EX-10.XI.C





Exhibit 10(xi)(c)



Terms and Conditions Applicable to

Long Term Performance Awards

issued pursuant to The Stanley Works 1997 and 2001 Long Term Incentive Plans



This document sets forth the Terms and Conditions applicable to long term performance awards
(“Performance Awards”) issued to eligible Employees pursuant to either The Stanley Works 1997
Long-Term Incentive Plan or The Stanley Works 2001 Long-Term Incentive Plan (the “Plan”) as
described in the Award Document.



Each Performance Award represents the right of the Participant to receive a number of Shares to be
issued if the Company achieves Performance Goals for the Measurement Period as set forth in the
Award Document.





	 	1.	 	Time and Manner of Settlement. As soon as practicable following completion of the
applicable Measurement Period, but in no event later than March 15 of the year following
the end of such period, and assuming that the Threshold Performance Goals are achieved and
employment requirements are satisfied, the Company shall issue a number of Shares to the
Participant, in settlement of the Participant’s Performance Award, equal to (i) the number
of Shares specified in the Award Document 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)



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.





If, at the time of settlement, the Participant meets or exceeds applicable Minimum
Ownership Guidelines set forth in the Award Document provided to that Participant,
Shares shall be issued in the form of Unrestricted Stock. If the Participant does not
meet the applicable Minimum Ownership Guidelines at the time of settlement, the Shares
shall be issued in the form of Restricted Stock to the extent necessary for such
Participant to meet such Minimum Ownership Guidelines at the time of settlement. Any
additional Shares shall be issued in the form of Unrestricted Stock.



 









 






	 	2.	 	Rights of a Shareholder. The Participant shall not have any rights of a
shareholder with respect to the Performance Awards or any Shares issued in settlement
thereof prior to the date of settlement.
	 
	 	3.	 	Transferability. Transferability shall be as set forth in the Plan.
	 
	 	4.	 	Adjustments. Notwithstanding any other provision hereof, the Committee shall
have authority to make adjustments in the terms and conditions of, and the criteria
included in, Performance Awards granted hereunder, as set forth in the Plan.
	 
	 	5.	 	Miscellaneous. The Committee shall have full authority to administer the
Performance Awards and to interpret the terms of the Award Document and this document,
which authority includes the authority to waive certain conditions in appropriate
circumstances. All decisions or interpretations of the Committee with respect to any
question arising in respect of the Performance Awards shall be binding, conclusive and
final. The waiver by Stanley of any provision of this document or an Award Document
shall not operate as or be construed to be a subsequent waiver of the same provision
or a waiver of any other provision of this document or any Award Document. The
validity and construction of the terms of this document and any Award Document shall
be governed by the laws of the State of Connecticut. The terms and conditions set
forth in this document and any Award Document are subject in all respects to the terms
and conditions of the Plan, which shall be controlling. The Participant agrees to
execute such other agreements, documents or assignments as may be necessary or
desirable to effect the purposes hereof.
	 
	 	6.	 	Unfunded Arrangement. The Performance Awards represented in any Award
Document constitute an unfunded unsecured promise of Stanley and the rights of the
Participant in respect of the Performance Awards are no greater than the rights of an
unsecured creditor of Stanley.
	 
	 	7.	 	Change in Control. Notwithstanding any provision in the Award documents to
the contrary, upon a Change in Control, unless otherwise determined by the Committee
with respect to a Performance Award at the time of its grant, each outstanding
Performance Award shall be cancelled and in respect of his or her cancelled
Performance Award a Participant shall receive a pro rata portion of the Performance
Award, calculated by assuming the achievement of the applicable Performance Goal or
Performance Goals at target levels and then multiplying this amount by a fraction, the
numerator of which is the number of days completed in the Performance Period prior to
the Change in Control and the denominator of which is the total number of days in the
Performance Period. The pro rata portion of the Performance Award shall be issued in
accordance with the terms of the Plan not later than 15 days following such Change in
Control. In addition, if any Performance Award which a Participant earned under




 









 






	 	 	 	the Plan during any Performance Period which ended prior to the Change in Control
has neither been issued to the Participant nor credited to such Participant under a
deferred compensation plan maintained or sponsored by the Company or an Affiliate
prior to the Change in Control, such Performance Award shall be settled in
accordance with the Plan as soon as practicable and in no event later than the
later of (i) March 1st following the year in respect of which the
Performance Award was earned or (ii) the fifteenth day following the Change in
Control, provided, however, that in no event shall such settlement occur later than
March 15 of the year following the year in respect of which the Performance Award
was earned. After a Change in Control, the Committee may not exercise its
discretion pursuant to Section 5 hereof to decrease the amount of stock issuable in
respect of any Performance Award which is outstanding immediately prior to the
occurrence of the Change in Control.
	 
	 	8.	 	Capitalized Terms. The following capitalized terms shall have the meaning
set forth below for purposes of any Award Document. All other capitalized terms used
in this document shall have the meanings set forth in the Plan.
	 
	 	 	 	Award Document. A letter or combination of letters to a Participant that advises
the Participant that he or she has been selected to Participate in the program and
sets forth the EPS Performance Goals, ROCE Performance Goals and Shares at the
Threshold, Target and Maximum Levels, signed by the Chairman of the Committee, in
the case of an Award Document to the Chief Executive Officer, and by the Chief
Executive Officer, in the case of an Award Document to any other Participant.
	 
	 	 	 	EPS Performance Goals. Threshold, Target and Maximum earnings per share (“EPS”)
performance to be achieved over the Measurement Period as set forth in the Award
Document.
	 
	 	 	 	Measurement Period. The period during which financial performance is measured
against the applicable Performance Goals as set forth in the Award Document.
	 
	 	 	 	Minimum Ownership Guidelines. Minimum levels of stock ownership Participants are
expected to reach over time, as set forth in the Award Document.
	 
	 	 	 	Performance Goals. EPS Performance Goals and ROCE Performance Goals as defined
herein.
	 
	 	 	 	Restricted Stock. Common Stock of the Company that confers on holders the right to
vote and receive dividends, but that is subject to certain restrictions on sale and
transfer. All restrictions on sale and transfer of such stock shall lapse on the
date the Participant’s employment




 









 






	 	 	 	with the Company or any Affiliate terminates, regardless of the reason for
termination, provided, however, that a transfer of employment from the Company to
any Affiliate or from any Affiliate to another Affiliate or to the Company shall
not be deemed a termination of employment hereunder. In addition, if through the
acquisition of additional Shares or otherwise, the total market value of shares
owned by a Participant (restricted and unrestricted) exceeds any applicable Minimum
Ownership Guidelines, the restrictions on the sale and transfer of that number of
Shares of Restricted Stock in excess of the number required to meet the applicable
Minimum Ownership Guidelines shall lapse.
	 
	 	 	 	ROCE Performance Goals. Threshold, Target and Maximum return on capital employed
(“ROCE”) performance to be achieved over the Measurement Period as set forth in the
Award Document.
	 
	 	 	 	Shares. Shares of Restricted Stock or Unrestricted Stock to be issued if
Performance Goals are achieved, as specified in an Award Document, with 50% of
Shares allocated to EPS Performance Goals and 50% of Shares allocated to ROCE
Performance Goals.
	 
	 	 	 	Unrestricted Stock. Common Stock of the Company that may be sold at any time.