Document:

EX-10.IX

Exhibit 10
(ix)

	 	 	 
	 

	 	Amended and Restated Effective January 1, 2009

Except As Otherwise Provided

THE STANLEY WORKS

Supplemental Executive Retirement Program

     The Supplemental Executive Retirement Program (“SERP”) provides a supplemental retirement
benefit to its Participants. In order for the SERP to comply with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (“Code”), and the Regulations thereunder, The
Stanley Works (“Stanley”) now desires to amend the SERP in the form of a restated plan, as follows,
effective January 1, 2009, except as provided in Sections 1, 7(d) and 7(e) therein.

          1. Participants. The employees eligible to participate in the SERP are Stanley’s chief
executive officer on January 1, 2007, and such other executives, not to exceed 24, as were
designated by the chief executive officer and whose names were filed prior to January 1, 2007 with
the records of the Compensation and Organization Committee (“Committee”) of Stanley’s Board
(“Eligible Employees”). An Eligible Employee becomes a Participant in the SERP upon reaching age
50 and completing five years of service with Stanley as an Eligible Employee (“Years of
Pre-Participation Service”). Anything herein to the contrary notwithstanding, an employee who is
not a Participant on January 1, 2007, shall not become a Participant unless he is Stanley’s
executive vice president and chief financial officer on January 1, 2007 and, in 2008, meets the age
50 and five Years of Pre-Participation Service requirements specified above, or he is Stanley’s
chief executive officer on January 1, 2007 and, in 2009, meets the age 50 and five Years of
Pre-Participation Service requirements specified above.

          2. Target Benefit.

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

3% for each of the first 5 years

2% for each of the next 15 years

1% for each of the 5 years thereafter

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

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          (b) Separation from Service. For purposes of the SERP, a Participant’s Separation from
Service will occur upon his or her separation from service, as defined in Treasury Regulation
Section 1.409A-1(h), with Stanley’s controlled group, for a reason other than death. For this
purpose, “controlled group” means the group of corporations or other entities of which Stanley 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. There is a Separation from Service as of
a particular date, if Stanley 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 as 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). While a Participant is on a bona
fide leave of absence, the Participant’s employment relationship shall be treated as continuing,
provided that the Participant is expected to return to work for Stanley’s 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 Stanley’s controlled group either by statute or by
contract. If the period of a leave of absence exceeds six months and there is no right to
reemployment, a termination of employment shall be deemed to have occurred as of the first date
immediately following the first six months of the leave. For purposes of this Section 2(b),
service as a director of a member of the controlled group shall not be taken into account, except
to the extent required under Treasury Regulation Section 1.409A-1(h)(5).

          3. Separation from Service Before Age 60.

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

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

          4. Disability.

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

          (b) Disability. For purposes of the SERP, a Participant’s Separation from Service will be
considered to have occurred by reason of a Disability if the Participant’s Separation from Service
occurs as a result of his or her permanent inability, by reason of a medically determinable

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physical or mental impairment, to perform any job for which the Participant is reasonably
suited by education and experience.

          5. Death.

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

          (b) Death after SERP Payments Commence. 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. In the case of a Participant who dies after SERP benefit payments have
commenced under a 100% joint and survivor annuity, benefit payments will continue in the same
amount under that annuity to the joint annuitant for his or her life. Upon the death of both the
Participant and his joint annuitant after benefits have commenced pursuant to a 100% joint and
survivor annuity, if the total annuity payments made are less than the actuarial equivalent lump
sum payment amount that would have been distributed to the Participant as of the benefit
commencement date, a lump sum death benefit, equal to the excess of such lump sum amount over the
total annuity payments that were made, will be paid to the beneficiary. Upon the death of a
Participant after benefit payments have commenced pursuant to a single life annuity, if the total
annuity payments that were made are less than the actuarial equivalent lump sum payment amount that
would have been distributed to the Participant as of the benefit commencement date, a lump sum
death benefit, equal to the excess of such lump sum payment amount over the total annuity payments
that were made, will be paid to the beneficiary. Otherwise, no death benefit will be paid in the
event of the death of a Participant who dies after payments have commenced.

          (c) Death Beneficiary. Any benefit payable upon a Participant’s death that is not payable to
the joint annuitant under a 100% joint and survivor annuity pursuant to Section 5(b) will be paid
to the beneficiary designated in writing by the Participant, provided that, if no such designated
beneficiary survives the Participant, the benefit shall be paid to the Participant’s surviving
spouse or, if there is no surviving spouse, the benefit shall be paid to the Participant’s estate.
Any benefit payable upon the death of the Participant ‘s joint annuitant, after beginning to
receive payments under a 100% joint and survivor annuity, shall be paid to the beneficiary
designated in 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.

          (d) Time of Payment. Any lump sum payment that is made pursuant to this Section 5 on account
of the Participant’s death or the death of both the Participant and the joint annuitant shall be
made on the first day of the second month that begins following the applicable date of death, any
annuity payments pursuant to Section 5(a) shall begin on the first day of the second month
following the date of death, and any annuity payments that are continued to the joint annuitant
upon the death of the Participant pursuant to Section 5(b) shall begin to be distributed to

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the joint annuitant at the date, following the date of the Participant’s death, on which the
next annuity payment would have been made to the Participant had he or she survived.

          6. Offset for Cornerstone Account Benefits. The benefit otherwise payable under the SERP, as
described in Sections 2, 3, 4 and 5, will be reduced by the vested “cornerstone account benefits”
(nonelective defined contribution benefits, exclusive of matching allocations) provided under the
Stanley Account Value Plan and under the Supplemental Plan, as applied pursuant to Appendix B.
Anything herein to the contrary notwithstanding, if the benefit payable under the SERP is not paid
in a life annuity but, instead, is paid in a different optional form that is made available, the
offset described in the first sentence in this Section 6 regarding cornerstone account benefits
shall not be applied to the life annuity benefit (with respect to which an actuarially adjusted
optional form of benefit payment is calculated). Instead, the actuarially adjusted optional form
of benefit payment that is calculated under Section 7 (with respect to the life annuity benefit
determined under Sections 2, 3, 4 or 5) shall be reduced, pursuant to Appendix B, by the
cornerstone account benefits described in the first sentence in this Section 6.

          7. Time and Form of Distribution of SERP Benefit.

          (a) Time of Distribution. Subject to Section 7(b), any payment to a Participant pursuant to
the SERP shall be made or commence pursuant to Separation from Service. Moreover, subject to
Section 7(b), any payment that is made or commences to a Participant pursuant to his or her
Separation from Service, shall be made or begin to be made upon the Participant’s Separation from
Service.

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

          (c) Form of Distribution. The SERP benefit to which a Participant is entitled shall be paid
in an annuity or an actuarially adjusted lump sum payment, as he or she elects, under Section 7(d)
or 7(f). A Participant who is unmarried on the benefit commencement date and did not elect a lump
sum payment or a 100% joint and survivor annuity with a former spouse as the joint annuitant under
Section 7(d) or 7(f), shall receive payments in the form of a single life annuity payable in equal
monthly payments. A Participant who is married on the benefit commencement

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date and did not elect a lump sum payment under Section 7(d) or 7(f), may select a single life
annuity or an actuarially adjusted 100% joint and survivor annuity with his or her spouse as the
joint annuitant pursuant to which equal monthly payments are made to the Participant for life, and,
upon the Participant’s death, monthly payments equal to the Participant’s monthly payment, are made
to the surviving spouse for life, provided that there is no change in the benefit commencement date
and such annuities are, at all times, actuarially equivalent to each other. If a Participant is
married on his or her benefit commencement date, did not elect a lump sum payment under Section
7(d) or 7(f), and fails to select the single life annuity form of payment before his or her benefit
commencement date, there will be no change in the benefit commencement date, and payments will be
made in the form of a 100% joint and survivor annuity with the Participant’s spouse as the joint
annuitant. If a Participant elected a 100% joint and survivor annuity with his or her spouse as
the joint annuitant as the form of payment pursuant to Section 7(d) or 7(f), but the Participant is
not married on the benefit commencement date, the benefit shall be paid in a single life annuity,
unless the Participant elects that the benefit be paid, beginning on the same benefit commencement
date, in an actuarial equivalent 100% joint and survivor annuity with another joint annuitant
designated, upon the benefit commencement date, by the Participant. Any actuarial adjustment to
reflect the form of distribution in a lump sum or a 100% joint and survivor annuity shall be
determined in accordance with Appendix A with respect to the life annuity described in Section 2,
3, 4 or 5 (if the designated joint annuitant under a 100% joint and survivor annuity is an
individual other than the spouse, the actuarial adjustments shall be applied under Appendix A in
the same manner as if the designated joint annuitant were the spouse), and, after such actuarially
adjusted lump sum or 100% joint and survivor annuity is determined, any offset described in Section
6 shall be applied pursuant to the pertinent rules set forth in Appendix B. All annuities
permitted under this Section 7(c) with respect to a Participant’s benefit shall require equal
monthly payments, shall utilize the same benefit commencement date, and shall, at all times, be
actuarially equivalent to each other.

          (d) Election of Form of Distribution. Subject to Sections 7(b), 7(e) and 7(f), an Eligible
Employee may make a written election by December 31, 2008, to have a SERP benefit to which he or
she becomes entitled distributed in a lump sum, a single life annuity, or an actuarial equivalent
100% joint and survivor annuity with the spouse as the joint annuitant. If an Eligible Employee
fails to make an election by December 31, 2008, with respect to the form of distribution of a SERP
benefit to which he or she becomes entitled, the Eligible Employee shall be deemed to have elected
that any such SERP benefit be distributed in an annuity, pursuant to Section 7(c). Notwithstanding
the foregoing, a Participant may elect to change his or her election or deemed election pursuant to
the provisions of Section 7(f). Moreover, without regard to Section 7(f), a Participant may change
a prior election of a life annuity form of payment to another actuarially equivalent life annuity
form of payment, that is available under Section 7(c), at any time up to the benefit commencement
date, provided that each annuity provides equal monthly payments, there is no change in the date on
which annuity payments begin, and the annuities are, at all times, actuarially equivalent to each
other.

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

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payable in 2008 and may not require a payment to be made in 2008 that would otherwise be
payable in a later year.

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

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

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

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

Anything herein to the contrary notwithstanding, a Participant may change a prior election of a
life annuity form of payment to another actuarially equivalent life annuity form of payment, that
is available under Section 7(c), at any time up to the benefit commencement date, provided that
there is no change in the date on which annuity payments begin, each annuity provides equal monthly
payments, and the annuities are, at all times, actuarially equivalent to each other. An election
by the Participant to change the identity of a 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 beneficiary 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 beneficiary.

          (g) Chief Executive Officer. Anything herein to the contrary notwithstanding, in the case of
the Participant who was Stanley’s chief executive officer on January 1, 2007, the provisions of
Section 5, regarding the time and form of payment of death benefits, shall not apply, and the
preceding provisions of this Section 7 regarding the time and form of payment shall not apply.
Instead, the time and form of payment of the SERP benefit payable to or on behalf of such
Participant shall be determined exclusively pursuant to the provisions of the Participant’s
employment agreement with Stanley that pertain to his “Pension Make-Whole” benefit under that
agreement, and the payment of any death benefit on his behalf under the SERP 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.

          8. Claims Procedure.

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

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make available copies of any claim forms or instructions, or advise the Claimant where such
forms or instructions may be obtained.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Any request or submission must be in writing and must be directed to the Committee or in the case
of a review of a claim for Disability benefits, its designee. The Committee (or, in the case of a

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claim for Disability benefits, its designee) shall have the sole responsibility for the review of
any denied claim and shall take all steps appropriate in light of its findings.

          (d) The Committee (or, in the case of a claim for Disability benefits, its designee) shall
render a decision upon review. If it is determined that any benefits claimed should be denied upon
review, written or electronic notice of the same shall be provided to the Claimant. The written or
electronic notice of the final decision shall set forth: the specific reason or reasons for the
adverse determination; references to the specific SERP provisions on which the benefit
determination was based; a statement that advises the Claimant that he or she is entitled to
receive, upon request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim for benefits; and in the case of the review of
a claim for a Disability benefit that was denied as a result of an internal rule, guideline,
protocol or other similar criterion, either the specific rule, guideline, protocol, or other
similar criterion relied upon in making the adverse determination, or a statement that such rule,
guideline, protocol, or other similar criterion was relied upon in making the adverse determination
and that a copy of the rule, guideline, protocol, or other similar criterion will be provided to
the Claimant free of charge upon request. Also, if the adverse determination upon review of a
claim for Disability benefits is based on a medical necessity or experimental treatment or similar
exclusion or limit, the Claimant shall be provided free of charge either an explanation of the
scientific or clinical judgment for the determination, applying the terms of the SERP to the
Claimant’s medical circumstances, or a statement that such explanation will be provided free of
charge upon request. In addition, the written or electronic notice to Claimant shall describe any
voluntary appeal procedures offered under the SERP and the Claimant’s right to obtain information
about such procedures and a statement of the Claimant’s right to bring an action under Section
502(a) of ERISA within 180 days following receipt of written or electronic notice of denial of the
claim for benefits upon review. The notice to the Claimant shall include the following statement:
“You and the SERP may have other voluntary alternative dispute resolution options, such as
mediation. One way to find out what may be available is to contact your local U.S. Department of
Labor Office and your State insurance regulatory agency.” A final determination by the Committee
shall be rendered within a reasonable period of time, not exceeding 60 days, after receipt of the
Claimant’s notice of appeal. Under special circumstances, such determination may be delayed for an
additional period not to exceed 60 days, in which case the Claimant shall be notified
electronically or in writing of the delay prior to the close of the initial 60 day period.
However, if the Committee holds regularly scheduled meetings at least quarterly, a final
determination by the Committee shall be rendered no later than the date of the first meeting of the
Committee after receipt of the Claimant’s notice of appeal, unless the receipt of the Claimant’s
notice of appeal is within the 30 day period preceding the date of the next scheduled meeting of
the Committee. In such case, a final determination by the Committee shall be rendered no later
than the date of the second meeting of the Committee after receipt of the Claimant’s notice of
appeal. Under special circumstances, such determination may be delayed to the date of the third
meeting of the Committee after receipt of the Claimant’s notice of appeal, in which case the
Claimant shall be notified electronically or in writing of the delay prior to the commencement of
the extension period. If the claim relates to a Disability benefit, a final determination by the
appropriate named
fiduciary shall be rendered within a reasonable period of time, not exceeding 45
days, after receipt of the Claimant’s notice of appeal. Under special circumstances, such
determination may be delayed for an additional period not to exceed 45 days, in which case the
Claimant shall be notified electronically or in writing of the delay prior to the close of the
initial 45 day period.

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          9. Miscellaneous.

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

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

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

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

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

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

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

	 	 	 	 	 
	 	THE STANLEY WORKS

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	Date: 	 

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THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX A

	 	 	 
	Form of Payment	 	Actuarial Adjustment Factors
	 
	 	 
	Lump Sum

	 	The lump sum of the Target Benefit is determined
by multiplying the annual benefit, expressed as
a single life annuity, by a factor of 9.45.
	 
	 	 
	Joint and Survivor (100%)

	 	Factors are as set forth in the attached table,
which shows no reduction if the spouse is older
than the Participant or if the spouse is no more
than two years younger than the Participant (in
either case, the factor is 1.000). For each year
over two that the spouse is younger than the
Participant, the Target Benefit (or early
retirement benefit) will be reduced by 0.7%.
	 
	 	 
	 

	 	Example 1: For a Participant whose age on the
benefit commencement date is 60 and whose
spouse’s age on the benefit commencement date is
56, the factor to convert the single life
annuity to a 100% joint and survivor annuity is
..986.
	 
	 	 
	 

	 	Example 2: For a Participant whose age on the
benefit commencement date is 54 and whose
spouse’s age on the benefit commencement date is
40, the factor to convert the single life
annuity to a 100% joint and survivor annuity is
..916.

 

 

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

APPENDIX A (continued)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Spouse’s	 	 
	Age	 	 
	(nearest	 	Participant’s Age (nearest birthday)
	birthday)	 	54	 	55	 	56	 	57	 	58	 	59	 	60	 	61	 	62	 	63	 	64	 	65
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	65

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 
	64

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 
	63

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 
	62

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 
	61

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 
	60

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 
	59

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 
	58

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 
	57

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 
	56

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 
	55

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 
	54

	 	 	1.000	 	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 
	53

	 	 	1.000	 	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 
	52

	 	 	1.000	 	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 
	51

	 	 	0.993	 	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 
	50

	 	 	0.986	 	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 
	49

	 	 	0.979	 	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 
	48

	 	 	0.972	 	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 
	47

	 	 	0.965	 	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 
	46

	 	 	0.958	 	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 
	45

	 	 	0.951	 	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 
	44

	 	 	0.944	 	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 	 	 	0.867	 
	43

	 	 	0.937	 	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 	 	 	0.867	 	 	 	0.860	 
	42

	 	 	0.930	 	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 	 	 	0.867	 	 	 	0.860	 	 	 	0.853	 
	41

	 	 	0.923	 	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 	 	 	0.867	 	 	 	0.860	 	 	 	0.853	 	 	 	0.846	 
	40

	 	 	0.916	 	 	 	0.909	 	 	 	0.902	 	 	 	0.895	 	 	 	0.888	 	 	 	0.881	 	 	 	0.874	 	 	 	0.867	 	 	 	0.860	 	 	 	0.853	 	 	 	0.846	 	 	 	0.839	 

 

 

THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX B

Cornerstone Offset Described in Section 6 of the SERP

     (a) Subject to paragraph (b), the offset of a SERP benefit attributable to a Participant’s
“vested cornerstone account” benefits (vested, nonelective defined contribution benefits, exclusive
of matching allocations) under the Stanley Account Value Plan and the Supplemental Plan shall be
determined by converting the value of such cornerstone account benefits, including the amount of
any prior distribution from said vested cornerstone account benefits under the Stanley Account
Value Plan, that has not been recontributed to that plan, to an actuarially equivalent single life
annuity benefit. The value of such vested cornerstone account benefits under the Stanley Account
Value Plan and the Supplemental Plan shall be determined as of the first day of the month in which
Separation from Service occurs or, if distributions are deferred beyond the distribution date
prescribed in Section 7(b), as of the first day of the month that contains the distribution date.
The value of such vested cornerstone account benefits payable upon death pursuant to Section 5(a)
shall be determined as of the first day of the month that contains the date of death. This
actuarial equivalent monthly single life annuity shall be determined by utilizing the following
factors, calculated as of the pertinent date set forth above:

	 	 	 
	Interest Rate:

	 	Composite Corporate Bond Rate (CCBR), published by the Internal Revenue Service, minus 200 basis points
	 
	 	 
	Mortality Table:

	 	RP-2000 table (male and female rates) projected 25 years with scale AA

     (b) In the case of a SERP benefit that is paid in an optional form of annuity payment other
than a single life annuity, the offset of the SERP benefit attributable to a Participant’s vested
cornerstone account benefits under the Stanley Account Value Plan and the Supplemental
Plan shall be determined by offsetting the actuarially adjusted optional form of payment
(calculated with respect to the single life annuity) by the same form of annuity payment calculated
by converting such cornerstone account benefits to the optional form of annuity pursuant to the
interest and mortality factors in (a) above. In the case of a SERP benefit that is not paid in an
annuity, the offset of the SERP benefit attributable to a Participant’s vested cornerstone account
benefits under the Stanley Account Value Plan and the Supplemental Plan shall be determined by
offsetting each payment under the actuarially adjusted optional form of payment (calculated with
respect to the single life annuity) by the portion of the pertinent cornerstone benefits, valued as
of the date set forth in (a) above, that corresponds to the portion of the total SERP benefit being
distributed pursuant to such payment.

     (c) For purposes of paragraphs (a) and (b) above, the value of particular, vested cornerstone
account benefits as of the first day of a month, shall be determined on the basis of the last
valuation applicable to such benefits under the terms of the pertinent plan on or before such first
day of the month.

 

 

THE STANLEY WORKS

Supplemental Executive Retirement Plan

APPENDIX C

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

Deferred payments under Section 7(b) shall be adjusted utilizing the interest rate prescribed in
Code Section 417(e) that is in effect during October of the calendar year preceding the calendar
year that includes the date of the Separation from Service.EX-10.X

Exhibit 10(x)

As amended October 17, 2008

THE STANLEY WORKS

1997 LONG-TERM INCENTIVE PLAN

Section 1. Purpose

     The purposes of this Long-Term Incentive Plan (the “Plan”) are to encourage selected salaried
employees of The Stanley Works (together with any successor thereto, the “Company”) and selected
salaried employees and non-employee directors of its Affiliates (as defined below) to acquire a
proprietary interest in the growth and performance of the Company, to generate an increased
incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of
the Company for the benefit of its shareholders, and to enhance the ability of the Company and its
Affiliates to attract and retain exceptionally qualified individuals upon whom, in large measure,
the sustained progress, growth and profitability of the Company depend.

Section 2. Definitions

     As used in the Plan, the following terms shall have the meanings set forth below:

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

 

 

	 	(i)	 	“Fair Market Value” shall mean, with respect to any property other than Shares,
the fair market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee, and with respect to Shares,
shall mean the mean average of the high and the low price of a Share as quoted on the
New York Stock Exchange Composite Tape on the date as of which fair market value is to
be determined or, if there is no trading of Shares on such date, such mean average of
the high and the low price on the next preceding date on which there was such trading.
	 
	 	(j)	 	“Immediate family members” of a Participant shall mean the Participant’s
children, grandchildren and spouse.
	 
	 	(k)	 	“Incentive Stock Option” shall mean an option granted under Section 6(a) of the
Plan that is intended to meet the requirements of Section 422 of the Code, or any
successor provision thereto.
	 
	 	(l)	 	“1990 Plan” shall mean the Company’s 1990 Stock Option Plan.
	 
	 	(m)	 	“Non-Employee Director” shall mean any non-employee director of an Affiliate.
	 
	 	(n)	 	“Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of
the Plan that is not intended to be an Incentive Stock Option.
	 
	 	(o)	 	“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
	 
	 	(p)	 	“Other Stock-Based Award” shall mean any right granted under Section 6(f) of
the Plan.
	 
	 	(q)	 	“Participant” shall mean a Salaried Employee designated to be granted an Award
under the Plan.
	 
	 	(r)	 	“Performance Award” shall mean any Award granted under Section 6(d) of the
Plan.
	 
	 	(s)	 	“Person” shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, or government or political
subdivision thereof.
	 
	 	(t)	 	“Released Securities” shall mean securities that were Restricted Securities
with respect to which all applicable restrictions have expired, lapsed, or been waived.
	 
	 	(u)	 	“Restricted Securities” shall mean securities covered by Awards of Restricted
Stock or other Awards under which issued and outstanding Shares are held subject to
certain restrictions.
	 
	 	(v)	 	“Restricted Stock” shall mean any Share granted under Section 6(c) of the Plan.

-2-

 

	 	(w)	 	“Restricted Stock Unit” shall mean any right granted under Section 6(c) of the
Plan that is denominated in Shares.
	 
	 	(x)	 	“Salaried Employee” shall mean any salaried Employee of the Company or of any
Affiliate.
	 
	 	(y)	 	“Shares” shall mean shares of the common stock of the Company, par value $2.50
per share, and such other securities or property as may become the subject of Awards,
or become subject to Awards, pursuant to an adjustment made under Section 4(b) of the
Plan.
	 
	 	(z)	 	“Stock Appreciation Right” shall mean any right granted under Section 6(b) of
the Plan.

Section 3. Administration

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

-3-

 

respect to such payment would, or could in the reasonable anticipation of the Committee, not
be permitted due to the application of Section 162(m) of the Code.

Section 4. Shares Available for Awards

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

	 	(i)	 	Calculation of Number of Shares Available. The number of
Shares authorized to be issued in connection with the granting of Awards under
the Plan is four million (4,000,000), and the number of Shares available for
granting Awards under the Plan in each fiscal year or, in the case of the years
1997 and 2007, part thereof shall be two percent (2%) of the issued Shares
(including, without limitation, treasury Shares) as of the first day of such
year; provided, however, that the number of Shares available for granting
Awards in any year shall be increased in any such year by the number of Shares
available under the Plan in previous years but not covered by Awards granted
under the Plan in such years. Further, if any Shares covered by an Award
granted under the Plan or by an award granted under the 1990 Plan, or to which
such an Award or award relates, are forfeited, or if an Award or award
otherwise terminates without the delivery of Shares or of other consideration,
or if upon the termination of the 1990 Plan there are Shares remaining that
were authorized for issuance under that Plan but with respect to which no
awards have been granted, then the Shares covered by such Awards or award, or
to which such Award or award relates, or the number of Shares otherwise counted
against the aggregate number of Shares available under the Plan with respect to
such Award or award, to the extent of any such forfeiture or termination, or
which were authorized for issuance under the 1990 Plan but with respect to
which no awards were granted as of the termination of the 1990 Plan shall again
be, or shall become available for granting Awards under the Plan.
Notwithstanding the foregoing but subject to adjustment as provided in Section
4(b), no more than one million (1,000,000) Shares shall be cumulatively
available for delivery pursuant to the exercise of Incentive Stock Options.
	 
	 	(ii)	 	Accounting for Awards. For purposes of this Section 4,

	 	(A)	 	if an Award (other than a Dividend Equivalent)
is denominated in Shares, the number of Shares covered by such Award,
or to which such Award relates, shall be counted on the date of grant
of such Award against the aggregate number of Shares available for
granting Awards under the Plan; and

	 	(B)	 	Dividend Equivalents and Awards not denominated
in Shares shall be counted against the aggregate number of Shares
available for granting Awards under the Plan, if at all, only in such
amount and at such time as the Committee shall determine under
procedures adopted by the Committee consistent with the purposes of the
Plan;

-4-

 

provided, however, that Awards that operate in tandem with (whether granted simultaneously with or
at a different time from), or that are substituted for, other Awards or awards granted under the
1990 Plan may be counted or not counted under procedures adopted by the Committee in order to avoid
double counting. Any Shares that are delivered by the Company, and any Awards that are granted by,
or become obligations of, the Company through the assumption by the Company or an Affiliate of, or
in substitution for, outstanding awards previously granted by an acquired company, shall not be
counted against the Shares available for granting Awards under the Plan.

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

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

Section 5. Eligibility

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

Section 6. Awards

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

-5-

 

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

	 	(A)	 	permit exercise, during the Participant’s
lifetime, by the Participant’s guardian or legal representative; and
	 
	 	(B)	 	permit transfer, upon the Participant’s death,
to beneficiaries designated by the Participant in a manner authorized
by the Committee, provided that the Committee determines that such
exercise and such transfer are consonant with requirements for
exemption from Section 16(b) of the Exchange Act and, with respect to
an Incentive Stock Option, the requirements of Section 422(b)(5) of the
Code; and
	 
	 	(C)	 	grant Non-Qualified Stock Options that are
transferable, or amend outstanding Non-Qualified Stock Options to make
them so transferable, without payment of consideration, to immediate
family members of the Participant or to trusts or partnerships for such
family members.

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	 	(b)	 	Stock Appreciation Rights. The Committee is hereby authorized to grant Stock
Appreciation Rights to Participants. Subject to the terms of the Plan and any
applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall
confer on the holder thereof a right to receive, upon exercise thereof, the excess of
(i) the Fair Market Value of one Share on the date of exercise over (ii) the grant
price of the right as specified by the Committee, which shall not be less than the Fair
Market Value of one Share on the date of grant of the Stock Appreciation Right (or, if
the Committee so determines, in the case of any Stock Appreciation Right retroactively
granted in tandem with or in substitution for another Award or any outstanding award
granted under any other plan of the Company, on the date of grant of such other Award
or award). Subject to the terms of the Plan and any applicable Award Agreement, the
grant price, term, methods of exercise, methods of settlement, and any other terms and
conditions of any Stock Appreciation Right shall be as determined by the Committee.
The Committee may impose such conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate.
	 
	 	(c)	 	Restricted Stock and Restricted Stock Units.

	 	(i)	 	Issuance. The Committee is hereby authorized to grant Awards
of Restricted Stock and Restricted Stock Units to Participants.
	 
	 	(ii)	 	Restrictions. Shares of Restricted Stock and Restricted Stock
Units shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other right or
property), which restrictions may lapse separately or in combination at such
time or times, in such installments or otherwise, as the Committee may deem
appropriate.
	 
	 	(iii)	 	Registration. Any Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in respect of
Shares of Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock.
	 
	 	(iv)	 	Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria established by the
Committee) for any reason during the applicable restriction period, all Shares
of Restricted Stock and all Restricted Stock Units still, in either case,
subject to restriction shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a waiver would be
in the best interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units. Unrestricted Shares, evidenced in such manner as

-7-

 

	 	 	 	the Committee shall deem appropriate, shall be delivered to the holder of
Restricted Stock promptly after such Restricted Stock shall become Released
Securities.

	 	(v)	 	Restricted Stock Units. Notwithstanding anything to the
contrary in the Plan or in any Award Agreement, Restricted Stock Units shall be
subject to the following requirements. Unless previously forfeited, and
subject to Section 10(b), Restricted Stock Units shall be settled on the
30th day following the earliest of (I) the applicable vesting date
set forth in the Award Agreement, (II) the Participant’s death, and (III) the
Participant’s separation from service within the meaning of Section 409A of the
Code after attaining the age of 55 and completing 10 years of service or as a
result of a disability within the meaning of Section 22(e)(3) of the Code. If
the Committee reasonably anticipates that making a payment in respect of
Restricted Stock Units may violate Federal securities laws or other applicable
law, such payment may be delayed and made in accordance with Section 409A of
the Code and Section 1.409A-2(b)(7)(ii) of the Treasury Regulations thereunder.

	 	(d)	 	Performance Awards. The Committee is hereby authorized to grant Performance
Awards to Participants. Subject to the terms of the Plan and any applicable Award
Agreement, a Performance Award granted under the Plan (i) may be denominated or payable
in cash, Shares (including without limitation, Restricted Stock), other securities,
other Awards, or other property and (ii) shall confer on the holder thereof rights
valued as determined by the Committee and payable to, or exercisable by, the holder of
the Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance periods as the Committee shall establish.
	 
	 	 	 	Performance goals shall be based on one or more of the following criteria,
determined in accordance with generally accepted accounting principles, where
applicable: (i) pre-tax income or after-tax income; (ii) earnings including
operating income, earnings before or after taxes, earnings before or after interest,
depreciation, amortization, or extraordinary or special items; (iii) net income
excluding amortization of intangible assets, depreciation and impairment of goodwill
and intangible assets; (iv) operating income; (v) earnings or book value per share
(basic or diluted); (vi) return on assets (gross or net), return on investment,
return on capital, or return on equity; (vii) return on revenues; (viii) net
tangible assets (working capital plus property, plants and equipment) or return on
net tangible assets (operating income divided by average net tangible assets) or
working capital; (ix) operating cash flow (operating income plus or minus changes in
working capital less capital expenditures); (x) cash flow, free cash flow, cash flow
return on investment (discounted or otherwise), net cash provided by operations, or
cash flow in excess of cost of capital; (xi) sales or sales growth; (xii) operating
margin or profit margin; (xiii) share price or total shareholder return; (xiv)
earnings from continuing operations; (xv) cost targets, reductions or savings,
productivity or efficiencies; (xvi) economic value added; and (xvii) strategic

-8-

 

	 	 	 	business criteria, consisting of one or more objectives based on meeting specified
market penetration or market share, geographic business expansion, customer
satisfaction, employee satisfaction, human resources management, financial
management, project management, supervision of litigation, information technology,
or goals relating to divestitures, joint ventures or similar transactions.
	 
	 	 	 	Where applicable, the performance goals may be expressed in terms of attaining a
specified level of the particular criterion or the attainment of a percentage
increase or decrease in the particular criterion, and may be applied to one or more
of Stanley or a parent or subsidiary of Stanley, or a division or strategic business
unit of Stanley, all as determined by the Compensation and Organization Committee
(the “Committee”). The performance goals may include a threshold level of
performance below which no payment will be made (or no vesting will occur), levels
of performance at which specified payments will be paid (or specified vesting will
occur) and a maximum level of performance above which no additional payment will be
made (or at which full vesting will occur).
	 
	 	 	 	Subject to the terms of the Plan and any applicable Awards Agreement, the
performance goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted, and the amount of
any payment or transfer to be made pursuant to any Performance Award shall be
determined by the Committee.

	 	(e)	 	Dividend Equivalents. The Committee is hereby authorized to grant to
Participants Awards under which the holders thereof shall be entitled to receive
payments equivalent to dividends or interest with respect to a number of Shares
determined by the Committee, and the Committee may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or otherwise reinvested.
Any such amounts will be paid in cash or reinvested at the time that dividends are
otherwise paid, but in no event later than March 15 of the year following the year in
which the dividends are paid. Subject to the terms of the Plan and any applicable
Awards Agreement, such Awards may have such terms and conditions as the Committee shall
determine.
	 
	 	(f)	 	Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants such other Awards that are denominated or payable in, valued in whole or
in part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares), as are deemed by the Committee
to be consistent with the purposes of the Plan, provided, however, that such grants
must comply with applicable law. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by such
method or methods and in such form or forms, including, without limitation, cash,
Shares, other securities, other Awards, or other property, or any combination thereof,
as the Committee shall determine, the value of which consideration, as established by
the Committee, shall not be less

-9-

 

	 	 	 	than the Fair Market Value of such Shares or other securities as of the date such
purchase right is granted (or, if the Committee so determines, in the case of any
such purchase right retroactively granted in tandem with or in substitution for
another Award or any outstanding award granted under any other plan of the Company,
on the date of grant of such other Award or award).

	 	(g)	 	General.

	 	(i)	 	No Cash Consideration for Awards. Awards shall be granted for
no cash consideration or for such minimal cash consideration as may be required
by applicable law.
	 
	 	(ii)	 	Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award or any awards granted under
any other plan of the Company or any Affiliate. Awards granted in addition to
or in tandem with other Awards, or in addition to or in tandem with awards
granted under any other plan of the Company or any Affiliate, may be granted
either at the same time as or at a different time from the grant of such other
Awards or awards.
	 
	 	(iii)	 	Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be made by
the Company or an Affiliate upon the grant, exercise, or payment of an Award
may be made in such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards, or other
property, or any combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents in respect of installment or
deferred payments.
	 
	 	(iv)	 	Limits on Transfer of Awards. Except as provided in Section
6(a) above regarding Options, no Award (other than Released Securities), and no
right under any such Award, shall be assignable, alienable, saleable, or
transferable by a Participant otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order, as
defined in the Code (or, in the case of an Award of Restricted Securities, to
the Company); provided, however, that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a
beneficiary or beneficiaries to exercise the rights of the Participant, and to
receive any property distributable, with respect to any Award upon the demand
of the Participant. Each Award, and each right under any Award, shall be
exercisable, during the Participant’s lifetime, only by the Participant or, if
permissible under applicable law, by the Participant’s

-10-

 

	 	 	 	guardian or legal representative. No Award (other than Released
Securities), and no right under any such Award, may be pledged, alienated,
attached, or otherwise encumbered, and any purported pledge, alienation,
attachment, or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate. Except as permitted under
Section 409A of the Code, any deferred compensation (within the meaning of
Section 409A of the Code) payable to Participant or for a Participant’s
benefit under this Plan and Awards hereunder may not be reduced by, or
offset against, any amount owing by a Participant to the Company or any
Affiliate.

	 	(v)	 	Terms of Awards. The Term of each Award shall be for such
period as may be determined by the Committee; provided, however, that in no
event shall the term of any Incentive Stock Option exceed a period of ten years
from the date of its grant.
	 
	 	(vi)	 	Per-Person Limitation on Options and SARs. The number of
Shares with respect to which Options and SARs may be granted under the Plan to
an individual Participant in any three-year period from September 17, 1997
through the end of the term shall not exceed 3,000,000 Shares, subject to
adjustment as provided in Section 4(b).
	 
	 	(vii)	 	Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares or other securities are then listed, and any
applicable Federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
	 
	 	(viii)	 	Maximum Payment Amount. The maximum fair market value of payments to any
executive officer made in connection with any long-term performance awards
(except for payments made in connection with Options or Stock Appreciation
Rights) granted under the 1997 Plan shall not, during any three-year period,
exceed two percent of Stanley’s shareholders’ equity as of the end of the year
immediately preceding the commencement of such three-year period.

Section 7. Amendment and Termination

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

	 	(a)	 	Amendments to the Plan. The Board of Directors of the Company may amend,
alter, suspend, discontinue, or terminate the Plan, including, without limitation, any
amendment, alteration, suspension, discontinuation, or termination that would

-11-

 

	 	 	 	impair the rights of any Participant, or any other holder or beneficiary of any
Award theretofore granted, without the consent of any shareholder, Participant,
other holder or beneficiary of an Award, or other Person; provided, however, that,
notwithstanding any other provision of the Plan or any Award Agreement, without the
approval of the shareholders of the Company no such amendment, alteration,
suspension, discontinuation, or termination shall be made that would:

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

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

Section 8. General Provisions

	 	(a)	 	No Rights to Awards. No Salaried Employee, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Salaried Employees, Participants, or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be
the same with respect to each recipient.

-12-

 

	 	(b)	 	Delegation. The Committee may delegate to one or more officers or managers of
the Company or any Affiliate, or a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights with respect to, alter,
discontinue, suspend or terminate Awards held by, Salaried Employees who are not
officers of the Company for purposes of Section 16 of the Exchange Act.
	 
	 	(c)	 	Withholding. The Company or any Affiliate shall be authorized to withhold from
any Award granted or any payment due or transfer made under any Award or under the Plan
the amount (in cash, Shares, other securities, other Awards, or other property) of
withholding taxes due in respect of an Award, its exercise, or any payment or transfer
under such Awards or under the Plan and to take such other action as may be necessary
in the opinion of the Company or Affiliate to satisfy all obligations for the payment
of such taxes.
	 
	 	(d)	 	No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect other
or additional compensation arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
	 
	 	(e)	 	No Right to Employment. The grant of an Award shall not be construed as giving
a Participant the right to be retained in the employ of the Company or any Affiliate.
Further, the Company or an Affiliate may at any time dismiss a Participant from
employment, free from any liability, or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement.
	 
	 	(f)	 	Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance with the
laws of the State of Connecticut and applicable Federal law.
	 
	 	(g)	 	Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any
Person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person, or Award,
and the remainder of the Plan and any such Award shall remain in full force and effect.
	 
	 	(h)	 	No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company or any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Company or any Affiliate.

-13-

 

	 	(i)	 	No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether cash,
other securities, or other property shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any rights thereto shall be
canceled, terminated, or otherwise eliminated.
	 
	 	(j)	 	Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or interpretation of the Plan or any
provision thereof.

Section 9. Change in Control

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

	 	(i)	 	all Options and Stock Appreciation Rights, whether granted as
performance awards or otherwise, shall become immediately exercisable in full
for the remainder of their terms, and Grantees shall have the right to have the
Company purchase all or any number of such Options or Stock Appreciation Rights
for cash for a period of thirty (30) days following a Change in Control at the
Option Acceleration Price (as hereinafter defined); and
	 
	 	(ii)	 	all restrictions applicable to all Restricted stock and
Restricted Stock Units, whether such Restricted Stock and Restricted Stock
Units were granted as performance awards or otherwise, shall immediately lapse
and have no effect, and Grantees shall have the right to have the Company
purchase all or any number of such Restricted Stock Units and shares of
Restricted Stock for cash for a period of thirty (30) days following a Change
in Control at the Restricted Stock Acceleration Price (as hereinafter defined).

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

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

-14-

 

	 	(D)	 	any cash merger or similar price paid for a
share of the Common Stock.

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

	 	(c)	 	A “Change in Control” shall be deemed to have occurred if the event set forth
in any one of the following paragraphs shall have occurred:

	 	(I)	 	any Person, as hereinafter defined, is or becomes the
Beneficial Owner, as hereinafter defined, directly or indirectly, of securities
of the Company, as hereinafter defined, (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates) representing 25% or more of the combined voting
power of the Company’s then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction described in
clause (i) of paragraph (III) below; or
	 
	 	(II)	 	the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s shareholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on December 17, 2003 or whose
appointment, election or nomination for election was previously so approved or
recommended;
	 
	 	(III)	 	there is consummated a merger or consolidation of the Company
or any direct or indirect subsidiary of the Company with any other corporation
or other entity, other than (i) a merger or consolidation which results in the
voting securities of the Company outstanding immediately prior to such merger
or consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof

-15-

 

	 	 	 	outstanding immediately after such merger or consolidation or (ii) a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 25% or more of the
combined voting power of the Company’s then outstanding securities; or
	 
	 	(IV)	 	the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
	 
	 	(V)	 	Notwithstanding any provision of this Plan to the contrary, to
the extent an award shall be deemed to be vested or restrictions lapse, expire
or terminate upon the occurrence of a Change in Control and such Change in
Control is not described by Section 409A(a)(2)(A)(v) of the Code, then any
resulting payment permitted by Section 9 that would be considered deferred
compensation under Section 409A of the Code will instead be made to the
Participant on the 30th day following the earliest of (A) the
Participant’s “separation from service” with the Company (determined in
accordance with Section 409A of the Code); (B) the date payment otherwise would
have been made in the absence of any provisions in this Plan to the contrary
(provided such date is permissible under Section 409A of the Code), or (C) the
Participant’s death.

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

	 	1.	 	“Beneficial Owner” shall have the meaning set forth in Rule
13d-3 under the Exchange Act.
	 
	 	2.	 	“Company” shall mean The Stanley Works.
	 
	 	3.	 	“Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareholders of the

-16-

 

	 	 	 	Company in substantially the same proportions as their ownership of stock of
the Company.

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

	 	(a)	 	To the extent applicable, it is intended that this Plan and any grants made
hereunder comply with the provisions of Section 409A of the Code, so that the income
inclusion provisions of Section 409A(a)(1) of the Code do not apply to Participants.
This Plan and any Awards granted hereunder shall be administered in a manner consistent
with this intent. Any reference in this Plan to Section 409A of the Code will also
include any regulations or any other formal guidance promulgated with respect to such
Section by the U.S. Department of the Treasury or the Internal Revenue Service.
	 
	 	(b)	 	If at the time of a Participant’s separation from service (within the meaning
of Section 409A of the Code), (i) the Participant shall be a specified employee (within
the meaning of Section 409A of the Code and using the identification methodology
selected by the Company from time to time) and (ii) the Company shall make a good faith
determination that an amount payable hereunder constitutes deferred compensation
(within the meaning of Section 409A of the Code) the payment of which is required to be
delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in
order to avoid taxes or penalties under Section 409A of the Code, then the Company
shall not pay such amount on the otherwise scheduled payment date but shall instead pay
it, without interest, on the first business day of the seventh month after such
six-month period or, if earlier, on the Participant’s death.
	 
	 	(c)	 	Notwithstanding any provision of this Plan or of any Award Agreement to the
contrary, in light of the uncertainty with respect to the proper application of Section
409A of the Code, the Company reserves the right to make amendments to this Plan and
any Award Agreements as the Company deems necessary or desirable to avoid the
imposition of taxes or penalties under Section 409A of the Code. In any case, a
Participant shall be solely responsible and liable for the satisfaction of all taxes
and penalties that may be imposed on a Participant or for a Participant’s account in
connection with this Plan and any Award Agreements (including any taxes and penalties
under Section 409A of the Code), and neither the Company nor any of its affiliates
shall have any obligation to indemnify or otherwise hold a Participant harmless from
any or all of such taxes or penalties.

Section 11. Effective Date of the Plan

     The Plan shall be effective as of September 17, 1997.

Section 12. Term of the Plan

     No Award shall be granted under the Plan after September 16, 2007. However, unless otherwise
expressly provided in the plan or in an applicable Award Agreement, any Award theretofore granted
may extend beyond such date, and the authority of the Committee to amend,

-17-

 

alter, or adjust any such Award, or to waive any conditions or rights under any such Award,
and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond
such date.

-18-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]