EXHIBIT 10(xxiv)

EXECUTION COPY

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (the "Agreement") by and between The Stanley Works, a
Connecticut corporation (the "Company"), and John F. Lundgren (the "Executive"),
dated February 3, 2004 and effective as of the Effective Date (as defined in
Section 1 below).

W I T N E S S E T H:

WHEREAS, the Company wishes to provide for the service and employment of the
Executive with the Company, and the Executive wishes to provide service to the
Company, in accordance with the terms and conditions set forth in this
Agreement;

NOW, THEREFORE, it is hereby agreed as follows:

1.    TERM.    The term of employment of the Executive by the Company hereunder
(the "Term") shall commence on March 1, 2004 (the "Effective Date"), and shall
continue until the occurrence of a Date of Termination (as defined in Section 4
below).

2.    POSITION AND DUTIES; LOCATION.

(a)    During the Term, the Executive shall serve as the Chief Executive Officer
and Chairman of the Company with such duties and responsibilities as are
customarily assigned to such positions, and such other duties and
responsibilities commensurate therewith as may from time to time be assigned to
him by the Board of Directors of the Company (the "Board"). The Executive shall
report solely to the Board. Effective as of the Effective Date, the Executive
shall be appointed to the Board and elected as Chairman of the Board. At the
Company's request, upon termination of the Executive's employment with the
Company for any reason, the Executive shall (1) promptly resign from the Board
and from all other positions the Executive then holds as an officer or member of
the board of directors of any of the Company's subsidiaries or affiliates and
(2) execute any and all documentation of such resignations.

(b)    During the Term, the Executive shall devote his full business time and
effort to the performance of his duties hereunder. It shall not be considered a
violation of the foregoing for the Executive to manage his personal investments
or, subject to the approval of the Board, to serve on corporate, industry, civic
or charitable boards or committees, so long as such activities do not
significantly interfere with the performance of the Executive's duties
hereunder.

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

3.    COMPENSATION AND BENEFITS.

(a)    BASE SALARY.    During the Term, the Executive shall receive a base
salary at the annual rate of $750,000. The Annual Base Salary (as defined below)
shall be payable in accordance with the Company's regular payroll practice for
its senior executives, as in effect from time to time. During the Term, the
Annual Base Salary shall be reviewed at least annually by the Compensation and
Organization Committee of the Board (the "C&O Committee") for possible increase.
Any increase in the Annual Base Salary shall not limit or reduce any other
obligation of the Company under this Agreement. Once increased, the Annual Base
Salary shall not thereafter be decreased, except pursuant to across-the-board
salary reductions similarly affecting all senior Company executives. The term
"Annual Base Salary" shall refer to the Annual Base Salary as in effect from
time to time.

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(b)    ANNUAL CASH BONUS.    For each fiscal year of the Company during the
Term, the Executive shall participate in the Company's Management Incentive
Compensation Plan, as amended, or any successor plan thereto (the "MICP"). The
Executive's annual target bonus opportunity pursuant to the MICP shall equal
100% (the "Target Annual Bonus Percentage") of the Annual Base Salary in effect
for the Executive at the beginning of such fiscal year, with a maximum potential
award equal to 200% of such Annual Base Salary. Any cash bonuses payable to the
Executive will be paid at the time the Company normally pays such bonuses to its
senior executives.

(c)    2003 BONUS FROM PRIOR EMPLOYER.    To the extent that the Executive's
prior employer (the "Prior Employer") fails to pay to the Executive any portion
of Executive's 2003 annual bonus of $537,192 (less applicable withholding taxes)
prior to the twentieth (20th) day following the Customary Payment Date (as
defined below), the Company, subject to the provisions of the succeeding
sentence, shall make such payment to the Executive (less applicable withholding
taxes) within five (5) business days thereafter. As a condition of receiving
payment from the Company under this Section 3(c), the Executive shall first be
required to make a prompt written demand to the Prior Employer in respect of
such bonus if it is not paid to him within ten (10) business days after the date
the Prior Employer makes such bonus payments to its officers generally (the
"Customary Payment Date"). If the Executive receives payment from the Prior
Employer in respect of his 2003 annual bonus after the date the Company has made
a payment to him in respect of such bonus, then the Executive shall notify the
Company and promptly remit to the Company, to the extent permitted by law, the
amount previously paid to him by the Company pursuant to this Section 3(c).

(d)    INITIAL OPTION GRANT.    On the Effective Date, the C&O Committee shall
grant to the Executive a nonqualified option (the "Option") to purchase 250,000
shares of the Company's common stock pursuant to the Company's 2001 Long-Term
Incentive Plan (the "LTIP"). The Option shall be evidenced by a stock option
certificate and agreement substantially in the form attached hereto as Exhibit
A.

(e)    INITIAL RESTRICTED STOCK UNIT GRANT.    On the Effective Date, the C&O
Committee shall grant to the Executive 75,000 Restricted Stock Units pursuant to
the LTIP. The grant of Restricted Stock Units shall be evidenced by a restricted
stock unit certificate and agreement substantially in the form attached hereto
as Exhibit B.

(f)    OTHER BENEFITS.    While the Executive is employed during the Term: (i)
the Executive shall be entitled to participate in all tax-qualified and
non-qualified savings, employee stock ownership, employee stock purchase,
deferred compensation and retirement and supplemental retirement plans that are
generally made available to the Company's senior officers, and shall be entitled
to participate in all fringe benefit and perquisite practices, policies and
programs of the Company made available to the senior officers of the Company or
to its Chief Executive Officer, including but not limited to the Company's
executive car program, financial planning services, executive life insurance
program, executive long-term disability program and executive physical program
(provided that in each case, such participation shall be no less favorable than
that available to senior officers of the Company); (ii) the Executive and/or the
Executive's eligible dependents, as the case may be, shall be eligible for
participation in, and shall receive all benefits under, all welfare benefit
plans, practices, policies and programs provided by the Company, including, any
medical (with COBRA equivalent premiums paid on a gross-up basis during any
waiting period that is not waived), flexible spending, prescription, dental,
short- and long-term disability, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs to the same
extent, and subject to the same terms and conditions, as are made available to
the senior officers of the Company; and (iii) the Executive shall be eligible to
receive, on terms and conditions no less favorable than those generally made
available to the other senior officers of the Company, ongoing equity grants and
other long-term incentives (in addition to those specified above) as may be
determined by the C&O Committee from time to time.

(g)    VACATION; RELOCATION; TEMPORARY LIVING EXPENSES.    The Executive shall
be entitled to four (4) weeks paid vacation per year. The Company shall
reimburse the Executive in accordance with the Company's Relocation Benefits
Program Enhanced, effective November 21,

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2001 (the "Relocation Policy") for expenses incurred in connection with the
relocation of the Executive and his "significant other" to the New Britain,
Connecticut area. The Company shall, if requested by the Executive, extend the
duration of the Relocation Policy by an additional six (6) months with respect
to items that would otherwise be payable or reimbursable within the customary
twelve (12) month limit, but such six (6) month extension shall not apply to any
other time limits in the Relocation Policy (e.g., reimbursement of costs of
selling the Executive's current residence and closing costs for a new residence
shall be extended to 18 months, but the 60-day time limit for storage of
household goods shall not be extended). The Company shall also provide, at no
cost to the Executive, a furnished corporate apartment or other furnished
residence reasonably acceptable to the Executive for the Executive and his
"significant other" in the New Britain, Connecticut area; provided, however,
that in no event shall such living accommodations be provided for longer than a
twelve (12) month period. In addition, to the extent the Company's Relocation
Policy does not cover expenses incurred by the Executive in connection with his
relocation, the Company shall reimburse the Executive for such expenses upon the
Executive's submission of documentation relating thereto reasonably acceptable
to the Company; provided, however, that the Company shall not be required to
reimburse the Executive for aggregate expenses in excess of $200,000.

(h)    EXPENSES.    The Company shall pay or reimburse the Executive for
reasonable out-of-pocket expenses incurred by the Executive during the Term in
the performance of the Executive's services under this Agreement, in accordance
with Company policy for its senior executives.

(i)    CHANGE IN CONTROL SEVERANCE AGREEMENT.    On the Effective Date, the
Executive and the Company shall enter into a Change in Control Severance
Agreement attached hereto as Exhibit C.

(j)    PENSION MAKE-WHOLE.    The Company shall provide the Executive with a
supplemental retirement benefit to make the Executive whole for the retirement
benefits he would reasonably expect to receive from the Prior Employer had he
continued his employment with the Prior Employer. The supplemental retirement
benefit will be calculated based on the Executive's historic compensation from
the Prior Employer, projected forward at an assumed rate of increase of 5% per
year. The supplemental retirement benefit that the Company will provide shall be
offset by (i) retirement benefits accrued under defined benefit plans and
arrangements with the Prior Employer (including retirement benefits accrued with
the entity that the Prior Employer acquired, but only if and to the degree such
retirement benefits would have been offset by such Prior Employer under its
applicable plan or arrangement) and (ii) other retirement benefits accrued under
Company sponsored plans that do not represent the Executive's elective deferrals
(e.g., 401(k) contributions). The Company agrees that if (i) it terminates the
Executive's employment for any reason other than for Cause or (ii) the Executive
terminates his employment hereunder for Good Reason (each as defined in Section
4 below) prior to September 3, 2006, the Executive will be treated as having
retired from the Prior Employer at age 55 for purposes of computing the
supplemental retirement benefit payable by the Company under this Section 3(j).
The manner in which such supplemental retirement benefit shall be calculated is
set forth by way of example on Exhibit D attached hereto.

(k)    INDEMNIFICATION.    To the fullest extent permitted by the Company's
certif-icate of incorporation and by-laws, or, if greater, by the laws of the
State of Connecticut, the Company shall promptly indemnify and hold harmless the
Execu-tive for all amounts (including, without limita-tion, judg-ments, fines,
settle-ment pay-ments, loss-es, damages, costs, expenses (in-cluding reasonable
attorneys' fees), ERISA excise taxes, or other liabilities or penalties and
amounts paid or to be paid in settlement) incurred or paid by the Executive in
connection with any action, proceeding, suit or investi-gation (the
"Proceeding") to which the Executive is made a party, or is threatened to be
made a party, by reason of the fact that he is or was a director, officer or
employee of the Company or is or was serving at the request of the Company as a
director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, programs or arrange-ments, whether or not the
basis of such Proceeding is the Executive's alleged action in an official
capacity. Such indemnification shall continue even if the Executive has ceased
to be a director, employee or agent of the Company or other affiliated entity

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and shall inure to the benefit of the Executive's heirs, executors and
administrators. The Company shall advance to the Executive all reasonable costs
and expenses incurred by him in connec-tion with a Proceeding within fifteen
(15) days after receipt by the Company of a written request from the Executive
for such ad-vance. Such request shall include an undertaking by the Execu-tive
to timely repay the amount of such ad-vance if it shall ultimately be determined
that he is not entitled to be indemnified against such costs and expens-es. The
Compa-ny also agrees to main-tain a director's and officers' lia-bility
insur-ance policy covering the Execu-tive to the extent the Company provides
such cover-age for its other senior executive officers. Fol-low-ing the Term,
the Compa-ny shall con-tin-ue to main-tain a directors' and officers' liability
insurance policy for the benefit of the Execu-tive which is no less favorable
than the policy covering other senior officers of the Company.

(l)    RETIREE MEDICAL.    So long as the Executive's employment hereunder has
not been terminated by the Company for Cause (as defined in Section 4(b) below)
or been voluntarily terminated by the Executive within two (2) years following
the Effective Time other than for Good Reason (as defined in Section 4(c)
below), the Company shall ensure that the Executive and his eligible dependents
shall have access to retiree medical insurance coverage from a reputable carrier
until the Executive shall first become eligible for Medicare (or in the event of
his death, until he would have first become eligible). Such coverage shall be on
terms and conditions no less favorable than generally made available to other
Company retirees (or if there are no other such retirees, on terms and
conditions reasonably acceptable to the Executive). The cost of such coverage
shall be borne solely by the Executive (or in the event of his death, his
eligible dependents), except to the extent that the Company generally bears such
costs for its senior executives.

4.    TERMINATION OF EMPLOYMENT.

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

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

(i)    "Cause" is defined as (A) the Executive's willful and continued failure
to substantially perform his duties with the Company (other than any such
failure resulting from his incapacity due to physical or mental illness) that
has not been cured within 30 days after a written demand for substantial
performance is delivered to the Executive by the Board, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties, (B) the willful engaging
by the Executive in conduct which is demonstrably and materially injurious to
the Company or its affiliates, (C) the Executive's conviction of (or plea of
nolo contendere to) any felony or any other crime involving dishonesty, fraud or
moral turpitude, (D) any violation of the Company's policies relating to
compliance with applicable laws that has a material adverse effect on the
Company or its affiliates or (E) the Executive's breach of any restrictive
covenant set forth in Section 8 hereof. For purposes of clauses (A) and (B) of
this definition, no act, or failure to act, on the

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Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that his act,
or failure to act, was in the best interest of the Company.

(ii)    A termination of the Executive's employment for Cause shall be not be
effective unless it is accomplished in accordance with the following
proce-dures. The Board shall give the Executive written notice ("Notice of
Termination for Cause") of its intention to terminate the Executive's employment
for Cause, setting forth in detail the specific conduct (including any failure
to act) of the Executive that it considers to constitute Cause, and proposing
the date, time and place (which, in each case, shall be subject to the
Executive's approval; provided that such approval shall not be unreasonably
withheld) of the Special Board Meeting for Cause. The "Special Board Meeting for
Cause" means a meeting of the Board called and held specifically and exclusively
for the purpose of considering the Executive's termina-tion for Cause, that
takes place not less than forty-five (45) business days after the Executive
receives the Notice of Termination for Cause. The Board shall provide the
Executive an opportunity, together with counsel, to be heard at the Special
Board Meeting for Cause. The Executive's termination for Cause shall be
effective when and if a resolution is duly adopted at the Special Board Meeting
for Cause stating that, in the good faith opinion of a majority of the Board
(other than the Executive), the Execu-tive's conduct constitutes Cause under
this Agreement.

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

(i)    "Good Reason" is defined as, without the Executive's consent, (A) the
assignment to the Executive of any duties inconsistent with his status as the
Company's Chief Executive Officer or a material adverse alteration in the nature
or status of the Executive's responsibilities, unless the Company has cured such
events within ten (10) business days after the receipt of written notice thereof
from the Executive, (B) a reduction in the Executive's Annual Base Salary or
Target Annual Bonus Percentage, except for across-the-board salary reductions
similarly affecting all senior Company executives, (C) the relocation of the
Company's headquarters to a location more than thirty-five (35) miles from the
location of such headquarters on the Effective Date, (D) the failure of the
Execu-tive to be elected or re-elected as Chairman of the Board, or (E) the
Company's election not to renew the Change in Control Severance Agreement.

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

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

(d)    DATE OF TERMINATION.    The "Date of Termination" means the date of the
Executive's death, the Disability Effective Time or the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason or without Good Reason is effective.

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5.    OBLIGATIONS OF THE COMPANY UPON TERMINATION.

(a)    OBLIGATIONS ON ANY TERMINATION.    If the Executive's employment
hereunder terminates for any reason, then (1) the Company shall pay to the
Executive, or his estate, beneficiary or legal representative, as applicable, in
a lump sum in cash within ten (10) business days after the Date of Termination,
(i) any portion of the Executive's Annual Base Salary through the Date of
Termination that has not yet been paid, (ii) any earned annual bonus that has
not been paid for any previous fiscal year, (iii) any unpaid amount due under
Section 3(c) hereof, and (iv) any amount needed to reimburse the Executive for
any unreimbursed business expenses properly incurred by Executive in accordance
with Company policy prior to the Date of Termination, (2) the Company shall also
pay or provide to the Executive (or the Executive's estate, beneficiary, or
legal representative, as the case may be) all compensation and benefits payable
to the Executive under the terms of the Com-pany's compensation and benefit
plans, programs or arrangements as in effect immediately prior to the Date of
Termination, and (3) all of the Executive's then outstanding equity and
incentive compensation awards shall be treated in accordance with the terms of
the plans and agreements evidencing such awards. Subject to Section 3(l) hereof,
the Company shall also provide the Executive and/or his eligible dependents with
access to retiree medical coverage.

(b)    OBLIGATIONS ON A TERMINATION DUE TO DEATH OR DISABILITY.    If the
Executive's employment hereunder terminates by reason of death or Disability,
then the Company, in addition to making the payments and benefits in Section
5(a), shall pay to the Executive, or his estate, beneficiary or legal
representative, as applicable, in a lump sum in cash as soon as practicable
following the Date of Termination, a pro-rata portion of the Executive's Target
Annual Bonus Percentage of Annual Base Salary for the Company's fiscal year in
which the Date of Termination occurs (the "Pro-Rata Bonus"). The Pro-Rata Bonus
shall be calculated by multiplying the Target Annual Bonus Percentage of Annual
Base Salary by a fraction, the numerator of which is the number of days in the
Company's fiscal year that have elapsed to the Date of Termination and the
denominator of which is the number of days in such fiscal year.

(c)    OTHER THAN FOR CAUSE, DISABILITY, OR DEATH, OR FOR GOOD REASON.

(i)    If, during the Term, the Company terminates the Executive's employment
for any reason other than for Cause, death or Disability, or the Executive
terminates his employment for Good Reason, then, in addition to making the
payments and providing the benefits pursuant to Section 5(a), subject to Section
5(c)(ii) and Section 12(h), (1) beginning as soon as practicable following the
Date of Termination, the Company shall pay to the Executive a monthly payment
for each of the first twenty-four (24) months following the Date of Termination
equal to one-twelfth (1/12th) the sum of (i) the Executive's Annual Base Salary
immediately prior to the Date of Termination plus (ii) the Executive's Target
Annual Bonus Percentage of Annual Base Salary for the fiscal year in which the
Date of Termination occurs; (2) the Company shall provide or arrange to provide
the Executive and his eligible dependents, at no greater cost to the Executive
than the cost to the Executive immediately prior to the Date of Termination,
life, disability, accident and health insurance benefits no less favorable than
those provided to the Executive and his eligible dependents immediately prior to
the Date of Termination for twenty-four (24) months following the Date of
Termination (the "Continuation Period"), or, if sooner, until he becomes
eligible for such benefits from a new employer (and the Executive shall promptly
notify the Company of such eligibility from any new employer); and (3) the
Company shall pay the Executive, as soon as practicable following the Date of
Termination, the Pro-Rata Bonus.

(ii)    In the event that, during the Continuation Period, the Executive shall,
without the written consent of the Board, directly or indirectly, as employee,
agent, consultant, stockholder, director, manager, co-partner or in any other
individual or representative capacity, own, operate, manage, control, engage in,
invest in or participate in any manner in, act as consultant or advisor to,
render services for (alone or in association with any person, firm, corporation
or entity), or otherwise assist any person or entity (other than the Company)
that

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engages in or owns, invests in, operates, manages or controls any venture or
enterprise that directly or indirectly engages or proposes to engage in any
Competitive Business (as defined below), then the Company's obligations to make
any further payments or provide any further benefits under this Section 5(c)
shall immediately terminate. "Competitive Business" shall mean any line of
business that is substantially the same as any line of any operating business
which on the Date of Termination the Company was engaged in or conducting and
which during the Company's preceding fiscal constituted at least 5% of the gross
sales of the Company and its subsidiaries. Notwithstanding the foregoing, the
Executive may, become a partner or employee of, or otherwise acquire an interest
in, a stock or business brokerage firm, consulting or advisory firm, investment
banking firm or similar organization which, as part of its business, trades or
invests in securities of Competitive Businesses or which represents or acts as
agent or advisor for Competitive Businesses, but only on condition that the
Executive shall not personally render any services in connection with such
Competitive Business either directly to such Competitive Business or other
persons or to the Executive's firm in connection therewith.

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

7.    FULL SETTLEMENT.    Except as provided herein, the Company's obligation to
make the payments provided for in, and otherwise to perform its obligations
under, this Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action that the Company may have
against the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action to mitigate the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced, regardless of whether the Executive obtains other
employment.

8.    CONFIDENTIAL INFORMATION; SOLICITATION.

(a)    The Executive shall hold in a fiduciary capacity for the benefit of the
Company any and all information of the Company and its subsidiaries that is not
generally known by others with whom they compete or do business, or with whom
they plan to compete or do business and any and all information not readily
available to the public, which, if disclosed by the Company or its subsidiaries
could reasonably be of benefit to such person or business in competing with or
doing business with the Company ("Confidential Information"). Confidential
Information includes, without limitation, such information relating to the (i)
development, research, testing, manufacturing, store operational processes,
marketing and financial activities, including costs, profits and sales, of the
Company and its subsidiaries, (ii) products and all formulas therefor, (iii)
costs, sources of supply, financial performance and strategic plans of the
Company and its subsidiaries, (iv) identity and special needs of the customers
and suppliers of the Company and its subsidiaries and (v) people and
organizations with whom the Company and its subsidiaries have business
relationships and those relationships. "Confidential Information" also includes
comparable information that the Company or any of its subsidiaries have received
belonging to others or which was received by the Company or any of its
subsidiaries pursuant to an agreement by the Company that it would not be
disclosed. "Confidential Information" does not include information which (A) is
or becomes available to the public generally (other than as a result of the
Executive's unauthorized disclosure), (B) was within the Executive's possession
prior to the date hereof or prior to its being furnished to the Executive by or
on behalf of the Company, provided that the source of such information was not
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Company or any other party with
respect to such information, (C) becomes available to the Executive on a

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non-confidential basis from a source other than the Company or its subsidiaries,
provided that such source is not bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
Company or any other party with respect to such information, (D) was
independently developed the Executive without reference to the Confidential
Information or (E) is required by law to be disclosed. The Executive shall
promptly return to the Company upon the Date of Termination or at any other time
the Company may so request, all notes, records, documents, files and memoranda
(including in electronic format and all copies of such materials) constituting
Confidential Information he may then possess or have under his control;
provided, however, that he may retain his personal correspondence, diaries and
other items of a personal nature.

(b)    For a period of two (2) years after the Date of Termination, the
Executive shall not, without the written consent of the Board, directly or
indirectly, (i) hire any person who was employed by the Company or any of its
subsidiaries or affiliates (other than persons employed in a clerical or other
non-professional position) within the six (6) month period preceding the date of
such hiring; or (ii) solicit, entice, persuade or induce (in each case, other
than pursuant to non-targeted, general advertisements) any person or entity
doing business with the Company and its subsidiaries or affiliates, to terminate
such relationship or to refrain from extending or renewing the same.

(c)    The Executive agrees that, in addition to any other remedies available to
the Company, the Company shall be entitled to injunctive relief in the event of
any actual or threatened breach of this Section 8 without the necessity of
posting any bond, it being acknowledged and agreed that any breach or threatened
breach of this Section 8 hereof will cause irreparable injury to the Company and
that money damages alone will not provide an adequate remedy to the Company.

9.    DISPUTE RESOLUTION.    Except for the Company's right to seek injunctive
relief as set forth in Section 8(c), all disputes arising under, related to, or
in connection with this Agreement shall be settled by expedited arbitration
conducted before a panel of three (3) arbitrators sitting in Hartford,
Connecticut, in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrators in that proceeding
shall be binding on the Company and the Executive. Judgment may be entered on
the award of the arbitrators in any court having jurisdic-tion. Each party shall
bear its own costs and expenses (including legal fees) in connection with any
arbitration proceeding instituted hereunder; provided, however, that if the
Executive prevails in the arbitration, his costs and expenses shall be promptly
reimbursed by the Company.

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

11.    NO VIOLATIONS.    As a material inducement to the Company's willingness
to enter into this Agreement, the Executive represents to the Company that
neither the execution of this Agreement by the Executive, the employment of the
Executive by the Company nor the performance by the Executive of his duties
hereunder will constitute a violation by the Executive of any employment,
non-competition or other agreement to which the Executive is a party. The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement (and those contemplated hereby) and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization.

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12.    MISCELLANEOUS.

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

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

If to the Executive:

At his address on file with the Company

With a copy to:

Simpson Thacher Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attn:    Kenneth C. Edgar Jr., Esq.

If to the Company:

The Stanley Works
1000 Stanley Drive
New Britain, CT 06053

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attn:    Stuart N. Alperin, Esq.

or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices and communications
shall be effective when actually received by the addressee.

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

(d)    LEGAL FEES.    The Company shall pay directly or reimburse the Executive
for legal fees and expenses incurred in connection with the negotiation and
preparation of this Agreement and the agreements contemplated herein; provided,
however, that such payment or reimbursement obligation shall not exceed $25,000
in the aggregate.

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

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

(g)    ENTIRE AGREEMENT.    The Executive and the Company acknowledge that this
Agreement (together with the Exhibits hereto) constitutes the entire
understanding of the parties with respect to the subject matter hereof and
supersede any other prior agreement or other under-standing, whether oral or
written, express or implied, between them concerning, related to or otherwise in

9

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connection with, the subject matter hereof and that, following the date hereof,
no such agreement or understanding shall be of any further force or effect.

(h)    RELEASE.    In connection with any termination of the Executive's
employ-ment, the Executive and the Company agree to execute a mutual release
from liability substantially in the form attached hereto as Exhibit E, and it is
understood that no payments shall be made or any benefits provided pursuant to
Section 5(c) hereof prior to the expiration of the required revocation period
with respect to such release.

(i)    PUBLIC ANNOUNCEMENT.    The Company and the Executive agree to fully
cooperate with respect to the timing and content of any public announcement
regarding the hiring of the Executive or the execution of this Agreement.

(j)    NEW HIRE PROCEDURES.    The Executive shall co-operate with the Company
in complying with the reasonable standard new hire policies and procedures of
the Company, which policies and procedures have been communicated to the
Executive.

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

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

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

10

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

THE STANLEY WORKS

[spacer.gif] By: _______________________________
Name: John D. Opie
Title: Director

EXECUTIVE

[spacer.gif] _______________________________
John F. Lundgren

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EXHIBIT A

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The Stanley Works 2001 Long-Term Incentive Plan

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Stock Option Grant Certificate

John F. Lundgren has been awarded an Option to purchase 250,000 shares

Grant Date:                         , 2004 Expiration Date:
                        , 2014

25% of Option exercisable                         , 2005 Purchase Price Per
Share: $[    ]             25% of Option exercisable                         ,
2006 25% of Option exercisable                         , 2007 25% of Option
exercisable                         , 2008

    

The Stanley Works

As a member of Stanley's team, your skills and contributions
are vital to our Company's and its Shareholders continued success.
This award of stock options provides you with the opportunity to earn
significant financial rewards for
your efforts and contributions to making Stanley the most successful company it
can be.
On behalf of the Board of Directors, Congratulations.

                                                            

John D. Opie                    

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EXHIBIT A

The Stanley Works hereby grants to the Grantee named on the front of this
Certificate the option (the "Option") to purchase, on or before the Expiration
Date at the Purchase Price per Share, the Option Shares, which shall be shares
of the Common Stock of The Stanley Works, par value $2.50 per share (the "Common
Stock") all as set forth on the front of this certificate. The Option is granted
subject to the following terms and conditions and the terms and conditions of
The Stanley Works 2001 Long Term Incentive Plan, as amended from time to time
(the "Plan").

1. Exercisability.    The Option may, from time to time from the Exercisable
Date to the Expiration Date, be exercised as to the Option Shares or a portion
thereof, as set forth on the front of this certificate. Stock may be purchased
hereunder only to the extent that this Option has become exercisable. See
paragraph 6 regarding termination of employment.

2. Process of Exercise.    The Option may be exercised, in whole or in part, by
written notification to Stanley's Treasurer at Stanley's executive offices in
New Britain, Connecticut, or by any other procedure established by Stanley from
time to time. Such notification shall (i) specify the number of shares with
respect to which the Option is being exercised, and (ii) be accompanied by
payment for such shares. Such notification shall be effective upon its receipt
by the Treasurer or any other party designated by the Treasurer on or before the
Expiration Date. The Option may not be exercised with respect to a fractional
share or with respect to the lesser of 100 shares or the balance of the shares
then covered by the Option. In the event the Expiration Date falls on a day
which is not a regular business day at Stanley's executive offices in New
Britain, Connecticut, then such written notification must be received at such
office on or before the last regular business day prior to the Expiration Date.
Payment is to be made by check payable to the order of The Stanley Works or by
one of the alternative methods of payment described in the Plan and acceptable
to Stanley's Compensation and Organization Committee (the "Committee"). No
shares shall be issued on exercise of the Option until full payment for such
shares has been made and all checks delivered in payment therefor have been
collected. The Grantee shall not have any rights of a shareholder upon exercise
of the Option, including but not limited to, the right to vote or to receive
dividends, until stock certificates have been issued to the Grantee.

3. Tax Withholding; etc.    Stanley shall not be required to issue any
certificate or certificates for shares purchased upon the exercise of any part
of the Option prior to (i) the admission of such shares to listing on any stock
exchange on which the stock may then be listed, (ii) the completion of any
registration or other qualification of such shares under any state or federal
law or rulings or regulations of any governmental regulatory body, (iii) the
obtaining of any consent or approval or other clearance from any governmental
agency which Stanley shall, in its sole discretion, determine to be necessary or
advisable, and (iv) the payment to Stanley, upon its demand, of any amount
requested by Stanley for withholding federal, state or local income or earnings
taxes or any other applicable tax or assessment (plus interest or penalties
thereon, if any, caused by a delay in making such payment) incurred by reason of
the exercise of the Option or the transfer of such shares. The Option shall be
exercised and shares issued only upon compliance with the Securities Act of
1933, as amended (the "Act"), and any other applicable securities laws, and the
Grantee shall comply with any requirements imposed by the Committee under such
laws. If the Grantee qualifies as an "affiliate" (as that term is defined in
Rule 144 ("Rule 144") promulgated under the Act), upon demand by Stanley, the
Grantee (or any person acting on his or her behalf) shall deliver to the
Treasurer at the time of any exercise of the Option a written representation
that upon exercising the Option he or she will acquire shares pursuant to the
Plan for his or her own account, that he or she is not taking the shares with a
view to distribution and that he or she will dispose of the shares only in
compliance with Rule 144.

4. Transferability.    Except as otherwise provided in the Plan, the Option is
not transferable by the Grantee otherwise than by will or by the laws of descent
and distribution, or pursuant to a qualified domestic relations order, as
defined in the Internal Revenue Code of 1986, as amended (the "Code"). More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of law and shall
not be subject to execution, attachment or similar process.

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EXHIBIT A

5. No Right to Employment.    The Option does not confer upon the Grantee any
right with respect to continuation of employment with Stanley or any of its
subsidiaries, and will not interfere in any way with the right of Stanley or any
of its subsidiaries to terminate the Grantee's employment.

6. Change in Control; Termination of Employment.    Notwithstanding any other
provisions:

Upon the termination of Grantee's employment with Stanley for any reason, the
portion of the Option not then exercisable (after taking into account the
provisions hereof) shall be immediately forfeited.

Upon the occurrence of a Change in Control (as defined in the Change in Control
Severance Agreement) during Grantee's employment with Stanley or upon
termination of Grantee's employment with Stanley by reason of death, Retirement
(as defined below) or Disability (as defined in Grantee's employment agreement
with Stanley dated                         , 2004, as amended from time to time
(the "Employment Agreement")), the Option shall thereupon become exercisable as
to all shares of Common Stock subject to the Option. Upon the termination of
Grantee's employment by Stanley other than for Cause (as defined in the
Employment Agreement), or upon Grantee's termination of employment from Stanley
for Good Reason (as defined in the Employment Agreement), the Option also shall
thereupon become exercisable as to all shares of Common Stock subject to the
Option. Upon a termination by the Company other than for Cause, death,
Retirement, or Disability, or upon Grantee's termination of employment from
Stanley for Good Reason, the Grantee may exercise the Option until the earlier
of the expiration of its original term or two (2) years after such termination
of employment. Upon a termination of employment due to death, Retirement or
Disability, the Grantee may exercise the option until the expiration of its
original term.

Upon the termination of the Grantee's employment with Stanley for Cause, the
Option shall expire immediately upon such termination. Upon the Grantee's
voluntary termination of employment with Stanley other than for Good Reason, the
Grantee may exercise the Option, to the extent then exercisable, until the
earlier of the expiration of its original term or two (2) months after such
termination.

Leaves of absence for such periods and purposes conforming to the personnel
policy of Stanley as may be approved by the Committee shall not be deemed
terminations or interruptions of employment.

If the Grantee should die while employed by Stanley or any of its subsidiaries
or after Disability or Retirement, the Option may be exercised by the person
designated in the Grantee's last will and testament or, in the absence of such
designation, by the Grantee's estate, to the full extent that the Option could
have been exercised by the Grantee immediately prior to the Grantee's death
until the expiration of its original term. For purposes of this paragraph 6,
"Retirement" shall have the meaning provided under the qualified pension plan
applicable to the Grantee.

In the event the Option is exercised by the executors, administrators, legatees
or distributees of the estate of the Optionee, Stanley shall be under no
obligation to issue shares unless Stanley is satisfied that the person or
persons exercising the Option are the duly appointed legal representatives of
the Optionee's estate or the proper legatees or distributees thereof.

7. Adjustments.    In the event of a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other changes in corporate
structure or capitalization affecting the Common Stock, the number of shares
remaining to be exercised under the Option and the Purchase Price shall be
appropriately adjusted by the Committee in accordance with the terms and
provisions of the Plan. If, as a result of any adjustment under this paragraph,
the Grantee becomes entitled to a fractional share, he or she shall have the
right to purchase only the adjusted number of full shares and no payment or
other adjustment will be made with respect to the fractional share so
disregarded.

8. Miscellaneous.    All decisions or interpretations of the Committee with
respect to any question arising under the Plan or under the Option shall be
binding, conclusive and final. The waiver by Stanley of any provision of the
Option shall not operate as or be construed to be a subsequent waiver of the
same provision

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or a waiver of any other provision of the Option. The Option shall be
irrevocable during the Option period and its validity and construction shall be
governed by the laws of the State of Connecticut. The terms and conditions set
forth in the Option are subject in all respects to the terms and conditions of
the Plan, which shall be controlling. Grantee agrees to execute such other
agreements, documents, or assignments as may be necessary or desirable to effect
the purposes of this the Option.

9. Binding Effect.    The grant of this Option shall be binding and effective
only if this Certificate is executed by or on behalf of Stanley.

10. Capitalized Terms.    All capitalized terms used in this Certificate which
are not defined herein shall have the meaning given them in the Plan unless the
context clearly requires otherwise.

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EXHIBIT B

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The Stanley Works 2001 Long-Term Incentive Plan

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RSU Grant Certificate

John F. Lundgren has been awarded 75,000 restricted stock units (RSU)

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[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] Grant Date:
___________, 2004 [spacer.gif] Distribution Date: [spacer.gif] 50% on ________,
2006   [spacer.gif]   [spacer.gif] 50% on ________, 2007 [spacer.gif]

    

The Stanley Works

As a member of Stanley's team, your skills and contributions
are vital to our Company's and its Shareholders continued success.
This award of stock options provides you with the opportunity to earn
significant financial
rewards for your efforts and contributions to making Stanley the most successful
company it can be.
On behalf of the Board of Directors, Congratulations.

                                                            

John D. Opie                    

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EXHIBIT B

Inter-Office Correspondence

To:    John F. Lundgren
                                                                                        _____________,
2004

As of __________, 2004, the company granted to you 75,000 restricted stock units
under Stanley's 2001 Long-Term Incentive Plan (the "Plan"), as evidenced by the
attached RSU Grant Certificate. These units shall include dividend equivalent
rights that will entitle you to receive payments at the same time and in the
same amount and kind as dividends are paid on shares. Except as indicated below,
these units will be forfeited if your employment is terminated for any reason
prior to the applicable distribution date set forth below.

Here are the terms of the grant.

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[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] Grantee
[spacer.gif] Total Grant [spacer.gif] Shares/Distribution Date John F. Lundgren
[spacer.gif]   75,000   [spacer.gif] 37,500 – __/__/06
37,500 – __/__/07 [spacer.gif]

If, prior to the applicable distribution date set forth above, (1) there occurs
a Change in Control (as defined in the Plan) while you remain employed by
Stanley, (2) your employment terminates by reason of death or Disability, (3)
your employment is terminated by Stanley (other than for Cause) or (4) your
employment is terminated by you for Good Reason, all then outstanding units
shall become vested and nonforfeitable and distribution in respect of such units
shall be made to you (subject to any deferral election made by you). For
purposes hereof, the terms "Disability," "Cause" and "Good Reason" shall have
the respective meanings ascribed to such terms in your employment agreement with
Stanley dated ___________, 2004, as amended from time to time.

[spacer.gif] Bruce H. Beatt

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EXHIBIT C

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT (the "Agreement"), dated ___________, 2004, is made by and
between The Stanley Works, a Connecticut corporation (the "Company"), and John
F. Lundgren (the "Executive").

WHEREAS, the Company considers it essential to the best interests of its
shareowners to foster the continued employment of key management personnel; and

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

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

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

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

2.    Term of Agreement.    The Term of this Agreement shall commence on
___________, 2004 and shall continue in effect through ___________, 2006;
provided, however, that commencing on ____________, 2005 and each ____________
thereafter, the Term shall automatically be extended for one additional year
unless, not later than ninety (90) days prior to ______________, the Company or
the Executive shall have given notice not to extend the Term; and
further provided, however, that if a Change in Control shall have occurred
during the Term, the Term shall expire no earlier than twenty-four (24) months
beyond the month in which such Change in Control occurred.

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

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

5.    Compensation Other Than Severance Payments.

5.1    Following a Change in Control and during the Term, during any period that
the Executive fails to perform the Executive's full-time duties with the Company
as a result of incapacity due to physical or mental illness, the Company shall
pay the Executive's Annual Base Salary at the rate in effect at the commencement
of any such period, together with all compensation and benefits payable to the
Executive under the terms of any compensation or benefit plan, program or
arrangement

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maintained by the Company during such period (other than any disability plan),
until the Executive's employment is terminated by the Company for Disability.

5.2    If the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company shall pay, in
addition to the payments and benefits due under Section 5(a) of the Employment
Agreement and subject to the nonduplication of benefits provisions set forth in
Section 12 of this Agreement, the Executive's Annual Base Salary to the
Executive through the Date of Termination at the rate in effect immediately
prior to the Date of Termination or, if higher, the rate in effect immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of the Company's compensation
and benefit plans, programs or arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason.

5.3    If the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company shall, in
addition to the payments and benefits due under Section 5(a) of the Employment
Agreement and subject to the nonduplication of benefits provisions set forth in
Section 12 of this Agreement, pay to the Executive the Executive's
post-termination compensation and benefits as such payments become due. Such
post-termination compensation and benefits shall be determined under, and paid
in accordance with, the Company's retirement, insurance and other compensation
or benefit plans, programs and arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or circumstance
constituting Good Reason.

6.    Severance Payments.

6.1    If the Executive's employment is terminated following a Change in Control
and during the Term, other than (A) by the Company for Cause, (B) by reason of
death or Disability, or (C) by the Executive without Good Reason, then the
Company shall pay the Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 ("Severance Payments") and Section 6.2,
in addition to any payments and benefits to which the Executive is entitled
under Section 5 hereof. For purposes of this Agreement, the Executive's
employment shall be deemed to have been terminated following a Change in Control
by the Company without Cause or by the Executive with Good Reason if (i) the
Executive's employment is terminated by the Company without Cause prior to a
Change in Control (whether or not a Change in Control occurs) and such
termination was at the request or direction of a Person who has entered into an
agreement with the Company the consummation of which would constitute a Change
in Control, (ii) the Executive terminates his employment for Good Reason prior
to a Change in Control (whether or not a Change in Control occurs) and the
circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, or (iii) the Executive's employment is terminated by
the Company without Cause or by the Executive for Good Reason and such
termination or the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in Control (whether
or not a Change in Control occurs).

(A)     In lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination and in lieu of any severance benefit
otherwise payable to the Executive pursuant to the Employment Agreement or
otherwise, the Company shall pay to the Executive a lump sum severance payment,
in cash, equal to three (3) times the sum of the (i) Executive's Annual Base
Salary or, if higher, the Annual Base Salary in effect immediately prior to the
first occurrence of an event or circumstance constituting Good Reason, and (ii)
the average annual bonus earned by the Executive pursuant to Section 3(b) of the
Employment Agreement and any other annual bonus or incentive plan maintained by
the Company in respect of the three (3) fiscal years ending immediately prior to
the fiscal year in which occurs the Date of Termination or, if higher,
immediately prior to the fiscal year in which the first event or circumstance
constituting Good Reason occurs. If the Executive has not been eligible to
receive three (3) annual bonuses due to his lack of tenure with the Company at
the time of termination of employment, such

2

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average shall be calculated with respect to the lesser number of fiscal years
for which the Executive was eligible to receive an annual bonus from the Company
and for which such bonuses were determined and paid by the Company (or deferred
by the Executive); provided, however, that (1) if the Executive's annual cash
bonus in respect of the Company's 2004 fiscal year has not been paid (or so
deferred) prior to the Executive's termination of employment, such average shall
be deemed to be $750,000 and (2) any annual bonus actually earned in respect of
2004 shall, for purposes of computing the applicable average, be deemed to be
the actual amount of the annual bonus for 2004, multiplied by a fraction, the
numerator of which is 366, and the denominator of which is the number of days
the Executive was employed by the Company in 2004. Any amount paid by the
Company pursuant to Section 3(c) of the Employment Agreement shall be
disregarded for purposes of this calculation.

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

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

3

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the DB Pension Plan that arises pursuant to Section 3(j) ("Pension Make-Whole")
of the Employment Agreement shall be determined based on the projected increase
in the Executive's Historical Average Compensation (as defined in Exhibit D to
the Employment Agreement).

(D)     In addition to the benefits to which the Executive is entitled under the
DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash,
equal to the sum of (i) the amount that would have been contributed thereto by
the Company on the Executive's behalf during the thirty-six (36) months
immediately following the Date of Termination, determined (x) as if the
Executive made the maximum permissible contributions thereto during such period,
(y) as if the Executive earned compensation during such period at a rate equal
to the Executive's compensation (as defined in the DC Pension Plan) during the
twelve (12) months immediately preceding the Date of Termination or, if higher,
during the twelve (12) months immediately prior to the first occurrence of an
event or circumstance constituting Good Reason, and (z) without regard to any
amendment to the DC Pension Plan made subsequent to a Change in Control and on
or prior to the Date of Termination, which amendment adversely affects in any
manner the computation of benefits thereunder, and (ii) the excess, if any, of
(x) the Executive's account balance under the DC Pension Plan as of the Date of
Termination over (y) the portion of such account balance that is nonforfeitable
under the terms of the DC Pension Plan.

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

(F)     The Company shall provide the Executive with third-party outplacement
services suitable to the Executive's position for a period of thirty-six (36)
months or, if earlier, until the first acceptance by the Executive of an offer
of employment, provided, however, that in no case shall the Company be required
to pay in excess of $50,000 over such period in providing outplacement services.

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

6.2    (A)    Whether or not the Executive becomes entitled to the Severance
Payments, if any of the payments or benefits received or to be received by the
Executive (including any payment or benefits received in connection with a
Change in Control or the Executive's termination of employment, whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement) (all
such payments and benefits, excluding the Gross-Up Payment, being hereinafter
referred to as the "Total Payments") will be subject to the Excise Tax, the
Company shall pay to the Executive an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any
Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to the Gross-Up Payment, shall be equal to the Total Payments.

(B)     For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as

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"parachute payments" (within the meaning of Section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the accounting firm which was, immediately prior
to the Change in Control, the Company's inde-pendent auditor (the "Auditor"),
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of Section 280G(b)(l) of the Code
shall be treated as subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount allocable to
such reasonable compensation, or are otherwise not subject to the Excise Tax,
and (iii) the value of any noncash benefits or any deferred payment or benefit
shall be determined by the Auditor in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or if there is no Date of Termination,
then the date on which the Gross-Up Payment is calculated for purposes of this
Section 6.2), net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.

(C)     In the event that the Excise Tax is finally determined to be less than
the amount taken into account hereunder in calculating the Gross-Up Payment, the
Executive shall repay to the Company, within five (5) business days following
the time that the amount of such reduction in the Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent that such repayment
results in a reduction in the Excise Tax and a dollar-for-dollar reduction in
the Executive's taxable income and wages for purposes of federal, state and
local income and employment taxes, plus interest on the amount of such repayment
at 120% of the rate provided in Section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5) business days following
the time that the amount of such excess is finally determined. The Executive and
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.

6.3    The payments provided in subsections (A), (C) and (D) of Section 6.1
hereof and in Section 6.2 hereof shall be made not later than the fifth day
following the Date of Termination (or if there is no Date of Termination, then
the date on which the Gross-Up Payment is calculated for purposes of Section 6.2
hereof); provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Company or, in the
case of payments under Section 6.2 hereof, in accordance with Section 6.2
hereof, of the minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together with interest on
the unpaid remainder (or on all such payments to the extent the Company fails to
make such payments when due) at 120% of the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event later than the thirtieth (30th) day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall be payable by the
Executive to the Company on the fifth (5th) business day after demand by the
Company (together with interest at 120% of the rate provided in Section
1274(b)(2)(B) of the Code). At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written statement
setting forth

5

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

6.4    The Company also shall pay to the Executive all legal fees and expenses
incurred by the Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive's employment, in seeking in good
faith to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder. Such payments shall be made within five (5) business days after
delivery of the Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.

7.    Termination Procedures and Compensation During Dispute.

7.1    Notice of Termination. After a Change in Control and during the Term, any
purported termination of the Executive's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Section 11 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination for Cause (and the
subsequent special Board meeting to determine whether Cause exists) shall be in
accordance with the provisions set forth in Section 4(b)(ii) of the Employment
Agreement.

7.2    Date of Termination.    "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's employment is terminated
for Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a termination for
Cause, in which case the Date of Termination will be determined in accordance
with Sections 4(b)(ii) and 4(d) of the Employment Agreement) and, in the case of
a termination by the Executive, shall not be less than fifteen (15) days nor
more than sixty (60) days, respectively, from the date such Notice of
Termination is given).

7.3    Dispute Concerning Termination.    If within fifteen (15) days after any
Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this Section 7.3), the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be extended until the earlier of
(i) the date on which the Term ends or (ii) the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or by a
final judgment, order or decree of three (3) arbitrators, in accordance with the
dispute resolution provisions set forth in Section 9 of the Employment
Agreement, or by a court of competent jurisdiction (which, in each case, is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); provided, however, that the Date of
Termination shall be extended by a notice of dispute given by the Executive only
if such notice is given in good faith and the Executive pursues the resolution
of such dispute with reasonable diligence.

7.4    Compensation During Dispute.    If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination is
extended in accordance with Section 7.3 hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, Annual Base Salary and
eligibility for the Target Annual Bonus Percentage) and continue the Executive
as a participant in all compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance with

6

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Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all
other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduced by any other amounts due
under this Agreement.

8.    No Mitigation.    The Company agrees that, if the Executive's employment
with the Company terminates during the Term, the Executive is not required to
seek other employment or to attempt in any way to reduce any amounts payable to
the Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof.
Further, except as specifically provided in Sections 6.1(B) and 6.1(G) hereof,
no payment or benefit provided for in this Agreement shall be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

9.    Restrictive Covenants.

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

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

(B)     The Executive agrees that (i) during the Non-Competition Period, the
Executive will remain bound by Section 8(b) of the Employment Agreement and (ii)
during the Term and thereafter, he will remain bound by Section 8(a) of the
Employment Agreement.

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

10.    Successors; Binding Agreement.

10.1    In addition to any obligations imposed by law upon any successor to the
Company, the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were to
terminate the Executive's employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

10.2    This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

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If the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate upon
the death of the Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate.

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

[spacer.gif] To the Company: The Stanley Works
1000 Stanley Drive
New Britain, Connecticut 06053

[spacer.gif] Attention: General Counsel

12.    Miscellaneous.    No provision of this Agreement may be modi-fied, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement shall supersede any
agreement setting forth the terms and conditions of the Executive's employment
with the Company (including, without limitation, the Employment Agreement) only
in the event that the Executive's employment with the Company is terminated
during the Term on or following a Change in Control (or deemed to have been so
terminated), by the Company other than for Cause, death or Disability or by the
Executive for Good Reason. Notwithstanding the foregoing, this Agreement shall
not supersede Sections 3(d), 3(e), 3(f), 3(g), 3(h), 3(j), 3(k), or 3(l) of the
Employment Agreement. To the extent that this Agreement does not supersede the
Employment Agreement but provides payments or benefits in excess of those to
which the Executive is entitled under the Employment Agreement, the Executive
shall be entitled to (i) such excess payments and benefits and (ii) payments and
benefits due pursuant to the Employment Agreement. Further, to the extent this
Agreement does not supersede the Employment Agreement or any other agreement
setting forth the terms and conditions of the Executive's employment with the
Company, it shall not result in any duplication of benefits to the Executive.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Connecticut, without regard to its
conflicts of law principles. All references to sections of the Exchange Act or
the Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under this Agreement which by their nature may require
either partial or total performance after the expiration of the Term (including,
without limitation, those under Sections 6 and 7 hereof) shall survive such
expiration.

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

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

15.    Settlement of Disputes.    All claims by the Executive for benefits under
this Agreement shall be directed to and determined by the Board and shall be in
writing. Any denial by the Board of a

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

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

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

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

(B)    "Annual Base Salary" shall have the meaning set forth in Section 3(a) of
the Employment Agreement.

(C)    "Annual Target Bonus Percentage" shall have the meaning set forth in
Section 3(b) of the Employment Agreement.

(D)    "Auditor" shall have the meaning set forth in Section 6.2 hereof.

(E)    "Base Amount" shall have the meaning set forth in Section 280G(b)(3) of
the Code.

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

(G)    "Board" shall mean the Board of Directors of the Company.

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

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

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

(II)     the following individuals cease for any reason to constitute a majority
of the number of directors then serving: individuals who, on the date hereof,
constitute the Board and any new direc-tor (other than a director whose initial
assumption of office is in connection with an actual

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or threatened election contest, including but not limited to a consent
solicitation, relating to the election of direc-tors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
shareowners was approved or recommended by a vote of at least two-thirds ( 2/3)
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended; or;

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

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

(J)    "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.

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

(L)    "Competitive Business" shall have the meaning set forth in Section
5(c)(ii) of the Employment Agreement.

(M)    "Confidential Information" shall have the meaning set forth in Section
8(a) of the Employment Agreement.

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

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

(P)    "Date of Termination" shall have the meaning set forth in Section 7.2
hereof.

(Q)    "Disability" shall have the meaning set forth in Section 4(a) of the
Employment Agreement.

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(R)    "Employment Agreement" shall mean the Employment Agreement by and between
the Company and the Executive, dated ______________, 2004, and any subsequent
amendments thereto.

(S)    "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

(T)    "Excise Tax" shall mean any excise tax imposed under section 4999 of the
Code.

(U)    "Executive" shall mean the individual named in the first paragraph of
this Agreement.

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

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

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

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

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

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

(VI)     the failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive under any of
the Company's pension, savings, life insurance, medical, health and accident, or
disability plans in which the Executive was participating immediately prior to
the Change in Control (except for across the board changes

11

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similarly affecting all senior executives of the Company and all senior
executives of any Person in control of the Company), the taking of any other
action by the Company which would directly or indirectly materially reduce any
of such benefits or deprive the Executive of any material fringe benefit enjoyed
by the Executive at the time of the Change in Control, or the failure by the
Company to provide the Executive with the number of paid vacation days to which
the Executive is entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time of
the Change in Control;

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

(VIII)    any event that would constitute "Good Reason" pursuant to the
Employment Agreement.

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

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

(W)    "Gross-Up Payment" shall have the meaning set forth in Section 6.2
hereof.

(X)    "Notice of Termination" shall have the meaning set forth in Section 7.1
hereof.

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

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

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

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

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

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

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

(BB)    "Severance Payments" shall have the meaning set forth in Section 6.1
hereof.

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

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(DD)    "Target Annual Bonus Percentage" shall have the meaning set forth in
Section 3(b) of the Employment Agreement.

(EE)    "Tax Counsel" shall have the meaning set forth in Section 6.2 hereof.

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

(GG)    "Total Payments" shall mean those payments so described in Section 6.2
hereof.

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

[spacer.gif] THE STANLEY WORKS

[spacer.gif] By:

[spacer.gif] [spacer.gif] [spacer.gif][spacer.gif] [spacer.gif] [spacer.gif]

[spacer.gif] Name:   Bruce H. Beatt
Title:    Vice President, General Counsel
               and Secretary

[spacer.gif] EXECUTIVE

[spacer.gif] [spacer.gif] [spacer.gif][spacer.gif] [spacer.gif] [spacer.gif]

[spacer.gif] John F. Lundgren

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EXHIBIT D

EXAMPLES OF PENSION MAKE-WHOLE1

[spacer.gif] [spacer.gif] I.  A.    Description of Normal Retirement Benefit

[spacer.gif] [spacer.gif] [spacer.gif] •  Payable for retirement at or after age
65.

[spacer.gif] [spacer.gif] [spacer.gif] •  The pension is equal to 50% of the
Executive's "Historical Average Compensation" (i.e., the average Cash Salary2
from his Prior Employer over the forty-eight (48) full calendar months preceding
the Executive's termination of employment from his Prior Employer, or if fewer,
all full calendar months of his employment with his Prior Employer that
immediately precede termination of employment).

[spacer.gif] [spacer.gif] [spacer.gif] •  For purposes of the Pension
Make-Whole, the Executive's 2003 Cash Salary is $1,040,000 and is assumed to
increase at the rate of 5% per year during Executive's employment with the
Company.

[spacer.gif] [spacer.gif] [spacer.gif] •  The annual normal retirement benefit
that the Company will provide will be equal to 50% of the Executive's Historical
Average Compensation (determined at Executive's retirement from the Company),
offset by (i) retirement benefits accrued and payable under any defined benefit
plans and arrangements with the Prior Employer (including retirement benefits
accrued and payable under plans and arrangements with the entity that was
acquired by the Prior Employer, but only if and to the degree such retirement
benefits are offset by the Prior Employer under its applicable plan or
arrangement) and (ii) other retirement benefits accrued and payable under plans
and arrangements of the Company that do not represent the Executive's elective
deferrals (e.g., 401(k) contributions).3

B.    Normal Retirement Example:

Assumptions:

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive is currently age 52 and
retires from the Company at age 65.

[spacer.gif]

1 Note that the examples and assumptions herein are for illustrative purposes
only. Numbers used in the examples herein will be revised at the time that the
pension make-whole is actually calculated.

2 "Cash Salary" - shall mean base salary, annual incentive bonuses and any cash
salary or annual incentive bonus which the Executive elected to defer (such
Deferred Amounts, "Deferred Salary"), and excludes, without limitation,
severance payments of any kind, deferred compensation under any long-term
incentive program (other than Deferred Salary), bonuses for purpose of
offsetting taxation and any other incentive compensation (other than annual
incentive bonuses); provided that annual incentive bonuses shall be counted in
the year(s) or partial year(s) with respect to which they are earned (rather
than in the year of payment) and shall be prorated for partial years (if not
already prorated to reflect partial year participation) included in the
forty-eight (48) month averaging period and provided, further, that if the
annual incentive bonus amount with respect to any part of that period is
unavailable at the time retirement payments are to commence, an estimated
benefit will be paid based on the available compensation data, subject to a
retroactive adjustment when final data are available.

3 For purposes of applying all offsets, accrued retirement benefits will be
treated as payable (i) at the earliest date provided for in the underlying plan
or arrangement and (ii) in the form of a single life annuity. Executive's
election to defer receipt of such benefits and/or to have such benefits paid in
a different form will not be taken into account. These examples assume that the
Executive's Prior Employer offsets the pension payable from the entity the Prior
Employer acquired.

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[spacer.gif] [spacer.gif] [spacer.gif] •  Executive's Historical Average
Compensation at age 65 for purposes of Pension Make-Whole is $1,820,000 (based
on Cash Salary of $1,040,000, increased for 13 years, and taking the average of
years 10,11,12,13).

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive elects to commence payment
of retirement benefits from his Prior Employer at age 62 (the earliest time at
which such benefit may commence); this lifetime annual retirement benefit is
assumed to be $300,000.

[spacer.gif] [spacer.gif] [spacer.gif] •  At retirement, Executive's aggregate
vested account balance attributable to Company contributions (other than 401(k)
elective deferrals) under Company-sponsored defined contribution plans is $1
million; the lifetime annual annuity equivalent of this account balance is
$100,000 (calculated by reference to the PBGC plan termination rate then in
effect and a standard mortality table selected by an actuarial firm appointed by
the Company and reasonably acceptable to the Executive).

Calculation of Pension Make-Whole:

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Normal Retirement Benefit
=          $910,000 (50% x $1,820,000)

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Offsets =         
$400,000 ($300,000 + $100,000)

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Pension Make-Whole =
         $510,000

[spacer.gif] [spacer.gif] II.  A.    Description of Early Retirement Benefit

[spacer.gif] [spacer.gif] [spacer.gif] •  Applies if Executive's employment with
the Company terminates for any reason prior to age 65 (other than a termination,
prior to age 55, (A) by the Company for Cause or (B) by the Executive without
Good Reason).

[spacer.gif] [spacer.gif] [spacer.gif] •  The pension is equal to the normal
retirement benefit, but reduced to reflect early payment (4% yearly reduction
for starting the benefit before age 62). Payment will not be made prior to
Executive attaining age 55.

[spacer.gif] [spacer.gif] [spacer.gif] •  The annual early retirement benefit
that the Company will provide will be equal to the amount due upon early
retirement, but will be subject to offset as described in "Description of Normal
Retirement Benefit" above.

B.    Early Retirement Example:

Assumptions:

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive retires from the Company at
age 55 after having worked for 3 years and elects that payment of Pension
Make-Whole commence immediately.

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive's Historical Average
Compensation at age 55 for purposes of Pension Make-Whole is $1,120,000 (average
of $1,040,000 plus this amount increased by 5% per year for 3 years, and taking
the average of these 4 amounts).

[spacer.gif] [spacer.gif] [spacer.gif] •  At Executive's termination from the
Company, he is not yet eligible to commence receipt of any retirement payments
from his Prior Employer; he is first eligible to commence to receive such
retirement payments at age 62, in an aggregate annual amount assumed to be
$200,000.

[spacer.gif] [spacer.gif] [spacer.gif] •  At termination, Executive's aggregate
vested account balance attributable to Company contributions (other than 401(k)
elective deferrals) under Company-sponsored defined contribution plans is
$100,000; the lifetime annual annuity equivalent of this account balance
(calculated as described above for payments commencing at termination) is
$5,000.

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Calculation of Pension Make-Whole:

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Early Retirement Benefit:
$403,000 (50% x $1,120,000 x 72%)

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Offset (prior to age 62):
5,000

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Pension Make-Whole (prior
to age 62): $398,000

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Additional Offset (after
age 62): $200,000

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Pension Make-Whole (after
age 62): $198,000

[spacer.gif] [spacer.gif] III.  A.    Description of Vested Retirement Benefit

[spacer.gif] [spacer.gif] [spacer.gif] •  Payable for termination prior to age
55 by the Company for Cause or by the Executive without Good Reason.

[spacer.gif] [spacer.gif] [spacer.gif] •  Pension payable at age 62 and is equal
to l/15th of the normal retirement benefit multiplied by Executive's aggregate
years of service with the Prior Employer and the Company, subject to offset as
described above.

B.    Vested Retirement Benefit Example:

Assumptions:

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive voluntarily terminates
employment in 2005 at age 54 without Good Reason after having worked with the
Company for two years.

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive's Historical Average
Compensation from his Prior Employer is $930,000.

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive's Historical Average
Compensation at age 54 for purposes of the Pension Make-Whole is $1,080,000
(average Cash Salary for 2002-2005; i.e., 2002 Cash Salary of $1,040,000 plus
2003 Cash Salary of $1,040,000 plus this amount increased by 5% for 1 and 2
years).

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive has accrued aggregate annual
retirement benefits assumed to be $300,000 payable from his Prior Employer at
age 62 (including a Vested Retirement Benefit of ($93,000 (50% x $930,000 x
3/15)).

[spacer.gif] [spacer.gif] [spacer.gif] •  Executive is not entitled to any other
retirement benefits from the Company.

Calculation of Pension Make-Whole (payable at age 62):

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Vested Retirement
Benefit: $180,000 (50% x $1,080,000 x 5/15)

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Offset: $300,000

[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] •  Pension Make-Whole $0

[spacer.gif] [spacer.gif] IV.  Pre-Termination Disability; Pre-Termination
Death; Post-Termination Death

[spacer.gif] [spacer.gif] [spacer.gif] •  If the Executive's employment
terminates as a result of Disability, Pre-Termination Death or Post-Termination
Death (as each is described in the Officer Retirement Agreement between the
Executive and his Prior Employer) (the "ORA"), the pension payable to or in
respect of the Executive shall be reduced in accordance with the applicable
reduction percentage set forth in such Officer Retirement Agreement.

V.    Benefit Forms

[spacer.gif] [spacer.gif] [spacer.gif] •  The pension payable hereunder shall be
paid at such time and in such manner as is set forth in the ORA.

[spacer.gif] [spacer.gif] [spacer.gif] •  The Executive may elect to have the
pension payable hereunder in one of the alternative benefit forms set forth in
the ORA. An actuarial firm appointed by the Company and reasonably acceptable to
the Executive shall determine (with reference to the PBGC plan termination rate
then in effect and a standard mortality table selected by such firm) the
actuarial equivalent amount payable to the Executive and any other adjustments
necessary to preserve the intent of Section 3(j) of the Employment Agreement.

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EXHIBIT E
  

MUTUAL RELEASE

(a) John F. Lundgren ("Releasor") for and in consideration of benefits provided
pursuant to an Employment Agreement with The Stanley Works entered into
effective as of                             , 2004 (the "Employment Agreement"),
does for himself and his heirs, executors, administrators, successors and
assigns, hereby now and forever, voluntarily, knowingly and willingly release
and discharge The Stanley Works and its parents, subsidiaries and affiliates
(collectively, the "Company Group"), together with their respective present and
former partners, officers, directors, employees and agents, and each of their
predecessors, heirs, executors, administrators, successors and assigns (but as
to any partner, officer, director, employee or agent, only in connection with,
or in relationship to, his to its capacity as a partner, officer, director,
employee or agent of the Company and its subsidiaries or affiliates and not in
connection with, or in relationship to, his or its personal capacity unrelated
to the Company or its subsidiaries or affiliates) (collectively, the "Company
Releasees") from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever, known or
unknown, suspected or unsuspected, which against the Company Releasees, jointly
or severally, Releasor or Releasor's heirs, executors, administrators,
successors or assigns ever had or now have by reason of any matter, cause or
thing whatsoever arising from the beginning of time to the time Releasor
executes this release arising out of or relating in any way to Releasor's
employment or director relationship with the Company, or the termination
thereof, including but not limited to, any rights or claims arising under any
statute or regulation, including the Age Discrimination in Employment Act of
1967, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
the Americans with Disabilities Act of 1990, or the Family and Medical Leave Act
of 1993, each as amended, or any other federal, state or local law, regulation,
ordinance or common law, or under any policy, agreement, understanding or
promise, written or oral, formal or informal, between any Company Releasee and
Releasor. Releasor shall not seek or be entitled to any recovery, in any action
or proceeding that may be commenced on Releasor's behalf in any way arising out
of or relating to the matters released under this Release. Notwithstanding the
foregoing, nothing herein shall release any Company Releasee from any claim or
damages based on (i) the Executive's rights under the Employment Agreement, (ii)
any right or claim that arises after the date the Executive executes this
release, (iii) the Executive's eligibility for indemnification in accordance
with applicable laws or the certificate of incorporation or by-laws of the
Company (or any affiliate or subsidiary) or any applicable insurance policy,
with respect to any liability the Executive incurs or incurred as a director,
officer or employee of the Company or any affiliate or subsidiary (including as
a trustee, director or officer of any employee benefit plan) or (iv) any right
the Executive may have to obtain contribution as permitted by law in the event
of entry of judgment against the Executive as a result of any act or failure to
act for which the Executive and the Company or any affiliate or subsidiary are
held jointly liable.

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

(c) Releasor has had in excess of twenty-one (21) calendar days to consider the
terms of this release. Once Releasor has signed this release, Releasor has seven
(7) additional days to revoke Releasor's consent and may do so by writing to the
Company as provided in Section 12(b) of the Employment Agreement. Releasor's
release shall not be effective, and no payments or benefits shall be due under
Section 5(c) of the Employment Agreement, until the eighth day after Releasor
shall have executed this release (the "Revocation Date") and returned it to the
Company, assuming that Releasor has not revoked Releasor's consent to this
release prior to the Revocation Date.

(d) The Company, for and in consideration of the Executive's covenants under the
Employment Agreement, on behalf of itself and the other members of the Company
Group and any other Company Releasee, their respective successors and assigns,
and any and all other persons claiming through any member of the Company Group
or such other Company Releasee, and each of them, does hereby now and forever,
voluntarily, knowingly and willingly release and discharge, the Releasor

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EXHIBIT E
  

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

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

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

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

THE STANLEY WORKS

By:
                                                                              
Name:
Title:

Signed as of this            day of                                      .

EXECUTIVE

[spacer.gif] [spacer.gif][spacer.gif] [spacer.gif] [spacer.gif]

John F. Lundgren

Signed as of this            day of                                      .

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