Exhibit
4.3


 


THIS DEBT SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE “SECURITIES ACT”), OR THE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION.  NEITHER THIS DEBT SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.


 


THE HOLDER OF THIS DEBT SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH DEBT SECURITY, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS DEBT SECURITY (OR ANY PREDECESSOR
OF SUCH DEBT SECURITY) ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE DEBT SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER,” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES TO NON-U.S.  PERSONS IN “OFFSHORE
TRANSACTIONS” WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D) AND (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.  AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S.  PERSON”
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.


 

















 


	
  No. 2005-1

  	
  $450,100,000

  



 


THE STANLEY WORKS

5.902% FIXED RATE/FLOATING RATE JUNIOR SUBORDINATED DEBT

SECURITIES DUE 2045


 


THE STANLEY WORKS, a Connecticut corporation(the “Company”, which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to HSBC BANK USA, NATIONAL ASSOCIATION,
in its capacity as Property Trustee of The Stanley Works Capital Trust I, or
registered assigns, the principal sum of FOUR HUNDRED FIFTY MILLION ONE HUNDRED
THOUSAND Dollars ($450,100,000) on December 1, 2045 and to pay interest on said
principal sum from November 22, 2005 or from the most recent interest payment
date (each such date, an “Interest Payment Date”) to which interest has been
paid or duly provided for.  Through the
final day of the Fixed Rate Period (or, if earlier, until the principal thereof
is paid), each Outstanding Debt Security will bear interest at the per annum
rate of 5.902% payable (subject to the provisions of the Indenture relating to
deferrals of such payments) semi-annually in arrears on June 1 and December 1
of each year commencing on June 1, 2006, and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at such Fixed Rate, compounded semi-annually.  During the Floating Rate Period, each
Outstanding Debt Security will bear interest during each Quarterly Interest
Accrual Period, payable (subject to the provisions of the Indenture relating to
deferrals of such payments) quarterly in arrears on each March 1, June 1,
September 1 and December 1, commencing March 1, 2011 at the rate equal to the
lower of (i) 1.40% plus the highest of the (x) 3-Month LIBOR Rate; (y) 10-Year
Treasury CMT, and (z) 30-Year Treasury CMT, as applicable for such Quarterly
Interest Accrual Period and (ii) 13.25% (such rate the “Floating Rate” with
respect to such Quarterly Interest Accrual Period) until the principal thereof
is paid, and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Floating Rate
prevailing from time to time, compounded quarterly at such prevailing Floating
Rates.  During the Fixed Rate Period, the
amount of interest payable on any Semi-Annual Interest Payment Date will be
computed on the basis of a 360-day year of twelve 30-day months, and the amount
of interest payable for any period shorter or longer than a full semi-annual
period for which interest is computed, will be computed on the basis of the
actual number of days elapsed in such 180-day semi-annual period.  During the Floating Rate Period, the amount
of interest payable for any period will be computed by multiplying the annual
Floating Rate in effect for the Quarterly Interest Accrual Period or portion
thereof in respect of which the interest payment is made by a fraction, the numerator
of which will be the actual number of days in such Quarterly Interest Accrual
Period (or a portion thereof) (determined by including the first day thereof
and excluding the last day thereof) and the denominator of which will be 365,
and multiplying the product obtained thereby by the principal amount hereof.  In the event that any date on which interest
is payable on this Debt Security is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and, in the case of a Semi-Annual Interest Payment Date, without
any interest or other payment in respect of any such delay).  The interest installment so payable, and
punctually paid or duly


 

















 


provided for, on any Interest Payment Date will,
as provided in the Indenture, be paid to the person in whose name this Debt
Security (or one or more Predecessor Securities, as defined in said Indenture)
is registered at the close of business on the regular record date for such
interest installment.  In the case of a
Global Security or any Debt Securities of which the Property Trustee is the holder;
such regular record date which, in respect of (i) Debt Securities of which the
Property Trustee is the registered holder and the Preferred Securities are in
book-entry only form or (ii) a Global Security, shall be the close of business
on the Business Day next preceding that Interest Payment Date.  Notwithstanding the foregoing sentence, if
(i) the Debt Securities are held by the Property Trustee and the Preferred
Securities are no longer in book-entry only form or (ii) the Debt Securities
are not represented by a Global Security, the Company may select a regular
record date at least one Business Day before an Interest Payment Date.  Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
holders on such regular record date, and may be paid to the Person in whose
name this Debt Security (or one or more Predecessor Securities) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered holders of this series of Debt Securities not less than (10) days
prior to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Debt Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.  The principal of (and premium, if any) and
the interest (including Compounded Interest, Additional Interest, Registration
Default Damages and Gross-Up Payments, if any) on this Debt Security shall be
payable at the office or agency of the Trustee maintained for that purpose in
Wilmington, Delaware, in any coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such address as shall
appear in the Security Register.  Notwithstanding
the foregoing, so long as the holder of this Debt Security is the Property
Trustee, the payment of the principal of (and premium, if any) and interest on
this Debt Security will be made at such place and to such account as may be
designated by the Property Trustee.


 


The indebtedness evidenced by this Debt Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debt Security is
issued subject to the provisions of the Indenture with respect thereto.  Each holder of this Debt Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.  Each holder hereof, by his
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such Holder upon said provisions.


 


This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed by
or on behalf of the Trustee.


 

















 


The provisions of this debt security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.


 

















 


IN WITNESS WHEREOF, the Company has caused this instrument to be executed.


 


Dated: November 22, 2005


 


	
   

  	
  THE STANLEY WORKS

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\

  	
   

  
	
   

  	
  Name: Craig A. Douglas

  
	
   

  	
  Title: Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  \s\

  	
   

  	
   

  
	
  Assistant Secretary

  	
   

  
						



 


 


CERTIFICATE OF AUTHENTICATION


 


This is one of the Debt Securities of the series of Debt Securities
described in the within-mentioned Indenture.


 


	
   

  	
  HSBC Bank USA, National

  Association, Not in its individual

  capacity but solely as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
	
   

  	
   

  



 

















 


(REVERSE OF NOTE)


 


This Debt Security is one of a duly authorized series of Debt
Securities of the Company (herein sometimes referred to as the “Debt Securities”),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of November 22, 2005, duly executed
and delivered between the Company and HSBC Bank USA, National Association, not
in its individual capacity but solely as trustee (the “Trustee”), as
supplemented by the First Supplemental Indenture thereto, dated as of November
22, 2005, between the Company and the Trustee (the Indenture, as so
supplemented, the “Indenture”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debt Securities.  By the terms of the Indenture, the Debt
Securities are issuable in series which may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Indenture.


 


Upon the occurrence and continuation of a Tax Event or an Investment
Company Event, as defined below, the Company shall have the right to redeem the
Debt Securities in whole, but not in part, for cash at the principal amount
together with any interest accrued and unpaid thereon (the “Special Redemption
Price”) within 90 days following the occurrence of such Special Event.  The Company shall have the right to redeem
this Debt Security at the option of the Company, in whole, but not in part, at
any time prior to December 1, 2010 at the Make Whole Redemption Price.  In addition, the Company shall have the right
redeem this Debt Security at the option of the Company, without premium or
penalty, in whole or in part, from time to time, on or after December 1, 2010
(an “Optional Redemption”), at a redemption price equal to 100% of the
principal amount plus any accrued but unpaid interest, including Additional
Interest, if any, to the date of such redemption (the “Optional Redemption
Price”).  The Special Redemption Price,
Make Whole Redemption Price or Optional Redemption Price, as applicable, shall
be paid prior to 12:00 noon, New York time, on the date of such redemption, or
at such earlier time as the Company determines.


 


Any redemption of the Debt Securities will be made upon not less than
30 days’ nor more that 60 days’ notice.  If
the Debt Securities are only partially redeemed by the Company pursuant to an
Optional Redemption, the Debt Securities will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided, that if at the time of
redemption, the Debt Securities are registered as a Global Security, the
Depositary shall determine the principal amount of such Debt Securities beneficially
held by each holder of a Debt Security to be redeemed.


 


In the event of redemption of this Debt Security in part only, a new
Debt Security or Debt Securities of this series for the unredeemed portion
hereof will be issued in the name of the holder hereof upon the cancellation
hereof.


 


In case an Acceleration Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Debt Securities
may be declared,


 

















 


and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.


 


The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debt Securities of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental indenture shall,
without the consent of the holder of each Debt Security so affected, (i) extend
the fixed maturity of any Debt Securities of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof;
(ii) amend, modify or waive the Company’s covenant to use its commercially
reasonable efforts to effect certain stock sales without a prior to simultaneous
irrevocable elimination of the restrictions contained in the Indenture of the
Company’s ability to pay deferred interest other than from the proceeds of
certain stock sales; or (iii) reduce the aforesaid percentage of Debt
Securities, the holders of which are required to consent to any such
supplemental indenture.  The Indenture
also contains provisions permitting the holders of a majority in aggregate
principal amount of the Debt Securities of such series at the time outstanding
affected thereby, on behalf of all of the holders of Debt Securities of such
series, to waive any past default in the performance of any of the covenants contained
in the Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the principal
of or premium; if any, or interest on any of the Debt Securities of such series.  Any such consent or waiver by the registered
holder of this Debt Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders
and owners of this Debt Security and of any Debt Security issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debt Security.


 


No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debt Security at the time and place and
at the rate and in the money herein prescribed.


 


So long as no Acceleration Event of Default has occurred and is
continuing, the Company shall have the right at any time during the term of the
Debt Securities, from time to time, to elect to defer payment of interest on
the Debt Securities on any Interest Payment Date, provided that (i) no such
deferral may extend beyond the maturity date of, or redemption date, for the
Debt Securities and (ii) no Mandatory Deferral Trigger Event with respect to
such Interest Payment Date has occurred prior to the issuance of the Company’s
notice of election (“Optional Deferral”). 
The Company may not elect Optional Deferral for an Interest Payment Date
if the Optional Deferral Period ending on such Interest Payment Date, together
with all consecutive Optional Deferral Periods and Mandatory Deferral Periods,
or combination thereof, preceding such elected Optional Deferral Period, with
respect to which any Deferred Interest remains outstanding, would exceed ten
years.


 

















 


Interest on the Debt Securities will continue
to accrue and compound during an Optional Deferral Period.  Upon the termination of an Optional Deferral
Period and upon the payment of all Deferred Interest, Registration Default Damages,
Additional Interest and Gross-Up Payments then due, the Company may select a new
period of Optional Deferral, subject to the foregoing requirements.  No interest shall be due and payable during a
period of Optional Deferral, except at the end thereof, but the Company may
prepay at any time all or any portion of the interest accrued during an
Optional Deferral Period.  In the event
that the Company provides a notice of election of Optional Deferral for an
Interest Payment Date prior to the Trigger Determination Date for such Interest
Payment Date, the notice of election of Optional Deferral will control and the
deferral of interest on such Interest Payment Date will be considered an
Optional Deferral for all purposes notwithstanding the subsequent occurrence of
a Mandatory Deferral Trigger Event on the Trigger Determination Date with
respect to such Interest Payment Date.


 


Subject to the following sentence, the Company shall not pay interest
on the Debt Securities on any Interest Payment Date in an amount in excess of
the New Common Equity Amount if a Mandatory Deferral Trigger Event has occurred
on the Trigger Determination Date with respect to such Interest Payment Date.  Notwithstanding the occurrence of a Mandatory
Deferral Trigger Event, the Company shall pay all interest due and payable on
the Debt Securities (i) on the maturity or earlier redemption thereof, and (ii)
on the first Interest Payment Date to occur following deferral of interest on
the Debt Securities due to Mandatory Deferral, Optional Deferral, or any
combination thereof, that has continued without payment in full of all deferred
interest for consecutive semi-annual and/or quarterly interest accrual periods
aggregating to in excess of ten years.  Deferral
of interest on the Debt Securities required under the terms of the Indenture is
referred to as “Mandatory Deferral.”


 


The Company shall give notice of any election of an Optional Deferral
not fewer than 15 nor more than 60 days prior to the Interest Payment Date for
which interest on the Debt Securities will be deferred.  If a Mandatory Deferral Trigger Event has occurred
as of any Trigger Determination Date, the Company shall give notice thereof not
less than 15 days prior to the related Interest Payment Date.


 


The Company may not pay on any Interest Payment Date interest that has
accrued during the semi-annual interest accrual period or quarterly interest
accrual period, as applicable, immediately preceding such Interest Payment
Date, unless the Company pays therewith all Deferred Interest at such time
outstanding on the Debt Securities.  The
Company may not pay Deferred Interest on any Interest Payment Date in an amount
that exceeds the New Common Equity Amount for such Interest Payment Date.


 


Each Holder of a Debt Security, by such Holder’s acceptance thereof,
agrees that upon any payment or distribution of assets to creditors of the
Company upon any liquidation, dissolution, winding up, reorganization, or in
connection with any insolvency, receivership or proceeding under any Bankruptcy
Law with respect to the Company, such Holder shall not have a claim for
interest deferred due to Mandatory Deferral and unpaid (and Compounded
Interest, Additional Interest and Gross-Up Payments thereon), to the extent
that the aggregate amount thereof (including Compounded Interest, Additional


 

















 


Interest and Gross-Up Payments thereon)
exceeds 25% of the original principal amount of the Debt Securities in respect
of which such interest was deferred.


 


As provided in the Indenture and subject to certain limitations therein
set forth, this Debt Security is transferable by the registered holder hereof
on the Security Register of the Company, upon surrender of this Debt Security
for registration of transfer at the office or agency of the Trustee in New York,
New York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorize in writing, and thereupon one or
more new Debt Securities of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees.  No service charge will be
made for any such transfer, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.


 


Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debt Security shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.


 


No recourse shall be had for the payment of the principal of or the
interest on this Debt Security, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.


 


The Debt Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to
certain limitations therein set forth, Debt Securities of this series are
exchangeable for a like aggregate principal amount of Debt Securities of this
series of a different authorize denomination, as requested by the Holder
surrendering the same.


 


All terms used in this Debt Security which are defined in the Indenture
shall have the meanings assigned to the Indenture.