Document:

EX-10.V.A

Exhibit 10(v)(a)

AMENDMENT NO. 1

to the

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of February 17, 2009

          AMENDMENT NO. 1 (this “Amendment”) dated as of the date first above written among The
Stanley Works (the “Company”) and the Lenders executing this Amendment on the signature
pages hereto.

          WHEREAS, the Company, the Lenders party thereto and Citibank, N.A., as administrative agent
(the “Administrative Agent”), are parties to an Amended and Restated Credit Agreement dated
as of February 27, 2008 (the “Credit Agreement”), providing, subject to the terms and
conditions thereof, for revolving credit loans to be made to the Company and the Designated
Borrowers; and

          WHEREAS, the parties hereto wish to amend the Credit Agreement in certain respects;

          NOW THEREFORE, the parties hereto hereby agree as follows:

          Section 1. Definitions. Except as otherwise defined in this Amendment, terms defined
in the Credit Agreement are used herein as defined therein. References in the Credit Agreement
(including references to the Credit Agreement as amended hereby) to “this Agreement” (and indirect
references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references
to the Credit Agreement as amended hereby.

          Section 2. Amendments to the Credit Agreement. Subject to satisfying the conditions
precedent in Section 4 hereof, but with effect as of the date hereof, the Credit Agreement is
hereby amended to delete the stricken text (indicated textually in the same manner as the following
example: stricken text) and to add the underlined text (indicated textually in the same manner as
the following example: double-underlined text) as set forth in Annex A hereto.

          Section 3. Representations and Warranties. The Company represents and warrants to
the Lenders and the Administrative Agent, as to itself and each of its subsidiaries, that (a) the
representations and warranties set forth in Article IV of the Credit Agreement and in each of the
other Loan Documents that have been entered into by the Company or any of the Designated Borrowers,
are true and correct in all material respects on the date hereof as if made on and as of the date
hereof (or, if any such representation or warranty is expressly stated to have been made as of a
specific date, such representation or warranty shall be true and correct in all material respects
as of such specific date) and as if each reference in said Article IV to “this Agreement” included
reference to this Amendment; provided that (x) in Sections 4.01(f) and 4.01(h) of the Credit
Agreement, the reference to the Company’s Annual Report on Form 10-K for the year ended December
29, 2007 shall be deemed to be a reference to such Annual Report and each of the Company’s reports
on Form 8-K and 10-Q during the period from February 27, 2008 through and including September 27,
2008 and (y) in Section 4.01(g) of the Credit Agreement, the reference to December 29, 2007 shall
be deemed to be a reference to September

 

 

27, 2008 and (b) no Default or Event of Default has occurred and is continuing.

          Section 4. Conditions Precedent. The amendments set forth in Section 2 hereof shall
become effective, as of the date hereof, upon satisfaction of the following conditions:

     4.01. Execution. The Administrative Agent shall have received counterparts of
this Amendment executed by the Company and the Lenders party to the Credit Agreement
constituting the Required Lenders.

     4.02. Amendment Fee. The Administrative Agent shall have received for the
account of each Lender, an amendment fee in an amount equal to 0.10% of the aggregate amount
of the Commitment of each Lender on the date hereof.

     4.03 Fee and Expenses. The Company shall have paid in full the costs, expenses
and fees as set forth in Section 8.04(a) of the Credit Agreement.

     4.04. Opinion of Counsel to Company. The Administrative Agent shall have
received favorable opinions of counsel for the Company (which counsel shall be reasonably
satisfactory to the Administrative Agent), in form and substance reasonably satisfactory to
the Administrative Agent and covering such matters (including as to the enforceability of
this Amendment and the Credit Agreement as amended hereby, the valid organization, good
standing and due authorization of the Company, and the lack of any conflicts of the Company
(including with respect to any material agreements)) as the Administrative Agent shall
reasonably request.

     4.05. Corporate Documents. The Administrative Agent shall have received
certified copies of the charter and by-laws of the Company and of all corporate authority
for the Company (including, without limitation, board of director resolutions and evidence
of the incumbency of officers for the Company) with respect to the execution, delivery and
performance of this Amendment and the Credit Agreement as amended hereby (and the
Administrative Agent and each Lender may conclusively rely on such certificate until it
receives notice in writing from the Company to the contrary).

          Section 5. Miscellaneous. Except as herein provided, the Credit Agreement shall
remain unchanged and in full force and effect. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same amendatory instrument
and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery
of a counterpart by electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. This Amendment shall be governed by, and construed in accordance with, the law
of the State of New York.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	THE STANLEY WORKS

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LENDERS

CITIBANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WILLIAM STREET LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BARCLAYS BANK PLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BNP PARIBAS

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NEW YORK MELLON

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	J.P. MORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MERRILL LYNCH BANK USA

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MORGAN STANLEY BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ROYAL BANK OF CANADA

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WACHOVIA BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE NORTHERN TRUST COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Annex A

Amendments to the Credit Agreement

[Attached]

 

 

CREDIT AGREEMENT

          This AMENDED AND RESTATED CREDIT AGREEMENT (as amended, supplemented or otherwise modified
from time to time, the “Agreement”) is made as of this 27th day of February,
2008 between THE STANLEY WORKS, a Connecticut corporation (the “Company”), the banks,
financial institutions and other institutional lenders (the “Initial Lenders”) listed on
the signature pages hereof, and CITIBANK, N.A. (“Citibank”), as administrative agent (in
such capacity, the “Administrative Agent”) for the Lenders (as hereinafter defined).

          The Company, certain banks, financial institutions and other institutional lenders and the
Administrative Agent are parties to a Credit Agreement dated as of December 1, 2005 (as amended,
supplemented or otherwise modified from time to time, and as in effect on the date hereof, the
“Existing Credit Agreement”), providing for the making of loans by such banks, financial
institutions and other institutional lenders to the Company in an aggregate principal amount at any
one time outstanding not exceeding $550,000,000.

          The parties hereto wish to amend the Existing Credit Agreement to, among other things,
increase the aggregate amount of the Commitments to $800,000,000 and make certain other amendments
and to restate the entire Existing Credit Agreement, as so amended, as set forth herein.

          Accordingly, subject to the occurrence of the Effective Date (as defined below), the parties
hereto hereby agree that the Existing Credit Agreement is amended and restated to read in its
entirety as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):

          “Acquiring Person” means any person (other than the ESOP) who is or becomes the
beneficial owner, directly or indirectly, of 10% or more of the Company’s outstanding common stock.

          “Additional Commitment Agreement” has the meaning provided in Section 2.01(d)(iii).

          “Additional Commitment Lender” has the meaning provided in Section 2.01(d)(iii).

          “Advance” means a Committed Advance or an Uncommitted Advance. For the purposes of
determining the unutilized amount of each Lender’s Commitment at any time, the

 

 

amount of each Advance of such Lender that is outstanding in an Alternate Currency shall be deemed
to be the Dollar Equivalent of the amount of such Advance.

          “Administrative Agent’s Account” means, with respect to any Currency, the account of
the Administrative Agent maintained by the Administrative Agent for such Currency and most recently
designated by it by notice to the Lenders and the Company.

          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

          “Agent’s Group” has the meaning provided in Section 7.02(b).

          “Alternate Currencies” means Euros and Pounds Sterling.

          “Applicable Eurocurrency Margin” means, on any date for each Eurocurrency Rate Advance,
the rate per annum equal to the arithmetical mean of the five-year credit default swap mid-rate
spreads of the Company (the “Credit Default Swap Spread”) (as provided by Markit Group Limited (or
any successor thereto) to the Administrative Agent) for each Business Day during the period of 30
days (the “Calculation Period”) immediately preceding but not including the day which falls two
Business Days prior to the first day of the applicable Interest Period for such Advance; provided,
that the Applicable Eurocurrency Margin shall in no event be less than a rate per annum equal to
0.75% or greater than a rate per annum equal to 2.50%; provided, further, that if the Applicable
Eurocurrency Margin is unavailable on any Business Day during the Calculation Period, the
arithmetical mean shall be calculated based on the actual number of Business Days within the
Calculation Period for which such rate is available.

          “Applicable Eurocurrency Margin” means, on any date for each Eurocurrency Rate
Advance, (i) 0.1000% if on such date the Company’s outstanding Long-Term Indebtedness is rated A+
or higher by Standard & Poor’s, A1 or higher by Moody’s, or A+ or higher by Fitch, (ii) 0.1400% if
on such date clause (i) is inapplicable and the Company’s outstanding Long-Term Indebtedness is
rated A or higher by Standard & Poor’s, A2 or higher by Moody’s, or A or higher by Fitch, (iii)
0.1800% if on such date clauses (i) and (ii) are inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated A- or higher by Standard & Poor’s, A3 or higher by Moody’s, or A-
or higher by Fitch, (iv) 0.2700% if on such date clauses (i), (ii) and (iii) are inapplicable and
the Company’s outstanding Long-Term Indebtedness is rated BBB+ or higher by Standard & Poor’s, Baa1
or higher by Moody’s, or BBB+ or higher by Fitch, and (v) 0.3500% if on such date clauses (i),
(ii), (iii) and (iv) are inapplicable (including if such Long-Term Indebtedness is no longer rated
by any agency); provided that if the respective levels of the Company’s outstanding
Long-Term Indebtedness credit ratings differ, the “Applicable Eurocurrency Margin” will be
determined based on, (a) if two of the ratings are at the same level and the other rating is one
level higher or lower than those same ratings, the level corresponding the two same ratings shall
apply, (b) if two of the ratings are at the same level and the other rating is two or more levels
above the two same ratings, the level corresponding to the rating that is one level above these
same ratings shall apply, (c) if two of the ratings are at the same level and the other rating is
two or more levels below these same ratings, the level corresponding to the rating that is one
level below the two same ratings shall apply and (d) if each of the three ratings fall within
different levels, then the level corresponding to the rating that is in between the highest and the
lowest ratings shall apply.

 

 

          If at any time the Applicable Eurocurrency Margin cannot be determined or is otherwise
unavailable, the Company and the Required Lenders shall negotiate in good faith (for a period of up
to thirty days after the Applicable Eurocurrency Margin first becomes unavailable (such thirty-day
period, the “Negotiation Period”)) to agree on an alternative method for establishing the
Applicable Eurocurrency Margin. The Applicable Eurocurrency Margin at any date of determination
thereof which falls during the Negotiation Period shall be based upon the then most recently
available quote as provided by Markit Group Limited (or any successor thereto) of the Credit
Default Swap Spread; provided that the Applicable Eurocurrency Margin shall in no event be less
than a rate per annum equal to 0.75% or greater than a rate per annum equal to 2.50%. If no such
alternative method is agreed upon during the Negotiation Period, the Applicable Eurocurrency Margin
at any date of determination subsequent to the end of the Negotiation Period shall be a rate per
annum equal to 2.50%.

          “Applicable Facility Fee Rate” means, on any date, a rate per annum equal to (i)
0.05000.0800% if on such date the Company’s outstanding Long-Term Indebtedness is rated A+
or higher by Standard & Poor’s, A1 or higher by Moody’s, or A+ or higher by Fitch, (ii)
0.06000.1000% if on such date clause (i) is inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated A or higher by Standard & Poor’s, A2 or higher by Moody’s, or A or
higher by Fitch, (iii) 0.07000.1250% if on such date clauses (i) and (ii) are inapplicable
and the Company’s outstanding Long-Term Indebtedness is rated A- or higher by Standard & Poor’s, A3
or higher by Moody’s, or A- or higher by Fitch, (iv) 0.08000.1500% if on such date clauses
(i), (ii) and (iii) are inapplicable and the Company’s outstanding Long-Term Indebtedness is rated
BBB+ or higher by Standard & Poor’s, Baa1 or higher by Moody’s, or BBB+ or higher by Fitch, and (v)
0.10000.2000% if on such date clauses (i), (ii), (iii) and (iv) are inapplicable (including
if such Long-Term Indebtedness is no longer rated by any agency); provided that if the
respective levels of the Company’s outstanding Long-Term Indebtedness credit ratings differ, the
“Applicable Facility Fee Rate” will be determined based on, (a) if two of the ratings are at the
same level and the other rating is one level higher or lower than those same ratings, the level
corresponding the two same ratings shall apply, (b) if two of the ratings are at the same level and
the other rating is two or more levels above the two same ratings, the level corresponding to the
rating that is one level above these same ratings shall apply, (c) if two of the ratings are at the
same level and the other rating is two or more levels below these same ratings, the level
corresponding to the rating that is one level below the two same ratings shall apply and (d) if
each of the three ratings fall within different levels, then the level corresponding to the rating
that is in between the highest and the lowest ratings shall apply.

          “Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurocurrency Lending Office in
the case of a Eurocurrency Rate Advance and, in the case of an Uncommitted Advance, the office of
such Lender notified by such Lender to the Administrative Agent and the Company as its Applicable
Lending Office with respect to such Uncommitted Advance.

          “Applicable Utilization Fee Rate” means, for each day on which the Utilization Ratio
exceeds 0.50, a rate per annum equal to (i) 0.05000% if on such date the Company’s outstanding
Long-Term Indebtedness is rated A- or higher by Standard & Poor’s, A3 or higher by Moody’s, or A-
or higher by Fitch, and (ii) 0.1000% if on such date clause (i) is inapplicable (including if such
Long-Term Indebtedness is no longer rated by any agency); provided that if the respective
levels of the Company’s outstanding Long-Term Indebtedness credit ratings differ, the “Applicable
Utilization Fee Rate” will be determined based on, (a) if two of the ratings are at the same level
and the other rating is one level higher or lower than those same ratings, the level

 

 

corresponding the two same ratings shall apply, (b) if two of the ratings are at the same level and
the other rating is two or more levels above the two same ratings, the level corresponding to the
rating that is one level above these same ratings shall apply, (c) if two of the ratings are at the
same level and the other rating is two or more levels below these same ratings, the level
corresponding to the rating that is one level below the two same ratings shall apply and (d) if
each of the three ratings fall within different levels, then the level corresponding to the rating
that is in between the highest and the lowest ratings shall apply.

          “Approved Electronic Communications” means each Communication that any Borrower is
obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Loan
Document or the transactions contemplated therein, including any financial statement, financial and
other report, notice, request, certificate and other information material; provided,
however, that, solely with respect to delivery of any such Communication by any Borrower to the
Administrative Agent and without limiting or otherwise affecting either the Administrative Agent’s
right to effect delivery of such Communication by posting such Communication to the Approved
Electronic Platform or the protections afforded hereby to the Administrative Agent in connection
with any such posting, “Approved Electronic Communication” shall exclude (i) any notice of
borrowing, letter of credit request, swing loan request, notice of conversion or continuation, and
any other notice, demand, communication, information, document and other material relating to a
request for a new, or a conversion or continuation of an existing, Borrowing, (ii) any notice
pursuant to Section 2.07(a) and Section 2.07(b) and any other notice relating to the payment of any
principal or other amount due under any Loan Document prior to the scheduled date therefor, (iii)
all notices of any Default or Event of Default and (iv) any notice, demand, communication,
information, document and other material required to be delivered to satisfy any of the conditions
set forth in Article 3 or any other condition to any Borrowing or other extension of credit
hereunder or any condition precedent to the effectiveness of this Agreement.

          “Approved Electronic Platform” has the meaning provided in Section 8.02(b).

          “Assignment and Acceptance” means an assignment and acceptance accepted by the
Administrative Agent in substantially the form of Exhibit G hereto.

          “Attributable Debt” means, in respect of any lease transaction described in Section
5.02(c), as of the date of determination, the lesser of (i) the sale price of the property so
leased multiplied by a fraction the numerator of which is the remaining portion of the base term of
the lease included in such transaction and the denominator of which is the base term of such lease,
and (ii) the total obligation (discounted to present value at the implicit interest factor,
determined in accordance with generally accepted financial practice, included in the rental
payments or, if such interest factor cannot readily be determined, at a rate of interest of 10% per
annum, compounded semi-annually) of the lessee for rental payments (other than amounts required to
be paid on account of property taxes as well as maintenance, repairs, insurance, water rates and
other items which do not constitute payments for property rights) during the remaining portion of
the base term of the lease included in such transaction.

          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to

 

 

exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

          “Currency” means either Dollars or an Alternate Currency.

          “Current Termination Date” has the meaning provided in Section 2.01(d)(i).

          “Declining Lender” has the meaning provided in Section 2.01(d)(ii).

          “Default” means an event which would constitute an Event of Default but for the giving
of notice, the lapse of time or both.

          “Designated Borrowers” means any Subsidiary of the Company as to which a Designation
Letter has been delivered to the Administrative Agent in accordance with and together with the
other documents required by Section 2.14, and no Termination Letter has been delivered to the
Administrative Agent thereunder.

          “Designation Letter” has the meaning provided in Section 2.l4.

          “Dollar Equivalent” means, with respect to any amount denominated in an Alternate
Currency on any date, the amount of Dollars that would be required to purchase such amount of such
Alternate Currency at or about 11:00 A.M. (Local Time) on such date, for delivery two Business Days
later, as determined by the Administrative Agent on the basis of the spot selling rate for the
offering of such Alternate Currency for Dollars in the London foreign exchange market,
determinations thereof made in good faith by the Administrative Agent to be conclusive and binding
on the parties in the absence of manifest error.

          “Dollars” and “$” mean lawful money of the United States of America.

          “Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the
Assignment and Acceptance, the Additional Commitment Agreement or the accession agreement pursuant
to which it became a Lender, or such other office of such Lender as such Lender may from time to
time specify in writing to the Company and the Administrative Agent.

          “EBITDA” means, for any period, the sum (without duplication) for the Company and its
Consolidated Subsidiaries on a consolidated basis of the following: (a) net income for such period
plus (b) to the extent deducted in determining net income for such period, the sum of (i)
depreciation and amortization for such period, (ii) Interest Expense for such period and (iii)
taxes for such period.  Notwithstanding the foregoing, in calculating EBITDA for any period
that includes one or more Restructuring Periods, EBITDA shall be increased by an amount equal to
the Applicable Restructuring Charges for any such Restructuring Periods. 

     As used herein:

     “Restructuring Period” means (a) each fiscal quarter of the Company during its
fiscal year ending in 2008 and (b) if the Company reports taking any restructuring charges
during any quarter of its fiscal year ending in 2009 in the Company’s Exchange Act
disclosure documents filed with the Securities and Exchange Commission on Forms 

 

 

8K, 10K or 10Q (or their equivalents) (the Company’s “SEC Filings”), each such
fiscal quarter of the Company during its fiscal year ending in 2009.

          “Applicable Restructuring Charge” means 

     (a) for the Restructuring Period that is the Company’s first quarter of its fiscal
year ending in 2008, $3,300,000; for the Restructuring Period that is the Company’s second
quarter of its fiscal year ending in 2008, $16,900,000; for the Restructuring Period that is
the Company’s third quarter of its fiscal year ending in 2008, $4,800,000 and for the
Restructuring Period that is the Company’s fourth quarter of its fiscal year ending in 2008,
$60,600,000; and 

     (b) for any Restructuring Period falling in the Company’s fiscal year ending in
2009, the restructuring charges reported in the Company’s SEC Filings in such fiscal
quarter; provided that the sum of the Applicable Restructuring Charges for all of the
Restructuring Periods in the Company’s fiscal year ending in 2009 will not exceed
$50,000,000 in the aggregate.

          “Effective Date” has the meaning provided in Section 3.01.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, or any successors thereto, and the regulations promulgated and the rulings found
thereunder.

          “ERISA Controlled Group” means a group consisting of any ERISA Person and all members
of a controlled group of corporations and all trades or businesses (whether or not incorporated)
under common control with such Person that, together with such Person, are treated as a single
employer under regulations promulgated under ERISA.

          “ERISA Person” has the meaning provided in Section 3(9) of ERISA for the term
“person.”

          “ERISA Plan” means (i) any Plan that (x) is not a Multiemployer Plan and (y) has
Unfunded Benefit Liabilities in excess of $20,000,000 and (ii) any Plan that is a Multiemployer
Plan.

          “ESOP” means Stanley Account Value Plan or any successor plan.

          “Euro” has the meaning provided in Section 2.15.

          “Eurocurrency Liabilities” has the meaning provided in Regulation D (or any successor
regulation) of the Federal Reserve Board, as in effect from time to time.

          “Eurocurrency Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Eurocurrency Lending Office” opposite its name on Schedule I hereto or in
the Assignment and Acceptance, the Additional Commitment Agreement or the accession agreement
pursuant to which it became a Lender (or, if no such office of such Lender is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender may from time to time
specify in writing to the Company and the Administrative Agent.

 

 

          “Eurocurrency Rate” means, for any Interest Period:

          (a) for each Eurocurrency Rate Advance denominated in Dollars comprising part of the same
Committed Borrowing, an interest rate per annum equal to the offered rate for deposits in such
Currency as quoted on the relevant Screen Page at 11:00 A.M. (London time) two London Banking Days
before the first day of such Interest Period in an amount substantially equal to the Reference
Bank’s Eurocurrency Rate Advance comprising part of such Committed Borrowing to be outstanding
during such Interest Period and for a period equal to such Interest Period;

          (b) for each Eurocurrency Rate Advance denominated in Pounds Sterling comprising part of the
same Committed Borrowing, (i) an interest rate per annum equal to the offered rate for deposits in
such Currency as quoted on the relevant Screen Page at 11:00 A.M. (London time) on the first day of
such Interest Period, for a period equal to such Interest Period plus (ii) the MCR Cost,
if any; or

          (c) for each Eurocurrency Rate Advance denominated in Euros comprising part of the same
Committed Borrowing, (i) an interest rate per annum equal to the offered rate for deposits in such
Currency as quoted on the relevant Screen Page at 11:00 A.M. (Brussels time) two TARGET Days before
the first day of such Interest Period, for a period equal to such Interest Period plus (ii)
the MCR Cost, if any.

          “Eurocurrency Rate Advance” means a Committed Advance that bears interest as provided
in Section 2.05(b).

          “Eurocurrency Rate Reserve Percentage” for any Lender for any Eurocurrency Rate
Advances owing to such Lender means the reserve percentage applicable two Business Days before the
first day of the applicable Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with
respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term
equal to the applicable Interest Period.

          “Events of Default” has the meaning provided in Section 6.01.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in effect.

          “Excluded Representation” means the representation and warranty set forth in Section
4.01(g).

          “Existing Credit Agreement” has the meaning provided in the recitals of this
Agreement.

          “GAAP” means United States generally accepted accounting principles as in effect from
time to time.

 

 

          “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate
future or option contracts, currency swap agreements, currency future or option contracts and other
similar agreements.

          “Indebtedness” of any Person means, without duplication, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services (other than
trade payables incurred in the ordinary course of business of such Person), (ii) all indebtedness
of such Person evidenced by a note, bond, debenture or similar instrument, (iii) the principal
component of all Capital Lease obligations of such Person, (iv) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all unreimbursed amounts
drawn thereunder, (v) all indebtedness of any other Person secured by any Lien on any property
owned by such Person, whether or not such indebtedness has been assumed, (vi) all Contingent
Obligations of such Person, and (vii) all indebtedness of such Person in respect of Hedge
Agreements.

          “Information Memorandum” means the document in the form approved by the Company
concerning the Borrowers and their Subsidiaries which, at the Company’s request and on its behalf,
was prepared in relation to this transaction and distributed by the Lead Arrangers to selected
financial institutions before the date of this Agreement.

          “Initial Lenders” has the meaning provided in the first paragraph of this Agreement.

          “Interest Coverage Ratio” means, for any period of four consecutive fiscal quarters,
the ratio of (a) EBITDA for such period to (b) Interest Expense for such period.

          “Interest Expense” means, for any period, the sum (determined without duplication) of
the aggregate amount of interest reported in respect of such period on the Indebtedness of the
Company and its Consolidated Subsidiaries on a consolidated basis, including, without limitation,
the interest portion of payments under Capital Lease obligations and any capitalized interest
but excluding imputed (non-cash) interest expense in respect of convertible bonds issued by the
Company or any of its Consolidated Subsidiaries as calculated in accordance with the Financial
Accounting Standards Board’s Staff Position Accounting Principles Board Opinion No. 14-1
(“Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion
(Including Partial Cash Settlement)”), minus (i) interest income of the Company and its
Consolidated Subsidiaries on a consolidated basis reported in respect of such period and (ii)
interest on deferred compensation reported in respect of such period.

          “Interest Period” means, for each Eurocurrency Rate Advance comprising part of the
same Committed Borrowing, each Floating Rate Advance comprising part of the same Uncommitted
Borrowing and each Fixed Rate Advance comprising part of the same Uncommitted Borrowing, the period
commencing on the date of such Advance or the date of the continuation of such Eurocurrency Rate
Advance or the date of the conversion of any Base Rate

          “Uncommitted Note” has the meaning provided in Section 2.11.

          “Unfunded Benefit Liabilities” means with respect to any Plan at any time, the amount
(if any) by which (i) the present value of all benefit liabilities under such Plan as defined in
Section 4001(a)(16) of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to

 

 

such benefits, all determined as of the then most recent valuation date for such Plan (on the basis
of assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).

          “Utilization Ratio” means, at any time, the ratio of (i) the aggregate outstanding
principal amount of the Advances at such time to (ii) the aggregate amount of the Commitments at
such time.

          SECTION 1.02. Computation of Time Periods; Terms Generally. In this Agreement in the
computation of periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but excluding”. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.

          SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

     SECTION 2.01. The Commitment. (a) The Committed Advances. (i) Each
Lender agrees, on the terms and conditions hereinafter set forth to make Committed Advances
to the Company and any Designated Borrower in Dollars or an Alternate Currency from time to
time on any Business Day during the period from the Effective Date until the Termination
Date in an aggregate amount not to exceed at any time outstanding (1) such Lender’s
Commitment minus (2) such Lender’s Pro Rata Share of the aggregate principal amount
of all Uncommitted Advances then outstanding; provided that (A) at no time shall the
aggregate outstanding principal amount of all Advances exceed the total amount of the
Commitments at such time; and (B) at no time shall the Dollar Equivalent of the aggregate
outstanding principal amount of all Committed Advances denominated in an Alternate Currency
to the Borrowers exceed the Foreign Currency Sublimit.

     (ii) Within the limits of each Lender’s Commitment and subject to the limitation set
forth in Section 2.07(c), each Borrower may borrow, repay, prepay (as provided in Section
2.07) and reborrow such amount or any portion thereof.

          (f) Failure to Make Advances. The failure of any Lender to make the Committed
Advance to be made by it as part of any Committed Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Committed Advance on the date of such Committed
Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the
Committed Advance to be made by such other Lender on the date of any Committed Borrowing.

 

 

          SECTION 2.03. Fees. (a) Facility Fee. The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee in Dollars on the aggregate
amount of such Lender’s Commitment (whether or not utilized and, after the Termination Date (or,
for any Declining Lender, after the Current Termination Date applicable to such Lender), on the
aggregate outstanding principal amount of the Advances of such Lender, if any) from the date hereof
in the case of each Lender and, in the case of each Person which becomes a Lender pursuant to
Section 8.07, from the effective date specified in the Assignment and Acceptance pursuant to which
it became a Lender and, in the case of a Person becoming a Lender pursuant to Section 2.01(c) or
2.01(d), from the effective date specified in the accession agreement or Additional Commitment
Agreement, as applicable, pursuant to which it became a Lender, until the Termination Date at the
Applicable Facility Fee Rate, payable quarterly in arrears on the last day of each March, June,
September and December during the term hereof and on the Termination Date. All computations of the
facility fee shall be based on a year of 360 days.

          (b) Administrative Agent’s Fees. The Company shall pay to the Administrative Agent
in Dollars for its own account such fees as may from time to time be agreed between the Company and
the Administrative Agent.

          (c) Utilization Fee. Each Borrower shall pay to the Administrative Agent for the pro
rata account of the Lenders a utilization fee on the outstanding principal amount of the Advances
made to it (which fee shall be payable in the Currency in which such Advances were denominated),
for each day on which the Utilization Ratio exceeds 0.50 and for each day after the Termination
Date regardless of the Utilization Ratio, at a rate per annum equal to the Applicable Utilization
Fee Rate, payable on each day on which a payment of interest is due under Section 2.05.

          SECTION 2.04. Continuation and Conversion. (a) General. Subject to the other provisions
hereof, each Borrower shall have the option (i) to convert all or any part of an outstanding
Committed Borrowing consisting of Base Rate Advances to a Committed Borrowing consisting of
Eurocurrency Rate Advances, (ii) to convert all or any part of an outstanding Committed Borrowing
in Dollars consisting of Eurocurrency Rate Advances to a Committed Borrowing consisting of Base
Rate Advances, or (iii) to continue all or any part of an outstanding Committed Borrowing
consisting of Eurocurrency Rate Advances as a Committed Borrowing consisting of Eurocurrency Rate
Advances for an additional Interest Period; provided that no Committed Borrowing consisting
of Eurocurrency Rate Advances shall be so converted other than as contemplated by Section 2.02(c)
or continued, until the expiration of the Interest Period applicable thereto.

          (b) Notice of Conversion or Continuation. In order to elect to convert or continue a
Committed Borrowing hereunder, the Company (on its own behalf or on behalf of any Designated
Borrower) shall deliver an irrevocable notice thereof (a “Notice of Conversion or
Continuation”) to the Administrative Agent by telecopier or by telephone confirmed immediately
in writing, no later than (i) 11:00 A.M., (New York City time) on the proposed conversion date in
the case of a conversion to Base Rate Advances and (ii) no earlier than 9:00 A.M. (New York City
time) and no later than 4:00 P.M. (New York City time) on the third Business Day in advance of the
proposed conversion or continuation date in the case of a conversion to, or a continuation of,
Eurocurrency Rate Advances, substantially in the form of Exhibit B hereto. A Notice of Conversion
or Continuation shall specify (w) the requested conversion or continuation date (which shall be a
Business Day), (x) the amount and Type of the Advances to be converted or continued, (y) whether a
conversion or continuation is requested, and (z) in the case of a
conversion to, or a continuation of, Eurocurrency Rate Advances, the requested Interest Period.
The relevant Eurocurrency Rate for such Interest Period in the case of a conversion to, or a
continuation of, Eurocurrency Rate Advances shall be determined in the manner provided in

 

 

Section
2.02(a) as if such conversion or continuation is instead new Eurocurrency Rate Advances in such
amount, on such date and for such Interest Period. If the Company fails to give a Notice of
Conversion or Continuation with respect to an outstanding Committed Borrowing consisting of
Eurocurrency Rate Advances in Dollars as provided in clause (ii) above, the Company shall be deemed
to have converted such Eurocurrency Rate Advances into Base Rate Advances in accordance with this
Section 2.04 if such Advances are outstanding after the last day of the Interest Period with
respect thereto. If the Company fails to give a Notice of Conversion or Continuation with respect
to an outstanding Committed Borrowing consisting of Eurocurrency Rate Advances in an Alternate
Currency as provided in clause (ii) above, the Company shall be deemed to have converted such
Eurocurrency Rate Advances into a Eurocurrency Rate Advance with an Interest Period of one (1)
month in accordance with this Section 2.04 if such Advances are outstanding after the last day of
the Interest Period with respect thereto.

          SECTION 2.05. Interest on Advances. Each Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date the proceeds of such Advance
are made available to such Borrower until such principal amount shall be paid in full, at the
following rates per annum:

     (a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal to the Base Rate in effect from time to time, payable in arrears quarterly on
the last Business Day of each fiscal quarter during the period such Base Rate Advance
remains outstanding and on the date such Base Rate Advance shall be paid in full;

     (b) Eurocurrency Rate Advances. If such Advance is a Eurocurrency Rate
Advance, a rate per annum equal at all times during the Interest Period for such Advance to
the sum of the Eurocurrency Rate for such Interest Period plus the Applicable Eurocurrency
Margin for such AdvanceInterest Period, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than three months, on
each day which occurs during such Interest Period every three months from the first day of
such Interest Period;

     (c) Floating Rate Advances. If such Advance is a Floating Rate Advance, a
rate per annum equal at all times during the Interest Period for such Advance to the
Floating Rate for such Interest Period quoted by such Lender in accordance with Section
2.13, payable in arrears on the last Business Day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day which occurs during
such Interest Period every three months from the first day of such Interest Period;

          (c) Payment of Taxes. The Company shall pay or cause to be paid, and shall cause
each of its Subsidiaries to pay or cause to be paid, when due, all taxes, charges and assessments
and all other lawful claims required to be paid by the Company or such Subsidiaries, except (x) as
contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves
have been established with respect thereto in accordance with GAAP and (y) where such nonpayment
could not reasonably be expected to result in a Material Adverse Effect.

          (d) Preservation of Corporate Existence. Except as otherwise permitted by this
Agreement, the Company shall, and shall cause each of its Subsidiaries to, do all things necessary
to preserve, renew and keep in full force and effect its corporate existence and the licenses,
permits, rights and franchises necessary to the proper conduct of its business, except

 

 

where the
failure to do so could not reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries will engage in any business if, as a result, the general nature
of the business, taken on a consolidated basis, which would then be engaged in by the Company and
its Subsidiaries would be substantially changed from the general nature of the business engaged in
by the Company and its Subsidiaries on the date of this Agreement.

          (e) Maintenance of Books and Records. The Company will maintain financial records in
accordance with GAAP, consistently applied. The representatives of the Administrative Agent or any
of the Lenders shall have the right to visit and inspect any of the properties of the Company and
of any of its Subsidiaries, to examine their books of account and records and take notes and make
transcripts therefrom, and to discuss their affairs, finances and accounts with, and be advised as
to the same by, their officers upon reasonable prior notice at such reasonable times and intervals
as may be requested (subject to the standard policies of the Company and its Subsidiaries as to
access, safety and, without prejudice to the reasonable requirements of lending institutions and
their regulatory supervisors, confidentiality).

          (f) Interest Coverage Ratio. The Company shall maintain, for each period of four
consecutive fiscal quarters of the Company, an Interest Coverage Ratio of not less than
5.003.50 to 1.00.

          SECTION 5.02. Negative Covenants. So long as any Advance or any other amount owing
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder:

          (a) No Liens. The Company shall not, and shall not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist, directly or indirectly, any Lien on any Principal
Property now owned or hereafter acquired (unless the Company secures the Advances made hereunder
equally and ratably with such Lien), other than:

     (i) Liens existing and disclosed to the Lenders in writing prior to the date hereof;

     (ii) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate reserves are
being maintained in accordance with GAAP;

     (iii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary courseEX-10.VIII

Exhibit 10 (viii)

SECOND AMENDMENT

TO THE

SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN

FOR SALARIED EMPLOYEES OF THE STANLEY WORKS

(As Amended And Restated Effective January 1, 2009, Except As Otherwise Provided)

     Background. A. The Stanley Works, together with its wholly-owned U.S. subsidiaries
(“Stanley”), maintains the Supplemental Retirement and Account Value Plan for Salaried Employees of
The Stanley Works (“Plan”) to provide certain employees with benefits that are not provided under a
tax-qualified retirement plan under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“Code”).

     B. The Stanley Works now desires to amend the Plan in the form of a restated Plan in order
for the Plan to comply with the requirements of Code Section 409A and the regulations thereunder,
as follows:

Article 1

Effective Date

This amendment and restatement of the Plan shall be effective January 1, 2009, provided that
Sections 4.3(c), 6.2(a), 6.2(c), 7.2(d) and 7.2(e) shall be effective as set forth therein. This
amended and restated Plan shall apply with respect to any amounts contributed to or distributed
from the Plan on or after January 1, 2009, provided that this restatement of the Plan shall not
apply with respect to annuity payments of a Supplemental Retirement Plan Benefit that are a
continuation of a series of annuity payments that began prior to January 1, 2009.

Article 2

Definitions

The following terms have the meanings set forth below.

     “Accounts” means a Participant’s Supplemental Employee Contribution Account and Supplemental
Company Contribution Account.

     “Account Value Plan” means the Stanley Account Value Plan.

     “Actuarial Equivalent” means a benefit which has the same present value, as of the benefit
commencement date, as the single life annuity form of benefit computed in accordance with Article 7
on the basis of the factors for determining actuarial equivalence described in Section 7.2(c)(iii).

     “Beneficiary” means any individual, trust or estate designated by a Participant, in accordance
with the procedures established by the Company, to receive a death benefit payable on the
Participant’s behalf under the Plan. If, at the time of death of a Participant, there is no
beneficiary designation on file with the Company or there is no such designated beneficiary
surviving, the death benefit, other than a death benefit for a joint annuitant provided under a
joint and survivor annuity, shall be paid to the Participant’s surviving spouse, or, if there is no
surviving spouse, the death benefit shall be paid to the Participant’s estate. Any benefit payable
upon the death of a Participant’s joint annuitant, after beginning to receive payments under a
joint and survivor annuity, shall be paid to the beneficiary designated in

1

 

writing by the joint annuitant, provided that, if no designated beneficiary survives the joint
annuitant, the benefit shall be paid to the joint annuitant’s estate.

     “Committee” means the Finance and Pension Committee of the Board of Directors of the Company.

     “Company” means The Stanley Works.

     “Compensation” means, with respect to a Plan Year:

     (a) Subject to paragraphs (b), (c) and (d), the salary and other amounts received by a
Participant from the Controlled Group for services actually rendered in the course of employment
with the Controlled Group during the pertinent Plan Year, to the extent such amounts are includible
in the gross income of the Participant for federal income tax purposes, including, but not limited
to, bonuses, commissions and vacation pay that are paid with respect to such services rendered
during the Plan Year. Compensation for a Plan Year shall also include a Participant’s Elective
Deferral Contributions under the Plan, and elective contributions of the Participant that are
excludable from gross income for federal income tax purposes under Section 402(g) of the Code,
Section 125 of the Code or Section 132(f)(4) of the Code (a qualified transportation fringe benefit
plan), provided that any such contributions are made from amounts that would be considered
Compensation pursuant to the preceding sentence if paid to the Participant.

     (b) Compensation for a Plan Year shall not include reimbursements or other expense allowances,
fringe benefits (whether or not paid in cash), moving expenses, welfare benefits, including the
cost of group term life insurance coverage, deferred compensation in the year paid if the
compensation has been deferred beyond the calendar year in which it would otherwise have been paid,
amounts paid to a Participant under the Company’s long-term incentive plans, amounts realized from
the grant or exercise of a stock option, or, except as provided below, any amounts paid during the
Plan Year for services rendered in a prior Plan Year. Subject to paragraph (d), for purposes of
paragraph (a), a bonus paid to the Participant in the Plan Year that follows the Plan Year during
which the services were performed with respect to which such bonus is paid will be included in
Compensation for such Plan Year in which the services were performed, and any Elective Deferred
Contributions with respect to a bonus, that are elected pursuant to Section 3.1(a) prior to the
beginning of the Plan Year in which the services were performed with respect to which the bonus is
determined, will be included in Compensation for that Plan Year. Except for a Participant’s final
regular payroll check or a bonus for services performed in a prior Plan Year, Compensation shall
not include amounts paid after the Participant ceases to have employment status with Stanley.
Amounts described in subsection (a) that are paid after the last day of a Plan Year solely for
services performed during the final payroll period that includes the last day of such Plan Year
shall be treated as Compensation for the Plan Year in which such final payroll period ends.
Pursuant to Treasury Regulation Section 1.409A- 2(a)(13), the preceding sentence shall not apply to
any amount that is paid after the last day of a Plan Year for services performed during any period
other than such final payroll period, such as a bonus paid entirely or in part with respect to
services performed during a period other than the final payroll period.

     (c) For purposes of subsection (a), a Participant who earns sales commission compensation is
treated as providing the services to which such compensation relates in the Plan Year in which the
pertinent sale occurs. For purposes of this paragraph (c), the term ‘sales commission
compensation’ means compensation or portions of compensation earned by a Participant if a
substantial portion of the services provided by such Participant to Stanley consists of the direct
sales of products or services to unrelated customers, such compensation earned by the Participant
consists of either a portion of the purchase price for products or services or an amount
substantially all of which is calculated by reference to the volume of sales, and payment of such
compensation is contingent upon the closing of the sales transaction and such other requirements as
may be specified by Stanley prior to the closing of the sales

2

 

transaction. For this purpose, a customer is treated as an unrelated customer only if the
customer is not related to either the Participant or Stanley, and a person is treated as related if
the person would be treated as related under Treasury Regulation Section 1.409A-1(f)(2)(ii) or the
person would be treated as providing management services under Treasury Regulation Section
1.409A-1(f)(2)(iv).

     (d) Anything herein to the contrary notwithstanding, amounts that are deferred at the election
of a Participant under Stanley’s Deferred Compensation Plan for Participants in Stanley’s
Management Incentive Plans (the “Deferred Compensation Plan”) shall not be considered Compensation
for any Plan Year for purposes of determining contributions under Section 4.1 or 4.2(a) but shall
be considered Compensation for purposes of determining contributions under Section 4.2(b), in the
year such amounts would have been paid to the Participant if not deferred under the Deferred
Compensation Plan. Also, anything herein to the contrary notwithstanding, solely for purposes of
determining contributions under Section 4.2(b), Compensation for a Plan Year shall include
Compensation for the Plan Year, as determined above, if it is payable during such Plan Year, and
also any amount that is payable during the Plan Year that otherwise would be considered
Compensation for a prior Plan Year as a result of being attributable to services performed in the
prior Plan Year, but shall not include any amount that is payable during the subsequent Plan Year
that otherwise would be considered Compensation for the current Plan Year as a result of being
attributable to services performed during the current Plan Year.

     “Controlled Group” means a group of corporations or other entities of which the Company is a
member, determined under Section 414(b) and Section 414(c) of the Internal Revenue Code, applied by
utilizing “at least 80 percent” each place it appears in Internal Revenue Code Section 1563(a)(1),
(2) and (3) and in Treasury Regulation Section 1.414(c)-2.

     “Disability” means a Participant’s Separation from Service 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.

     “Elective Deferral Contribution” means the amount of Compensation that a Participant elects to
defer under Section 4.1.

     “Employee” means an individual employed by Stanley as a common law employee on a salaried
basis who is subject to the income tax laws of the United States and is not an employee with ZAG
Storage USA. Anything herein to the contrary notwithstanding, an individual employed after
November 1, 2007, by an entity that first becomes a wholly-owned (direct or indirect) U.S.
subsidiary of the Company after that date shall not be considered an Employee, unless he or she is
eligible to participate in the Plan pursuant to Appendix A, provided that, anything herein to the
contrary notwithstanding, an individual shall not be considered an Employee and shall not be
eligible to defer Compensation with respect to a Plan Year or receive any other contributions under
the Plan for the Plan Year unless he or she is eligible to make elective pre-tax contributions
under the Account Value Plan on the first day of such Plan Year.

     “Highly Compensated Employee” means, for a Plan Year, an Employee who received earnings from
the Controlled Group during the preceding Plan Year in excess of the dollar amount prescribed under
Code Section 414(q)(1)(B). An individual who has been a Highly Compensated Employee shall cease to
be a Highly Compensated Employee, effective upon the close of business on the last day of the Plan
Year in which his or her earnings for such Plan Year do not exceed the pertinent dollar amount that
applies under Code Section 414(q)(1)(B) when determining his or her status as a ‘highly compensated
employee’ under Code Section 414(q)(1)(B) for the subsequent Plan Year. For purposes of this
definition, ‘earnings’ is an individual’s W-2 income, plus elective contributions made on behalf of
the individual by the Company, and all members of the Controlled Group, that are excludable from
gross income for federal income tax purposes under Code Section 125, 402(g), or 132(f)(4), except
that, “earnings” for all of the last calendar quarter of a Plan Year are determined based on
projected base salary, including

3

 

projected elective contributions under Code Section 125, 402(g) or 132(f)(4), with respect to
such base salary, rather than actual earnings.

     “Participant” means a Highly Compensated Employee who is eligible under Section 3.1(a)(i) to
elect to defer a portion of his or her Compensation under the Plan, or an Employee who is eligible
to defer a portion of his or her Compensation under the Plan, pursuant to Sections 3.1(a)(ii) and
3.2, based upon an annual rate of base salary in excess of the dollar amount prescribed under Code
Section 414(q)(1)(B). Notwithstanding anything herein to the contrary, an individual who has a
vested Supplemental Retirement Plan Benefit as of January 1, 2009 and is not eligible under Section
3.1 shall be a Participant for purposes of the provisions of the Plan other than Articles 3, 4, 5
and 6.

     “Plan Year” means the calendar year.

     “Retirement Plan” means The Stanley Works Retirement Plan as in effect on April 16, 2002,
without regard to any subsequent changes in such plan.

     “Separation from Service” means the termination of a Participant’s employment with the
Controlled Group for a reason other than death. Whether a Separation from Service has occurred is
determined in accordance with the standards that apply for determining if there is a ‘separation
from service’ for a reason other than death pursuant to Treasury Regulation Section 1.409A-1(h)(1).
There is a Separation from Service as of a particular date, if the Company and the Participant
reasonably anticipated that, as of that date, the Participant would provide no further services to
the Controlled Group as a common law employee or as an independent contractor or the Participant
would provide services to the Controlled Group as a common law employee or an independent
contractor at an annual rate that is not more than 20% of the services rendered, on average, during
the immediately preceding 36 consecutive months of service (or the full period of service, if less
than 36 months). For purposes of the preceding sentence, service as a director of a member of the
Controlled Group shall not be taken into account.

     The Participant’s employment relationship shall be treated as continuing while the Participant
is on military leave, sick leave or other bona fide leave of absence, provided that the Participant
is expected to return to work for a member of the Controlled Group 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 a member of the Controlled Group either by statute or by contract. If the period
of a military leave, sick leave or other bona fide leave of absence exceeds six months and there is
no right to reemployment, a termination of the employment relationship shall be deemed to have
occurred as of the first date immediately following the first six months of the leave.

     “Specified Employee” means a Participant who is identified as a ‘specified employee’ in
accordance with Treasury Regulation Section 1.409A-1(i), pursuant to a written policy established
and maintained by the Company.

     “Supplemental Company Contribution Account” means the bookkeeping record that reflects the
supplemental Company contributions credited under the Plan as of December 31, 2008, pursuant to the
terms of the Plan as then in effect.

     “Supplemental Employee Contribution Account” means the bookkeeping record that reflects
amounts credited under Section 4.1.

     “Supplemental Retirement Plan Benefit” means the frozen supplemental benefit accrued under the
Plan as of July 31, 2001, determined on the basis of the provisions of the Plan as in effect on
that date.

     “Valuation Date” means the date established by the Committee for valuing Participants’
Accounts.

4

 

Article 3

Plan Participation

          3.1 Date of Participation. (a) Eligibility to Defer.

          (i) Except as provided in subsection (ii), an Employee shall become a Participant in the Plan
effective upon the first January 1 on which he or she is a Highly Compensated Employee.

          (ii) An Employee who became a Participant in the Plan in 2008, based upon an annual rate of
base salary from the Controlled Group in excess of the dollar amount prescribed under Code Section
414(q)(1)(B) shall remain eligible to make Elective Deferral Contributions from Compensation
payable with respect to services performed during 2009, provided that such individual is still an
Employee on January 1, 2009 and, as of that date, his annual rate of base salary is in excess of
the dollar amount set forth in Code Section 414(q)(1)(B).

Subject to Section 3.2, a Participant shall be eligible to elect, under Section 4.1, to defer a
specified portion of the Compensation payable with respect to services performed during a Plan Year
that begins after the Plan Year in which the Participant makes the election to defer such portion
of Compensation, provided that the Participant must irrevocably elect to defer such portion before
January 1 of such Plan Year in which the services are performed and, subject to Section 3.3, such
election must remain in effect for the entire Plan Year.

          (b) Deferral Elections. Any election to defer Compensation shall be effective only with
respect to Compensation for services that are performed on or after the January 1st on
which such election becomes effective. A Participant’s election to defer Compensation by making
Elective Deferral Contributions shall be submitted to the Company by the deadline established by
the Company that precedes the first January 1 on which such election is to become effective. Such
election shall state the portion of Compensation to be withheld. Any election to defer shall be
made in accordance with procedures established by the Company and, subject to Section 3.3, shall be
irrevocable for the Compensation payable with respect to services performed during the Plan Year to
which such election applies.

          (c) Evergreen Deferral Elections. A Participant’s election to defer a specified portion of
Compensation payable with respect to services performed during a Plan Year shall remain in effect
for Compensation payable with respect to services performed during subsequent Plan Years until
changed or revoked by the Participant, and, subject to Sections 3.2 and 3.3, as of each December
31, such a prior election becomes irrevocable with respect to Compensation payable in connection
with services performed by the Participant during the immediately following Plan Year, so that the
deferral election with respect to Compensation payable with respect to services performed by the
Participant during the immediately following Plan Year shall be deemed to have been irrevocably
made as of December 31 of the preceding Plan Year.

          3.2 Continuing Plan Participation. If an Employee becomes a Participant for a Plan Year,
pursuant to Section 3.1(a)(i), he or she shall remain eligible to make Elective Deferral
Contributions from Compensation payable with respect to services performed during each subsequent
Plan Year in which he or she is a Highly Compensated Employee. If an Employee becomes a
Participant in 2008, pursuant to Section 3.1(a)(i)(ii), he or she may remain eligible in accordance
with said Section 3.1(a)(ii) to make Elective Deferral Contributions from Compensation payable with
respect to services performed during the 2009 Plan Year, but shall not be eligible to make Elective
Deferral Contributions from Compensation payable with respect to services performed during any Plan
Year subsequent to 2009 for which he or she is not a Highly Compensated Employee. If an Employee
who has become a Participant for a Plan Year, pursuant to Section 3.1(a)(i), ceases to be a Highly
Compensated Employee

5

 

with respect to a subsequent Plan Year, he or she shall not be eligible to make Elective
Deferral Contributions from Compensation payable with respect to services performed during that
subsequent Plan Year but shall be eligible to make Elective Deferral Contributions from
Compensation payable with respect to services performed during the next Plan Year in which he or
she is a Highly Compensated Employee by making a new deferral election under Section 3.1(a)(i). If
an Employee was eligible to contribute under the Plan pursuant to Section 3.1(a)(ii), but has
ceased to be eligible to contribute with respect to a Plan Year, such Employee shall not be
eligible to make Elective Deferral Contributions until the Plan Year in which he or she is a Highly
Compensated Employee, and he or she may make contributions from Compensation payable with respect
to services performed during that Plan Year by making a new deferral election, pursuant to Section
3.1(a)(i), before January 1 of such Plan Year in which the services are performed. The provisions
of the Plan shall continue to apply to an individual until his or her vested Accounts are
distributed.

          3.3 Unforeseeable Emergency. With the approval of the Committee, a Participant who is faced
with an “unforeseeable emergency” shall be permitted, on account of such emergency, to cancel an
election previously made by the Participant to make Elective Deferral Contributions under the Plan.
An election by a Participant to cancel his or her Elective Deferral Contributions with respect to
Compensation payable for services performed during a Plan Year on account of an unforeseeable
emergency shall cancel all remaining Elective Deferral Contributions of the Participant that would
otherwise be made with respect to Compensation payable for services performed during the Plan Year,
and no additional Elective Deferral Contributions shall be made until the Participant makes a new
election to defer a portion of his or her Compensation for services performed during a subsequent
Plan Year in accordance with Sections 3.1 and 3.2. For purposes of this Section 3.3, an
unforeseeable emergency is a severe financial hardship to a Participant resulting from (a) an
illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or
a dependent of the Participant (as defined in Code Section 152, without regard to Section
152(b)(1), (b)(2) and (d)(1)(B)), (b) loss of the Participant’s property due to casualty (including
the need to rebuild a home following damage to the home not otherwise covered by insurance), or (c)
other similar extraordinary and unforeseeable circumstances arising as a result of events beyond
the control of the Participant. The determination of whether a Participant is faced with an
unforeseeable emergency shall be made by the Committee in its sole discretion, based on the facts
and circumstances surrounding such emergency and such information as the Committee shall deem to be
necessary in accordance with the requirements of Code Section 409A and the regulations thereunder.

Article 4

Supplemental Employee and Company Contributions

          4.1 Elective Deferral Contributions. (a) Elections to Defer. A Participant may make an
election for a Plan Year in accordance with Section 3.1 to defer a specified whole percentage, from
1% to 7%, of the portion of Compensation for services performed during the Plan Year in excess of
the amount of Compensation for services performed during such Plan Year that may be taken into
account when determining elective pre-tax contributions under the Account Value Plan (on the basis
of the provisions of the Account Value Plan that were adopted prior to the first day of the Plan
Year and in effect on the first day of the Plan Year). Moreover, a Participant may elect for a
Plan Year, in accordance with Section 3.1, to defer from Compensation payable for services
performed during the Plan Year, up to the amount, if any, by which the limitation in effect under
Internal Revenue Code Section 402(g)(1)(B) for the Plan Year exceeds the maximum, available pre-tax
elective contributions under the Account Value Plan for the Plan Year, other than catch-up
contributions pursuant to Internal Revenue Code Section 414(v), determined on the basis of the
Account Value Plan provisions that were adopted prior to the first day of the Plan Year and in
effect on the first day of the Plan Year. Any election pursuant to this Section 4.1(a) shall be
implemented as an irrevocable election under Section 3.1.

6

 

          (b) Additional Elective Deferral Contributions. Subject to Section 3.1, a Participant who
elects contributions under Section 4.1(a) may also make an election to defer a specified whole
percentage, from 1% to 8%, of Compensation.

          (c) Crediting of Elective Deferral Contributions. Any amount deferred under this Section 4.1
shall be credited to a Supplemental Employee Contribution Account as soon as administratively
practicable following the date on which the amount would have been paid to the Participant if not
for the Participant’s election to defer.

          4.2 Supplemental Company Contributions. (a) Supplemental Matching Contributions for Elective
Deferral Contributions. The supplemental matching contributions that were allocated under the Plan
as of December 31, 2008, with respect to a Participant’s Elective Deferral Contributions to the
Plan as of December 31, 2008, are credited to the Participant’s Supplemental Company Contribution
Account.

          Anything herein to the contrary notwithstanding, effective January 1, 2009, all supplemental
matching contributions under the Plan are discontinued, so that no supplemental matching
contributions shall be made with respect to a Participant’s Elective Deferral Contributions for any
Plan Year beginning on or after January 1, 2009.

          (b) Supplemental Cornerstone Contributions for Certain Participants. The supplemental
cornerstone contributions that were allocated under the Plan as of December 31, 2008, on behalf of
certain Participants, are credited to each such Participant’s Supplemental Company Contribution
Account.

          Anything herein to the contrary notwithstanding, effective January 1, 2009, all cornerstone
contributions under the Plan are discontinued, so that no cornerstone contributions shall be made
with respect to any Participant for any Plan Year beginning on or after January 1, 2009.

          4.3. Investment Return. (a) Crediting of Investment Return. Subject to such rules and
limitations as the Committee may establish, each Participant shall designate from among the assumed
investment funds described in subsection (b) of this Section 4.3, one or more assumed investment
funds in which amounts that are credited to his or her Supplemental Employee Contribution Account
or Supplemental Company Contribution Account shall be deemed to be invested. At the discretion of
the Committee, different investment options may be made available with respect to amounts
attributable to the contributions determined under Section 4.2(b) than is the case with respect to
amounts attributable to the other contributions. A Participant’s Supplemental Employee
Contribution Account and Supplemental Company Contribution Account shall be adjusted periodically,
as of each Valuation Date, for increases or decreases in the fair market value of the assumed
investment funds in which such accounts are deemed to be invested.

          (b) Assumed Investment Alternatives. The Committee shall designate the assumed investment
funds, including a fund that is designed to invest primarily in Company stock, that shall be
available from time to time under the Plan for purposes of measuring the investment return of a
Supplemental Employee Contribution Account or a Supplemental Company Contribution Account, provided
that, at the discretion of the Committee, different investment options may be made available with
respect to amounts attributable to the contributions determined under Section 4.2(b) than is the
case with respect to amounts attributable to the other contributions. In accordance with
procedures established by the Committee, each Participant may elect how the amounts credited to his
or her Supplemental Employee Contribution Account and Supplemental Company Contribution Account
shall be deemed to be invested among the assumed investment funds made available by the Committee.
If a Participant has not made a valid investment election, the pertinent portion of the
Participant’s Supplemental Employee

7

 

Contribution Account and Supplemental Company Contribution Account shall be deemed to be
invested in a default investment fund identified by the Committee.

          (c) Discontinuance of Guaranteed Rate. Effective as of December 31, 2008, amounts
attributable to deemed investments in a fund considered to consist primarily of Company stock, that
had been subject to a guaranteed minimum investment return pursuant to the provisions of the Plan
as then in effect, shall cease to be subject to a minimum guaranteed investment return. To the
extent that, as of December 31, 2008, such a guarantee would have provided a lump sum distribution
to a Participant as of that date in excess of the lump sum distribution that otherwise would have
been made, the excess amount shall be credited on behalf of the Participant as of December 31, 2008
for reinvestment under the Plan.

Article 5

Vesting

          5.1 Supplemental Employee Contribution Account and Supplemental Company Contribution Account.
A Participant’s vested interest in his or her Accounts under the Plan shall be determined as
follows:

          (a) Supplemental Employee Contribution Account. A Participant is 100% vested at all times in
the value of any amounts credited to the Participant’s Supplemental Employee Contribution Account.

          (b) Supplemental Company Contribution Account. A Participant shall be 100% vested in the
value of his or her Supplemental Company Contribution Account upon the Participant’s completion of
3 years of service. No portion of a Participant’s Supplemental Company Contribution Account shall
be vested before completion of 3 years of service; provided, however, that a Participant shall
automatically become vested in the value of his or her Supplemental Company Contribution Account if
the Participant has employment status with any member of the Controlled Group (i) upon reaching his
or her 65th birthday, (ii) upon incurring a Disability, or (iii) upon his or her death.
For purposes of this subsection (b), a year of service means each twelve month period commencing on
an individual’s employment commencement date and the anniversaries thereof during which the
individual has employment status with any member of the Controlled Group, during the period it is a
member of the Controlled Group and the period of employment with a predecessor employer preceding
the Company’s acquisition of the business conducted by such employer, whether through the purchase
of all of the outstanding stock of such employer or of all, or substantially all, of the assets
used by such employer in a trade or business. A Participant who ceases to have employment status
with the Controlled Group on a date that is less than a full year following the most recent
anniversary of his or her employment commencement date shall receive vesting service credit for
each month during such partial year in which he or she had employment status. A Participant whose
employment is interrupted by a break in service shall have his or her years of service determined
by aggregating service with all members of the Controlled Group before and after the break in
service.

8

 

Article 6

Distributions of Vested Accounts

          6.1 Time and Form of Distribution of Vested Accounts. (a) Time of Distribution of Vested
Accounts. Except as otherwise provided in subsection (b) of this Section 6.1, in Section 6.4, and
in Section 6.5, a Participant’s vested Accounts shall be distributed as set forth below:

     (i) If the Participant elected a distribution date for his or her vested Accounts
pursuant to Section 6.2, the vested Accounts shall be distributed to the Participant upon
such date, pursuant to Section 8.1, provided that, if the Participant dies prior to that
date, the vested Accounts shall be distributed to the Participant’s Beneficiary upon the
Participant’s death, as provided in Section 8.1, except that, if such a distribution was not
made upon the Participant’s date of death prior to January 1, 2009, and the vested Accounts
were not payable in 2008, the vested Accounts shall be distributed to the Beneficiary on
March 31, 2009.

     (ii) If the Participant did not elect a distribution date for his or her vested
Accounts under Section 6.2, the vested Accounts shall be distributed to the Participant upon
his or her Separation from Service, as provided in Section 8.1, except that, if the
Participant’s Separation from Service preceded January 1, 2009, and the vested Accounts were
not payable in 2008, the vested Accounts shall be distributed to the Participant between
January 1, 2009 and March 31, 2009. If the Participant dies prior to the stipulated time of
distribution, the vested Accounts shall be distributed to the Participant’s Beneficiary
following the Participant’s death, as provided in Section 8.1, unless such a distribution
was not made upon a date of death that preceded January 1, 2009, and the vested Accounts
were not payable in 2008, in which case the vested Accounts shall be distributed to the
Beneficiary on March 31, 2009.

          (b) Delayed Distributions to Specified Employees. If a Participant is a Specified Employee as
of the date of his or her Separation from Service and the Participant did not elect a distribution
date for his or her vested Accounts, pursuant to Section 6.2, that is at least six months after the
date of his or her Separation from Service, payment of such Participant’s vested Accounts shall be
made to the Participant, as provided in Section 8.1, once six months have elapsed following the
date of the Participant’s Separation from Service. However, if a Participant for whom payments are
deferred under this Section 6.1(b) dies prior to receiving his or her payment under this Section
6.1(b), payment shall be made upon his or her death, as provided in Section 8.1, except that, if
such a distribution was not made upon the Participant’s date of death prior to January 1, 2009 and
the vested Accounts were not payable in 2008, the vested Accounts shall be distributed to the
Beneficiary on March 31, 2009. If a Specified Employee with a date of Separation from Service that
preceded January 1, 2008, did not elect a distribution date under Section 6.2 and the Vested
Accounts were not payable in 2008, the date of distribution to the Participant shall be between
January 1, 2009 and March 31, 2009.

          6.2 Election of Time of Distribution. (a) Time for Making Election. At the time a Participant
first makes an election to defer Compensation under the Plan, or, subject to subsection (c), in the
case of an individual who became a Participant in the Plan prior to January 1, 2009, upon a date
that is not later than December 31, 2008, the Participant may elect that his or her vested Accounts
be distributed on the later of the last day of a specified Plan Year quarter or the last day of the
Plan Year quarter which contains the date of the Participant’s Separation from Service, or, if the
Participant’s Separation from Service preceded January 1, 2009, the last day of a specified Plan
Year quarter.

          (b) Subsequent Elections as to Time of Distribution. A Participant shall be permitted to make
a written election, at any time after December 31, 2008, to delay a distribution of his or her
vested Accounts, provided that any such election must specify a distribution date that is the later
of

9

 

the last day of a Plan year quarter or the last day of the Plan Year quarter which contains
the date of Separation from Service and must satisfy all of the following requirements:

     (i) the election must be made at least twelve months prior to the date on which the
distribution would otherwise have been 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.

          (c) Elections Made in 2007 or 2008 as to Time of Distribution. If an election was made in
2007 to change the time of distribution of a Participant’s vested Accounts, such new election could
not defer to a later year the payment of any amount that would otherwise be payable in 2007 and
could not require a payment to be made in 2007 that would otherwise be payable in a later year.
Moreover, if an election was made in 2008 to change the time of distribution of a Participant’s
vested Accounts, such new election could not defer to a later year the payment of any amount that
would otherwise be payable in 2008 and could not require a payment to be made in 2008 that would
otherwise be payable in a later year.

          6.3 Form of Distribution of Vested Accounts. Subject to Sections 6.4 and 6.5, a
Participant’s vested Accounts shall be distributed in a lump sum payment to the Participant or, in
the case of a distribution that is made pursuant to the Participant’s death, to the Participant’s
Beneficiary. Each such lump sum payment shall be made in cash.

          6.4 Exceptions for Participants in the SERP. Subject to Section 6.5, in the case of a
Participant who is also a participant in The Stanley Works Supplemental Executive Retirement Plan
(SERP), the foregoing provisions of this Article 6 and any other provision in the Plan pertaining
to the time or form of a distribution shall not apply and, instead, all vested Accounts under the
Plan shall be paid at the same time and in the same form as the benefit payable to or on behalf of
such Participant under the SERP. If such vested Accounts under the Plan are paid in an annuity
pursuant to the provisions of this Section 6.4, the annuity shall be determined pursuant to the
procedures for calculating an annuity with respect to assets attributable to the Plan, as set forth
in Appendix B of the SERP, and the payment of any death benefit on behalf of the Participant shall
be made at the same time and in the same form as provided under the SERP to the beneficiary
determined under the SERP.

          6.5. Chief Executive Officer. Anything herein to the contrary notwithstanding, in the case of
the Participant who was the Company’s chief executive officer on January 1, 2007, the time and form
of payment of the vested Accounts payable to or on behalf of such Participant shall be the same
time and form of payment as the time and form of payment that applies to his “Pension Make-Whole”
benefit provided pursuant to the terms of such Participant’s employment agreement with the Company.
If such vested Accounts under the Plan are paid in an annuity pursuant to the provisions of this
Section 6.5, the annuity shall be calculated pursuant to the procedures for determining an annuity
with respect to the amount attributable to the Plan, as set forth in the Pension Make-Whole
provisions of the employment agreement, and the payment of any death benefit on his behalf shall be
made at the time and in the form provided under those provisions in such employment agreement to
the beneficiary determined under such provisions.

10

 

Article 7

Supplemental Retirement Plan Benefits

          7.1 Supplemental Retirement Plan Benefit. A Participant who has a vested Supplemental
Retirement Plan Benefit under the Plan as of July 31, 2001 and has not received or commenced to
receive payment of such benefit prior to January 1, 2009, shall be entitled to payment of such
vested Supplemental Retirement Plan Benefit at the time and in the form of payment provided in this
Article 7. An individual who commenced to receive periodic payments, prior to January 1, 2009, of
his or her vested Supplemental Retirement Plan Benefit shall continue to receive such payments
pursuant to the method of payment in effect on December 31, 2008. Subject to Section 7.2(b), the
vested Supplemental Retirement Plan Benefit shall be adjusted to reflect the payment of a benefit
prior to “Normal Retirement Date”, as defined in the Retirement Plan, in accordance with the
actuarial factors set forth in the Retirement Plan, or, the payment of a benefit subsequent to
Normal Retirement Date, based upon an interest rate of 7% and the UP84 Mortality Table.

          7.2 Time and Form of Distribution of Supplemental Retirement Plan Benefit. (a) Time of
Distribution. Except as otherwise provided in subsection (b) of this Section 7.2, a Participant’s
vested Supplemental Retirement Plan Benefit shall be distributed, or commence to be distributed, as
follows:

     (i) If the Participant elected a distribution date for his or her vested Supplemental
Retirement Plan Benefit pursuant to subsection (d) or (f) of this Section 7.2, the
Participant’s vested Supplemental Retirement Plan Benefit shall be distributed, or commence
to be distributed, upon such date, provided that if the Participant dies prior to that date,
a benefit shall be distributed, or commence to be distributed, to the Participant’s
Beneficiary upon the Participant’s death, as provided in Section 8.1.

     (ii) If the Participant did not elect a distribution date for his or her vested
Supplemental Retirement Plan Benefit pursuant to subsection (d) or (f) of this Section 7.2,
the Participant’s vested Supplemental Retirement Plan Benefit shall be distributed, or
commence to be distributed, upon the Participant’s Separation from Service, as provided in
Section 8.1, except that, if the Separation from Service preceded January 1, 2009, and a
benefit was not payable in 2008, the vested Supplemental Retirement Plan Benefit shall be
distributed to the Participant upon the later of the Participant’s attainment of age 65 or
June 1, 2009, and provided that, if the Participant dies prior to his or her distribution
date, the Participant’s vested Supplemental Retirement Plan Benefit shall be distributed, or
commence to be distributed, upon the Participant’s date of death, as provided in Section
8.1.

     (b) Delayed Distributions to Specified Employees. If a Participant is a Specified
Employee as of the date of his or her Separation from Service, and the Participant did not
elect a distribution date for his or her vested Supplemental Retirement Plan Benefit,
pursuant to subsection (d) or (f) of this Section 7.2, that is at least six months after the
date of his or her Separation from Service, such Participant’s vested Supplemental
Retirement Plan Benefit 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
7.2(b) beyond the date of the Participant’s death. The payments 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 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 B, to reflect the delay in payment
imposed under this Section 7.2(b). If a Participant for whom payments are deferred under
this Section 7.2(b) dies between the date of Separation from Service and the first day of
the

11

 

seventh month that begins after that date, payments shall not be made under this
Section 7.2(b), but instead shall be made under subsection (g) of this Section 7.2.

     (c) Form of Distribution.

     (i) A Participant’s vested Supplemental Retirement Plan Benefit shall be paid to him or
her in an annuity, unless he or she elects, under subsection (d) or (f) of this Section 7.2,
to receive an Actuarial Equivalent lump sum payment. A Participant who does not elect a
lump sum payment under subsection (d) or (f) of this Section 7.2 may select an Actuarial
Equivalent annuity described in subsection (c)(ii) of this Section 7.2. If a Participant
who did not elect a lump sum payment fails to elect the form of annuity payment, payments
shall be made in the form of a life only annuity as described in subsection (c)(ii)(A) of
this Section 7.2.

     (ii) Subject to subsection (c)(i) of this Section 7.2, a Participant’s vested
Supplemental Retirement Plan Benefit may be paid to the Participant under one of the
following annuity options:

     (A) Life Only — equal monthly annuity payments for the life of the
Participant;

     (B) 50% Joint & Survivor — equal monthly payments for the life of the
Participant, and, upon the death of the Participant, 50% of that amount to be paid
for the life of the Participant’s joint annuitant, if surviving;

     (C) 100% Joint & Survivor — equal monthly payments for the life of the
Participant, and, upon the death of the Participant, 100% of that amount to be paid
for the life of the Participant’s joint annuitant, if surviving.

     (iii) An Actuarial Equivalent lump sum shall be determined under subsection (i) with
respect to the vested Supplemental Retirement Plan Benefit, expressed as a monthly annuity
benefit payable for the Participant’s life, as described in Section 7.1, on the basis of the
provisions of the Retirement Plan that apply for purposes of calculating a lump sum benefit
(as if the lump sum were paid from the Retirement Plan), without regard to any changes
implemented in the law that were enacted after April 16, 2002, with respect to the
calculation of lump sum benefits. An annuity determined under subsection (ii)(B) or (C),
shall be the Actuarial Equivalent of the vested Supplemental Retirement Plan Benefit,
expressed as a monthly annuity benefit for the Participant’s life, as described in Section
7.1, determined by applying the factors in Appendix C. The annuity determined under
subsection (ii)(A) shall be the vested Supplemental Retirement Plan Benefit that is
expressed as a monthly annuity benefit payable for the Participant’s life, as described in
Section 7.1.

          (d) Election of Time or Form of Distribution. Subject to Sections 7.2(b) and 7.2(e), upon a
date that is not later than December 31, 2008, a Participant may elect that his or her vested
Supplemental Retirement Plan Benefit shall be distributed or commence to be distributed on a
specified date or, if later, the first day of the month following the date of his or her Separation
from Service and may elect whether to receive such benefit in a lump sum payment or in an annuity.
If a Participant’s date of Separation from Service preceded January 1, 2009, he or she may not
elect a distribution date prior to June 1, 2009. If a Participant who is an Employee fails to make
an election regarding the date of distribution, his or her vested benefit shall be distributed upon
Separation from Service, subject to the terms of subsections (a), (b) and (e) of this Section 7.2.
Subject to subsection (e), if a Participant fails to make an election with respect to the form of
payment of his or her vested Supplemental Retirement Plan Benefit by December 31, 2008, the
Participant shall be deemed to have elected that the vested Supplemental Retirement Plan Benefit be
distributed, pursuant to subsection (c)(ii)(A) of this Section 7.2,

12

 

in a life only annuity, subject to subsections (a), (b) and (e). Notwithstanding the
foregoing, after December 31, 2008, a Participant may elect to change his or her election or deemed
election pursuant to the provisions of subsection (f) of this Section 7.2.

          (e) Elections Made in 2007 or 2008 as to Time or Form of Distribution. If a Participant’s
election was made in 2007 to change the time or form of distribution of a vested Supplemental
Retirement Plan Benefit, such new election could not defer to a later year the payment of any
amount that would otherwise be payable in 2007 and could not require a payment to be made in 2007
that would otherwise be payable in a later year. Moreover, if an election was made in 2008 to
change the time or form of distribution of a Participant’s vested Supplemental Retirement Plan
Benefit, such new election could not defer to a later year the payment of any amount that would
otherwise be payable in 2008 and could not require a payment to be made in 2008 that would
otherwise be payable in a later year.

          (f) Subsequent Elections as to Time or Form of Distribution.

     (i) A Participant shall be permitted to make a written election, at any time after
December 31, 2008, that pertains to the time or form of distribution of his or her vested
Supplemental Retirement Plan Benefit, provided that any such election must specify a
distribution date that is the later of a specified date or the first day of the month
following the date of Separation from Service, and, except as otherwise provided in (ii),
any election made after December 31, 2008 must satisfy all of the following requirements:

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

     (ii) Notwithstanding subsection (i), a Participant who has elected a life annuity for
payment of his or her Supplemental Retirement Plan Benefit that is available under Section
7.2(c)(ii) may select another Actuarial Equivalent annuity option that is made available
under the Plan, pursuant to said Section 7.2(c)(ii), at any time prior to the benefit
commencement date, provided that such Actuarial Equivalent life annuity option has the same
scheduled date for the first annuity payment. An election by the Participant to change the
identity of a joint annuitant or Beneficiary shall not be treated as a change in the time or
form of distribution, provided that the time and form of the distribution are not otherwise
changed. Also, an election to change the joint annuitant under a life annuity does not
constitute a change in the time and form of payment if the change in the time of payments
results solely from the different life expectancy of the new joint annuitant.

          (g) Death before Benefit Commencement Date. If a Participant dies before the benefit
commencement date, the Actuarial Equivalent of the vested Supplemental Retirement Plan Benefit
shall be paid to the Beneficiary in a lump sum payment or in 120 equal monthly installments, as
elected by the Participant. This benefit shall be paid in a lump sum unless the Participant elected
120 equal monthly installment payments. The amount of such lump sum shall be determined in
accordance with the actuarial

13

 

assumptions of the Retirement Plan as if such lump sum were paid from the Retirement Plan and
the amount of the 120 monthly installments shall be determined on the basis of the actuarial
assumptions in Appendix C.

          (h) Death after Benefit Commencement Date. If a Participant dies after his benefit
commencement date, the benefit, if any, payable following his death depends upon the form of
benefit payment that is in effect. If a Participant dies after commencing to receive annuity
payments under Section 7.2(c)(ii)(A) or, if both the Participant and the joint annuitant die after
benefits commence under Section 7.2(c)(ii)(B) or (C), and the sum of the annuity payments made is
less than the total lump sum payment the Participant would have received on the benefit
commencement date, an amount equal to the excess of the lump sum payment that would have been made
on the Participant’s benefit commencement date over the sum of the monthly annuity payments made
shall be paid to the Beneficiary in a lump sum.

Article 8

Miscellaneous

          8.1 Distribution Date. Any distribution that is made in accordance with Article 6 pursuant to
a Participant’s Separation from Service or death, prior to his or her benefit commencement date,
shall be made upon the last day of the Plan Year quarter which contains the date of Separation from
Service or death, based on the Valuation Date that coincides with such last day of the Plan Year
quarter, except that any distribution to a Participant pursuant to Section 6.1(b) shall be made
upon the day following the last day of the Plan Year quarter which contains the sixth month that
begins after the date of Separation from Service, based on the Valuation Date that coincides with
such last day of the Plan Year quarter. Any payment that is made pursuant to Article 6 upon a
distribution date designated under Section 6.2(a) or (b) shall be based on the Valuation Date that
coincides with that distribution date, except that any distribution subject to Section 6.1(b) shall
not be made prior to the day following the last day of the Plan Year quarter which contains the
sixth month that begins after the date of the Participant’s Separation from Service. Subject to
Section 7.2(b), any payment to be made pursuant to Article 7 upon Separation from Service shall be
made upon the first day of the month following Separation from Service. Any payment that is made
pursuant to Article 7 upon death, shall be made on the first day of the second month following the
date of death, except that any annuity payments to a joint annuitant pursuant to Section
7.2(c)(ii)(B) or (C), following the death of the Participant, shall begin on the date, following
the date of death, on which the next annuity payment would have been made to the Participant if he
or she had survived. Subject to Sections 6.1(b) and 7.2(b), there shall be no interest adjustment
for a payment made subsequent to a distribution date.

          8.2 Amendment or Termination. (a) Amendment. The Company, by action of the Committee,
reserves the right to amend the Plan at any time, including but not limited to the right to amend
the Plan to cease future contributions to the Plan, provided that, unless necessary to meet the
requirements of applicable law, benefits that have already accrued on behalf of a Participant may
not be eliminated or reduced upon amendment of the Plan.

          (b) Termination of Account Balance Portion of Plan. Subject to Sections 6.4 and 6.5, the
Company, by action of the Committee, reserves the right, at any time, to terminate the account
balance portion of the Plan (Supplemental Employee Contribution Accounts and Supplemental Company
Contribution Accounts) and to distribute all such Supplemental Employee Contribution Accounts and
Supplemental Company Contribution Accounts in lump sum payments as soon as administratively
practicable to Participants and Beneficiaries, provided the account balance portion of the Plan is
terminated in the following circumstances:

     (i) Within 30 days before or 12 months after a change in control of the Company, as
defined in Code Section 409A and Treasury Regulation Section 1.409A-3(i)(5), provided that
all

14

 

distributions are made no later than 12 months following the termination of the account
balance portion of the Plan and further provided that all nonqualified deferred compensation
arrangements of the same type (i.e., all nonqualified account balance plans subject to Code
Section 409A) maintained by the Company and all members of the Controlled Group are
terminated, so that all Participants and all participants in the other arrangements are
required to receive all amounts of compensation deferred under the account balance portion
of the Plan and the other arrangements no later than 12 months following the date on which
the Committee takes action to terminate the account balance portion of the Plan and the
Controlled Group takes action to terminate all such other arrangements;

     (ii) Within 12 months of the dissolution of the Company under Internal Revenue Code
Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section
503(b)(1)(A), provided that all amounts credited to a Participant’s Accounts under the Plan
are included in the Participant’s gross income in the latest of (A) the calendar year in
which the account balance portion of the Plan is terminated; (B) the calendar year in which
all amounts credited to the Participant’s Accounts are no longer subject to a substantial
risk of forfeiture; or (C) the first calendar year in which the distribution of the Accounts
is administratively practicable, provided that a Participant incurs income tax liability
with respect to his or her Accounts under the Plan not later than the calendar year in which
he or she receives an actual or constructive distribution from such Accounts; or

     (iii) At the Committee’s discretion, provided that (A) the termination of the account
balance portion of the Plan does not occur proximate to a deterioration of the financial
health of the Controlled Group, (B) all nonqualified deferred compensation arrangements of
the same type (i.e., all nonqualified account balance plans subject to Code Section 409A)
maintained by the Company and all members of the Controlled Group are terminated with
respect to all employees, (C) no payments are made within 12 months after the termination of
the account balance portion of the Plan (other than payments that would have been payable
under the terms of the Plan if the termination of the account balance portion of the Plan
had not occurred), (D) all payments are made within 24 months after the termination of the
account balance portion of the Plan, and (E) neither the Company nor any member of the
Controlled Group adopts a nonqualified deferred compensation arrangement of the same type
(i.e., a nonqualified account balance plan subject to Code Section 409A) for a period of
three years, with respect to any employee, following the date of the termination of the
account balance portion of the Plan.

          (c) Termination of Nonaccount Balance Portion of Plan. The Company, by action of the
Committee, reserves the right, at any time, to terminate the nonaccount balance portion of the Plan
(Supplemental Retirement Plan Benefits) and to distribute all such Supplemental Retirement Plan
Benefits in lump sum payments as soon as administratively practicable to Participants and
Beneficiaries, provided the nonaccount balance portion of the Plan is terminated in the following
circumstances:

     (i) Within 30 days before or 12 months after a change in control of the Company, as
defined in Code Section 409A and Treasury Regulation Section 1.409A-3(i)(5), the Company
takes irrevocable action to terminate the nonaccount balance portion of the Plan and all
nonqualified deferred compensation arrangements of the same type (i.e., all nonqualified
nonaccount balance plans subject to Code Section 409A that are described in Treasury
Regulation Section 1.409A-1(c)(2)(i)(C)) maintained by the Company and all members of the
Controlled Group, so that each Participant in the Plan is required to receive the lump sum
actuarial equivalent present value of his or her Supplemental Retirement Plan Benefit (as
calculated by reference to the interest rate and mortality table described in the Retirement
Plan as of April 16, 2002) and all participants in such other arrangements are required to
receive the actuarial equivalent present value of their benefits under the other
arrangements no later than 12 months following the date of such irrevocable action;

15

 

     (ii) Within 12 months of the dissolution of the Company under Code Section 331, or with
the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), the Company
terminates the nonaccount balance portion of the Plan, provided that the actuarial
equivalent present value of each Participant’s Supplemental Retirement Plan Benefit (as
calculated by reference to the interest rate and mortality table described in the Retirement
Plan as of April 16, 2002) is distributed in the calendar year in which the nonaccount
balance portion of the Plan is terminated, or the first calendar year in which the
distribution is administratively practicable (whichever is later).

     (iii) At the Committee’s discretion, provided that (A) the termination does not occur
proximate to a deterioration of the financial health of the Company or a member of the
Controlled Group, (B) all nonqualified deferred compensation arrangements of the same type
(i.e., all nonqualified nonaccount balance plans subject to Code Section 409A that are
described in Treasury Regulation Section 1.409A-1(c)(2)(i)(C)) maintained by the Company and
all members of the Controlled Group are terminated with respect to all employees, (C) no
payments are made within 12 months after the termination of the nonaccount balance portion
of the Plan (other than payments that would have been payable under the terms of the Plan if
the nonaccount balance portion of the Plan had not terminated), (D) all payments are made
within 24 months after the termination of the nonaccount balance portion of the Plan, and
(E) neither the Company nor any member of the Controlled Group adopts a nonqualified
deferred compensation arrangement of the same type (i.e., a nonqualified nonaccount balance
plan subject to Code Section 409A that is described in Treasury Regulation Section
1.409A-1(c)(2)(i)(C)) for a period of three years, with respect to any employee, following
the date of the termination of the nonaccount balance portion of the Plan. If the
nonaccount balance portion of the Plan is terminated, the actuarial equivalent present value
of each Participant’s Supplemental Retirement Plan Benefit (as calculated by reference to
the interest rate and mortality table described in the Retirement Plan as of April 16, 2002)
shall be paid to the Participant in a lump sum on the first day of the month coinciding with
or next following the first anniversary of the termination of the nonaccount balance portion
of the Plan.

          8.3 Withholding. To the extent required by law, Stanley shall withhold taxes from any payment
due under the Plan.

          8.4 Administration of the Plan. The Plan shall be administered by the Committee. The
Committee is vested with full authority (including full discretionary authority) to administer,
interpret, and make rules regarding the Plan 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 the
Company’s Board of Directors or the Committee will be liable for any action or determination made
in good faith with respect to the Plan.

          8.5 Claims Procedure.

          (a) Any individual who believes he or she is entitled to benefits under the Plan (a
“Claimant”) 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

16

 

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 Plan upon which the denial is
based;

     (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 Plan 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 shall 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 Plan to the
Claimant’s circumstances, or a statement that an explanation shall 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;

17

 

     (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 shall
apply:

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

     (B) The review shall be conducted by an appropriate named fiduciary of the Plan
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 shall 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 Plan in connection with the adverse benefit determination that is the subject of
the review shall 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 shall
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 Plan 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 shall 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 Plan to the
Claimant’s medical circumstances, or a statement that such explanation shall be provided free of
charge upon request. In addition, the written or electronic notice to Claimant shall describe any
voluntary appeal procedures offered under the Plan and the Claimant’s right to obtain information
about such procedures and a statement of the Claimant’s right to

18

 

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 Plan 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.

          8.6 Governing Text. The Plan, including any amendments, shall constitute the entire agreement
between Stanley and any Employee, Participant or Beneficiary regarding the subject matter of the
Plan. The Plan, including any amendments, shall be binding on Stanley, Employees, Participants,
Beneficiaries, and their respective heirs, administrators, trustees, successors and assigns.

          8.7 Enforceability of Plan Provisions. If any provision of the Plan shall, to any extent, be
invalid or unenforceable, the remainder of the Plan shall not be affected, and each other provision
of the Plan shall be valid and enforced to the fullest extent permitted by law.

          8.8 Rights of Persons Entitled to Benefits. Any person entitled to receive benefits under the
Plan shall have the rights of an unsecured general creditor of Stanley.

          8.9 Nonassignability.

          (a) Except as provided in subsection (b), the right of any individual to a benefit under the
Plan shall not be subject to attachment or other legal process for the debts of such individual and
an individual’s benefit under the Plan shall not be subject to anticipation, alienation, sale,
transfer, assignment or encumbrance.

          (b) Notwithstanding anything herein to the contrary, there shall be assigned from a
Participant’s Accounts, the amount that the Committee determines to have been lawfully assigned to
the Participant’s former spouse (‘alternate payee’) under a judgment or order, including an
approved divorce settlement agreement, that is implemented pursuant to a state domestic relations
law in regard to a dissolution of marriage that was effective October 3, 2008, provided that such
assignment does not alter the time or form of payment of any portion of the Participant’s vested
Accounts that is not assigned to the alternate payee.

          8.10 Special Distributions. Whenever, in the opinion of the Committee, a person entitled to
receive a benefit under the Plan 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.

19

 

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 shall be a complete discharge of any liability for the making of such
payment under the provisions of the Plan.

          8.11 Terms of Employment. Participation in the Plan 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 Plan had not been adopted.

          8.12 Restricted Transactions. A Participant’s right under Section 4.3 to direct the
investment of his or her Accounts, and a Participant’s right under Article 6 to receive a
distribution, of all vested amounts credited to his or her Accounts shall be restricted to the
extent necessary to comply with the securities laws.

	 	 	 	 	 
	THE STANLEY WORKS

 	 	 
	By  	 	 	 
	 	Title: 	 	 
	 	Date: 	 	 

20

 

	 	 	 	 	 

APPENDIX A

SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN

FOR SALARIED EMPLOYEES OF THE STANLEY WORKS

Individuals employed in the following units become covered under the Plan pursuant to the
second sentence in the definition of “Employee” in the Plan and, thus, are subject to the
same eligibility rules that apply under the terms of the Plan when determining status as an
Employee and eligibility for coverage of other individuals employed by Stanley.

Entity or Division

Stanley Security Solutions, Inc. at Chula Vista, California

Stanley Convergent Security Solutions, Inc.

Stanley Security Solutions, Inc. at Las Vegas, Nevada

 

 

APPENDIX B

SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN

FOR SALARIED EMPLOYEES OF THE STANLEY WORKS

Deferred Payments Described Under Section 7.2(b) of the Plan

Deferred payments under Section 7.2(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 Separation from Service.

 

 

APPENDIX C

SUPPLEMENTAL RETIREMENT AND ACCOUNT VALUE PLAN

FOR SALARIED EMPLOYEES OF THE STANLEY WORKS

     Assumptions for Determining Actuarial Equivalence under Section 7.2(c) of the Plan:

	 	 	 	 	 
	Interest:
	 	5%
	Mortality:
	 	1994 Uninsured Pensioners Mortality Table (UP94)

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