ 1.10	$ 1.04
Weighted Average Shares Outstanding (in thousands):
Basic (in shares)	145,135	148,059	145,583	150,339
Diluted (in shares)	147,263	152,663	147,543	154,881

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Current Assets
Cash and cash equivalents	$ 568.2	$ 465.4
Accounts and notes receivable, net	1,571.0	1,331.8
Inventories, net	1,688.6	1,526.4
Other current assets	465.4	338.5
Total Current Assets	4,293.2	3,662.1
Property, Plant and Equipment, net	1,462.5	1,450.2
Goodwill	7,108.7	7,084.3
Intangibles, net	2,483.9	2,541.5
Other Assets	392.5	389.7
Total Assets	15,740.8	15,127.8
Current Liabilities
Short-term borrowings	351.1	2.5
Current maturities of long-term debt	6.8	5.1
Accounts payable	1,739.0	1,533.1
Accrued expenses	1,613.0	1,261.9
Total Current Liabilities	3,709.9	2,802.6
Long-Term Debt	3,814.1	3,792.1
Deferred Taxes	776.7	825.9
Post-retirement Benefits	637.2	669.4
Other Liabilities	952.8	1,178.6
Stanley Black & Decker, Inc. Shareowners' Equity
Preferred stock, without par value: Authorized and unissued 10,000,000 shares	0.0	0.0
Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2013 and 2012 Issued 176,906,265 shares in 2013 and 2012	442.3	442.3
Retained earnings	4,793.8	4,491.7
Additional paid in capital	4,464.5	4,421.7
Accumulated other comprehensive loss	(1,711.2)	(1,694.2)
ESOP	(28.4)	(34.9)
Stockholders' Equity Subtotal, Total	7,961.0	7,626.6
Less: cost of common stock in treasury	(2,157.5)	(1,815.0)
Stanley Black & Decker, Inc. Shareowners' Equity	5,803.5	5,811.6
Non-controlling interests	46.6	47.6
Total Shareowners' Equity	5,850.1	5,859.2
Total Liabilities and Shareowners' Equity	$ 15,740.8	$ 15,127.8

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 02, 2016	Jan. 02, 2016
Preferred stock, shares unissued	10,000,000	10,000,000
Preferred stock, shares authorized	10,000,000	10,000,000
Common Stock, Par or Stated Value Per Share	$ 2.50	$ 2.50
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	0	176,902,738

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
OPERATING ACTIVITIES
Net Earnings Attributable to Common Shareowners	$ 271.5	$ 227.2	$ 460.9	$ 389.5
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization of property, plant and equipment	65.6	62.5	129.8	125.4
Amortization of intangibles	36.4	39.5	72.3	79.1
Changes in working capital	57.6	(50.5)	(210.4)	(428.4)
Changes in other assets and liabilities	65.3	33.9	(49.3)	(50.5)
Cash provided by operating activities	496.4	312.6	403.3	115.1
INVESTING ACTIVITIES
Capital expenditures	(78.7)	(65.7)	(143.6)	(111.6)
Business acquisitions, net of cash acquired	(8.0)	0.0	(21.0)	(0.4)
Proceeds from sale of assets	5.5	13.2	7.6	14.2
Proceeds (payments) on net investment hedge settlements	7.9	33.5	5.5	63.9
Payments for (Proceeds from) Other Investing Activities	8.7	10.9	12.2	20.6
Cash provided by (used in) investing activities	(82.0)	(29.9)	(163.7)	(54.5)
FINANCING ACTIVITIES
Payments on long-term debt	0.0	(0.3)	0.0	(0.6)
Stock purchase contract fees	(3.4)	(4.2)	(6.9)	(8.5)
Net short-term borrowings	(132.9)	(180.2)	348.3	418.7
Cash dividends on common stock	(79.8)	(76.8)	(159.4)	(159.5)
Proceeds from Derivative Instrument, Financing Activities	27.0		27.0
Payments for Derivative Instrument, Financing Activities		0.0		0.0
Proceeds from the issuance of common stock	23.7	31.7	32.2	74.7
Purchase of common stock for treasury	(0.7)	(100.0)	(362.1)	(448.0)
Proceeds from (Payments for) Other Financing Activities	0.2	0.0	(0.5)	0.0
Cash provided by (used in) financing activities	(165.9)	(329.8)	(121.4)	(123.2)
Effect of exchange rate changes on cash and cash equivalents	(32.5)	3.5	(15.4)	(42.1)
Change in cash and cash equivalents	216.0	(43.6)	102.8	(104.7)
Cash and cash equivalents, beginning of period	352.2	435.5	465.4	496.6
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 568.2	$ 391.9	$ 568.2	$ 391.9

XML

Basis of Presentation

6 Months Ended

Jul. 02, 2016

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (hereinafter referred to as “generally accepted accounting principles”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations for the interim periods have been included and are of a normal, recurring nature. Operating results for the three and six months ended July 2, 2016 are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the consolidated financial statements and footnotes included in Stanley Black & Decker, Inc.’s (the “Company”) Form 10-K for the year ended January 2, 2016, and subsequent related filings with the Securities and Exchange Commission.

During the fourth quarter of 2014, the Company classified the Security segment’s Spain and Italy operations as held for sale based on management's intention to sell these businesses. In July 2015, the Company completed the sale of these businesses. The operating results of Security Spain and Italy have been reported as discontinued operations for the three and six months ended July 4, 2015. Net sales for discontinued operations totaled $17.6 million and $35.5 million for the three and six months ended July 4, 2015, respectively.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Certain amounts reported in the previous year have been reclassified to conform to the 2016 presentation.

XML

New Accounting Standards

6 Months Ended

Jul. 02, 2016

New Accounting Standards

New Accounting Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adopting the new guidance as well as the impact it may have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The objective of this update is to simplify the presentation of deferred income taxes by requiring all deferred tax assets and liabilities to be classified as noncurrent in the statement of financial position. The amendments in this update do not affect the current requirement to offset deferred tax assets and liabilities for each tax-paying component within a tax jurisdiction. This ASU is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods, and can be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This ASU is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard in the first quarter of 2016.

In August 2015, the FASB issued ASU 2015-15, "Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements." This ASU provides additional guidance to ASU 2015-03, discussed further below, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this standard in the first quarter of 2016.

In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." This ASU changes the measurement principle for certain inventory methods from the lower of cost or market to the lower of cost and net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU does not apply to inventory that is measured using Last-in First-out ("LIFO") or the retail inventory method. The provisions of ASU 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The new standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also indicates that debt issuance costs do not meet the definition of an asset because they provide no future economic benefit. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted this standard in the first quarter of 2016 on a retrospective basis.

In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." The new standard amends the consolidation guidance in ASC 810 and significantly changes the consolidation analysis required under current generally accepted accounting principles. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company adopted this standard in the first quarter of 2016 and it did not have an impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenue recognition standard outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model provides a five-step analysis in determining when and how revenue is recognized. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB affirmed its proposal to defer the effective date of the standard to annual reporting periods (and interim reporting periods within those years) beginning after December 15, 2017. Entities are permitted to apply the new revenue standard early, but not before the original effective date of annual periods beginning after December 15, 2016. The standard shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In March, April and May 2016, the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, and collectibility. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.

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Earnings Per Share

6 Months Ended

Jul. 02, 2016

Earnings Per Share

Earnings Per Share

The following table reconciles net earnings attributable to common shareowners and the weighted average shares outstanding used to calculate basic and diluted earnings per share for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Numerator (in millions):
Net earnings from continuing operations attributable to common shareowners	$	271.5	$	235.7		$	460.9	$	402.5
Net loss from discontinued operations	—		(8.5		)	—		(13.0		)
Net Earnings Attributable to Common Shareowners	$	271.5	$	227.2		$	460.9	$	389.5

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Denominator (in thousands):
Basic earnings per share — weighted average shares	145,135		148,059			145,583		150,339
Dilutive effect of stock options, awards and other equity arrangements	2,128		4,604			1,960		4,542
Diluted earnings per share — weighted average shares	147,263		152,663			147,543		154,881
Earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock:
Continuing operations	$	1.87	$	1.59		$	3.17	$	2.68
Discontinued operations	—		(0.06		)	—		(0.09		)
Total basic earnings per share of common stock	$	1.87	$	1.53		$	3.17	$	2.59
Diluted earnings (loss) per share of common stock:
Continuing operations	$	1.84	$	1.54		$	3.12	$	2.60
Discontinued operations	—		(0.06		)	—		(0.08		)
Total dilutive earnings per share of common stock	$	1.84	$	1.49		$	3.12	$	2.51

The following weighted average stock options were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive (in thousands):

	Second Quarter		Year-to-Date
	2016	2015	2016	2015
Number of stock options	972	642	1,281	808

As described in detail in Note I, Equity Arrangements, the Company issued Equity Units comprised of $345.0 million of Notes and Equity Purchase Contracts, which obligate the holders to purchase on November 17, 2016, for $100, between 1.0122 and 1.2399 shares of the Company’s common stock. The shares related to the Equity Purchase Contracts were anti-dilutive during January and February of 2016, and from January through April of 2015. Upon the November 17, 2016 settlement date, the Company will issue approximately 3.5 to 4.3 million shares of common stock, subject to customary anti-dilution adjustments, and expects to receive additional cash proceeds of $345.0 million.

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Financing Receivables

6 Months Ended

Jul. 02, 2016

Financing Receivables

Financing Receivables

Long-term trade financing receivables of $185.7 million and $182.1 million at July 2, 2016 and January 2, 2016, respectively, are reported within Other Assets in the Condensed Consolidated Balance Sheets. Financing receivables and long-term financing receivables are predominantly related to certain security equipment leases with commercial businesses. Generally, the Company retains legal title to any equipment under lease and bears the right to repossess such equipment in an event of default. All financing receivables are interest bearing and the Company has not classified any financing receivables as held-for-sale. Interest income earned from financing receivables that are not delinquent is recorded on the effective interest method. The Company considers any financing receivable that has not been collected within 90 days of original billing date as past-due or delinquent. Additionally, the Company considers the credit quality of all past-due or delinquent financing receivables as non-performing.

The Company has an accounts receivable sale program that expires on January 5, 2018. According to the terms of that program, the Company is required to sell certain of its trade accounts receivables at fair value to a wholly-owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS”). The BRS, in turn, must sell such receivables to a third-party financial institution (“Purchaser”) for cash and a deferred purchase price receivable. The Purchaser’s maximum cash investment in the receivables at any time is $100.0 million. The purpose of the program is to provide liquidity to the Company. The Company accounts for these transfers as sales under ASC 860, Transfers and Servicing. Receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities and its right to the deferred purchase price receivable. At July 2, 2016, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold.

At July 2, 2016 and January 2, 2016, $100.5 million and $100.4 million, respectively, of net receivables were derecognized. Gross receivables sold amounted to $488.8 million ($404.9 million, net) and $873.5 million ($746.2 million, net) for the three and six months ended July 2, 2016, respectively. These sales resulted in a pre-tax loss of $1.4 million and $2.4 million, respectively, and included servicing fees of $0.2 million and $0.4 million, respectively, for the three and six months ended July 2, 2016. Proceeds from transfers of receivables to the Purchaser totaled $400.0 million and $677.6 million for the three and six months ended July 2, 2016, respectively. Collections of previously sold receivables, including deferred purchase price receivables, and all fees, which are settled one month in arrears, resulted in payments to the Purchaser of $383.4 million and $677.6 million for the three and six months ended July 2, 2016, respectively.

Gross receivables sold amounted to $395.9 million ($341.4 million, net) and $732.0 million ($640.8 million, net) for the three and six months ended July 4, 2015, respectively. These sales resulted in a pre-tax loss of $1.0 million and $1.8 million, respectively, and included servicing fees of $0.2 million and $0.3 million, respectively, for the three and six months ended July 4, 2015. Proceeds from transfers of receivables to the Purchaser totaled $348.3 million and $593.3 million for the three and six months ended July 4, 2015, respectively. Collections of previously sold receivables, including deferred purchase price receivables, and all fees, which are settled one month in arrears, resulted in payments to the Purchaser of $325.0 million and $593.3 million for the three and six months ended July 4, 2015, respectively.

The Company’s risk of loss following the sale of the receivables is limited to the deferred purchase price receivable, which was $122.1 million at July 2, 2016 and $41.1 million at January 2, 2016. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within 30 days, and as such the carrying value of the receivable recorded approximates fair value. There were no delinquencies or credit losses for the three and six months ended July 2, 2016 or July 4, 2015. Cash inflows related to the deferred purchase price receivable totaled $128.7 million and $219.5 million for the three and six months ended July 2, 2016, respectively, and $102.3 million and $191.3 million for the three and six months ended July 4, 2015, respectively. All cash flows under the program are reported as a component of changes in accounts receivable within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is either: 1) received upon the initial sale of the receivable or 2) from the ultimate collection of the underlying receivables and the underlying receivables are not subject to significant risks, other than credit risk, given their short-term nature.

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Inventories

6 Months Ended

Jul. 02, 2016

Inventories

Inventories

The components of Inventories, net at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	July 2, 2016		January 2, 2016
Finished products	$	1,211.0	$	1,085.0
Work in process	135.3		136.1
Raw materials	342.3		305.3
Total	$	1,688.6	$	1,526.4

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Goodwill

6 Months Ended

Jul. 02, 2016

Goodwill

Goodwill

Changes in the carrying amount of goodwill by segment are as follows:

(Millions of Dollars)	Tools & Storage			Security		Industrial		Total
Balance January 2, 2016	$	3,343.4		$	2,317.2	$	1,423.7	$	7,084.3
Acquisition adjustments	—			11.8		—		11.8
Foreign currency translation and other	(31.7		)	14.7		29.6		12.6
Balance July 2, 2016	$	3,311.7		$	2,343.7	$	1,453.3	$	7,108.7

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Long-Term Debt and Financing Arrangements

6 Months Ended

Jul. 02, 2016

Long-Term Debt and Financing Arrangements

Long-Term Debt and Financing Arrangements

Long-term debt and financing arrangements at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	Interest Rate	July 2, 2016			January 2, 2016
Notes payable due in 2018	2.45%	$	628.5		$	627.5
Notes payable due in 2018 (junior subordinated)	2.25%	344.0			343.8
Notes payable due 2021	3.40%	416.7			405.9
Notes payable due 2022	2.90%	749.9			749.6
Notes payable due 2028	7.05%	175.8			167.0
Notes payable due 2040	5.20%	360.9			360.1
Notes payable due 2052 (junior subordinated)	5.75%	730.2			729.9
Notes payable due 2053 (junior subordinated)	5.75%	396.5			394.2
Other, payable in varying amounts through 2022	0.00% – 2.47%	18.4			19.2
Total long-term debt, including current maturities		$	3,820.9		$	3,797.2
Less: Current maturities of long-term debt		(6.8		)	(5.1		)
Long-term debt		$	3,814.1		$	3,792.1

In the first quarter of 2016, the Company adopted ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires debt issuance costs related to recognized debt liabilities to be presented in the balance sheet as a direct deduction from the debt liability rather than an asset. Accordingly, at July 2, 2016, approximately $42 million of deferred debt issuance costs were presented as a direct deduction within Long-Term Debt on the Company's Condensed Consolidated Balance Sheets. Furthermore, the Company reclassified approximately $45 million of deferred debt issuance costs from Other Assets to Long-Term Debt as of January 2, 2016.

At July 2, 2016, the Company's carrying value on its $632.5 million notes payable due 2018 includes $4.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $345.0 million notes payable due 2018 includes $1.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $400.0 million notes payable due 2021 includes $18.7 million pertaining to the unamortized gain on previously terminated swaps, $0.2 million of unamortized discount on the notes and $1.8 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $754.3 million notes payable due 2022 includes $0.4 million of unamortized discount on the notes and $4.0 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $150.0 million notes payable due 2028 includes a gain of $12.7 million pertaining to fair value adjustments made in purchase accounting and $13.1 million pertaining to the unamortized gain on previously terminated swaps.

At July 2, 2016, the Company's carrying value of its $400.0 million notes payable due 2040 includes $35.6 million pertaining to the unamortized loss on previously terminated swaps, $0.2 million of unamortized discount on the notes and $3.3 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $750.0 million notes payable due 2052 includes $19.8 million pertaining to deferred financing fees.

At July 2, 2016, the Company's carrying value on its $400.0 million notes payable due 2053 includes a gain of $4.9 million pertaining to the unamortized gain on previously terminated swaps and $8.4 million pertaining to deferred financing fees.

Unamortized gains and fair value adjustments associated with interest rate swaps and the impact of terminated swaps are more fully discussed in Note H, Derivative Financial Instruments.

As of July 2, 2016, the Company had $343.8 million of borrowings outstanding against the Company’s $2.0 billion commercial paper program and at January 2, 2016, the Company had no commercial paper borrowings outstanding. As of July 2, 2016, the Company has not drawn on its $1.75 billion committed credit facility.

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Derivative Financial Instruments

6 Months Ended

Jul. 02, 2016

Derivative Financial Instruments

Derivative Financial Instruments

The Company is exposed to market risk from changes in foreign currency exchange rates, interest rates, stock prices and commodity prices. As part of the Company’s risk management program, a variety of financial instruments such as interest rate swaps, currency swaps, purchased currency options, foreign exchange contracts and commodity contracts may be used to mitigate interest rate exposure, foreign currency exposure and commodity price exposure.

Financial instruments are not utilized for speculative purposes. If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, management designates its derivative instruments as cash flow hedges, fair value hedges or net investment hedges. Generally, commodity price exposures are not hedged with derivative financial instruments and instead are actively managed through customer pricing initiatives, procurement-driven cost reduction initiatives and other productivity improvement projects.

A summary of the fair value of the Company’s derivatives recorded in the Condensed Consolidated Balance Sheets at July 2, 2016 and January 2, 2016 follows: 

(Millions of Dollars)	Balance Sheet Classification	July 2, 2016		January 2, 2016		Balance Sheet Classification	July 2, 2016		January 2, 2016
Derivatives designated as hedging instruments:
Interest Rate Contracts Cash Flow	LT other assets	$	—	$	—	LT other liabilities	$	95.1	$	41.1
Interest Rate Contracts Fair Value	Other current assets	—		14.9		Accrued expenses	—		2.5
	LT other assets	—		1.4		LT other liabilities	—		5.2
Foreign Exchange Contracts Cash Flow	Other current assets	11.6		21.9		Accrued expenses	4.3		1.8
	LT other assets	4.6		3.7		LT other liabilities	0.4		—
Net Investment Hedge	Other current assets	92.3		30.3		Accrued expenses	1.5		4.8
	LT other assets	—		—		LT other liabilities	20.5		—
Total Designated		$	108.5	$	72.2		$	121.8	$	55.4
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other current assets	$	37.3	$	7.1	Accrued expenses	$	85.2	$	40.7
Total Undesignated		$	37.3	$	7.1		$	85.2	$	40.7

The counterparties to all of the above mentioned financial instruments are major international financial institutions. The Company is exposed to credit risk for net exchanges under these agreements, but not for the notional amounts. The credit risk is limited to the asset amounts noted above. The Company limits its exposure and concentration of risk by contracting with diverse financial institutions and does not anticipate non-performance by any of its counterparties. Further, as more fully discussed in Note L, Fair Value Measurements, the Company considers non-performance risk of its counterparties at each reporting period and adjusts the carrying value of these assets accordingly. The risk of default is considered remote.

During the six months ended July 2, 2016 and July 4, 2015, cash flows related to derivatives, including those that are separately discussed below, resulted in net cash received of $26.6 million and $48.3 million, respectively.

CASH FLOW HEDGES

As of July 2, 2016 and January 2, 2016, there was an after-tax mark-to-market loss of $105.3 million and $52.1 million, respectively, reported for cash flow hedge effectiveness in Accumulated other comprehensive loss. An after-tax loss of $6.6 million is expected to be reclassified to earnings as the hedged transactions occur or as amounts are amortized within the next twelve months. The ultimate amount recognized will vary based on fluctuations of the hedged currencies and interest rates through the maturity dates.

The tables below detail pre-tax amounts reclassified from Accumulated other comprehensive loss into earnings for active derivative financial instruments during the periods in which the underlying hedged transactions affected earnings for the three and six months ended July 2, 2016 and July 4, 2015 (in millions): 

Second Quarter 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(22.5	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	17.5		Cost of sales	$	5.0	$	—

Year-to-Date 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(54.1	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(4.4	)	Cost of sales	$	23.6	$	—

Second Quarter 2015	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	35.0		Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(3.6	)	Cost of sales	$	16.2	$	—

Year-to-Date 2015	Gain (Loss) Recorded in  OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	19.5	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	34.4	Cost of sales	$	22.9	$	—

 * Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

For the three and six months ended July 2, 2016, the hedged items' impact to the Consolidated Statements of Operations and Comprehensive Income was a loss of $5.0 million and $23.6 million, respectively, in Cost of sales, which is offsetting the amounts shown above. For the three and six months ended July 4, 2015, the hedged items’ impact to the Consolidated Statements of Operations and Comprehensive Income was a loss of $16.2 million and $22.9 million, respectively. There was no impact related to the interest rate contracts' hedged items for all periods presented.

For the three and six months ended July 2, 2016, an after-tax gain of $0.5 million and $9.8 million, respectively, was reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings. For the three and six months ended July 4, 2015, an after-tax gain of $4.9 million and $6.0 million, respectively, was reclassified from Accumulated other comprehensive loss into earnings (inclusive of the gain/loss amortization on terminated derivative instruments) during the periods in which the underlying hedged transactions affected earnings.

Interest Rate Contracts

The Company enters into interest rate swap agreements in order to obtain the lowest cost source of funds within a targeted range of variable to fixed-debt proportions. At July 2, 2016 and January 2, 2016, the Company had $400 million of forward starting swaps outstanding which were executed in 2014. The objective of the hedges is to offset the expected variability on future payments associated with the interest rate on debt instruments expected to be issued in 2018. Gains or losses on the swaps are recorded in Accumulated other comprehensive income (loss) and will be subsequently reclassified into earnings as the future interest expense is recognized in earnings or as ineffectiveness occurs.

Foreign Currency Contracts

Forward Contracts: Through its global businesses, the Company enters into transactions and makes investments denominated in multiple currencies that give rise to foreign currency risk. The Company and its subsidiaries regularly purchase inventory from subsidiaries with non-U.S. dollar functional currencies which creates currency-related volatility in the Company’s results of operations. The Company utilizes forward contracts to hedge these forecasted purchases and sales of inventory. Gains and losses reclassified from Accumulated other comprehensive income (loss) for the effective and ineffective portions of the hedge, as well as any amounts excluded from effectiveness testing, are recorded in Cost of sales. Gains and losses incurred after a hedge has been de-designated are not recorded in Accumulated other comprehensive income (loss), but are recorded directly to the Consolidated Statements of Operations in Other-net. At July 2, 2016, the notional value of forward currency contracts outstanding was $673.2 million, maturing on various dates through 2017. At January 2, 2016, the notional value of forward currency contracts outstanding was $439.3 million, maturing on various dates through 2017.

Purchased Option Contracts: The Company and its subsidiaries have entered into various intercompany transactions whereby the notional values are denominated in currencies other than the functional currencies of the party executing the trade. In order to better match the cash flows of its intercompany obligations with cash flows from operations, the Company enters into purchased option contracts. Gains and losses reclassified from Accumulated other comprehensive income (loss) for the effective and ineffective portions of the hedge as well as any amounts excluded from effectiveness testing are recorded in Cost of sales. At July 2, 2016, the notional value of purchased option contracts was $109.5 million maturing on various dates through 2016. As of January 2, 2016, the notional value of purchased option contracts was $197.4 million, maturing on various dates through 2016.

FAIR VALUE HEDGES

Interest Rate Risk: In an effort to optimize the mix of fixed versus floating rate debt in the Company’s capital structure, the Company enters into interest rate swaps. In previous years, the Company entered into interest rate swaps on the first five years of the Company's $400 million5.75% notes due 2053 and interest rate swaps with notional values which equaled the Company's $400 million3.40% notes due 2021 and the Company's $150 million7.05% notes due 2028. These interest rate swaps effectively converted the Company's fixed rate debt to floating rate debt based on LIBOR, thereby hedging the fluctuation in fair value resulting from changes in interest rates. In the second quarter of 2016, the Company terminated all of the above interest rate swaps. The terminations resulted in cash receipts of $27.0 million. This gain was deferred and will be amortized to earnings over the remaining life of the notes.

The changes in fair value of the interest rate swaps during the period were recognized in earnings as well as the offsetting changes in fair value of the underlying notes. There were no open contracts as of July 2, 2016. The notional value of open contracts was $950.0 million as of January 2, 2016. A summary of the fair value adjustments relating to these swaps is as follows (in millions):

	Second Quarter 2016					Year-to-Date 2016
Income Statement Classification	Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(28.6	)	$	29.0	$	(3.3	)	$	3.8

	Second Quarter 2015					Year-to-Date 2015
Income Statement Classification	Gain/(Loss)  on Swaps*			Gain /(Loss)  on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(18.6	)	$	18.3	$	(1.4	)	$	1.5

*Includes ineffective portion and amount excluded from effectiveness testing.

In addition to the fair value adjustments in the table above, the net swap accruals for each period and amortization of the gains on terminated swaps are also reported as a reduction of interest expense and totaled $2.3 million and $5.3 million for the three and six months ended July 2, 2016, respectively, and $3.6 million and $7.4 million for the three and six months ended July 4, 2015, respectively. Interest expense on the underlying debt was $8.1 million and $19.9 million for the three and six months ended July 2, 2016, respectively, and $11.8 million and $23.7 million for the three and six months ended July 4, 2015, respectively.

NET INVESTMENT HEDGES

Foreign Exchange Contracts: The Company utilizes net investment hedges to offset the translation adjustment arising from re-measurement of its investment in the assets and liabilities of its foreign subsidiaries. The total after-tax amounts in Accumulated other comprehensive loss were gains of $35.5 million and $11.8 million at July 2, 2016 and January 2, 2016, respectively. As of July 2, 2016, the Company had foreign exchange forward contracts maturing on various dates through 2017 with notional values totaling $1.4 billion outstanding hedging a portion of its British pound sterling, Mexican peso, Swedish krona, Euro and Canadian dollar denominated net investments and a cross currency swap with a notional value totaling $250.0 million maturing in 2023 hedging a portion of its Japanese yen denominated net investment. As of January 2, 2016, the Company had foreign exchange contracts maturing on various dates through 2016 with notional values totaling $1.9 billion outstanding hedging a portion of its British pound sterling, Mexican peso, Swedish krona, Japanese yen, Euro and Canadian dollar denominated net investments. For the six months ended July 2, 2016 and July 4, 2015, maturing foreign exchange contracts resulted in net cash receipts of $5.5 million and $63.9 million, respectively. Gains and losses on net investment hedges remain in Accumulated other comprehensive income (loss) until disposal of the underlying assets.

The pre-tax gain or loss from fair value changes recorded in Accumulated other comprehensive loss was as follows (in millions):

	Second Quarter 2016						Year-to-Date 2016
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	35.2	$	—	$	—	$	37.8	$	—	$	—

	Second Quarter 2015							Year-to-Date 2015
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	(39.4	)	$	—	$	—	$	(2.5	)	$	—	$	—

*Includes ineffective portion and amount excluded from effectiveness testing.

UNDESIGNATED HEDGES

Foreign Exchange Contracts: Currency swaps and foreign exchange forward contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (such as affiliate loans, payables and receivables). The objective of these practices is to minimize the impact of foreign currency fluctuations on operating results. The total notional amount of the forward contracts outstanding at July 2, 2016 was $2.3 billion, maturing on various dates through 2017. The total notional amount of the forward contracts outstanding at January 2, 2016 was $2.0 billion, maturing at various dates in 2016. The income statement impacts related to derivatives not designated as hedging instruments for the three and six months ended July 2, 2016 and July 4, 2015 are as follows (in millions): 

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2016 Amount of Gain (Loss) Recorded in Income on Derivative			Year-to-Date 2016 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	(31.0	)	$	(37.0	)

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2015 Amount of Gain (Loss) Recorded in Income on Derivative		Year-to-Date 2015 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	50.1	$	20.7

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Equity Arrangements

6 Months Ended

Jul. 02, 2016

Equity Arrangements

.    Equity Arrangements

In February 2016, the Company repurchased 3,763,145 shares of common stock. Additionally, the Company net-share settled capped call options on its common stock and received 293,142 shares. See further discussion below.

During 2015, the Company repurchased a total of 6,623,709 shares of common stock. Additionally, the Company net-share settled capped call options on its common stock and received 2,603,855 shares during 2015.

In March 2015, the Company entered into a forward share purchase contract on its common stock. The contract obligates the Company to pay $350.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than March 2017, or earlier at the Company’s option, for the 3,645,510 shares purchased. The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract and factored into the calculation of weighted average shares outstanding at that time.

In October 2014, the Company entered into a forward share purchase contract on its common stock. The contract obligates the Company to pay $150.0 million, plus an additional amount related to the forward component of the contract, to the financial institution counterparty not later than October 2016, or earlier at the Company’s option, for the 1,603,822 shares purchased. The reduction of common shares outstanding was recorded at the inception of the forward share purchase contract and factored into the calculation of weighted average shares outstanding at that time.

In November 2013, the Company purchased from certain financial institutions “out-of-the-money” capped call options on 12.2 million shares of its common stock (subject to customary anti-dilution adjustments) for an aggregate premium of $73.5 million, or an average of $6.03 per share. The purpose of the capped call options was to hedge the risk of stock price appreciation between the lower and upper strike prices of the capped call options for a future share repurchase. In accordance with ASC 815-40, the premium paid was recorded as a reduction to equity. The contracts for the options provide that they may, at the Company’s election, subject to certain conditions, be cash settled, physically settled, modified-physically settled, or net-share settled (the default settlement method). The capped call options had various expiration dates and initially had an average lower strike price of $86.07 and an average upper strike price of $106.56, subject to customary market adjustments. In February 2015, the Company net-share settled 9.1 million of the 12.2 million capped call options on its common stock and received 911,077 shares using an average reference price of $96.46 per common share. Additionally, the Company purchased directly from the counterparties participating in the net-share settlement, 3,381,162 shares for $326.1 million, equating to an average price of $96.46 per share. In February 2016, the Company net-share settled the remaining 3.1 million capped call options on its common stock and received 293,142 shares using an average reference price of $94.34 per common share. Additionally, the Company purchased 1,316,858 shares directly from the counterparty participating in the net-share settlement for $124.2 million.

Equity Units and Capped Call Transactions

In December 2013, the Company issued Equity Units comprised of $345.0 million of Notes and Equity Purchase Contracts as described more fully in Note H, Long-Term Debt and Financing Arrangements, of the Company’s Form 10-K for the year ended January 2, 2016. The Equity Purchase Contracts obligate the holders to purchase on November 17, 2016, for $100.00, between 1.0122 and 1.2399 shares of the Company’s common stock, which are equivalent to an initial settlement price of $98.80 and $80.65, respectively, per share of common stock. As of July 2, 2016, due to the customary anti-dilution provisions, the settlement rate on the Equity Units Stock was 1.0150 (equivalent to a conversion price of approximately $98.52 per common share). Upon the November 17, 2016 settlement date, the Company will issue approximately 3.5 to 4.3 million shares of common stock, subject to customary anti-dilution adjustments, and expects to receive additional cash proceeds of $345.0 million. If a fundamental change occurs, in certain circumstances, the number of shares of common stock deliverable upon settlement of the Equity Purchase Contracts will be increased by the make-whole amount, resulting in the issuance of a maximum of approximately 4.9 million shares of common stock. Holders may elect to settle their Equity Purchase Contracts early in cash prior to November 17, 2016.

Contemporaneously with the issuance of the Equity Units described above, the Company paid $9.7 million, or an average of $2.77 per option, to enter into capped call transactions on 3.5 million shares of common stock with a major financial institution. The purpose of the capped call transactions is to offset the potential economic dilution associated with the common shares issuable upon the settlement of the Equity Purchase Contracts. With respect to the impact on the Company, the capped call transactions and the Equity Units, when taken together, result in the economic equivalent of having the conversion price on the Equity Units at $112.60, the upper strike price of the capped call as of July 2, 2016. Refer to Note H, Long-Term Debt and Financing Arrangements, of the Company’s Form 10-K for the year ended January 2, 2016. In accordance with ASC 815-40, the $9.7 million premium paid was recorded as a reduction to equity.

The capped call transactions cover, subject to customary anti-dilution adjustments, the number of shares equal to the number of shares issuable upon settlement of the Equity Purchase Contracts at the 1.0122 minimum settlement rate. The capped call transactions have a term of approximately three years and initially had a lower strike price of $98.80, which corresponds to the minimum settlement rate of the Equity Purchase Contracts, and an upper strike price of $112.91, which is approximately 40% higher than the closing price of the Company’s common stock on November 25, 2013, and are subject to customary anti-dilution adjustments. The capped call transactions may be settled by net-share settlement (the default settlement method) or, at the Company’s option and subject to certain conditions, cash settlement, physical settlement or modified physical settlement. The aggregate fair value of the options at July 2, 2016 was $35.3 million.

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Accumulated Other Comprehensive Income (Notes)

6 Months Ended

Jul. 02, 2016

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income (Loss) [Text Block]

Accumulated Other Comprehensive Loss

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive loss:

(Millions of Dollars)	Currency translation adjustment and other			Unrealized losses on cash flow hedges, net of tax			Unrealized gains on net investment hedges, net of tax		Pension (losses) gains, net of tax			Total
Balance - January 2, 2016	$	(1,300.9	)	$	(52.1	)	$	11.8	$	(353.0	)	$	(1,694.2	)
Other comprehensive (loss) income before reclassifications	$	(5.1	)	$	(43.4	)	$	23.7	$	11.8		$	(13.0	)
Reclassification adjustments to earnings	—			(9.8		)	—		5.8			(4.0		)
Net other comprehensive (loss) income	$	(5.1	)	$	(53.2	)	$	23.7	$	17.6		$	(17.0	)
Balance - July 2, 2016	$	(1,306.0	)	$	(105.3	)	$	35.5	$	(335.4	)	$	(1,711.2	)

(Millions of Dollars)	Currency translation adjustment and other			Unrealized (losses) gains on cash flow hedges, net of tax			Unrealized losses on net investment hedges, net of tax			Pension (losses) gains, net of tax			Total
Balance - January 3, 2015	$	(796.8	)	$	(50.9	)	$	(37.2	)	$	(385.3	)	$	(1,270.2	)
Other comprehensive (loss) income before reclassifications	$	(225.4	)	$	32.1		$	(1.5	)	$	9.8		$	(185.0	)
Reclassification adjustments to earnings	—			(6.0		)	—			5.9			(0.1		)
Net other comprehensive (loss) income	$	(225.4	)	$	26.1		$	(1.5	)	$	15.7		$	(185.1	)
Balance - July 4, 2015	$	(1,022.2	)	$	(24.8	)	$	(38.7	)	$	(369.6	)	$	(1,455.3	)

The reclassifications out of accumulated other comprehensive loss for the six months ended July 2, 2016 and July 4, 2015 were as follows (in millions):

Reclassifications from Accumulated other comprehensive loss to earnings	2016			2015			Affected line item in Consolidated Statements of Operations And Comprehensive Income
Realized gains on cash flow hedges	$	23.6		$	22.9		Cost of sales
Realized losses on cash flow hedges	(7.5		)	(7.6		)	Interest expense
Tax effect	(6.3		)	(9.3		)	Income taxes on continuing operations
Realized gains on cash flow hedges, net of tax	$	9.8		$	6.0
Amortization of defined benefit pension items:
Actuarial losses and prior service costs / credits	$	(5.3	)	$	(5.2	)	Cost of sales
Actuarial losses and prior service costs / credits	(3.5		)	(3.5		)	Selling, general and administrative
Total before taxes	$	(8.8	)	$	(8.7	)
Tax effect	3.0			2.8			Income taxes on continuing operations
Amortization of defined benefit pension items, net of tax	$	(5.8	)	$	(5.9	)

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Net Periodic Benefit Cost - Defined Benefit Plans

6 Months Ended

Jul. 02, 2016

Net Periodic Benefit Cost - Defined Benefit Plans

Net Periodic Benefit Cost — Defined Benefit Plans

Following are the components of net periodic pension (benefit) expense for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	2.4		$	1.9		$	3.2		$	3.6		$	0.1		$	0.2
Interest cost	11.4			13.6			9.8			12.0			0.4			0.5
Expected return on plan assets	(17.0		)	(18.7		)	(11.8		)	(14.2		)	—			—
Amortization of prior service cost (credit)	1.3			0.2			—			0.1			(0.3		)	(0.3		)
Amortization of net loss	1.8			2.2			1.6			2.1			—			—
Net periodic pension (benefit) expense	$	(0.1	)	$	(0.8	)	$	2.8		$	3.6		$	0.2		$	0.4

	Year-to-Date
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	4.7		$	3.5		$	6.4		$	7.2		$	0.3		$	0.3
Interest cost	22.7			26.9			19.4			23.8			0.8			1.1
Expected return on plan assets	(33.9		)	(37.4		)	(23.5		)	(28.2		)	—			—
Amortization of prior service cost (credit)	2.6			0.4			0.1			0.2			(0.6		)	(0.6		)
Amortization of net loss	3.5			3.9			3.1			4.2			—			—
Settlement / curtailment loss	—			—			0.1			0.3			—			—
Net periodic pension (benefit) expense	$	(0.4	)	$	(2.7	)	$	5.6		$	7.5		$	0.5		$	0.8

In the first quarter of 2016, the Company changed the method used to estimate the service and interest cost components of net periodic pension (benefit) expense. The new estimation method uses a full yield curve approach by applying specific spot rates along the yield curve used in the determination of the pension benefit obligation, to their underlying projected cash flows, and provides a more precise measurement of the service and interest cost components. Previously, the Company used a single weighted average discount rate derived from the corresponding yield curve used to measure the pension benefit obligation. The change is applied prospectively as a change in estimate that is inseparable from a change in accounting principle and reduced service and interest cost for the three and six months ended July 2, 2016 by approximately $3.5 million and $7.1 million, respectively.

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Fair Value Measurements

6 Months Ended

Jul. 02, 2016

Fair Value Measurements

Fair Value Measurements

FASB ASC 820, "Fair Value Measurement," defines, establishes a consistent framework for measuring, and expands disclosure requirements about fair value. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs and significant value drivers are observable.

Level 3 — Instruments that are valued using unobservable inputs.

The Company holds various derivative financial instruments that are employed to manage risks, including foreign currency and interest rate exposures. These financial instruments are carried at fair value and are included within the scope of ASC 820. The Company determines the fair value of derivatives through the use of matrix or model pricing, which utilizes observable inputs such as market interest and currency rates. When determining the fair value of these financial instruments for which Level 1 evidence does not exist, the Company considers various factors including the following: exchange or market price quotations of similar instruments, time value and volatility factors, the Company’s own credit rating and the credit rating of the counter-party.

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis for each of the hierarchy levels:

(Millions of Dollars)	Total Carrying Value		Level 1		Level 2
July 2, 2016
Money market fund	$	5.6	$	5.6	$	—
Derivative assets	$	145.8	$	—	$	145.8
Derivative liabilities	$	207.0	$	—	$	207.0
January 2, 2016
Money market fund	$	7.0	$	7.0	$	—
Derivative assets	$	79.3	$	—	$	79.3
Derivative liabilities	$	96.1	$	—	$	96.1

The following table presents the carrying values and fair values of the Company's financial assets and liabilities, as well as the Company's debt, as of July 2, 2016 and January 2, 2016:

	July 2, 2016				January 2, 2016
(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	$	10.3	$	10.7	$	11.7	$	11.7
Derivative assets	$	145.8	$	145.8	$	79.3	$	79.3
Derivative liabilities	$	207.0	$	207.0	$	96.1	$	96.1
Long-term debt, including current portion	$	3,820.9	$	4,193.2	$	3,797.2	$	4,034.4

The Company had no significant non-recurring fair value measurements, nor any financial assets or liabilities measured using Level 3 inputs, during the first six months of 2016 or 2015.

The money market fund and other investments outlined in the tables above relate to the West Coast Loading Corporation ("WCLC") trust and are considered Level 1 instruments within the fair value hierarchy. The long-term debt instruments are considered Level 2 instruments and are measured using the stated cash flows in each obligation discounted at the Company’s marginal borrowing rates. The differences between the carrying values and fair values of long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing rates. The fair values of the Company's variable rate short-term borrowings approximate their carrying values at July 2, 2016 and January 2, 2016. The fair values of foreign currency and interest rate swap agreements, comprising the derivative assets and liabilities in the table above, are based on current settlement values.

As discussed in Note D, Financing Receivables, the Company has a deferred purchase price receivable related to sales of trade receivables. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within 30 days, and as such the carrying value of the receivable approximates fair value.

Refer to Note H, Derivative Financial Instruments, for more details regarding derivative financial instruments, Note Q, Commitments and Contingencies, for more details regarding the other investments related to the WCLC trust, and Note G, Long-Term Debt and Financing Arrangements, for more information regarding the carrying values of the long-term debt.

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Other Costs and Expenses

6 Months Ended

Jul. 02, 2016

Other Costs and Expenses

Other Costs and Expenses

Other, net is primarily comprised of intangible asset amortization expense, currency related gains or losses, and environmental remediation expense.

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Restructuring Charges

6 Months Ended

Jul. 02, 2016

Restructuring Charges

Restructuring Charges

A summary of the restructuring reserve activity from January 2, 2016 to July 2, 2016 is as follows:

(Millions of Dollars)	January 2, 2016		Net Additions		Usage			Currency			July 2, 2016
Severance and related costs	$	44.3	$	9.7	$	(27.6	)	$	0.3		$	26.7
Facility closures and asset impairments	14.4		8.5		(18.0		)	(0.1		)	4.8
Total	$	58.7	$	18.2	$	(45.6	)	$	0.2		$	31.5

For the six months ended July 2, 2016, the Company recognized net restructuring charges of $18.2 million. This amount reflects $9.7 million of net severance charges associated with the reduction of approximately 602 employees. The Company also recognized $4.2 million of facility closure costs and $4.3 million of asset impairments.

For the three months ended July 2, 2016, the Company recognized net restructuring charges of $10.2 million. This amount reflects $6.0 million of net severance charges associated with the reduction of approximately 305 employees. The Company also recognized $4.2 million of facility closure costs.

The majority of the $31.5 million of reserves remaining as of July 2, 2016 is expected to be utilized within the next 12 months.

Segments: The $18 million net restructuring charge for the six months ended July 2, 2016 includes: $1 million of net charges pertaining to the Tools & Storage segment; $8 million of net charges pertaining to the Security segment; $4 million of net charges pertaining to the Industrial segment; and $5 million of net charges pertaining to Corporate.

The $10 million net restructuring charge for the three months ended July 2, 2016 includes: $7 million of net charges pertaining to the Security segment; $2 million of net charges pertaining to the Industrial segment; and $1 million of net charges pertaining to Corporate.

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Income Taxes

6 Months Ended

Jul. 02, 2016

Income Taxes

Income Taxes

The Company recognized income tax expense of $90.5 million and $156.0 million for the three and six months ended July 2, 2016, respectively, resulting in effective tax rates of 25.0% and 25.3%, respectively. The effective tax rates differ from the U.S. statutory tax rate during these periods primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions, the finalization of audit settlements during the first quarter of 2016, and adjustments to tax positions relating to undistributed foreign earnings during the second quarter of 2016.

The Company recognized income tax expense of $78.5 million and $133.8 million for the three and six months ended July 4, 2015, respectively, resulting in an effective tax rate of 25.0% for each period. The effective tax rate differed from the U.S. statutory tax rate primarily due to a portion of the Company’s earnings being realized in lower-taxed foreign jurisdictions and the reversal of valuation allowances during the second quarter of 2015 for certain foreign deferred tax assets which had become realizable.

The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other taxing authorities both domestically and internationally. The final outcome of the future tax consequences of these examinations and legal proceedings, as well as the outcome of competent authority proceedings, changes and interpretation in regulatory tax laws, or expiration of statute of limitations could impact the Company’s financial statements. Accordingly, the Company has tax reserves recorded for which it is reasonably possible that the amount of the unrecognized tax benefit will increase or decrease which could have a material effect on the financial results for any particular fiscal quarter or year. However, based on the uncertainties associated with litigation and the status of examinations, including the protocols of finalizing audits by the relevant tax authorities which could include formal legal proceedings, it is not possible to estimate the impact of any such change.

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Business Segments

6 Months Ended

Jul. 02, 2016

Business Segments

Business Segments

The Company's operations are classified into three reportable business segments, which also represent its operating segments: Tools & Storage, Security and Industrial.

The Tools & Storage segment is comprised of the Power Tools and Hand Tools & Storage businesses. The Power Tools business includes professional products, consumer products and power tool accessories. Professional products include professional grade corded and cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders, as well as pneumatic tools and fasteners including nail guns, nails, staplers and staples, concrete and masonry anchors. Consumer products include corded and cordless electric power tools sold primarily under the BLACK+DECKER brand, lawn and garden products, including hedge trimmers, string trimmers, lawn mowers, edgers and related accessories, and home products such as hand-held vacuums, paint tools and cleaning appliances. Power tool accessories include drill bits, router bits, abrasives and saw blades.

The Hand Tools & Storage business sells measuring, leveling and layout tools, planes, hammers, demolition tools, knives, saws, chisels and industrial and automotive tools. Storage products include tool boxes, sawhorses, medical cabinets and engineered storage solution products.

The Security segment is comprised of the Convergent Security Solutions ("CSS") and Mechanical Access Solutions ("MAS") businesses. The CSS business designs, supplies and installs electronic security systems and provides electronic security services, including alarm monitoring, video surveillance, fire alarm monitoring, systems integration and system maintenance. Purchasers of these systems typically contract for ongoing security systems monitoring and maintenance at the time of initial equipment installation. The business also sells healthcare solutions, which include asset tracking solutions, infant protection, pediatric protection, patient protection, wander management, fall management, and emergency call products. The MAS business sells automatic doors, commercial hardware, locking mechanisms, electronic keyless entry systems, keying systems, tubular and mortise door locksets.

The Industrial segment is comprised of the Engineered Fastening and Infrastructure businesses. The Engineered Fastening business primarily sells engineered fastening products and systems designed for specific applications. The product lines include stud welding systems, blind rivets and tools, blind inserts and tools, drawn arc weld studs, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, and high-strength structural fasteners. The Infrastructure business consists of the Oil & Gas and Hydraulics businesses. The Oil & Gas business sells and rents custom pipe handling, joint welding and coating equipment used in the construction of large and small diameter pipelines, and provides pipeline inspection services. The Hydraulics business sells hydraulic tools and accessories.

The Company utilizes segment profit, which is defined as net sales minus cost of sales and SG&A inclusive of the provision for doubtful accounts (aside from corporate overhead expense), and segment profit as a percentage of net sales to assess the profitability of each segment. Segment profit excludes the corporate overhead expense element of SG&A, interest income, interest expense, other, net (inclusive of intangible asset amortization expense), restructuring charges, and income taxes. Refer to Note N, Restructuring Charges, for the amount of net restructuring charges by segment. Corporate overhead is comprised of world headquarters facility expense, cost for the executive management team and cost for certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as legal and corporate finance functions. Transactions between segments are not material. Segment assets primarily include cash, accounts receivable, inventory, other current assets, property, plant and equipment, intangible assets and other miscellaneous assets.

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
NET SALES
Tools & Storage	$	1,931.6		$	1,839.5		$	3,638.5		$	3,471.6
Security	537.7			533.3			1,041.9			1,042.9
Industrial	463.1			494.1			924.1			982.4
Total	$	2,932.4		$	2,866.9		$	5,604.5		$	5,496.9
SEGMENT PROFIT
Tools & Storage	$	362.5		$	301.6		$	624.5		$	558.4
Security	67.7			55.2			127.9			110.0
Industrial	78.8			94.3			154.8			169.0
Segment profit	509.0			451.1			907.2			837.4
Corporate overhead	(47.0		)	(38.4		)	(95.4		)	(74.1		)
Other, net	(47.6		)	(50.5		)	(93.8		)	(114.2		)
Restructuring charges	(10.2		)	(5.0		)	(18.2		)	(29.9		)
Interest expense	(47.7		)	(46.2		)	(95.0		)	(90.6		)
Interest income	5.5			3.0			11.3			6.7
Earnings from continuing operations before income taxes	$	362.0		$	314.0		$	616.1		$	535.3

The following table is a summary of total assets by segment as of July 2, 2016 and January 2, 2016:

(Millions of Dollars)	July 2, 2016			January 2, 2016
Tools & Storage	$	8,798.2		$	8,492.9
Security	3,775.4			3,741.6
Industrial	3,482.8			3,438.7
	16,056.4			15,673.2
Corporate assets	(315.6		)	(545.4		)
Consolidated	$	15,740.8		$	15,127.8

Corporate assets primarily consist of cash, deferred taxes and property, plant and equipment. Based on the nature of the Company's cash pooling arrangements, at times corporate-related cash accounts will be in a net liability position.

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Commitments and Contingencies

6 Months Ended

Jul. 02, 2016

Commitments and Contingencies

Commitments and Contingencies

The Company is involved in various legal proceedings relating to environmental issues, employment, product liability, workers’ compensation claims and other matters. The Company periodically reviews the status of these proceedings with both inside and outside counsel, as well as an actuary for risk insurance. Management believes that the ultimate disposition of these matters will not have a material adverse effect on operations or financial condition taken as a whole.

In connection with the 2010 merger with Black & Decker, the Company assumed certain commitments and contingent liabilities. Black & Decker is a party to litigation and administrative proceedings with respect to claims involving the discharge of hazardous substances into the environment. Some of these assert claims for damages and liability for remedial investigations and clean-up costs with respect to sites that have never been owned or operated by Black & Decker but at which Black & Decker has been identified as a potentially responsible party ("PRP"). Other matters involve current and former manufacturing facilities.

The Environmental Protection Agency (“EPA”) has asserted claims in federal court in Rhode Island against certain current and former affiliates of Black & Decker related to environmental contamination found at the Centredale Manor Restoration Project Superfund ("Centredale") site, located in North Providence, Rhode Island. The EPA has discovered a variety of contaminants at the site, including but not limited to, dioxins, polychlorinated biphenyls, and pesticides. The EPA alleges that Black & Decker and certain of its current and former affiliates are liable for site clean-up costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") as successors to the liability of Metro-Atlantic, Inc., a former operator at the site, and demanded reimbursement of the EPA’s costs related to this site. Black & Decker and certain of its current and former affiliates contest the EPA's allegation that they are responsible for the contamination, and have asserted contribution claims, counterclaims and cross-claims against a number of other PRPs, including the federal government as well as insurance carriers. The EPA released its Record of Decision ("ROD") in September 2012, which identified and described the EPA's selected remedial alternative for the site. Black & Decker and certain of its current and former affiliates are contesting the EPA's selection of the remedial alternative set forth in the ROD, on the grounds that the EPA's actions were arbitrary and capricious and otherwise not in accordance with law, and have proposed other equally-protective, more cost-effective alternatives. On June 10, 2014, the EPA issued an Administrative Order under Sec. 106 of CERCLA, instructing Emhart Industries, Inc. and Black & Decker to perform the remediation of Centredale pursuant to the ROD. Black & Decker and Emhart Industries, Inc. dispute the factual, legal and scientific bases cited by the EPA for such an Order and have provided the EPA with numerous good-faith bases for Black & Decker’s and Emhart Industries, Inc.’s declination to comply with the Order at this time. Black & Decker and Emhart Industries, Inc. continue to vigorously litigate the issue of their liability for environmental conditions at the Centredale site, including the completion of the Phase 1 trial in late July, 2015. The Court in this initial phase of trial found that dioxin contamination at the Centredale site was not “divisible”, and that Emhart was jointly and severally liable for dioxin contamination at the Site. The next two phases of trial will address whether the EPA’s proposed remedy for the Site is “arbitrary and capricious”, and if necessary, the allocation of liability to other parties who may have contributed to contamination of the Site with dioxins, PCB’s and other contaminants of concern. The second phase of the trial addressing the remedy and certain other issues is scheduled to commence on September 26, 2016. The Company's estimated remediation costs related to the Centredale site (including the EPA’s past costs as well as costs of additional investigation, remediation, and related costs such as EPA’s oversight costs, less escrowed funds contributed by primary PRPs who have reached settlement agreements with the EPA), which the Company considers to be probable and reasonably estimable, range from approximately $68.1 million to $139.7 million, with no amount within that range representing a more likely outcome until such time as the litigation is resolved through judgment or compromise. The Company’s reserve for this environmental remediation matter of $68.1 million reflects the fact that the EPA considers Metro-Atlantic, Inc. to be a primary source of contamination at the site. As the specific nature of the environmental remediation activities that may be mandated by the EPA at this site have not yet been finally determined through the on-going litigation, the ultimate remedial costs associated with the site may vary from the amount accrued by the Company at July 2, 2016.

In the normal course of business, the Company is involved in various lawsuits and claims. In addition, the Company is a party to a number of proceedings before federal and state regulatory agencies relating to environmental remediation. Also, the Company, along with many other companies, has been named as a PRP in a number of administrative proceedings for the remediation of various waste sites, including 31 active Superfund sites. Current laws potentially impose joint and several liabilities upon each PRP. In assessing its potential liability at these sites, the Company has considered the following: whether responsibility is being disputed, the terms of existing agreements, experience at similar sites, and the Company’s volumetric contribution at these sites.

The Company’s policy is to accrue environmental investigatory and remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. The amount of liability recorded is based on an evaluation of currently available facts with respect to each individual site and includes such factors as existing technology, presently enacted laws and regulations, and prior experience in remediation of contaminated sites. The liabilities recorded do not take into account any claims for recoveries from insurance or third parties. As assessments and remediation progress at individual sites, the amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. As of July 2, 2016 and January 2, 2016 the Company had reserves of $165.9 million and $170.7 million, respectively, for remediation activities associated with Company-owned properties, as well as for Superfund sites, for losses that are probable and estimable. Of the 2016 amount, $17.8 million is classified as current and $148.1 million as long-term which is expected to be paid over the estimated remediation period. As of July 2, 2016, the Company has recorded $15.9 million in other assets related to funding received by the EPA and placed in a trust in accordance with the final settlement with the EPA, embodied in a Consent Decree approved by the United States District Court for the Central District of California on July 3, 2013. Per the Consent Decree, Emhart Industries, Inc. (a dissolved, former indirectly wholly-owned subsidiary of The Black & Decker Corporation) (“Emhart”) has agreed to be responsible for an interim remedy at a site located in Rialto, California and formerly operated by West Coast Loading Corporation (“WCLC”), a defunct company for which Emhart was alleged to be liable as a successor. The remedy will be funded by (i) the amounts received from the EPA as gathered from multiple parties, and, to the extent necessary, (ii) Emhart's affiliate.  The interim remedy requires the construction of a water treatment facility and the filtering of ground water at or around the site for a period of approximately 30 years or more. Accordingly, as of July 2, 2016, the Company's cash obligation associated with the aforementioned remediation activities including WCLC is $150.0 million. The range of environmental remediation costs that is reasonably possible is $132.2 million to $273.0 million which is subject to change in the near term. The Company may be liable for environmental remediation of sites it no longer owns. Liabilities have been recorded on those sites in accordance with policy.

The Company and approximately 60 other companies comprise the Lower Passaic Cooperating Parties Group (the “CPG”). The CPG members and other companies are parties to a May 2007 Administrative Settlement Agreement and Order on Consent (“AOC”) with the EPA to perform a remedial investigation/feasibility study (“RI/FS”) of the lower seventeen miles of the Lower Passaic River in New Jersey (the “River”). The Company’s potential liability stems from former operations in Newark, New Jersey. As an interim step related to the 2007 AOC, the CPG members voluntarily entered into an AOC on June 18, 2012 with the EPA for remediation actions focused solely at mile 10.9 of the River. The Company’s estimated costs related to the RI/FS and focused remediation action at mile 10.9, based on an interim allocation, are included in environmental reserves as of July 2, 2016 and January 2, 2016. On April 11, 2014, the EPA issued a Focused Feasibility Study (“FFS”) and proposed plan which addressed various early action remediation alternatives for the lower 8.3 miles of the River. The EPA received public comment on the FFS and proposed plan (including comments from the CPG and other entities asserting that the FFS and proposed plan do not comply with CERCLA) which public comment period ended on August 20, 2014. On March 4, 2016, the EPA issued a Record of Decision selecting the remedy for the lower 8.3 miles of the River. The cleanup plan adopted by the EPA is now considered a final action for the lower 8.3 miles of the River and will include the removal of 3.5 million cubic yards of sediment, placement of a cap over the entire lower 8.3 miles of the River, will cost approximately $1.4 billion and take 6 years to implement after the remedial design is completed according to the EPA. The Company and 105 other parties received a letter dated March 31, 2016 from the EPA notifying such parties of potential liability for the costs of the cleanup of the lower 8.3 miles of the River. The CPG submitted to the EPA the draft RI report in February 2015 and draft FS report in April 2015 for the entire lower seventeen miles of the River. There has been no determination as to how the RI/FS will be modified in light of the EPA decision to implement a final action for the lower 8.3 miles of the River. At this time, the Company cannot reasonably estimate its liability related to the remediation efforts, excluding the RI/FS and remediation actions at mile 10.9, as the RI/FS is ongoing, the ultimate remedial approach and associated cost for the upper portion of the River has not yet been determined, and the parties that will participate in funding the remediation and their respective allocations are not yet known. 

The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

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Guarantees

6 Months Ended

Jul. 02, 2016

Guarantees

Guarantees

The Company’s financial guarantees at July 2, 2016 are as follows:

(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased properties	One to five years	$	39.3	$	—
Standby letters of credit	Up to three years	78.3		—
Commercial customer financing arrangements	Up to six years	60.6		16.3
Total		$	178.2	$	16.3

The Company has guaranteed a portion of the residual values of leased properties arising from its synthetic lease program. The lease guarantees are for an amount up to $39.3 million while the fair value of the underlying buildings is estimated at $43.7 million. The related assets would be available to satisfy the guarantee obligations and therefore it is unlikely the Company will incur any future loss associated with these guarantees.

The Company has issued $78.3 million in standby letters of credit that guarantee future payments which may be required under certain insurance programs.

The Company provides various limited and full recourse guarantees to financial institutions that provide financing to U.S. and Canadian Mac Tool distributors and franchisees for their initial purchase of the inventory and trucks necessary to function as a distributor and franchisee. In addition, the Company provides limited and full recourse guarantees to financial institutions that extend credit to certain end retail customers of its U.S. Mac Tool distributors and franchisees. The gross amount guaranteed in these arrangements is $60.6 million and the $16.3 million carrying value of the guarantees issued is recorded in debt and other liabilities as appropriate in the Condensed Consolidated Balance Sheets.

The Company provides product and service warranties which vary across its businesses. The types of warranties offered generally range from one year to limited lifetime, while certain products carry no warranty. Further, the Company sometimes incurs discretionary costs to service its products in connection with product performance issues. Historical warranty and service claim experience forms the basis for warranty obligations recognized. Adjustments are recorded to the warranty liability as new information becomes available.

The changes in the carrying amount of product and service warranties for the six months ended July 2, 2016 and July 4, 2015 are as follows:

(Millions of Dollars)	2016			2015
Balance beginning of period	$	105.4		$	109.6
Warranties and guarantees issued	46.2			47.7
Warranty payments and currency	(44.6		)	(47.8		)
Balance end of period	$	107.0		$	109.5

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Earnings Per Share (Tables)

6 Months Ended

Jul. 02, 2016

Reconciliation of Net Earnings Attributable to Common Shareowners and Weighted-Average Shares Outstanding used to Calculate Basic and Diluted Earnings per Share

The following table reconciles net earnings attributable to common shareowners and the weighted average shares outstanding used to calculate basic and diluted earnings per share for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Numerator (in millions):
Net earnings from continuing operations attributable to common shareowners	$	271.5	$	235.7		$	460.9	$	402.5
Net loss from discontinued operations	—		(8.5		)	—		(13.0		)
Net Earnings Attributable to Common Shareowners	$	271.5	$	227.2		$	460.9	$	389.5

	Second Quarter					Year-to-Date
	2016		2015			2016		2015
Denominator (in thousands):
Basic earnings per share — weighted average shares	145,135		148,059			145,583		150,339
Dilutive effect of stock options, awards and other equity arrangements	2,128		4,604			1,960		4,542
Diluted earnings per share — weighted average shares	147,263		152,663			147,543		154,881
Earnings (loss) per share of common stock:
Basic earnings (loss) per share of common stock:
Continuing operations	$	1.87	$	1.59		$	3.17	$	2.68
Discontinued operations	—		(0.06		)	—		(0.09		)
Total basic earnings per share of common stock	$	1.87	$	1.53		$	3.17	$	2.59
Diluted earnings (loss) per share of common stock:
Continuing operations	$	1.84	$	1.54		$	3.12	$	2.60
Discontinued operations	—		(0.06		)	—		(0.08		)
Total dilutive earnings per share of common stock	$	1.84	$	1.49		$	3.12	$	2.51

Weighted-Average Stock Options and Warrants Outstanding Not included in Computation of Diluted Shares Outstanding

The following weighted average stock options were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive (in thousands):

	Second Quarter		Year-to-Date
	2016	2015	2016	2015
Number of stock options	972	642	1,281	808

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Inventories (Tables)

6 Months Ended

Jul. 02, 2016

Components of Inventories

The components of Inventories, net at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	July 2, 2016		January 2, 2016
Finished products	$	1,211.0	$	1,085.0
Work in process	135.3		136.1
Raw materials	342.3		305.3
Total	$	1,688.6	$	1,526.4

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Goodwill (Tables)

6 Months Ended

Jul. 02, 2016

Changes in Carrying Amount of Goodwill by Segment

Changes in the carrying amount of goodwill by segment are as follows:

(Millions of Dollars)	Tools & Storage			Security		Industrial		Total
Balance January 2, 2016	$	3,343.4		$	2,317.2	$	1,423.7	$	7,084.3
Acquisition adjustments	—			11.8		—		11.8
Foreign currency translation and other	(31.7		)	14.7		29.6		12.6
Balance July 2, 2016	$	3,311.7		$	2,343.7	$	1,453.3	$	7,108.7

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Long-Term Debt and Financing Arrangements (Tables)

6 Months Ended

Jul. 02, 2016

Long-Term Debt and Financing Arrangements

Long-term debt and financing arrangements at July 2, 2016 and January 2, 2016 are as follows:

(Millions of Dollars)	Interest Rate	July 2, 2016			January 2, 2016
Notes payable due in 2018	2.45%	$	628.5		$	627.5
Notes payable due in 2018 (junior subordinated)	2.25%	344.0			343.8
Notes payable due 2021	3.40%	416.7			405.9
Notes payable due 2022	2.90%	749.9			749.6
Notes payable due 2028	7.05%	175.8			167.0
Notes payable due 2040	5.20%	360.9			360.1
Notes payable due 2052 (junior subordinated)	5.75%	730.2			729.9
Notes payable due 2053 (junior subordinated)	5.75%	396.5			394.2
Other, payable in varying amounts through 2022	0.00% – 2.47%	18.4			19.2
Total long-term debt, including current maturities		$	3,820.9		$	3,797.2
Less: Current maturities of long-term debt		(6.8		)	(5.1		)
Long-term debt		$	3,814.1		$	3,792.1

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Derivative Financial Instruments (Tables)

6 Months Ended

Jul. 02, 2016

Summary of Fair Value of Derivatives

A summary of the fair value of the Company’s derivatives recorded in the Condensed Consolidated Balance Sheets at July 2, 2016 and January 2, 2016 follows: 

(Millions of Dollars)	Balance Sheet Classification	July 2, 2016		January 2, 2016		Balance Sheet Classification	July 2, 2016		January 2, 2016
Derivatives designated as hedging instruments:
Interest Rate Contracts Cash Flow	LT other assets	$	—	$	—	LT other liabilities	$	95.1	$	41.1
Interest Rate Contracts Fair Value	Other current assets	—		14.9		Accrued expenses	—		2.5
	LT other assets	—		1.4		LT other liabilities	—		5.2
Foreign Exchange Contracts Cash Flow	Other current assets	11.6		21.9		Accrued expenses	4.3		1.8
	LT other assets	4.6		3.7		LT other liabilities	0.4		—
Net Investment Hedge	Other current assets	92.3		30.3		Accrued expenses	1.5		4.8
	LT other assets	—		—		LT other liabilities	20.5		—
Total Designated		$	108.5	$	72.2		$	121.8	$	55.4
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other current assets	$	37.3	$	7.1	Accrued expenses	$	85.2	$	40.7
Total Undesignated		$	37.3	$	7.1		$	85.2	$	40.7

Detail Pre-tax Amounts Reclassified From Accumulated Other Comprehensive Income (Loss) into Earnings for Active Derivative Financial Instruments

The tables below detail pre-tax amounts reclassified from Accumulated other comprehensive loss into earnings for active derivative financial instruments during the periods in which the underlying hedged transactions affected earnings for the three and six months ended July 2, 2016 and July 4, 2015 (in millions): 

Second Quarter 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(22.5	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	17.5		Cost of sales	$	5.0	$	—

Year-to-Date 2016	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	(54.1	)	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(4.4	)	Cost of sales	$	23.6	$	—

Second Quarter 2015	Gain (Loss) Recorded in  OCI			Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	35.0		Interest expense	$	—	$	—
Foreign Exchange Contracts	$	(3.6	)	Cost of sales	$	16.2	$	—

Year-to-Date 2015	Gain (Loss) Recorded in  OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income (Effective Portion)		Gain (Loss) Recognized in Income (Ineffective Portion*)
Interest Rate Contracts	$	19.5	Interest expense	$	—	$	—
Foreign Exchange Contracts	$	34.4	Cost of sales	$	22.9	$	—

 * Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

Fair Value Adjustments Relating to Swaps

A summary of the fair value adjustments relating to these swaps is as follows (in millions):

	Second Quarter 2016					Year-to-Date 2016
Income Statement Classification	Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(28.6	)	$	29.0	$	(3.3	)	$	3.8

	Second Quarter 2015					Year-to-Date 2015
Income Statement Classification	Gain/(Loss)  on Swaps*			Gain /(Loss)  on Borrowings		Gain/(Loss) on Swaps*			Gain /(Loss) on Borrowings
Interest Expense	$	(18.6	)	$	18.3	$	(1.4	)	$	1.5

Details of Foreign Exchange Contracts Pre-Tax Amounts

The pre-tax gain or loss from fair value changes recorded in Accumulated other comprehensive loss was as follows (in millions):

	Second Quarter 2016						Year-to-Date 2016
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)		Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	35.2	$	—	$	—	$	37.8	$	—	$	—

	Second Quarter 2015							Year-to-Date 2015
Income Statement Classification	Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement		Amount Recorded in  OCI Gain (Loss)			Effective Portion Recorded in  Income Statement		Ineffective Portion* Recorded in Income Statement
Other, net	$	(39.4	)	$	—	$	—	$	(2.5	)	$	—	$	—

Income Statement Impacts Related to Derivatives Not Designated as Hedging Instruments

The income statement impacts related to derivatives not designated as hedging instruments for the three and six months ended July 2, 2016 and July 4, 2015 are as follows (in millions): 

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2016 Amount of Gain (Loss) Recorded in Income on Derivative			Year-to-Date 2016 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	(31.0	)	$	(37.0	)

Derivatives Not Designated as Hedging Instruments under ASC 815	Income Statement Classification	Second Quarter 2015 Amount of Gain (Loss) Recorded in Income on Derivative		Year-to-Date 2015 Amount of Gain (Loss) Recorded in Income on Derivative
Foreign Exchange Contracts	Other, net	$	50.1	$	20.7

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jul. 02, 2016

Jul. 04, 2015

Accumulated Other Comprehensive Income (Loss) [Line Items]

Changes to the components of accumulated other comprehensive income (loss)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive loss:

(Millions of Dollars)	Currency translation adjustment and other			Unrealized losses on cash flow hedges, net of tax			Unrealized gains on net investment hedges, net of tax		Pension (losses) gains, net of tax			Total
Balance - January 2, 2016	$	(1,300.9	)	$	(52.1	)	$	11.8	$	(353.0	)	$	(1,694.2	)
Other comprehensive (loss) income before reclassifications	$	(5.1	)	$	(43.4	)	$	23.7	$	11.8		$	(13.0	)
Reclassification adjustments to earnings	—			(9.8		)	—		5.8			(4.0		)
Net other comprehensive (loss) income	$	(5.1	)	$	(53.2	)	$	23.7	$	17.6		$	(17.0	)
Balance - July 2, 2016	$	(1,306.0	)	$	(105.3	)	$	35.5	$	(335.4	)	$	(1,711.2	)

(Millions of Dollars)	Currency translation adjustment and other			Unrealized (losses) gains on cash flow hedges, net of tax			Unrealized losses on net investment hedges, net of tax			Pension (losses) gains, net of tax			Total
Balance - January 3, 2015	$	(796.8	)	$	(50.9	)	$	(37.2	)	$	(385.3	)	$	(1,270.2	)
Other comprehensive (loss) income before reclassifications	$	(225.4	)	$	32.1		$	(1.5	)	$	9.8		$	(185.0	)
Reclassification adjustments to earnings	—			(6.0		)	—			5.9			(0.1		)
Net other comprehensive (loss) income	$	(225.4	)	$	26.1		$	(1.5	)	$	15.7		$	(185.1	)
Balance - July 4, 2015	$	(1,022.2	)	$	(24.8	)	$	(38.7	)	$	(369.6	)	$	(1,455.3	)

Reclassifications out of accumulated other comprehensive income (loss)

The reclassifications out of accumulated other comprehensive loss for the six months ended July 2, 2016 and July 4, 2015 were as follows (in millions):

Reclassifications from Accumulated other comprehensive loss to earnings	2016			2015			Affected line item in Consolidated Statements of Operations And Comprehensive Income
Realized gains on cash flow hedges	$	23.6		$	22.9		Cost of sales
Realized losses on cash flow hedges	(7.5		)	(7.6		)	Interest expense
Tax effect	(6.3		)	(9.3		)	Income taxes on continuing operations
Realized gains on cash flow hedges, net of tax	$	9.8		$	6.0
Amortization of defined benefit pension items:
Actuarial losses and prior service costs / credits	$	(5.3	)	$	(5.2	)	Cost of sales
Actuarial losses and prior service costs / credits	(3.5		)	(3.5		)	Selling, general and administrative
Total before taxes	$	(8.8	)	$	(8.7	)
Tax effect	3.0			2.8			Income taxes on continuing operations
Amortization of defined benefit pension items, net of tax	$	(5.8	)	$	(5.9	)

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Net Periodic Benefit Cost - Defined Benefit Plans (Tables)

6 Months Ended

Jul. 02, 2016

Components of Net Periodic Benefit Cost

Following are the components of net periodic pension (benefit) expense for the three and six months ended July 2, 2016 and July 4, 2015:

	Second Quarter
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	2.4		$	1.9		$	3.2		$	3.6		$	0.1		$	0.2
Interest cost	11.4			13.6			9.8			12.0			0.4			0.5
Expected return on plan assets	(17.0		)	(18.7		)	(11.8		)	(14.2		)	—			—
Amortization of prior service cost (credit)	1.3			0.2			—			0.1			(0.3		)	(0.3		)
Amortization of net loss	1.8			2.2			1.6			2.1			—			—
Net periodic pension (benefit) expense	$	(0.1	)	$	(0.8	)	$	2.8		$	3.6		$	0.2		$	0.4

	Year-to-Date
	Pension Benefits												Other Benefits
	U.S. Plans						Non-U.S. Plans						All Plans
(Millions of Dollars)	2016			2015			2016			2015			2016			2015
Service cost	$	4.7		$	3.5		$	6.4		$	7.2		$	0.3		$	0.3
Interest cost	22.7			26.9			19.4			23.8			0.8			1.1
Expected return on plan assets	(33.9		)	(37.4		)	(23.5		)	(28.2		)	—			—
Amortization of prior service cost (credit)	2.6			0.4			0.1			0.2			(0.6		)	(0.6		)
Amortization of net loss	3.5			3.9			3.1			4.2			—			—
Settlement / curtailment loss	—			—			0.1			0.3			—			—
Net periodic pension (benefit) expense	$	(0.4	)	$	(2.7	)	$	5.6		$	7.5		$	0.5		$	0.8

In the first quarter of 2016, the Company changed the method used to estimate the service and interest cost components of net periodic pension (benefit) expense. The new estimation method uses a full yield curve approach by applying specific spot rates along the yield curve used in the determination of the pension benefit obligation, to their underlying projected cash flows, and provides a more precise measurement of the service and interest cost components. Previously, the Company used a single weighted average discount rate derived from the corresponding yield curve used to measure the pension benefit obligation. The change is applied prospectively as a change in estimate that is inseparable from a change in accounting principle and reduced service and interest cost for the three and six months ended July 2, 2016 by approximately $3.5 million and $7.1 million, respectively.

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2016

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis for each of the hierarchy levels:

(Millions of Dollars)	Total Carrying Value		Level 1		Level 2
July 2, 2016
Money market fund	$	5.6	$	5.6	$	—
Derivative assets	$	145.8	$	—	$	145.8
Derivative liabilities	$	207.0	$	—	$	207.0
January 2, 2016
Money market fund	$	7.0	$	7.0	$	—
Derivative assets	$	79.3	$	—	$	79.3
Derivative liabilities	$	96.1	$	—	$	96.1

Summary of Financial Instruments Carrying and Fair Values

	July 2, 2016				January 2, 2016
(Millions of Dollars)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	$	10.3	$	10.7	$	11.7	$	11.7
Derivative assets	$	145.8	$	145.8	$	79.3	$	79.3
Derivative liabilities	$	207.0	$	207.0	$	96.1	$	96.1
Long-term debt, including current portion	$	3,820.9	$	4,193.2	$	3,797.2	$	4,034.4

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Restructuring Charges (Tables)

6 Months Ended

Jul. 02, 2016

Summary of Restructuring Reserve Activity

A summary of the restructuring reserve activity from January 2, 2016 to July 2, 2016 is as follows:

(Millions of Dollars)	January 2, 2016		Net Additions		Usage			Currency			July 2, 2016
Severance and related costs	$	44.3	$	9.7	$	(27.6	)	$	0.3		$	26.7
Facility closures and asset impairments	14.4		8.5		(18.0		)	(0.1		)	4.8
Total	$	58.7	$	18.2	$	(45.6	)	$	0.2		$	31.5

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Business Segments (Tables)

6 Months Ended

Jul. 02, 2016

Business Segments

	Second Quarter						Year-to-Date
(Millions of Dollars)	2016			2015			2016			2015
NET SALES
Tools & Storage	$	1,931.6		$	1,839.5		$	3,638.5		$	3,471.6
Security	537.7			533.3			1,041.9			1,042.9
Industrial	463.1			494.1			924.1			982.4
Total	$	2,932.4		$	2,866.9		$	5,604.5		$	5,496.9
SEGMENT PROFIT
Tools & Storage	$	362.5		$	301.6		$	624.5		$	558.4
Security	67.7			55.2			127.9			110.0
Industrial	78.8			94.3			154.8			169.0
Segment profit	509.0			451.1			907.2			837.4
Corporate overhead	(47.0		)	(38.4		)	(95.4		)	(74.1		)
Other, net	(47.6		)	(50.5		)	(93.8		)	(114.2		)
Restructuring charges	(10.2		)	(5.0		)	(18.2		)	(29.9		)
Interest expense	(47.7		)	(46.2		)	(95.0		)	(90.6		)
Interest income	5.5			3.0			11.3			6.7
Earnings from continuing operations before income taxes	$	362.0		$	314.0		$	616.1		$	535.3

Summary of Total Assets by Segment

he following table is a summary of total assets by segment as of July 2, 2016 and January 2, 2016:

(Millions of Dollars)	July 2, 2016			January 2, 2016
Tools & Storage	$	8,798.2		$	8,492.9
Security	3,775.4			3,741.6
Industrial	3,482.8			3,438.7
	16,056.4			15,673.2
Corporate assets	(315.6		)	(545.4		)
Consolidated	$	15,740.8		$	15,127.8

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Guarantees (Tables)

6 Months Ended

Jul. 02, 2016

Financial Guarantees

The Company’s financial guarantees at July 2, 2016 are as follows:

(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased properties	One to five years	$	39.3	$	—
Standby letters of credit	Up to three years	78.3		—
Commercial customer financing arrangements	Up to six years	60.6		16.3
Total		$	178.2	$	16.3

Changes in Carrying Amount of Product and Service Warranties

The changes in the carrying amount of product and service warranties for the six months ended July 2, 2016 and July 4, 2015 are as follows:

(Millions of Dollars)	2016			2015
Balance beginning of period	$	105.4		$	109.6
Warranties and guarantees issued	46.2			47.7
Warranty payments and currency	(44.6		)	(47.8		)
Balance end of period	$	107.0		$	109.5

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Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Document Period End Date			Jul. 02, 2016
Disposal Group, Including Discontinued Operation, Revenue		$ 17.6		$ 35.5
Net Sales	$ 2,932.4	$ 2,866.9	$ 5,604.5	$ 5,496.9

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Reconciliation of Net Earnings Attributable to Common Shareowners and Weighted-Average Shares Outstanding used to Calculate Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Numerator
Net earnings from continuing operations attributable to common shareowners	$ 271.5	$ 235.7	$ 460.9	$ 402.5
Net earnings from discontinued operations	0.0	(8.5)	0.0	(13.0)
Net Earnings Attributable to Common Shareowners	$ 271.5	$ 227.2	$ 460.9	$ 389.5
Denominator:
Basic earnings per share - weighted-average shares	145,135	148,059	145,583	150,339
Weighted Average Number Diluted Shares Outstanding Adjustment	2,128	4,604	1,960	4,542
Diluted earnings per share - weighted-average shares	147,263	152,663	147,543	154,881
Basic earnings per share of common stock:
Continuing operations (in dollars per share)	$ 1.87	$ 1.59	$ 3.17	$ 2.68
Discontinued operations (in dollars per share)	0.00	(0.06)	0.00	(0.09)
Total basic earnings per share of common stock	(1.87)	(1.53)	(3.17)	(2.59)
Diluted earnings per share of common stock:
Continuing operations (in dollars per share)	1.84	1.54	3.12	2.60
Discontinued operations (in dollars per share)	0.00	(0.06)	0.00	(0.08)
Total dilutive earnings per share of common stock	$ (1.84)	$ (1.49)	$ (3.12)	$ (2.51)

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Weighted-Average Stock Options and Warrants Outstanding Not included in Computation of Diluted Shares Outstanding (Detail) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 01, 2016	Feb. 28, 2015	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016	Dec. 28, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Long-term Debt			$ 3,820,900,000		$ 3,820,900,000		$ 3,797,200,000
Preferred Stock Par Value Per Share			$ 2.50		$ 2.50		$ 2.50
Payments for Repurchase of Common Stock	$ 124,200,000	$ 326,100,000	$ 700,000	$ 100,000,000	$ 362,100,000	$ 448,000,000
Common Stock, Shares, Issued			0		0		176,902,738
Notes 2 Point 25 Percent due 2018 [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Long-term Debt			$ 344,000,000		$ 344,000,000		$ 343,800,000
Preferred Stock Par Value Per Share							$ 100.00
Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common Stock, Shares, Issued							3,500,000.0
Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common Stock, Shares, Issued							4,300,000
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares					1.0150
Common Stock [Member] | Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Payments for Repurchase of Common Stock								$ 98.80
Equity Units Conversion Rate Number Of Common Stock Shares							1.0122	1.0122
Common Stock [Member] | Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Payments for Repurchase of Common Stock								$ 80.65
Equity Units Conversion Rate Number Of Common Stock Shares							1.2399	1.2399

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Earnings Per Share - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2013	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016	Dec. 28, 2013
Stockholders Equity Note [Line Items]
Mandatory Convertible Equity Units	$ 345.0			$ 345.0
Document Period End Date				Jul. 02, 2016
Long-term Debt				$ 345.0
Common Stock, Par or Stated Value Per Share		$ 2.50		$ 2.50		$ 2.50
Common Stock, Shares, Issued		0		0		176,902,738
Minimum [Member]
Stockholders Equity Note [Line Items]
Common Stock, Shares, Issued						3,500,000.0
Maximum [Member]
Stockholders Equity Note [Line Items]
Common Stock, Shares, Issued						4,300,000
Stock Options [Member]
Stockholders Equity Note [Line Items]
Antidilutive securities excluded from the computation of EPS		972,000	642,000	1,281,000	808,000
Notes 2 Point 25 Percent due 2018 [Member]
Stockholders Equity Note [Line Items]
Common Stock, Par or Stated Value Per Share						$ 100.00
Common Stock [Member]
Stockholders Equity Note [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares				1.0150
Common Stock [Member] | Minimum [Member]
Stockholders Equity Note [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares						1.0122	1.0122
Common Stock [Member] | Maximum [Member]
Stockholders Equity Note [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares						1.2399	1.2399

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Financing Receivables - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 03, 2015	Jan. 02, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Period End Date			Jul. 02, 2016
Number of Days Before Considered Past Due or Delinquent			90 days
Net receivables derecognized	$ 100.5		$ 100.5			$ 100.4
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale, Gain (Loss) on Sale	1.4	$ 1.0	2.4	$ 1.8
Proceeds from transfers of receivables to the purchaser	400.0	348.3	677.6	593.3
Payment to the Purchaser	383.4	325.0	677.6	593.3
Sale of receivables, deferred purchase price			122.1		$ 41.1
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together, Net Credit Losses During Period	0.0	0.0		0.0
Cash inflows related to the deferred purchase price receivable	128.7	102.3	219.5	191.3
Gross receivables sold
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables sold	488.8	395.9	873.5	732.0
Net receivables sold
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables sold	404.9	341.4	746.2	640.8
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cash investment purchaser allowed to have in transferors receivables	100.0		100.0
Payment to the Purchaser, servicing fees	0.2	$ 0.2	0.4	$ 0.3
Other assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Long-term trade financing receivables	$ 185.7		$ 185.7			$ 182.1

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Components of Inventories (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Schedule of Inventory [Line Items]
Finished products	$ 1,211.0	$ 1,085.0
Work in process	135.3	136.1
Raw materials	342.3	305.3
Total	$ 1,688.6	$ 1,526.4

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Acquisitions - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
Business Acquisition [Line Items]
Goodwill	$ 7,108.7		$ 7,108.7		$ 7,084.3
Purchase price for acquisitions	8.0	$ 0.0	21.0	$ 0.4
Inventories, net	1,688.6		1,688.6		1,526.4
Industrial Segment
Business Acquisition [Line Items]
Goodwill	$ 2,343.7		$ 2,343.7		$ 2,317.2

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Estimated Fair Values of Major Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items]
Goodwill	$ 7,108.7	$ 7,084.3

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Changes in Carrying Amount of Goodwill by Segment (Detail) $ in Millions	6 Months Ended
	Jul. 02, 2016 USD ($)
Goodwill [Line Items]
Goodwill, Acquired During Period	$ 11.8
Goodwill Beginning Balance	7,084.3
Foreign currency translation	12.6
Goodwill Ending Balance	7,108.7
Tools & Storage [Member]
Goodwill [Line Items]
Goodwill, Acquired During Period	0.0
Goodwill Beginning Balance	3,343.4
Foreign currency translation	(31.7)
Goodwill Ending Balance	3,311.7
Industrial Segment
Goodwill [Line Items]
Goodwill, Acquired During Period	0.0
Goodwill Beginning Balance	2,317.2
Foreign currency translation	14.7
Goodwill Ending Balance	2,343.7
Securities Industry
Goodwill [Line Items]
Goodwill, Acquired During Period	11.8
Goodwill Beginning Balance	1,423.7
Foreign currency translation	29.6
Goodwill Ending Balance	$ 1,453.3

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Long-Term Debt and Financing Arrangements (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016	Jan. 03, 2015
Debt Instrument [Line Items]
Long-term debt fair value adjustment	$ 12.7
Commercial paper borrowings outstanding	343.8	$ 0.0
Commercial paper borrowings capacity	2,000.0
Long-term Debt	3,820.9	3,797.2
Less: Current maturities of long-term debt	(6.8)	(5.1)
Long-Term Debt	$ 3,814.1	$ 3,792.1
Notes 2 Point 45 Percent due 2018 [Member] [Member]
Debt Instrument [Line Items]
Long-term debt, interest rate	2.45%	2.45%
Long-term Debt	$ 628.5	$ 627.5
Notes 2 Point 25 Percent due 2018 [Member]
Debt Instrument [Line Items]
Stated interest rate	2.25%	2.25%
Long-term Debt	$ 344.0	$ 343.8
Notes payable due 2021
Debt Instrument [Line Items]
Stated interest rate	3.40%
Long-term debt, interest rate		3.40%
Long-term Debt	$ 416.7	$ 405.9
Notes Payable Maturities 2022 [Member]
Debt Instrument [Line Items]
Stated interest rate	2.90%
Long-term debt, interest rate		2.90%
Long-term Debt	$ 749.9	$ 749.6
Notes payable due 2028
Debt Instrument [Line Items]
Stated interest rate	7.05%
Long-term debt, interest rate		7.05%
Long-term Debt	$ 175.8	$ 167.0
Notes payable due 2040
Debt Instrument [Line Items]
Stated interest rate	5.20%
Long-term debt, interest rate		5.20%
Long-term Debt	$ 360.9	$ 360.1
Notes 5 Point 75 Percent Due 2052 [Member]
Debt Instrument [Line Items]
Stated interest rate	5.75%
Long-term debt, interest rate		5.75%
Long-term Debt	$ 730.2	$ 729.9
Notes 5 Point 75 Percent due 2053 [Member]
Debt Instrument [Line Items]
Stated interest rate	5.75%		5.75%
Long-term debt, interest rate		5.75%
Long-term Debt	$ 396.5	$ 394.2
Other, payable in varying amounts through 2021
Debt Instrument [Line Items]
Long-term Debt	$ 18.4	$ 19.2
Other, payable in varying amounts through 2021 | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rate	0.00%	0.00%
Other, payable in varying amounts through 2021 | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rate	2.4275%	2.43%
New Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 1,750.0
Fixed to Floating Interest Rate Swap | Notes payable due 2021
Debt Instrument [Line Items]
Debt instrument, face amount	400.0
Fixed to Floating Interest Rate Swap | Notes payable due 2028
Debt Instrument [Line Items]
Debt instrument, face amount	150.0
Fixed to Floating Interest Rate Swap | Notes payable due 2040
Debt Instrument [Line Items]
Debt instrument, face amount	400.0
Cash Flow Hedges | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Notional Amount	$ 400.0	$ 400.0

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Long-Term Debt and Financing Arrangements - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2016	Jan. 02, 2016	Jan. 03, 2015
Debt Instrument [Line Items]
Deferred Finance Costs, Net	$ 42.0	$ 45.0
Document Period End Date	Jul. 02, 2016
Long-term debt fair value adjustment	$ 12.7
Commercial paper borrowings outstanding	343.8	$ 0.0
Commercial paper borrowings capacity	2,000.0
Notes 2 Point 45 Percent due 2018 [Member] [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Net	4.0
Long-term Debt, Gross	632.5
Notes 2 Point 25 Percent due 2018 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Net	1.0
Long-term Debt, Gross	$ 345.0
Stated interest rate	2.25%	2.25%
Notes payable due 2021
Debt Instrument [Line Items]
Deferred Finance Costs, Net	$ 1.8
Stated interest rate	3.40%
Notes payable due 2021 | Fixed-to-Floating Interest Rate Swaps Terminated
Debt Instrument [Line Items]
Unamortized gain on terminated swap	$ 18.7
Notes payable due 2021 | Fixed to Floating Interest Rate Swap
Debt Instrument [Line Items]
Debt instrument, face amount	400.0
Unamortized gain on terminated swap	0.2
Notes Payable due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	754.3
Debt Instrument, Unamortized Discount	0.4
Notes Payable Maturities 2022 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Net	$ 4.0
Stated interest rate	2.90%
Notes payable due 2028
Debt Instrument [Line Items]
Stated interest rate	7.05%
Notes payable due 2028 | Fixed to Floating Interest Rate Swap
Debt Instrument [Line Items]
Debt instrument, face amount	$ 150.0
Debt Instrument, Unamortized Discount	13.1
Notes payable due 2040
Debt Instrument [Line Items]
Deferred Finance Costs, Net	3.3
Unamortized gain on terminated swap	0.2
Long-term Debt	$ 35.6
Stated interest rate	5.20%
Notes payable due 2040 | Fixed to Floating Interest Rate Swap
Debt Instrument [Line Items]
Debt instrument, face amount	$ 400.0
Notes 5 Point 75 Percent Due 2052 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Net	19.8
Long-term Debt, Gross	$ 750.0
Stated interest rate	5.75%
Notes 5 Point 75 Percent due 2053 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Net	$ 8.4
Long-term Debt	$ 400.0
Stated interest rate	5.75%		5.75%
Notes 5 Point 75 Percent due 2053 [Member] | Fixed to Floating Interest Rate Swap
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount	$ 4.9
New Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 1,750.0

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Summary of Fair Value of Derivatives (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Fair Value Hedging [Member]
Derivatives, Fair Value [Line Items]
Notional Amount of Interest Rate Derivatives	$ 0.0	$ 950.0
Net Investment Hedging | Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Notional Amount of Interest Rate Derivatives	1,400.0
Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	108.5	72.2
Fair value of liability derivatives	121.8	55.4
Designated as Hedging Instruments | Cash Flow Hedges | Interest Rate Contracts | LT other assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	0.0	0.0
Designated as Hedging Instruments | Cash Flow Hedges | Interest Rate Contracts | LT other liabilities
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	95.1	41.1
Designated as Hedging Instruments | Cash Flow Hedges | Foreign Exchange Contracts | Other current assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	11.6	21.9
Designated as Hedging Instruments | Cash Flow Hedges | Foreign Exchange Contracts | LT other assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	4.6	3.7
Designated as Hedging Instruments | Cash Flow Hedges | Foreign Exchange Contracts | Accrued expenses
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	4.3	1.8
Designated as Hedging Instruments | Cash Flow Hedges | Foreign Exchange Contracts | LT other liabilities
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	0.4	0.0
Designated as Hedging Instruments | Fair Value Hedging [Member] | Interest Rate Contracts | Other current assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	0.0	14.9
Designated as Hedging Instruments | Fair Value Hedging [Member] | Interest Rate Contracts | LT other assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	0.0	1.4
Designated as Hedging Instruments | Fair Value Hedging [Member] | Interest Rate Contracts | Accrued expenses
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	0.0	2.5
Designated as Hedging Instruments | Fair Value Hedging [Member] | Interest Rate Contracts | LT other liabilities
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	0.0	5.2
Designated as Hedging Instruments | Net Investment Hedging | Other current assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	92.3	30.3
Designated as Hedging Instruments | Net Investment Hedging | LT other assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives		0.0
Designated as Hedging Instruments | Net Investment Hedging | Accrued expenses
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	1.5	4.8
Designated as Hedging Instruments | Net Investment Hedging | LT other liabilities
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	0.0
Fair value of liability derivatives	20.5	0.0
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	37.3	7.1
Fair value of liability derivatives	85.2	40.7
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Other current assets
Derivatives, Fair Value [Line Items]
Fair value of asset derivatives	37.3	7.1
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Accrued expenses
Derivatives, Fair Value [Line Items]
Fair value of liability derivatives	$ 85.2	$ 40.7

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Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016	Jan. 03, 2015	Oct. 31, 2012	Jan. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Payments for (Proceeds from) Derivative Instrument, Investing Activities				$ 26.6	$ (48.3)
Notes 5 Point 75 Percent due 2053 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate		5.75%		5.75%			5.75%
Notes payable due 2040
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate		5.20%		5.20%
Notes payable due 2028
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate		7.05%		7.05%
Notes 5 Point 75 Percent Due 2052 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate		5.75%		5.75%
Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
After-tax gain (loss) for cash flow hedge effectiveness in accumulated other comprehensive loss		$ (105.3)		$ (105.3)		$ (52.1)
Cash flow gain (loss) hedge loss expected to be reclassified to earnings as hedged transactions occur or as amounts are amortized within the next 12 months				(6.6)
Gain (loss) reclassified from accumulated other comprehensive loss into earnings		(0.5)	$ (4.9)	(9.8)	(6.0)
Fair Value Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives		0.0		0.0		950.0
Derivative, Loss on Derivative		2.3	3.6	5.3	7.4
Interest Expense, Debt		8.1	11.8	19.9	23.7
Foreign Exchange Forward | Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives		673.2		673.2		439.3
Foreign Exchange Option | Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives		109.5		109.5		197.4
Interest Rate Risk | Fair Value Hedging [Member] | Notes 5 Point 75 Percent due 2053 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives							$ 400.0
Interest Rate Risk | Fair Value Hedging [Member] | Notes 3 Point 4 Percent Due in 2021 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate								3.40%
Notional Amount of Interest Rate Derivatives								$ 400.0
Interest Rate Risk | Fair Value Hedging [Member] | Notes payable due 2028
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives									$ 150.0
Interest Rate Risk | Fair Value Hedging [Member] | Notes 7 Point 05 Percent Due in 2028 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Stated interest rate									7.05%
Foreign Exchange Contracts | Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Payments for (Proceeds from) Derivative Instrument, Investing Activities				(5.5)	(63.9)
Notional Amount of Interest Rate Derivatives		1,400.0		1,400.0
Gain (loss) included in accumulated other comprehensive income (loss)		(35.5)		(35.5)		(11.8)
Foreign Exchange Contracts | Net Investment Hedging | Currency, British Pound Sterling
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives						1,900.0
Interest Rate Swap [Member] | Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives		400.0		400.0		400.0
Not Designated as Hedging Instrument | Forward Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount of Interest Rate Derivatives		2,300.0		2,300.0		$ 2,000.0
Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest Expense, Debt		29.0	18.3	3.8	1.5
Interest Expense [Member] | Interest Rate Contracts | Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net		(22.5)	35.0	(54.1)	19.5
Gain (loss) reclassified from accumulated other comprehensive loss into earnings		0.0	0.0	0.0	0.0
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net		0.0		0.0
Other Income And Expense [Member] | Foreign Exchange Contracts | Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net		35.2	(39.4)	37.8	(2.5)
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion		0.0	0.0	0.0	0.0
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net		0.0	0.0	0.0	0.0
Cost of sales | Foreign Exchange Contracts | Cash Flow Hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net		17.5	(3.6)	(4.4)	34.4
Derivative, Hedged Item, Gain (Loss) Effect on Income Statement		5.0	16.2	23.6	22.9
Gain (loss) reclassified from accumulated other comprehensive loss into earnings		(5.0)	(16.2)	(23.6)	(22.9)
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net	[1]	$ 0.0	$ 0.0	$ 0.0	$ 0.0

[1] Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

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Detail Pre-tax Amounts Reclassified From Accumulated Other Comprehensive Income (Loss) into Earnings for Active Derivative Financial Instruments (Detail) - Cash Flow Hedges - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Reclassified from OCI to Income (Effective Portion)		$ 0.5	$ 4.9	$ 9.8	$ 6.0
Interest Rate Contracts | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount Recorded in OCI Gain (Loss)		(22.5)	35.0	(54.1)	19.5
Gain (Loss) Reclassified from OCI to Income (Effective Portion)		0.0	0.0	0.0	0.0
Gain (Loss) Recognized in Income (Ineffective Portion)		0.0		0.0
Foreign Exchange Contracts | Cost of sales
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Hedged Item, Gain (Loss) Effect on Income Statement		5.0	16.2	23.6	22.9
Amount Recorded in OCI Gain (Loss)		17.5	(3.6)	(4.4)	34.4
Gain (Loss) Reclassified from OCI to Income (Effective Portion)		5.0	16.2	23.6	22.9
Gain (Loss) Recognized in Income (Ineffective Portion)	[1]	$ 0.0	$ 0.0	$ 0.0	$ 0.0

[1] Includes ineffective portion and amount excluded from effectiveness testing on derivatives.

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Fair Value Adjustments Relating to Swaps (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Document Period End Date			Jul. 02, 2016
Proceeds from Derivative Instrument, Financing Activities	$ 27.0		$ 27.0
Fair Value Hedging [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Notional Amount of Interest Rate Derivatives	0.0		0.0		$ 950.0
Proceeds from Derivative Instrument, Financing Activities	27.0
Interest Expense, Debt	8.1	$ 11.8	19.9	$ 23.7
Fair Value Hedging [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Gain/(Loss) on Swaps	(28.6)	(18.6)	(3.3)	(1.4)
Interest Expense, Debt	29.0	18.3	3.8	1.5
Foreign Exchange Contract [Member] | Net Investment Hedging [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Notional Amount of Interest Rate Derivatives	1,400.0		1,400.0
Foreign Exchange Contract [Member] | Net Investment Hedging [Member] | Other Income And Expense [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	35.2	(39.4)	37.8	(2.5)
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Notes 5 Point 20 Percent Due 2040 [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Stated interest rate	5.20%		5.20%

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Details of Foreign Exchange Contracts Pre-Tax Amounts (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Proceeds from Hedge, Investing Activities			$ (26.6)	$ 48.3
Document Period End Date			Jul. 02, 2016
Fair Value Hedging [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Derivative, Notional Amount	$ 0.0		$ 0.0		$ 950.0
Derivative, Loss on Derivative	2.3	$ 3.6	5.3	7.4
Interest Expense, Debt	8.1	11.8	19.9	23.7
Net Investment Hedging | Foreign Exchange Contracts
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Derivative, Notional Amount	1,400.0		1,400.0
Proceeds from Hedge, Investing Activities			5.5	63.9
Net Investment Hedging | Foreign Exchange Contracts | Other Income And Expense [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Amount Recorded in OCI Gain (Loss)	35.2	(39.4)	37.8	(2.5)
Gain (Loss) Recognized in Income (Ineffective Portion)	0.0	$ 0.0	0.0	$ 0.0
Net Investment Hedging | Currency Swap [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Derivative, Notional Amount	$ 250.0		$ 250.0

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Income Statement Impacts Related to Derivatives Not Designated as Hedging Instruments (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Other Income And Expense [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Amount of Gain (Loss) Recorded in Income on Derivative	$ (31.0)	$ 50.1	$ (37.0)	$ 20.7
Fair Value Hedging [Member]
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Interest Expense, Debt	8.1	11.8	19.9	23.7
Derivative, Loss on Derivative	$ 2.3	$ 3.6	$ 5.3	$ 7.4

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Equity Arrangements - Additional Information (Detail) - USD ($)			1 Months Ended				3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 01, 2016	Oct. 31, 2014	Feb. 29, 2016	Mar. 31, 2015	Feb. 28, 2015	Dec. 31, 2013	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016	Dec. 28, 2013
Stockholders Equity Note [Line Items]
Forward share purchase contract		$ 150,000,000		$ 350,000,000
Payments for Repurchase of Common Stock	$ 124,200,000				$ 326,100,000		$ 700,000	$ 100,000,000	$ 362,100,000	$ 448,000,000
Long-term debt, including current maturities							3,820,900,000		3,820,900,000		$ 3,797,200,000
Call option, aggregate premium						$ 9,700,000
Preferred Stock, Value, Issued							0		$ 0		$ 0
Debt Instrument Convertible Conversion Warrant Strike Price, Percentage Higher than Previous Price on November 1, 2010											$ 0.4
Equity Forward Contracts, Net Settlement, Shares		1,603,822		3,645,510
Option Indexed to Issuer's Equity, Settlement Alternatives, Shares, at Fair Value	293,142				911,077						2,603,855
Treasury Stock Acquired, Average Cost Per Share	$ 94.34				$ 96.46				$ 112.60
Document Period End Date									Jul. 02, 2016
Treasury Stock, Shares, Acquired	1,316,858		3,763,145		3,381,162						6,623,709
Call Option [Member]
Stockholders Equity Note [Line Items]
Call option, average price (in dollars per share)												$ 2.77
Open option contracts written at fair value							35,300,000		$ 35,300,000
Notes 2 Point 25 Percent due 2018 [Member]
Stockholders Equity Note [Line Items]
Long-term debt, including current maturities							$ 344,000,000		$ 344,000,000		$ 343,800,000
Convertible Preferred Stock [Member]
Stockholders Equity Note [Line Items]
Common stock to be issued up on conversion												3,500,000.0
Common Stock [Member]
Stockholders Equity Note [Line Items]
Conversion price of convertible note (in dollars per share)							$ 98.52		$ 98.52
Common Stock [Member] | Maximum [Member]
Stockholders Equity Note [Line Items]
Payments for Repurchase of Common Stock												$ 80.65
Common Stock [Member] | Minimum [Member]
Stockholders Equity Note [Line Items]
Payments for Repurchase of Common Stock												$ 98.80
Call Option [Member]
Stockholders Equity Note [Line Items]
Number of common shares purchased under call option	3,100,000.0							9,100,000.0				12,200,000.0
Option Indexed to Issuer's Equity, Premium Amount												$ 73,500,000
Option Indexed to Issuer's Equity, Average Premium Price Per Share												$ 6.03
Option Indexed to Issuer's Equity, Average Lower Strike Price												86.07
Option Indexed to Issuer's Equity, Average Upper Strike Price												$ 106.56

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Summary of Capped Call (Equity Options) Issued (Detail) - USD ($)		1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 01, 2016	Feb. 28, 2015	Dec. 31, 2013	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016	Dec. 28, 2013
Option Indexed to Issuer's Equity [Line Items]
Option Indexed to Issuer's Equity, Settlement Alternatives, Shares, at Fair Value	293,142	911,077						2,603,855
Long-term Debt			$ 345,000,000			$ 345,000,000
Convertible Preferred Stock Shares Issuable Upon Conversion									4,900,000
Net Premium Paid			$ 9,700,000
Common Stock, Par or Stated Value Per Share				$ 2.50		$ 2.50		$ 2.50
Payments for Repurchase of Common Stock	$ 124,200,000	$ 326,100,000		$ 700,000	$ 100,000,000	$ 362,100,000	$ 448,000,000
Common Stock, Shares, Issued				0		0		176,902,738
Cash Settlement on Forward Stock Purchase Contract						$ 345,000,000
Stock Exercise Price Per Share Percentage Greater Than Closing Price								$ 0.4
Treasury Stock Acquired, Average Cost Per Share	$ 94.34	$ 96.46				$ 112.60
Call Option [Member]
Option Indexed to Issuer's Equity [Line Items]
Original Number of Options	3,100,000.0				9,100,000.0				12,200,000.0
Minimum [Member]
Option Indexed to Issuer's Equity [Line Items]
Common Stock, Shares, Issued								3,500,000.0
Stock Exercise Price Per Share								$ 98.80
Maximum [Member]
Option Indexed to Issuer's Equity [Line Items]
Common Stock, Shares, Issued								4,300,000
Stock Exercise Price Per Share								$ 112.91
Call Option [Member]
Option Indexed to Issuer's Equity [Line Items]
Common Stock Price Per Share									$ 2.77
Open Option Contracts Written, at Fair Value				$ 35,300,000		$ 35,300,000
Notes 2 Point 25 Percent due 2018 [Member]
Option Indexed to Issuer's Equity [Line Items]
Common Stock, Par or Stated Value Per Share								$ 100.00
Common Stock [Member]
Option Indexed to Issuer's Equity [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares						1.0150
Conversion price of convertible note (in dollars per share)				$ 98.52		$ 98.52
Common Stock [Member] | Minimum [Member]
Option Indexed to Issuer's Equity [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares								1.0122	1.0122
Payments for Repurchase of Common Stock									$ 98.80
Common Stock [Member] | Maximum [Member]
Option Indexed to Issuer's Equity [Line Items]
Equity Units Conversion Rate Number Of Common Stock Shares								1.2399	1.2399
Payments for Repurchase of Common Stock									$ 80.65
Convertible Preferred Stock [Member]
Option Indexed to Issuer's Equity [Line Items]
Conversion of Stock, Shares Issued									3,500,000.0

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Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
Accumulated other comprehensive income (loss):
Balance - beginning of period	$ (1,694.2)	$ (1,270.2)
Other comprehensive (loss) income before reclassifications	(13.0)	(185.0)
Reclassification adjustments to earnings	(4.0)	(0.1)
Net other comprehensive (loss) income	(17.0)	(185.1)
Balance - end of period	(1,711.2)	(1,455.3)
Currency translation adjustment and other
Accumulated other comprehensive income (loss):
Balance - beginning of period	(1,300.9)	(796.8)
Other comprehensive (loss) income before reclassifications	(5.1)	(225.4)
Reclassification adjustments to earnings	0.0	0.0
Net other comprehensive (loss) income	(5.1)	(225.4)
Balance - end of period	(1,306.0)	(1,022.2)
Unrealized losses on cash flow hedges, net of tax
Accumulated other comprehensive income (loss):
Balance - beginning of period	(52.1)	(50.9)
Other comprehensive (loss) income before reclassifications	(43.4)	32.1
Reclassification adjustments to earnings	(9.8)	(6.0)
Net other comprehensive (loss) income	(53.2)	26.1
Balance - end of period	(105.3)	(24.8)
Unrealized gains on net investment hedges, net of tax
Accumulated other comprehensive income (loss):
Balance - beginning of period	11.8	(37.2)
Other comprehensive (loss) income before reclassifications	23.7	(1.5)
Reclassification adjustments to earnings	0.0	0.0
Net other comprehensive (loss) income	23.7	(1.5)
Balance - end of period	35.5	(38.7)
Pension (losses) gains, net of tax
Accumulated other comprehensive income (loss):
Balance - beginning of period	(353.0)	(385.3)
Other comprehensive (loss) income before reclassifications	11.8	9.8
Reclassification adjustments to earnings	5.8	5.9
Net other comprehensive (loss) income	17.6	15.7
Balance - end of period	$ (335.4)	$ (369.6)

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Accumulated Other Comprehensive Income - Reclassifications out of AOCI (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income taxes on continuing operations	$ (90,500,000)	$ (78,500,000)	$ (156,000,000)	$ (133,800,000)
Reclassifications from Accumulated other comprehensive loss to earnings | Cost of sales
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax			23,600,000	22,900,000
Reclassifications from Accumulated other comprehensive loss to earnings | Interest Expense [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax			(7,500,000)	(7,600,000)
Reclassifications from Accumulated other comprehensive loss to earnings | Unrealized losses on cash flow hedges, net of tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income taxes on continuing operations			6,300,000	9,300,000
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax			9,800,000	6,000,000
Reclassifications from Accumulated other comprehensive loss to earnings | Pension (losses) gains, net of tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax			8,800,000	(8,700,000)
Income taxes on continuing operations			3,000,000	2,800,000
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Net of Tax			(5,800,000)	(5,900,000)
Reclassifications from Accumulated other comprehensive loss to earnings | Pension (losses) gains, net of tax | Cost of sales
Accumulated Other Comprehensive Income (Loss) [Line Items]
Actuarial losses, reclassification to Statements of Operations and Comprehensive Income			(5,300,000)	(5,200,000)
Reclassifications from Accumulated other comprehensive loss to earnings | Pension (losses) gains, net of tax | Selling, general and administrative
Accumulated Other Comprehensive Income (Loss) [Line Items]
Actuarial losses, reclassification to Statements of Operations and Comprehensive Income			$ (3,500,000)	$ (3.5)

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Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Defined Benefit Plan Disclosure [Line Items]
Change in Accounting Estimate, Description	$ 3.5		$ 7.1
Document Period End Date			Jul. 02, 2016
Pension Benefit, U.S. Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	2.4	$ 1.9	$ 4.7	$ 3.5
Interest cost	11.4	13.6	22.7	26.9
Expected return on plan assets	(17.0)	(18.7)	(33.9)	(37.4)
Amortization of prior service cost (credit)	1.3	0.2	2.6	0.4
Defined Benefit Plan, Amortization of Gains (Losses)	1.8	2.2	3.5	3.9
Curtailment loss			0.0	0.0
Net periodic benefit cost	(0.1)	(0.8)	(0.4)	(2.7)
Pension Benefits, Non-U.S Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	3.2	3.6	6.4	7.2
Interest cost	9.8	12.0	19.4	23.8
Expected return on plan assets	(11.8)	(14.2)	(23.5)	(28.2)
Amortization of prior service cost (credit)	0.0	0.1	0.1	0.2
Defined Benefit Plan, Amortization of Gains (Losses)	1.6	2.1	3.1	4.2
Curtailment loss			0.1	0.3
Net periodic benefit cost	2.8	3.6	5.6	7.5
Other Benefits, U.S Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	0.1	0.2	0.3	0.3
Interest cost	0.4	0.5	0.8	1.1
Expected return on plan assets	0.0	0.0	0.0	0.0
Amortization of prior service cost (credit)	(0.3)	(0.3)	(0.6)	(0.6)
Defined Benefit Plan, Amortization of Gains (Losses)	0.0	0.0	0.0	0.0
Curtailment loss			0.0	0.0
Net periodic benefit cost	$ 0.2	$ 0.4	$ 0.5	$ 0.8

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Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 145.8	$ 79.3
Derivative liabilities	207.0	96.1
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market fund	5.6	7.0
Derivative assets	145.8	79.3
Derivative liabilities	207.0	96.1
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	145.8	79.3
Derivative liabilities	207.0	96.1
Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market fund	5.6	7.0
Derivative assets	0.0	0.0
Derivative liabilities	0.0	0.0
Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market fund	0.0	0.0
Derivative assets	145.8	79.3
Derivative liabilities	$ 207.0	$ 96.1

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Summary of Financial Instruments Carrying and Fair Values (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, Fair Value Disclosure	$ 10.7	$ 11.7
Long-term debt, including current maturities	3,820.9	3,797.2
Long-term Debt, Fair Value	4,193.2	4,034.4
Derivative assets	145.8	79.3
Derivative liabilities	207.0	96.1
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments, Fair Value Disclosure	10.3	11.7
Long-term debt, including current maturities	3,820.9	3,797.2
Derivative assets	145.8	79.3
Derivative liabilities	$ 207.0	$ 96.1

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Summary of Restructuring Reserve Activity (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Restructuring Cost and Reserve [Line Items]
Document Period End Date			Jul. 02, 2016
Reserve, Beginning Balance			$ 58.7
Restructuring charges	$ 10.2	$ 5.0	18.2	$ 29.9
Usage			(45.6)
Currency			0.2
Reserve, Ending Balance	31.5		31.5
Severance and related costs
Restructuring Cost and Reserve [Line Items]
Reserve, Beginning Balance			44.3
Restructuring charges			9.7
Usage			(27.6)
Currency			0.3
Reserve, Ending Balance	26.7		26.7
Facility closures
Restructuring Cost and Reserve [Line Items]
Reserve, Beginning Balance			14.4
Restructuring charges			8.5
Usage			(18.0)
Currency			(0.1)
Reserve, Ending Balance	4.8		4.8
Series of Individually Immaterial Business Acquisitions [Member]
Restructuring Cost and Reserve [Line Items]
Asset Impairment Charges	4.2		4.3
Restructuring charges	10.2		18.2
Severance Costs	$ 6.0		$ 9.7

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Restructuring Charges - Additional Information (Detail) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016 USD ($) employee	Jul. 04, 2015 USD ($)	Jul. 02, 2016 USD ($) employee	Jul. 04, 2015 USD ($)	Jan. 02, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Document Period End Date			Jul. 02, 2016
Restructuring charges and asset impairments recognized	$ (10.2)	$ (5.0)	$ (18.2)	$ (29.9)
Restructuring reserves	31.5		31.5		$ 58.7
Tools & Storage [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized			(1.0)
Securities Industry
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized	(7.0)		(8.0)
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized	(1.0)		(5.0)
Acquisition
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized	(10.2)		(18.2)
Severance Costs	$ 6.0		$ 9.7
Number of employees reduced | employee	305		602
Business Exit Costs			$ 4.2
Business Exit Costs	$ 4.2		4.3
Facility closures
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized			(8.5)
Restructuring reserves	4.8		4.8		14.4
Severance and related costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized			(9.7)
Restructuring reserves	26.7		26.7		$ 44.3
Severance and related costs | Acquisition | Industrial Segment
Restructuring Cost and Reserve [Line Items]
Restructuring charges and asset impairments recognized	$ (2.0)		$ (4.0)

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Income Taxes [Line Items]
Income taxes on continuing operations	$ 90.5	$ 78.5	$ 156.0	$ 133.8
Document Period End Date			Jul. 02, 2016
Effective tax rate	25.00%	25.00%	25.30%	25.00%

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Business Segments (Detail) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016 USD ($)	Jul. 04, 2015 USD ($)	Jul. 02, 2016 USD ($) Integer	Jul. 04, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments | Integer			3
Net Sales	$ 2,932.4	$ 2,866.9	$ 5,604.5	$ 5,496.9
Segment profit	509.0	451.1	907.2	837.4
Corporate overhead	(47.0)	(38.4)	(95.4)	(74.1)
Other-net	(47.6)	(50.5)	(93.8)	(114.2)
Restructuring charges and asset impairments recognized	(10.2)	(5.0)	(18.2)	(29.9)
Interest expense	(47.7)	(46.2)	(95.0)	(90.6)
Interest income	5.5	3.0	11.3	6.7
Earnings from continuing operations before income taxes	362.0	314.0	616.1	535.3
Tools & Storage [Member]
Segment Reporting Information [Line Items]
Restructuring charges and asset impairments recognized			(1.0)
Securities Industry
Segment Reporting Information [Line Items]
Restructuring charges and asset impairments recognized	(7.0)		(8.0)
Segment, Continuing Operations | Tools & Storage [Member]
Segment Reporting Information [Line Items]
Net Sales	1,931.6	1,839.5	3,638.5	3,471.6
Segment profit	362.5	301.6	624.5	558.4
Segment, Continuing Operations | Securities Industry
Segment Reporting Information [Line Items]
Net Sales	537.7	533.3	1,041.9	1,042.9
Segment profit	67.7	55.2	127.9	110.0
Segment, Continuing Operations | Industrial Segment
Segment Reporting Information [Line Items]
Net Sales	463.1	494.1	924.1	982.4
Segment profit	$ 78.8	$ 94.3	$ 154.8	$ 169.0

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Business Segments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Segment Reporting Information [Line Items]
Decrease in segment profit due to non-cash inventory step-up amortization	$ 509.0	$ 451.1	$ 907.2	$ 837.4

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Summary of Total Assets by Segment (Detail) - USD ($) $ in Millions	Jul. 02, 2016	Jan. 02, 2016
Segment Reporting Information [Line Items]
Assets	$ (15,740.8)	$ (15,127.8)
Segment, Continuing Operations
Segment Reporting Information [Line Items]
Assets	(16,056.4)	(15,673.2)
Segment, Continuing Operations | Tools & Storage [Member]
Segment Reporting Information [Line Items]
Assets	(8,798.2)	(8,492.9)
Segment, Continuing Operations | Securities Industry
Segment Reporting Information [Line Items]
Assets	(3,775.4)	(3,741.6)
Segment, Continuing Operations | Industrial Segment
Segment Reporting Information [Line Items]
Assets	(3,482.8)	(3,438.7)
Segment, Continuing Operations | Corporate assets
Segment Reporting Information [Line Items]
Assets	$ (315.6)	$ (545.4)

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended	12 Months Ended
	Jul. 02, 2016 USD ($) sites	Dec. 28, 2013 USD ($)	Jan. 02, 2016 USD ($)
Loss Contingencies [Line Items]
Superfund Sites | sites	31
Environmental remediation. Period construction of treatment facility to be maintained	30 years
Centredale Site [Member]
Loss Contingencies [Line Items]
Environmental remediation costs, reserve	$ 68.1
Centredale Site [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Environmental remediation costs deemed probable and reasonably estimable		$ 68.1
Centredale Site [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Environmental remediation costs deemed probable and reasonably estimable		$ 139.7
Property, Plant and Equipment, Other Types
Loss Contingencies [Line Items]
Environmental remediation costs, reserve	165.9		$ 170.7
Reserve for environmental remediation costs, current	17.8
Reserve for environmental remediation costs, noncurrent	148.1
Accrual for Environmental Loss Contingencies, EPA Funded Amount	15.9
Accrual for Environmental Loss Contingencies, Obligation After EPA Funding	150.0
Property, Plant and Equipment, Other Types | Minimum [Member]
Loss Contingencies [Line Items]
Environmental remediation costs deemed probable and reasonably estimable	132.2
Property, Plant and Equipment, Other Types | Maximum [Member]
Loss Contingencies [Line Items]
Environmental remediation costs deemed probable and reasonably estimable	$ 273.0

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Financial Guarantees (Detail) $ in Millions	3 Months Ended
	Jul. 02, 2016 USD ($)
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	$ 178.2
Guarantee Liability Carrying Amount	16.3
Guarantees on the residual values of leased properties
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	39.3
Guarantee Liability Carrying Amount	$ 0.0
Guarantees on the residual values of leased properties | Minimum [Member]
Guarantor Obligations [Line Items]
Guarantee Obligation Term	1 year
Guarantees on the residual values of leased properties | Maximum [Member]
Guarantor Obligations [Line Items]
Guarantee Obligation Term	5 years
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	$ 78.3
Guarantee Liability Carrying Amount	$ 0.0
Standby Letters of Credit [Member] | Maximum [Member]
Guarantor Obligations [Line Items]
Guarantee Obligation Term	3 years
Commercial customer financing arrangements
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	$ 60.6
Guarantee Liability Carrying Amount	$ 16.3
Commercial customer financing arrangements | Maximum [Member]
Guarantor Obligations [Line Items]
Guarantee Obligation Term	6 years

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Guarantees - Additional Information (Detail) $ in Millions	Jul. 02, 2016 USD ($)
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	$ 178.2
Carrying amount of guarantees recorded in the consolidated balance sheet	16.3
Property Lease Guarantee [Member]
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	39.3
Capital Leased Assets, Noncurrent, Fair Value Disclosure	43.7
Carrying amount of guarantees recorded in the consolidated balance sheet	0.0
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	78.3
Carrying amount of guarantees recorded in the consolidated balance sheet	0.0
Commercial customer financing arrangements
Guarantor Obligations [Line Items]
Guarantee Obligations Maximum Potential Payment	60.6
Carrying amount of guarantees recorded in the consolidated balance sheet	$ 16.3

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Changes in Carrying Amount of Product and Service Warranties (Detail) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
Class of Warrant or Right [Line Items]
Balance beginning of period	$ 105.4	$ 109.6
Warranties and guarantees issued	46.2	47.7
Warranty payments and currency	(44.6)	(47.8)
Balance end of period	$ 107.0	$ 109.5