-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DVf5J7Ns3S3OpSN4vdXV3hFwniecajHZOELLRTUo/UZuly4zMCDPOHAqFHBq95pI 1e8vDFMWaWGq9e4xSaIS/A== /in/edgar/work/20000727/0000950136-00-000975/0000950136-00-000975.txt : 20000921 0000950136-00-000975.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950136-00-000975 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000727 EFFECTIVENESS DATE: 20000727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANLEY WORKS CENTRAL INDEX KEY: 0000093556 STANDARD INDUSTRIAL CLASSIFICATION: [3420 ] IRS NUMBER: 060548860 STATE OF INCORPORATION: CT FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-42346 FILM NUMBER: 679903 BUSINESS ADDRESS: STREET 1: 1000 STANLEY DR STREET 2: P O BOX 7000 CITY: NEW BRITAIN STATE: CT ZIP: 06053 BUSINESS PHONE: 8062255111 MAIL ADDRESS: STREET 1: 1000 STANLEY DR CITY: NEW BRITAIN STATE: CT ZIP: 06053 S-8 1 0001.txt REGISTRATION STATEMENT; BENEFIT PLAN As filed with the Securities and Exchange Commission on July 27, 2000 Registration No. 333-______ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------- THE STANLEY WORKS (Exact name of registrant as specified in its charter) CONNECTICUT 06-0548860 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 1000 STANLEY DRIVE NEW BRITAIN, CONNECTICUT 06053 (Address of Principal Executive Offices) (Zip Code) THE STANLEY WORKS UK SHARE SAVE PLAN (Full titles of the Plans) JENNIFER O. ESTABROOK, ESQUIRE THE STANLEY WORKS 1000 STANLEY DRIVE NEW BRITAIN, CONNECTICUT 06053 (Name and address of agent for service) 860-225-5111 (Telephone number, including area code of agent for service) CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------- TITLE OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF REGISTERED* REGISTERED* OFFERING PRICE PER SHARE** AGGREGATE PRICE** FILING FEE - ----------- ----------- -------------------------- ----------------- ---------- Common Stock, $2.50 par value per share 500,000 $26.25 $13,125,000 $3465.00 - -------------------------------------------------------------------------------------------------------------
* This Registration Statement also pertains to Stock Purchase Rights of the Registrant which are attached to the Common Stock. In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plans described herein. ** Estimated for purposes of calculation of the registration fee pursuant to Rule 457(c) and based upon an average of the high and low prices of the Registrant's Common Stock as reported on the New York Stock Exchange on July 24, 2000. PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents filed by The Stanley Works (the "Company") with the Securities and Exchange Commission are incorporated by reference in this Registration Statement: (1) the Company's Annual Report on Form 10-K/A for the year ended January 1, 2000; (2) the Company's Quarterly Report on Form 10-Q for the quarter ended April 1, 2000, and the Company's Current Reports on Form 8-K dated January 27, 2000, February 11, 2000, April 19, 2000, May 26, 2000, June 23, 2000, July 11, 2000, July 13, 2000 and July 19, 2000. (3) the description of the Company's Common Stock, $2.50 par value per share, contained in a registration statement filed under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") including any amendment or report filed for the purpose of updating such description; (4) the description of the Company's Stock Purchase Rights which is contained in a Report on Form 8-K filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description. In addition, all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. 2 ITEM 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL None. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Pursuant to the statutes of the State of Connecticut, a director, officer or employee of a corporation is entitled, under specified circumstances, to indemnification by the corporation against reasonable expenses, including attorney's fees, incurred by him or her in connection with the defense of a civil or criminal proceeding to which he or she has been made, or threatened to be made, a party by reason of the fact that he or she was a director, officer or employee. In certain circumstances, indemnification is provided against judgments, fines and amounts paid in settlement. In general, indemnification is not available where the director, officer or employee has been adjudged to have breached his or her duty to the corporation or where he or she did not act in good faith. Specific court approval is required in some cases. The foregoing statement is subject to the detailed provisions of Section 33-771 of the Connecticut General Statutes. In addition, the Company maintains an insurance policy providing coverage for certain liabilities of directors and officers. In addition, Article V of the Company's By-Laws provides as follows: "V. INDEMNIFICATION To the extent properly permitted by law the Board of Directors shall provide for the indemnification and reimbursement of, and advances of expenses to, any person made a party to any action, suit or proceeding by reason of the fact that he or she, or a person whose legal representative or successor he or she is, (a) is or was a Director, officer, employee or agent of the Corporation, or (b) served at the Corporation's request as a director, officer, employee or agent of another corporation, for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he or she may have become liable as the Board of Directors deems reasonable, actually incurred by him or her in connection with the defense or reasonable settlement of any such action, suit or proceeding or any appeal therein. 3 This provision of indemnification shall be in addition to any other right or remedy which such person may have. The Corporation shall have the right to intervene in and defend all such actions, suits or proceedings brought against any such person." ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS 4.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit (3)(i) to the Annual Report on Form 10-K for year ended January 2, 1999). 4.2 By-laws (filed herewith). 4.3 Indenture, dated as of April 1, 1986 between the Company and State Street Bank and Trust Company, as successor trustee, defining the rights of holders of 7-3/8% Notes Due December 15, 2002 and 5.75% Notes Due March 1, 2004 (incorporated by reference to Exhibit 4(a) to Registration Statement No. 33-4344 filed March 27, 1986). 4.4 First Supplemental Indenture, dated as of June 15, 1992 between the Company and State Street Bank and Trust Company, as successor trustee (incorporated by reference to Exhibit (4)(c) to Registration Statement No. 33-46212 filed July 21, 1992). (a) Certificate of Designated Officers establishing Terms of 7-3/8% Notes Due December 15, 2002 (incorporated by reference to Exhibit (4)(ii) to Current Report on Form 8-K dated December 7, 1992). (b) Certificate of Designated Officers establishing Terms of 5.75% Notes Due March 1, 2004 (incorporated by reference to Exhibit (4)(ii)(b) to the Annual Report on Form 10-K for the year ended January 2, 1999). 4.5 Rights Agreement, dated January 31, 1996 (incorporated by reference to Exhibit (4)(i) to Current Report on Form 8-K dated January 31, 1996). 4.6 (a) Amended and Restated Facility A (364 Day) Credit Agreement, dated as of October 23, 1996, with the banks named therein and Citibank, N.A. as agent (incorporated by reference to Exhibit 4 (iv) to the Annual Report on Form 10-k for the year ended December 6, 1996). 4 (b) Credit Agreement, dated as of October 21, 1998, among the Company, the Lenders named therein and Citibank, N.A. as agent (incorporated by reference to Exhibit 4 (iv)(c) to the Quarterly Report on Form 10-Q for the quarter ended October 3, 1998). (c) Credit Agreement, dated as of October 21, 1998, as amended and restated as of October 20, 1999, among the Company, each lender that is a signatory thereto and Citibank, N.A. as Agent for the Lenders (incorporated by reference to Exhibit 4 (i) to the Quarterly Report on Form 10-Q for the quarter ended October 2, 1999). 4.7 Amended and Restated Facility B (Five Year) Credit Agreement, dated as of October 23, 1996, with the banks named therein and Citibank, N.A. as agent (incorporated by reference to Exhibit 4 (v) to the Annual Report on Form 10-K for the year ended December 28, 1996). 5.1 Opinion of Jennifer O. Estabrook (filed herewith). 23.1 Consent of Ernst & Young LLP (filed herewith). 23.2 Consent of Jennifer O. Estabrook (included in Exhibit 5). 24.1 Powers of attorney (filed herewith). 99.1 The Stanley Works UK Share Save Plan (filed herewith). ITEM 9. UNDERTAKINGS a. Rule 415 Offering. The undersigned registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that 5 which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) of the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the registration statement is on Form S-3 or Form S- 8, and the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. b. Subsequent Exchange Act Documents. The undersigned hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable each filing of any employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended), that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. c. Indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, 6 therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 7 SIGNATURES The Registrant. Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized in the City of New Britain, State of Connecticut on July 27, 2000. THE STANLEY WORKS By: /s/ John M. Trani ------------------------------------------ Name: John M. Trani Title: Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated. NAME TITLE DATE - ---- ----- ---- /s/ John M. Trani Chairman, July 27, 2000 - --------------------------- Chief Executive John M. Trani Officer and Director /s/ James M. Loree Vice President, Finance July 27, 2000 - -------------------------- and Chief Financial James M.Loree Officer (Chief Financial Officer) /s/ Theresa F. Yerkes Vice President and July 27, 2000 - -------------------------- Controller (Chief Theresa F. Yerkes Accounting Officer) Director July 27, 2000 - -------------------------- John G. Breen * Director July 27, 2000 - -------------------------- Stillman B. Brown 8 NAME TITLE DATE - ---- ----- ---- * Director July 27, 2000 - -------------------------- Mannie L. Jackson * Director July 27, 2000 - -------------------------- James G. Kaiser * Director July 27, 2000 - -------------------------- Eileen S. Kraus Director July 27, 2000 - -------------------------- John D. Opie * Director July 27, 2000 - -------------------------- Hugo E. Uyterhoeven Director July 27, 2000 - -------------------------- Walter W. Williams * Director July 27, 2000 - -------------------------- Kathryn D. Wriston * By: /s/ Jennifer O. Estabrook July 27, 2000 ------------------------------- Jennifer O. Estabrook (As Attorney-in-Fact) 9 EXHIBIT INDEX Exhibit No. Page 4.2 By-laws. 11 5.1 Opinion of Jennifer O. Estabrook. 24 23.1 Consent of Ernst & Young LLP. 25 23.2 Consent of Jennifer O. Estabrook (Included in Exhibit 5). 24.1 Powers of attorney. 26 99.1 UK Share Save Plan. 28 10 EX-4.2 2 0002.txt BY LAWS As amended May 26, 2000 EXHIBIT 4.2 THE STANLEY WORKS BYLAWS ARTICLE I --------- SHAREHOLDERS' MEETINGS ---------------------- 1. ANNUAL MEETING. The Annual Meeting of the shareholders shall be held at such time in the month of February, March or April in each year and at such place within or without the State of Connecticut as the Board of Directors may determine. Notice thereof shall be mailed to each shareholder to his or her last known post office address not less than ten days nor more than sixty days before such Meeting. 2. SPECIAL MEETINGS. Special Meetings of the shareholders shall be called by the Chairman, or the President or Secretary, or by the Chairman, or the President or Secretary upon the written request of the holders of not less than 35% of the voting power of all shares entitled to vote on any issue proposed to be considered at such Meeting by mailing a notice thereof to each shareholder to his or her last known post office address not less than twenty-five days nor more than fifty days before such Meeting. 3. QUORUM. At any Meeting of shareholders the holders of not less than a majority of the shares outstanding and entitled to vote present in person or by proxy shall constitute a quorum. The Directors may establish a record date for voting or other purposes in accordance with law. 4. BUSINESS TO BE CONDUCTED AT ANNUAL MEETING. No business may be transacted at an Annual Meeting of shareholders (including any adjournment thereof), other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting by any shareholder (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section 4 and on the record date for the determination of shareholders entitled to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 4. In addition to any other applicable requirements, for business to be properly brought As amended May 26, 2000 before an Annual Meeting by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a shareholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the anniversary of the date on which the immediately preceding Annual Meeting of shareholders was convened; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. To be in proper written form, a shareholder's notice to the Secretary must set forth as to each matter such shareholder proposes to bring before the Annual Meeting (i) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (ii) the name and record address of such shareholder, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such shareholder, (iv) a description of all arrangements or understandings between such shareholder and any other person or persons (including their names) in connection with the proposal of such business by such shareholder and any material interest of such shareholder in such business and (v) a representation that such shareholder intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting. No business shall be conducted at the Annual Meeting of shareholders except business brought before the Annual Meeting in accordance with the procedures set forth in this Section 4, provided, however, that, once business has been properly brought before the Annual Meeting in accordance with such procedures, nothing in this Section 4 shall be deemed to preclude discussion by any shareholder of any such business. If the Chairman of an Annual Meeting determines that business was not properly brought before the Annual Meeting in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted. 2 As amended May 26, 2000 ARTICLE II ---------- NOMINATIONS OF DIRECTOR CANDIDATES ---------------------------------- 1. ELIGIBILITY TO MAKE NOMINATIONS. Nominations of candidates for election as directors of the Corporation at any meeting of shareholders called for election of directors (an "Election Meeting") may be made by the Board of Directors or by any shareholder entitled to vote at such Election Meeting. 2. PROCEDURE FOR NOMINATIONS BY THE BOARD OF DIRECTORS. Nominations made by the Board of Directors shall be made at a meeting of the Board of Directors, or by written consent of directors in lieu of a meeting, not less than 30 days prior to the date of the Election Meeting, and such nominations shall be reflected in the minute books for the Corporation as of the date made. At the request of the Secretary of the Corporation each proposed nominee shall provide the Corporation with such information concerning himself or herself as is required, under the rules of the Securities and Exchange Commission, to be included in the Corporation's proxy statement soliciting proxies for his or her election as a director. 3. PROCEDURE FOR NOMINATIONS BY SHAREHOLDERS. Not less than 30 days prior to the date of the Election Meeting, any shareholder who intends to make a nomination at the Election Meeting shall deliver a notice to the Secretary of the Corporation setting forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Corporation which are beneficially owned by each such nominee and (iv) such other information concerning each such nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominees. 4. SUBSTITUTION OF NOMINEES. In the event that a person is validly designated as a nominee in accordance with section 2 or 3 hereof and shall thereafter become unable or unwilling to stand for election to the Board of Directors, a substitute nominee may be designated as follows: (a) by those named as proxies in proxies solicited on behalf of the Board of Directors if the person was designated as nominee in accordance with section 2 hereof (b) by the shareholder who proposed such nominee if the person was designated as a nominee in accordance with section 3 hereof. 5. DETERMINATION OF COMPLIANCE WITH PROCEDURE. ------------------------------------------ If the chairman of the Election Meeting determines that a nomination was not in accordance with the foregoing procedures, such nomination shall be void. 3 As amended May 26, 2000 ARTICLE III ----------- DIRECTORS AND COMMITTEES ------------------------ 1. DIRECTORS. The business, property and affairs of this Corporation shall be managed by or under the direction of the Board of Directors consisting of not less than eight nor more than eighteen Directors, the exact number to be determined by the Board of Directors from time to time. All Directors shall be shareholders of record. The Directors shall be divided into three classes designated Class I, Class II and Class III. Such classes shall be as nearly equal in number as the total number of Directors constituting the entire Board of Directors permits. One class shall be chosen annually at the Annual Meeting of shareholders and the members of such class shall hold office until their successors be elected and qualified. The Directors may increase the prescribed number of Directors by the concurring vote of a majority of the prescribed number of Directors. Any increase or decrease in the prescribed number of Directors shall be so apportioned among the classes of Directors as to make all the classes as nearly equal in number as possible. No reduction of the number of Directors shall remove or shorten the term of any Director in office. A majority of the number of Directors prescribed shall constitute a quorum for the transaction of business. 2. MEETINGS. The Chairman or the President or any Vice Chairman may and upon written application of any three Directors shall call a meeting of the Board of Directors to be held at such time and place as may be determined by the person calling said meeting and shall cause notice thereof to be given. Unless waived in writing, three days verbal or written (mail) notice shall be required provided, however, that if in the judgment of any two officers an emergency exists, a meeting may be called forthwith by telephone or telegram or verbal notice and such notice shall be deemed sufficient notice notwithstanding that some of the Directors may not have actual notice. The Annual Meeting of the Directors for the election of officers shall be held without notice, immediately after the Annual Meeting of shareholders. Regular meetings of the Directors shall be held at least on a quarterly basis. 3. WRITTEN CONSENT. If all the Directors, or all members of a committee of the Board of Directors, as the case may be, severally or collectively consent in writing to any action taken or to be taken by the Corporation, and the number of such Directors or members constitutes a quorum for such action, such action shall be a valid corporate action as though it had been authorized at a meeting of the Board of Directors or committee, as the case may be. The Secretary shall file such consents with the minutes of the Board of Directors or of the committee, as the case may be. 4 As amended May 26, 2000 4. PARTICIPATION BY TELEPHONE. A Director may participate in a meeting of the Board of Directors or of a committee by any means of communication by which all Directors participating in the meeting may simultaneously hear one another during the meeting, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting. 5. VACANCIES. In case any vacancy or vacancies shall exist in the Board of Directors at any time the remaining members of the Board by majority action may fill the vacancy or vacancies. The term of a Director elected to fill a vacancy expires at the next shareholders meeting at which Directors are elected. 6. COMMITTEES. The Board of Directors may from time to time appoint from its membership such committees as it may deem necessary or desirable for the best interests of the Corporation and may delegate to any committee all needful authority to the extent permitted by law. The meetings of all committees are open to all directors. Each committee shall fix its own rules as to procedure and calling of meetings. It shall appoint a Secretary, who need not be a member of the committee. Such Secretary shall call meetings of the committee on the request of the Chair of the committee or any two members and shall keep permanent record of all of its proceedings. A majority of the members of any committee shall constitute a quorum. 7. EXECUTIVE COMMITTEE. The Directors shall appoint an Executive Committee consisting of the Chairman, if any, the President and at least three other Directors, but in no event shall the Committee consist of less than five members. The Board of Directors may at any time decrease (subject to the provisions of the preceding paragraph) or increase the size of said Committee, may change the membership thereof and may fill vacancies therein. During intervals between meetings of the Board of Directors, the Executive Committee shall possess and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation, but the Committee shall have no power to declare dividends or do other things specially reserved by law to the Directors. The Executive Committee shall have power to appoint such subcommittees as it may deem necessary to report and make recommendations to the Executive Committee. Any action taken by the Executive Committee shall be subject to change, alteration and revision by the Board of Directors, provided that no rights or acts of others shall be affected by any such alteration or revision. 8. FINANCE AND PENSION COMMITTEE. A Finance and Pension Committee consisting of at least five Directors shall be appointed by the Board of Directors. The Committee shall advise and assist the Chief Financial Officer and the Treasurer in major matters 5 As amended May 26, 2000 concerning the finances of the Corporation and in matters of major policy decisions in the purchase and sale of securities. In performance of this the Committee shall regularly review the financial condition of the Corporation so as to counsel these officers and the Board on the total financial resources, strength and capabilities of the Corporation. In this connection, the Committee shall analyze and advise on fundamental corporate changes in capital structure (both debt and equity); review the capital structure of the Corporation and make recommendations with respect to management proposals concerning financing, purchases of treasury stock, investments, and dividend actions; review periodically the Corporation's risk management program and its adequacy to safeguard the Corporation against extraordinary liabilities or losses; and advise and assist in matters such as short-term investments, credit liabilities, financings, and hedges of foreign currency exposures. The Committee shall oversee the Corporation's administration of its pension plans and of the pension plans of its subsidiaries. The Committee shall be responsible for setting (subject to the approval of the Board of Directors) the retirement policies of the Corporation and its subsidiaries; for amending pension plans, savings and retirement plans, stock ownership plans or any similar plans or related trust agreements; and for approving actuarial assumptions and investment policies for the Corporation's pension plans. It shall report at least annually to the Board of Directors. The Committee may delegate any or all of these functions to such employees as it, in its judgment, deems appropriate. Specifically, the Committee shall approve retaining or terminating the services of actuaries, lawyers, accountants or other professionals for the plans; shall approve annually the amount of the contributions to be made by the Corporation to the respective plans; and shall approve appointing and terminating trustees and investment managers and determine the allocation of the assets of the plans among one or more trustees or investment managers. 9. AUDIT COMMITTEE. An Audit Committee consisting of at least three Directors, none of whom shall be officers or employees of the Corporation or any of its subsidiaries, shall be appointed by the Board of Directors. The Committee shall nominate the public accounting firm to conduct the annual audit and shall review fees for audit and tax work and approve in advance management consulting services which management may propose be provided by the Corporation's public accounting firm. With respect to such management consulting services, consideration shall be given to the effect that performing such services might have on audit independence. The Committee shall review with the auditors the scope and timing of their audit examination, with particular emphasis on those areas which either the Committee or the auditors believe warrant special attention. The Committee is authorized to have the auditors perform such supplemental reviews or audits as it deems desirable. 6 As amended May 26, 2000 The Committee shall review the audited financial statements and the auditors' report thereon, including consideration of all significant disclosures required by the Securities and Exchange Commission, and any proposed changes in accounting principles or practices which have a significant impact on amounts reported for the current year (or will have in the future) and shall discuss with the auditors any significant problems encountered in the completion of the audit. The Committee shall review with management and the independent auditors the qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted including the degree of aggressiveness or conservatism of the accounting principles and underlying estimates including significant liabilities and reserves associated with those liabilities. The Committee shall review the auditors' recommendations regarding internal control and their comments, if any, relating to conflicts of interest, questionable payments or other similar matters, and monitor with management the consideration given and/or the corrective action taken with respect to these comments and recommendations. The Committee shall review management's evaluation of the Corporation's system of internal accounting controls, including the independence, scope and results of the internal audit function, and monitor the effectiveness of the system with management, independent auditors and internal audit management. The Committee shall review with management and independent auditors and consider the impact on the Corporation of significant recent or pending statements by the Financial Accounting Standards Board, the Securities and Exchange Commission, the Auditing Standards Executive Committee of the American Institute of Certified Public Accountants and similar authoritative bodies. The Committee shall review environmental liabilities and the reserves associated with those liabilities. In carrying out all of the foregoing responsibilities, the Committee shall have direct and open access to Management, public accountants and internal audit management (each of which shall have direct and open access to the Committee); shall submit Committee reports, recommendations, and minutes of meetings to the Board of Directors; and shall provide opportunities to the other members of the Board to have full and open access to the independent auditors. 10. COMPENSATION AND ORGANIZATION COMMITTEE. A Compensation and Organization Committee consisting of at least three Directors, none of whom shall be employees of the Corporation or any of its subsidiaries, shall be appointed by the Board of Directors. The Committee shall review and approve major organization and compensation structure changes as recommended by Management. Although the Board, itself, will review the performance of the chief executive officer and fix his or her salary, the Committee shall approve the performance and determine the salaries of the other executive officers of the Corporation and of other senior executives whose base salary exceeds an amount fixed by the Board of Directors; shall determine the compensation of all executive officers and 7 As amended May 26, 2000 such senior executives under the Corporation's senior executive compensation plans; shall administer all of the Corporation's senior executive compensation plans; and shall assure that there is a succession plan in place. 11. COMMITTEE ON BOARD AFFAIRS AND PUBLIC POLICY. A Committee on Board Affairs and Public Policy consisting of at least three directors, none of whom shall be employees of the Corporation or any of its subsidiaries shall be appointed by the Board of Directors. The Committee shall consider and make recommendations to the Board of Directors as to Board of Director membership with respect to names generated by the Committee itself or submitted by shareholders. The Committee shall consider and make recommendations to the Board of Directors with respect to Board of Director committee membership and chair assignments. (These will normally be acted upon by the Board of Directors at its Annual Meeting held immediately after the Annual Meeting of shareholders.) The Committee shall consider and make recommendations to the Board of Directors with respect to the number of members of the Board of Directors. (The Charter and Bylaws provide for not less than nine nor more than eighteen as may be determined by the Board). Annually, the Committee shall consider and recommend to the Board of Directors the persons whom the Committee proposes that the Board of Directors nominate for election as directors at the Annual Meeting of shareholders. The Committee shall consider and make recommendations to the Board of Directors with respect to remuneration of directors. The Committee shall provide guidance to the Management on major issues in areas of corporate social responsibility, including environmental issues and public affairs. The Committee shall review and approve policy guidelines to be used by Management in making charitable contributions and shall annually review all charitable contributions made by the Corporation during the previous twelve months and recommend to the Board the level of contributions to be set for the ensuing year. 12. In the absence of any one or more members from a meeting of any of the committees provided for in these Bylaws, the Chairman, or the President, may in his or her discretion invite any member or members of the Board (otherwise qualified to serve) to attend such meeting. Temporary members thus appointed to attend for absentees shall act as regular members and shall have the right to vote. 13. POWERS OF ALL COMMITTEES. The powers of all committees are at all times subject to the control of the Directors, and any member of any committee may be removed at any time at the pleasure of the Board. ARTICLE IV ---------- 8 As amended May 26, 2000 OFFICERS -------- 1. ELECTION OF OFFICERS. The Board of Directors shall have power to elect from its own members or otherwise a Chairman, a President, one or more Vice Chairmen and Vice Presidents, a Secretary, a Treasurer, one or more Assistant Treasurers and Assistant Secretaries, and such other officers, agents and employees as it may deem expedient, and to define the duties and authority of all officers, employees and agents and to delegate to them such lawful powers as may be deemed advisable. The officers shall respectively perform all acts and duties required of such officers by law, by the Charter and Bylaws of this Corporation, or by the Board of Directors. 2. CHAIRMAN OF THE BOARD. If the Directors have elected a Chairman, the Chairman shall preside at all meetings of the Board except that in the Chairman's absence the Directors present shall designate a person to preside. The Chairman shall have such additional duties as the Board of Directors or the Executive Committee may assign. 3. PRESIDENT. The President shall be elected by the Directors and shall have such duties as the Board of Directors or the Executive Committee may assign. 4. CHIEF EXECUTIVE OFFICER One of the officers shall be appointed Chief Executive Officer of the Corporation by the Board of Directors. Subject to the Board of Directors and the Executive Committee, the Chief Executive Officer shall have general supervision and control of the policies, business and affairs of the Corporation. 5. VICE CHAIRMEN. Each Vice Chairman shall have such powers and perform such duties as may be conferred upon him or her or determined by the Chief Executive Officer. 6. VICE PRESIDENTS. Each Vice President shall have such powers and perform such duties as may be conferred upon him or her or determined by the Chief Executive Officer. 7. TREASURER. The Treasurer shall have the oversight and control of the funds of the Corporation and shall have the power and authority to make and endorse notes, drafts and checks and other obligations necessary for the transaction of the business of the Corporation except as herein otherwise provided. 8. CONTROLLER. The Controller shall have the oversight and control of the accounting records of the Corporation and shall prepare such accounting reports and recommendations as shall be appropriate for the operation of the Corporation. 9. SECRETARY. It shall be the duty of the Secretary to make and keep records of the votes, 9 As amended May 26, 2000 doings and proceedings of all meetings of the shareholders and Board of Directors of the Corporation, and of its Committees, and to authenticate records of the Corporation. 10. ASSISTANT TREASURERS. The Assistant Treasurers shall have such duties as the Treasurer shall determine. 11. ASSISTANT SECRETARIES. The Assistant Secretaries shall have such duties as the Secretary shall determine. 12. POWERS OF ALL OFFICERS. The powers of all officers are at all times subject to the control of the Directors, and any officer may be removed at any time at the pleasure of the Board. ARTICLE V --------- INDEMNIFICATION --------------- To the extent properly permitted by law the Board of Directors shall provide for the indemnification and reimbursement of, and advances of expenses to, any person made a party to any action, suit or proceeding by reason of the fact that he or she, or a person whose legal representative or successor he or she is, (a) is or was a Director, officer, employee or agent of the Corporation, or (b) served at the Corporation's request as a director, officer, employee or agent of another corporation, for expenses, including attorney's fees, and such amount of any judgment, money decree, fine, penalty or settlement for which he or she may have become liable as the Board of Directors deems reasonable, actually incurred by him or her in connection with the defense or reasonable settlement of any such action, suit or proceeding or any appeal therein. This provision of indemnification shall be in addition to any other right or remedy which such person may have. The Corporation shall have the right to intervene in and defend all such actions, suits or proceedings brought against any such person. ARTICLE VI ---------- CORPORATE SEAL -------------- 10 As amended May 26, 2000 The corporate seal shall be in the custody of the Secretary and either the Secretary or any other officer shall have the power to affix the same for the Corporation. ARTICLE VII ----------- STOCK CERTIFICATES ------------------ 1. SIGNATURES. Certificates of stock shall be signed by the Chairman, the President or a Vice President and by the Secretary or the Treasurer (except that where any such certificate is signed by a transfer agent or transfer clerk and by the registrar, the signatures of any such Chairman, President, Vice President, Secretary or Treasurer may be facsimiles, engraved or printed) and shall be sealed with the seal of the corporation (or shall bear a facsimile of such seal). 2. LOST CERTIFICATES. No certificate for shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed except upon production of such evidence of such loss, theft or destruction as the Board of Directors in its discretion may require and upon delivery to the Corporation of a bond of indemnity in form and, unless such requirement is waived by Resolution of the Board, with one or more sureties, satisfactory to the Board in at least double the value of the stock represented by said Certificate. ARTICLE VIII ------------ FISCAL YEAR ----------- The Corporation's fiscal year shall close on the Saturday nearest December 31st of each year. ARTICLE IX ---------- INDEPENDENT AUDIT ----------------- The Board of Directors shall provide for a yearly independent audit, the form and scope of which shall be determined by the Board from time to time. 11 As amended May 26, 2000 ARTICLE X --------- AMENDMENTS ---------- The Board of Directors of the Corporation may adopt, amend or repeal the Bylaws of the Corporation, subject, however, to the power of the shareholders to adopt, amend or repeal the same, provided that any notice of a meeting of shareholders or of the Board of Directors at which Bylaws are to be adopted, amended or repealed, shall include notice of such proposed action. ARTICLE XI ---------- ACQUISITIONS OF STOCK --------------------- (a) Except as set forth in subsection (b) hereof, the Corporation shall not acquire any of its voting equity securities (as defined below) at a price per share above the market price per share (as defined below) of such securities on the date of such acquisition from any person actually known by the Corporation to be the beneficial owner (as determined pursuant to Rule 13d_3 under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation) of more than three percent of the Corporation's voting equity securities who has been the beneficial owner of the Corporation's voting equity securities for less than two years prior to the date of the Corporation's acquisition thereof, unless such acquisition (i) has been approved by a vote of a majority of the shares entitled to vote, excluding shares owned by any beneficial owner any of whose shares are proposed to be acquired pursuant to the proposed acquisition that is the subject of such vote or (ii) is pursuant to an offer made on the same terms to all holders of securities of such class. The determination of the Board of Directors shall be conclusive in determining the price paid per share for acquired voting equity securities if the Corporation acquires such securities for consideration other than cash. (b) This provision shall not restrict the Corporation from: (i) acquiring shares in the open market in transactions in which there has been no prior arrangement with, or solicitation of (other than a solicitation publicly made to all holders), any selling holder of voting equity securities or in which all shareholders desiring to sell their shares have an equal chance to sell their shares; (ii) offering to acquire shares of shareholders owning less than 100 shares of any class of voting equity securities; (iii) acquiring shares pursuant to the terms of a stock option or similar plan that has been approved by a vote of a majority of the Corporation's common shares represented at a meeting of shareholders and entitled to vote 12 As amended May 26, 2000 thereon; (iv) acquiring shares from, or on behalf of, any employee benefit plan maintained by the Corporation or any subsidiary or any trustee of, or fiduciary with respect to, any such plan when acting in such capacity; or (v) acquiring shares pursuant to a statutory appraisal right or otherwise as required by law. (c) Market price per share on a particular day means the highest sale price on that day or during the period of five trading days immediately preceding that day of a share of such voting equity security on the Composite Tape for New York Stock Exchange_Listed Stocks, or if such voting equity security is not quoted on the Composite Tape on the New York Stock Exchange or listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such voting equity security is listed, or, if such voting equity security is not listed on any such exchange, the highest sales price or, if sales price is not reported, the highest closing bid quotation with respect to a share of such voting equity security on that day or during the period of five trading days immediately preceding that day on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such voting equity security as determined by a majority of the Board of Directors. (d) Voting equity securities of the Corporation means equity securities issued from time to time by the Corporation which by their terms are entitled to be voted generally in the election of the directors of the Corporation. (e) The Board of Directors shall have the power to interpret the terms and provisions of, and make any determinations with respect to, this Article XI, which interpretations and determinations shall be conclusive. 13 EX-5.1 3 0003.txt OPINION ON JENNIFER O. ESTABROOK EXHIBIT 5.1 The Stanley Works 1000 Stanley Drive New Britain, Connecticut 06053 July 27, 2000 The Stanley Works 1000 Stanley Drive New Britain, CT 06053 Ladies and Gentlemen: I am the Vice President, General Counsel and Secretary of The Stanley Works, a Connecticut corporation (the "Corporation"), and have assisted the Corporation in connection with the filing by the Corporation of a Registration Statement on Form S-8 (the "Registration Statement") relating to the registration of 500,000 shares of the Corporation's Common Stock, par value $2.50 per share relating to the Corporation's UK Share Save Plan (the "Plan"). I have examined the originals, or copies certified or otherwise identified to my satisfaction, of the Plan and such other corporate records, documents, certificates or other instruments as in my judgment are necessary or appropriate to enable me to render the opinion set forth below. In rendering such opinion, I have assumed that the purchases of Common Stock pursuant to the Plans will be made only an aggregate value not less than the aggregate par value of the Common Stock so granted. Based on the foregoing, I am of the opinion that authorized but not previously issued shares of Common Stock which may be issued under the Plan have been duly authorized and when issued in accordance with the terms of the Plan will be validly issued, fully paid and non-assessable. I hereby consent to the filing of this opinion as an exhibit to the Corporation's Registration Statement. In giving such consent, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ Jennifer O. Estabrook Jennifer O. Estabrook Vice President, General Counsel and Secretary 1 EX-23.1 4 0004.txt CONSENT OF ERNST AND YOUNG LLP EXHIBIT 23.1 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement on Form S-8 pertaining to The Stanley Works UK Share Save Plan of our reports dated January 26, 2000 and March 24, 2000, with respect to the consolidated financial statements of The Stanley Works incorporated by reference in its Annual Report (Form 10-K) for the year ended January 1, 2000 and the related financial statement schedule included therein, filed with the Securities and Exchange Commission. /s/Ernst & Young LLP Hartford, Connecticut July 26, 2000 EX-24.1 5 0005.txt POWER OF ATTORNEY EXHIBIT 24.1 POWER OF ATTORNEY We, the undersigned officers and directors of The Stanley Works, a Connecticut corporation (the "Corporation"), hereby severally constitute Stephen S. Weddle and Jennifer O. Estabrook our true and lawful attorneys with full power of substitution, to sign for us and in our names in the capacities indicated below, the Registration Statement on Form S-8 of the Corporation filed herewith (the "Registration Statement") relating to the shares of the Corporation's common stock issued under the Savings Related Share Plan in the United Kingdom and the resale of shares of the Corporation's common stock purchased by employees under such plan, and any and all amendments thereto, and generally to do all such things in our name and on our behalf in our capacities as officers and directors to enable the Corporation to comply with the provisions of the Securities Act of 1933, as amended, all requirements of the Securities and Exchange Commission, and all requirements of any other applicable law or regulation, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or either of them, to such Registration Statement and any and all amendments thereto, including post-effective amendments. SIGNATURE TITLE DATE - --------- ----- ---- John M. Trani Chairman, May 26, 2000 - ------------------------ Chief John M. Trani Executive Officer and Director SIGNATURE TITLE DATE - --------- ----- ---- Stillman B. Brown Director May 26, 2000 - ------------------------ Stillman B. Brown Mannie L. Jackson Director May 26, 2000 - ------------------------ Mannie L. Jackson James G. Kaiser Director May 26, 2000 - ------------------------ James G. Kaiser Eileen S. Kraus Director May 26, 2000 - ------------------------ Eileen S. Kraus William Y. O'Connor Director May 26, 2000 - ------------------------ William Y. O'Connor Hugo E. Uyterhoeven Director May 26, 2000 - ------------------------ Hugo E. Uyterhoeven Director May 26, 2000 - ------------------------ Walter W. Williams Kathryn D. Wriston Director May 26, 2000 - ------------------------ Kathryn D. Wriston EX-99.1 6 0006.txt UK SHARE SAVE PLAN RULES OF THE STANLEY WORKS SHARESAVE PLAN (after proposed amendments) August 1999 RULES OF THE STANLEY WORKS SHARESAVE PLAN 1. DEFINITIONS In these Rules: 1.1 the following words and expressions have the following meanings: "Act" the Income and Corporation Taxes Act 1988; "Associated Company" an associated company of the Company within the meaning of Section 187(2) of the Act; "Auditors" the auditors for the time being of the Company; "Available Shares" in respect of any Date of Invitation such of the number of the Shares referred to in Rule 3.1 as being available for the grant of Options as the Directors shall determine; "Bonus Date" the earliest date on which a bonus becomes payable under the relevant Savings Contract after payment of 60 Savings Contributions (the "Five Year Bonus Date"); "Company" the Stanley Works Limited; "Contractual Savings Scheme" the arrangement specified for the time being by the Directors under which Savings Contributions are made by a Participant in accordance with the Plan, such arrangement being a certified contractual savings scheme within the meaning of Section 326 of the Act which has been approved by the Commissioners of Inland Revenue for the purposes of Schedule 9 to the Act; "Control" the meaning given to that expression in Section 840 of the Act; "Date of Grant" the date on which the Directors grant an Option in accordance with the terms of Rule 2; "Date of Invitation" the date on which any notice is given pursuant to Rule 2.1; "Directors" the board of directors for the time being of the Company or a duly authorised committee thereof; "Eligible Employee" any person (including a full-time director) who at any Date of Invitation is in the employment of any Participating Company and who is then chargeable to tax in respect of such employment under Case I of Schedule E and who has been in the employment of any company within the Group or any company which becomes a company within the Group for a continuous period of not less than 90 days ending on the Date of Grant; or such other person in the employment of a Participating Company as the Directors may decide. For the purposes of this paragraph "full-time" shall mean having a normal contractual working week of 25 hours or more, excluding meal breaks; "Employment" employment with the Company and/or any company under the Control of the Company or with any Jointly-owned Company and "ceasing to be in Employment" shall be construed as ceasing to be employed by all such companies; "Exercise Notice" the meaning given to that expression in Rule 4.3; "Exchange Rate" the average of the buying and selling closing Sterling for Dollar spot rates quoted in the London edition of the 'Financial Times' on the last working day preceding the Date of Invitation or if such paper is not published or such rate is not quoted the average Sterling for Dollar spot rate quoted by the Company's bankers (being a United Kingdom Clearing Bank) for the time being 11.00 a.m. in London; 3 "Group" the Company and all its Subsidiaries and Jointly-owned Companies; "Jointly-owned Company" a company which is: (a) not under the Control of any single person; and (b) under the Control of two persons between them one of such persons being the Company; and (c) not a participating company in any other company's group plan (as those terms are defined in paragraph 1 of Schedule 9 to the Act) and any other company which is under the Control of a company which meets the conditions in paragraphs (a), (b) and (c) above and is not itself a participating company in any other company's group plan (as those terms are defined in paragraph 1 of Schedule 9 to the Act); "Minimum Savings Contribution" the amount specified by the Directors from time to time, which shall be no greater than the amount for the time being specified by paragraph 24(2)(b) of Schedule 9 to the Act and no lower than (pound)10; "Option" the right granted or to be granted on any particular Date of Grant to subscribe for or acquire Shares in accordance with the Rules; "Option Certificate" a certificate evidencing an Option as referred to in Rule 2.9; "Option Price" the price per Share payable on the exercise of an Option which on the Date of Grant shall be the higher of: (a) the par (nominal) value of a Share converted to (pound) Sterling at the Exchange Rate; and (b) subject to the provisions of Rule 6, an amount determined by the Directors being not less than 80% of 4 the average of the quotation of a Share on the New York Stock Exchange as quoted in the Financial Times in London for the three days prior to the Date of Invitation and converted to (pound) Sterling at the applicable Exchange Rate; "Parent Company" the Stanley Works, 195 Lake Street, New Britain, Connecticut, 06050, United States of America; "Participant" any person (including, where the context permits, the legal personal representatives of such a person) who holds an Option; "Participating Company" the Company and any other company within the Group which the Directors have determined shall be a Participating Company for the purposes of the Plan provided that any Jointly-owned Company which ceases to be a Jointly-owned Company and which does not then become a Subsidiary shall cease to be a Participating Company; "Plan" this Plan, being the Stanley Works Sharesave Plan constituted by the Rules; "Record Date" in relation to any particular payment of dividend or other right attaching to Shares the date on which any shareholder must duly appear in the register of members of the Parent Company as such in order to be entitled to such dividend or other right; "Redundancy" redundancy within the meaning of the Employment Rights Act 1996; "Retirement" retirement on reaching pensionable age within the meaning of Schedule 20 to the Social Security Act 1975 or any other age at which a Participant is bound to retire in accordance with the terms of his contract of employment; "Rules" these rules together with any amendment thereto effected in accordance with Rule 9; 5 "Savings Contract" a savings contract entered into under a Contractual Savings Scheme; "Savings Contract Repayment" in respect of a Savings Contract an amount equal to sixty times the Savings Contribution plus the bonus payable on the Bonus Date; "Savings Contribution" the amount payable per month by a Participant by way of contributions under a Savings Contract in respect of any Option which amount shall normally be paid by means of periodic deductions from the Participant's remuneration by his employer and shall be an integral multiple of (pound)1 and shall be not less than the Minimum Savings Contribution; "Share" a share in the capital of the Parent Company which complies with the provisions of paragraphs 10 to 14 of Schedule 9 to the Act; "Subsidiary" a company which is both under the Control of the Company and a subsidiary of the Company within the meaning of Section 736 of the Companies Act 1985; "Withdrawal Notice" the meaning given to that expression by Rule 4.3. 1.2 Where the context so admits 1.2.1 words importing the singular shall include the plural and vice versa and words importing the masculine shall include the feminine; and 1.2.2 any reference to a statute (or a particular Chapter, Part or Section thereof) shall mean and include any statutory modification or re-enactment thereof for the time being in force and any regulations made thereunder. 2. OFFER AND GRANT OF OPTIONS 2.1 At such time as the Directors shall in their absolute discretion determine, they may give notice to each Eligible Employee that he is invited to apply for an Option and such notice shall specify the method by which the Option Price shall be calculated and: 6 2.1.1. the Option Price; 2.1.2. the period, being not less than fourteen days nor more than twenty-one days from the Date of Invitation during which he may apply for an Option in accordance with Rule 2.2; 2.1.3. the Minimum Savings Contribution in respect of the offer; 2.1.4. the maximum aggregate Savings Contribution permitted under Rule 3.1 or 3.2; and 2.1.5. state that the Option will normally be exercisable using the proceeds of a Savings Contract at the Five Year Bonus Date. 2.2 Subject to Rule 2.10, following any notice to an Eligible Employee by the Directors pursuant to Rule 2.1, he may apply for an Option by completing and returning an application in such form (not inconsistent with the provisions of the Plan) as the Directors may from time to time determine. Such form shall specify the Savings Contribution which he wishes to pay and authorise the deduction of the Savings Contribution from his remuneration. It must be accompanied by a signed form of application concerning his entry into a Savings Contract, such form to be in terms acceptable to the body administering the Contractual Savings Scheme. 2.3 Within thirty days following the first of the three dealing days referred to in the definition of Option Price in Rule 1.1 (unless the provisions of Rule 2.4 or 2.5 apply) the Directors shall, in respect of each Eligible Employee who has made a valid application and who remains in the employment of any Participating Company, grant an Option over the number of Shares the aggregate of the Option Prices of which is as nearly as possible equal to, but not in excess of, an amount equal to the Savings Contract Repayment on the relevant Bonus Date relating to the Savings Contribution specified by such person in the application referred to in Rule 2.2. 2.4 If the number of Available Shares is insufficient to enable the Directors to grant an Option to each Eligible Employee who has applied for such in respect of a Savings Contribution equal to the Minimum Savings Contribution the Directors shall grant an Option to each Eligible Employee, who has applied for such and who at the expiry of the application period allowed pursuant to Rule 2.1 was not making Savings Contributions under the Plan, over the number of Shares in respect of which the amount of the aggregate Option Price is as nearly as possible equal to, but not in excess of, an amount equal to the Savings Contract Repayment relating to a Savings Contribution equal to the Minimum Savings Contribution provided that the number of Available Shares is sufficient to enable the grant of Options over that number of Shares to each such Eligible Employee and if the number of Available Shares is insufficient to enable this to be done no Options shall be granted pursuant to notices given by the Directors under Rule 2.1 on the relevant Date of Invitation. 7 2.5 If the number of Available Shares is insufficient to enable the Directors to grant an Option to each person who has applied for such in respect of a Savings Contribution equal to the Minimum Savings Contribution, either the Directors shall select by ballot the applications in respect of which Options will be granted or no Options shall be granted pursuant to notices given by the Directors under Rule 2.1 on the relevant Date of Invitation. 2.6 Where Options are granted pursuant to Rule 2.4 or 2.5 the period between the first of the three dealing days referred to in the definition of Option Price and the Date of Grant shall not exceed forty-two days. 2.7 Notwithstanding any provision of any other of these Rules whatsoever: 2.7.1 the Plan shall not form part of any contract of employment between the Company, the Parent Company, a Subsidiary, a Jointly-owned Company or any Associated Company and any Participant and it shall not confer on any Participant any legal or equitable rights (other than those constituted by the Options themselves) whatsoever against the Company, the Parent Company, a Subsidiary, a Jointly-owned Company or Associated Company directly or indirectly or give rise to any cause of action at law or in equity against the Company, the Parent Company, a Subsidiary, a Jointly-owned Company or any Associated Company; 2.7.2. the benefits to the Participants under the Plan shall not form part of their wages or remuneration or count as pay or remuneration for pension or other purposes; 2.7.3 the Grant of Options to a Participant is a matter entirely separate from any pension right or entitlement he may have and from his terms and conditions of employment and participation in the Plan shall in no respect whatever affect his pension rights or entitlements or terms or conditions of employment and in particular (but without limiting the generality of the foregoing) any Participant who ceases to be an employee of any company in the Group or a Jointly-owned Company shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Plan which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever and notwithstanding that he may have been dismissed wrongfully or unfairly (within the meaning of the Employment Rights Act 1996). 2.8. An Option shall be personal to the Participant and shall not be assignable and any purported assignment, transfer, charge, disposal or dealing with the rights or interests of the Participant under the Plan shall render the Option void. However, on the death of a Participant, an Option shall be capable of being exercised by his legal personal representatives in accordance with the provisions of Rule 4. 8 2.9 As soon as is practicable upon the grant of an Option to a person pursuant to Rules 2.3, 2.4 or 2.5 the Directors shall issue to the said person an Option Certificate evidencing such Option. The Option Certificate shall specify the number of Shares comprised in the Option, the Date of Grant and the Option Price in respect of each such Share and shall be otherwise in such form (not inconsistent with the provisions of the Plan) as the Directors may from time to time determine. If any such certificate shall be worn out, defaced, destroyed or lost, it may be renewed on such evidence being provided and on such terms as the Directors may reasonably require. 2.10. No Option shall be granted to any person unless he is an employee of a Participating Company on the Date of Grant or if such person is ineligible to participate in the Plan by virtue of the provisions of paragraph 8 of Schedule 9 to the Act. 3. LIMITATIONS 3.1. The aggregate of the Savings Contributions being made at any time by a Participant under the Plan and any contributions then being made under certified contractual savings schemes linked to any other savings-related plan or plans approved under Schedule 9 to the Act shall not exceed (pound)250 per month (or such other amount as the Directors may determine and as may be permitted pursuant to paragraph 24 of Schedule 9 to the Act). 3.2 The Directors may decide in respect of any Date of Invitation to impose a lower limit on the maximum Savings Contribution which employees may apply to make. 4 EXERCISE AND LAPSE OF OPTIONS 4.1 An Option shall be capable of being exercised in whole or in part following the earliest of: 4.1.1. the relevant Bonus Date if the Participant is an employee or director of a Participating Company; 4.1.2 the relevant Bonus Date if the Participant is an employee or director of a company which is not a Participating Company but which is a company of which the Company has Control; 4.1.3. the death of the Participant; 4.1.4. the Participant ceasing to be in Employment by reason of his Retirement, injury, disability or Redundancy; 9 4.1.5. the Participant ceasing to be in Employment more than three years from its Date of Grant by reason of retirement on receipt of a pension under any pension scheme of which he is a member in respect of his or her Employment or her pregnancy (and for the purposes of this rule, a Participant ceases to be in employment by reason of pregnancy on the earliest of the date she notifies her employing company of her intention not to return, the last day of the 29th week of her confinement and any other date specified by the terms of her employment with her employing company [or by reason that his Employment is in a company which ceases to be a Jointly-owned Company and does not become a Subsidiary;] 4.1.6. the Participant ceasing to be in Employment by reason that his Employment is in a company of which the Company ceases to have Control, or it relates to a business or part of a business which is transferred to a person who is not a company of which the Company has Control; 4.1.7. the Participant reaching pensionable age within the meaning of Schedule 20 to the Social Security Act 1975 and continuing to be an employee of a Participating Company in which case the right to exercise an Option under this Rule is available for a period of six months following attainment of such age provided that if he does not exercise such Option within the said period of six months he will nevertheless be able to exercise the Option on the next earliest event covered by Rule 4.1; 4.1.8 the date on which an Option becomes exercisable pursuant to Rule 7 or Rule 8; provided that (I) no Option shall be capable of being exercised other than at a time when the Participant is in Employment except in the circumstances described in Rules 4.1.3, 4.1.4, 4.1.5 and 4.1.6; and (II) no Option shall be capable of being exercised at a time when paragraph 8 of Schedule 9 to the Act would disqualify the Participant from being granted an Option, nor by the personal representatives of a Participant who was so precluded at the date of his death. 4.2 In no event shall an Option be capable of being exercised in respect of a number of Shares the aggregate Option Prices of which exceed the repayment made (including any bonus or interest but excluding the repayment of any contributions the due date for payment of which falls more than one month after the date on which repayment is made) to the Participant under the related Savings Contract. 4.3 An Option shall lapse to the extent that it has not been exercised by the earliest of: 4.3.1. the expiry of six months from the relevant Bonus Date except where the death of the Participant occurs before the expiry of such period; 10 4.3.2 if the Participant dies before the relevant Bonus Date, the expiry of twelve months from the date of death of the Participant; 4.3.3 the expiry of twelve months from the relevant Bonus Date where the death of the Participant occurs within six months after the relevant Bonus Date; 4.3.4 the expiry of six months from the date on which the Participant ceased to be in Employment in the circumstances described in Rules 4.1.4, 4.1.5 or 4.1.6 except where the death of the Participant occurs before the expiry of such period; 4.3.5 the date on which the Participant ceases to be in Employment for any reason other than death or any of the circumstances described in Rules 4.1.4, 4.1.5 or 4.1.6; 4.3.6 the Participant's right to continue making the related Savings Contributions lapsing in respect of an Option in accordance with the provisions of the Contractual Savings Scheme before the Participant has made all the Savings Contributions required by the Contractual Savings Scheme unless such Option has already become exercisable under the provisions of this Rule; 4.3.7 the receipt by the body administering the Contractual Savings Scheme of a Withdrawal Notice in respect of the Savings Contract relative to such Option provided that such Option is not then capable of being exercised; 4.3.8 the date on which an Option lapses pursuant to Rule 7 or Rule 8. The Participant may direct at any time by notice (referred to as a "Withdrawal Notice") given in writing in a form acceptable to the body administering the Contractual Savings Scheme that he wishes such repayment as is then due to him to be made under the Savings Contract relative to any Option and in addition, if such notice is given in respect of the Savings Contract relative to any Option which the Participant then wishes to exercise in whole or in part, notice to that effect shall be given to the Company in such form as the Directors may prescribe (referred to as an "Exercise Notice"). 5. MANNER OF EXERCISE OF OPTIONS 5.1. In order to exercise an Option the Participant shall give to the Company an Exercise Notice stating that the Option is thereby exercised in respect of that number of Shares the aggregate Option Prices of which are as nearly as possible equal to, but not in excess of, the amount specified in the Exercise Notice which must be equal to or less than the repayment due under the related Savings Contract that he wishes to be applied in respect of the exercise of the Option. Such Exercise Notice shall be accompanied by payment (or an authority to obtain 11 such payment from the body administering the Savings Contract) in full of the amount specified. 5.2. Within thirty days after receipt by the Company of the Exercise Notice, Option Certificate and the proceeds of repayment under the Savings Contract specified in the Exercise Notice the Parent Company shall allot or procure the transfer of the appropriate number of shares and the allottee or transferee shall be entered on the register of members of the Parent Company in respect of these Shares. The said Shares shall rank in full for all dividends and other rights to which a right arises by reference to a Record Date falling on or after the date on which the allottee or transferee is entered on the register of members of the Parent Company and shall in all other respects rank pari passu with the other issued Shares of the same class and shall be acquired subject to the Parent Company's articles of association. 5.3. Where an Option is exercised in part, it shall lapse to the extent of the unexercised balance. 5.4. The Company shall ensure that sufficient Shares are always available to satisfy in full all outstanding Options. 6. VARIATION OF SHARE CAPITAL In the event of any variation of share capital, capitalisation or rights issue or rights offer or any consolidation, sub-division or reduction of capital or other issue or reorganisation by the Parent Company, the number of Shares subject to any Option and the Option Price for each of those Shares shall be adjusted in such manner as the Auditors shall confirm in writing to be, in their opinion fair and reasonable (except in the case of a capitalisation issue) provided that: 6.1 the aggregate amount payable on the exercise of an Option in full is neither materially changed nor increased beyond the expected repayment under the Savings Contract at the appropriate Bonus Date; 6.2. in the case of an Option which may be satisfied on exercise by the issue of new Shares, the Option Price for a Share is not reduced below its nominal value unless the Directors shall be authorised to capitalise from the reserves of the Parent Company a sum equal to the amount by which the nominal value of each Share in respect of which the Option is exercised exceeds the relevant Option Price and to apply such sum in paying up such amount on such Share, and so that on the exercise of any Option in respect of which such a reduction shall have been made the Directors shall capitalise such sum (if any) and apply the same in paying up such amount as aforesaid; 6.3 no adjustment shall be made without the prior approval of the Commissioners of Inland Revenue; and 12 6.4 following the adjustment the Shares continue to satisfy the conditions specified in paragraphs 10 to 14 inclusive of Schedule 9 to the Act. 7. TAKOEVER OR RECONSTRUCTION 7.1. If any person obtains Control of the Parent Company as a result of making 7.1.1 a general offer to acquire the whole of the issued ordinary share capital of the Parent Company which is made on a condition such that if it is satisfied the person making the offer will have Control of the Parent Company; or 7.1.2 a general offer to acquire all the shares in the Parent Company which are of the same class as the Shares over which Options have been granted then, subject to Rule 4.3, a Participant will be entitled to exercise his Option within six months following the later of the date on which Control of the Parent Company passes and the date on which the offer becomes unconditional. 7.2 If any person becomes bound or entitled to acquire shares in the Parent Company under the [Connecticut] company law equivalent of Sections 428 to 430F of the Companies Act 1985 then, subject to Rule 4.3, a Participant will be entitled to exercise his Option at any time when that person remains so bound or entitled, on the expiry of which period all outstanding Options shall lapse. 7.3 If as a result of the events specified in Rule 7.1 or 7.3 any company (the "Acquiring Company") has obtained Control of the Parent Company or has become bound or entitled as mentioned in Rule 7.2, a Participant may, with the agreement of the Acquiring Company and during the appropriate period as defined in paragraph 15(2) of Schedule 9 to the Act, release all or part of his rights under the Plan (the "Old Rights") in consideration of the grant to him of rights (the "New Rights") which satisfy the conditions of paragraph 15(3) of the said Schedule, and the New Rights shall be deemed to have been granted at the time when the Old Rights were granted. 7.4 In the application of the Rules to the New Rights, the terms"Parent Company" and "Company" in Rules 5, 6, 7 and 8 shall be taken as referring to the company over whose share capital the New Rights are granted, and the other expressions which are defined in Rule 1 hereof and occur in those Rules shall be interpreted as though the words "Parent Company" and "Company" were so defined. 7.5 For the purposes of this Rule 7 (other than Rule 7.4) a person shall be deemed to have obtained Control of a company if he and others acting in concert with him have together obtained Control of it. 7.6 The exercise of an Option pursuant to the preceding provisions of this Rule shall be subject to the provisions of Rule 5 above. 13 7.7 The Directors shall use reasonable endeavours to notify any Participant forthwith of any event of which they have actual notice arising pursuant to this Rule which concerns any Option held by him for the time being. 8. VOLUNTARY WINDING UP If a resolution for the voluntary winding up of the Parent Company shall be passed the Directors shall give notice thereof to all Participants and thereupon each Participant shall (subject to Rule 4.3), forthwith and until the expiry of six months from the date on which such resolution was passed, be entitled to exercise any Option then held by him in the manner provided in Rule 5 at the expiry of which period all unexercised Options shall lapse. 9. ADMINISTRATION AND AMENDMENT 9.1 The Plan shall be administered under the direction of the Directors who may at any time and from time to time by resolution amend the Rules in any respect to take account of any change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Participants or the Group. 9.2 No amendment shall operate to his disadvantage any rights already acquired by a Participant under the Plan without his consent. 9.3 Notwithstanding Rules 9.1 and 9.2 but subject to Rule 9.4, the Directors may by resolution amend the Plan in any way but only to the extent necessary or desirable: 9.3.1 to secure or maintain the approval of the Plan by the Commissioners of Inland Revenue under Schedule 9 to the Act; or 9.3.2 to facilitate the use of such new savings contracts as may from time to time be authorised by the Treasury or other official body as replacement for or alternative to or modification of any Contractual Savings Scheme which is approved by the Commissioners of Inland Revenue for the purposes of Schedule 9 to the Act. 9.4 No amendment shall have effect until it has been approved by the Commissioners of Inland Revenue. 9.5 Subject as herein otherwise expressly provided the Directors' decision on any matter concerning the Plan shall be final and binding. 9.6 The costs of the operation of the Plan (including but not limited to any costs relating to the issue of Shares upon the exercise of Options) shall be borne by the Company. 14 9.7 In any matter in which they are required to act hereunder the Auditors shall be deemed to be acting as experts and not as arbitrators and the Arbitration Acts 1950-1996 shall not apply hereto. 9.8. All notices under the Plan shall be in writing and, if to the Company, shall be either delivered in person to the Company Secretary or sent to the Company's registered office for the time being (or to such other address as the Directors may from time to time specify) and, if to a Participant, shall be delivered personally to him at his place of work or sent by first-class post to the Participant at the address which he shall give in writing to the Company for this purpose, or, failing any such address, his last known place of abode. All notices to the Company, however sent, shall be deemed to be served only upon actual receipt thereof by the Company Secretary or (as the case may be) at the appropriate address as determined above. Notices to the Participant shall, if delivered personally to him at his place of work, be deemed to be served upon such delivery and, if sent by first-class post to the appropriate address as determined above, shall be deemed to be served forty-eight hours after the posting to such address of a properly addressed and prepaid envelope containing such notice. 9.9 The Plan and Options granted under it shall be governed by and construed in accordance with English Law (except where otherwise stated) and all disputes shall be referred for resolution to the courts of England. 10. TERMINATION The Directors may at any time resolve to cease making further offers of participation under the Plan but in such event the subsisting rights of Participants will not thereby be affected. 15 -----END PRIVACY-ENHANCED MESSAGE-----