Amended and Restated Effective January 1, 2009

 

Except As Otherwise Provided

THE STANLEY WORKS

Supplemental Executive Retirement Program

The Supplemental Executive Retirement Program (“SERP”) provides a supplemental
retirement benefit to its Participants. In order for the SERP to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”), and the Regulations thereunder, The Stanley Works (“Stanley”) now
desires to amend the SERP in the form of a restated plan, as follows, effective
January 1, 2009, except that (i) Sections 1, 7(d) and 7(e) shall be effective
January 1, 2007, and (ii) the last two sentences in Section 6, the last sentence
in Section 7(c), and Appendix B shall be effective January 1, 2008.

1. Participants. The employees eligible to participate in the SERP are Stanley’s
chief executive officer, and such other executives, not to exceed 24, as were
designated by the chief executive officer and whose names were filed with the
records of the Compensation and Organization Committee (“Committee”) of
Stanley’s Board (“Eligible Employees”). An Eligible Employee becomes a
Participant in the SERP upon reaching age 50 and completing five years of
service with Stanley as an Eligible Employee (“Years of Pre-Participation
Service”). Anything herein to the contrary notwithstanding, an employee who is
not a Participant on January 1, 2007, shall not become a Participant unless he
is Stanley’s chief executive officer on January 1, 2007 and, in 2009, meets the
age 50 and five Years of Pre-Participation Service requirements specified above.

2. Target Benefit.

(a) Target Benefit Formula. The “Target Benefit” for a Participant, expressed as
a single life annuity, payable annually, equal to a percentage of Average Pay
and subject to discount and to certain Offsets, will be based on years of
service according to the following schedule.

3% for each of the first 5 years

2% for each of the next 15 years

1% for each of the 5 years thereafter

For example, if a Participant’s “Separation from Service”, as defined in Section
2(b), occurs at age 60 after 20 years of service, the Participant’s Target
Benefit would be 45% of Average Pay. Average Pay will be one-third of the
Participant’s highest “Compensation”, as determined under the Supplemental
Retirement and Account Value Plan for Salaried Employees of The Stanley Works
(“Supplemental Plan”), for any consecutive 36-month period.

 

 

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(b) Separation from Service. For purposes of the SERP, a Participant’s
Separation from Service will occur upon his or her termination of employment
with Stanley, and all members of Stanley’s parent-subsidiary controlled group,
for a reason other than death. The determination as to whether there is a
Separation from Service is based on the facts and circumstances surrounding the
termination of the Participant’s employment and whether Stanley and the
Participant intended for the Participant to provide significant services for
Stanley following such termination. A Separation from Service shall not have
occurred if the Participant continues to provide services as a common law
employee or as an independent contractor of Stanley at an annual rate that is
more than 20% of the services rendered, on average, during the immediately
preceding three full calendar years of employment. While a Participant is on a
bona fide leave of absence, the Participant’s employment relationship shall be
treated as continuing, provided that the Participant is expected to return to
work for Stanley and the period of such leave of absence does not exceed six
months, or if the period is longer, the Participant has a right to reemployment
with Stanley either by statute or by contract. If the period of a leave of
absence exceeds six months and there is no right to reemployment, a Separation
from Service shall be deemed to have occurred as of the first date immediately
following the first six months of the leave.

3. Separation from Service Before Age 60.

(a) Separation from Service before Age 54. No SERP benefit will be paid to or on
behalf of any Participant whose Separation from Service, other than by reason of
a Disability, occurs before the Participant’s attainment of age 54.

(b) Discount for Separation from Service before Age 60. For each month that a
Participant’s Separation from Service occurs prior to age 60, the Target Benefit
will be reduced .167% (i.e., 2% per year). For example, a Participant whose
Separation from Service occurs at age 55 after 20 years of service would have a
benefit, before Offsets, equal to 90% of the Target Benefit, or 40.5% (45% x 90%
= 40.5%) of Average Pay.

4. Disability.

(a) Separation from Service by Reason of Disability. SERP benefit payments will
be made to a Participant whose Separation from Service occurs by reason of his
or her “Disability”, as defined in Section 4(b), if payments would not otherwise
be made under Section 3. In the event of such SERP payments prior to age 60,
payments will be reduced in accordance with the formula set forth in Section
3(b).

(b) Disability. For purposes of the SERP, a Participant’s Separation from
Service will be considered to have occurred by reason of a Disability if the
Participant’s Separation from Service occurs as a result of his or her permanent
inability, by reason of a medically determinable physical or mental impairment,
to perform any job for which the Participant is reasonably suited by education
and experience.

 

 

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5. Death.

(a) Death before SERP Payments Commence. The lump sum actuarial equivalent of
the Target Benefit, subject to the Offsets described in Section 6 and subject to
the reduction described in the second sentence of this Section 5(a), of a
Participant who dies before commencement of his or her SERP benefit shall be
paid to the Participant’s beneficiary as a life annuity, unless a timely
election was made by the Participant to receive a lump sum payment, in which
case the death benefit will be such lump sum actuarial equivalent. The Target
Benefit will be reduced 2% per year for each year (i.e., .167% per month) prior
to age 60 that the Participant dies.

(b) Death after SERP Payments Commence. In the case of a Participant who was
married on the benefit commencement date and dies after SERP benefit payments
have commenced under a 100% joint and survivor annuity, benefit payments will
continue under that annuity to the surviving spouse. Otherwise, no death benefit
will be paid in the event of the death of a Participant who was married on the
benefit commencement date and dies after payments have commenced. Upon the death
of a Participant who was unmarried on the benefit commencement date and dies
after SERP benefit payments have commenced under a single life annuity pursuant
to which the total annuity payments made to the Participant are less than the
actuarial equivalent lump sum payment amount that would have been distributed to
the Participant as of the benefit commencement date, a lump sum death benefit
equal to the excess of such lump sum amount over the total amount of annuity
payments made to the Participant will be paid to the Participant’s beneficiary.
Otherwise, no death benefit will be paid in the event of the death of a
Participant who was unmarried on the benefit commencement date and dies after
payments have commenced.

(c) Death Beneficiary. Any benefit payable upon a Participant’s death to anyone
other than the Participant’s surviving spouse will be paid to the beneficiary
determined under the Stanley Account Value Plan, unless the Participant
designated in writing a different beneficiary to receive such benefit.

(d) Date of Payment. Any payment that is made or that commences to a
Participant’s beneficiary pursuant to this Section 5 on account of the
Participant’s death shall be considered to have been made or to have commenced
upon the Participant’s death if the distribution is made or begins no later than
90 days following the date of the Participant’s death, provided that neither the
Participant nor the recipient of the death benefit may, directly or indirectly,
specify the calendar year in which a payment is made.

6. Offsets. The benefit otherwise payable under the SERP, as described in
Sections 2, 3, 4 and 5, will be reduced by the “Offsets” described in Sections
6(a), 6(b) and 6(c), resulting in the benefit net of Offsets:

(a) the “cornerstone account” benefits provided under the Stanley Account Value
Plan and under the Supplemental Plan, as applied pursuant to Appendix B;

 

 

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(b) the Social Security retirement benefit payable to the Participant1; and

(c) disability benefits payable to the Participant under a long-term disability
plan that covers a substantial number of Stanley’s employees and was established
prior to the date the Participant becomes disabled.

Anything herein to the contrary notwithstanding, if the benefit payable under
the SERP is not paid in a life annuity but, instead, is paid in a lump sum or a
100% joint and survivor annuity pursuant to Section 7, the Offset described in
Section 6(a) shall not be applied to the life annuity benefit (with respect to
which an actuarially adjusted lump sum or 100% joint and survivor annuity
benefit is calculated under Section 7). Instead, the actuarially adjusted lump
sum or 100% joint and survivor annuity benefit that is calculated under Section
7 (with respect to the life annuity benefit determined under Sections 2, 3, 4
and 5 to which Offsets have been applied, to the extent appropriate, under
Sections 6(b) and 6(c)) shall be offset, pursuant to Appendix B, by the amount
described in Section 6(a).

7. Date and Form of Distribution of SERP Benefit.

(a) Date of Distribution. Subject to Section 7(b), any payment that is made or
commences to a Participant on account of his or her Separation from Service,
shall be considered to have been made upon the Participant’s Separation from
Service if the distribution is made no later than 90 days following the date of
the Participant’s Separation from Service, provided that the Participant may
not, directly or indirectly, specify the calendar year in which the payment is
made.

(b) Delayed Distributions to Specified Employees. If a Participant is a
specified employee as of the date of his or her Separation from Service, the
SERP benefit to which the Participant is entitled upon Separation from Service
shall be distributed or commence to be distributed on the first day of the
seventh month that begins after the date of the Participant’s Separation from
Service, provided that no distribution is required to be delayed pursuant to
this Section 7(b) beyond the date of the Participant’s death. Any payment that
otherwise would have been paid to a specified employee during the six months
following his or her Separation from Service shall be accumulated and paid to
the Participant on the first day of the seventh month that begins after the date
of the Participant’s Separation from Service. Any such accumulated payment shall
be actuarially increased, pursuant to Appendix C, to reflect the delay in
payment imposed under this Section 7(b). A Participant is a ‘specified employee’
if he or she is identified as a specified employee in accordance with Treasury
Regulation Section 1.409A-l(i), pursuant to a written policy established and
maintained by Stanley. If a Participant for whom payments are deferred under
this Section 7(b) dies between the date of Separation from Service and the first
day of the seventh month that begins after that date, payments shall not be made
under this Section 7, but instead shall be made under Section 5.

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If the Participant retires prior to being eligible for Social Security, the
Social Security benefit offset will not commence until the Participant is
eligible for Social Security retirement benefits. For example, for a retirement
in 2009 by a Participant who is 60 years old, there would be no Social Security
offset until the Participant is age 62, the age of initial eligibility for
Social Security. The estimated Social Security benefit that is payable will be
determined at age 62 or at the Participant’s attained age if older than age 62
and assuming no compensation after termination of employment with Stanley.

 

 

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(c) Form of Distribution. The SERP benefit to which a Participant is entitled
shall be paid in an annuity, unless he or she elects, under Section 7(d) or
7(f), to receive an actuarially adjusted lump sum payment. A Participant who is
unmarried on his or her benefit commencement date and did not elect a lump sum
payment under Section 7(d) or 7(f), shall receive payments in a life only
annuity. A Participant who is married on his or her benefit commencement date
and did not elect a lump sum payment under Section 7(d) or 7(f), may, prior to
such benefit commencement date, select a life only annuity or an actuarially
adjusted 100% joint and survivor annuity with his or her spouse. If a
Participant who is married on his or her benefit commencement date and did not
elect a lump sum payment fails to select the form of annuity payment before his
or her benefit commencement date, payments will be made in the form of a 100%
joint and survivor annuity with the Participant’s spouse. Any actuarial
adjustment to reflect the form of distribution in a lump sum or a 100% joint and
survivor annuity shall be determined in accordance with Appendix A with respect
to the life annuity described in Sections 2, 3, 4 and 5 to which the Offsets
described in Sections 6(b) and 6(c), to the extent appropriate, have been
applied, and, after such actuarially adjusted lump sum or 100% joint and
survivor annuity is determined, any Offsets described in Section 6(a) shall be
applied pursuant to the pertinent rules set forth in Appendix B.

(d) Election of Form of Distribution. Subject to Sections 7(b), 7(e) and 7(f),
an Eligible Employee may make a written election by December 31, 2008, to have a
SERP benefit to which he or she becomes entitled distributed in a lump sum
rather than in an annuity. If an Eligible Employee fails to make an election
with respect to the form of distribution of a SERP benefit to which he or she
becomes entitled, the Eligible Employee shall be deemed to have elected that any
such SERP benefit be distributed in an annuity, pursuant to Section 7(c).
Notwithstanding the foregoing, a Participant may elect to change his or her
election or deemed election pursuant to the provisions of Section 7(f).

(e) Elections Made in 2007 or 2008 as to Form of Distribution. If a Participant
makes an election in 2007 to change the form of distribution of a SERP benefit
to which he or she becomes entitled, such new election may not defer to a later
year the payment of any amount that would otherwise be paid in 2007 and may not
require a payment to be made in 2007 that would otherwise be paid in a later
year. Moreover, if a Participant makes an election in 2008 to change the form of
distribution of a SERP benefit to which he or she becomes entitled, such new
election may not defer to a later year the payment of any amount that would
otherwise be paid in 2008 and may not require a payment to be made in 2008 that
would otherwise be paid in a later year.

(f) Subsequent Elections as to Form of Distribution. A Participant shall be
permitted to make a written election, at any time after December 31, 2008, that
changes the form of distribution that would otherwise apply, provided that any
such election must satisfy all of the following requirements:

 

 

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(i) the election must be made at least twelve months prior to the date on which
the distribution would otherwise have been made (or in the case of an annuity,
twelve months before the date on which the first payment was scheduled to be
made);

(ii) the election may not become effective until at least twelve months after
the date on which the election is made; and

(iii) except in the case of an election relating to a distribution to be made
upon a Participant’s death, the distribution must be deferred for at least 5
years from the date on which the distribution would otherwise have been made (or
in the case of an annuity, for at least 5 years from the date on which the first
payment was scheduled to be made).

8. Claims Procedure.

(a) Any Participant or beneficiary (each a “Claimant”) who believes he or she is
entitled to benefits under the SERP shall file a written claim request with the
Committee on such forms as the Committee may require. The Committee shall, upon
written request of a Claimant, make available copies of any claim forms or
instructions, or advise the Claimant where such forms or instructions may be
obtained.

(b) If a claim is wholly or partially denied, the Committee shall furnish to the
Claimant a written or electronic notice of the decision within 90 days. The
notice shall be set forth in a manner calculated to be understood by the
Claimant. If special circumstances require, the Committee may defer action on a
claim for benefits for an additional period of not to exceed 90 days, and, in
that case, it shall notify the Claimant in a written or electronic notice prior
to the close of the initial 90 day period of the special circumstances involved
and the time by which it expects to render a decision. If the claim relates to
Disability benefits, the Committee shall furnish to the Claimant a written or
electronic notice of the decision within 45 days. If special circumstances
require, the Committee may defer action on a claim for Disability benefits for
an additional period of not to exceed 30 days, and, in that case, it shall
notify the Claimant in a written or electronic notice prior to the close of the
initial 45 day period of the special circumstances involved and the time by
which it expects to render a decision. However, if prior to the end of the 30
day period, the Committee determines that, due to matters beyond its control, a
decision cannot be rendered on a claim for Disability benefits, the period for
making the Disability claim determination may be extended for up to an
additional 30 day period, and, in that case, the Committee shall notify the
Claimant in a written or electronic notice prior to the end of the first 30 day
period of the circumstances involved and the time by which a decision is
expected. The written or electronic notice of a denial of a claim shall contain
the following information:

(i) The specific reason(s) for denial of the claim;

(ii) Specific references to pertinent provisions of the SERP upon which the
denial is based;

 

 

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(iii) A description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such material or
information is necessary;

(iv) An explanation of the claims review procedure under the SERP describing the
steps to be taken by a Claimant who wishes to submit the claim for review; and
the time limits applicable to such procedures, and the Claimant’s right to bring
a civil action under Section 502(a) of ERISA within 180 days following an
adverse determination on review;

(v) In the case of a claim for Disability benefits, a copy of any specific
internal rule, guideline, protocol or other similar criterion that was relied
upon in making the determination, or a statement that a copy of the rule,
guideline, protocol or other similar criterion will be provided to the Claimant
free of charge upon request; and

(vi) In the case of a claim for Disability benefits that is denied based on a
medical necessity or experimental treatment or similar exclusion or limit, an
explanation of the scientific or clinical judgment for the determination,
applying the terms of the SERP to the Claimant’s circumstances, or a statement
that an explanation will be provided free of charge upon request.

(c) A Claimant may, with respect to any denied claim:

(i) Request review upon written application filed within 60 days after receipt
by the Claimant of written or electronic notice of the denial of the Claimant’s
benefit claim, or if the claim is for a Disability benefit, request review upon
written application filed within 180 days after receipt by the Claimant of
written or electronic notice of the denial of the Claimant’s Disability benefit
claim;

(ii) Review pertinent documents and submit any additional issues and comments in
writing;

(iii) Submit documents, records and other information relating to the claim for
benefits;

(iv) Have reasonable access to, upon request and free of charge, copies of all
documents, records, and other information relevant to a benefit claim;

(v) Have a full and fair review by the Committee of the denial that takes into
account all comments, documents, records, and other information relevant to the
Claimant’s claim for benefits; and

(vi) If the claim is for Disability benefits, the following additional rules
will apply:

 

 

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(A) The review will not give deference to the initial adverse benefit
determination;

(B) The review will be conducted by an appropriate named fiduciary of the SERP
who is neither the individual who made the initial decision to deny the
Disability benefit claim nor a subordinate of that individual.

(C) If the adverse determination that is the subject of the review was based on
a medical judgment, the named fiduciary will consult with a health care
professional who has appropriate training and experience in the field of
medicine involved in the medical judgment;

(D) Any medical or vocational experts whose advice was obtained on behalf of the
SERP in connection with the adverse benefit determination that is the subject of
the review will be identified, without regard to whether the advice was relied
upon in making the benefit determination; and

(E) The health care professional engaged for purposes of a consultation will be
an individual who is neither an individual who was consulted in connection with
the adverse benefit determination that is the subject of the appeal, nor the
subordinate of any such individual.

Any request or submission must be in writing and must be directed to the
Committee or in the case of a review of a claim for Disability benefits, its
designee. The Committee (or, in the case of a claim for Disability benefits, its
designee) shall have the sole responsibility for the review of any denied claim
and shall take all steps appropriate in light of its findings.

(d) The Committee (or, in the case of a claim for Disability benefits, its
designee) shall render a decision upon review. If it is determined that any
benefits claimed should be denied upon review, written or electronic notice of
the same shall be provided to the Claimant. The written or electronic notice of
the final decision shall set forth: the specific reason or reasons for the
adverse determination; references to the specific SERP provisions on which the
benefit determination was based; a statement that advises the Claimant that he
or she is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the claim for benefits; and in the case of the review of a claim for a
Disability benefit that was denied as a result of an internal rule, guideline,
protocol or other similar criterion, either the specific rule, guideline,
protocol, or other similar criterion relied upon in making the adverse
determination, or a statement that such rule, guideline, protocol, or other
similar criterion was relied upon in making the adverse determination and that a
copy of the rule, guideline, protocol, or other similar criterion will be
provided to the Claimant free of charge upon request. Also, if the adverse
determination upon review of a claim for Disability benefits is based on a
medical necessity or experimental treatment or similar exclusion or limit, the
Claimant shall be provided free of charge either an explanation of the
scientific or clinical judgment for the determination, applying the terms of the
SERP to the Claimant’s medical circumstances, or a statement that such
explanation will be provided free of charge upon request. In addition, the
written or electronic notice to Claimant

 

 

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shall describe any voluntary appeal procedures offered under the SERP and the
Claimant’s right to obtain information about such procedures and a statement of
the Claimant’s right to bring an action under Section 502(a) of ERISA within 180
days following receipt of written or electronic notice of denial of the claim
for benefits upon review. The notice to the Claimant shall include the following
statement: “You and the SERP may have other voluntary alternative dispute
resolution options, such as mediation. One way to find out what may be available
is to contact your local U.S. Department of Labor Office and your State
insurance regulatory agency.” A final determination by the Committee shall be
rendered within a reasonable period of time, not exceeding 60 days, after
receipt of the Claimant’s notice of appeal. Under special circumstances, such
determination may be delayed for an additional period not to exceed 60 days, in
which case the Claimant shall be notified electronically or in writing of the
delay prior to the close of the initial 60 day period. However, if the Committee
holds regularly scheduled meetings at least quarterly, a final determination by
the Committee shall be rendered no later than the date of the first meeting of
the Committee after receipt of the Claimant’s notice of appeal, unless the
receipt of the Claimant’s notice of appeal is within the 30 day period preceding
the date of the next scheduled meeting of the Committee. In such case, a final
determination by the Committee shall be rendered no later than the date of the
second meeting of the Committee after receipt of the Claimant’s notice of
appeal. Under special circumstances, such determination may be delayed to the
date of the third meeting of the Committee after receipt of the Claimant’s
notice of appeal, in which case the Claimant shall be notified electronically or
in writing of the delay prior to the commencement of the extension period. If
the claim relates to a Disability benefit, a final determination by the
appropriate named fiduciary shall be rendered within a reasonable period of
time, not exceeding 45 days, after receipt of the Claimant’s notice of appeal.
Under special circumstances, such determination may be delayed for an additional
period not to exceed 45 days, in which case the Claimant shall be notified
electronically or in writing of the delay prior to the close of the initial 45
day period.

9. Miscellaneous.

(a) Amendment. The Committee may at any time amend the SERP so long as the
benefits of anyone who is then a Participant are not diminished as a result.

(b) Administration of the SERP. The SERP will be administered by the Committee.
The Committee is vested with full authority (including full discretionary
authority) to administer, interpret, and make rules regarding the SERP as it may
deem advisable and to make determinations in its discretion that shall be final,
binding, and conclusive upon all persons. No member of Stanley’s Board of
Directors or the Committee will be liable for any action or determination made
in good faith with respect to the SERP.

(c) Governing Text. The SERP, including any amendments, will constitute the
entire agreement between Stanley and any Participant or beneficiary regarding
the subject matter of the SERP. The SERP, including any amendments, will be
binding on Stanley, Participants, beneficiaries, and their respective heirs,
administrators, trustees, successors, and assigns.

 

 

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(d) Rights of Persons Entitled to Benefits. Any person entitled to receive
benefits under the SERP shall have the rights of an unsecured general creditor
of Stanley.

(e) Nonassignability. The right of any individual to a benefit under the SERP
shall not be subject to attachment or other legal process for the debts of such
individual. In no event may an individual’s benefit under the SERP be subject to
anticipation, alienation, sale, transfer, assignment or encumbrance.

(f) Special Distributions. Whenever, in the opinion of the Committee, a person
entitled to receive a benefit under the SERP is unable to manage his or her
financial affairs, the Committee may direct that payment be made to a legal
representative or relative of such person for his or her benefit. Alternatively,
the Committee may direct that any payment for such person be applied for the
benefit of such person in such manner as the Committee considers advisable. Any
payment made in accordance with this Section 9(f) shall be a complete discharge
of any liability for the making of such payment under the provisions of the
SERP.

(g) Terms of Employment. Participation in the SERP shall not give an individual
any right to remain in the service of Stanley, and an individual shall remain
subject to discharge to the same extent as if the SERP had not been adopted.

THE STANLEY WORKS

 

 

 

 

By 

/s/

 

 

 

 

Title: Vice President Human Resources

 

 

 

Date: 1/9/08

 

 

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THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX A

 

Form of Payment

 

Actuarial Adjustment Factors

Lump Sum

 

The lump sum of the Target Benefit is determined by multiplying the annual
benefit payable for the participant’s lifetime by a factor of 9.45.

Joint and Survivor (100%)

 

Factors are as set forth in the attached table, which shows no reduction if the
spouse is older than the Participant or if the spouse is no more than two years
younger than the Participant (in either case, the factor is 1.000). For each
year over two that the spouse is younger than the Participant, the Target
Benefit (or early retirement benefit) will be reduced by 0.7%.

 

 

Example 1: For a Participant whose age on the benefit commencement date is 60
and whose spouse’s age on the benefit commencement date is 56, the factor to
convert the life annuity to a 100% joint and survivor annuity is .986.

 

 

Example 2: For a Participant whose age on the benefit commencement date is 54
and whose spouse’s age on the benefit commencement date is 40, the factor to
convert the life annuity to a 100% joint and survivor annuity is .916.

 

 

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THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX B

Cornerstone Offset Described in Sections 6 and 7 of the SERP

(a) Subject to paragraph (b), the Offset of a SERP benefit attributable to a
Participant’s “cornerstone account” benefits under the Stanley Account Value
Plan and the Supplemental Plan shall be determined by converting such
cornerstone account benefits to a life annuity benefit, based on the average of
the three most competitive quotes for the purchase of a comparable annuity from
an insurance company for a qualified retirement plan distribution, that are
obtained from one of the five largest brokerage firms (measured by the number of
annuities placed during at least one of the three calendar years immediately
preceding the calendar year that contains the date as of which the quotes are
obtained), provided that (i) an insurance company’s quote will be utilized only
if the insurance company is rated AA- or higher by Standard & Poor’s and rated
A- or higher by A.M. Best Company, (ii) if only two quotes that may be utilized
are furnished by such brokerage firm, the average of such two quotes will be
used, and (iii) if such brokerage firm furnishes only one quote that may be
utilized, that quote will be used. Any quote that pertains to a distribution
upon Separation from Service shall be obtained as of the first business day of
the month in which Separation from Service occurs, provided that a quote
regarding a distribution upon Separation from Service in connection with a
Disability shall be obtained as of the last business day of the month that
contains the date of the Participant’s Separation from Service. A quote in
regard to a distribution upon death shall be obtained as of the last business
day of the month that contains the date of death.

(b) In the case of a SERP benefit that is paid as a 100% joint and survivor
annuity, the Offset of the SERP benefit attributable to a Participant’s
“cornerstone account” benefits under the Stanley Account Value Plan and the
Supplemental Plan shall be determined by offsetting the actuarially adjusted
100% joint and survivor annuity (calculated with respect to the life only
annuity that has been reduced by any Offsets under Sections 6(b) and 6(c)) by a
100% joint and survivor annuity calculated by converting such “cornerstone
account” benefits to a 100% joint and survivor annuity pursuant to the
procedures set forth in paragraph (a) above, except that such procedures shall
be applied in regard to such a joint and survivor annuity rather than a life
only annuity. In the case of a SERP benefit that is paid in a lump sum, the
Offset of the SERP benefit attributable to a Participant’s “cornerstone account”
benefits under the Stanley Account Value Plan and the Supplemental Plan shall be
determined by offsetting the actuarially adjusted lump sum (calculated with
respect to the life only annuity that has been reduced by Offsets under Sections
6(b) and 6(c)) by the entire value of the pertinent cornerstone accounts, as of
the date of distribution of the lump sum SERP benefit.

 

 

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THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX C

Deferred Payments Described Under Section 7(b) of the SERP

Deferred payments under Section 7(b) shall be adjusted utilizing the interest
rate prescribed in Code Section 417(e) that is in effect during October of the
calendar year preceding the calendar year that includes the date of the
Separation from Service.

 

 

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THE STANLEY WORKS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 100% Joint & Survivor
Factors

APPENDIX A (continued)

 

Spouse’s Age
(nearest birthday)

 

Participant’s Age (nearest birthday) 

 

 

54

 

55

 

56

 

57

 

58

 

59

 

60

 

61

 

62

 

63

 

64

 

65

 

65

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

64

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

63

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

62

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

61

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

60

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

59

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

58

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

57

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

56

 

1.000

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

55

 

1.000

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

54

 

1.000

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

53

 

1.000

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

52

 

1.000

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

51

 

0.993

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

50

 

0.986

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

49

 

0.979

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

48

 

0.972

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

47

 

0.965

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

46

 

0.958

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

45

 

0.951

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

44

 

0.944

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

0.867

 

43

 

0.937

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

0.867

 

0.860

 

42

 

0.930

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

0.867

 

0.860

 

0.853

 

41

 

0.923

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

0.867

 

0.860

 

0.853

 

0.846

 

40

 

0.916

 

0.909

 

0.902

 

0.895

 

0.888

 

0.881

 

0.874

 

0.867

 

0.860

 

0.853

 

0.846

 

0.839

 

No reduction if spouse is not more than two years younger than participant.
Reduction is .7% for each year the spouse is more than two years younger than
the participant.

 

 

ii

 

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