Exhibit 10(iii)(a)
THE STANLEY WORKS
2009 LONG-TERM INCENTIVE PLAN
Section 1. Purpose
     The purposes of this Long-Term Incentive Plan (the “Plan”) are to encourage
selected salaried employees of The Stanley Works (together with any successor
thereto, the “Company”) and selected salaried employees and non-employee
directors of its Affiliates (as defined below) to acquire a proprietary interest
in the growth and performance of the Company, to generate an increased incentive
to contribute to the Company’s future success and prosperity, thus enhancing the
value of the Company for the benefit of its shareholders, and to enhance the
ability of the Company and its Affiliates to attract and retain exceptionally
qualified individuals upon whom, in large measure, the sustained progress,
growth and profitability of the Company depend.
Section 2. Definitions
     As used in the Plan, the following terms shall have the meanings set forth
below:

  (a)   “Affiliate” shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in which
the Company has a significant equity interest, as determined by the Committee.  
  (b)   “Award” shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, or Other
Stock-Based Award granted under the Plan.     (c)   “Award Agreement” shall mean
any written agreement, contract, or other instrument or document evidencing any
Award granted under the Plan. An Award Agreement may be in an electronic medium.
    (d)   “Board of Directors” or “Board” shall mean the Board of Directors of
the Company.     (e)   “Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time.     (f)   “Committee” shall mean the Compensation and
Organization Committee of the Board.     (g)   “Dividend Equivalent” shall mean
any right granted under Section 6(e) of the Plan.     (h)   “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time.     (i)
  “Fair Market Value” shall mean, with respect to any property other than
Shares, the fair market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee, and with
respect to

 

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      Shares, shall mean the mean average of the high and the low price of a
Share as quoted on the New York Stock Exchange Composite Tape on the date as of
which fair market value is to be determined or, if there is no trading of Shares
on such date, such mean average of the high and the low price on the next
preceding date on which there was such trading.     (j)   “Full Value Award”
shall mean an Award that is settled by the issuance of Shares, other than a
Stock Option or Stock Appreciation Right.     (k)   “Immediate family members”
of a Participant shall mean the Participant’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
employee’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in
which these persons (or the employee) control the management of assets, and any
other entity in which these persons (or the employee) own more than fifty
percent of the voting interests.     (l)   “Incentive Stock Option” shall mean
an option granted under Section 6(a) of the Plan that is intended to meet the
requirements of Section 422 of the Code, or any successor provision thereto.    
(m)   “1997 Plan” shall mean the Company’s 1997 Long-Term Incentive Plan.    
(n)   “Non-Employee Director” shall mean any non-employee director of an
Affiliate.     (o)   “Non-Qualified Stock Option” shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.     (p)   “Option” shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.     (q)   “Other Stock-Based Award” shall mean any
right granted under Section 6(f) of the Plan.     (r)   “Participant” shall mean
a Salaried Employee or Non-Employee Director designated to be granted an Award
under the Plan.     (s)   “Performance Award” shall mean any Award granted under
Section 6(d) of the Plan.     (t)   “Person” shall mean any individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, or government or political subdivision thereof.    
(u)   “Released Securities” shall mean securities that were Restricted
Securities with respect to which all applicable restrictions have expired,
lapsed, or been waived.

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  (v)   “Restricted Securities” shall mean securities covered by Awards of
Restricted Stock or other Awards under which issued and outstanding Shares are
held subject to certain restrictions.     (w)   “Restricted Stock” shall mean
any Share granted under Section 6(c) of the Plan.     (x)   “Restricted Stock
Unit” shall mean any right granted under Section 6(c) of the Plan that is
denominated in Shares.     (y)   “Salaried Employee” shall mean any salaried
employee of the Company or of any Affiliate.     (z)   “Shares” shall mean
shares of the common stock of the Company, par value $2.50 per share, and such
other securities or property as may become the subject of Awards, or become
subject to Awards, pursuant to an adjustment made under Section 4(b) of the
Plan.     (aa)   “Stock Appreciation Right” shall mean any right granted under
Section 6(b) of the Plan.     (bb)   “2001 Plan” shall mean the Company’s 2001
Long-Term Incentive Plan.

Section 3. Administration
     Except as otherwise provided herein, the Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, the Committee
shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to each Participant
under the Plan; (iii) determine the number of Shares to be covered by or with
respect to which payments, rights, or other matters are to be calculated in
connection with Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards, or
other property, or canceled, forfeited, or suspended, and the method or methods
by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine in accordance with the requirements of Section 409A of the Code
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any shareholder, and any employee of the
Company or of any Affiliate. All elective deferrals permitted pursuant to this
Section 3 shall be accomplished by the delivery of a written, irrevocable
election by the

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Participant on a form provided by the Company. All deferrals shall be made in
accordance with administrative guidelines established by the Committee to ensure
that such deferrals comply with all applicable requirements of Section 409A of
the Code. The Committee may credit interest, at such rates to be determined by
the Committee, on cash payments that are deferred and credit dividends or
dividend equivalents on deferred payments denominated in the form of Shares. The
Committee may, in its discretion, require deferral of payment of any Award
(other than an Option or Stock Appreciation Right) or portion thereof if the
deduction with respect to such payment would, or could in the reasonable
anticipation of the Committee, not be permitted due to the application of
Section 162(m) of the Code.
Section 4. Shares Available for Awards

  (a)   Shares Available. Subject to adjustment as provided in Section 4(b):

  (i)   Calculation of Number of Shares Available. The number of Shares
authorized to be issued in connection with the granting of Awards under the Plan
is five million one hundred thousand (5,100,000). If any Shares covered by an
Award granted under the Plan or by an award granted under the 2001 Plan or the
1997 Plan, or to which such an Award or award relates, are forfeited, or if an
Award or award otherwise terminates without the delivery of Shares or of other
consideration, then the Shares covered by such Awards or award, or to which such
Award or award relates, or the number of Shares otherwise counted against the
aggregate number of Shares available under the Plan with respect to such Award
or award, to the extent of any such forfeiture or termination, shall again be,
or shall become available for granting Awards under the Plan. Notwithstanding
the foregoing but subject to adjustment as provided in Section 4(b), (A) no more
than one million (1,000,000) Shares shall be cumulatively available for delivery
pursuant to the exercise of Incentive Stock Options and (B) no more than two
million five hundred thousand (2,500,000) Shares shall be cumulatively available
for issuance in connection with the payment or settlement of Full Value Awards.

  (ii)   Accounting for Awards. For purposes of this Section 4,

  (A)   if an Award (other than a Dividend Equivalent) is denominated in Shares,
the number of Shares covered by such Award, or to which such Award relates,
shall be counted on the date of grant of such Award against the aggregate number
of Shares available for granting Awards under the Plan; and     (B)   Dividend
Equivalents shall be counted against the aggregate number of Shares available
for granting Awards under the Plan, if at all, only in such amount and at such
time as the Committee shall determine under procedures adopted by the Committee
consistent with the purposes of the Plan; provided, however, that Awards that
operate in tandem with (whether granted simultaneously with or at

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      a different time from), or that are substituted for, other Awards or
awards granted under the 2001 Plan or the 1997 Plan may be counted or not
counted under procedures adopted by the Committee in order to avoid double
counting. Any Shares that are delivered by the Company, and any Awards that are
granted by, or become obligations of, the Company through the assumption by the
Company or an Affiliate of, or in substitution for, outstanding awards
previously granted by an acquired company, shall not be counted against the
Shares available for granting Awards under the Plan.

  (iii)   Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

  (b)   Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation split-up, spin-off, combination
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) which thereafter may be made the subject of
Awards, (ii) the number and type of Shares (or other securities or property)
subject to outstanding Awards, (iii) the number and type of Shares (or other
securities or property) specified as the annual per-participant limitation under
Sections 6(g)(vi) and 6(g)(viii), and (iv) the grant, purchase, or exercise
price with respect to any Award, or, if deemed appropriate, make provision for a
cash payment to the holder of an outstanding Award; provided, however, in each
case, that with respect to Awards of Incentive Stock Options no such adjustment
shall be authorized to the extent that such authority would cause the Plan to
violate Section 422(b)(1) of the Code or any successor provision thereto; and
provided further, however, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.

Section 5. Eligibility
     Any Salaried Employee, including any officer or employee-director of the
Company or of any Affiliate, and any Non-Employee Director, who is not a member
of the Committee shall be eligible to be designated a Participant.

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Section 6. Awards

  (a)   Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of the
Plan, as the Committee shall determine:

  (i)   Exercise Price. The purchase price per Share purchasable under an Option
shall be determined by the Committee; provided, however, that such purchase
price shall not be less than the Fair Market Value of a Share on the date of
grant of such Option (or, if the Committee so determines, in the case of any
Option retroactively granted in tandem with or in substitution for another Award
or any outstanding award granted under any other plan of the Company, on the
date of grant of such other Award or award).     (ii)   Option Term. The term of
each Option shall be fixed by the Committee; provided, however, that in no event
shall the term of any Option exceed a period of ten years from the date of its
grant.     (iii)   Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part, and
the method or methods by which, and the form or forms, including, without
limitation, cash, Shares, other Awards, or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the relevant
exercise price, in which, payment of the exercise price with respect thereto may
be made or deemed to have been made.     (iv)   Incentive Stock Options. The
terms of any Incentive Stock Option granted under the plan shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision thereto, and any regulations promulgated thereunder. No Incentive
Stock Option shall be granted to any Non-Employee Director who is not otherwise
an employee of the Company or any of its Affiliates.     (v)   Transferability.
An Option shall not be transferable other than by will or the laws of descent
and distribution or pursuant to a domestic relations order, as defined in the
Code, and, during the Participant’s lifetime, shall be exercisable only by the
Participant, except that the Committee may:

  (A)   permit exercise, during the Participant’s lifetime, by the Participant’s
guardian or legal representative; and     (B)   permit transfer, upon the
Participant’s death, to beneficiaries designated by the Participant in a manner
authorized by the Committee, provided that the Committee determines that such
exercise and such transfer are consonant with requirements for exemption from
Section 16(b) of the Exchange Act and, with

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      respect to an Incentive Stock Option, the requirements of Section
422(b)(5) of the Code; and

  (C)   grant Non-Qualified Stock Options that are transferable, or amend
outstanding Non-Qualified Stock Options to make them so transferable, without
payment of consideration, to Immediate Family of the Participant.

  (b)   Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants. Subject to the terms of the Plan and
any applicable Award Agreement, a Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive in cash or Shares, at
the Company’s sole discretion, upon exercise thereof, the excess of (i) the Fair
Market Value of one Share on the date of exercise over (ii) the grant price of
the right as specified by the Committee, which shall not be less than the Fair
Market Value of one Share on the date of grant of the Stock Appreciation Right
(or, if the Committee so determines, in the case of any Stock Appreciation Right
retroactively granted in tandem with or in substitution for another Award or any
outstanding award granted under any other plan of the Company, on the date of
grant of such other Award or award). Subject to the terms of the Plan and any
applicable Award Agreement, the grant price, term, methods of exercise, methods
of settlement, and any other terms and conditions of any Stock Appreciation
Right shall be as determined by the Committee; provided that no Stock
Appreciation Right shall be exercisable more than ten (10) years from the date
of grant. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem appropriate.     (c)  
Restricted Stock and Restricted Stock Units.

  (i)   Issuance. The Committee is hereby authorized to grant Awards of
Restricted Stock and Restricted Stock Units to Participants.     (ii)  
Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be
subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote a Share of Restricted Stock or
the right to receive any dividend or other right or property), which
restrictions, subject to Section 6(e), may lapse separately or in combination at
such time or times, in such installments or otherwise, as the Committee may deem
appropriate.     (iii)   Registration. Any Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of Shares of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear

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      an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock.

  (iv)   Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment (as determined under criteria established by the
Committee) for any reason during the applicable restriction period, all Shares
of Restricted Stock and all Restricted Stock Units still, in either case,
subject to restriction shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a waiver would be
in the best interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units. Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be delivered to the holder of Restricted Stock
promptly after such Restricted Stock shall become Released Securities.     (v)  
Restricted Stock Units. Notwithstanding anything to the contrary in the Plan or
in any Award Agreement, Restricted Stock Units shall be subject to the following
requirements. Unless previously forfeited, and subject to Section 10(b),
Restricted Stock Units shall be settled on the 30th day following the earliest
of (I) the applicable vesting date set forth in the Award Agreement, (II) the
Participant’s death, (III) the Participant’s separation from service within the
meaning of Section 409A of the Code after attaining the age of 55 and completing
10 years of service or as a result of a disability within the meaning of
Section 22(e)(3) of the Code. If the Committee reasonably anticipates that
making a payment in respect of Restricted Stock Units may violate Federal
securities laws or other applicable law, such payment may be delayed and made in
accordance with Section 409A of the Code and Section 1.409A-2(b)(7)(ii) of the
Treasury Regulations thereunder.

  (d)   Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants. Subject to the terms of the Plan and any
applicable Award Agreement, a Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including without limitation,
Restricted Stock), other securities, other Awards, or other property and
(ii) shall confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the Performance
Award, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish.        
Performance goals shall be based on one or more of the following criteria,
determined in accordance with generally accepted accounting principles, where
applicable: (i) pre-tax income or after-tax income; (ii) earnings including
operating income, earnings before or after taxes, earnings before or after
interest, depreciation, amortization, or extraordinary or special items;
(iii) net income excluding amortization of intangible assets, depreciation and
impairment of

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      goodwill and intangible assets; (iv) operating income; (v) earnings or
book value per share (basic or diluted); (vi) return on assets (gross or net),
return on investment, return on capital, or return on equity; (vii) return on
revenues; (viii) net tangible assets (working capital plus property, plants and
equipment) or return on net tangible assets (operating income divided by average
net tangible assets) or working capital; (ix) operating cash flow (operating
income plus or minus changes in working capital less capital expenditures);
(x) cash flow, free cash flow, cash flow return on investment (discounted or
otherwise), net cash provided by operations, or cash flow in excess of cost of
capital; (xi) sales or sales growth; (xii) operating margin or profit margin;
(xiii) share price or total shareholder return; (xiv) earnings from continuing
operations; (xv) cost targets, reductions or savings, productivity or
efficiencies; (xvi) economic value added; and (xvii) strategic business
criteria, consisting of one or more objectives based on meeting specified market
penetration or market share, geographic business expansion, customer
satisfaction, employee satisfaction, human resources management, financial
management, project management, supervision of litigation, information
technology, or goals relating to divestitures, joint ventures or similar
transactions.         Where applicable, the performance goals may be expressed
in terms of attaining a specified level of the particular criterion or the
attainment of a percentage increase or decrease in the particular criterion, and
may be applied to one or more of the Company or a parent or subsidiary of the
Company, or a division or strategic business unit of the Company, all as
determined by the Committee. The performance goals may include a threshold level
of performance below which no payment will be made (or no vesting will occur),
levels of performance at which specified payments will be paid (or specified
vesting will occur) and a maximum level of performance above which no additional
payment will be made (or at which full vesting will occur).         Subject to
the terms of the Plan and any applicable Awards Agreement, the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award granted, and the amount of any
payment or transfer to be made pursuant to any Performance Award shall be
determined by the Committee.

  (e)   Dividend Equivalents. The Committee is hereby authorized to grant to
Participants Awards (other than Awards in respect of Options and Stock
Appreciation Rights) under which the holders thereof shall be entitled to
receive payments equivalent to dividends or interest with respect to a number of
Shares determined by the Committee, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested. Dividend equivalents credited in respect of an Award will
vest (or be forfeited) and will settle at the same time as the underlying Award
to which they relate. Subject to the terms of the Plan and any applicable Awards
Agreement, such Awards may have such additional terms and conditions as the
Committee shall determine.

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  (f)   Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants must comply with applicable law. Subject to
the terms of the Plan and any applicable Award Agreement, the Committee shall
determine the terms and conditions of such Awards. Shares or other securities
delivered pursuant to a purchase right granted under this Section 6(f) shall be
purchased for such consideration, which may be paid by such method or methods
and in such form or forms, including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any combination thereof, as the
Committee shall determine, the value of which consideration, as established by
the Committee, shall not be less than the Fair Market Value of such Shares or
other securities as of the date such purchase right is granted (or, if the
Committee so determines, in the case of any such purchase right retroactively
granted in tandem with or in substitution for another Award or any outstanding
award granted under any other plan of the Company, on the date of grant of such
other Award or award).     (g)   General.

  (i)   No Cash Consideration for Awards. Awards may be granted for no cash
consideration or for such minimal cash consideration as may be required by
applicable law.     (ii)   Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or in addition
to, in tandem with, or in substitution for any other Award or any awards granted
under any other plan of the Company or any Affiliate. Awards granted in addition
to or in tandem with other Awards, or in addition to or in tandem with awards
granted under any other plan of the Company or any Affiliate, may be granted
either at the same time as or at a different time from the grant of such other
Awards or awards.     (iii)   Forms of Payment Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Company or an Affiliate upon the grant, exercise, or payment
of an Award may be made in such form or forms as the Committee shall determine,
including, without limitation, cash, Shares, other securities, other Awards, or
other property, or any combination thereof, and may be made in a single payment
or transfer, in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents in respect of installment or deferred
payments.

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  (iv)   Limits on Transfer of Awards. Except as provided in Section 6(a) above
regarding Options, no Award (other than Released Securities), and no right under
any such Award, shall be assignable, alienable, saleable, or transferable by a
Participant otherwise than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined in the Code (or, in
the case of an Award of Restricted Securities, to the Company); provided,
however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any property
distributable, with respect to any Award upon the death of the Participant. Each
Award, and each right under any Award, shall be exercisable, during the
Participant’s lifetime, only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative. No Award
(other than Released Securities), and no right under any such Award, may be
pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate. Except as permitted under Section 409A of
the Code, any deferred compensation (within the meaning of Section 409A of the
Code) payable to Participant or for a Participant’s benefit under this Plan and
Awards hereunder may not be reduced by, or offset against, any amount owing by a
Participant to the Company or any Affiliate.     (v)   Terms of Awards. The Term
of each Award shall be for such period as may be determined by the Committee;
provided, however, that in no event shall the term of any Incentive Stock Option
exceed a period of ten years from the date of its grant.     (vi)   Per-Person
Limitation on Options and SARs. The number of Shares with respect to which
Options and SARs may be granted under the Plan to an individual Participant in
any three-year period from January 4, 2009 through the end of the term shall not
exceed 4,000,000 Shares, subject to adjustment as provided in Section 4(b).    
(vii)   Share Certificates. All certificates for Shares or other securities
delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
Shares or other securities are then listed, and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.    
(viii)   Maximum Payment Amount. The maximum fair market value of payments to
any executive officer made in connection with any long-term

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      performance awards (except for payments made in connection with Options or
Stock Appreciation Rights) granted under the Plan shall not, during any
three-year period, exceed two percent of the Company’s shareholders’ equity as
of the end of the year immediately preceding the commencement of such three-year
period.

Section 7. Amendment and Termination
     Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

  (a)   Amendments to the Plan. The Board of Directors of the Company may amend,
alter, suspend, discontinue, or terminate the Plan, including, without
limitation, any amendment, alteration, suspension, discontinuation, or
termination that would impair the rights of any Participant, or any other holder
or beneficiary of any Award theretofore granted, without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, that, notwithstanding any other provision of the Plan
or any Award Agreement, without the approval of the shareholders of the Company
no such amendment, alteration, suspension, discontinuation, or termination shall
be made that would:

  (i)   increase the total number of Shares available for Awards under the Plan,
except as provided in Section 4 hereof; or     (ii)   permit Options, Stock
Appreciation Rights, or other Stock-Based Awards encompassing rights to purchase
Shares to be granted with per Share grant, purchase, or exercise prices of less
than the Fair Market Value of a Share on the date of grant thereof, except to
the extent permitted under Sections 6(a), 6(b), or 6(f) hereof.

  (b)   Adjustments of Awards Upon Certain Acquisitions. In the event the
Company or any Affiliate shall assume outstanding employee awards or the right
or obligation to make future such awards in connection with the acquisition of
another business or another corporation or business entity, the Committee may
make such adjustments, not inconsistent with the terms of the Plan, in the terms
of Awards as it shall deem appropriate in order to achieve reasonable
comparability or other equitable relationship between the assumed awards and the
Awards granted under the Plan as so adjusted.     (c)   Adjustments of Awards
Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee
shall be authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(b) hereof)
affecting the Company, any Affiliate, or the financial statements of the Company
or any Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement

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      of the benefits or potential benefits to be made available under the Plan;
provided that such adjustments shall be consistent with the requirements of
Section 162(m) of the Code with regard to Awards subject to Section 162(m) of
the Code.

  (d)   Certain Adjustments of Awards Not Permitted. Except in connection with
an event or transaction described in subsections (b) or (c) or Section 4(b), the
terms of outstanding Awards may not be amended to reduce the purchase price per
share purchasable under an Option or the grant price of Stock Appreciation
Rights, or cancel outstanding Options or Stock Appreciation Rights in exchange
for cash, other Awards or Options or Stock Appreciation Rights with a purchase
price per share or grant price, as applicable, that is less than the purchase
price per share or grant price of the original Options or Stock Appreciation
Rights, as applicable, without shareholder approval.     (e)   Correction of
Defects, Omissions and Inconsistencies. The Committee may correct any defect,
supply any omission, or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry the Plan into
effect.

Section 8. General Provisions

  (a)   No Rights to Awards. No Salaried Employee, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Salaried Employees, Participants, or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to each recipient.     (b)  
Delegation. The Committee may delegate to one or more officers or managers of
the Company or any Affiliate, or a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend or terminate Awards held by, Salaried Employees
who are not officers of the Company for purposes of Section 16 of the Exchange
Act.     (c)   Withholding. The Company or any Affiliate shall be authorized to
withhold from any Award granted or any payment due or transfer made under any
Award or under the Plan the minimum amount (in cash, Shares, other securities,
other Awards, or other property) of withholding taxes due in respect of an
Award, its exercise, or any payment or transfer under such Awards or under the
Plan and to take such other action as may be necessary in the opinion of the
Company or Affiliate to satisfy all obligations for the payment of such taxes.  
  (d)   No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.

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  (e)   No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability, or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
    (f)   Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Connecticut and applicable Federal law.     (g)  
Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to
any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person, or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.     (h)   No Trust or Fund Created.
Neither the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.     (i)   No Fractional
Shares. No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award, and the Committee shall determine whether cash, other securities,
or other property shall be paid or transferred in lieu of any fractional Shares,
or whether such fractional Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.     (j)   Headings. Headings are given to
the Sections and subsections of the Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of the Plan or any provision thereof.

Section 9. Change in Control

  (a)   Upon the occurrence of a Change in Control (as hereinafter defined),
unless otherwise determined by the Committee and set forth in an Award
Agreement:

  (i)   all Options and Stock Appreciation Rights, whether granted as
performance awards or otherwise, shall become immediately exercisable in full
for the remainder of their terms, and Grantees shall have the right to have the
Company purchase all or any number of such Options or Stock Appreciation Rights
for cash for a period of thirty (30) days following a

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      Change in Control at the Option Acceleration Price (as hereinafter
defined); and

  (ii)   all restrictions applicable to all Restricted Stock and Restricted
Stock Units, whether such Restricted Stock and Restricted Stock Units were
granted as performance awards or otherwise, shall immediately lapse and have no
effect, and Grantees shall have the right to have the Company purchase all or
any number of such Restricted Stock Units and shares of Restricted Stock for
cash for a period of thirty (30) days following a Change in Control at the
Restricted Stock Acceleration Price (as hereinafter defined).     (iii)   In
addition, for each Option or Stock Appreciation Right with a purchase price per
share or grant price, as applicable, that is greater than the consideration
offered in connection with any Change in Control, the Committee may in its sole
discretion elect to cancel such Option or Stock Appreciation Right without any
payment to the person holding such Option or Stock Appreciation Right.

(b)   (i)   The “Restricted Stock Acceleration Price” is the highest of the
following on the date of a Change in Control:

  (A)   the highest reported sales price of a share of the Common Stock within
the sixty (60) days preceding the date of a Change in Control, as reported on
any securities exchange upon which the Common Stock is listed,     (B)   the
highest price of a share of the Common Stock reported in a Schedule 13D or an
amendment thereto as paid within the sixty (60) days preceding the date of the
Change in Control,     (C)   the highest tender offer price paid for a share of
the Common Stock, and     (D)   any cash merger or similar price paid for a
share of the Common Stock.

  (ii)   The “Option Acceleration Price” is the excess of the price received by
shareholders of the Company for one Share pursuant to the Change in Control over
the exercise price or the grant price of the award; provided, however, that the
Option Acceleration Price is limited to the spread between the Fair Market Value
(which shall be based on the per Share price received by the shareholders of the
Company pursuant to such Change in Control) and the exercise price or grant
price. In the event the Change in Control is effected pursuant to a
stock-for-stock transaction, the price received by shareholders of the Company
for one Share pursuant to the Change in Control shall be calculated using the
exchange ratio applied in the transaction.

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  (c)   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, as hereinafter defined, is or becomes the Beneficial Owner,
as hereinafter defined, directly or indirectly, of securities of the Company, as
hereinafter defined, (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, 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 director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders 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 December 17,
2003 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
shareholders 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

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      shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.     (V)  
Notwithstanding any provision of this Plan to the contrary, to the extent an
award shall be deemed to be vested or restrictions lapse, expire or terminate
upon the occurrence of a Change in Control and such Change in Control is not
described by Section 409A(a)(2)(A)(v) of the Code, then any resulting payment
permitted by Section 9 that would be considered deferred compensation under
Section 409A of the Code will instead be made to the Participant on the 30th day
following the earliest of (A) the Participant’s “separation from service” with
the Company (determined in accordance with Section 409A of the Code); (B) the
date payment otherwise would have been made in the absence of any provisions in
this Plan to the contrary (provided such date is permissible under Section 409A
of the Code), or (C) the Participant’s death.

  (d)   Solely for purposes of Section 9(c) and (d), and notwithstanding
anything to the contrary in any other provision of this Plan, the following
terms shall have the meanings indicated below:

  1.   “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.     2.   “Company” shall mean The Stanley Works.     3.  
“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 shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

Section 10. Compliance with Section 409A of the Code.

  (a)   To the extent applicable, it is intended that this Plan and any grants
made hereunder comply with the provisions of Section 409A of the Code, so that
the income inclusion provisions of Section 409A(a)(1) of the Code do not apply
to Participants. This Plan and any Awards granted hereunder shall be
administered in a manner consistent with this intent. Any reference in this Plan
to Section 409A of the Code will also include any regulations or any other
formal guidance promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.

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  (b)   If at the time of a Participant’s separation from service (within the
meaning of Section 409A of the Code), (i) the Participant shall be a specified
employee (within the meaning of Section 409A of the Code and using the
identification methodology selected by the Company from time to time) and
(ii) the Company shall make a good faith determination that an amount payable
hereunder constitutes deferred compensation (within the meaning of Section 409A
of the Code) the payment of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A of the Code in order to avoid
taxes or penalties under Section 409A of the Code, then the Company shall not
pay such amount on the otherwise scheduled payment date but shall instead pay
it, without interest, on the first business day of the seventh month after such
six-month period or, if earlier, on the Participant’s death.     (c)  
Notwithstanding any provision of this Plan or of any Award Agreement to the
contrary, in light of the uncertainty with respect to the proper application of
Section 409A of the Code, the Company reserves the right to make amendments to
this Plan and any Award Agreements as the Company deems necessary or desirable
to avoid the imposition of taxes or penalties under Section 409A of the Code. In
any case, a Participant shall be solely responsible and liable for the
satisfaction of all taxes and penalties that may be imposed on a Participant or
for a Participant’s account in connection with this Plan and any Award
Agreements (including any taxes and penalties under Section 409A of the Code),
and neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold a Participant harmless from any or all of such taxes
or penalties.

Section 11. Effective Date of the Plan
     The Plan shall be effective as of January 4, 2009.
Section 12. Term of the Plan
     No Award shall be granted under the Plan after January 3, 2019. However,
unless otherwise expressly provided in the plan or in an applicable Award
Agreement, any Award theretofore granted may extend beyond such date, and the
authority of the Committee to amend, alter, or adjust any such Award, or to
waive any conditions or rights under any such Award, and the authority of the
Board of Directors of the Company to amend the Plan, shall extend beyond such
date.

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