EXHIBIT 10(xxvi)

EMPLOYMENT AGREEMENT
 
BETWEEN
 
Stanley Doors France SAS, a “société par actions simplifiée” whose registered
office is located at rue Auguste Jouchoux, ZI de Trepillot, 25000 Besançon,
France, registered with the Registry of Trade and Companies of Besançon under
number 307 104 315 (the “Company”), represented by Mrs. Corinne Herzog,
President, duly authorised for the purposes hereof,

AND

Thierry Paternot, whose address is 59 avenue de la Bourdonnais, 75007 Paris,
France (the “Executive”),
 
IT IS HEREBY AGREED THAT:
 
ARTICLE 1 - JOB DESCRIPTION

The Executive shall be employed by the Company as a senior executive (not as
corporate officer) in the capacity of “President-Europe” for The Stanley Works’
tool’s business in Europe (“The Stanley Works Europe”). He shall also exercise
the functions of “President and CEO” (Président-) of Facom SAS.

In his capacity as the chief executive officer of The Stanley Works Europe, the
Executive shall be responsible for leading and coordinating the activities of
The Stanley Works Europe. In his capacity as President and CEO of Facom SAS, the
Executive shall manage Facom SAS and ensure the smooth running of its corporate
bodies. The Executive shall also perform such other tasks that are normally
attached to his positions or specifically assigned to him.

The Executive shall perform his functions under the authority and within the
instruction scope he is provided with by the chief executive officer of The
Stanley Works currently Mr. Lundgren or to any other manager designated by the
Company for this purpose.

The Executive agrees to devote all of his attention and energies to the
performance of the duties assigned to him and the development of the activities
and promotion of the interests of The Stanley Works Europe and Facom SA. He
shall perform such duties faithfully, diligently and to the best of his
abilities and subject to such laws, rules, regulations and policies from
 

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time to time applicable to the Company’s employees. The Executive agrees to
refrain from engaging in any activity that does, will or could reasonably be
deemed to conflict with the best interests of The Stanley Works and Affiliates.

This agreement is governed by the National Collective agreement for Metallurgy
(“Convention Collective Nationale de la Métallurgie n°650”) (the “Collective
Agreement”).

ARTICLE 2 - EXCLUSIVITY

The Executive formally declares that he is not bound to any other company, that
he has left his previous employer free from all obligations and that he is not
presently subject to any non-competition clause whatsoever.

The Executive undertakes to devote all his work time and effort for the
exclusive benefit of the Company and he may therefore not exercise any other
professional activity throughout the duration of this agreement without the
prior written express approval of the Company.
 
ARTICLE 3 - DURATION OF AGREEMENT

This agreement is entered into for an indefinite duration starting on the date
of the acquisition of Facom SA by the Company or its affiliates (the “Closing
Date”), without any trial period.

The Executive’s length of service shall be computed for all purposes, other than
for a termination of employment, as from December 1st, 2002, which is the date
on which he commenced employment with the Facom SA group.

Each of the parties shall have the right to terminate this agreement at any
time, subject to a prior written notice of six (6) months.

The parties hereby acknowledge and agree that The Stanley Works and the Company
have agreed to grant the Executive stock options, inter alia, to serve as a
severance package. Therefore, any severance payment the Executive may be
entitled to under the Collective Agreement and/or French law shall be considered
as included into the gains made under the stock options granted under this
Agreement.

ARTICLE 4 - REMUNERATION

4.1 The Executive will be paid, in remuneration for his activities, an annual
gross base salary equal to two hundred and thirty thousand Euros (€230,000),
which shall be paid to him in twelve monthly instalments.

4.2 To take into account the importance of the travels that the Executive shall
be required to make and given the constraints associated with these travels and
their frequency, the Executive is entitled to a travel allowance (“prime
d’expatriation”). This allowance shall be proportionate to the number of travel
days abroad per year. The travel allowance, to which
 

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the Executive is entitled, shall be of one thousand Euros (€1,000) on average
per day spent abroad in relation to his professional duties as Executive and
will be subject to the legal applicable provisions, namely those of Article 81 A
II of the French Tax Code.
 
4.3 The Executive shall be entitled to an annual bonus depending on the
attainment of performance targets. The targets shall be based on the agreed
business plan, as revised as the case may be in light of the economic
circumstances. The bonus payable for a given year shall be equal to a maximum of
seven hundred fifty thousand Euros (€750,000) per year upon achievement of 100%
of the targets. The bonus for a year, if payable, shall be paid in or prior to
March of the following year.

4.4 All the elements of remuneration cited above shall be subject to deduction
of the employee’s share of social security, supplemental retirement, invalidity
and death, unemployment insurance contributions, and CSG and CRDS, and any other
applicable withholding.

4.5 It is expressly agreed that any premium or bonus that may be granted by the
Company, other than that granted in 4.2 and 4.3 above shall not be part of the
remuneration and shall always remain a revocable grant.

ARTICLE 5 - STOCK OPTIONS

The Executive shall be granted two hundred thousand (200,000) stock options of
The Stanley Works on the later to occur of (i) the Closing Date or (ii) January
1st, 2006. Such options shall be granted pursuant to the terms of the stock
option certificate set forth in Exhibit A to this agreement. In respect of such
stock options, the Executive hereby undertakes to meet any and all obligations
necessary to be entitled, and allow the Company and The Stanley Works to be
entitled, to the benefit of favorable tax and social security treatment provided
by Articles 80 bis and 163 bis C of the French Tax Code and by the second
paragraph of Article L. 242-1 of the French Social Security Code, as such may be
amended or succeeded from time to time.

ARTICLE 6 - SHARES

The Executive shall be granted free shares (restricted stock) of The Stanley
Works on the later to occur of (i) the Closing Date or (ii) January 1st, 2006
with a value of one million five hundred thousand Euros (€1,500,000). The number
of such shares that the Executive shall be entitled to retain, if any, shall be
determined in accordance with the terms and conditions of Long Term Performance
Award Program (the “Program”) under The Stanley Works’ 1997 or 2001 Long Term
Incentive Plans, as amended, for the 2006-2008 performance period as soon as
reasonably practicable after the completion of such period. It is the intention
of the parties that the general terms and conditions of the Program that apply
to the Executive shall operate in the same manner as apply to other senior The
Stanley Works executives, but that the Program shall be modified to provide for
the initial grant of actual shares in order to achieve favorable tax treatment
and to comply with French tax and legal requirements.
 

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Attached as Exhibit B is a description of the 2005-2007 Program. The Company and
The Stanley Works expect the 2006-2008 Program to be similar, but retain the
right to modify the Program in any manner except that, with respect to the
Executive, such modifications shall not be inconsistent with the following: (i)
if threshold, target or maximum performance is achieved under the Program, the
Executive shall be entitled to retain, respectively, one-third (1/3), two-thirds
(2/3) and one hundred percent (100%) of the shares granted to him pursuant the
Program for the 2006-2008 performance period; (ii) for performance between these
benchmarks, the number of shares the Executive shall be entitled to retain shall
be pro rated in the manner as apply to other The Stanley Works executives; (iii)
the free shares granted pursuant to this Article 6 shall be granted in book
entry form and shall not be entitled to receive any dividends or enjoy voting
rights until the number of shares the Executive is entitled to retain has been
determined in accordance with the Program for the 2006-2008 performance period.

In respect of the shares to be granted pursuant to the Program, the Executive
hereby undertakes to meet any and all obligations necessary to be entitled, and
allow the Company and The Stanley Works to be entitled, to the benefit of
favorable tax and social security treatment provided by Articles 80 quaterdecies
and 200 A. bis of the French Tax Code and by the second paragraph of Article L.
242-1 of the French Social Security Code, as such may be amended or succeeded
from time to time.
 
ARTICLE 7 - PLACE OF WORK

The Executive’s place of work shall be in Ile de France.

In addition, it is expressly understood and agreed that the Executive will be
required to travel in France, Europe or overseas in fulfilment of his duties as
reasonably required.

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ARTICLE 8 - WORKING TIME

The Executive’s remuneration, as defined in Article 4 above, which was agreed
upon in light of both the special nature of the functions assigned to him and
the importance of his responsibilities, will remain independent of the time that
the Executive, who benefits from the largest autonomy in the organization of his
working time, will devote to the performance of his functions.

Regarding both his remuneration and the importance of his responsibilities, the
Executive shall be considered as a key executive (“cadre dirigeant”) in
accordance with the provisions of article L. 212-15-1 of the French Labor code
and therefore he will not be governed by most of the legal and conventional
rules on working hours.

ARTICLE 9 - EXPENSES

The Executive shall be reimbursed his reasonable business expenses actually
incurred in carrying out his duties, upon presentation of the relevant receipts
and in conformity with the Company’s expense reimbursement policy.

ARTICLE 10 - COMPANY CAR

The Company will provide the Executive with an automobile of the type Volvo S80
with a driver for use in the execution of his duties, which shall remain the
Company’s property. The automobile is provided for business use. The Executive
is, however, authorized to make personal use of the vehicle outside the
execution of his duties, on condition that he pays for the fuel expenses that
correspond to such personal use.

The personal use of the company car shall be deemed a benefit in kind, subject
to the applicable social security contributions and tax applicable within the
Company.

Subject to the submission of adequate invoices and receipts and a record of the
kilometers effected, the Company shall reimburse the Executive for the petrol
and maintenance costs incurred for business use, in accordance with the
Company’s internal rules and rates.

Insurance costs relating to coverage of professional risks shall be paid for by
the Company, which shall subscribe a fully comprehensive insurance policy. In
the event of an accident, the Executive shall inform the management within a
maximum period of 48 hours and shall comply with the law and the provisions
contained in the insurance policy, so that the liability of the Company shall
not be engaged in any respect whatsoever. The Executive represents that he holds
a valid driving license as of the date hereof, and expressly undertakes to
notify the Company of any suspension measures to which he may be subject.

Subject to a one-month prior notice, the Company is entitled to withdraw the car
for the Company’s needs. The vehicle must also be returned in the event of the
termination of the Executive’s employment agreement for whatever grounds
whatsoever and from the moment of the effective cessation of his duties.
 

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ARTICLE 11 - SOCIAL BENEFITS

The Executive shall benefit from all retirement and insurance benefits granted
by the Company, including inter alia a supplemental medical insurance of the
type currently provided to the Executive by Gras Savoye.

ARTICLE 12 - PAID VACATION

The Executive shall be entitled to vacation as provided by law and by the
Collective Bargaining agreement. Holiday periods shall be set by agreement
between the Company and the Executive, taking into account business
requirements.

ARTICLE 13 - CONFIDENTIALITY

The Executive shall not, directly or indirectly, either during the period of his
employment or after the termination thereof, give, procure or supply, in any
manner whatsoever, to any person, firm, association or company, the name or
address of any client of The Stanley Works or company controlled by,
controlling, or under common control with The Stanley Works, including but not
limited to the Company and Facom SA (“The Stanley Works and Affiliates”), or any
trade secret or confidential information concerning the business of The Stanley
Works and Affiliates and their personnel, except with the written authorization
of a representative of The Stanley Works.

Information which is considered confidential includes, in particular, all
technical, commercial or financial information (whether or not this information
is recorded in a written document or in any other medium) which relates to The
Stanley Works, its subsidiaries, shareholders or representatives.

ARTICLE 14 - NON-SOLICITATION UNDERTAKING

The Executive undertakes, for a period of two (2) years as from the date of his
actual departure from the Company not to propose to any person who was, at the
time of the Executive’s actual departure or during the twelve (12) months
preceding his departure, an employee of The Stanley Works and Affiliates, or to
attempt by any means, directly or indirectly, to persuade or incite this person
to accept another employment or to leave The Stanley Works and Affiliates.

ARTICLE 15 - RETURN OF DOCUMENTS AND INFORMATION

On the day of the termination of his responsibilities in the Company, the
Executive shall promptly return any material or assets in whatever form which
have been put at his disposal by The Stanley Works and Affiliates, including the
company car, together with all written documents or recordings containing
confidential information as described above.

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ARTICLE 16 - NON-COMPETITION

Given the extreme sensitiveness of the know-how and technical and commercial
information to which the Executive has access in the framework of his functions
and the extremely competitive nature of the activities of The Stanley Works and
Affiliates, the parties expressly agree on the necessity of a non-compete
obligation in order to protect the legitimate interests of The Stanley Works and
Affiliates. Moreover, the Executive understands that in light of his training,
this provision does not hinder his capacity to find a new position.

In the event this agreement is terminated by either of the parties, for any
reason whatsoever, the Executive expressly undertakes not to enter the service
of another company or division of a company in the European Union manufacturing
or selling products or services that could compete with those of The Stanley
Works and Affiliates, to create in the European Union a firm of the same type or
to participate directly or indirectly therein in any capacity.

For this purpose, the Executive undertakes, in particular, for any product or
service that might compete with the products or services of The Stanley Works
and Affiliates, not to visit or contact their clients or to deal with any
individual or company that was a client of The Stanley Works and Affiliates and
with whom the Executive was in contact at any time during the three (3) years
preceding his actual departure from the Company.

It is expressly agreed that the performance of this clause is limited to a
period of one year, renewable one time at the Company’s option for an additional
year, as from the date of the Executive’s actual departure from the Company.

During this period of non-competition, the Executive will receive a monthly
indemnity corresponding to 60% of his average monthly salary received over the
last 12 months preceding the termination of the employment agreement, it being
understood that this indemnity will be subject to social security contributions.

It is agreed that, in any case, the Company shall be entitled waive this clause,
provided however that it informs the Executive thereof by registered letter with
return receipt requested within the eight (8) days following the notification of
the termination of the employment agreement.

The parties expressly agree that each restriction mentioned above applies and
must be interpreted independently from the others so that if one of the
restrictions is considered void, the others will remain in force and produce
their effect.
 

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ARTICLE 17 - PENALTY CLAUSE

Any violation of the provisions stipulated in articles 2 (exclusivity), 13
(confidentiality), 14 (non-solicitation) and 16 (non-competition) above shall be
sanctioned by the payment of an indemnity at least equal to the remuneration
received by the Executive during the last six months of the existence of this
agreement, although the Company reserves the right to prove a greater prejudice
and to obtain the cessation of the violation and obtain compensation by all
legal means.

ARTICLE 18 - GOVERNING LAW - COMPETENT COURTS - ASSIGNMENT

This agreement is governed by French law, both with respect to its performance
and its termination. Any dispute relating hereto shall be subject to the
exclusive jurisdiction of the French courts. The Company may assign this
agreement to any French affiliate of The Stanley Works.
 
ARTICLE 19 - ENTIRE AGREEMENT

This agreement replaces and supersedes any prior oral or written agreement or
statement with respect to the terms of the Executive’s employment with the
Company.
 

Executed in two (2) originals, on
_____________
 
 
     

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For the Company
by Mrs. Corinne Herzog, President
   

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The Executive
 
 
 
     

 

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STANLEY DOORS SAS
24 rue Jouchoux
25009 Besançon

 
Thierry Paternot
59 Avenue de la Bourdonnais
75007 Paris

 
February 18 2006

Sir,

Following our various discussions related to the remuneration described in your
works contract dated 15 February 2006.

We hereby gladly confirm that the components of your remuneration as provided in
sections 4.1 and 4.2 of your works contract, including your remuneration as
corporate officer and President of Facom SAS will not, cumulatively, give rise
to an annual gross remuneration of less than five hundred thousand Euros (500
000€), nor be of more than such amount.

As a matter of form, we thank you for sending us a copy of this document with
your approval and signature.

Sincerely yours
 

      Corinne Herzog  
  Thierry Paternot
President          

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