EXHIBIT 10(xi)(h)

Date

Dear Thiery:

It is my pleasure to congratulate you for being selected to participate in the
Long Term Performance Award Program (the “Program”) under The 1997 Stanley Works
Long-Term Incentive Plan. This Program is intended to provide substantial,
equity-based rewards for specified full-time members of our senior executive
team, provided specific Corporate goals are achieved during the Program’s three
year measurement period (January 1, 2006 through January 3, 2009).

In conjunction with our short-term variable compensation program (MICP) and our
stock option program, the Program is an important addition to your total
compensation package, and provides a strong additional incentive to continue
increasing shareholder value.

Bonus Opportunity

Each participant will have an opportunity to earn a number of Performance Shares
(PS) based upon achievement of corporate financial goals, and may earn
additional performance shares if the corporate financial goals are exceeded.
Each PS unit represents one share of Stanley Common Stock and, accordingly, the
potential value of a participant’s performance award under the Program may
change as our stock price changes.

Each participant is allocated a threshold, target and maximum number of PS units
based upon assigned percentages of his or her annual base salary, at the rate in
effect as of January 1, 2006.

Your performance award covers the following number of PS units:

   
Threshold
 
Target
 
Max
 
# PS
   
12,226
   
24,453
   
37,050
 

Vesting and Settlement

Your Performance Award will become vested in accordance with the provisions of
the Restricted Stock Award Certificate enclosed herewith. The number of Shares
you shall receive, if any, in settlement of your Performance Award, shall be
equal to (i) the number of Shares specified above to be issued based upon the
Performance Goals achieved plus (ii) in the event performance falls between the
Threshold and Target or Target and Maximum Goals as specified in the Award
Document, a pro rata number of Shares calculated as follows (rounded to the
closest whole number):
 
S = (A-L/N-L)x(SN-SL)

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where:
S =the additional number of Shares to be issued
A =the actual EPS or ROCE achieved
L =the EPS or ROCE Goal reached
N =the next highest EPS or ROCE Goal
SN =the number of Shares designated for issuance at the next highest EPS or ROCE
Goal; and
SL = the number of Shares designated for issuance at the EPS or ROCE Goal
reached.
 
For purposes of these calculations, 50% of Shares are allocated to EPS
Performance Goals and 50% of Shares are allocated to ROCE Performance Goals.

Financial Measurements

The Corporate financial goals for this Program will consist of two equally
weighted metrics, one based on EPS and one based on ROCE, as set forth in the
attached document entitled LTIP Corporate Goals (2006-2008).

Although this summary includes the key aspects of the Program, it is not
intended to represent a full accounting of the rules and regulations applicable
to the Program and is subject to the terms described in the enclosed Restricted
Stock Award Certificate and the Stanley Works 1997 Long-Term Incentive Plan,
which together with this document govern the Program.

If you have any questions, please call me, Jim Loree or Mark Mathieu. Once
again, thank you for your continued support and congratulations on being
selected to participate in this important Program.

Best regards,

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