Document:

Amended and Restated Effective January 1, 2009
 
	
                         
 	
                        Except As Otherwise Provided
 

THE STANLEY WORKS 

Supplemental Executive Retirement Program

The Supplemental Executive Retirement Program (“SERP”) provides a supplemental retirement benefit to its Participants. In order for the SERP to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), and the Regulations thereunder, The Stanley Works (“Stanley”) now desires to amend the SERP in the form of a restated plan, as follows, effective January 1, 2009, except that (i) Sections 1, 7(d) and 7(e) shall be effective January 1, 2007, and (ii) the last two sentences in Section 6, the last sentence in Section 7(c), and Appendix B shall be effective January 1, 2008.

1. Participants. The employees eligible to participate in the SERP are Stanley’s chief executive officer, and such other executives, not to exceed 24, as were designated by the chief executive officer and whose names were filed with the records of the Compensation and Organization Committee (“Committee”) of Stanley’s Board (“Eligible Employees”). An Eligible Employee becomes a Participant in the SERP upon reaching age 50 and completing five years of service with Stanley as an Eligible Employee (“Years of Pre-Participation Service”). Anything herein to the contrary notwithstanding, an employee who is not a Participant on January 1, 2007, shall not become a Participant unless he is Stanley’s chief executive
officer on January 1, 2007 and, in 2009, meets the age 50 and five Years of Pre-Participation Service requirements specified above.

2. Target Benefit.

(a) Target Benefit Formula. The “Target Benefit” for a Participant, expressed as a single life annuity, payable annually, equal to a percentage of Average Pay and subject to discount and to certain Offsets, will be based on years of service according to the following schedule.

3% for each of the first 5 years 

2% for each of the next 15 years 

1% for each of the 5 years thereafter

For example, if a Participant’s “Separation from Service”, as defined in Section 2(b), occurs at age 60 after 20 years of service, the Participant’s Target Benefit would be 45% of Average Pay. Average Pay will be one-third of the Participant’s highest “Compensation”, as determined under the Supplemental Retirement and Account Value Plan for Salaried Employees of The Stanley Works (“Supplemental Plan”), for any consecutive 36-month period.

 

 

1

 

 (b) Separation from Service. For purposes of the SERP, a Participant’s Separation from Service will occur upon his or her termination of employment with Stanley, and all members of Stanley’s parent-subsidiary controlled group, for a reason other than death. The determination as to whether there is a Separation from Service is based on the facts and circumstances surrounding the termination of the Participant’s employment and whether Stanley and the Participant intended for the Participant to provide significant services for Stanley following such termination. A Separation from Service shall not have occurred if the Participant continues to provide services as a common law employee or as an independent contractor of Stanley at an annual rate that is more than 20% of the services
rendered, on average, during the immediately preceding three full calendar years of employment. While a Participant is on a bona fide leave of absence, the Participant’s employment relationship shall be treated as continuing, provided that the Participant is expected to return to work for Stanley and the period of such leave of absence does not exceed six months, or if the period is longer, the Participant has a right to reemployment with Stanley either by statute or by contract. If the period of a leave of absence exceeds six months and there is no right to reemployment, a Separation from Service shall be deemed to have occurred as of the first date immediately following the first six months of the leave.

3. Separation from Service Before Age 60.

(a) Separation from Service before Age 54. No SERP benefit will be paid to or on behalf of any Participant whose Separation from Service, other than by reason of a Disability, occurs before the Participant’s attainment of age 54.

(b) Discount for Separation from Service before Age 60. For each month that a Participant’s Separation from Service occurs prior to age 60, the Target Benefit will be reduced .167% (i.e., 2% per year). For example, a Participant whose Separation from Service occurs at age 55 after 20 years of service would have a benefit, before Offsets, equal to 90% of the Target Benefit, or 40.5% (45% x 90% = 40.5%) of Average Pay.

4. Disability.

(a) Separation from Service by Reason of Disability. SERP benefit payments will be made to a Participant whose Separation from Service occurs by reason of his or her “Disability”, as defined in Section 4(b), if payments would not otherwise be made under Section 3. In the event of such SERP payments prior to age 60, payments will be reduced in accordance with the formula set forth in Section 3(b).

(b) Disability. For purposes of the SERP, a Participant’s Separation from Service will be considered to have occurred by reason of a Disability if the Participant’s Separation from Service occurs as a result of his or her permanent inability, by reason of a medically determinable physical or mental impairment, to perform any job for which the Participant is reasonably suited by education and experience.

 

 

2

 

5. Death.

(a) Death before SERP Payments Commence. The lump sum actuarial equivalent of the Target Benefit, subject to the Offsets described in Section 6 and subject to the reduction described in the second sentence of this Section 5(a), of a Participant who dies before commencement of his or her SERP benefit shall be paid to the Participant’s beneficiary as a life annuity, unless a timely election was made by the Participant to receive a lump sum payment, in which case the death benefit will be such lump sum actuarial equivalent. The Target Benefit will be reduced 2% per year for each year (i.e., .167% per month) prior to age 60 that the Participant dies.

(b) Death after SERP Payments Commence. In the case of a Participant who was married on the benefit commencement date and dies after SERP benefit payments have commenced under a 100% joint and survivor annuity, benefit payments will continue under that annuity to the surviving spouse. Otherwise, no death benefit will be paid in the event of the death of a Participant who was married on the benefit commencement date and dies after payments have commenced. Upon the death of a Participant who was unmarried on the benefit commencement date and dies after SERP benefit payments have commenced under a single life annuity pursuant to which the total annuity payments made to the Participant are less than the actuarial equivalent lump sum payment amount that would have been distributed to the Participant as of
the benefit commencement date, a lump sum death benefit equal to the excess of such lump sum amount over the total amount of annuity payments made to the Participant will be paid to the Participant’s beneficiary. Otherwise, no death benefit will be paid in the event of the death of a Participant who was unmarried on the benefit commencement date and dies after payments have commenced.

(c) Death Beneficiary. Any benefit payable upon a Participant’s death to anyone other than the Participant’s surviving spouse will be paid to the beneficiary determined under the Stanley Account Value Plan, unless the Participant designated in writing a different beneficiary to receive such benefit.

(d) Date of Payment. Any payment that is made or that commences to a Participant’s beneficiary pursuant to this Section 5 on account of the Participant’s death shall be considered to have been made or to have commenced upon the Participant’s death if the distribution is made or begins no later than 90 days following the date of the Participant’s death, provided that neither the Participant nor the recipient of the death benefit may, directly or indirectly, specify the calendar year in which a payment is made.

6. Offsets. The benefit otherwise payable under the SERP, as described in Sections 2, 3, 4 and 5, will be reduced by the “Offsets” described in Sections 6(a), 6(b) and 6(c), resulting in the benefit net of Offsets:

(a) the “cornerstone account” benefits provided under the Stanley Account Value Plan and under the Supplemental Plan, as applied pursuant to Appendix B;

 

 

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(b) the Social Security retirement benefit payable to the Participant1; and

(c) disability benefits payable to the Participant under a long-term disability plan that covers a substantial number of Stanley’s employees and was established prior to the date the Participant becomes disabled.

Anything herein to the contrary notwithstanding, if the benefit payable under the SERP is not paid in a life annuity but, instead, is paid in a lump sum or a 100% joint and survivor annuity pursuant to Section 7, the Offset described in Section 6(a) shall not be applied to the life annuity benefit (with respect to which an actuarially adjusted lump sum or 100% joint and survivor annuity benefit is calculated under Section 7). Instead, the actuarially adjusted lump sum or 100% joint and survivor annuity benefit that is calculated under Section 7 (with respect to the life annuity benefit determined under Sections 2, 3, 4 and 5 to which Offsets have been applied, to the extent appropriate, under Sections 6(b) and 6(c)) shall be offset, pursuant to Appendix B, by the amount described in Section 6(a).

7. Date and Form of Distribution of SERP Benefit.

(a) Date of Distribution. Subject to Section 7(b), any payment that is made or commences to a Participant on account of his or her Separation from Service, shall be considered to have been made upon the Participant’s Separation from Service if the distribution is made no later than 90 days following the date of the Participant’s Separation from Service, provided that the Participant may not, directly or indirectly, specify the calendar year in which the payment is made.

(b) Delayed Distributions to Specified Employees. If a Participant is a specified employee as of the date of his or her Separation from Service, the SERP benefit to which the Participant is entitled upon Separation from Service shall be distributed or commence to be distributed on the first day of the seventh month that begins after the date of the Participant’s Separation from Service, provided that no distribution is required to be delayed pursuant to this Section 7(b) beyond the date of the Participant’s death. Any payment that otherwise would have been paid to a specified employee during the six months following his or her Separation from Service shall be accumulated and paid to the Participant on the first day of the seventh month that begins after the date of the Participant’s
Separation from Service. Any such accumulated payment shall be actuarially increased, pursuant to Appendix C, to reflect the delay in payment imposed under this Section 7(b). A Participant is a ‘specified employee’ if he or she is identified as a specified employee in accordance with Treasury Regulation Section 1.409A-l(i), pursuant to a written policy established and maintained by Stanley. If a Participant for whom payments are deferred under this Section 7(b) dies between the date of Separation from Service and the first day of the seventh month that begins after that date, payments shall not be made under this Section 7, but instead shall be made under Section 5.

______________

	
                        1
 	
                        If the Participant retires prior to being eligible for Social Security, the Social Security benefit offset will not commence until the Participant is eligible for Social Security retirement benefits. For example, for a retirement in 2009 by a Participant who is 60 years old, there would be no Social Security offset until the Participant is age 62, the age of initial eligibility for Social Security. The estimated Social Security benefit that is payable will be determined at age 62 or at the Participant’s attained age if older than age 62 and assuming no compensation after termination of employment with Stanley.
 

 

 

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(c) Form of Distribution. The SERP benefit to which a Participant is entitled shall be paid in an annuity, unless he or she elects, under Section 7(d) or 7(f), to receive an actuarially adjusted lump sum payment. A Participant who is unmarried on his or her benefit commencement date and did not elect a lump sum payment under Section 7(d) or 7(f), shall receive payments in a life only annuity. A Participant who is married on his or her benefit commencement date and did not elect a lump sum payment under Section 7(d) or 7(f), may, prior to such benefit commencement date, select a life only annuity or an actuarially adjusted 100% joint and survivor annuity with his or her spouse. If a Participant who is married on his or her benefit commencement date and did not elect a lump sum payment fails to select
the form of annuity payment before his or her benefit commencement date, payments will be made in the form of a 100% joint and survivor annuity with the Participant’s spouse. Any actuarial adjustment to reflect the form of distribution in a lump sum or a 100% joint and survivor annuity shall be determined in accordance with Appendix A with respect to the life annuity described in Sections 2, 3, 4 and 5 to which the Offsets described in Sections 6(b) and 6(c), to the extent appropriate, have been applied, and, after such actuarially adjusted lump sum or 100% joint and survivor annuity is determined, any Offsets described in Section 6(a) shall be applied pursuant to the pertinent rules set forth in Appendix B.

(d) Election of Form of Distribution. Subject to Sections 7(b), 7(e) and 7(f), an Eligible Employee may make a written election by December 31, 2008, to have a SERP benefit to which he or she becomes entitled distributed in a lump sum rather than in an annuity. If an Eligible Employee fails to make an election with respect to the form of distribution of a SERP benefit to which he or she becomes entitled, the Eligible Employee shall be deemed to have elected that any such SERP benefit be distributed in an annuity, pursuant to Section 7(c). Notwithstanding the foregoing, a Participant may elect to change his or her election or deemed election pursuant to the provisions of Section 7(f).

(e) Elections Made in 2007 or 2008 as to Form of Distribution. If a Participant makes an election in 2007 to change the form of distribution of a SERP benefit to which he or she becomes entitled, such new election may not defer to a later year the payment of any amount that would otherwise be paid in 2007 and may not require a payment to be made in 2007 that would otherwise be paid in a later year. Moreover, if a Participant makes an election in 2008 to change the form of distribution of a SERP benefit to which he or she becomes entitled, such new election may not defer to a later year the payment of any amount that would otherwise be paid in 2008 and may not require a payment to be made in 2008 that would otherwise be paid in a later year.

(f) Subsequent Elections as to Form of Distribution. A Participant shall be permitted to make a written election, at any time after December 31, 2008, that changes the form of distribution that would otherwise apply, provided that any such election must satisfy all of the following requirements:

 

 

5

 

 (i) the election must be made at least twelve months prior to the date on which the distribution would otherwise have been made (or in the case of an annuity, twelve months before the date on which the first payment was scheduled to be made);

(ii) the election may not become effective until at least twelve months after the date on which the election is made; and

(iii) except in the case of an election relating to a distribution to be made upon a Participant’s death, the distribution must be deferred for at least 5 years from the date on which the distribution would otherwise have been made (or in the case of an annuity, for at least 5 years from the date on which the first payment was scheduled to be made).

8. Claims Procedure.

(a) Any Participant or beneficiary (each a “Claimant”) who believes he or she is entitled to benefits under the SERP shall file a written claim request with the Committee on such forms as the Committee may require. The Committee shall, upon written request of a Claimant, make available copies of any claim forms or instructions, or advise the Claimant where such forms or instructions may be obtained.

(b) If a claim is wholly or partially denied, the Committee shall furnish to the Claimant a written or electronic notice of the decision within 90 days. The notice shall be set forth in a manner calculated to be understood by the Claimant. If special circumstances require, the Committee may defer action on a claim for benefits for an additional period of not to exceed 90 days, and, in that case, it shall notify the Claimant in a written or electronic notice prior to the close of the initial 90 day period of the special circumstances involved and the time by which it expects to render a decision. If the claim relates to Disability benefits, the Committee shall furnish to the Claimant a written or electronic notice of the decision within 45 days. If special circumstances require, the Committee may defer action on a claim for Disability benefits for an additional period of not to
exceed 30 days, and, in that case, it shall notify the Claimant in a written or electronic notice prior to the close of the initial 45 day period of the special circumstances involved and the time by which it expects to render a decision. However, if prior to the end of the 30 day period, the Committee determines that, due to matters beyond its control, a decision cannot be rendered on a claim for Disability benefits, the period for making the Disability claim determination may be extended for up to an additional 30 day period, and, in that case, the Committee shall notify the Claimant in a written or electronic notice prior to the end of the first 30 day period of the circumstances involved and the time by which a decision is expected. The written or electronic notice of a denial of a claim shall contain the following information:

(i) The specific reason(s) for denial of the claim;

(ii) Specific references to pertinent provisions of the SERP upon which the denial is based;

 

 

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(iii) A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary;

(iv) An explanation of the claims review procedure under the SERP describing the steps to be taken by a Claimant who wishes to submit the claim for review; and the time limits applicable to such procedures, and the Claimant’s right to bring a civil action under Section 502(a) of ERISA within 180 days following an adverse determination on review;

(v) In the case of a claim for Disability benefits, a copy of any specific internal rule, guideline, protocol or other similar criterion that was relied upon in making the determination, or a statement that a copy of the rule, guideline, protocol or other similar criterion will be provided to the Claimant free of charge upon request; and

(vi) In the case of a claim for Disability benefits that is denied based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination, applying the terms of the SERP to the Claimant’s circumstances, or a statement that an explanation will be provided free of charge upon request.

(c) A Claimant may, with respect to any denied claim:

(i) Request review upon written application filed within 60 days after receipt by the Claimant of written or electronic notice of the denial of the Claimant’s benefit claim, or if the claim is for a Disability benefit, request review upon written application filed within 180 days after receipt by the Claimant of written or electronic notice of the denial of the Claimant’s Disability benefit claim;

(ii) Review pertinent documents and submit any additional issues and comments in writing;

(iii) Submit documents, records and other information relating to the claim for benefits;

(iv) Have reasonable access to, upon request and free of charge, copies of all documents, records, and other information relevant to a benefit claim;

(v) Have a full and fair review by the Committee of the denial that takes into account all comments, documents, records, and other information relevant to the Claimant’s claim for benefits; and

(vi) If the claim is for Disability benefits, the following additional rules will apply:

 

 

7

 

(A) The review will not give deference to the initial adverse benefit determination;

(B) The review will be conducted by an appropriate named fiduciary of the SERP who is neither the individual who made the initial decision to deny the Disability benefit claim nor a subordinate of that individual.

(C) If the adverse determination that is the subject of the review was based on a medical judgment, the named fiduciary will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment;

(D) Any medical or vocational experts whose advice was obtained on behalf of the SERP in connection with the adverse benefit determination that is the subject of the review will be identified, without regard to whether the advice was relied upon in making the benefit determination; and

(E) The health care professional engaged for purposes of a consultation will be an individual who is neither an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual.

Any request or submission must be in writing and must be directed to the Committee or in the case of a review of a claim for Disability benefits, its designee. The Committee (or, in the case of a claim for Disability benefits, its designee) shall have the sole responsibility for the review of any denied claim and shall take all steps appropriate in light of its findings.

(d) The Committee (or, in the case of a claim for Disability benefits, its designee) shall render a decision upon review. If it is determined that any benefits claimed should be denied upon review, written or electronic notice of the same shall be provided to the Claimant. The written or electronic notice of the final decision shall set forth: the specific reason or reasons for the adverse determination; references to the specific SERP provisions on which the benefit determination was based; a statement that advises the Claimant that he or she is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits; and in the case of the review of a claim for a Disability benefit that was denied as a result of an internal rule, guideline, protocol or other similar criterion,
either the specific rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination, or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided to the Claimant free of charge upon request. Also, if the adverse determination upon review of a claim for Disability benefits is based on a medical necessity or experimental treatment or similar exclusion or limit, the Claimant shall be provided free of charge either an explanation of the scientific or clinical judgment for the determination, applying the terms of the SERP to the Claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request. In addition, the written or electronic notice to Claimant

 

 

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shall describe any voluntary appeal procedures offered under the SERP and the Claimant’s right to obtain information about such procedures and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA within 180 days following receipt of written or electronic notice of denial of the claim for benefits upon review. The notice to the Claimant shall include the following statement: “You and the SERP may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.” A final determination by the Committee shall be rendered within a reasonable period of time, not exceeding 60 days, after receipt of the Claimant’s notice of appeal. Under special circumstances, such determination may be
delayed for an additional period not to exceed 60 days, in which case the Claimant shall be notified electronically or in writing of the delay prior to the close of the initial 60 day period. However, if the Committee holds regularly scheduled meetings at least quarterly, a final determination by the Committee shall be rendered no later than the date of the first meeting of the Committee after receipt of the Claimant’s notice of appeal, unless the receipt of the Claimant’s notice of appeal is within the 30 day period preceding the date of the next scheduled meeting of the Committee. In such case, a final determination by the Committee shall be rendered no later than the date of the second meeting of the Committee after receipt of the Claimant’s notice of appeal. Under special circumstances, such determination may be delayed to the date of the third meeting of the Committee after receipt of the Claimant’s notice of appeal, in which case the Claimant shall be
notified electronically or in writing of the delay prior to the commencement of the extension period. If the claim relates to a Disability benefit, a final determination by the appropriate named fiduciary shall be rendered within a reasonable period of time, not exceeding 45 days, after receipt of the Claimant’s notice of appeal. Under special circumstances, such determination may be delayed for an additional period not to exceed 45 days, in which case the Claimant shall be notified electronically or in writing of the delay prior to the close of the initial 45 day period.

9. Miscellaneous.

(a) Amendment. The Committee may at any time amend the SERP so long as the benefits of anyone who is then a Participant are not diminished as a result.

(b) Administration of the SERP. The SERP will be administered by the Committee. The Committee is vested with full authority (including full discretionary authority) to administer, interpret, and make rules regarding the SERP as it may deem advisable and to make determinations in its discretion that shall be final, binding, and conclusive upon all persons. No member of Stanley’s Board of Directors or the Committee will be liable for any action or determination made in good faith with respect to the SERP.

(c) Governing Text. The SERP, including any amendments, will constitute the entire agreement between Stanley and any Participant or beneficiary regarding the subject matter of the SERP. The SERP, including any amendments, will be binding on Stanley, Participants, beneficiaries, and their respective heirs, administrators, trustees, successors, and assigns.

 

 

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(d) Rights of Persons Entitled to Benefits. Any person entitled to receive benefits under the SERP shall have the rights of an unsecured general creditor of Stanley.

(e) Nonassignability. The right of any individual to a benefit under the SERP shall not be subject to attachment or other legal process for the debts of such individual. In no event may an individual’s benefit under the SERP be subject to anticipation, alienation, sale, transfer, assignment or encumbrance.

(f) Special Distributions. Whenever, in the opinion of the Committee, a person entitled to receive a benefit under the SERP is unable to manage his or her financial affairs, the Committee may direct that payment be made to a legal representative or relative of such person for his or her benefit. Alternatively, the Committee may direct that any payment for such person be applied for the benefit of such person in such manner as the Committee considers advisable. Any payment made in accordance with this Section 9(f) shall be a complete discharge of any liability for the making of such payment under the provisions of the SERP.

(g) Terms of Employment. Participation in the SERP shall not give an individual any right to remain in the service of Stanley, and an individual shall remain subject to discharge to the same extent as if the SERP had not been adopted.

THE STANLEY WORKS

 

	
                         
 	
                         
 	
                         
 
	
                        By 
 	
                         /s/
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        Title: Vice President Human Resources
 	
                         
 	
                         
 	
                         
 

Date: 1/9/08

 

 

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THE STANLEY WORKS 

Supplemental Executive Retirement Plan

APPENDIX A

 

	
                        Form of Payment 
 	
                         
 	
                        Actuarial Adjustment Factors
 
	
                        Lump Sum 
 	
                         
 	
                        The lump sum of the Target Benefit is determined by multiplying the annual benefit payable for the participant’s lifetime by a factor of 9.45.
 
	
                        Joint and Survivor (100%) 
 	
                         
 	
                        Factors are as set forth in the attached table, which shows no reduction if the spouse is older than the Participant or if the spouse is no more than two years younger than the Participant (in either case, the factor is 1.000). For each year over two that the spouse is younger than the Participant, the Target Benefit (or early retirement benefit) will be reduced by 0.7%.
 
	
                         
 	
                         
 	
                        Example 1: For a Participant whose age on the benefit commencement date is 60 and whose spouse’s age on the benefit commencement date is 56, the factor to convert the life annuity to a 100% joint and survivor annuity is .986.
 
	
                         
 	
                         
 	
                        Example 2: For a Participant whose age on the benefit commencement date is 54 and whose spouse’s age on the benefit commencement date is 40, the factor to convert the life annuity to a 100% joint and survivor annuity is .916.
 

 

 

THE STANLEY WORKS 

Supplemental Executive Retirement Plan

APPENDIX B

Cornerstone Offset Described in Sections 6 and 7 of the SERP

(a) Subject to paragraph (b), the Offset of a SERP benefit attributable to a Participant’s “cornerstone account” benefits under the Stanley Account Value Plan and the Supplemental Plan shall be determined by converting such cornerstone account benefits to a life annuity benefit, based on the average of the three most competitive quotes for the purchase of a comparable annuity from an insurance company for a qualified retirement plan distribution, that are obtained from one of the five largest brokerage firms (measured by the number of annuities placed during at least one of the three calendar years immediately preceding the calendar year that contains the date as of which the quotes are obtained), provided that (i) an insurance company’s quote will be utilized only if the insurance company is rated AA- or higher by Standard & Poor’s and rated A- or
higher by A.M. Best Company, (ii) if only two quotes that may be utilized are furnished by such brokerage firm, the average of such two quotes will be used, and (iii) if such brokerage firm furnishes only one quote that may be utilized, that quote will be used. Any quote that pertains to a distribution upon Separation from Service shall be obtained as of the first business day of the month in which Separation from Service occurs, provided that a quote regarding a distribution upon Separation from Service in connection with a Disability shall be obtained as of the last business day of the month that contains the date of the Participant’s Separation from Service. A quote in regard to a distribution upon death shall be obtained as of the last business day of the month that contains the date of death.

(b) In the case of a SERP benefit that is paid as a 100% joint and survivor annuity, the Offset of the SERP benefit attributable to a Participant’s “cornerstone account” benefits under the Stanley Account Value Plan and the Supplemental Plan shall be determined by offsetting the actuarially adjusted 100% joint and survivor annuity (calculated with respect to the life only annuity that has been reduced by any Offsets under Sections 6(b) and 6(c)) by a 100% joint and survivor annuity calculated by converting such “cornerstone account” benefits to a 100% joint and survivor annuity pursuant to the procedures set forth in paragraph (a) above, except that such procedures shall be applied in regard to such a joint and survivor annuity rather than a life only annuity. In the case of a SERP benefit that is paid in a lump sum, the Offset of the SERP benefit
attributable to a Participant’s “cornerstone account” benefits under the Stanley Account Value Plan and the Supplemental Plan shall be determined by offsetting the actuarially adjusted lump sum (calculated with respect to the life only annuity that has been reduced by Offsets under Sections 6(b) and 6(c)) by the entire value of the pertinent cornerstone accounts, as of the date of distribution of the lump sum SERP benefit.

 

 

THE STANLEY WORKS 

Supplemental Executive Retirement Plan

APPENDIX C

Deferred Payments Described Under Section 7(b) of the SERP

Deferred payments under Section 7(b) shall be adjusted utilizing the interest rate prescribed in Code Section 417(e) that is in effect during October of the calendar year preceding the calendar year that includes the date of the Separation from Service.

 

 

THE STANLEY WORKS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 100% Joint & Survivor Factors

APPENDIX A (continued)

 

	
                        Spouse’s Age

                        (nearest birthday)
	
                         
 	
                        Participant’s Age (nearest birthday) 
                       	 
	
       
 	
      54
 	
       
 	
      55
 	
       
 	
      56
 	
       
 	
      57
 	
       
 	
      58
 	
       
 	
      59
 	
       
 	
      60
 	
       
 	
      61
 	
       
 	
      62
 	
       
 	
      63
 	
       
 	
      64
 	
       
 	
      65
 	
       
 
	
                        65
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 
	
                        64
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 
	
                        63
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 
	
                        62
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 
	
                        61
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 
	
                        60
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 
	
                        59
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 
	
                        58
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 
	
                        57
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 
	
                        56
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 
	
                        55
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 
	
                        54
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 
	
                        53
 	
                         
 	
                        1.000
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 
	
                        52
 	
                         
 	
                        1.000
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 
	
                        51
 	
                         
 	
                        0.993
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 
	
                        50
 	
                         
 	
                        0.986
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 
	
                        49
 	
                         
 	
                        0.979
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 
	
                        48
 	
                         
 	
                        0.972
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 
	
                        47
 	
                         
 	
                        0.965
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 
	
                        46
 	
                         
 	
                        0.958
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 
	
                        45
 	
                         
 	
                        0.951
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 
	
                        44
 	
                         
 	
                        0.944
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 	
                        0.867
 	
                         
 
	
                        43
 	
                         
 	
                        0.937
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 	
                        0.867
 	
                         
 	
                        0.860
 	
                         
 
	
                        42
 	
                         
 	
                        0.930
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 	
                        0.867
 	
                         
 	
                        0.860
 	
                         
 	
                        0.853
 	
                         
 
	
                        41
 	
                         
 	
                        0.923
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 	
                        0.867
 	
                         
 	
                        0.860
 	
                         
 	
                        0.853
 	
                         
 	
                        0.846
 	
                         
 
	
                        40
 	
                         
 	
                        0.916
 	
                         
 	
                        0.909
 	
                         
 	
                        0.902
 	
                         
 	
                        0.895
 	
                         
 	
                        0.888
 	
                         
 	
                        0.881
 	
                         
 	
                        0.874
 	
                         
 	
                        0.867
 	
                         
 	
                        0.860
 	
                         
 	
                        0.853
 	
                         
 	
                        0.846
 	
                         
 	
                        0.839
 	
   
 

No reduction if spouse is not more than two years younger than participant. Reduction is .7% for each year the spouse is more than two years younger than the participant.

 

 

iiExhibit 10(xiii)(f)

Date

Dear ________:

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 (fiscal years 2007-2009). 

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, 2007. The initial value of each PS unit is $•, the average of the high and low price of Stanley stock on •. 

Your performance award covers the following number of PS units:

 

	
                         
 	
                         
 	
                        Threshold
 	
                         
 	
                        Target
 	
                         
 	
                        Max
 
	
                        % of Pay
 	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        # PS
 	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 

Vesting and Settlement

Performance awards will become vested at the time of settlement to the extent that the applicable performance metrics have been achieved and provided that the participant is continuously employed by Stanley until such time. Performance awards will be settled in shares of Stanley stock as soon as practicable following the end of the measurement period. The shares will be distributed in the form of restricted stock to the extent the participant does not hold the number of shares specified in the minimum stock ownership guidelines for executives at the time of settlement. Participants will be entitled to vote and receive dividends on restricted stock following the date of distribution.

 

 

The Minimum Ownership Guidelines are as follows:

 

	
                        Position 
 	
                         
 	
                        Multiple of Base Salary
 
	
                        CEO
 	
                         
 	
                        3X
 
	
                        Level 1
 	
                         
 	
                        2X
 
	
                        Level 2
 	
                         
 	
                        1X
 

If a participant’s employment with Stanley terminates due to his or her retirement, death or disability prior to the date the performance awards are settled, the participant’s performance award will be pro-rated based on the number of days in the measurement period that the participant was employed by Stanley. The participant’s pro-rated performance award will be settled at the same time as performance awards for active participants are settled, to the extent the applicable performance metrics have been achieved. Pro-rated performance awards will be settled in the form of unrestricted shares of Stanley common stock. A participant whose employment with Stanley terminates prior to the date of settlement for any other reason will forfeit all rights in respect of his or her performance award and will not be entitled to receive any shares of Stanley stock or other payment under the Program.

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 (2007-2009). 

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 Terms and Conditions Applicable to Long Term Performance Awards 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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