-----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, LUk6zTsyjKTU9Q9zkZOpUSDJF4dgY4ZeoIjrzMNocBV7lk1zhUDiKIkQNRldX95F /ZvyOfP3E948ui4KU/1MOw== /in/edgar/work/20000731/0000950136-00-000987/0000950136-00-000987.txt : 20000921 0000950136-00-000987.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950136-00-000987 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000728 EFFECTIVENESS DATE: 20000728 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: 333-42582 FILM NUMBER: 681695 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 28, 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 SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN FOR SALARIED EMPLOYEES THE STANLEY WORKS 1997 LONG TERM INCENTIVE PLAN AGREEMENT, DATED JUNE 28, 1998 BETWEEN THE STANLEY WORKS AND STEF G.H. KRANENDIJK STOCK OPTION GRANTS TO LARRY PORCELLATO AND JOHN MARSLAND ON MARCH 24, 1999 AND TO HANS-GERD FUECHTENKORT ON MAY 19, 1999 (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 4,981,000 $25.7188 $128,105,342.80 $33,819.81 - ------------------------------------------------------------------------------------------------------------
* 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 26, 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 (incorporated by reference to Exhibit 4.2 to Registration Statement No. 333-42346 filed July 27, 2000). 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 4 (incorporated by reference to Exhibit 4 (iv) to the Annual Report on Form 10-K for the year ended December 6, 1996). (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 5.1). 24.1 Powers of attorney (filed herewith). 99.1 Supplemental Retirement and Account Value For Salaried Employees of The Stanley Works (filed herewith). 99.2 1997 Long Term Incentive Plan (filed herewith). 99.3 Agreement, dated June 28, 1998 between The Stanley Works and Stef G.H. Kranendijk (incorporated by reference to Exhibit 4 (xvii) to the Annual Report on Form 10-K for the year ended January 2, 1999). 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: 5 (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 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 6 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, 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 28, 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 28, 2000 - ------------------------ Chief Executive John M. Trani Officer and Director /s/ James M. Loree Vice President, Finance July 28, 2000 - ------------------------ and Chief Financial James M.Loree Officer (Chief Financial Officer) /s/ Theresa F. Yerkes Vice President and July 28, 2000 - ------------------------ Controller (Chief Theresa F. Yerkes Accounting Officer) - ------------------------ Director July 28, 2000 John G. Breen * Director July 28, 2000 - ------------------------ Stillman B. Brown
8
NAME TITLE DATE - ---- ----- ---- * Director July 28, 2000 - ------------------------ Mannie L. Jackson * Director July 28, 2000 - ------------------------ James G. Kaiser * Director July 28, 2000 - ------------------------ Eileen S. Kraus Director July 28, 2000 - ------------------------ John D. Opie Director July 28, 2000 - ------------------------ Hugo E. Uyterhoeven * Director July 28, 2000 - ------------------------ Walter W. Williams * Director July 28, 2000 - ------------------------ Kathryn D. Wriston * By: /s/ Jennifer O. Estabrook July 28, 2000 ---------------------------------- Jennifer O. Estabrook (As Attorney-in-Fact)
9 EXHIBIT INDEX Exhibit No. Page 5.1 Opinion of Jennifer O. Estabrook. 11 23.1 Consent of Ernst & Young LLP. 12 23.2 Consent of Jennifer O. Estabrook (Included in Exhibit 5.1). 24.1 Powers of attorney. 13 99.1 Supplemental Retirement and Account Value For Salaried Employees of The Stanley Works. 19 99.2 1997 Long Term Incentive Plan. 25 10 EX-5.1 2 0002.txt OPINION OF JENNIFER O. ESTABROOK EXHIBIT 5.1 THE STANLEY WORKS 1000 Stanley Drive New Britain, Connecticut 06053 July 28, 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 4,981,000 shares of the Corporation's Common Stock, par value $2.50 per share relating to the Corporation's 1997 Long Term Incentive Plan (the "1997 Plan"), the Corporation's Supplemental Retirement and Account Value Plan for Salaried Employees (the "Supplemental Plan"), the Agreement, dated June 19, 1998, between the Corporation and Stef Kranendijk (the "Kranendijk Agreement") and options granted by the Board of Directors of the Corporation to Larry Porcellato and John Marsland on March 24, 1999 and to Hans-Gerd Fuechtenkort on May 19, 1999 (together with the 1997 Plan, the Supplemental Plan and the Kranendijk Agreement, the "Plans"). I have examined the originals, or copies certified or otherwise identified to my satisfaction, of the Plans 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 grants of Common Stock subject to restrictions on transferability pursuant to the Plans will be made only for past services to the Corporation having 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 Plans have been duly authorized and when issued in accordance with the terms of the Plans 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 3 0003.txt CONSENT OF ERNST & 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 Supplemental Retirement and Account Value Plan for Salaried Employees, The Stanley Works 1997 Long Term Incentive Plan Agreement, dated June 28, 1998 between The Stanley Works and Stef G. H. Kranendijk, Stock Option Grants to Larry Porcellato and John Marsland dated March 24, 1999 and to Hans-Gerd Fuchtenkort on May 19, 1999, 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 4 0004.txt POWER OF ATTORNEY POWER OF ATTORNEY We, the undersigned officers and directors of The Stanley Works, a Connecticut corporation (the "Corporation"), hereby severally constitute Stephen S. Weddle, Jennifer O. Estabrook and Nancy M. Clark 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 issued under (1) the Supplemental Retirement and Savings Plan for Salaried Employees of the Corporation and (2) the 1997 Long Term Incentive 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, September 16, 1998 - ------------------- Chief John M. Trani Executive Officer and Director SIGNATURE TITLE DATE - --------- ----- ---- Stillman B. Brown Director September 16, 1998 - ----------------------------- Stillman B. Brown Edgar R. Fiedler Director September 16, 1998 - ----------------------------- Edgar R. Fiedler Mannie L. Jackson Director September 16, 1998 - ----------------------------- Mannie L. Jackson James G. Kaiser Director September 16, 1998 - ----------------------------- James G. Kaiser Eileen S. Kraus Director September 16, 1998 - ----------------------------- Eileen S. Kraus Director September 16, 1998 - ----------------------------- Hugo E. Uyterhoeven Walter W. Williams Director September 16, 1998 - ----------------------------- Walter W. Williams Kathryn D. Wriston Director September 16, 1998 - ----------------------------- Kathryn D. Wriston POWER OF ATTORNEY We, the undersigned officers and directors of The Stanley Works, a Connecticut corporation (the "Corporation"), hereby severally constitute Stephen S. Weddle, Jennifer O. Estabrook and Nancy M. Clark 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 (1) the shares of the Corporation's common stock issued under non-qualified stock options granted by the Corporation to Larry Porcellato and John W. Marsland on April 28, 1999, and any and all amendments thereo, and (2) the shares of the Corporation's common stock issued under the Savings Related Share Plans in the United Kingdom and Germany and the resale of shares of the Corporation's common stock purchased by employees under such plans, and any and all amendments thereo, 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, July 14, 1999 - ------------------ Chief John M. Trani Executive Officer and Director SIGNATURE TITLE DATE - --------- ----- ---- Stillman B. Brown Director July 14, 1999 - ----------------------------- Stillman B. Brown Edgar R. Fiedler Director July 14, 1999 - ----------------------------- Edgar R. Fiedler Mannie L. Jackson Director July 14, 1999 - ----------------------------- Mannie L. Jackson James G. Kaiser Director July 14, 1999 - ----------------------------- James G. Kaiser Eileen S. Kraus Director July 14, 1999 - ----------------------------- Eileen S. Kraus Hugo E. Uyterhoeven Director July 14, 1999 - ----------------------------- Hugo E. Uyterhoeven Walter W. Williams Director July 14, 1999 - ----------------------------- Walter W. Williams Kathryn D. Wriston Director July 14, 1999 - ----------------------------- Kathryn D. Wriston POWER OF ATTORNEY We, the undersigned officers and directors of The Stanley Works, a Connecticut corporation (the "Corporation"), hereby severally constitute Stephen S. Weddle, Jennifer O. Estabrook and Nancy M. Clark 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 non-qualified stock options granted by the Corporation to Hans-Gerd Fuchtenkort on May 19, 1999 and Dror Noach on September 29, 1999, and any and all amendments thereo, 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, September 29, 1999 - ------------------ Chief John M. Trani Executive Officer and Director SIGNATURE TITLE DATE - --------- ----- ---- Stillman B. Brown Director September 29, 1999 - ----------------------------- Stillman B. Brown Edgar R. Fiedler Director September 29, 1999 - ----------------------------- Edgar R. Fiedler Mannie L. Jackson Director September 29, 1999 - ----------------------------- Mannie L. Jackson James G. Kaiser Director September 29, 1999 - ----------------------------- James G. Kaiser Eileen S. Kraus Director September 29, 1999 - ----------------------------- Eileen S. Kraus Hugo E. Uyterhoeven Director September 29, 1999 - ----------------------------- Hugo E. Uyterhoeven Walter W. Williams Director September 29, 1999 - ----------------------------- Walter W. Williams Kathryn D. Wriston Director September 29, 1999 - ----------------------------- Kathryn D. Wriston EX-99.1 5 0005.txt SUPPLEMENT RETIREMENT AND ACCOUNT VALUE FOR SALARIED EMPLOYEES OF THE STANLEY WORKS AMENDED AND RESTATED EFFECTIVE AS OF APRIL 1, 2000 SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN FOR SALARIED EMPLOYEES OF THE STANLEY WORKS BACKGROUND. A. The Stanley Works (together with its wholly-owned U.S. subsidiaries, "Stanley") maintains certain retirement plans for its salaried employees that are designed to meet the requirements of Section 401(a) of the Internal Revenue Code (the "Code"). B. The benefits and contributions that may be provided under such retirement plans are limited on account of Sections 401 and 415 of the Code and certain other provisions of the Code. C. Stanley maintains the Supplemental Retirement and Savings Plan for Salaried Employees of The Stanley Works (the "Supplemental Plan") to provide certain employees with benefits that may not be provided under these retirement plans. D. Stanley now desires to restate the Supplemental Plan as the Supplemental Retirement and Account Value Plan for Salaried Employees of The Stanley Works (which shall continue to be known as the "Supplemental Plan"). TERMS OF THE SUPPLEMENTAL PLAN 1. EFFECTIVE DATE. This amendment and restatement shall be effective as of April 1, 2000. 2. DEFINITIONS. The following terms have the meanings set forth below. "ACCOUNT VALUE PLAN" means the Stanley Account Value Plan. "APPLICABLE LIMITATION" means each of: (a) the limitation under Sections 401(a)(30) and 402(g)(1) of the Code on the amount of pre-tax elective contributions that may be made by an employee under the Account Value Plan; (b) the limitation in Section 401(a)(17) of the Code on the amount of compensation of an employee that may be taken into account under the Retirement Plan or Account Value Plan; (c) the limitation under the Account Value Plan on the amount of an employee's pre-tax elective contributions or Stanley matching contributions imposed under the nondiscrimination rules of Section 401 of the Code; (d) the exclusion of earnings deferred at the election of an employee pursuant to the Deferred Compensation Plan for Participants in Stanley's Management Incentive Plans from the "Compensation" utilized under the Retirement Plan or for "Cornerstone Account" allocations under the Account Value Plan; and (e) the limitations in Section 415 of the Code on the maximum contributions that may be made under the Account Value Plan and the maximum benefits that may be provided under the Retirement Plan. "COMMITTEE" means the Finance and Pension Committee of the Board of Directors of The Stanley Works. "401(K) DOLLAR LIMITS" means the dollar limitation described in paragraph (a) of the definition of Applicable Limitation. "HIGHLY COMPENSATED EMPLOYEE" means: (a) except as provided in (b), a salaried employee of Stanley who during the applicable Plan Year is a highly compensated employee, as defined in Section 414(q) of the Code (i.e., W-2 income, including elective contributions to health and dental plans, to flexible spending plans, and to the Account Value Plan, exceeding the indexed amount for the preceding Plan Year [e.g., earnings during 1999 exceeding $80,000 results in Highly Compensated Employee status for the 2000 Plan Year]). (b) An individual who is not a highly compensated employee, as defined in Section 414(q) of the Code, for the Plan Year in which he or she first becomes a salaried employee of Stanley or for the subsequent Plan Year but whose basic annual rate of compensation from Stanley during the applicable Plan Year is at least $100,000 shall be a Highly Compensated Employee for the applicable Plan Year. "PLAN YEAR" means the plan year of a Qualified Plan. "QUALIFIED PLAN" means each of the Account Value Plan and the Retirement Plan. "RETIREMENT PLAN" means The Stanley Works Retirement Plan. "SUPPLEMENTAL COMPANY CONTRIBUTION ACCOUNT" means the bookkeeping record that reflects amounts credited under Section 4.2. "SUPPLEMENTAL EMPLOYEE CONTRIBUTION ACCOUNT" means the bookkeeping record that reflects amounts credited under Section 4.1. "UNRESTRICTED QUALIFIED PLAN BENEFIT" means the benefit amount that would be payable to an individual under the Retirement Plan but for an Applicable Limitation. 3. PARTICIPATION IN THE SUPPLEMENTAL PLAN. 3.1. PARTICIPATION. Each Highly Compensated Employee shall become a participant in the Supplemental Plan on the date as of which an amount is first credited on his or her behalf under Section 4. 3.2. REMAINING A PARTICIPANT. Subject to Section 7, a Highly Compensated Employee shall remain a participant until all amounts to which he or she is entitled have been distributed. 4. CREDITING OF BENEFITS; ELECTIONS TO DEFER. 4.1. SUPPLEMENTAL EMPLOYEE CONTRIBUTIONS. (a) EMPLOYEE CONTRIBUTIONS EXCEEDING 401(K) DOLLAR LIMITS. If a Highly Compensated Employee's pre-tax elective contributions under the Account Value Plan for a Plan Year are limited by the 401(k) Dollar Limits, the Highly Compensated Employee may elect to defer a portion of compensation. The amount deferred for a Plan Year under this Section 4.1(a), when added to the pre-tax elective contributions for the Plan Year under the Account Value Plan, shall not exceed 15% of compensation. (b) EMPLOYEE CONTRIBUTIONS EXCEEDING OTHER LIMITS. If a Highly Compensated Employee may not make pre-tax elective contributions under the Account Value Plan for a Plan Year as a result of an Applicable Limitation (other than as described in Section 4.1(a)), the Highly Compensated Employee may elect to defer a portion of compensation, up to the amount of such pre-tax elective contributions that could not be made. (c) CREDITING OF EMPLOYEE CONTRIBUTIONS. Any amount deferred under this Section 4.1 shall be credited to a Supplemental Employee Contribution Account. 4.2. SUPPLEMENTAL COMPANY CONTRIBUTIONS. (a) MATCHING CONTRIBUTIONS FOR EMPLOYEE CONTRIBUTIONS EXCEEDING DOLLAR LIMITS. If an amount is credited to a Supplemental Employee Contribution Account under Section 4.1, there shall also be an amount credited to a Supplemental Company Contribution Account. This amount shall equal the contribution that would have been made by Stanley under the Account Value Plan with respect to the amount credited under Section 4.1 if such amount had been contributed to the Account Value Plan. (b) STANLEY CONTRIBUTIONS AFFECTED BY OTHER LIMITS. If a Stanley contribution could not be made under the Account Value Plan as a result of an Applicable Limitation (other than as described in Section 4.2(a)), an amount equal to such Stanley contribution that could not be made shall be credited to a Supplemental Company Contribution Account. 4.3. SUPPLEMENTAL RETIREMENT PLAN BENEFITS. If a Highly Compensated Employee's Unrestricted Qualified Plan Benefit exceeds the benefit payable under the Retirement Plan, the excess amount, to the extent vested under Section 5.1, shall be provided under this Supplemental Plan. 4.4. CREDITING OF EARNINGS. A participant's Supplemental Employee Contribution Account and Supplemental Company Contribution Account shall be credited with the rate of return such accounts would have earned if they had been invested under the Account Value Plan. In addition, these accounts shall be credited with any additional amount that would have been payable under the Retirement Plan to reflect IPA benefits. For purposes of crediting the rate of return, an amount shall be considered to be credited under Section 4.1 or 4.2 on the date on which it would have been allocated under the Account Value Plan but for an Applicable Limitation. 4.5. PROCEDURES FOR ELECTING EMPLOYEE CONTRIBUTIONS. An election to defer compensation under Section 4.1 shall be made, and may be revoked, under rules established by the Committee. Any election to defer compensation shall be effective only as to compensation earned after the date of the election. 5. VESTING SCHEDULE. A participant's vested interest in a benefit provided under this Plan shall be determined in accordance with the vesting provisions of the particular Qualified Plan with respect to which the benefit is determined. 6. DISTRIBUTIONS. 6.1. TIME FOR PAYING BENEFITS. Amounts credited to a participant's Supplemental Employee Contribution Account or Supplemental Company Contribution Account shall be distributed upon retirement, death, disability or earlier separation from service with Stanley unless either the rules of Section 7.3 apply or the participant elects to have payments made on a later date specified in an election made under Section 6.3. Amounts payable under Section 4.3 (relating to Supplemental Retirement Plan Benefits) shall be distributed when benefit payments commence under the Retirement Plan. 6.2. FORM OF PAYMENT. Benefits attributable to an individual's Supplemental Employee Contribution Account and Supplemental Company Contribution Account shall be distributed in a lump sum. To the extent that the amount credited to such accounts is deemed to be invested in shares of Stanley stock pursuant to Section 4.4 at the time of distribution, the lump sum shall consist of shares of Stanley stock. Any remaining portion of such lump sum shall be paid in cash. The benefit determined under Section 4.3 (relating to Supplemental Retirement Plan Benefits) shall be paid in a life annuity, unless the participant elects, under Section 6.3, a lump sum payment or another form of annuity available under the Retirement Plan (irrespective of any spousal consent requirements) that provides for payments to be made to a joint or contingent annuitant after the participant's death. 6.3. ELECTIONS BY PARTICIPANTS. An election to receive a lump sum payment or a form of annuity available under the Retirement Plan that provides for payments to be made to a joint or contingent annuitant after the participant's death, of the benefit payable under Section 4.3 (relating to Supplemental Retirement Plan Benefits) or an election to defer distributions of the Supplemental Employee Contribution and Supplemental Company Contribution Accounts may be made by a participant in writing prior to the beginning of the one year period that ends on the date on which the participant dies, becomes disabled, or otherwise separates from service. An election may be made after the beginning of such one year period only with the approval of the Committee. 6.4. ADJUSTMENTS TO DISTRIBUTIONS. Upon determining that a participant is indebted to Stanley, the Committee shall be entitled to offset such indebtedness, including any interest accruing thereon, against any payment that would otherwise be made on behalf of the participant. 6.5. DEATH BENEFICIARY. Upon a participant's death, any benefit payment shall be made to the beneficiary determined under the Qualified Plan to which the benefit relates unless the participant designated in writing a different beneficiary to receive such benefit. The benefit shall be paid in the manner provided in Section 6.2. 6.6. WITHHOLDING. To the extent required by law, Stanley shall withhold taxes from any payment due under the Plan. 7. INELIGIBILITY FOR COVERAGE. 7.1. BECOMING INELIGIBLE. Amounts shall not be credited under Section 4.1 or 4.2 upon either (a) a participant ceasing to be a Highly Compensated Employee or (b) the Committee, in its sole discretion, determining that a Highly Compensated Employee may no longer actively participate in the Plan. 7.2. RESUMING PARTICIPATION. An individual described in Section 7.1(a) shall resume active participation in the Supplemental Plan upon again becoming a Highly Compensated Employee. An individual described in Section 7.1(b) may again become an active participant at the discretion of the Committee. Once an individual resumes participation in the Supplemental Plan, amounts shall again be credited under Section 4.1 upon the filing of an election pursuant to Section 4.5, and amounts may also be credited under Section 4.2. 7.3. DISTRIBUTIONS TO INELIGIBLE INDIVIDUALS. An amount credited under Section 4 on behalf of an individual for a Plan Year in which such individual was not a Highly Compensated Employee shall be distributed in a lump sum payment, in the manner described in Section 6.2, upon the earliest of the following: (a) death, (b) disability, (c) other separation from service with Stanley, or (d) the first day of the calendar year in which the individual attains age 60. No additional amount shall be credited to an account established in the name of an individual described in this subsection unless such individual becomes a Highly Compensated Employee. If the individual becomes a Highly Compensated Employee, amounts credited to an account established in the name of the individual while a Highly Compensated Employee shall be distributed in accordance with Section 6, and other amounts shall be distributed in the manner described above in this subsection. 8. MISCELLANEOUS. 8.1. AMENDMENT OR TERMINATION. The Committee may at any time amend or terminate the Supplemental Plan without the consent of any participant or beneficiary. 8.2. ADMINISTRATION OF THE SUPPLEMENTAL PLAN. The Supplemental Plan shall be administered by the Committee. The Committee shall have the discretionary authority to interpret the Supplemental Plan and to make all determinations regarding eligibility for coverage and the benefits to be paid. Any denial by the Committee of a claim for benefits under the Supplemental Plan shall be stated in writing by the Committee and delivered or mailed to the appropriate individual. Such notice shall set forth the specific reasons for the denial. The Committee shall afford to any participant or beneficiary whose claim for benefits has been denied a reasonable opportunity for a review of the denial of the claim. 8.3. GOVERNING TEXT. The Supplemental Plan, including any amendments, shall constitute the entire agreement between Stanley and any employee, participant or beneficiary regarding the subject matter of the Supplemental Plan. The Supplemental Plan, including any amendments, shall be binding on Stanley, employees, participants, beneficiaries, and their respective heirs, administrators, trustees, successors and assigns. 8.4. ENFORCEABILITY OF PLAN PROVISIONS. If any provision of the Supplemental Plan shall, to any extent, be invalid or unenforceable, the remainder of the Supplemental Plan shall not be affected, and each other provision of the Supplemental Plan shall be valid and enforced to the fullest extent permitted by law. 8.5. RIGHTS OF PARTICIPANT. Any person entitled to receive benefits under the Supplemental Plan shall have the rights of an unsecured general creditor of Stanley. 8.6. CLAIMS OF CREDITORS. The right of any participant or beneficiary to a benefit under the Supplemental Plan shall not be subject to attachment or other legal process for the debts of such participant or beneficiary. Except as provided in Section 6.4, a benefit of a participant or beneficiary shall not be subject to anticipation, alienation, sale, transfer, assignment or encumbrance. 8.7. SPECIAL DISTRIBUTIONS. Whenever, in the opinion of the Committee, a person entitled to receive a benefit under the Plan is unable to manage his or her financial affairs, the Committee may direct that payment be made to a legal representative or relative of such person for his or her benefit. Alternatively, the Committee may direct that any payment be applied for the benefit of such person in such manner as the Committee considers advisable. Any payment made in accordance with this Section shall be a complete discharge of any liability for the making of such payment under the provisions of the Supplemental Plan. 8.8. TERMS OF EMPLOYMENT. Participation in the Supplemental Plan shall not give an individual any right to remain in the service of Stanley, and an individual shall remain subject to discharge to the same extent as if the Supplemental Plan had not been adopted. THE STANLEY WORKS By --------------------------- Title: Date: EX-99.2 6 0006.txt 1997 LONG TERM INCENTIVE PLAN Adopted by the Board of Directors September 17, 1997 Amended by the Board of Directors February 25, 1998 Adopted by the shareholders April 15, 1998 Amended by the Board of Directors May 26, 2000 THE STANLEY WORKS 1997 LONG-TERM INCENTIVE PLAN Section 1. Purpose The purposes of this Long-Term Incentive Plan (the "Plan") are to encourage selected salaried employees of The Stanley Works (together with any successor thereto, the "Company") and selected salaried employees and non-employee directors of its Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company's future success and prosperity, thus enhancing the value of the Company for the benefit of its shareholders, and to enhance the ability of the Company and its Affiliates to attract and retain exceptionally qualified individuals upon whom, in large measure, the sustained progress, growth and profitability of the Company depend. Section 2. Definitions As used in the Plan, the following terms shall have the meanings set forth below: (a) "Affiliate" shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, as determined by the Committee. (b) "Award" shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, or Other Stock- Based Award granted under the Plan. (c) "Award Agreement" shall mean any written agreement, contract, or other instrument or document evidencing any Award granted under the Plan. (d) "Board of Directors" or "Board" shall mean the Board of Directors of the Company. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (f) "Committee" shall mean the Compensation and Organization Committee of the Board. (g) "Dividend Equivalent" shall mean any right granted under Section 6(e) of the Plan. (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (i) "Fair Market Value" shall mean, with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee, and with respect to Shares, shall mean the mean average of the high and the low price of a Share as quoted on the New York Stock Exchange Composite Tape on the date as of which fair market value is to be determined or, if there is no trading of Shares on such date, such mean average of the high and the low price on the next preceding date on which there was such trading. (j) "Immediate family members" of a Participant shall mean the Participant's children, grandchildren and spouse. (k) "Incentive Stock Option" shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code, or any successor provision thereto. (l) "1990 Plan" shall mean the Company's 1990 Stock Option Plan. (m) "Non-Employee Director" shall mean any non-employee director of an Affiliate. (n) "Non-Qualified Stock Option" shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option. (o) "Option" shall mean an Incentive Stock Option or a Non- Qualified Stock Option. (p) "Other Stock-Based Award" shall mean any right granted under Section 6(f) of the Plan. (q) "Participant" shall mean a Salaried Employee designated to be granted an Award under the Plan. (r) "Performance Award" shall mean any Award granted under Section 6(d) of the Plan. 2 (s) "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof. (t) "Released Securities" shall mean securities that were Restricted Securities with respect to which all applicable restrictions have expired, lapsed, or been waived. (u) "Restricted Securities" shall mean securities covered by Awards of Restricted Stock or other Awards under which issued and outstanding Shares are held subject to certain restrictions. (v) "Restricted Stock" shall mean any Share granted under Section 6(c) of the Plan. (w) "Restricted Stock Unit" shall mean any right granted under Section 6(c) of the Plan that is denominated in Shares. (x) "Salaried Employee" shall mean any salaried Employee of the Company or of any Affiliate. (y) "Shares" shall mean shares of the common stock of the Company, par value $2.50 per share, and such other securities or property as may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made under Section 4(b) of the Plan. (z) "Stock Appreciation Right" shall mean any right granted under Section 6(b) of the Plan. Section 3. Administration Except as otherwise provided herein, the Plan shall be administered by the Committee. Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or canceled, forfeited, or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts 3 payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder, and any employee of the Company or of any Affiliate. Section 4. Shares Available for Awards (a) Shares Available. Subject to adjustment as provided in Section 4(b): (i) Calculation of Number of Shares Available. The number of Shares authorized to be issued in connection with the granting of Awards under the Plan is four million (4,000,000), and the number of Shares available for granting Awards under the Plan in each fiscal year or, in the case of the years 1997 and 2007, part thereof shall be two percent (2%) of the issued Shares (including, without limitation, treasury Shares) as of the first day of such year; provided, however, that the number of Shares available for granting Awards in any year shall be increased in any such year by the number of Shares available under the Plan in previous years but not covered by Awards granted under the Plan in such years. Further, if any Shares covered by an Award granted under the Plan or by an award granted under the 1990 Plan, or to which such an Award or award relates, are forfeited, or if an Award or award otherwise terminates without the delivery of Shares or of other consideration, or if upon the termination of the 1990 Plan there are Shares remaining that were authorized for issuance under that Plan but with respect to which no awards have been granted, then the Shares covered by such Awards or award, or to which such Award or award relates, or the number of Shares otherwise counted against the aggregate number 4 of Shares available under the Plan with respect to such Award or award, to the extent of any such forfeiture or termination, or which were authorized for issuance under the 1990 Plan but with respect to which no awards were granted as of the termination of the 1990 Plan shall again be, or shall become available for granting Awards under the Plan. Notwithstanding the foregoing but subject to adjustment as provided in Section 4(b), no more than one million (1,000,000) Shares shall be cumulatively available for delivery pursuant to the exercise of Incentive Stock Options. (ii) Accounting for Awards. For purposes of this Section 4, (A) if an Award (other than a Dividend Equivalent) is denominated in Shares, the number of Shares covered by such Award, or to which such Award relates, shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan; and (B) Dividend Equivalents and Awards not denominated in Shares shall be counted against the aggregate number of Shares available for granting Awards under the Plan, if at all, only in such amount and at such time as the Committee shall determine under procedures adopted by the Committee consistent with the purposes of the Plan; provided, however, that Awards that operate in tandem with (whether granted simultaneously with or at a different time from), or that are substituted for, other Awards or awards granted under the 1990 Plan may be counted or not counted under procedures adopted by the Committee in order to avoid double counting. Any Shares that are delivered by the Company, and any Awards that are granted by, or become obligations of, the Company through the assumption by the Company or an Affiliate of, or in substitution for, outstanding awards previously granted by an acquired company, shall not be counted against the Shares available for granting Awards under the Plan. (iii) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may 5 consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. (b) Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation split-up, spin-off, combination repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, (iii) the number and type of Shares (or other securities or property) specified as the annual per-participant limitation under Section 6(g)(vi), and (iv) the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, however, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422(b)(1) of the Code or any successor provision thereto; and provided further, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number. Section 5. Eligibility Any Salaried Employee, including any officer or employee- director of the Company or of any Affiliate, and any Non-Employee Director, who is not a member of the Committee shall be eligible to be designated a Participant. Section 6. Awards (a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the 6 provisions of the Plan, as the Committee shall determine: (i) Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, that such purchase price shall not be less than the Fair Market Value of a Share on the date of grant of such Option (or, if the Committee so determines, in the case of any Option retroactively granted in tandem with or in substitution for another Award or any outstanding award granted under any other plan of the Company, on the date of grant of such other Award or award). (ii) Option Term. The term of each Option shall be fixed by the Committee. (iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms, including, without limitation, cash, Shares, other Awards, or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which, payment of the exercise price with respect thereto may be made or deemed to have been made. (iv) Incentive Stock Options. The terms of any Incentive Stock Option granted under the plan shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder. No Incentive Stock Option shall be granted to any Non-Employee Director who is not otherwise an employee of the Company or any of its Affiliates. (v) Transferability. An Option shall not be transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, as defined in the Code, and, during the Participant's lifetime, shall be exercisable only by the Participant, except that the Committee may: 7 (A) permit exercise, during the Participant's lifetime, by the Participant's guardian or legal representative; and (B) permit transfer, upon the Participant's death, to beneficiaries designated by the Participant in a manner authorized by the Committee, provided that the Committee determines that such exercise and such transfer are consonant with requirements for exemption from Section 16(b) of the Exchange Act and, with respect to an Incentive Stock Option, the requirements of Section 422(b)(5) of the Code; and (C) grant Non-Qualified Stock Options that are transferable, or amend outstanding NonQualified Stock Options to make them so transferable, without payment of consideration, to immediate family members of the Participant or to trusts or partnerships for such family members. (b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise or, if the Committee shall so determine in the case of any such right other than one related to any Incentive Stock Option, at any time during a specified period before or after the date of exercise over (ii) the grant price of the right as specified by the Committee, which shall not be less than the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right (or, if the Committee so determines, in the case of any Stock Appreciation Right retroactively granted in tandem with or in substitution for another Award or any outstanding award granted under any other plan of the Company, on the date of grant of such other Award or award). Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, methods of settlement, and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate. 8 (c) Restricted Stock and Restricted Stock Units. (i) Issuance. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants. (ii) Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. (iii) Registration. Any Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. (iv) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) for any reason during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units still, in either case, subject to restriction shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to the holder of Restricted Stock promptly after such Restricted Stock shall become Released Securities. 9 (d) Performance Awards. The Committee is hereby authorized to grant Performance Awards to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares (including without limitation, Restricted Stock), other securities, other Awards, or other property and (ii) shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Award, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee shall establish. Subject to the terms of the Plan and any applicable Awards Agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted, and the amount of any payment or transfer to be made pursuant to any Performance Award shall be determined by the Committee. (e) Dividend Equivalents. The Committee is hereby authorized to grant to Participants Awards under which the holders thereof shall be entitled to receive payments equivalent to dividends or interest with respect to a number of Shares determined by the Committee, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested. Subject to the terms of the Plan and any applicable Awards Agreement, such Awards may have such terms and conditions as the Committee shall determine. (f) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purposes of the Plan, provided, however, that such grants must comply with applicable law. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(f) shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, as the Committee shall determine, the value of which consideration, as established by the Committee, shall not be less than the Fair Market Value 10 of such Shares or other securities as of the date such purchase right is granted (or, if the Committee so determines, in the case of any such purchase right retroactively granted in tandem with or in substitution for another Award or any outstanding award granted under any other plan of the Company, on the date of grant of such other Award or award). (g) General. (i) No Cash Consideration for Awards. Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law. (ii) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any awards granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards or awards. (iii) Forms of Payment Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments. (iv) Limits on Transfer of Awards. Except as provided in Section 6(a) above regarding Options, no Award (other than Released Securities), and no right under any such Award, 11 shall be assignable, alienable, saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, as defined in the Code (or, in the case of an Award of Restricted Securities, to the Company); provided, however, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant, and to receive any property distributable, with respect to any Award upon the demand of the Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant's lifetime, only by the Participant or, if permissible under applicable law, by the Participant's guardian or legal representative. No Award (other than Released Securities), and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. (v) Terms of Awards. The Term of each Award shall be for such period as may be determined by the Committee; provided, however, that in no event shall the term of any Incentive Stock Option exceed a period of ten years from the date of its grant. (vi) Per-Person Limitation on Options and SARs. The number of Shares with respect to which Options and SARs may be granted under the Plan to an individual Participant in any three-year period from September 17, 1997 through the end of the term shall not exceed 3,000,000 Shares, subject to adjustment as provided in Section 4(b). (vii) Share Certificates. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state securities laws, and the 12 Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. (viii) Maximum Payment Amount. The maximum fair market value of payments to any executive officer made in connection with any long-term performance awards (except for payments made in connection with Options or Stock Appreciation Rights) granted under the 1997 Plan shall not, during any three-year period, exceed two percent of Stanley's shareholders' equity as of the end of the year immediately preceding the commencement of such three-year period. Section 7. Amendment and Termination Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan: (a) Amendments to the Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue, or terminate the Plan, including, without limitation, any amendment, alteration, suspension, discontinuation, or termination that would impair the rights of any Participant, or any other holder or beneficiary of any Award theretofore granted, without the consent of any shareholder, Participant, other holder or beneficiary of an Award, or other Person; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of the Company no such amendment, alteration, suspension, discontinuation, or termination shall be made that would: (i) increase the total number of Shares available for Awards under the Plan, except as provided in Section 4 hereof; or (ii) permit Options, Stock Appreciation Rights, or other Stock-Based Awards encompassing rights to purchase Shares to be granted with per Share grant, purchase, or exercise prices of less than the Fair Market Value of a Share on the date of grant thereof, except to the extent permitted under Sections 6(a), 6(b), or 6(f) hereof. (b) Adjustments of Awards Upon Certain Acquisitions. In the event the Company or any Affiliate shall assume outstanding employee awards or the right or obligation 13 to make future such awards in connection with the acquisition of another business or another corporation or business entity, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to achieve reasonable comparability or other equitable relationship between the assumed awards and the Awards granted under the Plan as so adjusted. (c) Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(b) hereof) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits to be made available under the Plan. (d) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 8. General Provisions (a) No Rights to Awards. No Salaried Employee, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Salaried Employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. (b) Delegation. The Committee may delegate to one or more officers or managers of the Company or any Affiliate, or a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights with respect to, alter, discontinue, suspend or terminate Awards held by, Salaried Employees who are not officers of the Company for purposes of Section 16 of the Exchange Act. 14 (c) Withholding. The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, Shares, other securities, other Awards, or other property) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Awards or under the Plan and to take such other action as may be necessary in the opinion of the Company or Affiliate to satisfy all obligations for the payment of such taxes. (d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. (e) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. (f) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Connecticut and applicable Federal law. (g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. (h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person 15 acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (i) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated. (j) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Section 9. Change in Control (a) Upon the occurrence of a Change in Control (as hereinafter defined); (i) all Options and Stock Appreciation Rights, whether granted as performance awards or otherwise, shall become immediately exercisable in full for the remainder of their terms, and Grantees shall have the right to have the Company purchase all or any number of such Options or Stock Appreciation Rights for cash for a period of thirty (30) days following a Change in Control at the Option Acceleration Price (as hereinafter defined); and (ii) all restrictions applicable to all Restricted stock and Restricted Stock Units, whether such Restricted Stock and Restricted Stock Units were granted as performance awards or otherwise, shall immediately lapse and have no effect, and Grantees shall have the right to have the Company purchase all or any number of such Restricted Stock Units and shares of Restricted Stock for cash for a period of thirty (30) days following a Change in Control at the Restricted Stock Acceleration Price (as hereinafter defined). (b)(i) The "Restricted Stock Acceleration Price" is the highest of the following on the date of a Change in Control: 16 (A) the highest reported sales price of a share of the Common Stock within the sixty (60) days preceding the date of a Change in Control, as reported on any securities exchange upon which the Common Stock is listed, (B) the highest price of a share of the Common Stock reported in a Schedule 13D or an amendment thereto as paid within the sixty (60) days preceding the date of the Change in Control, (C) the highest tender offer price paid for a share of the Common Stock, and (D) any cash merger or similar price paid for a share of the Common Stock. (ii) The "Option Acceleration Price" is the excess of the Restricted Stock Acceleration Price over the exercise price of the award, except that for Incentive Stock Options, the Option Acceleration Price is limited to the spread between the Fair Market Value on the date of exercise and the option price. (C) A "Change in Control" is the occurrence of any one of the following events: (i) any "person," as such term is defined in Section 3(a)(9) and modified and used in Sections 13(d) and 14(d) of the Exchange Act (other than a Grantee, the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company (or of any subsidiary of the Company), or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person 17 who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), (iv) or (v) of this definition) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 75% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (with the exceptions specified in clause (i) of this definition) acquires 25% or more of the combined voting power of the Company's then outstanding securities; (iv) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets; or (v) the Company consummates a merger, consolidation, stock dividend, stock split or combination, extraordinary cash dividend, exchange offer, issuer tender offer or other transaction effecting a recapitalization of the Company (or similar transaction) (the "Transaction") and, in connection with the Transaction, a Designated Downgrading occurs with respect to the unsecured general obligations of the Company (the "Securities"), as described below: 18 (A) If the rating of the Securities by both Rating Agencies (defined hereinafter) on the date 60 days prior to the public announcement of the Transaction (a "Base Date") is equal to or higher than BBB Minus (as hereinafter defined), then a "Designated Downgrading" means that the rating of the Securities by either Rating Agency on the effective date of the Transaction (or, if later, the earliest date on which the rating shall reflect the effect of the Transaction) (as applicable, the "Transaction Date") is equal to or lower than BB Plus (as hereinafter defined); if the rating of the Securities by either Rating Agency on a Base Date is lower than BBB Minus, then a "Designated Downgrading" means that the rating of the Securities by either Rating Agency on the Transaction Date has decreased from the rating by such Rating Agency on the Base Date. In determining whether the rating of the Securities has decreased, a decrease of one gradation (+ and - for S&P and 1, 2 and 3 for Moody's, or the equivalent thereof by any substitute rating agency referred to below) shall be taken into account; (B) "Rating Agency" means either Standard & Poor's Corporation or its successor ("S&P") or Moody's Investor Service, Inc. or its successor ("Moody's"); (C) "BBB Minus" means, with respect to ratings by S&P, a rating of BBB- and, with respect to ratings by Moody's, a rating of Baa3, or the equivalent thereof by any substitute agency referred to below; (D) "BB Plus" means, with respect to ratings by S&P, a rating of BB+ and, with respect to ratings by Moody's, a rating of BBB3, or the equivalent thereof by any substitute agency referred to below; (E) The Company shall take all reasonable action necessary to enable each of the Rating Agencies to provide a rating for the Securities, but, if either or both of the Rating Agencies shall not make such a rating available, a nationally-recognized investment banking firm shall select a nationally-recognized securities rating agency or two nationally-recognized securities rating agencies to act as substitute 19 rating agency or substitute rating agencies, as the case may be. Section 10. Effective Date of the Plan The Plan shall be effective as of September 17, 1997. Section 11. Term of the Plan No Award shall be granted under the Plan after September 16, 2007. However, unless otherwise expressly provided in the plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, or adjust any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond such date. 20 -----END PRIVACY-ENHANCED MESSAGE-----